The Goodyear Tire & Rubber Company Annual Report 2020

FY2020 Annual Report · The Goodyear Tire & Rubber Company

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2 0 2 0 A N N U A L R E P O R T

THE GOODYEAR T IRE & RUBBE R CO MPA NY

Goodyear is one of the world’s leading tire companies, with one of the most recognizable brand names. It develops,
manufactures, markets and distributes tires for most applications and manufactures and markets rubber-related chemicals
for various uses. The company also has established itself as a leader in providing services, tools, analytics and products for
evolving modes of transportation, including electric vehicles, autonomous vehicles and fleets of shared and connected
consumer vehicles. Goodyear was the first major tire manufacturer to offer direct-to-consumer tire sales on-line and offers
a proprietary service and maintenance platform for fleets of shared passenger vehicles. Within its global retail presence,
Goodyear operates approximately 1,000 company-owned outlets around the world where it offers its products for sale to
consumer and commercial customers and provides repair and other services. It is one of the world’s largest operators of
commercial truck service and tire retreading centers and offers a leading service and maintenance platform for commercial
fleets. Goodyear is annually recognized as a top place to work and is guided by its corporate responsibility framework,
Goodyear Better Future, which articulates the company’s commitment to sustainability. The company manufactures its
products in 46 facilities in 21 countries and has operations in most regions of the world. Its two Innovation Centers in
Akron, Ohio, and Colmar-Berg, Luxembourg, strive to develop state-of-the-art products and services that set the technology
and performance standard for the industry.

THE GOODYEAR TIRE & RUBBER COMPANY
200 Innovation Way

Akron, Ohio 44316-0001

www.goodyear.com

ON THE COVER
Top: In 2020, Goodyear became the first tire manufacturer to install a dynamic driving simulator. This system replicates real-world driving
conditions, allowing tires to be tested in a virtual environment before they are built, improving the speed and efficiency of the product
development process.
Lower left: The award-winning Goodyear Vector 4Seasons Gen-3 helped the company earn All-Season “Manufacturer of Year” honors from
Germany’s leading automotive magazine.
Lower right: Among the components used in many Goodyear tires is rice husk ash silica, shown here in its stages of processing. The husks
are stripped from rice (far left), burned to ash and converted to a silica substitute (far right). Rice husk ash silica is a bio-based replacement
that can deliver performance like traditional silica yet is more environmentally friendly and helps reduce waste going to landfill.

In 2020, Goodyear returned to the 24 Hours of LeMans,
marking the brand’s first appearance at the world’s most
prestigious endurance race since 2006. The event was a
solid success, as two racing teams outfitted with Goodyear
tires earned spots on the podium in their category. In
addition, the Goodyear blimp made its first appearance in
Europe in almost a decade and provided aerial coverage
for more than 30 television networks around the world.

FINANCIAL OVERVIEW

YEAR ENDED DEC. 31 YEAR ENDED DEC. 31
(in millions, except per share and associates) 2020 2019

Net Sales $ 12,321 $ 14,745
Gross Profit $ 1,984 $ 3,143
(311)
Goodyear Net Income (Loss) $
(1.33)
– Per Diluted Share $

(1,254) $
(5.35) $

Weighted Average Shares Outstanding – Basic 234 233
– Diluted 234 233

Segment Operating Income (Loss) $
945
Segment Operating Margin (0.1%) 6.4%
Gross Margin 16.1% 21.3%
Return on Sales (10.2%) (2.1%)
770
Capital Expenditures $
647 $
Research and Development Expenditures $ 390 $
430
Tire Units Sold 126.0 155.3

(14) $

Total Assets $ 16,506 $ 17,185
Total Debt* $ 5,990 $ 5,663
Goodyear Shareholders’ Equity $ 3,078 $ 4,351
Total Shareholders’ Equity $ 3,259 $ 4,545
Debt to Debt and Equity 64.8% 55.5%
37 $ 148
Common Stock Dividends Paid $

Number of Associates 62,000 63,000
22.17
Price Range of Common Stock: – High $
10.74

– Low $

15.69 $
4.09 $

* Total debt includes Notes payable and overdrafts, Long term debt and finance leases due within one year, and Long term debt and finance leases.

CONTENTS

To Our Shareholders
Management’s Discussion and Analysis of Financial Condition and

Results of Operations

Forward-Looking Information
Quantitative and Qualitative Disclosures about Market Risk
Consolidated Financial Statements
Notes to Consolidated Financial Statements
Management’s Report on Internal Control Over Financial Reporting
Report of Independent Registered Public Accounting Firm
Supplementary Data (Unaudited)
Selected Financial Data
General Information Regarding Our Segments
Performance Graph
Directors and Officers
Facilities
Shareholder Information

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6

30
31
33
40
89
90
93
95
96
97
98
99
100

This Annual Report contains a number of forward-looking statements. For more information, please see page 30.

TO OUR SHAREHOLDERS

INTRODUCTION

Throughout our 122-year history, The Goodyear Tire &
Rubber Company has faced daunting challenges. Since we
were founded, we have continued operations through two
World Wars, economic depression and cycles of recession
and cultural change around the globe. In every situation,
we adjusted to the dynamic conditions and kept moving
forward.

In 2020, the global coronavirus pandemic caused a
disruption unlike anything we’ve experienced in our history.
But, as we have done in every other instance, Goodyear
responded to the conditions, changed how we worked and
remained vital to moving the world forward. I’m pleased to
say that despite the challenges, our business continued
to make significant progress in critical areas.

Globally, we enhanced our original equipment pipeline,
winning fitments representing more than nine million units
of future volume, with many on electric vehicles. We drove
greater efficiencies across our manufacturing footprint and
launched new tire management tools and fuel-efficient
products that allowed us to continue winning with
commercial fleets. We strengthened our position in the
emerging new mobility ecosystem with new product and
service offerings. And we reinforced and increased our
commitment to sustainability.

Richard J. Kramer
Goodyear Chairman, Chief Executive Officer & President

OUR RESPONSE TO COVID-19

The top priority of our response to COVID-19 is the health
and wellbeing of our associates. Like the rest of the world,
we saw the first signs of outbreak in China and responded
by suspending manufacturing at our facility in Pulandian in
February. We followed in early March with a safe and orderly
shutdown of nearly all our global tire manufacturing plants,
something never done before in Goodyear’s history.

Immediately, we took decisive actions to safeguard our
business to mitigate the effects of the pandemic. We
continued to serve customers from our inventory of tires,
minimizing the disruption to our business. Goodyear’s
network of aligned dealers and distributors was essential to
the worldwide pandemic response, helping keep first
responders – including police, firefighters and emergency
medical providers – commercial fleets and economies
moving forward. Though our customers faced challenges
to their own businesses, their response was pivotal to
sustaining the transportation of critical goods and services.

It is important to acknowledge that our associates continued
to deliver outstanding performance while in many cases
balancing shifting responsibilities and increased challenges
in their personal lives. We implemented work-from-home
protocols for office locations, as Goodyear associates found
new ways to work to stay close to consumers, customers
and each other.

By using digital tools and increasing communication, we
stayed attuned to the needs of customers to limit the
chance of service interruption. When stay-at-home
mandates affected both consumers’ buying options and
traditional sales and service operations, Goodyear’s retail
and commercial fleet service locations introduced
“zero-contact” options to assure safety.

We adjusted our goals to focus on maintaining a leading
position in the market, reducing cost and strengthening
cash flow. We executed cost savings programs while
continuing to support our new product development and
increased service offerings. As a result, we increased our
share of market in several important segments, reduced
costs with minimal effect on our operations and exceeded
our expectations on cash flow.

Though the pandemic had immediate and severe effects on
each of our businesses, we did not allow it to derail our
momentum. Among the factors that contributed to our
performance in the face of unprecedented challenges were
several initiatives already in place that gave Goodyear an
advantage as consumer behavior continued to evolve during
the pandemic.

For example, in the Americas, our well-established
e-commerce platform allowed us to serve consumers as
on-line purchases increased. Also, we expanded the reach
of mobile installation in the U.S., giving us an advantage
while stay-at-home directives were in place.

By taking advantage of such industry-leading assets and
acting with agility and urgency, Goodyear made it easier for
consumers and customers during such a disruptive year.
Even through the difficult environment, we positioned the
company for strong recovery.

CONTINUING OUR MOMENTUM

Over the past few years, we have focused on the evolution
of consumer preferences and behavior as a world of new
mobility takes shape. Driven by technology, the changes in
the transportation environment had reached an inflection
point prior to the onset of the global pandemic. Last year,
we believe that COVID-19 didn’t slow the adoption of these
changes; it accelerated their adoption. Likewise, we
increased our commitment to actively shaping new mobility
while investing in our core businesses.

• Products – The best lineup of tires for both original
equipment and replacement continued to grow,
particularly for electric vehicles (EVs). New consumer EV
fitments include the Porsche Taycan, the Volkswagen
ID.3 and the GMC Hummer EV. In addition, we are
supplying original equipment (OE) tires for Lordstown
Motors, a new American manufacturer of an all-electric
light truck. Our portfolio of products continued to earn
third-party recognition in Europe, Middle East and Africa.
For example, a leading German automotive magazine
honored Goodyear as manufacturer of the year for
all-season tires for our Vector 4Seasons Gen-3
all-season tire. We also earned the OE fitment on the
Ford Transit in Europe, an important vehicle for the
increasing need for last-mile deliveries. Our product
and brand strength continued to grow in China, led by
the success of the Eagle F1 SuperSport. Though the
global aviation business has yet to recover from the
pandemic, we earned the China Eastern Airlines Boeing
777 business and captured a new customer with
Hainan Airlines.

• Services – Our commercial truck service centers
continued to provide best-in-class products and
service for fleets. In the Americas, we expanded our
e-commerce platform in our commercial tire business,
giving fleets of all sizes access to our products, leading
service network and complete tire management solu-
tions. Also, our value proposition helped us win valuable
new customers in 2020, earning the Ryder, Dart,
Pepsi MidAmerica and Albertson’s Grocery businesses,
among others.

We also made strides in our commercial business in
Europe, Middle East and Africa, where we enhanced
our Total Mobility Solutions offering with new tools and
services. The pandemic did not derail our efforts to drive
aligned distribution for our consumer business in
Europe, where we continued to execute our plans with
full-service distributors. We increased our presence in
emerging markets with new aligned distributors.

Also, we are making progress on aligned distribution in
Asia Pacific, especially China, which is allowing us to
better capture the value of our brand.

• Technology – In 2020, Goodyear continued to expand
our technology capabilities, developing more predictive
analytics and digital solution platforms. We made
important strides with our intelligent tire, which is
equipped with sensors to provide real-time analytics
for enhancing the safety, performance and handling of
new vehicles, including future autonomous vehicles. In
addition, Goodyear became the first tire manufacturer
to have its own dynamic driving simulator. The simulator
creates an immersive experience that replicates driving
a tire at its limits, enabling us to increase the speed of
tire development and strengthen collaboration with
original equipment manufacturers.

• Partnerships – As part of Goodyear’s commitment to

helping shape the future of new mobility, we announced
the formation of Goodyear Ventures. This venture capital
fund of $100 million over 10 years is targeted for
new investments in future mobility solutions. The first
investment launched AndGo, a fully integrated vehicle-
servicing platform for passenger fleets. We also invested
in Envoy Technologies, a provider of shared electric
vehicles, and we expanded our partnership with Borrow,
a California-based electric-car subscription company.
On the commercial side, we joined with TuSimple, a
global autonomous trucking technology company, to
provide tires and tire management solutions.

• Sustainability – We continued developing new solutions
that not only enhance the performance of our products
but do so with alternative materials and processes that
reduce impact on the environment. Goodyear remains
the only tire manufacturer to feature soybean oil, instead
of petroleum oil, in tread compounds. We have increased
our use of soybean oil in many of our best-selling
tires and are on our way to an established goal of
replacing all petroleum-derived oils in our tires by 2040.
We’re also using rice husk ash silica to help deliver
performance equal to or better than traditional sand-
based silica in tires, with less environmental impact
and waste to landfills.

REFLECTIONS

Throughout our history, Goodyear has faced almost every
kind of challenge. Each time we’ve been confronted with
something different or unanticipated, we’ve assessed our
situation, made a plan and responded as quickly and
thoroughly as possible. Such was the case with the
pandemic in 2020. Though the global social and economic
disruption was unprecedented, we reacted as we always
have. We stayed agile, acted with urgency and never
became complacent. We took care of our customers and
kept moving forward. And when the market started to show
signs of recovery as the year wound down, we grew our
share and outperformed the industry in a variety of
measures.

What we’ve accomplished, from where we were, is nothing
short of phenomenal. I have never been prouder of our
remarkable associates. While there have been times of
anxiety and uncertainty, those days are easily outnumbered
by moments of inspiration, ingenuity and grit.

Over the past year, I’ve talked to our associates about the
“Goodyear spirit,” an attitude of finding solutions when none
seem apparent, of turning challenges into opportunities
and of staying positive when surrounded by adversity. Our
associates embodied this spirit every day and kept our
business moving forward. In the course of delivering great
products and services, they did something even more:
they kept the world moving.

Unfortunately, COVID-19 infection rates continue to be
volatile around the world and the long-term effects are still
unknown. However, our people are the source of confidence
that Goodyear will continue to be a great partner, supplier
and innovator.

Speaking for all of us at Goodyear, thank you for your
ongoing support and trust.

Respectfully submitted,

Richard J. Kramer

Chairman, Chief Executive Officer & President

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

OVERVIEW

The Goodyear Tire & Rubber Company is one of the world’s leading manufacturers of tires, with one of the most recognizable
brand names in the world and operations in most regions of the world. We have a broad global footprint with 46 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; and Asia Pacific.

This management's discussion and analysis provides comparisons of material changes in the consolidated financial statements
for the years ended December 31, 2020 and 2019. For a comparison of the years ended December 31, 2019 and 2018, refer to
Management's Discussion and Analysis of Financial Condition and Results of Operations included in our annual report on
Form 10-K for the year ended December 31, 2019.

Results of Operations

Our results for 2020 were highly influenced by the severe economic disruption caused by the ongoing COVID-19 pandemic.
However, based on recent favorable recovery trends, particularly in the U.S., Europe and China, the negative impacts of the
pandemic on tire industry demand, auto production, miles driven and our tire volume have moderated and are expected to
continue to improve. The tire industry has been negatively impacted by this evolving situation, particularly earlier in the year,
which was characterized by a sudden and sharp decline in replacement tire demand and original equipment (“OE”)
manufacturers suspending or severely limiting automobile production globally. This environment, which persisted throughout
much of 2020, aggravated already challenging industry conditions in many of our key markets, including foreign currency
headwinds due to a strong U.S. dollar, lower OE industry volume, softening demand in Europe, weak market conditions in
China and economic volatility in Latin America, that were present throughout 2019.

We continue to take actions in response to COVID-19 to protect the health and wellbeing of our associates, customers and
communities, which remain our top priority, to mitigate the near- and long-term financial impacts on our operating results, and
to ensure adequate liquidity and capital resources are available to maintain our operations until the auto industry and
replacement tire demand fully recovers.

Actions taken throughout 2020 included:

•

In March 2020, we announced the suspension of production in Europe and the Americas. These temporary measures
were implemented in a way that allowed us to safely and promptly resume production as public health and market
conditions improved. We completed a phased restart of most of our manufacturing facilities during the second quarter
of 2020, without any significant subsequent COVID-19 related disruptions.

• During parts of the first half of 2020, production was also temporarily suspended or significantly limited in several
locations in Asia Pacific, most notably at our Pulandian, China manufacturing facility. Our Pulandian facility began
operating with all of its workforce by the end of the first quarter.

•

Throughout the third quarter of 2020, we continued to ramp up tire production across our manufacturing footprint and
most of our factories returned to full capacity by the end of the third quarter and remained at full capacity during the
fourth quarter. Our decisions to change production levels in the future will be based on an evaluation of market
demand signals, inventory and supply levels, as well as our ability to continue to safeguard the health of our associates.

• As our business is deemed essential in the U.S. and most other parts of the world, in order to maintain customer
service, warehouses, commercial truck service centers and retail operations remained largely operational throughout
the year on a reduced staffing schedule, when necessary, and with strong social distancing practices in place. We
continue to closely monitor local conditions surrounding these operations, as well as inventory and supply levels, to
continue delivery of our products.

• We are following guidance from the Centers for Disease Control and Prevention and have introduced a number of
preventative measures at our facilities that are open, including limiting visitor access and business travel, remote
working and social distancing practices, and increased frequency of disinfection.

• On April 2, 2020, we announced second quarter actions to reduce our payroll costs through a combination of furloughs,
temporary salary reductions and salary deferrals covering over 9,000 of our corporate and business unit associates,
including substantial salary reductions and deferrals for our CEO, officers and directors. These and other similar

actions reduced our expenses by approximately $65 million during the second quarter of 2020, while taking advantage
of governmental income replacement programs to ensure our associates were supported.

• On April 9, 2020, we amended and restated our $2.0 billion first lien revolving credit facility, extending the maturity
date from April 2021 to April 2025. The refinancing includes favorable adjustments to the calculation of the facility’s
borrowing base, which improved our availability under the facility by approximately $230 million at December 31,
2020. In May 2020, we further strengthened our liquidity position by issuing $800 million of 9.5% senior notes due
2025, a portion of the proceeds of which were used to repay our $282 million 8.75% senior notes at maturity in August
2020. For further discussion related to these important sources of liquidity, refer to “Liquidity and Capital Resources.”

• On April 16, 2020, we announced that we suspended the quarterly dividend on our common stock. Previously, these

dividends totaled approximately $37 million each quarter.

• We are leveraging governmental relief efforts when available to defer payroll and other tax payments, which benefited
full-year cash flows by approximately $60 million in the U.S. alone. In addition, we benefited from a provision in the
Coronavirus Aid, Relief, and Economic Security Act that provided for a 50 percent refundable payroll tax credit on
wages, including continuing health benefits, paid to U.S. employees retained but not working due to the COVID-19
pandemic. As a result, during 2020, we recorded a benefit of $12 million as an offset to payroll tax expense.

• We have taken, and will continue to take, as necessary, other actions to reduce costs and preserve cash in order to
successfully navigate the current economic environment, including limiting capital expenditures to $647 million for
2020 and reducing discretionary spending, including other selling, administrative and general expenses (“SAG”),
which, in total, decreased by $131 million in 2020.

Additionally, on April 17, 2020, we reached a tentative bargaining agreement, which was ratified on May 1, 2020, and
subsequently permanently closed our Gadsden, Alabama manufacturing facility (“Gadsden”) as part of our continuing strategy
to strengthen the competitiveness of our manufacturing footprint by curtailing production of tires for declining, less profitable
segments of the tire market. We estimate the total pre-tax charges associated with this plan to be $280 million to $295 million,
of which $170 million to $180 million are expected to be cash charges. We recorded $189 million of these charges and made
cash payments of $46 million during 2020. The remaining charges will be recorded and the remaining cash payments will be
made primarily in 2021 and 2022. We expect the combined impact of this plan and the previously announced rationalization
actions related to Gadsden will result in approximately $130 million in annual savings in 2021 when compared to 2019.

Our results for 2020 reflect an 18.9% decrease in tire unit shipments compared to 2019, as industry demand was significantly
affected, particularly in the second quarter of 2020, by the actions governments, businesses and consumers took to slow the
spread of COVID-19. More recently, the macroeconomic impacts of the pandemic have moderated and are expected to
continue to improve. Our tire unit shipments were down 17.6%, 45.5%, 9.1% and 4.9% in the first, second, third and fourth
quarters of 2020, respectively, compared to 2019. Our results for 2020 include a $394 million unfavorable impact due to higher
conversion costs, primarily as a result of lower factory utilization and other period costs directly related to the suspension of
production and subsequent ramp up at our manufacturing facilities, partially offset by cost savings of $370 million, including
raw material cost saving measures of $61 million. Cost savings for 2020 include approximately $140 million of costs eliminated
in response to the COVID-19 pandemic, including through furloughs and government support programs, most of which are
expected to return in 2021.

Net sales were $12,321 million in 2020, compared to $14,745 million in 2019. Net sales decreased in 2020 primarily due to
lower global tire volume, lower sales in other tire-related businesses, primarily due to lower aviation sales globally and a
decrease in third-party sales of chemical products in Americas, and unfavorable foreign currency translation, primarily in
Americas and EMEA. These decreases were partially offset by improvements in price and product mix, primarily in EMEA
and Americas.

Goodyear net loss in 2020 was $1,254 million, or $5.35 per diluted share, compared to Goodyear net loss of $311 million, or
$1.33 per diluted share, in 2019. The increase in Goodyear net loss in 2020 was primarily driven by lower segment operating
income and non-cash goodwill and other asset impairment charges, partially offset by lower income tax expense.

Our total segment operating loss for 2020 was $14 million, compared to income of $945 million in 2019. The $959 million
decrease was primarily due to lower global tire volume of $571 million, higher conversion costs of $394 million, primarily in
Americas and EMEA, and lower income from other tire-related businesses of $158 million, driven by lower aviation sales
globally and lower third-party chemical sales in Americas. These decreases were partially offset by lower SAG of $100 million,
primarily due to lower wages and benefits and lower advertising expense reflecting actions taken as a result of the COVID-19
pandemic, lower raw material costs of $63 million, primarily in EMEA and Asia Pacific, and improvements in price and product

mix of $38 million, primarily in EMEA and Americas, partially offset by unfavorable price and product mix in Asia Pacific.
Refer to "Results of Operations — Segment Information” for additional information.

Liquidity

At December 31, 2020, we had $1,539 million in cash and cash equivalents as well as $3,881 million of unused availability
under our various credit agreements, compared to $908 million and $3,554 million, respectively, at December 31, 2019. Cash
and cash equivalents increased by $631 million from December 31, 2019 primarily due to cash flows from operating activities
of $1,115 million and net borrowings of $250 million, partially offset by capital expenditures of $647 million and first quarter
dividends paid of $37 million. Cash flows from operating activities reflect cash provided by working capital of $871 million.
Cash flows from operating activities also reflect our net loss for the year of $1,250 million, which includes non-cash charges
for depreciation and amortization of $859 million and goodwill and other asset impairments of $330 million, as well as current
year changes in Balance Sheet Accounts for Other Assets and Liabilities and Compensation and Benefits totaling $290 million.
Refer to "Liquidity and Capital Resources" for additional information.

Outlook

The COVID-19 pandemic caused the temporary closure of many businesses throughout the world during 2020, which limited
global business activity, particularly earlier in the year. Most of our manufacturing facilities around the world suspended or
significantly limited production at times during the first half of 2020 in response to the pandemic. We completed a phased
restart of most of our manufacturing facilities during the second quarter of 2020, returned to full capacity by the end of the
third quarter, and remained at full capacity during the fourth quarter.

During the second half of 2020, tire demand in our major markets recovered faster than we anticipated. The stronger than
planned volume exceeded our production. We expect to reinvest $450 million to $500 million in working capital during 2021
given the decrease in our inventory levels during 2020.

While markets have recovered considerably, we continue to face a high level of uncertainty as several governments around the
globe have recently implemented, or are considering implementing, measures to slow the pandemic that have the potential to
reduce economic activity and mobility. We expect volume in the first quarter of 2021 to remain below 2019 levels, reflecting
lower auto production and continued softness in vehicle miles traveled.

During the first quarter of 2021, we expect our production to be approximately 3 million units higher than in the first quarter
of 2020. Beyond the first quarter, our decisions to change production levels will be based on an evaluation of market demand
signals, inventory and supply levels, as well as our ability to continue to safeguard the health of our associates.

Our other tire-related businesses have also been significantly affected by the weak economic environment. While our retail and
chemical businesses largely stabilized in the second half of 2020, the decline in business and leisure travel is continuing to
adversely impact our aviation business, which we expect will continue in 2021.

For the full year of 2021, we expect our raw material costs to increase $125 million to $175 million, including the benefit of
raw material cost saving measures, primarily in the second half of the year. Natural and synthetic rubber prices and other
commodity prices historically have been volatile, and this estimate could change significantly based on fluctuations in the cost
of these and other key raw materials and foreign exchange rates. We are continuing 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.

In 2021, we expect our capital expenditures will be approximately $850 million, which includes spending for certain items that
were deferred in 2020.

Refer to “Risk Factors” 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” for a discussion of our use of forward-looking
statements.

RESULTS OF OPERATIONS — CONSOLIDATED

All per share amounts are diluted and refer to Goodyear net income (loss).

Goodyear net loss in 2020 was $1,254 million, or $5.35 per share, compared to Goodyear net loss of $311 million, or $1.33
per share, in 2019. The increase in Goodyear net loss in 2020 was primarily driven by lower segment operating income and
non-cash goodwill and other asset impairment charges, partially offset by lower income tax expense.

Net Sales

Net sales in 2020 of $12,321 million decreased $2,424 million, or 16.4%, compared to $14,745 million in 2019, primarily due
to lower global tire volume of $2,387 million, lower sales in other tire-related businesses of $244 million, primarily due to
lower aviation sales globally and a decrease in third-party sales of chemical products in Americas, and unfavorable foreign
currency translation of $233 million, primarily in Americas and EMEA. These decreases were partially offset by improvements
in price and product mix of $402 million, primarily in EMEA and Americas. Goodyear worldwide tire unit net sales were
$10,339 million and $12,524 million in 2020 and 2019, respectively. Consumer and commercial net sales were $7,190 million
and $2,636 million in 2020, respectively. Consumer and commercial net sales were $8,835 million and $2,953 million in 2019,
respectively.

The following table presents our tire unit sales for the periods indicated:

(In millions of tires)
Replacement Units
United States.............................................................................................
International..............................................................................................
Total ..............................................................................................

OE Units
United States.............................................................................................
International..............................................................................................
Total ..............................................................................................
Goodyear worldwide tire units ........................................................

2020

Year Ended December 31,
2019

% Change

31.4
63.6
95.0

9.3
21.7
31.0
126.0

40.3
74.7
115.0

11.2
29.1
40.3
155.3

(22.1)%
(14.9)%
(17.4)%

(16.9)%
(25.4)%
(23.1)%
(18.9)%

The decrease in worldwide tire unit sales of 29.3 million units, or 18.9%, compared to 2019, included a decrease of 20.0 million
replacement tire units, or 17.4%, comprised primarily of a decrease in Americas and EMEA. OE tire units decreased by 9.3
million units, or 23.0%, primarily due to lower vehicle production globally. Consumer and commercial unit sales in 2020 were
113.8 million and 10.6 million, respectively. Consumer and commercial unit sales in 2019 were 141.9 million and 11.7 million,
respectively.

Cost of Goods Sold

Cost of goods sold (“CGS”) was $10,337 million in 2020, decreasing $1,265 million, or 10.9%, from $11,602 million in 2019.
CGS was 83.9% of sales in 2020 compared to 78.7% of sales in 2019. CGS in 2020 decreased primarily due to lower global
tire volume of $1,816 million, foreign currency translation of $208 million, primarily in Americas and EMEA, lower costs in
other tire-related businesses of $86 million, driven by lower aviation sales globally and lower third-party chemical sales in
Americas, and lower raw material costs of $63 million, primarily in EMEA and Asia Pacific. These decreases were partially
offset by higher conversion costs of $394 million, primarily due to lower factory utilization and other period costs, and the
write-off of work-in-process inventory of approximately $26 million, both as a direct result of the suspension of production
and subsequent ramp up at our manufacturing facilities, primarily in Americas and EMEA, and higher costs related to product
mix of $364 million, primarily in Americas and EMEA. CGS in 2020 included pension expense of $16 million compared to
$14 million in 2019. CGS in 2020 and 2019 also included incremental savings from rationalization plans of $107 million and
$20 million, respectively.

CGS in 2020 included accelerated depreciation and asset write-offs of $105 million ($81 million after-tax and minority),
primarily related to the permanent closure of Gadsden. CGS in 2019 included accelerated depreciation and asset write-offs of
$15 million ($12 million after-tax and minority) and favorable indirect tax settlements in Brazil of $11 million ($7 million
after-tax and minority) and in the U.S. of $6 million ($5 million after-tax and minority).

Selling, Administrative and General Expense

SAG was $2,192 million in 2020, decreasing $131 million, or 5.6%, from $2,323 million in 2019. SAG was 17.8% of sales in
2020 compared to 15.8% of sales in 2019. SAG decreased primarily due to lower wages and benefits of $42 million, lower

advertising expense of $31 million and lower travel-related expenses of $30 million, reflecting global actions taken as a result
of the COVID-19 pandemic. SAG also decreased due to foreign currency translation of $23 million, primarily in Americas.
SAG in 2020 included pension expense of $18 million compared to $15 million in 2019. SAG in 2020 and 2019 also included
incremental savings from rationalization plans of $6 million and $17 million, respectively.

Goodwill and Other Asset Impairments

During 2020, we recorded non-cash impairment charges of $182 million ($178 million after-tax and minority) related to
goodwill of our EMEA reporting unit and $148 million ($113 million after-tax and minority) related to our investment in
TireHub. For further information, refer to Notes to the Consolidated Financial Statements No. 11, Goodwill and Intangible
Assets, and No. 12, Other Assets and Investments.

Rationalizations

We recorded net rationalization charges of $159 million ($127 million after-tax and minority) in 2020. Net rationalization
charges include $94 million in Americas, primarily related to the permanent closure of Gadsden, and $59 million in EMEA,
primarily related to additional termination benefits for associates at the closed Amiens, France manufacturing facility.

We recorded net rationalization charges of $205 million ($165 million after-tax and minority) in 2019. Net rationalization
charges include $115 million in EMEA, primarily related to a plan to modernize two of our manufacturing facilities in Germany,
and $90 million in Americas, primarily related to the offer of voluntary buy-outs and other actions in 2019 related to Gadsden.

Upon completion of the 2020 plans, we estimate that annual segment operating income will improve by approximately $91
million ($73 million CGS and $18 million SAG). The savings realized in 2020 from rationalization plans totaled $113 million
($107 million CGS and $6 million SAG).

For further information, refer to the Note to the Consolidated Financial Statements No. 3, Costs Associated with Rationalization
Programs.

Interest Expense

Interest expense was $324 million in 2020, decreasing $16 million from $340 million in 2019. The decrease was primarily due
to a lower average interest rate of 4.99% in 2020 compared to 5.31% in 2019, partially offset by a higher average debt balance
of $6,495 million in 2020 compared to $6,408 million in 2019.

Other (Income) Expense

Other Expense was $119 million and $98 million in 2020 and 2019, respectively. The $21 million increase was primarily due
to a decrease in net gains on asset sales of $18 million, a decrease in net foreign currency exchange gains of $13 million, interest
income in 2019 on favorable indirect tax settlements in Brazil of $8 million ($5 million after-tax and minority), and a net gain
in 2019 on insurance recoveries of $4 million ($3 million after-tax and minority). These increases were partially offset by
charges of $25 million ($25 million after-tax and minority) in 2019 related to flooding at our Beaumont, Texas chemical facility.

Non-service related pension and other postretirement benefits expense of $110 million in 2020 includes net pension settlement
and curtailment charges of $18 million ($14 million after-tax and minority). Non-service related pension and other
postretirement benefits expense of $118 million in 2019 includes pension settlement charges of $5 million ($4 million after-
tax and minority).

Net (gains) losses on asset sales were a loss of $2 million ($2 million after-tax and minority) in 2020 as compared to a gain of
$16 million ($15 million after-tax and minority) in 2019.

Other (Income) Expense in 2020 included charges of $3 million ($2 million after-tax and minority), compared to charges of $5
million ($4 million after-tax and minority) in 2019, for non-asbestos legal claims related to discontinued products. Other
(Income) Expense in 2019 included a net gain of $2 million ($2 million after-tax and minority) related to an acquisition and $2
million ($2 million after-tax and minority) of favorable foreign currency translation on indirect tax items.

For further information, refer to the Note to the Consolidated Financial Statements No. 5, Other (Income) Expense.

Income Taxes

Income tax expense in 2020 was $110 million on a loss before income taxes of $1,140 million. In 2020, income tax expense
was unfavorably impacted by net discrete adjustments totaling $305 million ($305 million after minority interest), including
the establishment of a $295 million valuation allowance on certain deferred tax assets for foreign tax credits during the first
quarter of 2020 as discussed below. Discrete adjustments also reflect a net charge of $10 million, including a $15 million

charge related to a U.S. valuation allowance for state loss carryforwards, a $13 million benefit to adjust our deferred tax assets
in England for a third quarter enacted change in the tax rate, and various other net charges totaling $8 million.

Income tax expense in 2019 was $474 million on income before income taxes of $177 million. In 2019, income tax expense
was unfavorably impacted by net discrete adjustments totaling $386 million. Discrete adjustments were due to non-cash charges
of $334 million related to an acceleration of royalty income in the U.S. from the sale of certain European royalty payments to
Luxembourg and $150 million related to an increase in our valuation allowance on tax losses in Luxembourg, which were
partially offset by a non-cash tax benefit of $98 million related to a reduction of our U.S. valuation allowance for foreign tax
credits.

At December 31, 2020, we had approximately $1.2 billion of U.S. federal, state and local deferred tax assets, net of valuation
allowances totaling $368 million primarily for foreign tax credits with limited lives. Approximately $900 million of these U.S.
net deferred tax assets have unlimited lives and approximately $300 million have limited lives and expire between 2025 and
2040. At December 31, 2019, we had approximately $1.2 billion of U.S. federal, state and local deferred tax assets, net of
valuation allowances totaling $13 million. In the U.S., we have a cumulative loss for the three-year period ending December
31, 2020. However, as the three-year cumulative loss in the U.S. is driven by the business disruption created by the COVID-
19 pandemic, in assessing our ability to utilize our deferred tax assets, we also considered objectively verifiable information
including recent favorable recovery trends in the tire industry and our tire volume as well as the return to profitability of our
U.S. business by the end of the fourth quarter and its expected continued improvement. While the COVID-19 related
disruptions to our business are ultimately expected to be temporary, there is still considerable uncertainty around the extent and
duration of these disruptions, as well as what additional actions federal, state or local governments may take to contain the
pandemic. As such, an additional valuation allowance may be required against all, or a portion of, our U.S. net deferred tax
assets in a future period.

At December 31, 2020 and 2019, our U.S. deferred tax assets included $133 million and $403 million of foreign tax credits
with limited lives, net of valuation allowances of $328 million and $3 million, respectively, generated primarily from the receipt
of foreign dividends. During the first quarter of 2020, we established a valuation allowance of $295 million against all of these
foreign tax credits with expiration dates through 2024 and a portion of those expiring in 2025. In addition, during the fourth
quarter of 2020, we increased our valuation allowance by $30 million with a corresponding increase to our deferred tax assets
to reflect the impact of a decrease in foreign tax credits utilized on our 2019 income tax return. Due to the sudden and sharp
decline in industry demand and the temporary suspension of production at our U.S. manufacturing facilities as a result of the
COVID-19 pandemic, we have a significant U.S. tax loss for 2020. As loss carryforwards must be utilized prior to foreign tax
credits in offsetting future income for tax purposes, we concluded that it is not more likely than not that we will be able to
utilize these foreign tax credits prior to their expiration. Our earnings and forecasts of future profitability, taking into
consideration recent trends, along with three significant sources of foreign income provide us sufficient positive evidence that
we will be able to utilize our remaining foreign tax credits that expire between 2025 and 2030. Our sources of foreign income
are (1) 100% of our domestic profitability can be re-characterized as foreign source income under current U.S. tax law to the
extent domestic losses have offset foreign source income in prior years, (2) annual net foreign source income, exclusive of
dividends, primarily from royalties, and (3) tax planning strategies, including capitalizing research and development costs,
accelerating income on cross border transactions, including sales of inventory or raw materials to our subsidiaries, and reducing
U.S. interest expense by, for example, reducing intercompany loans through repatriating current year earnings of foreign
subsidiaries, all of which would increase our domestic profitability.

We consider our current forecasts of future profitability in assessing our ability to realize our deferred tax assets, including our
foreign tax credits. As noted above, these forecasts include the impact of recent trends, including various macroeconomic
factors such as the impact of the COVID-19 pandemic, on our profitability, as well as the impact of tax planning strategies.
Macroeconomic factors, including the impact of the COVID-19 pandemic, possess a high degree of volatility and can
significantly impact our profitability. As such, there is a risk that future earnings will not be sufficient to fully utilize our U.S.
net deferred tax assets, including our remaining foreign tax credits. However, we believe our forecasts of future profitability
along with the three significant sources of foreign income described above provide us sufficient positive, objectively verifiable
evidence to conclude that it is more likely than not that, at December 31, 2020, our U.S. net deferred tax assets, including our
foreign tax credits, net of valuation allowances, will be fully utilized.

At December 31, 2020 and 2019, we had approximately $1.3 billion and $1.2 billion of foreign deferred tax assets, respectively,
and valuation allowances of $1.1 billion and $1.0 billion, respectively. Our losses in various foreign taxing jurisdictions in
recent periods represented sufficient negative evidence to require us to maintain a full valuation allowance against certain of
these net foreign deferred tax assets. Most notably, in Luxembourg, we maintain a valuation allowance of $978 million 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 having a significant impact on our financial position or results of
operations will exist within the next twelve months.

For further information, refer to "Critical Accounting Policies" and Note to the Consolidated Financial Statements No. 6,
Income Taxes.

Minority Shareholders’ Net Income

Minority shareholders’ net income was $4 million in 2020, compared to $14 million in 2019. The decrease primarily relates to
a $17 million indirect tax benefit in EMEA during the first quarter of 2019.

RESULTS OF OPERATIONS — SEGMENT INFORMATION

Segment information reflects our SBUs, which are organized to meet customer requirements and global competition and are
segmented on a regional basis.

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.

Total segment operating loss in 2020 was $14 million, compared to total segment operating income of $945 million in 2019.
Total segment operating margin (segment operating income (loss) divided by segment sales) in 2020 was (0.1%) compared to
6.4% in 2019.

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 the 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.

Americas

(In millions)
Tire Units ..................................................................................................
Net Sales ................................................................................................... $
Operating Income .....................................................................................
Operating Margin......................................................................................

2020

Year Ended December 31,
2019

2018

56.7
6,556
9
0.1%

70.4
7,922
550
6.9%

70.9
8,168
654
8.0%

Americas unit sales in 2020 decreased 13.7 million units, or 19.4%, to 56.7 million units. Replacement tire volume decreased
10.7 million units, or 19.3%, primarily in our consumer business in the United States, Brazil and Canada, due to lower sales
resulting from the economic impacts of the COVID-19 pandemic. OE tire volume decreased 3.0 million units, or 19.8%,
primarily in our consumer business in the United States, Brazil and Canada, driven by lower vehicle production as a result of
pandemic-related impacts at major OE manufacturers.

Net sales in 2020 were $6,556 million, decreasing $1,366 million, or 17.2%, compared to $7,922 million in 2019. The decrease
in net sales was driven by lower volume of $1,231 million, lower sales in other tire-related businesses of $191 million, primarily
due to a decrease in third-party sales of chemical products and lower aviation and retail sales, and unfavorable foreign currency
translation of $165 million, primarily related to the Brazilian real. These decreases were partially offset by improvements in
price and product mix of $185 million, driven by higher proportionate sales of commercial tires, and $34 million ($26 million
after-tax and minority) for a one-time legal settlement.

Operating income in 2020 was $9 million, decreasing $541 million, or 98.4%, from $550 million in 2019. The decrease in
operating income was due to lower volume of $281 million, higher conversion costs of $215 million, primarily related to lower
factory utilization and other period costs, and the write-off of work-in-process inventory of approximately $13 million, both as
a direct result of the suspension of production and subsequent ramp up at our manufacturing facilities, and lower earnings in
other tire-related businesses of $94 million, primarily due to a decrease in third-party sales of chemical products and lower
aviation and retail sales. These decreases were partially offset by lower SAG of $37 million, primarily related to lower wages
and benefits and travel-related expenses reflecting actions taken as a result of the COVID-19 pandemic, and improvements in

price and product mix of $20 million. Operating income was also impacted by the $34 million one-time legal settlement noted
above as well as a $13 million ($10 million after-tax and minority) charge for an environmental remediation liability at a closed
facility. Conversion costs include savings from rationalization plans of $92 million in 2020, primarily related to Gadsden. Price
and product mix includes TireHub equity losses of $36 million and $33 million in 2020 and 2019, respectively.

Operating income in 2020 excluded the TireHub non-cash impairment charge of $148 million, as well as accelerated
depreciation and asset write-offs of $103 million and rationalization charges of $94 million, primarily related to the permanent
closure of Gadsden. Operating income in 2019 excluded rationalization charges of $90 million and accelerated depreciation
and asset write-offs of $13 million.

Americas' results are highly dependent upon the United States, which accounted for 82% and 81% of Americas' net sales in
2020 and 2019, respectively. Results of operations in the United States are expected to continue to have a significant impact
on Americas' future performance.

Europe, Middle East and Africa

(In millions)
Tire Units..................................................................................................
Net Sales................................................................................................... $
Operating Income (Loss)..........................................................................
Operating Margin .....................................................................................

2020

Year Ended December 31,
2019

2018

44.5
4,020
(72)
(1.8)%

55.1
4,708
202
4.3%

57.8
5,090
363
7.1%

Europe, Middle East and Africa unit sales in 2020 decreased 10.6 million units, or 19.3%, to 44.5 million units. Replacement
tire volume decreased 7.5 million units, or 18.2%, primarily in our consumer business, reflecting decreased industry demand
due to the economic impacts of the COVID-19 pandemic and expected declines resulting from our initiative to align distribution
in Europe. OE tire volume decreased 3.1 million units, or 22.6%, primarily in our consumer business, driven by lower vehicle
production as a result of pandemic-related impacts at major OE manufacturers and our continued exit of declining, less
profitable market segments.

Net sales in 2020 were $4,020 million, decreasing $688 million, or 14.6%, compared to $4,708 million in 2019. Net sales
decreased primarily due to lower volume of $825 million, unfavorable foreign currency translation of $52 million, driven by
the weakening of the Turkish lira, South African rand and Russian ruble, partially offset by the strengthening of the euro, and
lower sales in other tire-related businesses of $22 million, primarily due to lower aviation sales. These decreases were partially
offset by improvements in price and product mix of $210 million, driven by higher proportionate sales of commercial tires and
our continued focus on 17-inch and above rim size consumer tires.

Operating loss in 2020 was $72 million, a change of $274 million, from operating income of $202 million in 2019. The change
in operating income (loss) was primarily due to lower volume of $204 million, higher conversion costs of $143 million,
primarily related to lower factory utilization and other period costs, and the write-off of work-in-process inventory of
approximately $12 million, both as a direct result of the suspension of production and subsequent ramp up at our manufacturing
facilities, lower earnings in other tire-related businesses of $27 million, primarily due to lower aviation and motorcycle sales,
and higher start-up costs of $8 million, primarily related to our plant expansion projects in Europe. These decreases in operating
income were partially offset by improvements in price and product mix of $58 million, lower raw material costs of $40 million,
and lower SAG of $37 million, primarily related to lower advertising and travel-related expenses reflecting actions taken as a
result of the COVID-19 pandemic. SAG and conversion costs included incremental savings from rationalization plans of $4
million and $15 million, respectively.

Operating income (loss) in 2020 excluded a non-cash goodwill impairment charge of $182 million, net rationalization charges
of $59 million, net losses on asset sales of $2 million, and accelerated depreciation and asset write-offs of $2 million. Operating
income (loss) in 2019 excluded net rationalization charges of $115 million, net gains on asset sales of $16 million, and
accelerated depreciation and asset write-offs of $2 million.

EMEA’s results are highly dependent upon Germany, which accounted for 18% and 21% of EMEA’s net sales in 2020 and
2019, respectively. Results of operations in Germany are expected to continue to have a significant impact on EMEA’s future
performance.

Asia Pacific

2020

Year Ended December 31,
2019

2018

24.8
1,745
49
2.8%

29.8
2,115
193
9.1%

30.5
2,217
257
11.6%

Asia Pacific unit sales in 2020 decreased 5.0 million units, or 16.9%, to 24.8 million units. OE tire volume decreased 3.2 million
units, or 27.8%, primarily in our consumer business in China and India, driven by lower vehicle production at major OE
manufacturers as a result of the COVID-19 pandemic and the impact of discontinued fitments in China. Replacement tire
volume decreased 1.8 million units, or 10.1%, primarily in our consumer business, reflecting decreased industry demand as a
result of the economic impacts of the COVID-19 pandemic.

Net sales in 2020 were $1,745 million, decreasing $370 million, or 17.5%, from $2,115 million in 2019. Net sales decreased
due to lower volume of $331 million, lower sales in other tire-related businesses of $31 million, primarily due to lower aviation
and retail sales, and unfavorable foreign currency translation of $16 million, primarily related to the weakening of the Indian
rupee. These decreases were partially offset by improvements in price and product mix of $7 million.

Operating income in 2020 was $49 million, decreasing $144 million, or 74.6%, from $193 million in 2019. Operating income
decreased due to lower volume of $86 million, unfavorable price and product mix of $40 million, lower earnings in other tire-
related businesses of $37 million, primarily due to lower aviation and retail sales, and higher conversion costs of $36 million,
primarily due to the impact of lower factory utilization. These decreases were partially offset by lower raw material costs of
$35 million and lower SAG of $26 million, primarily related to lower wages and benefits, advertising and travel-related
expenses reflecting actions taken as a result of the COVID-19 pandemic.

Operating income in 2020 excluded net rationalization charges of $4 million.

Asia Pacific’s results are highly dependent upon Australia and China. Australia accounted for 27% of Asia Pacific’s net sales
in both 2020 and 2019, respectively. China accounted for 25% and 26% of Asia Pacific's net sales in 2020 and 2019,
respectively. Results of operations in Australia and China are expected to continue to have a significant impact on Asia Pacific's
future performance.

CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes to
the financial statements. On an ongoing basis, management reviews its estimates, based on currently available information.
Changes in facts and circumstances may alter such estimates and affect our results of operations and financial position in future
periods. Our critical accounting policies relate to:

•
•
•
•
•

general and product liability and other litigation,
workers’ compensation,
goodwill,
deferred tax asset valuation allowances and uncertain income tax positions, and
pensions and other postretirement benefits.

General and Product Liability and Other Litigation. We have recorded liabilities totaling $285 million, including related legal
fees expected to be incurred, for potential product liability and other tort claims, including asbestos claims, at
December 31, 2020. General and product liability and other litigation liabilities are recorded based on management’s
assessment that a loss arising from these matters is probable. If the loss can be reasonably estimated, we record the amount of
the estimated loss. If the loss is estimated within a range and no point within the range is more probable than another, we record
the minimum amount in the range. As additional information becomes available, any potential liability related to these matters
is assessed and the estimates are revised, if necessary. Loss ranges are based upon the specific facts of each claim or class of
claims and are determined after review by counsel. Court rulings on our cases or similar cases may impact our assessment of
the probability and our estimate of the loss, which may have an impact on our reported results of operations, financial position
and liquidity. We record receivables for insurance recoveries related to our litigation claims when it is probable that we will
receive reimbursement from the insurer. Specifically, we are a defendant in numerous lawsuits alleging various asbestos-related
personal injuries purported to result from alleged exposure to asbestos in certain products previously manufactured by us or
present in certain of our facilities. Typically, these lawsuits have been brought against multiple defendants in federal and state
courts.

We periodically, and at least annually, update, using actuarial analyses, our existing reserves for pending claims, including a
reasonable estimate of the liability associated with unasserted asbestos claims, and estimate our receivables from probable
insurance recoveries. In determining the estimate of our asbestos liability, we evaluated claims over the next ten-year period.
Due to the difficulties in making these estimates, analysis based on new data and/or changed circumstances arising in the future
may result in an increase in the recorded obligation, and that increase may be significant. We had recorded gross liabilities for
both asserted and unasserted asbestos claims, inclusive of defense costs, totaling $149 million at December 31, 2020.

We maintain certain primary and excess insurance coverage under coverage-in-place agreements, and also have additional
excess liability insurance with respect to asbestos liabilities. We record a receivable with respect to such policies when we
determine that recovery is probable and we can reasonably estimate the amount of a particular recovery. This determination is
based on consultation with our outside legal counsel and takes into consideration agreements with certain of our insurance
carriers, the financial viability and legal obligations of our insurance carriers, and other relevant factors.

As of December 31, 2020, we recorded a receivable related to asbestos claims of $90 million, and we expect that approximately
60% of asbestos claim related losses would be recoverable through insurance through the period covered by the estimated
liability. Of this amount, $13 million was included in Current Assets as part of Accounts Receivable at December 31, 2020.
The recorded receivable consists of an amount we expect to collect under coverage-in-place agreements with certain primary
and excess insurance carriers as well as an amount we believe is probable of recovery from certain of our other excess insurance
carriers. Although we believe these amounts are collectible under primary and certain excess policies today, future disputes
with insurers could result in significant charges to operations.

Workers’ Compensation. We have recorded liabilities, on a discounted basis, of $196 million for anticipated costs related to
U.S. workers’ compensation claims at December 31, 2020. The costs include an estimate of expected settlements on pending
claims, defense costs and a provision for claims incurred but not reported. These estimates are based on our assessment of
potential liability using an analysis of available information with respect to pending claims, historical experience and current
cost trends. The amount of our ultimate liability in respect of these matters may differ from these estimates. We periodically,
and at least annually, update our loss development factors based on actuarial analyses. The liability is discounted using the
risk-free rate of return.

For further information on general and product liability and other litigation, and workers’ compensation, refer to Note to the
Consolidated Financial Statements No. 19, Commitments and Contingent Liabilities.

Goodwill. Goodwill is tested for impairment annually as of October 31 or more frequently if an indicator of impairment is
present. Goodwill totaled $408 million at December 31, 2020.

We test goodwill for impairment on at least an annual basis, with the option to perform a qualitative assessment to determine
whether further impairment testing is necessary or to perform a quantitative assessment by comparing the fair value of a
reporting unit to its carrying amount, including goodwill. Under the qualitative assessment, an entity is not required to calculate
the fair value of a reporting unit unless the entity determines that it is more likely than not (defined as a likelihood of more than
50%) that its fair value is less than its carrying amount. If under the quantitative assessment the fair value of a reporting unit is
less than its carrying amount, then an impairment charge is recorded for that difference, not to exceed the total goodwill
allocated to that reporting unit. Our policy is to perform a quantitative assessment at least once every five years.

As a result of the COVID-19 pandemic and the resulting decline in the macroeconomic environment, as well as a significant
decrease in our market capitalization, we performed an interim impairment analysis as of March 31, 2020 utilizing a discounted
cash flow model. Based on the results of this interim analysis, we recorded a non-cash impairment charge of $182 million
related to our EMEA reporting unit in the first quarter of 2020. The most critical assumptions used in the calculation of the
estimated fair value of our reporting units were the timing of the recovery in sales from the COVID-19 pandemic, the projected
long-term operating margin and the discount rate. Since the date of our 2019 annual goodwill impairment assessment, which
was conducted on a quantitative basis, the overall discount rate increased, reflecting an increase in the risk premium components
of the rate partially offset by a decrease in the risk-free interest rate component, as a result of the macroeconomic environment.
Also, we gave consideration to the expected near-term negative cash flow impact of the COVID-19 pandemic and subsequent
recovery, based on our forecasts at that time, as well as a decrease in our market capitalization.

Our estimates of future cash flows include assumptions concerning future operating performance and economic conditions,
including the impacts of the ongoing COVID-19 pandemic on our sales, and may differ from actual future cash flows. Under
the discounted cash flow approach, fair value is calculated as the sum of the projected discounted cash flows of the reporting
unit over the next five years and the terminal value at the end of those five years and is dependent on estimates for future sales,
operating margin, capital expenditures, rationalization activities and working capital changes, as well as expected long-term
growth rates for cash flows and an appropriate discount rate. The risk adjusted discount rate used is consistent with the weighted
average cost of capital for companies in the tire industry and is intended to represent a rate of return that would be expected by
a market participant. The projected long term operating margin utilized in our fair value estimates is consistent with the
reporting unit operating plan and is dependent on the successful execution of our business plan, overall industry growth rates
and the competitive environment. As a result, the long term operating margin could be adversely impacted by our ability to
execute our business plan as well as by volatile macroeconomic factors such as raw material prices, industry conditions,
including the ongoing impacts of the COVID-19 pandemic, or competition. Our business plan includes rationalization
programs, aligned distribution actions, and recovering past raw material cost increases by improving price and product mix,
including through continued focus on higher margin tires. The discount rate could be adversely impacted by changes in the
macroeconomic environment and volatility in the equity and debt markets. Although management believes its estimate of fair
value is reasonable, if future financial performance falls below our expectations or there are negative revisions to significant
assumptions, or if our market capitalization declines further and if such a decline becomes indicative that the fair value of our
reporting units has declined below their carrying values, we may need to record a material, non-cash goodwill impairment
charge in a future period.

Deferred Tax Asset Valuation Allowances and Uncertain Income Tax Positions. At December 31, 2020, our valuation
allowance on certain of our U.S. federal, state and local deferred tax assets was $368 million, primarily related to foreign tax
credits with limited lives, and our valuation allowance on our foreign deferred tax assets was $1.1 billion. At December 31,
2019, our valuation allowance on certain U.S. federal, state and local deferred tax assets was $13 million and our valuation
allowance on our foreign deferred tax assets was $1.0 billion.

We record a reduction to the carrying amounts of deferred tax assets by recording a valuation allowance if, based on the
available evidence, it is more likely than not such assets will not be realized. The valuation of deferred tax assets requires
judgment in assessing future profitability, including the impact of tax planning strategies and the expiration date of the asset.

We consider both positive and negative evidence when measuring the need for a valuation allowance. The weight given to the
evidence is commensurate with the extent to which it may be objectively verified. Current and cumulative financial reporting
results are a source of objectively verifiable evidence. We give operating results during the most recent three-year period a
significant weight in our analysis. We typically only consider forecasts of future profitability when positive cumulative
operating results exist in the most recent three-year period. We perform scheduling exercises to determine if sufficient taxable
income of the appropriate character exists in the periods required in order to realize our deferred tax assets with limited lives
(such as tax loss carryforwards and tax credits) prior to their expiration. We consider tax planning strategies available to
accelerate taxable amounts if required to utilize expiring deferred tax assets. A valuation allowance is not required to the extent
that, in our judgment, positive evidence exists with a magnitude and duration sufficient to result in a conclusion that it is more
likely than not that our deferred tax assets will be realized.

decline in industry demand and the temporary suspension of production at our U.S. manufacturing facilities as a result of the
COVID-19 pandemic, we have a significant U.S. tax loss for 2020. As loss carryforwards must be utilized prior to foreign tax
credits in offsetting future income for tax purposes, we concluded that it is not more likely than not that we will be able to
utilize these foreign tax credits prior to their expiration. Our earnings and forecasts of future profitability, taking into
consideration recent trends, along with three significant sources of foreign income provide us sufficient positive evidence that
we will be able to utilize our remaining foreign tax credits that expire between 2025 and 2030. Our sources of foreign income
are (1) 100% of our domestic profitability can be re-characterized as foreign source income under current U.S. tax law to the
extent domestic losses have offset foreign source income in prior years, (2) annual net foreign source income, exclusive of
dividends, primarily from royalties, and (3) tax planning strategies, including capitalizing research and development costs,
accelerating income on cross border transactions, including sales of inventory or raw materials to our subsidiaries, and reducing
U.S. interest expense by, for example, reducing intercompany loans through repatriating current year earnings of foreign
subsidiaries, all of which would increase our domestic profitability.

We recognize the effects of changes in tax rates and laws on deferred tax balances in the period in which legislation is enacted.
We remeasure existing deferred tax assets and liabilities considering the tax rates at which they will be realized. We also
consider the effects of enacted tax laws in our analysis of the need for valuation allowances.

Effective January 1, 2018, the Tax Cuts and Jobs Act subjects a U.S. parent to current tax on its global intangible low-taxed
income ("GILTI"). To the extent that we incur expense under the GILTI provisions, we will treat it as a component of income
tax expense in the period incurred.

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations, including
those for transfer pricing. We recognize liabilities for anticipated tax audit issues based on our estimate of whether, and the
extent to which, additional taxes will be due. If we ultimately determine that payment of these amounts is unnecessary, we
reverse the liability and recognize a tax benefit during the period in which we determine that the liability is no longer necessary.
We also recognize income tax benefits to the extent that it is more likely than not that our positions will be sustained when
challenged by the taxing authorities. We derecognize income tax benefits when, based on new information, we determine that
it is no longer more likely than not that our position will be sustained. To the extent we prevail in matters for which liabilities
have been established, or determine we need to derecognize tax benefits recorded in prior periods, our results of operations and
effective tax rate in a given period could be materially affected. An unfavorable tax settlement would require use of our cash,
and lead to recognition of expense to the extent the settlement amount exceeds recorded liabilities, resulting in an increase in
our effective tax rate in the period of resolution. To reduce our risk of an unfavorable transfer price settlement, the Company
applies consistent transfer pricing policies and practices globally, supports pricing with economic studies and seeks advance
pricing agreements and joint audits to the extent possible. A favorable tax settlement would be recognized as a reduction of
expense to the extent the settlement amount is lower than recorded liabilities and, in the case of an income tax settlement, would
result in a reduction in our effective tax rate in the period of resolution. We report interest and penalties related to uncertain
income tax positions as income tax expense.

For additional information regarding uncertain income tax positions and valuation allowances, refer to Note to the Consolidated
Financial Statements No. 6, Income Taxes.

Pensions and Other Postretirement Benefits. We have recorded liabilities for pension and other postretirement benefits of $606
million and $236 million, respectively, at December 31, 2020. Our recorded liabilities and net periodic costs for pensions and
other postretirement benefits are based on a number of assumptions, including:

•

life expectancies,

retirement rates,

discount rates,

long term rates of return on plan assets,

inflation rates,

future compensation levels,

future health care costs, and

• maximum company-covered benefit costs.

Certain of these assumptions are determined with the assistance of independent actuaries. Assumptions about life expectancies,
retirement rates, future compensation levels and future health care costs are based on past experience and anticipated future
trends. The discount rate for our U.S. plans is based on a yield curve derived from a portfolio of corporate bonds from issuers
rated AA or higher as of December 31 and is reviewed annually. Our expected benefit payment cash flows are discounted based
on spot rates developed from the yield curve. The mortality assumption for our U.S. plans is based on actual historical
experience, an assumed long term rate of future improvement based on published actuarial tables, and current government
regulations related to lump sum payment factors. The long term rate of return on U.S. plan assets is based on estimates of future
long term rates of return similar to the target allocation of substantially all fixed income securities. Actual U.S. pension fund
asset allocations are reviewed on a monthly basis and the pension fund is rebalanced to target ranges on an as-needed basis.
These assumptions are reviewed regularly and revised when appropriate. Changes in one or more of them may affect the amount
of our recorded liabilities and net periodic costs for these benefits. Other assumptions involving demographic factors such as
retirement age and turnover are evaluated periodically and are updated to reflect our experience and expectations for the future.
If actual experience differs from expectations, our financial position, results of operations and liquidity in future periods may
be affected.

The weighted average discount rate used in estimating the total liability for our U.S. pension and other postretirement benefit
plans was 2.42% and 2.34%, respectively, at December 31, 2020, compared to 3.22% and 3.14%, respectively, at December 31,
2019. The decrease in the discount rate at December 31, 2020 was due primarily to lower yields on highly rated corporate
bonds. Interest cost included in our U.S. net periodic pension cost was $126 million in 2020, compared to $173 million in 2019
and $157 million in 2018. Interest cost included in our worldwide net periodic other postretirement benefits cost was $8 million
in 2020, compared to $11 million in 2019 and $12 million in 2018.

The following table presents the sensitivity of our U.S. projected pension benefit obligation and accumulated other
postretirement benefits obligation to the indicated increase/decrease in the discount rate:

(Dollars in millions)
Assumption:
Pensions ....................................................................................................
Other Postretirement Benefits ...............................................................

Change

+ / − Change at December 31, 2020
PBO/ABO Annual Expense

+/- 0.5% $
+/- 0.5%

290 $
5

5
—

Changes in general interest rates and corporate (AA or better) credit spreads impact our discount rate and thereby our U.S.
pension benefit obligation. Our U.S. pension plans are invested in a portfolio of substantially all fixed income securities
designed to offset the impact of future discount rate movements on liabilities for these plans. If corporate (AA or better) interest
rates increase or decrease in parallel (i.e., across all maturities), the investment portfolio described above is designed to mitigate
a substantial portion of the expected change in our U.S. pension benefit obligation. For example, if corporate (AA or better)
interest rates increased or decreased by 0.5%, the investment portfolio described above would be expected to mitigate more
than 85% of the expected change in our U.S. pension benefit obligation.

At December 31, 2020, our net actuarial loss included in Accumulated Other Comprehensive Loss ("AOCL") related to global
pension plans was $2,989 million, $2,353 million of which related to our U.S. pension plans. The net actuarial loss included in
AOCL related to our U.S. pension plans is primarily due to declines in U.S. discount rates and plan asset losses that occurred
prior to 2015, plus the impact of prior increases in estimated life expectancies. For purposes of determining our 2020

U.S. pension total benefits cost, we recognized $109 million of the net actuarial losses in 2020. We will recognize
approximately $110 million of net actuarial losses in 2021 U.S. net periodic pension cost. If our future experience is consistent
with our assumptions as of December 31, 2020, actuarial loss recognition over the next few years will remain at an amount
near that to be recognized in 2021 before it begins to gradually decline. In addition, if annual lump sum payments from a
pension plan exceed annual service and interest cost for that plan, accelerated recognition of net actuarial losses will be required
through a settlement in total benefits cost.

The actual rate of return on our U.S. pension fund was 13.20%, 15.90% and (1.90)% in 2020, 2019 and 2018, respectively, as
compared to the expected rate of 4.22%, 5.25% and 4.58% in 2020, 2019 and 2018, respectively. We use the fair value of our
pension assets in the calculation of pension expense for all of our U.S. pension plans.

The weighted average amortization period for our U.S. pension plans is approximately 17 years.

Service cost of pension plans was recorded in CGS, as part of the cost of inventory sold during the period, or SAG in our
Consolidated Statements of Operations, based on the specific roles (i.e., manufacturing vs. non-manufacturing) of employee
groups covered by each of our pension plans. In 2020, 2019 and 2018, approximately 45% and 55% of service cost was
included in CGS and SAG, respectively. Non-service related net periodic pension costs were recorded in Other (Income)
Expense.

Globally, we expect our 2021 net periodic pension cost to be $80 million to $100 million, including approximately $35 million
of service cost, compared to $117 million in 2020, which included $34 million of service cost. The decrease in expected net
periodic pension cost is primarily due to lower interest cost for our U.S. pension plans from decreases in interest rates.

We experienced a decrease in our U.S. discount rate at the end of 2020 and a large portion of the $30 million net actuarial loss
included in AOCL for our worldwide other postretirement benefit plans as of December 31, 2020 is a result of the overall
decline in U.S. discount rates over time. For purposes of determining 2020 worldwide net periodic other postretirement benefits
cost, we recognized $4 million of net actuarial losses in 2020. We will recognize approximately $3 million of net actuarial
losses in 2021. If our future experience is consistent with our assumptions as of December 31, 2020, actuarial loss recognition
over the next few years will remain at an amount near that to be recognized in 2021 before it begins to gradually decline.

For further information on pensions and other postretirement benefits, refer to Note to the Consolidated Financial Statements
No. 17, Pension, Other Postretirement Benefits and Savings Plans.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our primary sources of liquidity are cash generated from our operating and financing activities. Our cash flows from operating
activities are driven primarily by our operating results and changes in our working capital requirements and our cash flows
from financing activities are dependent upon our ability to access credit or other capital.

In April 2020, we amended and restated our $2.0 billion first lien revolving credit facility. Changes to the facility include
extending the maturity to April 9, 2025 and increasing the borrowing base for the facility by increasing the amount attributable
to the value of our principal trademarks and adding the value of eligible machinery and equipment, which improved our
availability under the facility by approximately $230 million at December 31, 2020. The interest rate for loans under the facility
increased by 50 basis points to LIBOR plus 175 basis points, based on our current liquidity, and undrawn amounts under the
facility will be subject to an annual commitment fee of 25 basis points.

In May 2020, we further enhanced our liquidity position by issuing $800 million of 9.5% senior notes due 2025. We used the
net proceeds from the issuance of these notes for general corporate purposes, including the repayment of our $282 million
8.75% notes at their maturity in August 2020.

For further information on the other initiatives we pursued in 2020, refer to “Management’s Discussion and Analysis of
Financial Condition and Results of Operations — Overview.”

At December 31, 2020, we had $1,539 million of Cash and Cash Equivalents, compared to $908 million at December 31, 2019.
The increase in cash and cash equivalents of $631 million was primarily due to cash flows from operating activities of $1,115
million, driven by cash from working capital of $871 million, and cash flows from financing activities of $203 million,
primarily due to net borrowings of $250 million, partially offset by cash used for first quarter dividends of $37 million. These
sources of cash were partially offset by cash used by investing activities of $667 million, reflecting capital expenditures of
$647 million.

At December 31, 2020 and 2019, we had $3,881 million and $3,554 million, respectively, of unused availability under our
various credit agreements. The table below provides unused availability by our significant credit facilities as of December 31:

(In millions)
First lien revolving credit facility................................................................................. $
European revolving credit facility................................................................................
Chinese credit facilities ................................................................................................
Mexican credit facilities ...............................................................................................
Other domestic and international debt facilities...........................................................
Short term credit arrangements ....................................................................................

2020

2019

1,535 $
982
297
48
380
639
3,881 $

1,662
899
290
—
338
365
3,554

The borrowing base under our first lien revolving credit facility is dependent, in significant part, on our eligible accounts
receivable and inventory, which have declined as a result of our lower sales and production levels due to the COVID-19
pandemic. A decline in our borrowing base would reduce our availability under the first lien revolving credit facility.
Additionally, the amounts available to us from our pan-European accounts receivable securitization facility and other accounts
receivable factoring programs have declined since December 31, 2019 due to the decline in our accounts receivable as a result
of the impacts of the COVID-19 pandemic on our sales.

We actively monitor our liquidity and took a number of actions aimed at mitigating the negative consequences of the COVID-19
pandemic on our cash flows and liquidity, such as suspending production at most of our manufacturing facilities during parts
of the first half of 2020, reducing our second quarter payroll costs through a combination of furloughs, temporary salary
reductions and salary deferrals, refinancing our first lien revolving credit facility to extend its maturity and increase its
borrowing base, issuing $800 million of 9.5% senior notes due 2025, suspending the quarterly dividend on our common stock,
reducing capital expenditures and discretionary spending, and using governmental relief efforts to defer payroll and other tax
payments globally. We intend to operate the business in a way that allows us to address our cash flow needs with our existing
cash and available credit if they cannot be funded by cash generated from operating or other financing activities. We believe
that our liquidity position is adequate to fund our operating and investing needs and debt maturities for the next twelve months
and to provide us with the ability to respond to further changes in the business environment.

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 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 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 December 31, 2020, approximately $680 million
of net assets, including $185 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 and Argentina have not adversely impacted our ability to make
transfers out of those countries.

We expect our 2021 cash flow needs to include capital expenditures of approximately $850 million. We also expect interest
expense to be $350 million to $375 million, rationalization payments to be approximately $175 million, income tax payments
to be $125 million to $150 million, which include payments deferred from 2020, and contributions to our funded non-U.S.
pension plans to be $25 million to $50 million. We expect working capital to be a use of cash of $450 million to $500 million
in 2021. We intend to operate the business in a way that allows us to address these needs with our existing cash and available
credit if they cannot be funded by cash generated from operations.

Cash Position

At December 31, 2020, significant concentrations of cash and cash equivalents held by our international subsidiaries included
the following amounts:

•

$387 million or 25% in Asia Pacific, primarily China and Japan ($337 million or 37% at December 31, 2019),

$387 million or 25% in EMEA, primarily Belgium ($214 million or 24% at December 31, 2019), and

$384 million or 25% in Americas, primarily Brazil, Canada and Chile ($190 million or 21% at December 31, 2019).

We have deposited our cash and cash equivalents and entered into various credit agreements and derivative contracts with
financial institutions that we considered to be substantial and creditworthy at the time of such transactions. We seek to control
our exposure to these financial institutions by diversifying our deposits, credit agreements and derivative contracts across
multiple financial institutions, by setting deposit and counterparty credit limits based on long term credit ratings and other
indicators of credit risk such as credit default swap spreads, and by monitoring the financial strength of these financial
institutions on a regular basis. We also enter into master netting agreements with counterparties when possible. By controlling
and monitoring exposure to financial institutions in this manner, we believe that we effectively manage the risk of loss due to
nonperformance by a financial institution. However, we cannot provide assurance that we will not experience losses or delays
in accessing our deposits or lines of credit due to the nonperformance of a financial institution. Our inability to access our cash
deposits or make draws on our lines of credit, or the inability of a counterparty to fulfill its contractual obligations to us, could
have a material adverse effect on our liquidity, financial condition or results of operations in the period in which it occurs.

Operating Activities

Net cash provided by operating activities was $1,115 million in 2020, decreasing $92 million compared to net cash provided
by operating activities of $1,207 million in 2019.

The decrease in net cash provided by operating activities was driven by a decrease in operating income from our SBUs of $959
million and higher cash payments for rationalizations of $127 million, primarily due to cash payments made during 2020 related
to Gadsden. These uses of cash were partially offset by an increase in cash provided by working capital of $789 million and a
decrease in cash income tax payments of $97 million, primarily due to our lower earnings. In addition, current year cash flows
from operating activities were favorably impacted by a net year-over-year change of $109 million in Other Assets and
Liabilities, Compensation and Benefits and Other Current Liabilities on the Balance Sheet, driven by governmental relief efforts
to defer payroll tax payments as well as insurance proceeds related to hurricane damage suffered in previous years.

The net increase in cash provided by working capital includes increases in cash provided by Inventory of $707 million and
Accounts Receivable of $61 million, driven by the impacts of the COVID-19 pandemic, which included lower sales volume as
well as mitigating actions taken by us, such as the suspension of production and subsequent ramp up at our manufacturing
facilities.

Investing Activities

Net cash used by investing activities was $667 million in 2020, compared to $800 million in 2019. Capital expenditures were
$647 million in 2020, compared to $770 million in 2019. Beyond expenditures required to sustain our facilities, capital
expenditures in 2020 and 2019 primarily related to investments in additional 17-inch and above capacity around the world.

Financing Activities

Net cash flows provided from financing activities were $203 million in 2020, compared to net cash used by financing activities
of $307 million in 2019. The $510 million year-over-year change reflects net borrowings of $250 million in 2020 in order to
enhance our liquidity and cash position in light of the ongoing COVID-19 pandemic, versus net debt repayments of $119
million in 2019. In addition, cash paid for dividends decreased $111 million from $148 million in 2019 to $37 million in 2020,
as a result of us suspending the quarterly dividend on our common stock on April 16, 2020.

Credit Sources

In aggregate, we had total credit arrangements of $9,707 million available at December 31, 2020, of which $3,881 million were
unused, compared to $9,054 million available at December 31, 2019, of which $3,554 million were unused. At December 31,
2020, we had long term credit arrangements totaling $8,632 million, of which $3,242 million were unused, compared to $8,320
million and $3,189 million, respectively, at December 31, 2019. At December 31, 2020, we had short term committed and
uncommitted credit arrangements totaling $1,075 million, of which $639 million were unused, compared to $734 million and
$365 million, respectively, at December 31, 2019. The continued availability of the short term uncommitted arrangements is at
the discretion of the relevant lender and may be terminated at any time.

Outstanding Notes

At December 31, 2020, we had $3,860 million of outstanding notes, compared to $3,311 million at December 31, 2019. In May
2020, we issued $800 million in aggregate principal amount of 9.5% senior notes due 2025, a portion of the proceeds of which
were used to pay in full our $282 million 8.75% senior notes at maturity on August 17, 2020.

$2.0 Billion Amended and Restated First Lien Revolving Credit Facility due 2025

On April 9, 2020, we amended and restated our $2.0 billion first lien revolving credit facility. Changes to the facility include
extending the maturity to April 9, 2025 and increasing the borrowing base for the facility by increasing the amount attributable
to the value of our principal trademarks by $100 million and adding the value of eligible machinery and equipment. The interest
rate for loans under the facility increased by 50 basis points to LIBOR plus 175 basis points, based on our current liquidity,
and undrawn amounts under the facility will be subject to an annual commitment fee of 25 basis points.

Our amended and restated first lien revolving credit facility is available in the form of loans or letters of credit. Up to $800
million in letters of credit and $50 million of swingline loans are available for issuance under the facility. Availability under
the facility is subject to a borrowing base, which is based on (i) eligible accounts receivable and inventory of The Goodyear
Tire & Rubber Company and certain of its U.S. and Canadian subsidiaries, (ii) the value of our principal trademarks in an
amount not to exceed $400 million, (iii) the value of eligible machinery and equipment, and (iv) certain cash in an amount not
to exceed $200 million. To the extent that our eligible accounts receivable and inventory and other components of the borrowing
base decline in value, our borrowing base will decrease and the availability under the facility may decrease below $2.0 billion.
In addition, if the amount of outstanding borrowings and letters of credit under the facility exceeds the borrowing base, we are
required to prepay borrowings and/or cash collateralize letters of credit sufficient to eliminate the excess. As of December 31,
2020, our borrowing base, and therefore our availability, under the facility was $454 million below the facility's stated amount
of $2.0 billion.

At December 31, 2020, we had no borrowings and $11 million of letters of credit issued under the revolving credit facility. At
December 31, 2019, we had no borrowings and $37 million of letters of credit issued under the revolving credit facility.

At December 31, 2020, we had $341 million in letters of credit issued under bilateral credit agreements.

Amended and Restated Second Lien Term Loan Facility due 2025

Our amended and restated second lien term loan facility matures on March 7, 2025. The term loan bears interest, at our option,
at (i) 200 basis points over LIBOR or (ii) 100 basis points over an alternative base rate (the higher of (a) the prime rate, (b) the
federal funds effective rate or the overnight bank funding rate plus 50 basis points or (c) LIBOR plus 100 basis points). In
addition, if the Total Leverage Ratio is equal to or less than 1.25 to 1.00, we have the option to further reduce the spreads
described above by 25 basis points. "Total Leverage Ratio" has the meaning given it in the facility.

At December 31, 2020 and 2019, the amounts outstanding under this facility were $400 million.

€800 Million Amended and Restated Senior Secured European Revolving Credit Facility due 2024

Our amended and restated European revolving credit facility consists of (i) a €180 million German tranche that is available
only to Goodyear Dunlop Tires Germany GmbH (“GDTG”) and (ii) a €620 million all-borrower tranche that is available to
Goodyear Europe B.V. (“GEBV”), GDTG and Goodyear Dunlop Tires Operations S.A. Up to €175 million of swingline loans
and €75 million in letters of credit are available for issuance under the all-borrower tranche. Amounts drawn under this facility
will bear interest at LIBOR plus 150 basis points for loans denominated in U.S. dollars or pounds sterling and EURIBOR plus
150 basis points for loans denominated in euros, and undrawn amounts under the facility are subject to an annual commitment
fee of 25 basis points. Subject to the consent of the lenders whose commitments are to be increased, we may request that the
facility be increased by up to €200 million.

At December 31, 2020 and 2019, there were no borrowings and no letters of credit outstanding under the European revolving
credit facility.

Each of our first lien revolving credit facility and our European revolving credit facility have customary representations and
warranties including, as a condition to borrowing, that all such representations and warranties are true and correct, in all material
respects, on the date of the borrowing, including representations as to no material adverse change in our business or financial
condition since December 31, 2019 under the first lien facility and December 31, 2018 under the European facility.

Accounts Receivable Securitization Facilities (On-Balance Sheet)

GEBV and certain other of our European subsidiaries are parties to a pan-European accounts receivable securitization facility
that expires in 2023. The terms of the facility provide the flexibility to designate annually the maximum amount of funding
available under the facility in an amount of not less than €30 million and not more than €450 million. For the period from
October 18, 2018 through October 15, 2020, the designated maximum amount of the facility was €320 million. For the period
from October 16, 2020 through October 18, 2021, the designated maximum amount of the facility was decreased to €280
million.

The facility involves the ongoing daily sale of substantially all of the trade accounts receivable of certain GEBV subsidiaries.
These subsidiaries retain servicing responsibilities. Utilization under this facility is based on eligible receivable balances.

The funding commitments under the facility will expire upon the earliest to occur of: (a) September 26, 2023, (b) the non-
renewal and expiration (without substitution) of all of the back-up liquidity commitments, (c) the early termination of the
facility according to its terms (generally upon an Early Amortisation Event (as defined in the facility), which includes, among
other things, events similar to the events of default under our senior secured credit facilities; certain tax law changes; or certain
changes to law, regulation or accounting standards), or (d) our request for early termination of the facility. The facility’s current
back-up liquidity commitments will expire on October 18, 2021.

At December 31, 2020, the amounts available and utilized under this program totaled $291 million (€237 million). At
December 31, 2019, the amounts available and utilized under this program totaled $327 million (€291 million). The program
does not qualify for sale accounting, and accordingly, these amounts are included in Long Term Debt and Finance Leases.

Accounts Receivable Factoring Facilities (Off-Balance Sheet)

We have sold certain of our trade receivables under off-balance sheet programs. For these programs, we have concluded that
there is generally no risk of loss to us from non-payment of the sold receivables. At December 31, 2020, the gross amount of
receivables sold was $451 million, compared to $548 million at December 31, 2019.

Supplier Financing

We have entered into payment processing agreements with several financial institutions. Under these agreements, the financial
institution acts as our paying agent with respect to accounts payable due to our suppliers. These agreements also allow our
suppliers to sell their receivables to the financial institutions at the sole discretion of both the supplier and the financial
institution on terms that are negotiated between them. We are not always notified when our suppliers sell receivables under
these programs. Our obligations to our suppliers, including the amounts due and scheduled payment dates, are not impacted by
our suppliers' decisions to sell their receivables under the program. Agreements for such supplier financing programs totaled
up to $500 million at December 31, 2020 and 2019.

Further Information

On November 30, 2020, the ICE Benchmark Administration, the administrator of LIBOR, with the support of the U.S. Federal
Reserve Board and the U.K. Financial Conduct Authority, announced plans to consult on ceasing the publication of USD
LIBOR on December 31, 2021 for only the one week and two month USD LIBOR tenors, and on June 30, 2023 for all other
USD LIBOR tenors. In the United States, efforts to identify a set of alternative U.S. dollar reference interest rates include

proposals by the Alternative Reference Rates Committee that has been convened by the Federal Reserve Board and the Federal
Reserve Bank of New York to encourage market participants’ use of the Secured Overnight Financing Rate, known as SOFR.
Additionally, the International Swaps and Derivatives Association, Inc. launched a consultation on technical issues related to
new benchmark fallbacks for derivative contracts that reference certain interbank offered rates, including LIBOR. We cannot
currently predict the effect of the discontinuation of, or other changes to, LIBOR or any establishment of alternative reference
rates in the United States, the European Union or elsewhere on the global capital markets. The uncertainty regarding the future
of LIBOR, as well as the transition from LIBOR to any alternative reference rate or rates, could have adverse impacts on
floating rate obligations, loans, deposits, derivatives and other financial instruments that currently use LIBOR as a benchmark
rate. We have identified and evaluated our financing obligations and other contracts that refer to LIBOR and expect to be able
to transition those obligations and contracts to an alternative reference rate in the event of the discontinuation of LIBOR. Our
amended and restated first lien revolving credit facility, our second lien term loan facility and our European revolving credit
facility, which constitute the most significant of our LIBOR-based debt obligations, contain “fallback” provisions that address
the potential discontinuation of LIBOR and facilitate the adoption of an alternate rate of interest. We have not issued any long
term floating rate notes. Our amended and restated first lien revolving credit facility and second lien term loan facility also
contain express provisions for the use, at our option, of an alternative base rate (the higher of (a) the prime rate, (b) the federal
funds effective rate or the overnight bank funding rate plus 50 basis points or (c) LIBOR plus 100 basis points). We do not
believe that the discontinuation of LIBOR, or its replacement with an alternative reference rate or rates, will have a material
impact on our results of operations, financial position or liquidity.

For a further description of the terms of our outstanding notes, first lien revolving credit facility, second lien term loan facility,
European revolving credit facility and pan-European accounts receivable securitization facility, refer to Note to the
Consolidated Financial Statements No. 15, Financing Arrangements and Derivative Financial Instruments.

Covenant Compliance

Our first and second lien credit facilities and some of the indentures governing our notes contain certain covenants that, among
other things, limit our ability to incur additional debt or issue redeemable preferred stock, pay dividends, repurchase shares or
make certain other restricted payments or investments, incur liens, sell assets, incur restrictions on the ability of our subsidiaries
to pay dividends or to make other payments to us, enter into affiliate transactions, engage in sale and leaseback transactions,
and consolidate, merge, sell or otherwise dispose of all or substantially all of our assets. These covenants are subject to
significant exceptions and qualifications. Our first and second lien credit facilities and the indentures governing our notes also
have customary defaults, including cross-defaults to material indebtedness of Goodyear and its subsidiaries.

We have additional financial covenants in our first and second lien credit facilities that are currently not applicable. We only
become subject to these financial covenants when certain events occur. These financial covenants and related events are as
follows:

• We become subject to the financial covenant contained in our first lien revolving credit facility when the aggregate
amount of our Parent Company (The Goodyear Tire & Rubber Company) and guarantor subsidiaries cash and cash
equivalents (“Available Cash”) plus our availability under our first lien revolving credit facility is less than
$200 million. If this were to occur, our ratio of EBITDA to Consolidated Interest Expense may not be less than 2.0 to
1.0 for the most recent period of four consecutive fiscal quarters. As of December 31, 2020, our unused availability
under this facility of $1,535 million plus our Available Cash of $408 million totaled $1,943 million, which is in excess
of $200 million.

• We become subject to a covenant contained in our second lien credit facility upon certain asset sales. The covenant
provides that, before we use cash proceeds from certain asset sales to repay any junior lien, senior unsecured or
subordinated indebtedness, we must first offer to use such cash proceeds to prepay borrowings under the second lien
credit facility unless our ratio of Consolidated Net Secured Indebtedness to EBITDA (Pro Forma Senior Secured
Leverage Ratio) for any period of four consecutive fiscal quarters is equal to or less than 3.0 to 1.0.

In addition, our European revolving credit facility contains non-financial covenants similar to the non-financial covenants in
our first and second lien credit facilities that are described above and a financial covenant applicable only to GEBV and its
subsidiaries. This financial covenant provides that we are not permitted to allow GEBV’s ratio of Consolidated Net GEBV
Indebtedness to Consolidated GEBV EBITDA for a period of four consecutive fiscal quarters to be greater than 3.0 to 1.0 at
the end of any fiscal quarter. Consolidated Net GEBV Indebtedness is determined net of the sum of cash and cash equivalents
in excess of $100 million held by GEBV and its subsidiaries, cash and cash equivalents in excess of $150 million held by the
Parent Company and its U.S. subsidiaries, and availability under our first lien revolving credit facility if the ratio of EBITDA
to Consolidated Interest Expense described above is not applicable and the conditions to borrowing under the first lien revolving
credit facility are met. Consolidated Net GEBV Indebtedness also excludes loans from other consolidated Goodyear entities.

This financial covenant is also included in our pan-European accounts receivable securitization facility. At December 31, 2020,
we were in compliance with this financial covenant.

Our credit facilities also state that we may only incur additional debt or make restricted payments that are not otherwise
expressly permitted if, after giving effect to the debt incurrence or the restricted payment, our ratio of EBITDA to Consolidated
Interest Expense for the prior four fiscal quarters would exceed 2.0 to 1.0. Certain of our senior note indentures have
substantially similar limitations on incurring debt and making restricted payments. Our credit facilities and indentures also
permit the incurrence of additional debt through other provisions in those agreements without regard to our ability to satisfy
the ratio-based incurrence test described above. We believe that these other provisions provide us with sufficient flexibility to
incur additional debt necessary to meet our operating, investing and financing needs without regard to our ability to satisfy the
ratio-based incurrence test.

Covenants could change based upon a refinancing or amendment of an existing facility, or additional covenants may be added
in connection with the incurrence of new debt.

As of December 31, 2020, we were in compliance with the currently applicable material covenants imposed by our principal
credit facilities and indentures.

The terms “Available Cash,” “EBITDA,” “Consolidated Interest Expense,” “Consolidated Net Secured Indebtedness,” “Pro
Forma Senior Secured Leverage Ratio,” “Consolidated Net GEBV Indebtedness” and “Consolidated GEBV EBITDA” have
the meanings given them in the respective credit facilities.

Potential Future Financings

In addition to our previous financing activities, we may seek to undertake additional financing actions which could include
restructuring bank debt or capital markets transactions, possibly including the issuance of additional debt or equity. Given the
inherent uncertainty of market conditions, access to the capital markets cannot be assured.

Our future liquidity requirements may make it necessary for us to incur additional debt. However, a substantial portion of our
assets are already subject to liens securing our indebtedness. As a result, we are limited in our ability to pledge our remaining
assets as security for additional secured indebtedness. In addition, no assurance can be given as to our ability to raise additional
unsecured debt.

Dividends and Common Stock Repurchase Program

Under our primary credit facilities and some of our note indentures, we are permitted to pay dividends on and repurchase our
capital stock (which constitute restricted payments) as long as no default will have occurred and be continuing, additional
indebtedness can be incurred under the credit facilities or indentures following the payment, and certain financial tests are
satisfied.

During 2020, 2019 and 2018, we paid cash dividends of $37 million, $148 million and $138 million, respectively, on our
common stock. This excludes dividends earned on stock-based compensation plans of $1 million, $2 million and $1 million
for 2020, 2019 and 2018, respectively. On April 16, 2020, we announced that we have suspended the quarterly dividend on our
common stock.

From time to time, we repurchase shares of our common stock under programs approved by the Board of Directors. During
2020 and 2019, we did not repurchase any shares of our common stock. During 2018, we repurchased shares totaling
approximately $220 million under a program that expired on December 31, 2019.

The restrictions imposed by our credit facilities and indentures did not affect our ability to pay the dividends on or repurchase
our capital stock as described above, and are not expected to affect our ability to pay similar dividends or make similar
repurchases in the future.

Asset Dispositions

The restrictions on asset sales imposed by our material indebtedness have not affected our ability to divest non-core businesses,
and those divestitures have not affected our ability to comply with those restrictions.

Supplemental Guarantor Financial Information

Certain of our subsidiaries, which are listed on Exhibit 22.1 to the Annual Report on Form 10-K for the year ended December
31, 2020 and are generally holding companies or smaller operating companies, have guaranteed our obligations under the $1.0
billion outstanding principal amount of 5.125% senior notes due 2023, the $800 million outstanding principal amount of 9.5%
senior notes due 2025, the $900 million outstanding principal amount of 5% senior notes due 2026 and the $700 million
outstanding principal amount of 4.875% senior notes due 2027 (collectively, the “Notes”).

The Notes have been issued by The Goodyear Tire & Rubber Company (the “Parent Company”) and are its senior unsecured
obligations. The Notes rank equally in right of payment with all of our existing and future senior unsecured obligations and
senior to any of our future subordinated indebtedness. The Notes are effectively subordinated to our existing and future secured
indebtedness to the extent of the assets securing that indebtedness. The Notes are fully and unconditionally guaranteed on a
joint and several basis by each of our wholly-owned U.S. and Canadian subsidiaries that also guarantee our obligations under
certain of our senior secured credit facilities (such guarantees, the “Guarantees”; and, such guaranteeing subsidiaries, the
“Subsidiary Guarantors”). The Guarantees are senior unsecured obligations of the Subsidiary Guarantors and rank equally in
right of payment with all existing and future senior unsecured obligations of our Subsidiary Guarantors. The Guarantees are
effectively subordinated to existing and future secured indebtedness of the Subsidiary Guarantors to the extent of the assets
securing that indebtedness.

The Notes are structurally subordinated to all of the existing and future debt and other liabilities, including trade payables, of
our subsidiaries that do not guarantee the Notes (the “Non-Guarantor Subsidiaries”). The Non-Guarantor Subsidiaries will have
no obligation, contingent or otherwise, to pay amounts due under the Notes or to make funds available to pay those amounts.
Certain Non-Guarantor Subsidiaries are limited in their ability to remit funds to us by means of dividends, advances or loans
due to required foreign government and/or currency exchange board approvals or limitations in credit agreements or other debt
instruments of those subsidiaries.

The Subsidiary Guarantors, as primary obligors and not merely as sureties, jointly and severally irrevocably and unconditionally
guarantee on a senior unsecured basis the performance and full and punctual payment when due of all obligations of the Parent
Company under the Notes and the related indentures, whether for payment of principal of or interest on the Notes, expenses,
indemnification or otherwise. The Guarantees of the Subsidiary Guarantors are subject to release in limited circumstances only
upon the occurrence of certain customary conditions.

Although the Guarantees provide the holders of Notes with a direct unsecured claim against the assets of the Subsidiary
Guarantors, under U.S. federal bankruptcy law and comparable provisions of U.S. state fraudulent transfer laws, in certain
circumstances a court could cancel a Guarantee and order the return of any payments made thereunder to the Subsidiary
Guarantor or to a fund for the benefit of its creditors.

A court might take these actions if it found, among other things, that when the Subsidiary Guarantors incurred the debt
evidenced by their Guarantee (i) they received less than reasonably equivalent value or fair consideration for the incurrence of
the debt and (ii) any one of the following conditions was satisfied:

•

the Subsidiary Guarantor was insolvent or rendered insolvent by reason of the incurrence;

the Subsidiary Guarantor was engaged in a business or transaction for which its remaining assets constituted
unreasonably small capital; or

the Subsidiary Guarantor intended to incur, or believed (or reasonably should have believed) that it would incur, debts
beyond its ability to pay as those debts matured.

In applying the above factors, a court would likely find that a Subsidiary Guarantor did not receive fair consideration or
reasonably equivalent value for its Guarantee, except to the extent that it benefited directly or indirectly from the issuance of
the Notes. The determination of whether a guarantor was or was not rendered “insolvent” when it entered into its guarantee
will vary depending on the law of the jurisdiction being applied. Generally, an entity would be considered insolvent if the sum
of its debts (including contingent or unliquidated debts) is greater than all of its assets at a fair valuation or if the present fair
salable value of its assets is less than the amount that will be required to pay its probable liability on its existing debts, including
contingent or unliquidated debts, as they mature.

Under Canadian federal bankruptcy and insolvency laws and comparable provincial laws on preferences, fraudulent
conveyances or other challengeable or voidable transactions, the Guarantees could be challenged as a preference, fraudulent
conveyance, transfer at undervalue or other challengeable or voidable transaction. The test to be applied varies among the
different pieces of legislation, but as a general matter these types of challenges may arise in circumstances where:

•

such action was intended to defeat, hinder, delay, defraud or prejudice creditors or others;

such action was taken within a specified period of time prior to the commencement of proceedings under Canadian
bankruptcy, insolvency or restructuring legislation in respect of a Subsidiary Guarantor, the consideration received by
the Subsidiary Guarantor was conspicuously less than the fair market value of the consideration given, and the
Subsidiary Guarantor was insolvent or rendered insolvent by such action and (in some circumstances, or) such action
was intended to defraud, defeat or delay a creditor;

•

such action was taken within a specified period of time prior to the commencement of proceedings under Canadian
bankruptcy, insolvency or restructuring legislation in respect of a Subsidiary Guarantor and such action was taken, or
is deemed to have been taken, with a view to giving a creditor a preference over other creditors or, in some
circumstances, had the effect of giving a creditor a preference over other creditors; or

a Subsidiary Guarantor is found to have acted in a manner that was oppressive, unfairly prejudicial to or unfairly
disregarded the interests of any shareholder, creditor, director, officer or other interested party.

In addition, in certain insolvency proceedings a Canadian court may subordinate claims in respect of the Guarantees to other
claims against a Subsidiary Guarantor under the principle of equitable subordination if the court determines that (1) the holder
of Notes engaged in some type of inequitable or improper conduct, (2) the inequitable or improper conduct resulted in injury
to other creditors or conferred an unfair advantage upon the holder of Notes and (3) equitable subordination is not inconsistent
with the provisions of the relevant solvency statute.

If a court canceled a Guarantee, the holders of Notes would no longer have a claim against that Subsidiary Guarantor or its
assets.

Each Guarantee is limited, by its terms, to an amount not to exceed the maximum amount that can be guaranteed by the
applicable Subsidiary Guarantor without rendering the Guarantee, as it relates to that Subsidiary Guarantor, voidable under
applicable law relating to fraudulent conveyance or fraudulent transfer or similar laws affecting the rights of creditors generally.

Each Subsidiary Guarantor is a consolidated subsidiary of the Parent Company at the date of the balance sheet presented. The
following tables present summarized financial information for the Parent Company and the Subsidiary Guarantors on a
combined basis after elimination of (i) intercompany transactions and balances among the Parent Company and the Subsidiary
Guarantors and (ii) equity in earnings from and investments in any Non-Guarantor Subsidiary.

(In millions)
Total Current Assets(1)...........................................................................................................................
Total Non-Current Assets .....................................................................................................................

Total Current Liabilities ........................................................................................................................
Total Non-Current Liabilities................................................................................................................

Summarized
Balance Sheet
December 31,
2020

4,662
5,426

1,960
7,538

(1)

Includes receivables due from Non-Guarantor Subsidiaries of $2,428 million as of December 31, 2020.

(In millions)
Net Sales................................................................................................................................................
Cost of Goods Sold ...............................................................................................................................
Selling, Administrative and General Expense.......................................................................................
Goodwill and Other Asset Impairments................................................................................................
Rationalizations.....................................................................................................................................
Interest Expense ....................................................................................................................................
Other (Income) Expense........................................................................................................................
Income (Loss) before Income Taxes(2)..................................................................................................

Net Income (Loss).................................................................................................................................
Goodyear Net Income (Loss) ................................................................................................................

Summarized Statement
of Operations
Year Ended
December 31, 2020

$
$

6,114
5,277
1,094
148
95
257
(58)
(699)

(806)
(806)

(2)

Includes income from intercompany transactions with Non-Guarantor Subsidiaries of $527 million for the year ended
December 31, 2020, primarily from royalties, dividends, interest and intercompany product sales.

COMMITMENTS AND CONTINGENT LIABILITIES

Contractual Obligations

The following table presents our contractual obligations and commitments to make future payments as of December 31, 2020:

2022

2021

Total

(In millions)
Debt Obligations(1) ............................................ $ 5,769 $
539 $
Finance Lease Obligations(2) .............................
17
250
Interest Payments(3) ........................................... 1,727
293
Operating Lease Obligations(4).......................... 1,151
245
Pension Benefits(5).............................................
62
310
Other Postretirement Benefits(6) ........................
16
144
Workers’ Compensation(7).................................
29
255
Binding Commitments(8) ................................... 2,054 1,294
Uncertain Income Tax Positions(9) ....................
4

2023
472 $ 1,696 $
2
263
146
62
15
17
165
—
$ 11,671 $ 2,499 $ 1,253 $ 2,366 $

3
277
186
62
16
22
209
6

2024

2025

Beyond
2025

87 $ 1,216 $ 1,759
225
1
548
196
376
110
NA
62
68
15
163
13
143
132
—
—
616 $ 1,655 $ 3,282

2
150
88
62
14
11
111
1

(1)

(2)
(3)

(4)

(5)

Debt obligations include Notes Payable and Overdrafts, and excludes the impact of deferred financing fees and
unamortized discounts.
The minimum lease payments for finance lease obligations are $796 million.
These amounts represent future interest payments related to our existing debt obligations and finance leases based on
fixed and variable interest rates specified in the associated debt and lease agreements. The amounts provided relate
only to existing debt obligations and do not assume the refinancing or replacement of such debt or future changes in
variable interest rates.
Operating lease obligations have not been reduced by minimum sublease rentals of $10 million, $8 million, $6 million,
$4 million, $2 million and $4 million in each of the periods above, respectively, for a total of $34 million. Payments,
net of minimum sublease rentals, total $1,117 million. The present value of the net operating lease payments, including
sublease rentals, is $853 million. The operating leases relate to, among other things, real estate, vehicles, data
processing equipment and miscellaneous other assets. No asset is leased from any related party.
The obligation related to pension benefits is actuarially determined and is reflective of obligations as of December 31,
2020. Although subject to change, the amounts set forth in the table represent the mid-point of the range of our
expected contributions for funded U.S. and non-U.S. pension plans, plus expected cash funding of direct participant
payments to our U.S. and non-U.S. pension plans.

We made significant contributions to fully fund our U.S. pension plans in 2013 and 2014. We have no minimum
funding requirements for our funded U.S. pension plans under current ERISA law or the provisions of our USW
collective bargaining agreement, which requires us to maintain an annual ERISA funded status for the hourly U.S.
pension plan of at least 97%.

Future U.S. pension contributions will be affected by our ability to offset changes in future interest rates with asset
returns from our fixed income portfolio and any changes to ERISA law. For further information on the U.S. pension
investment strategy, refer to Note to the Consolidated Financial Statements No. 17, Pension, Other Postretirement
Benefits and Savings Plans.

Future non-U.S. contributions are affected by factors such as:

•

future interest rate levels,

the amount and timing of asset returns, and

how contributions in excess of the minimum requirements could impact the amount and timing of future
contributions.

(6)

(7)

(8)

(9)

The payments presented above are expected payments for the next 10 years. The payments for other postretirement
benefits reflect the estimated benefit payments of the plans using the provisions currently in effect. Under the relevant
summary plan descriptions or plan documents we have the right to modify or terminate the plans. The obligation
related to other postretirement benefits is actuarially determined on an annual basis.
The payments for workers’ compensation obligations are based upon recent historical payment patterns on claims.
The present value of anticipated claims payments for workers’ compensation is $196 million.
Binding commitments are for raw materials, capital expenditures, utilities, and various other types of contracts. The
obligations to purchase raw materials include supply contracts at both fixed and variable prices. Those with variable
prices are based on index rates for those commodities at December 31, 2020.
These amounts primarily represent expected payments with interest for uncertain income tax positions as of
December 31, 2020. We have reflected them in the period in which we believe they will be ultimately settled based
upon our experience with these matters.

Additional other long term liabilities include items such as general and product liabilities, environmental liabilities and
miscellaneous other long term liabilities. These other liabilities are not contractual obligations by nature. We cannot, with any
degree of reliability, determine the years in which these liabilities might ultimately be settled. Accordingly, these other long
term liabilities are not included in the above table.

In addition, pursuant to certain long term agreements, we will purchase varying amounts of certain raw materials and finished
goods at agreed upon base prices that may be subject to periodic adjustments for changes in raw material costs and market
price adjustments, or in quantities that may be subject to periodic adjustments for changes in our or our suppliers' production
levels. These contingent contractual obligations, the amounts of which cannot be estimated, are not included in the table above.

We do not engage in the trading of commodity contracts or any related derivative contracts. We generally purchase raw
materials and energy through short term, intermediate and long term supply contracts at fixed prices or at formula prices related
to market prices or negotiated prices. We may, however, from time to time, enter into contracts to hedge our energy costs.

At December 31, 2020, we had an agreement to provide a revolving loan commitment to TireHub of up to $100 million. As
of December 31, 2020, $14 million was drawn on this commitment.

Off-Balance Sheet Arrangements

An off-balance sheet arrangement is any transaction, agreement or other contractual arrangement involving an unconsolidated
entity under which a company has:

• made guarantees,

•

retained or held a contingent interest in transferred assets,

undertaken an obligation under certain derivative instruments, or

undertaken any obligation arising out of a material variable interest in an unconsolidated entity that provides financing,
liquidity, market risk or credit risk support to the company, or that engages in leasing, hedging or research and
development arrangements with the company.

We have entered into certain arrangements under which we have provided guarantees that are off-balance sheet arrangements.
Those guarantees totaled $73 million at December 31, 2020. For further information about our guarantees, refer to Note to the
Consolidated Financial Statements No. 19, Commitments and Contingent Liabilities.

FORWARD-LOOKING INFORMATION — SAFE HARBOR STATEMENT

Certain information in this Annual Report (other than historical data and information) may constitute forward-looking
statements regarding events and trends that may affect our future operating results and financial position. The words “estimate,”
“expect,” “intend” and “project,” as well as other words or expressions of similar meaning, are intended to identify forward-
looking statements. You are cautioned not to place undue reliance on forward-looking statements, which speak only as of the
date of this Annual Report. Such statements are based on current expectations and assumptions, are inherently uncertain, are
subject to risks and should be viewed with caution. Actual results and experience may differ materially from the forward-
looking statements as a result of many factors, including:

•

our future results of operations, financial condition and liquidity are expected to be adversely impacted by the COVID-
19 pandemic, and that impact may be material;

if we do not successfully implement our strategic initiatives, our operating results, financial condition and liquidity
may be materially adversely affected;

we face significant global competition and our market share could decline;

deteriorating economic conditions in any of our major markets, or an inability to access capital markets or third-party
financing when necessary, may materially adversely affect our operating results, financial condition and liquidity;

raw material and energy costs may materially adversely affect our operating results and financial condition;

if we experience a labor strike, work stoppage or other similar event our business, results of operations, financial
condition and liquidity could be materially adversely affected;

our international operations have certain risks that may materially adversely affect our operating results, financial
condition and liquidity;

we have foreign currency translation and transaction risks that may materially adversely affect our operating results,
financial condition and liquidity;

our long term ability to meet our obligations, to repay maturing indebtedness or to implement strategic initiatives may
be dependent on our ability to access capital markets in the future and to improve our operating results;

financial difficulties, work stoppages, supply disruptions or economic conditions affecting our major OE customers,
dealers or suppliers could harm our business;

our capital expenditures may not be adequate to maintain our competitive position and may not be implemented in a
timely or cost-effective manner;

we have a substantial amount of debt, which could restrict our growth, place us at a competitive disadvantage or
otherwise materially adversely affect our financial health;

any failure to be in compliance with any material provision or covenant of our debt instruments, or a material reduction
in the borrowing base under our revolving credit facility, could have a material adverse effect on our liquidity and
operations;

our variable rate indebtedness subjects us to interest rate risk, which could cause our debt service obligations to
increase significantly;

we have substantial fixed costs and, as a result, our operating income fluctuates disproportionately with changes in
our net sales;

we may incur significant costs in connection with our contingent liabilities and tax matters;

our reserves for contingent liabilities and our recorded insurance assets are subject to various uncertainties, the
outcome of which may result in our actual costs being significantly higher than the amounts recorded;

we are subject to extensive government regulations that may materially adversely affect our operating results;

we may be adversely affected by any disruption in, or failure of, our information technology systems due to computer
viruses, unauthorized access, cyber-attack, natural disasters or other similar disruptions;

if we are unable to attract and retain key personnel, our business could be materially adversely affected; and

we may be impacted by economic and supply disruptions associated with events beyond our control, such as war, acts
of terror, political unrest, public health concerns, labor disputes or natural disasters.

It is not possible to foresee or identify all such factors. We will not revise or update any forward-looking statement or disclose
any facts, events or circumstances that occur after the date hereof that may affect the accuracy of any forward-looking statement.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We utilize derivative financial instrument contracts and nonderivative instruments to manage interest rate, foreign exchange
and commodity price risks. We have established a control environment that includes policies and procedures for risk assessment
and the approval, reporting and monitoring of derivative financial instrument activities. We do not hold or issue derivative
financial instruments for trading purposes.

Commodity Price Risk

The raw materials costs to which our operations are principally exposed include the cost of natural rubber, synthetic rubber,
carbon black, fabrics, steel cord and other petrochemical-based commodities. Approximately two-thirds of our raw materials
are petroleum-based, the cost of which may be affected by fluctuations in the price of oil. We currently do not hedge commodity
prices. We do, however, use various strategies to partially offset cost increases for raw materials, including centralizing
purchases of raw materials through our global procurement organization in an effort to leverage our purchasing power,
expanding our capabilities to substitute lower cost raw materials, and reducing the amount of material required in each tire.

Interest Rate Risk

We continuously monitor our fixed and floating rate debt mix. Within defined limitations, we manage the mix using refinancing.
At December 31, 2020, 24% of our debt was at variable interest rates averaging 2.79% compared to 32% at an average rate of
3.81% at December 31, 2019.

The following table presents information about long term fixed rate debt, excluding finance leases, at December 31:

(In millions)
Carrying amount — liability ......................................................................................... $
Fair value — liability ....................................................................................................
Pro forma fair value — liability....................................................................................

2020

2019

4,094 $
4,283
4,353

3,434
3,558
3,629

The pro forma information assumes an 100 basis point decrease in market interest rates at December 31 of each year, and
reflects the estimated fair value of fixed rate debt outstanding at that date under that assumption. The sensitivity of our fixed
rate debt to changes in interest rates was determined using current market pricing models.

Foreign Currency Exchange Risk

We enter into foreign currency contracts in order to reduce the impact of changes in foreign exchange rates on our consolidated
results of operations and future foreign currency-denominated cash flows. These contracts reduce exposure to currency
movements affecting existing foreign currency-denominated assets, liabilities, firm commitments and forecasted transactions
resulting primarily from trade purchases and sales, equipment acquisitions, intercompany loans and royalty agreements.
Contracts hedging short term trade receivables and payables normally have no hedging designation.

The following table presents foreign currency derivative information at December 31:

(In millions)
Fair value — asset (liability)......................................................................................... $
Pro forma decrease in fair value ...................................................................................
Contract maturities .......................................................................................................

2020

(33) $
(167)
1/21-12/21

2019

(8)
(199)
1/20-12/21

The pro forma decrease in fair value assumes a 10% adverse change in underlying foreign exchange rates at December 31 of
each year, and reflects the estimated change in the fair value of contracts outstanding at that date under that assumption. The
sensitivity of our foreign currency positions to changes in exchange rates was determined using current market pricing models.

Fair values are recognized on the Consolidated Balance Sheets at December 31 as follows:

(In millions)
Current asset (liability):

Accounts receivable ................................................................................................... $
Other current liabilities...............................................................................................

Long term asset (liability):

Other assets ................................................................................................................ $
Other long term liabilities ..........................................................................................

2020

2019

1 $

(34)

— $
—

10
(18)

1
(1)

For further information on foreign currency contracts, refer to Note to the Consolidated Financial Statements No. 15, Financing
Arrangements and Derivative Financial Instruments.

Refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital
Resources” for a discussion of our management of counterparty risk.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share amounts)
Net Sales (Note 2) ..................................................................................... $
Cost of Goods Sold ...................................................................................
Selling, Administrative and General Expense...........................................
Goodwill and Other Asset Impairments (Notes 11 and 12) ......................
Rationalizations (Note 3)...........................................................................
Interest Expense (Note 4) ..........................................................................
Other (Income) Expense (Note 5) .............................................................
Income (Loss) before Income Taxes .........................................................
United States and Foreign Tax Expense (Note 6) .....................................
Net Income (Loss) .....................................................................................
Less: Minority Shareholders’ Net Income..............................................
Goodyear Net Income (Loss) .................................................................. $
Goodyear Net Income (Loss) — Per Share of Common Stock

Basic ....................................................................................................... $
Weighted Average Shares Outstanding (Note 7) ...................................
Diluted.................................................................................................... $
Weighted Average Shares Outstanding (Note 7) ...................................

2020

Year Ended December 31,
2019

2018

12,321 $
10,337
2,192
330
159
324
119
(1,140)
110
(1,250)
4
(1,254) $

(5.35) $
234
(5.35) $
234

14,745 $
11,602
2,323
—
205
340
98
177
474
(297)
14
(311) $

(1.33) $
233
(1.33) $
233

15,475
11,961
2,312
—
44
321
(174)
1,011
303
708
15
693

2.92
237
2.89
239

The accompanying notes are an integral part of these consolidated financial statements.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(In millions)
Net Income (Loss)..................................................................................... $
Other Comprehensive Income (Loss):

Foreign currency translation, net of tax of $4 in 2020 ($4 in 2019,
($10) in 2018) ......................................................................................
Defined benefit plans:

Amortization of prior service cost and unrecognized gains and
losses included in total benefit cost, net of tax of $35 in 2020
($33 in 2019, $34 in 2018).............................................................
(Increase)/decrease in net actuarial losses, net of tax of ($10) in
2020 (($42) in 2019, $1 in 2018) ...................................................
Immediate recognition of prior service cost and unrecognized
gains and losses due to curtailments, settlements, and
divestitures, net of tax of $7 in 2020 ($2 in 2019, $5 in 2018)......
Prior service credit (cost) from plan amendments, net of tax of
($1) in 2020 ($1 in 2019, ($3) in 2018) .........................................

Deferred derivative gains (losses), net of tax of $0 in 2020 ($0 in
2019, $3 in 2018).................................................................................
Reclassification adjustment for amounts recognized in income,
net of tax of $0 in 2020 ($0 in 2019, $0 in 2018) ..........................
Other Comprehensive Income (Loss)....................................................
Comprehensive Income (Loss) ...............................................................

Less: Comprehensive Income (Loss) Attributable to Minority
Shareholders ...........................................................................................
Goodyear Comprehensive Income (Loss) ............................................. $

2020

Year Ended December 31,
2019

2018

(1,250) $

(297) $

708

(134)

(264)

109

104

(3)

(169)

(2)

(13)
(6)
(1,256)

(3)
(1,253) $

(14)
(59)
(356)

15
(371) $

105

(12)

7
(119)
589

(4)
593

The accompanying notes are an integral part of these consolidated financial statements.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In millions, except share data)
Assets:
Current Assets:

Cash and Cash Equivalents (Note 1) ......................................................................... $
Accounts Receivable (Note 9) ...................................................................................
Inventories (Note 10) .................................................................................................
Prepaid Expenses and Other Current Assets..............................................................
Total Current Assets.............................................................................................
Goodwill (Note 11).......................................................................................................
Intangible Assets (Note 11) ..........................................................................................
Deferred Income Taxes (Note 6) ..................................................................................
Other Assets (Note 12) .................................................................................................
Operating Lease Right-of-Use Assets (Note 14)..........................................................
Property, Plant and Equipment (Note 13) ....................................................................

Total Assets............................................................................................................ $

Liabilities:
Current Liabilities:

Accounts Payable — Trade........................................................................................ $
Compensation and Benefits (Notes 17 and 18) .........................................................
Other Current Liabilities............................................................................................
Notes Payable and Overdrafts (Note 15) ...................................................................
Operating Lease Liabilities due Within One Year (Note 14) ....................................
Long Term Debt and Finance Leases due Within One Year (Notes 14 and 15) .......
Total Current Liabilities ......................................................................................
Operating Lease Liabilities (Note 14) ..........................................................................
Long Term Debt and Finance Leases (Notes 14 and 15) .............................................
Compensation and Benefits (Notes 17 and 18) ............................................................
Deferred Income Taxes (Note 6) ..................................................................................
Other Long Term Liabilities.........................................................................................
Total Liabilities .....................................................................................................

Commitments and Contingent Liabilities (Note 19)
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Common Stock, no par value:

Authorized, 450 million shares, Outstanding shares — 233 million (233 million
in 2019) ...................................................................................................................
Capital Surplus...........................................................................................................
Retained Earnings ......................................................................................................
Accumulated Other Comprehensive Loss (Note 21).................................................
Goodyear Shareholders’ Equity ..........................................................................
Minority Shareholders’ Equity — Nonredeemable ......................................................
Total Shareholders’ Equity ..................................................................................
Total Liabilities and Shareholders’ Equity......................................................... $

The accompanying notes are an integral part of these consolidated financial statements.

December 31,

2020

2019

1,539 $
1,691
2,153
237
5,620
408
135
1,467
952
851
7,073
16,506 $

2,945 $
540
865
406
198
152
5,106
684
5,432
1,470
84
471
13,247

233
2,171
4,809
(4,135)
3,078
181
3,259
16,506 $

908
1,941
2,851
234
5,934
565
137
1,527
959
855
7,208
17,185

2,908
536
734
348
199
562
5,287
668
4,753
1,334
90
508
12,640

233
2,141
6,113
(4,136)
4,351
194
4,545
17,185

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

Common Stock

Amount

Capital
Surplus

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Goodyear
Shareholders'
Equity

Minority
Shareholders'
Equity — Non-
Redeemable

Total
Shareholders'
Equity

(Dollars in millions, except per share amounts)
Balance at December 31, 2017
(after deducting 38,308,825
common treasury shares) ............................ 240,154,602 $
Comprehensive income (loss):

Net income..................................................
Foreign currency translation
(net of tax of ($10)) .................................
Amortization of prior service
cost and unrecognized gains
and losses included in total
benefit cost (net of tax of $34) ................
Decrease in net actuarial losses
(net of tax of $1) ......................................
Immediate recognition of prior
service cost and unrecognized
gains and losses due to
curtailments, settlements and
divestitures (net of tax of $5)...................
Prior service cost from plan
amendments (net of tax of ($3)) ..............
Deferred derivative gains
(net of tax of $3) ......................................

Reclassification adjustment
for amounts recognized in
income (net of tax of $0)......................
Other comprehensive income (loss) ........
Total comprehensive income (loss).............
Adoption of new accounting standard ...........
Stock-based compensation plans ...................
Repurchase of common stock ........................
Dividends declared.........................................
Common stock issued from treasury..............
Purchase of minority shares ...........................

240 $

2,295 $

6,044 $

(3,976) $

4,603 $

247 $

4,850

693

708

(245)

(19)

(264)

105

(12)

105

(12)

7
(100)
593
(1)
19
(220)
(139)
4
5

105

(12)

7
(119)
589
(1)
19
(220)
(147)
4
(24)

(19)
(4)

(8)

(29)

(8,936,302)

(9)

952,743

(1)

(139)

19
(211)

3
5

Balance at December 31, 2018
(after deducting 46,292,384
common treasury shares) ............................ 232,171,043 $

232 $

2,111 $

6,597 $

(4,076) $

4,864 $

206 $

5,070

We declared and paid cash dividends of $0.58 per common share for the year ended December 31, 2018.

The accompanying notes are an integral part of these consolidated financial statements.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY — (Continued)

Common Stock

Amount

Capital
Surplus

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Goodyear
Shareholders'
Equity

Minority
Shareholders'
Equity — Non-
Redeemable

Total
Shareholders'
Equity

(Dollars in millions, except per share amounts)
Balance at December 31, 2018
(after deducting 46,292,384
common treasury shares)........................... 232,171,043 $
Comprehensive income (loss):

Net income (loss) ......................................
Foreign currency translation
(net of tax of $4) ....................................
Amortization of prior service
cost and unrecognized gains
and losses included in total
benefit cost (net of tax of $33)...............
Increase in net actuarial losses
(net of tax of ($42))................................
Immediate recognition of prior
service cost and unrecognized
gains and losses due to
curtailments, settlements and
divestitures (net of tax of $2) .................
Prior service credit from plan
amendments (net of tax of $1) ...............
Deferred derivative gains
(net of tax of $0) ....................................

Reclassification adjustment
for amounts recognized in
income (net of tax of $0) ....................
Other comprehensive income (loss).......
Total comprehensive income (loss) ...........
Adoption of new accounting standard..........
Stock-based compensation plans..................
Dividends declared .......................................
Common stock issued from treasury ............
Purchase of minority shares .........................

232 $

2,111 $

6,597 $

(4,076) $

4,864 $

206 $

5,070

(311)

(297)

104

(169)

(14)

(14)
(60)
(371)
(23)
29
(150)
1
1

104

(169)

(14)
(59)
(356)
(23)
29
(155)
1
(21)

1
15

(5)

(22)

479,275

(23)

(150)

Balance at December 31, 2019
(after deducting 45,813,109
common treasury shares)........................... 232,650,318 $

233 $

2,141 $

6,113 $

(4,136) $

4,351 $

194 $

4,545

We declared and paid cash dividends of $0.64 per common share for the year ended December 31, 2019.

The accompanying notes are an integral part of these consolidated financial statements.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY — (Continued)

(Dollars in millions, except per share amounts)
Balance at December 31, 2019
(after deducting 45,813,109
common treasury shares)........................... 232,650,318 $
Comprehensive income (loss):

Common Stock

Amount

Capital
Surplus

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Goodyear
Shareholders'
Equity

Minority
Shareholders'
Equity — Non-
Redeemable

Total
Shareholders'
Equity

233 $

2,141 $

6,113 $

(4,136) $

4,351 $

194 $

4,545

(1,254)

(1,250)

(128)

(6)

(134)

Net income (loss) ......................................
Foreign currency translation
(net of tax of $4) ....................................
Amortization of prior service
cost and unrecognized gains
and losses included in total
benefit cost (net of tax of $35)...............
Increase in net actuarial losses
(net of tax of ($10))................................
Immediate recognition of prior
service cost and unrecognized
gains and losses due to
curtailments, settlements and
divestitures (net of tax of $7) .................
Prior service cost from plan
amendments (net of tax of ($1)).............
Deferred derivative gains
(net of tax of $0) ....................................

Reclassification adjustment
for amounts recognized in
income (net of tax of $0) ....................
Other comprehensive income (loss).......
Total comprehensive income (loss) ...........
Adoption of new accounting
standard (Note 1) .......................................
Stock-based compensation plans..................
Dividends declared .......................................
Common stock issued from treasury ............

109

(2)

(13)

109

(2)

(13)
1
(1,253)

(12)
32
(38)
(2)

(1)

(7)
(3)

(10)

109

(3)

(2)

(13)
(6)
(1,256)

(12)
32
(48)
(2)

569,780

(12)

(38)

(2)

Balance at December 31, 2020
(after deducting 45,243,329
common treasury shares)........................... 233,220,098 $

233 $

2,171 $

4,809 $

(4,135) $

3,078 $

181 $

3,259

We declared and paid cash dividends of $0.16 per common share for the year ended December 31, 2020.

The accompanying notes are an integral part of these consolidated financial statements.

Year Ended December 31,
2019

2018

2020

(1,250) $

(297) $

708

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)
Cash Flows from Operating Activities:
Net Income (Loss) .................................................................................................................... $

Adjustments to Reconcile Net Income (Loss) to Cash Flows from Operating Activities:

Depreciation and Amortization............................................................................................
Amortization and Write-Off of Debt Issuance Costs...........................................................
Goodwill and Other Asset Impairments (Notes 11 and 12).................................................
Provision for Deferred Income Taxes..................................................................................
Net Pension Curtailments and Settlements (Note 17) .........................................................
Net Rationalization Charges (Note 3)..................................................................................
Rationalization Payments ....................................................................................................
Net (Gains) Losses on Asset Sales (Note 5) ........................................................................
Gain on TireHub transaction, net of transaction costs (Note 5) ..........................................
Operating Lease Expense (Note 14) ....................................................................................
Operating Lease Payments (Note 14) ..................................................................................
Pension Contributions and Direct Payments .......................................................................

Changes in Operating Assets and Liabilities, Net of Asset Acquisitions and Dispositions:

Accounts Receivable............................................................................................................
Inventories ...........................................................................................................................
Accounts Payable — Trade..................................................................................................
Compensation and Benefits .................................................................................................
Other Current Liabilities......................................................................................................
Other Assets and Liabilities.................................................................................................
Total Cash Flows from Operating Activities......................................................................

Cash Flows from Investing Activities:

Capital Expenditures...............................................................................................................
Asset Dispositions...................................................................................................................
Short Term Securities Acquired .............................................................................................
Short Term Securities Redeemed ...........................................................................................
Notes Receivable ....................................................................................................................
Other Transactions ..................................................................................................................
Total Cash Flows from Investing Activities .......................................................................

Cash Flows from Financing Activities:

859
11
330
23
18
159
(186)
2
—
286
(268)
(56)

132
713
26
95
26
195
1,115

(647)
—
(96)
96
(13)
(7)
(667)

795
15
—
323
6
205
(59)
(16)
—
292
(267)
(79)

71
6
5
184
(50)
73
1,207

(770)
12
(113)
106
(7)
(28)
(800)

Short Term Debt and Overdrafts Incurred ..............................................................................
Short Term Debt and Overdrafts Paid ....................................................................................
Long Term Debt Incurred .......................................................................................................
Long Term Debt Paid .............................................................................................................
Common Stock Issued ............................................................................................................
Common Stock Repurchased (Note 20) .................................................................................
Common Stock Dividends Paid (Note 20) .............................................................................
Transactions with Minority Interests in Subsidiaries .............................................................
Debt Related Costs and Other Transactions ...........................................................................
Total Cash Flows from Financing Activities ......................................................................
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash.................
Net Change in Cash, Cash Equivalents and Restricted Cash...........................................
Cash, Cash Equivalents and Restricted Cash at Beginning of the Period .................................

Cash, Cash Equivalents and Restricted Cash at End of the Period................................. $

1,651
(1,593)
6,251
(6,059)
—
—
(37)
(10)
—
203
(1)
650
974
1,624 $

1,880
(1,933)
5,942
(6,008)
1
—
(148)
(26)
(15)
(307)
1
101
873
974 $

The accompanying notes are an integral part of these consolidated financial statements.

778
15
—
131
22
44
(174)
(1)
(272)
—
—
(74)

(172)
(171)
223
(26)
(181)
66
916

(811)
2
(68)
68
(55)
(3)
(867)

1,944
(1,795)
6,455
(6,469)
4
(220)
(138)
(31)
7
(243)
(43)
(237)
1,110
873

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Accounting Policies

A summary of the significant accounting policies used in the preparation of the accompanying consolidated financial statements
follows:

Basis of Presentation

We maintain a robust business continuity plan to adequately respond to situations such as the COVID-19 pandemic, including
a framework for remote work arrangements, in order to effectively maintain operations, including financial reporting systems,
internal control over financial reporting and disclosure controls and procedures.

Effective January 1, 2020, we early adopted, as permitted, SEC amendments to the financial disclosure requirements for
registered debt securities with subsidiary guarantees. The amendments replace the condensed consolidating financial
information with summarized financial information of the issuers and guarantors, require expanded qualitative disclosures with
respect to information about guarantors, the terms and conditions of guarantees and the factors that may affect payment, and
permit these disclosures to be provided outside the footnotes to the parent company’s audited annual and interim consolidated
financial statements. We have elected to provide this information in Management’s Discussion and Analysis of Financial
Condition and Results of Operations.

Recently Adopted Accounting Standards

Effective January 1, 2020, we adopted an accounting standards update with new guidance on accounting for credit losses on
financial instruments. The new guidance includes an impairment model for estimating credit losses that is based on expected
losses, rather than incurred losses. As a result of using the modified retrospective adoption approach, $12 million was recorded
as a cumulative effect adjustment to decrease Retained Earnings, with Accounts Receivable decreasing by $15 million and
Deferred Income Taxes increasing by $3 million.

The following table presents the balance of allowances for credit losses, which represents our allowance for doubtful accounts
associated with accounts receivable, and the changes during the year ended December 31, 2020:

(In millions)
Balance at January 1, 2020................................ $
Current period provision ......................................
Write-offs charged against the allowance ............
Translation............................................................
Balance at December 31, 2020........................... $

Americas

Europe, Middle
East & Africa

Asia Pacific

Total

38 $
10
(4)
(2)
42 $

78 $
15
(7)
6
92 $

10 $
5
—
1
16 $

126
30
(11)
5
150

Effective January 1, 2020, we adopted an accounting standards update with new guidance requiring a customer in a cloud
computing arrangement that is a service contract to follow existing internal-use software guidance to determine which
implementation costs to capitalize as an asset. The adoption of this standards update did not impact our consolidated financial
statements.

Effective April 1, 2020, we early adopted, as permitted, an accounting standards update with new guidance that changes the
accounting for certain income tax transactions. The adoption of this standards update did not have a material impact on our
consolidated financial statements.

Recently Issued Accounting Standards

In January 2020, the Financial Accounting Standards Board issued an accounting standards update which eliminates differences
in practice among fair value accounting for investments in equity securities, equity method investments and certain derivative
instruments. The new standard is expected to increase comparability of the accounting for these items. The standards update is
effective prospectively for fiscal years and interim periods beginning after December 15, 2020, with early adoption permitted.
The adoption of this standards update will not have a material impact on our consolidated financial statements.

Principles of Consolidation

The consolidated financial statements include the accounts of all legal entities in which we hold a controlling financial interest.
A controlling financial interest generally arises from our ownership of a majority of the voting shares of our subsidiaries. We

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

would also hold a controlling financial interest in variable interest entities if we are considered to be the primary beneficiary.
Investments in companies in which we do not own a majority interest and we have the ability to exercise significant influence
over operating and financial policies are accounted for using the equity method. Investments in other companies are carried at
cost. All intercompany balances and transactions have been eliminated in consolidation.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the consolidated financial statements and related notes to
the consolidated financial statements. Actual results could differ from those estimates. On an ongoing basis, management
reviews its estimates, including those related to:

•

general and product liabilities and other litigation,

workers’ compensation,

goodwill, intangibles and other long-lived assets,

deferred tax asset valuation allowances and uncertain income tax positions,

pension and other postretirement benefits, and

various other operating allowances and accruals, based on currently available information.

Changes in facts and circumstances may alter such estimates and affect results of operations and financial position in future
periods.

Revenue Recognition and Accounts Receivable Valuation

Sales are recognized when obligations under the terms of a contract are satisfied and control is transferred. This generally
occurs with shipment or delivery, depending on the terms of the underlying contract, or when services have been rendered.
Sales are measured as the amount of consideration we expect to receive in exchange for transferring goods or providing
services. The amount of consideration we receive and sales we recognize can vary due to changes in sales incentives, rebates,
rights of return or other items we offer our customers, for which we estimate the expected amounts based on an analysis of
historical experience, or as the most likely amount in a range of possible outcomes. Payment terms with customers vary by
region and customer, but are generally 30-90 days or at the point of sale for our consumer retail locations. Net sales exclude
sales, value added and other taxes. Costs to obtain contracts are generally expensed as incurred due to the short term nature of
individual contracts. Incidental items that are immaterial in the context of the contract are recognized as expense as incurred.
We have elected to recognize the costs incurred for transportation of products to customers as a component of cost of goods
sold ("CGS").

Appropriate provisions are made for uncollectible accounts based on historical loss experience, portfolio duration, economic
conditions and credit risk, considering both expected future losses as well as current incurred losses. The adequacy of the
allowances are assessed quarterly.

Research and Development Costs

Research and development costs include, among other things, materials, equipment, compensation and contract services. These
costs are expensed as incurred and included as a component of CGS. Research and development expenditures were $390
million, $430 million and $424 million in 2020, 2019 and 2018, respectively.

Warranty

Warranties are provided on the sale of certain of our products and services and an accrual for estimated future claims is recorded
at the time revenue is recognized. Tire replacement under most of the warranties we offer is on a prorated basis. Warranty
reserves are based on past claims experience, sales history and other considerations. Refer to Note to the Consolidated Financial
Statements No. 19, Commitments and Contingent Liabilities.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Environmental Cleanup Matters

We expense environmental costs related to existing conditions resulting from past or current operations and from which no
current or future benefit is discernible. Expenditures that extend the life of the related property or mitigate or prevent future
environmental contamination are capitalized. We determine our liability on a site by site basis and record a liability at the time
when it is probable and can be reasonably estimated. Our estimated liability is reduced to reflect the anticipated participation
of other potentially responsible parties in those instances where it is probable that such parties are legally responsible and
financially capable of paying their respective shares of the relevant costs. Our estimated liability is not discounted or reduced
for possible recoveries from insurance carriers. Refer to Note to the Consolidated Financial Statements No. 19, Commitments
and Contingent Liabilities.

Legal Costs

We record a liability for estimated legal and defense costs related to pending general and product liability claims, environmental
matters and workers’ compensation claims. Refer to Note to the Consolidated Financial Statements No. 19, Commitments and
Contingent Liabilities.

Advertising Costs

Costs incurred for producing and communicating advertising are generally expensed when incurred as a component of selling,
administrative and general expense ("SAG"). Costs incurred under our cooperative advertising programs with dealers and
franchisees are generally recorded as reductions of sales as related revenues are recognized. Advertising costs, including costs
for our cooperative advertising programs with dealers and franchisees, were $304 million, $353 million and $345 million in
2020, 2019 and 2018, respectively.

Rationalizations

We record costs for rationalization actions implemented to reduce excess and high-cost manufacturing capacity and operating
and administrative costs. Associate-related costs include severance, supplemental unemployment compensation and benefits,
medical benefits, pension curtailments, postretirement benefits, and other termination benefits. For ongoing benefit
arrangements, a liability is recognized when it is probable that employees will be entitled to benefits and the amount can be
reasonably estimated. For one-time benefit arrangements, a liability is incurred and must be accrued at the date the plan is
communicated to employees, unless they will be retained beyond a minimum retention period. In this case, the liability is
calculated at the date the plan is communicated to employees and is accrued ratably over the future service period. For voluntary
benefit arrangements, a liability is not estimable and is not recognized until eligible associates apply for the benefit and we
accept the applications. Other costs generally include non-cancelable lease, contract termination and relocation costs. A liability
for these costs is recognized in the period in which the liability is incurred. Rationalization charges related to accelerated
depreciation and asset impairments are recorded in CGS or SAG. Refer to Note to the Consolidated Financial Statements No.
3, Costs Associated with Rationalization Programs.

Income Taxes

Income taxes are recognized during the year in which transactions enter into the determination of financial statement income,
with deferred taxes being provided for temporary differences between carrying values of assets and liabilities for financial
reporting purposes and such carrying values as measured under applicable tax laws. The effect on deferred tax assets or
liabilities of a change in the tax law or tax rate is recognized in the period the change is enacted. Valuation allowances are
recorded to reduce net deferred tax assets to the amount that is more likely than not to be realized. The calculation of our tax
liabilities also involves considering uncertainties in the application of complex tax regulations. We recognize liabilities for
uncertain income tax positions based on our estimate of whether it is more likely than not that additional taxes will be required
and we report related interest and penalties as income taxes. To the extent that we incur expense under the global intangible
low-taxed income provisions we will treat it as a component of income tax expense in the period incurred. Refer to Note to the
Consolidated Financial Statements No. 6, Income Taxes.

Cash and Cash Equivalents / Consolidated Statements of Cash Flows

Cash and cash equivalents consist of cash on hand and marketable securities with original maturities of three months or less.
Substantially all of our cash and short-term investment securities are held with investment grade rated counterparties. At
December 31, 2020, our cash investments with any single counterparty did not exceed approximately $345 million.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Cash flows associated with derivative financial instruments designated as hedges of identifiable transactions or events are
classified in the same category as the cash flows from the related hedged items. Cash flows associated with derivative financial
instruments not designated as hedges are classified as operating activities. Bank overdrafts, if any, are recorded within Notes
Payable and Overdrafts. Cash flows associated with bank overdrafts are classified as financing activities.

Customer prepayments for products and government grants received that predominately relate to operations are reported as
operating activities. Government grants received that are predominately related to capital expenditures are reported as investing
activities. The Consolidated Statements of Cash Flows are presented net of finance leases of $3 million, $36 million and $6
million originating in the years ended December 31, 2020, 2019 and 2018, respectively, and accrued capital expenditures
financed with extended terms of $15 million in 2020. Cash flows from investing activities in 2020 exclude $224 million of
accrued capital expenditures remaining unpaid at December 31, 2020, and include payment for $243 million of capital
expenditures that were accrued and unpaid at December 31, 2019. Cash flows from investing activities in 2019 exclude $243
million of accrued capital expenditures remaining unpaid at December 31, 2019, and include payment for $266 million of
capital expenditures that were accrued and unpaid at December 31, 2018. Cash flows from investing activities in 2018 exclude
$266 million of accrued capital expenditures remaining unpaid at December 31, 2018, and include payment for $265 million
of capital expenditures that were accrued and unpaid at December 31, 2017.

Restricted Cash

The following table provides a reconciliation of Cash, Cash Equivalents and Restricted Cash as reported within the
Consolidated Statements of Cash Flows:

(In millions)
Cash and Cash Equivalents ....................................................................... $
Restricted Cash..........................................................................................
Total Cash, Cash Equivalents and Restricted Cash............................. $

2020

December 31,
2019

2018

1,539 $
85
1,624 $

908 $
66
974 $

801
72
873

Restricted Cash, which is included in Prepaid Expenses and Other Current Assets in the Consolidated Balance Sheets, primarily
represents amounts required to be set aside in connection with accounts receivable factoring programs. The restrictions lapse
when cash from factored accounts receivable is remitted to the purchaser of those receivables.

Restricted Net Assets

In certain countries where we operate, transfers of funds into or out of such countries by way of dividends, loans or advances
are generally or periodically subject to various governmental regulations. In addition, certain of our credit agreements and other
debt instruments limit the ability of foreign subsidiaries to make cash distributions. At December 31, 2020, approximately $680
million of net assets were subject to such regulations or limitations.

Inventories

Inventories are stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out or the average
cost method. Costs include direct material, direct labor and applicable manufacturing and engineering overhead. We allocate
fixed manufacturing overheads based on normal production capacity and recognize abnormal manufacturing costs as period
costs. We determine a provision for excess and obsolete inventory based on management’s review of inventories on hand
compared to estimated future usage and sales. Refer to Note to the Consolidated Financial Statements No. 10, Inventories.

Goodwill and Other Intangible Assets

Goodwill is recorded when the cost of acquired businesses exceeds the fair value of the identifiable net assets acquired.
Goodwill and intangible assets with indefinite useful lives are not amortized but are assessed for impairment annually with the
option to perform a qualitative assessment to determine whether further impairment testing is necessary or to perform a
quantitative assessment by comparing the fair value of the reporting unit or indefinite-lived intangible to its carrying amount.
Under the qualitative assessment, an entity is not required to calculate the fair value unless the entity determines that it is more
likely than not that the fair value is less than the carrying amount. If under the quantitative assessment the fair value is less than
the carrying amount, then an impairment loss will be recorded for the difference between the carrying value and the fair value.
We perform a quantitative assessment at least once every five years.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

In addition to annual testing, impairment testing is conducted when events occur or circumstances change that would more
likely than not reduce the fair value of the asset below its carrying amount. Goodwill and intangible assets with indefinite useful
lives would be written down to fair value if considered impaired. Intangible assets with finite useful lives are amortized to their
estimated residual values over such finite lives, and reviewed for impairment whenever events or circumstances warrant such
a review. Refer to Note to the Consolidated Financial Statements No. 11, Goodwill and Intangible Assets.

Investments

Investments in marketable securities are stated at fair value. Fair value is determined using quoted market prices at the end of
the reporting period and, when appropriate, exchange rates at that date. Unrealized gains and losses on marketable equity
securities are recorded in earnings. Unrealized gains and losses on marketable debt securities classified as available-for-sale
are recorded in Accumulated Other Comprehensive Income (Loss) (“AOCL”), net of tax. Our investment in TireHub, LLC
(“TireHub”), a distribution joint venture in the U.S., is accounted for under the equity method.

We regularly review our investments to determine whether a decline in fair value below their recorded amount is other than
temporary. If the decline in fair value is judged to be other than temporary, the investment is written down to fair value and the
amount of the write-down is included in the Consolidated Statements of Operations. Refer to Notes to the Consolidated
Financial Statements No. 12, Other Assets and Investments, No. 16, Fair Value Measurements, and No. 21, Reclassifications
out of Accumulated Other Comprehensive Loss.

Property, Plant and Equipment

Property, plant and equipment are stated at cost. Depreciation is computed using the straight-line method. Additions and
improvements that substantially extend the useful life of property, plant and equipment, and interest costs incurred during the
construction period of major projects are capitalized. Government grants to us that are predominately related to capital
expenditures are recorded as reductions of the cost of the associated assets. Repair and maintenance costs are expensed as
incurred. Property, plant and equipment are depreciated to their estimated residual values over their estimated useful lives, and
reviewed for impairment whenever events or circumstances warrant such a review. Depreciation expense for property, plant
and equipment was $857 million, $793 million and $776 million in 2020, 2019 and 2018, respectively. Refer to Notes to the
Consolidated Financial Statements No. 4, Interest Expense, and No. 13, Property, Plant and Equipment.

Leases

Effective January 1, 2019, we adopted, using the modified retrospective adoption approach, an accounting standards update
with new guidance relating to leases. Our adoption of this standards update resulted in adjustments that increased Total Assets
by $873 million, increased Long Term Debt and Finance Leases by $14 million, and decreased Goodyear Shareholders’ Equity
and Total Shareholders’ Equity by $23 million. Periods prior to 2019 have not been restated for the adoption of this standards
update.

We determine if an arrangement is or contains a lease at inception. We enter into leases primarily for our distribution facilities,
manufacturing equipment, administrative offices, retail stores, vehicles and data processing equipment under varying terms
and conditions. Our leases have remaining lease terms of less than 1 year to approximately 50 years. Most of our leases include
options to extend the lease, with renewal terms ranging from 1 to 50 years or more, and some include options to terminate the
lease within 1 year. If it is reasonably certain that an option to extend or terminate a lease will be exercised, that option is
considered in the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet, and we
recognize short-term lease expense for these leases on a straight-line basis over the lease term.

Certain of our lease agreements include variable lease payments, generally based on consumer price indices. Variable lease
payments that are assigned to an index are determined based on the initial index at commencement, and the variability based
on changes in the index is accounted for as it changes. The variable portion of payments is not included in the initial
measurement of the right-of-use asset or lease liability due to the uncertainty of the payment amount and are recorded as lease
expense in the period incurred. Our lease agreements do not contain any material residual value guarantees or material
restrictive covenants. We have lease agreements with lease and non-lease components, which are accounted for separately.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Operating leases are included in Operating Lease Right-of-Use (“ROU”) Assets, Operating Lease Liabilities due Within One
Year and Operating Lease Liabilities on our Consolidated Balance Sheets. Finance leases are included in Property, Plant and
Equipment, Long Term Debt and Finance Leases due Within One Year, and Long Term Debt and Finance Leases on our
Consolidated Balance Sheets.

ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to
make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the commencement
date based on the present value of lease payments over the lease term. Generally, we use our incremental borrowing rate based
on the information available at the commencement date in determining the present value of lease payments, unless there is a
rate stated in the lease agreement. Operating lease expense is recognized on a straight-line basis over the lease term. Refer to
Note to the Consolidated Financial Statements No. 14, Leases.

Foreign Currency Translation

The functional currency for most subsidiaries outside the United States is the local currency. Financial statements of these
subsidiaries are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a
weighted average exchange rate for each period for revenues, expenses, gains and losses. The U.S. dollar is used as the
functional currency in countries with a history of high inflation and in countries that predominantly sell into the U.S. dollar
export market. For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency
are included in Other (Income) Expense. Translation adjustments are recorded in AOCL. Income taxes are generally not
provided for foreign currency translation adjustments.

Derivative Financial Instruments and Hedging Activities

To qualify for hedge accounting, hedging instruments must be designated as hedges and meet defined correlation and
effectiveness criteria. These criteria require that the anticipated cash flows and/or changes in fair value of the hedging
instrument substantially offset those of the position being hedged.

Derivative contracts are reported at fair value on the Consolidated Balance Sheets as Accounts Receivable, Other Assets, Other
Current Liabilities or Other Long Term Liabilities. Deferred gains and losses on contracts designated as cash flow hedges are
recorded net of tax in AOCL.

Interest Rate Contracts — Gains and losses on contracts designated as cash flow hedges are initially deferred and recorded in
AOCL. Amounts are transferred from AOCL and recognized in income as Interest Expense in the same period that the hedged
item is recognized in income. Gains and losses on contracts designated as fair value hedges are recognized in income in the
current period as Interest Expense. Gains and losses on contracts with no hedging designation are recorded in the current period
in Other (Income) Expense.

Foreign Currency Contracts — Gains and losses on contracts designated as cash flow hedges are initially deferred and recorded
in AOCL. Amounts are transferred from AOCL and recognized in income in the same period and on the same line that the
hedged item is recognized in income. Gains and losses on contracts designated as fair value hedges, excluding premiums and
discounts, are recorded in Other (Income) Expense in the current period. Gains and losses on contracts with no hedging
designation are also recorded in Other (Income) Expense in the current period. We do not include premiums or discounts on
forward currency contracts in our assessment of hedge effectiveness. Premiums and discounts on contracts designated as hedges
are recorded in AOCL. The amounts are recognized in the Statement of Operations on a straight-line basis over the life of the
contract on the same line that the hedged item is recognized in the Statement of Operations.

Net Investment Hedging — Nonderivative instruments denominated in foreign currencies are used from time to time to hedge
net investments in foreign subsidiaries. Gains and losses on these instruments are deferred and recorded in AOCL as Foreign
Currency Translation Adjustments. These gains and losses are only recognized in income upon the complete or partial sale of
the related investment or the complete liquidation of the investment.

Termination of Contracts — Gains and losses (including deferred gains and losses in AOCL) are recognized in Other (Income)
Expense when contracts are terminated concurrently with the termination of the hedged position. To the extent that such
position remains outstanding, gains and losses are amortized to Interest Expense or to Other (Income) Expense over the
remaining life of that position. Gains and losses on contracts that we temporarily continue to hold after the early termination
of a hedged position, or that otherwise no longer qualify for hedge accounting, are recognized in Other (Income) Expense.
Refer to Note to the Consolidated Financial Statements No. 15, Financing Arrangements and Derivative Financial Instruments.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Stock-Based Compensation

We measure compensation cost arising from the grant of stock-based awards to employees at fair value and recognize such
cost in income over the period during which the service is provided, usually the vesting period. We recognize compensation
expense using the straight-line approach.

Stock-based awards to employees include grants of performance share units, restricted stock units and stock options. We
measure the fair value of grants of performance share units and restricted stock units based primarily on the closing market
price of a share of our common stock on the date of the grant, modified as appropriate to take into account the features of such
grants.

We estimate the fair value of stock options using the Black-Scholes valuation model. Assumptions used to estimate
compensation expense are determined as follows:

•

Expected term represents the period of time that options granted are expected to be outstanding based on our historical
experience of option exercises;

Expected volatility is measured using the weighted average of historical daily changes in the market price of our
common stock over the expected term of the award and implied volatility calculated for our exchange traded options
with an expiration date greater than one year;

Risk-free interest rate is equivalent to the implied yield on zero-coupon U.S. Treasury bonds with a remaining maturity
equal to the expected term of the awards; and

Forfeitures are based substantially on the history of cancellations of similar awards granted in prior years.

Refer to Note to the Consolidated Financial Statements No. 18, Stock Compensation Plans.

Earnings Per Share of Common Stock

Basic earnings per share are computed based on the weighted average number of common shares outstanding. Diluted earnings
per share primarily reflects the dilutive impact of outstanding stock options and other stock based awards. All earnings per
share amounts in these notes to the consolidated financial statements are diluted, unless otherwise noted. Refer to Note to the
Consolidated Financial Statements No. 7, Earnings Per Share.

Fair Value Measurements

Valuation Hierarchy

Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency
of inputs to the valuation as of the measurement date.

•

Level 1 — Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in active markets.

Level 2 — Valuation is based upon quoted prices for similar assets and liabilities in active markets, or other inputs
that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial
instrument.

Level 3 — Valuation is based upon other unobservable inputs that are significant to the fair value measurement.

The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to
the measurement. Valuation methodologies used for assets and liabilities measured at fair value are as follows:

Investments

Where quoted prices are available in an active market, investments are classified within Level 1 of the valuation hierarchy.
Level 1 securities include highly liquid government bonds, certain mortgage products and exchange-traded equities. If quoted
market prices are not available, fair values are estimated using quoted prices of securities with similar characteristics or inputs
other than quoted prices that are observable for the security, and would be classified within Level 2 of the valuation hierarchy.
In certain cases where there is limited activity or less transparency around inputs to the valuation, securities would be classified
within Level 3 of the valuation hierarchy.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Derivative Financial Instruments

Exchange-traded derivative financial instruments that are valued using quoted prices would be classified within Level 1 of the
valuation hierarchy. Derivative financial instruments valued using internally-developed models that use as their basis readily
observable market parameters are classified within Level 2 of the valuation hierarchy. Derivative financial instruments that are
valued based upon models with significant unobservable market parameters, and that are normally traded less actively, would
be classified within Level 3 of the valuation hierarchy. Refer to Notes to the Consolidated Financial Statements No. 15,
Financing Arrangements and Derivative Financial Instruments, and No. 16, Fair Value Measurements.

Reclassifications and Adjustments

Certain items previously reported in specific financial statement captions have been reclassified to conform to the current
presentation.

Note 2. Net Sales

The following table shows disaggregated net sales from contracts with customers by major source for the year ended
December 31, 2020:

(In millions)
Tire unit sales(1) .................................................................. $
Other tire and related sales .................................................
Retail services and service related sales .............................
Chemical sales ....................................................................
Other ...................................................................................
Net Sales by reportable segment ..................................... $

Americas

Europe, Middle East
and Africa

Asia Pacific

Total

5,138 $
549
538
317
14
6,556 $

3,611 $
309
95
—
5
4,020 $

1,590 $
98
55
—
2
1,745 $

10,339
956
688
317
21
12,321

(1)

Americas tire unit sales for 2020 include a gain of $34 million for a one-time legal settlement.

The following table shows disaggregated net sales from contracts with customers by major source for the year ended
December 31, 2019:

(In millions)
Tire unit sales ..................................................................... $
Other tire and related sales .................................................
Retail services and service related sales .............................
Chemical sales ....................................................................
Other ...................................................................................
Net Sales by reportable segment ..................................... $

Americas

Europe, Middle East
and Africa

Asia Pacific

Total

6,300 $
659
535
403
25
7,922 $

4,300 $
363
39
—
6
4,708 $

1,924 $
117
70
—
4
2,115 $

12,524
1,139
644
403
35
14,745

The following table shows disaggregated net sales from contracts with customers by major source for the year ended
December 31, 2018:

Americas

Europe, Middle East
and Africa

Asia Pacific

Total

6,381 $
656
564
554
13
8,168 $

4,670 $
379
34
—
7
5,090 $

2,009 $
127
77
—
4
2,217 $

13,060
1,162
675
554
24
15,475

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Tire unit sales consist of consumer, commercial, farm and off-the-road tire sales, including the sale of new Company-branded
tires through Company-owned retail channels. Other tire and related sales consist of aviation, race and motorcycle tire sales,
retread sales and other tire related sales. Sales of tires in this category are not included in reported tire unit information. Retail
services and service related sales consist of automotive services performed for customers through our Company-owned retail
channels, and includes service related products. Chemical sales relate to the sale of synthetic rubber and other chemicals to
third parties, and exclude intercompany sales. Other sales include items such as franchise fees and ancillary tire parts.

When we receive consideration from a customer prior to transferring goods or services under the terms of a sales contract, we
record deferred revenue, which represents a contract liability. Deferred revenue included in Other Current Liabilities in the
Consolidated Balance Sheets totaled $23 million at December 31, 2020 and 2019. Deferred revenue included in Other Long
Term Liabilities in the Consolidated Balance Sheets totaled $27 million and $31 million at December 31, 2020 and 2019,
respectively. We recognize deferred revenue after we have transferred control of the goods or services to the customer and all
revenue recognition criteria are met.

The following table presents the balances of deferred revenue related to contracts with customers, and changes during the years
ended December 31:

(In millions)
Balance at January 1....................................................................... $
Revenue deferred during period ........................................................
Revenue recognized during period....................................................
Impact of foreign currency translation ..............................................
Balance at December 31.................................................................. $

2020

2019

54 $
169
(173)
—
50 $

78
155
(179)
—
54

Note 3. Costs Associated with Rationalization Programs

In order to maintain our global competitiveness, we have implemented rationalization actions over the past several years to
reduce high-cost and excess manufacturing capacity and operating and administrative costs.

The following table presents the roll-forward of the liability balance between periods:
Associate-
Related Costs

(In millions)
Balance at December 31, 2017 ................................................................ $
2018 charges(1) ...........................................................................................
Incurred, net of foreign currency translation of $(3) million and $0
million, respectively...................................................................................
Reversed to the Statement of Operations...................................................
Balance at December 31, 2018 ................................................................ $
2019 charges(1) ...........................................................................................
Incurred, net of foreign currency translation of $(2) million and $0
million, respectively...................................................................................
Reversed to the Statement of Operations...................................................
Balance at December 31, 2019 ................................................................ $
2020 charges(1) ...........................................................................................
Incurred, net of foreign currency translation of $12 million and $0
million, respectively...................................................................................
Reversed to the Statement of Operations...................................................
Balance at December 31, 2020 ................................................................ $

Other Costs

Total

210 $
47

(158)
(19)
80 $
185

(41)
(4)
220 $
129

(147)
(2)
200 $

3 $
17

(19)
—
1 $
19

(20)
—
— $
27

(27)
—
— $

213
64

(177)
(19)
81
204

(61)
(4)
220
156

(174)
(2)
200

(1)

Charges of $156 million, $204 million and $64 million in 2020, 2019 and 2018, respectively, exclude $5 million, $5
million and $(1) million, respectively, of benefit plan curtailments and settlements recorded in Rationalizations in the
Statements of Operations.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

On April 17, 2020, we reached a tentative bargaining agreement, which was ratified on May 1, 2020, and subsequently
permanently closed our Gadsden, Alabama tire manufacturing facility (“Gadsden”) as part of our continuing strategy to
strengthen the competitiveness of our manufacturing footprint by curtailing production of tires for declining, less profitable
segments of the tire market. The plan will result in approximately 470 job reductions. We have $32 million accrued related to
this plan at December 31, 2020, which is expected to be substantially paid through 2021.

During the first quarter of 2019, we approved a plan to modernize two of our tire manufacturing facilities in Germany. We
have $89 million accrued related to this plan at December 31, 2020, which is expected to be substantially paid through 2022.

The remainder of the accrual balance at December 31, 2020 is expected to be substantially utilized in the next 12 months and
includes $35 million related to the closed Amiens, France tire manufacturing facility, $11 million related to global plans to
reduce SAG headcount, $9 million related to plans to reduce manufacturing headcount and improve operating efficiency in
EMEA, and $7 million related to a plan primarily to offer voluntary buy-outs to certain associates at Gadsden.

The following table shows net rationalization charges included in Income (Loss) before Income Taxes:
(In millions)
Current Year Plans
Associate severance and other related costs .............................................. $
Benefit plan curtailment and special termination benefits.........................
Other exit and non-cancelable lease costs .................................................
Current Year Plans - Net Charges.................................................... $

77 $
9
16
102 $

2020

2019

183 $
5
11
199 $

Prior Year Plans
Associate severance and other related costs .............................................. $
Benefit plan curtailment and special termination benefits.........................
Other exit and non-cancelable lease costs .................................................
Prior Year Plans - Net Charges......................................................... $
Total Net Charges ......................................................................... $
Asset write-off and accelerated depreciation charges................................ $

50 $
(4)
11
57 $
159 $
105 $

(2) $
—
8
6 $
205 $
15 $

2018

40
—
—
40

(11)
(1)
16
4
44
4

Substantially all of the new charges in 2020 related to future cash outflows. Net current year plan charges for the year ended
December 31, 2020 primarily related to the permanent closure of Gadsden.

Prior year plan charges recognized in the year ended December 31, 2020 include $30 million related to additional termination
benefits for associates at the closed Amiens, France manufacturing facility. Refer to Note to the Consolidated Financial
Statements No. 19, Commitments and Contingent Liabilities. In addition, prior year plan charges for the year ended December
31, 2020 include $19 million related to the plan to modernize two of our manufacturing facilities in Germany, $5 million related
to a plan primarily to offer voluntary buy-outs to certain associates at Gadsden, a curtailment credit of $4 million for a
postretirement benefit plan related to the exit of employees under an approved rationalization plan, and $3 million related to
the closure of our tire manufacturing facility in Philippsburg, Germany. Prior year plan charges for the year ended
December 31, 2020 also include reversals of $2 million for actions no longer needed for their originally intended purposes.

Ongoing rationalization plans had approximately $990 million in charges through 2020 and approximately $80 million is
expected to be incurred in future periods.

Approximately 800 associates will be released under new plans initiated in 2020, of which approximately 600 were released
through December 31, 2020, primarily related to the permanent closure of Gadsden. In 2020, approximately 1,200 associates
were released under plans initiated in prior years. Approximately 450 associates remain to be released under all ongoing
rationalization plans.

Rationalization activities initiated in 2019 include current year charges of $105 million related to the plan to modernize two of
our manufacturing facilities in Germany, $76 million related to the Gadsden voluntary buy-out plan, and $18 million related to
separate plans to reduce manufacturing headcount and improve operating efficiency in Americas and EMEA. Prior year plan
charges recognized in the year ended December 31, 2019 include $10 million primarily related to EMEA manufacturing plans.
Prior year plan charges for the year ended December 31, 2019 also include reversals of $4 million for actions no longer needed
for their originally intended purposes.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Rationalization activities initiated in 2018 include current year charges of $28 million related to a global plan to reduce SAG
headcount and $13 million related to plans to reduce manufacturing headcount and improve operating efficiency in EMEA.
Current year plan charges for the year ended December 31, 2018 also include reversals of $1 million for actions no longer
needed for their originally intended purposes. Prior year plan charges recognized in the year ended December 31, 2018 include
charges of $15 million related to the closure of our tire manufacturing facility in Philippsburg, Germany, $3 million related to
a plan to reduce manufacturing headcount in EMEA, and $3 million related to a global plan to reduce SAG headcount. Prior
year plan charges for the year ended December 31, 2018 also include reversals of $18 million for actions no longer needed for
their originally intended purposes.

Asset write-off and accelerated depreciation charges in 2020 and 2019 primarily related to Gadsden. Asset write-off and
accelerated depreciation charges in 2018 primarily related to the closure of our tire manufacturing facility in Philippsburg,
Germany. Asset write-off and accelerated depreciation charges for all periods were recorded in CGS.

Note 4. Interest Expense

Interest expense includes interest and the amortization of deferred financing fees and debt discounts, less amounts capitalized,
as follows:
(In millions)
Interest expense before capitalization........................................................ $
Capitalized interest ....................................................................................
$

339 $
(15)
324 $

351 $
(11)
340 $

335
(14)
321

2018

2020

2019

Cash payments for interest, net of amounts capitalized, were $315 million, $324 million and $331 million in 2020, 2019 and
2018, respectively.

Note 5. Other (Income) Expense

(In millions)
Gain on TireHub transaction, net of transaction costs .............................. $
Non-service related pension and other postretirement benefits costs .......
Interest income on indirect tax settlements in Brazil ................................
Financing fees and financial instruments expense ....................................
Net foreign currency exchange (gains) losses ...........................................
General and product liability expense - discontinued products.................
Royalty income..........................................................................................
Net (gains) losses on asset sales ................................................................
Interest income ..........................................................................................
Miscellaneous (income) expense...............................................................
$

2020

2019

2018

— $
110
—
26
(9)
10
(19)
2
(14)
13
119 $

— $
118
(8)
34
(22)
11
(19)
(16)
(18)
18
98 $

(272)
121
(38)
36
(16)
9
(20)
(1)
(16)
23
(174)

Gain on TireHub transaction represented the difference between the initial fair value of the equity interest received and the net
book value of the assets and liabilities contributed in connection with the formation of TireHub in 2018, net of transaction
costs. For the year ended December 31, 2018, we recognized a gain of $286 million and incurred transaction costs of $14
million.

Non-service related pension and other postretirement benefits cost consists primarily of the interest cost, expected return on
plan assets and amortization components of net periodic cost, as well as curtailments and settlements which are not related to
rationalization plans. Non-service related pension and other postretirement benefits cost included net pension settlement and
curtailment charges of $18 million, $6 million and $21 million in 2020, 2019 and 2018, respectively. For further information,
refer to Note to the Consolidated Financial Statements No. 17, Pension, Other Postretirement Benefits and Savings Plans.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

We previously filed claims with the Brazilian tax authorities challenging the legality of the calculation of certain indirect taxes
for the years 2001 through 2018. During 2018, we received favorable rulings related to these claims. As a result of the rulings,
we recorded a gain of $53 million in CGS and related interest income of $38 million in Other (Income) Expense for the year
ended December 31, 2018. During 2019, there were additional favorable rulings related to these claims. As a result, we recorded
an additional gain of $11 million in CGS and related interest income of $8 million in Other (Income) Expense.

Miscellaneous expense for the year ended December 31, 2019 includes expenses of $25 million incurred by the Company as a
direct result of flooding at our Beaumont, Texas chemical facility during the third quarter of 2019. Miscellaneous expense in
2018 includes $12 million related to expenses incurred by the Company as a direct result of hurricanes Harvey and Irma during
2017.

Other (Income) Expense also includes financing fees and financial instruments expense which consists of commitment fees
and charges incurred in connection with financing transactions; net foreign currency exchange (gains) and losses; general and
product liability expense - discontinued products, which consists of charges for claims against us related primarily to asbestos
personal injury claims, net of probable insurance recoveries; royalty income which is derived primarily from licensing
arrangements; net (gains) and losses on asset sales, and interest income.

Note 6. Income Taxes

The components of Income (Loss) before Income Taxes follow:
(In millions)
U.S. ............................................................................................................ $
Foreign .......................................................................................................
$

2020

2019

2018

(993) $
(147)
(1,140) $

(39) $
216
177 $

439
572
1,011

2020

2019

A reconciliation of income taxes at the U.S. statutory rate to United States and Foreign Tax Expense follows:
(In millions)
U.S. federal income tax expense (benefit) at the statutory rate of 21% .... $
Net establishment (release) of U.S. valuation allowances.........................
Net foreign losses (income) with no tax due to valuation allowances ......
Goodwill impairment.................................................................................
Deferred tax impact of enacted tax rate and law changes .........................
State income taxes, net of U.S. federal benefit..........................................
U.S. charges (benefits) related to foreign tax credits, R&D and foreign
derived intangible deduction......................................................................
Adjustment for foreign income taxed at different rates.............................
Net establishment of uncertain tax positions .............................................
Federal and state tax on accelerated royalty income transaction...............
Net establishment (release) of foreign valuation allowances ....................
Other ..........................................................................................................
United States and Foreign Tax Expense................................................ $

(9)
7
6
—
—
(1)
110 $

(239) $
310
37
34
(18)
(17)

(17)
16
7
334
140
5
474 $

37 $
(98)
48
—
3
(1)

2018

212
25
7
—
—
(1)

20
30
18
—
(5)
(3)
303

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

The components of United States and Foreign Tax Expense by taxing jurisdiction, follow:
(In millions)
Current:

2020

2019

2018

Federal .................................................................................................. $
Foreign..................................................................................................
State ......................................................................................................

Deferred:

Federal ..................................................................................................
Foreign..................................................................................................
State ......................................................................................................

United States and Foreign Tax Expense ................................................ $

(5) $
95
(3)
87

63
(31)
(9)
23
110 $

— $
134
17
151

133
153
37
323
474 $

(15)
188
(1)
172

120
6
5
131
303

Income tax expense in 2020 was $110 million on a loss before income taxes of $1,140 million. In 2020, income tax expense
was unfavorably impacted by net discrete adjustments totaling $305 million, including the establishment of a $295 million
valuation allowance on certain deferred tax assets for foreign tax credits during the first quarter of 2020 as discussed below.
Discrete adjustments also reflect a net charge of $10 million, including a $15 million charge related to a U.S. valuation
allowance for state loss carryforwards, a $13 million benefit to adjust our deferred tax assets in England for a third quarter
enacted change in the tax rate, and various other net charges totaling $8 million.

In 2019, income tax expense of $474 million was unfavorably impacted by net discrete adjustments totaling $386 million.
Discrete adjustments were due to non-cash charges of $334 million related to an acceleration of royalty income in the U.S.
from the sale of certain European royalty payments to Luxembourg and $150 million related to an increase in our valuation
allowance on tax losses in Luxembourg, which were partially offset by a non-cash tax benefit of $98 million related to a
reduction of our U.S. valuation allowance for foreign tax credits.

In 2018, income tax expense of $303 million was unfavorably impacted by net discrete adjustments of $65 million. Discrete
adjustments were primarily due to charges totaling $135 million related to deferred tax assets for foreign tax credits, including
the establishment of a valuation allowance on foreign tax credits of $98 million, partially offset by a tax benefit of $88 million
related to a worthless stock deduction created by permanently ceasing operations of our Venezuelan subsidiary during the
fourth quarter of 2018. Income tax expense in 2018 also included net charges of $18 million for various other discrete tax
adjustments, including those related to finalizing our accounting for certain provisional items related to the Tax Cuts and Jobs
Act.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

duration of these disruptions, as well as what additional actions federal, state or local governments may take to contain the
pandemic. As such, an additional valuation allowance may be required against all, or a portion of, our U.S. net deferred tax
assets in a future period.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Temporary differences and carryforwards giving rise to deferred tax assets and liabilities at December 31 follow:
(In millions)
Tax loss carryforwards and credits............................................................................... $
Prepaid royalty income.................................................................................................
Capitalized research and development expenditures....................................................
Accrued expenses deductible as paid ...........................................................................
Postretirement benefits and pensions ...........................................................................
Lease liabilities .............................................................................................................
Rationalizations and other provisions...........................................................................
Vacation and sick pay...................................................................................................
Other .............................................................................................................................

2020

Valuation allowance .....................................................................................................
Total deferred tax assets ............................................................................................
Property basis differences.............................................................................................
Right-of-use assets........................................................................................................
Tax on undistributed earnings of subsidiaries ..............................................................
Total net deferred tax assets ...................................................................................... $

1,570 $
629
421
255
209
76
34
21
133
3,348
(1,469)
1,879
(420)
(75)
(1)
1,383 $

2019

1,159
576
416
347
221
75
38
23
106
2,961
(982)
1,979
(467)
(74)
(1)
1,437

At December 31, 2020, we had $704 million of tax assets for net operating loss, capital loss and tax credit carryforwards related
to certain foreign subsidiaries. These carryforwards are primarily from countries with unlimited carryforward periods, but
include $69 million of tax credit carryforwards in various European countries that are subject to expiration from 2021 to 2030.
A valuation allowance totaling $1,101 million has been recorded against these and other deferred tax assets where recovery of
the asset or carryforward is uncertain. In addition, we had $767 million of federal and $99 million of state tax assets for net
operating loss and tax credit carryforwards. The federal carryforwards include $461 million of foreign tax credits that are
subject to expiration from 2022 to 2030 and $92 million of tax assets related to research and development credits and other
federal credits that are subject to expiration from 2030 to 2040. The state carryforwards include $87 million that are subject to
expiration from 2021 to 2040. A valuation allowance of $368 million has been recorded against federal and state deferred tax
assets where recovery is uncertain.

At December 31, 2020, we had unrecognized tax benefits of $85 million that if recognized, would have a favorable impact on
our tax expense of $58 million. We had accrued interest of $2 million as of December 31, 2020. If not favorably settled, $9
million of the unrecognized tax benefits and all the accrued interest would require the use of our cash. We do not expect changes
during 2021 to our unrecognized tax benefits to have a significant impact on our financial position or results of operations. A
summary of our unrecognized tax benefits and changes during the year follows:
(In millions)
Balance at January 1 ............................................................................... $
Increases related to prior year tax positions...............................................
Decreases related to prior year tax positions .............................................
Settlements.................................................................................................
Foreign currency impact ............................................................................
Increases related to current year tax positions ...........................................
Lapse of statute of limitations....................................................................
Balance at December 31 .......................................................................... $

71 $
24
—
(11)
(2)
—
—
82 $

82 $
26
(1)
(15)
(7)
—
—
85 $

52
9
(1)
(2)
(5)
21
(3)
71

2019

2020

2018

We are open to examination in the U.S. for 2020 and in Germany from 2018 onward. Generally, for our remaining tax
jurisdictions, years from 2015 onward are still open to examination.

We have undistributed earnings and profits of our foreign subsidiaries totaling approximately $2.3 billion at December 31,
2020. We have concluded that no provision for tax in the U.S. is required because substantially all of the remaining
undistributed earnings and profits have been or will be reinvested in property, plant and equipment and working capital outside
of the U.S. A foreign withholding tax charge of approximately $85 million (net of foreign tax credits) would be required if
these earnings and profits were to be distributed to the U.S.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

On March 27, 2020, the President signed the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), a
substantial tax and spending package intended to provide economic stimulus to address the impact of the COVID-19
pandemic. The CARES Act allows corporations with net operating losses generated in 2018, 2019 and 2020 to elect to
carryback those losses for a period of five years and relaxes the limitation for business interest deductions for 2019 and
2020. These provisions did not have a material impact on our operating results. We did, however, benefit from a CARES Act
provision that accelerates the ability of corporations to claim a refund of alternative minimum tax credit carryforwards. Under
this provision, we received a refund of $5 million during the third quarter of 2020 that would otherwise have been received in
two equal annual installments in 2021 and 2022.

Net cash payments for income taxes were $45 million, $142 million and $178 million in 2020, 2019 and 2018, respectively.

Note 7. Earnings Per Share

Basic earnings per share are computed based on the weighted average number of common shares outstanding. Diluted earnings
per share are calculated to reflect the potential dilution that could occur if securities or other contracts were exercised or
converted into common stock.

Basic and diluted earnings per common share are calculated as follows:
(In millions, except per share amounts)
Earnings (loss) per share — basic:

2020

2019

2018

(1,254) $
234

(5.35) $

Earnings (loss) per share — diluted:

Goodyear net income (loss) .................................................................... $
Weighted average shares outstanding.....................................................
Dilutive effect of stock options and other dilutive securities .................
Weighted average shares outstanding — diluted ....................................
Earnings (loss) per common share — diluted..................................... $

(1,254) $
234
—
234

(5.35) $

(311) $
233

(1.33) $

(311) $
233
—
233

(1.33) $

693
237

2.92

693
237
2
239

2.89

Weighted average shares outstanding — diluted for 2020 excludes approximately 9 million equivalent shares related to options
with exercise prices greater than the average market price of our common shares (i.e., “underwater” options). There were
approximately 2 million equivalent shares related to underwater options for both 2019 and 2018. Additionally, weighted
average shares outstanding — diluted for 2019 excludes the dilutive effect of approximately 3 million equivalent shares related
primarily to options with exercise prices less than the average market price of our common shares (i.e., "in-the-money" options),
as their inclusion would have been anti-dilutive due to the Goodyear net loss. There were no in-the-money options for 2020.

Note 8. Business Segments

Segment information reflects our strategic business units (“SBUs”), which are organized to meet customer requirements and
global competition. For the year ended December 31, 2020, we operated our business through three operating segments
representing our regional tire businesses: Americas; Europe, Middle East and Africa; and Asia Pacific. Segment information is
reported on the basis used for reporting to our Chief Executive Officer. Each of the three regional business segments is involved
in the development, manufacture, distribution and sale of tires. Certain of the business segments also provide related products
and services, which include retreads and automotive and commercial truck maintenance and repair services. Each segment also
exports tires to other segments.

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

EMEA manufactures and sells tires for automobiles, trucks, buses, aircraft, motorcycles, and earthmoving, mining and
industrial equipment throughout Europe, the Middle East and Africa. EMEA also sells retreaded aviation tires, retreading and

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

related services for commercial truck and earthmoving, mining and industrial equipment, and automotive maintenance and
repair services.

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

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

(In millions)
Sales

Americas ................................................................................................. $
Europe, Middle East and Africa..............................................................
Asia Pacific .............................................................................................
Net Sales............................................................................................ $
Segment Operating Income (Loss) .........................................................
Americas ................................................................................................. $
Europe, Middle East and Africa..............................................................
Asia Pacific .............................................................................................
Total Segment Operating Income (Loss)....................................... $

Less:

Goodwill and Other Asset Impairments (Notes 11 and 12) .................
Rationalizations (Note 3)......................................................................
Interest expense (Note 4)......................................................................
Other (income) expense (Note 5) .........................................................
Asset write-offs and accelerated depreciation (Note 3) .......................
Corporate incentive compensation plans..............................................
Retained expenses of divested operations ............................................
Other(1)..................................................................................................
Income (Loss) before Income Taxes............................................... $

2020

2019

2018

6,556 $
4,020
1,745
12,321 $

7,922 $
4,708
2,115
14,745 $

8,168
5,090
2,217
15,475

9 $
(72)
49
(14) $

330
159
324
119
105
44
8
37
(1,140) $

550 $
202
193
945 $

—
205
340
98
15
50
10
50
177 $

654
363
257
1,274

—
44
321
(174)
4
13
9
46
1,011

(1)

Primarily represents unallocated corporate costs and the elimination of $17 million, $17 million and $18 million for
the years ended December 31, 2020, 2019 and 2018, respectively, of royalty income attributable to the strategic
business units.

The following table presents segment assets at December 31:

(In millions)
Assets

2020

2019

6,666 $
4,825
2,725
14,216
2,290
16,506 $

7,606
4,724
2,711
15,041
2,144
17,185

(1)

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

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

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

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

(In millions)
Net Sales

2020

2019

2018

United States............................................................................................ $
Germany(1) ...............................................................................................
Other international...................................................................................
$

Long-Lived Assets

United States............................................................................................ $
China........................................................................................................
Germany ..................................................................................................
Other international...................................................................................
$

5,424 $
705
6,192
12,321 $

2,517 $
742
729
3,085
7,073 $

6,489 $
979
7,277
14,745 $

2,681
722
653
3,152
7,208

6,692
1,691
7,092
15,475

(1)

The decrease in net sales from 2018 primarily related to a business reorganization that centralized our OE sales for
EMEA in Luxembourg.

At December 31, 2020, significant concentrations of cash and cash equivalents held by our international subsidiaries included
the following amounts:

•

$387 million or 25% in Asia Pacific, primarily China and Japan ($337 million or 37% at December 31, 2019),

$387 million or 25% in EMEA, primarily Belgium ($214 million or 24% at December 31, 2019), and

$384 million or 25% in Americas, primarily Brazil, Canada and Chile ($190 million or 21% at December 31, 2019).

Goodwill and other asset impairments, as described in Notes to the Consolidated Financial Statements No. 11, Goodwill and
Intangible Assets, and No. 12, Other Assets and Investments; rationalizations, as described in Note to the Consolidated
Financial Statements No. 3, Costs Associated with Rationalization Programs; net (gains) losses on asset sales, as described in
Note to the Consolidated Financial Statements No. 5, Other (Income) Expense, and asset write-offs and accelerated depreciation
were not charged (credited) to the SBUs for performance evaluation purposes but were attributable to the SBUs as follows:

(In millions)
Goodwill and Other Asset Impairments

2020

2019

2018

148 $
182
330 $

— $
—
— $

—
—
—

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

(In millions)
Rationalizations

2020

2019

2018

94 $
59
4
157 $
2
159 $

90 $
115
—
205 $
—
205 $

3
36
3
42
2
44

(In millions)
Net (Gains) Losses on Asset Sales

2020

2019

2018

Americas(1) .............................................................................................. $
Europe, Middle East and Africa..............................................................
Total Segment Asset Sales............................................................... $

— $
2
2 $

— $
(16)
(16) $

(275)
2
(273)

(1)

Americas Net (Gains) Losses on Asset Sales for the year ended December 31, 2018 includes the gain of $272 million
related to the TireHub transaction, net of transaction costs.

(In millions)
Asset Write-Offs and Accelerated Depreciation

2020

2019

2018

Total Segment Asset Write-Offs and Accelerated
Depreciation ..................................................................................... $

103 $
2

105 $

13 $
2

15 $

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

(In millions)
Capital Expenditures

2020

2019

2018

302 $
235
91
628 $
19
647 $

369 $
227
141
737 $
33
770 $

(In millions)
Depreciation and Amortization

2020

2019

2018

490 $
201
133
824 $
35
859 $

430 $
197
133
760 $
35
795 $

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

—
4

406
180
188
774
37
811

414
201
131
746
32
778

(In millions)

Equity in (Income) Loss

2020

2019

2018

31 $
—
31 $

32 $
—
32 $

11
(1)
10

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Note 9. Accounts Receivable

(In millions)
Accounts receivable ..................................................................................................... $
Allowance for doubtful accounts .................................................................................

Note 10. Inventories

(In millions)
Raw materials ............................................................................................................... $
Work in process ............................................................................................................
Finished goods ..............................................................................................................

2020

2019

1,841 $
(150)
1,691 $

2020

2019

517 $
143
1,493
2,153 $

2,052
(111)
1,941

530
143
2,178
2,851

Note 11. Goodwill and Intangible Assets

The following table presents the net carrying amount of goodwill allocated by segment, and changes during 2020:

(In millions)
Americas............................................. $
Europe, Middle East and Africa .........
Asia Pacific ........................................
$

Acquisitions Divestitures
— $
10
—
10 $

— $
—
—
— $

91 $
411
63
565 $

The following table presents the net carrying amount of goodwill allocated by segment, and changes during 2019:

Balance at
December 31,
2019

Balance at
December 31,
2018

Impairment Translation

Balance at
December 31,
2020

— $
(182)
—
(182) $

— $
11
4
15 $

91
250
67
408

Impairment Translation

Balance at
December 31,
2019

— $
—
—
— $

— $
(6)
(1)
(7) $

91
411
63
565

(In millions)
Americas............................................. $
Europe, Middle East and Africa .........
Asia Pacific ........................................
$

Acquisitions Divestitures
— $
2
1
3 $

— $
—
—
— $

91 $
415
63
569 $

The following table presents information about intangible assets:

(In millions)
Intangible assets with indefinite
lives .................................................... $
Trademarks and patents......................
Other intangible assets .......................
$

2020

2019

Gross
Carrying
Amount(1)

Accumulated
Amortization(1)

Net
Carrying
Amount

Gross
Carrying
Amount(1)

Accumulated
Amortization(1)

Net
Carrying
Amount

125 $
23
25
173 $

(6) $
(19)
(13)
(38) $

119 $
4
12
135 $

124 $
24
25
173 $

(6) $
(19)
(11)
(36) $

118
5
14
137

(1)

Includes impact of foreign currency translation.

Intangible assets are primarily comprised of the rights to use the Dunlop brand name and related trademarks and certain other
brand names and trademarks.

Amortization expense for intangible assets totaled $2 million in 2020, 2019 and 2018. We estimate that annual amortization
expense related to intangible assets will be $2 million in 2021, and $1 million in 2022 through 2025. The weighted average
remaining amortization period is approximately 20 years.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

cash flow model. Based on the results of this interim analysis, we recorded a non-cash impairment charge of $182 million
related to our EMEA reporting unit in the first quarter of 2020. The most critical assumptions used in the calculation of the
estimated fair value of our reporting units were the timing of the recovery in sales from the COVID-19 pandemic, the projected
long-term operating margin and the discount rate. Since the date of our 2019 annual quantitative goodwill impairment
assessment, the overall discount rate increased, reflecting an increase in the risk premium components of the rate partially offset
by a decrease in the risk-free interest rate component, as a result of the macroeconomic environment. Also, we gave
consideration to the expected near-term negative cash flow impact of the COVID-19 pandemic and subsequent recovery, based
on our forecasts at that time, as well as a decrease in our market capitalization.

Since the first quarter of 2020, our forecasts as well as our market capitalization have both improved and we have concluded
that there were no additional triggering events during the remaining nine months of 2020. Likewise, our 2020 annual
impairment analysis as of October 31, 2020 indicated no impairment of goodwill or intangible assets with indefinite lives. Our
annual impairment analyses for 2019 and 2018 also indicated no impairment of goodwill or intangible assets with indefinite
lives. Our quantitative goodwill analysis as of October 31, 2020 concluded that the fair values substantially exceeded the
carrying amounts for each reporting unit tested. There were no events or circumstances that indicated the quantitative
impairment tests should be re-performed for goodwill or for intangible assets with indefinite lives for any reporting unit at
December 31, 2020. Nonetheless, if we make future adverse revisions to our significant assumptions, including as a result of
business performance or market conditions, or if our market capitalization declines and if such decline becomes indicative that
the fair value of our reporting units has declined below their carrying values, we may need to record a material, non-cash
impairment charge in a future period.

Note 12. Other Assets and Investments

Dividends received from our consolidated subsidiaries were $155 million, $43 million and $608 million in 2020, 2019 and
2018, respectively. Dividends received in 2020 were primarily from Singapore, Peru and Brazil and paid to the United States.
Dividends received in 2019 were primarily from Singapore and Brazil and paid to the United States. Dividends received in
2018 were primarily from Singapore and Japan and paid to the United States. Dividends received from our affiliates accounted
for using the equity method were $5 million, $4 million and $5 million in 2020, 2019 and 2018, respectively.

Investment in TireHub

The carrying value of our investment in TireHub was $77 million and $262 million at December 31, 2020 and 2019,
respectively, and was included in Other Assets on our Consolidated Balance Sheets. In addition, we have an outstanding loan
receivable from TireHub of $14 million as of December 31, 2020, which is also included in Other Assets on our Consolidated
Balance Sheets. Our investment in TireHub is accounted for under the equity method of accounting and, as such, includes our
50% share of the net losses of TireHub, which totaled $36 million, $33 million and $15 million in 2020, 2019 and 2018,
respectively.

We regularly review our investment in TireHub for potential impairment and will recognize an impairment charge if the
estimated fair value of our investment declines below its recorded amount and such decline is determined to be other-than
temporary. The most critical assumptions used in our discounted cash flow model for estimating the fair value of our investment
are forecasted tire volume for TireHub, including the extent and duration of, as well as the timing of the recovery from, the
ongoing impacts of the COVID-19 pandemic, and the discount rate.

Our TireHub joint venture was initially formed during the second quarter of 2018 and, as previously disclosed, its net losses
included higher than expected start-up expenses and additional costs incurred to build out TireHub’s distribution footprint for
future growth. These additional costs as well as TireHub’s net losses were expected to be temporary and moderate in 2020.
However, higher than expected net losses for TireHub continued into 2020, driven by the severe impacts of the COVID-19
pandemic.

Accordingly, we evaluated our investment and concluded that there had been an other-than-temporary decline in the fair value
of our investment during the second quarter of 2020. As such, we conducted an impairment assessment and estimated the fair
value of our investment utilizing updated forecasts of TireHub’s volume, revised expectations as to the extent and duration of,
as well as the timing of the recovery from, the COVID-19 pandemic, and an updated discount rate reflective of current market
conditions at that time. As a result, during the second quarter of 2020, we recognized a non-cash impairment charge of $148
million.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

During the second half of 2020, we concluded that there was no additional other-than-temporary decline in the fair value of
our investment in TireHub. Nonetheless, there remains a high degree of uncertainty as to the extent and duration of, as well as
timing of the recovery from, the COVID-19 pandemic. If we make future adverse revisions to these or our other significant
assumptions, including as a result of business performance or market conditions, we may need to record an additional material,
non-cash impairment charge in a future period.

Other Assets

Other Assets at December 31, 2020 included a $30 million trade receivable from a customer that was refinanced into a
collateral-backed note receivable in the second quarter of 2020.

Note 13. Property, Plant and Equipment

(In millions)
Property, plant and equipment, at cost:

Owned

2020
Finance
Leases

Total

Owned

2019
Finance
Leases

Land .......................................................... $
Buildings ...................................................
Machinery and equipment.........................
Construction in progress ...........................

Accumulated depreciation ...........................

Spare parts.................................................
$

436 $
2,467
13,893
737
17,533
(10,931)
6,602
269
6,871 $

1 $
232
29
—
262
(60)
202
—
202 $

437 $
2,699
13,922
737
17,795
(10,991)
6,804
269
7,073 $

425 $
2,431
13,624
681
17,161
(10,438)
6,723
276
6,999 $

1 $
227
30
1
259
(50)
209
—
209 $

Total

426
2,658
13,654
682
17,420
(10,488)
6,932
276
7,208

The range of useful lives of property used in arriving at the annual amount of depreciation is as follows: buildings and
improvements, 3 to 45 years; and machinery and equipment, 3 to 40 years.

Note 14. Leases

The components of lease expense included in Income (Loss) before Income Taxes for the years ended December 31, 2020 and
2019 are as follows:

(In millions)
Operating Lease Expense........................................................................... $
Finance Lease Expense:

Amortization of ROU assets ...................................................................
Interest on lease liabilities.......................................................................
Short Term Lease Expense ........................................................................
Variable Lease Expense.............................................................................
Sublease Income ........................................................................................
Total Lease Expense ................................................................................ $

2020

2019

286 $

11
21
6
3
(11)
316 $

292

11
21
6
7
(15)
322

Net rental expense for the year ended December 31, 2018 is comprised of the following:

(In millions)

Gross rental expense ........................................................................................................................................ $
Sublease rental income ....................................................................................................................................
$

2018

333
(16)
317

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Supplemental cash flow information related to leases for the years ended December 31, 2020 and 2019 is as follows:
(In millions)
Cash Paid for Amounts Included in the Measurement of Lease Liabilities

2020

2019

Operating Cash Flows for Operating Leases....................................................................... $
Operating Cash Flows for Finance Leases ..........................................................................
Financing Cash Flows for Finance Leases ..........................................................................

ROU Assets Obtained in Exchange for Lease Obligations

Operating Leases .................................................................................................................
Finance Leases ....................................................................................................................

268 $
21
7

202
3

Supplemental balance sheet information related to leases as of December 31, 2020 and 2019 is as follows:

(In millions, except lease term and discount rate)
Operating Leases

2020

2019

Operating Lease ROU Assets............................................................................................. $

851 $

Operating Lease Liabilities due Within One Year................................................................ $
Operating Lease Liabilities ...................................................................................................

Total Operating Lease Liabilities ................................................................................... $

Finance Leases

Property, Plant and Equipment, at cost................................................................................. $
Accumulated Depreciation ...................................................................................................

Property, Plant and Equipment, net .............................................................................. $

Long Term Debt and Finance Leases due Within One Year ................................................ $
Long Term Debt and Finance Leases ...................................................................................

Total Finance Lease Liabilities ....................................................................................... $

198 $
684
882 $

262 $
(60)
202 $

18 $

232
250 $

Weighted Average Remaining Lease Term (years)

Operating Leases ...................................................................................................................
Finance Leases ......................................................................................................................

7.3
30.9

267
21
7

197
34

855

199
668
867

259
(50)
209

6
243
249

7.2
31.6

Weighted Average Discount Rate

6.85%
8.48%

6.69%
8.46%

Future maturities of our lease liabilities, excluding subleases, as of December 31, 2020 are as follows:
(In millions)
2021 ....................................................................................................................................... $
2022 .......................................................................................................................................
2023 .......................................................................................................................................
2024 .......................................................................................................................................
2025 .......................................................................................................................................
Thereafter...............................................................................................................................
Total Lease Payments .......................................................................................................
Less: Imputed Interest............................................................................................................
Total.................................................................................................................................... $

Operating Leases Finance Leases
38
245 $
23
186
21
146
21
110
22
88
671
376
796
1,151
546
269
250
882 $

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

As of December 31, 2020, we have additional operating and finance leases that have not yet commenced for which the present
value of lease payments over the respective lease terms totals $23 million. Accordingly, these leases are not recorded on the
Consolidated Balance Sheets at December 31, 2020. These leases will commence in 2021 and 2022 with lease terms of 7 years
to 15 years.

Note 15. Financing Arrangements and Derivative Financial Instruments

At December 31, 2020, we had total credit arrangements of $9,707 million, of which $3,881 million were unused. At that date,
24% of our debt was at variable interest rates averaging 2.79%.

Notes Payable and Overdrafts, Long Term Debt and Finance Leases due Within One Year and Short Term Financing
Arrangements

At December 31, 2020, we had short term committed and uncommitted credit arrangements totaling $1,075 million, of which
$639 million were unused. These arrangements are available primarily to certain of our foreign subsidiaries through various
banks at quoted market interest rates.

The following table presents amounts due within one year:

(In millions)

Chinese credit facilities .......................................................................................... $
Other domestic and foreign debt ............................................................................
Notes Payable and Overdrafts .................................................................................. $
Weighted average interest rate ...............................................................................

Chinese credit facilities .......................................................................................... $
8.75% due 2020 ......................................................................................................
Other domestic and foreign debt (including finance leases) ..................................
Long Term Debt and Finance Leases due Within One Year ................................. $
Weighted average interest rate ...............................................................................
Total obligations due within one year ...................................................................... $

Long Term Debt and Finance Leases and Financing Arrangements

December 31,
2020

December 31,
2019

163
243
406
$
4.52%

13
—
139
152
$
3.87%
$
558

118
230
348
4.92%

95
280
187
562
6.58%
910

At December 31, 2020, we had long term credit arrangements totaling $8,632 million, of which $3,242 million were unused.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

The following table presents long term debt and finance leases, net of unamortized discounts, and interest rates:

(In millions)
Notes:

8.75% due 2020....................................................... $
5.125% due 2023 ..........................................................
3.75% Euro Notes due 2023 .........................................
9.5% due 2025 ..............................................................
5% due 2026 .................................................................
4.875% due 2027 ..........................................................
7% due 2028 .................................................................

Credit Facilities:

First lien revolving credit facility due 2025..................
Second lien term loan facility due 2025 .......................
European revolving credit facility due 2024.................
Pan-European accounts receivable facility ........................
Mexican credit facilities .....................................................
Chinese credit facilities ......................................................
Other foreign and domestic debt(1)..................................

Unamortized deferred financing fees .................................

Finance lease obligations(2) ............................................

Less portion due within one year....................................
$

December 31, 2020

December 31, 2019

Amount

Interest Rate

Amount

Interest Rate

—
1,000
307
803
900
700
150

—
400
—
291
152
212
451
5,366
(32)
5,334
250
5,584
(152)
5,432

—
2.15%
—
1.18%
1.87%
4.49%
3.22%

280
1,000
281
—
900
700
150

—
400
—
327
200
195
661
5,094
(28)
5,066
249
5,315
(562)
4,753

—
3.97%
—
0.98%
3.44%
4.87%
4.02%

Interest rates are weighted average interest rates related to various foreign credit facilities with customary terms and
conditions.

Includes non-cash financing additions of $3 million during the twelve month period ended December 31, 2020.

(1)

(2)

NOTES

$282 million 8.75% Senior Notes due 2020

On August 17, 2020, we repaid in full our $282 million 8.75% senior notes at maturity.

$1.0 billion 5.125% Senior Notes due 2023

At December 31, 2020, $1.0 billion aggregate principal amount of 5.125% senior notes due 2023 were outstanding. These notes
were sold at 100% of the principal amount and will mature on November 15, 2023. These notes are unsecured senior obligations
and are guaranteed by our U.S. and Canadian subsidiaries that also guarantee our obligations under our U.S. senior secured
credit facilities described below.

We have the option to redeem these notes, in whole or in part, at any time at a redemption price of 100%, plus accrued and
unpaid interest to the redemption date.

The terms of the indenture for these notes, among other things, limit the ability of the Company and certain of its subsidiaries,
including Goodyear Europe B.V. ("GEBV"), to (i) incur additional debt or issue redeemable preferred stock, (ii) pay dividends,
repurchase shares or make certain other restricted payments or investments, (iii) incur liens, (iv) sell assets, (v) incur restrictions
on the ability of our subsidiaries to pay dividends or to make other payments to us, (vi) enter into affiliate transactions, (vii)
engage in sale and leaseback transactions, and (viii) consolidate, merge, sell or otherwise dispose of all or substantially all of
our assets. These covenants are subject to significant exceptions and qualifications. For example, if these notes are assigned an
investment grade rating from at least two of Moody's, Standard and Poor's and Fitch and no default has occurred and is

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

continuing, certain covenants will be suspended and we may elect to suspend the subsidiary guarantees. The indenture has
customary defaults, including a cross-default to material indebtedness of Goodyear and our subsidiaries.

€250 million 3.75% Senior Notes due 2023 of GEBV

At December 31, 2020, €250 million aggregate principal amount of GEBV’s 3.75% senior notes due 2023 were outstanding.
These notes were sold at 100% of the principal amount and will mature on December 15, 2023. These notes are unsecured
senior obligations of GEBV and are guaranteed, on an unsecured senior basis, by the Company and our U.S. and Canadian
subsidiaries that also guarantee our obligations under our U.S. senior secured credit facilities described below.

We have the option to redeem these notes, in whole or in part, at any time at a redemption price of 100%, plus accrued and
unpaid interest to the redemption date.

The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing
our 5.125% senior notes due 2023, described above.

$800 million 9.5% Senior Notes due 2025

On May 18, 2020, we issued $600 million in aggregate principal amount of 9.5% senior notes due 2025. These notes were sold
at 100% of the principal amount and will mature on May 31, 2025. On May 22, 2020, we issued $200 million in aggregate
principal amount of additional notes, which were sold at 101.75% of the principal amount at an effective yield of 9.056%.
These notes are unsecured senior obligations and are guaranteed by our U.S. and Canadian subsidiaries that also guarantee our
obligations under our U.S. senior secured credit facilities described below.

We have the option to redeem these notes, in whole or in part, at any time on or after May 31, 2022 at a redemption price of
104.75%, 102.375% and 100% during the 12-month periods commencing on May 31, 2022, 2023 and 2024 and thereafter,
respectively, plus accrued and unpaid interest to the redemption date. Prior to May 31, 2022, we may redeem these notes, in
whole or in part, at a redemption price equal to 100% of the principal amount plus a make-whole premium and accrued and
unpaid interest to the redemption date. In addition, prior to May 31, 2022, we may redeem up to 35% of the original aggregate
principal amount of these notes from the net cash proceeds of certain equity offerings at a redemption price equal to 109.5% of
the principal amount plus accrued and unpaid interest to the redemption date.

The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing
our 5.125% senior notes due 2023, described above.

$900 million 5% Senior Notes due 2026

At December 31, 2020, $900 million aggregate principal amount of 5% senior notes due 2026 were outstanding. These notes
were sold at 100% of the principal amount and will mature on May 31, 2026. These notes are unsecured senior obligations and
are guaranteed by our U.S. and Canadian subsidiaries that also guarantee our obligations under our U.S. senior secured credit
facilities described below.

We have the option to redeem these notes, in whole or in part, at any time on or after May 31, 2021 at a redemption price of
102.5%, 101.667%, 100.833% and 100% during the 12-month periods commencing on May 31, 2021, 2022, 2023 and 2024
and thereafter, respectively, plus accrued and unpaid interest to the redemption date. Prior to May 31, 2021, we may redeem
these notes, in whole or in part, at a redemption price equal to 100% of the principal amount plus a make-whole premium and
accrued and unpaid interest to the redemption date.

The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing
our 5.125% senior notes due 2023, described above.

$700 million 4.875% Senior Notes due 2027

At December 31, 2020, $700 million aggregate principal amount of 4.875% senior notes due 2027 were outstanding. These
notes were sold at 100% of the principal amount and will mature on March 15, 2027. These notes are unsecured senior
obligations and are guaranteed by our U.S. and Canadian subsidiaries that also guarantee our obligations under our U.S. senior
secured credit facilities described below.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

We have the option to redeem these notes, in whole or in part, at any time prior to their maturity. If we elect to redeem the
notes prior to December 15, 2026, we will pay a redemption price equal to the greater of 100% of the principal amount of the
notes redeemed or the sum of the present values of the remaining scheduled payments on the notes redeemed, discounted using
a defined treasury rate plus 50 basis points, plus in either case accrued and unpaid interest to the redemption date. If we elect
to redeem the notes on or after December 15, 2026, we will pay a redemption price equal to 100% of the principal amount of
the notes redeemed plus accrued and unpaid interest to the redemption date.

The terms of the indenture for these notes, among other things, limit our ability and the ability of certain of our subsidiaries to
(i) incur certain liens, (ii) engage in sale and leaseback transactions, and (iii) consolidate, merge, sell or otherwise dispose of
all or substantially all of our assets. These covenants are subject to significant exceptions and qualifications.

$150 million 7% Senior Notes due 2028

At December 31, 2020, $150 million aggregate principal amount of 7% notes due 2028 were outstanding. These notes are
unsecured senior obligations and will mature on March 15, 2028.

We have the option to redeem these notes, in whole or in part, at any time at a redemption price equal to the greater of 100%
of the principal amount thereof or the sum of the present values of the remaining scheduled payments thereon, discounted using
a defined treasury rate plus 15 basis points, plus in either case accrued and unpaid interest to the redemption date.

The terms of the indenture for these notes, among other things, limit our ability and the ability of certain of our subsidiaries to
(i) incur secured debt, (ii) engage in sale and leaseback transactions, and (iii) consolidate, merge, sell or otherwise dispose of
all or substantially all of our assets. These covenants are subject to significant exceptions and qualifications.

CREDIT FACILITIES

$2.0 billion Amended and Restated First Lien Revolving Credit Facility due 2025

On April 9, 2020, we amended and restated our $2.0 billion first lien revolving credit facility. Changes to the facility include
extending the maturity to April 9, 2025 and increasing the borrowing base for the facility by increasing the amount attributable
to the value of our principal trademarks by $100 million and adding the value of eligible machinery and equipment. The interest
rate for loans under the facility increased by 50 basis points to LIBOR plus 175 basis points, based on our current liquidity as
described below, and undrawn amounts under the facility will be subject to an annual commitment fee of 25 basis points.

Our amended and restated first lien revolving credit facility is available in the form of loans or letters of credit. Up to $800
million in letters of credit and $50 million of swingline loans are available for issuance under the facility. Subject to the consent
of the lenders whose commitments are to be increased, we may request that the facility be increased by up to $250 million.

Our obligations under the facility are guaranteed by most of our wholly-owned U.S. and Canadian subsidiaries. Our obligations
under the facility and our subsidiaries' obligations under the related guarantees are secured by first priority security interests in
collateral that includes, subject to certain exceptions:

• U.S. and Canadian accounts receivable and inventory;
•

certain of our U.S. manufacturing facilities;

•

equity interests in our U.S. subsidiaries and up to 65% of the voting equity interests in most of our directly owned
foreign subsidiaries; and

substantially all other tangible and intangible assets, including equipment, contract rights and intellectual property.

Availability under the facility is subject to a borrowing base, which is based on (i) eligible accounts receivable and inventory
of The Goodyear Tire & Rubber Company and certain of its U.S. and Canadian subsidiaries, after adjusting for customary
factors that are subject to modification from time to time by the administrative agent or the majority lenders at their discretion
(not to be exercised unreasonably), (ii) the value of our principal trademarks in an amount not to exceed $400 million, (iii) the
value of eligible machinery and equipment, and (iv) certain cash in an amount not to exceed $200 million. Modifications are
based on the results of periodic collateral and borrowing base evaluations and appraisals. To the extent that our eligible accounts
receivable, inventory and other components of the borrowing base decline in value, our borrowing base will decrease and the
availability under the facility may decrease below $2.0 billion. In addition, if the amount of outstanding borrowings and letters
of credit under the facility exceeds the borrowing base, we are required to prepay borrowings and/or cash collateralize letters

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

of credit sufficient to eliminate the excess. As of December 31, 2020, our borrowing base, and therefore our availability, under
this facility was $454 million below the facility's stated amount of $2.0 billion.

The facility, which matures on April 9, 2025, contains covenants that, among other things, limit our ability and the ability of
certain of our subsidiaries to (i) incur additional debt or issue redeemable preferred stock, (ii) pay dividends, repurchase shares
or make certain other restricted payments or investments, (iii) incur liens, (iv) sell assets, (v) incur restrictions on the ability of
our subsidiaries to pay dividends or to make other payments to us, (vi) enter into affiliate transactions, (vii) engage in sale and
leaseback transactions, and (viii) consolidate, merge, sell or otherwise dispose of all or substantially all of our assets. These
covenants are subject to significant exceptions and qualifications. In addition, in the event that the availability under the facility
plus the aggregate amount of our Available Cash is less than $200 million, we will not be permitted to allow our ratio of
EBITDA to Consolidated Interest Expense to be less than 2.0 to 1.0 for any period of four consecutive fiscal quarters.
“Available Cash,” “EBITDA” and “Consolidated Interest Expense” have the meanings given them in the facility.

The facility has customary representations and warranties including, as a condition to borrowing, that all such representations
and warranties are true and correct, in all material respects, on the date of the borrowing, including representations as to no
material adverse change in our business or financial condition since December 31, 2019. The facility also has customary
defaults, including a cross-default to material indebtedness of Goodyear and our subsidiaries.

If Available Cash (as defined in the facility) plus the availability under the facility is greater than $750 million, amounts drawn
under the facility will bear interest, at our option, at (i) 175 basis points over LIBOR or (ii) 75 basis points over an alternative
base rate (the higher of (a) the prime rate, (b) the federal funds effective rate or the overnight bank funding rate plus 50 basis
points or (c) LIBOR plus 100 basis points). If Available Cash plus the availability under the facility is equal to or less than
$750 million, then amounts drawn under the facility will bear interest, at our option, at (i) 200 basis points over LIBOR or (ii)
100 basis points over an alternative base rate.

Amended and Restated Second Lien Term Loan Facility due 2025

Our obligations under our second lien term loan facility are guaranteed by most of our wholly-owned U.S. and Canadian
subsidiaries and are secured by second priority security interests in the same collateral securing the $2.0 billion first lien
revolving credit facility.

The facility contains covenants, representations, warranties and defaults similar to those in the $2.0 billion first lien revolving
credit facility. In addition, if our Pro Forma Senior Secured Leverage Ratio (the ratio of Consolidated Net Secured Indebtedness
to EBITDA) for any period of four consecutive fiscal quarters is greater than 3.0 to 1.0, before we may use cash proceeds from
certain asset sales to repay any junior lien, senior unsecured or subordinated indebtedness, we must first offer to use such cash
proceeds to prepay borrowings under the second lien term loan facility. "Pro Forma Senior Secured Leverage Ratio,"
"Consolidated Net Secured Indebtedness" and "EBITDA" have the meanings given them in the facility.

At December 31, 2020 and 2019, the amounts outstanding under this facility were $400 million.

€800 million Amended and Restated Senior Secured European Revolving Credit Facility due 2024

Our amended and restated European revolving credit facility consists of (i) a €180 million German tranche that is available
only to Goodyear Dunlop Tires Germany GmbH (“GDTG”) and (ii) a €620 million all-borrower tranche that is available to
GEBV, GDTG and Goodyear Dunlop Tires Operations S.A. Up to €175 million of swingline loans and €75 million in letters
of credit are available for issuance under the all-borrower tranche. Amounts drawn under this facility will bear interest at
LIBOR plus 150 basis points for loans denominated in U.S. dollars or pounds sterling and EURIBOR plus 150 basis points for
loans denominated in euros, and undrawn amounts under the facility are subject to an annual commitment fee of 25 basis points.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

GEBV and certain of its subsidiaries in the United Kingdom, Luxembourg, France and Germany provide guarantees to support
the facility. GEBV’s obligations under the facility and the obligations of its subsidiaries under the related guarantees are secured
by security interests in collateral that includes, subject to certain exceptions:

•

the capital stock of the principal subsidiaries of GEBV; and

a substantial portion of the tangible and intangible assets of GEBV and certain of its subsidiaries in the United
Kingdom, Luxembourg, France and Germany, including real property, equipment, inventory, contract rights,
intercompany receivables and cash accounts, but excluding accounts receivable and certain cash accounts in
subsidiaries that are or may become parties to securitization or factoring transactions.

The German guarantors secure the German tranche on a first-lien basis and the all-borrower tranche on a second-lien basis.
GEBV and its other subsidiaries that provide guarantees secure the all-borrower tranche on a first-lien basis and generally do
not provide collateral support for the German tranche. The Company and its U.S. and Canadian subsidiaries that guarantee our
U.S. senior secured credit facilities described above also provide unsecured guarantees in support of the facility.

The facility contains covenants similar to those in our first lien revolving credit facility, with additional limitations applicable
to GEBV and its subsidiaries. In addition, under the facility, GEBV’s ratio of Consolidated Net GEBV Indebtedness to
Consolidated GEBV EBITDA for a period of four consecutive fiscal quarters is not permitted to be greater than 3.0 to 1.0 at
the end of any fiscal quarter. “Consolidated Net GEBV Indebtedness” and “Consolidated GEBV EBITDA” have the meanings
given them in the facility.

The facility has customary representations and warranties including, as a condition to borrowing, that all such representations
and warranties are true and correct, in all material respects, on the date of the borrowing, including representations as to no
material adverse change in our business or financial condition since December 31, 2018. The facility also has customary
defaults, including a cross-default to material indebtedness of Goodyear and our subsidiaries.

At December 31, 2020 and 2019, there were no borrowings and no letters of credit outstanding under the European revolving
credit facility.

Accounts Receivable Securitization Facilities (On-Balance Sheet)

The facility involves an ongoing daily sale of substantially all of the trade accounts receivable of certain GEBV subsidiaries.
These subsidiaries retain servicing responsibilities. Utilization under this facility is based on eligible receivable balances.

Accounts Receivable Factoring Facilities (Off-Balance Sheet)

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Other Foreign Credit Facilities

A Mexican subsidiary and a U.S. subsidiary have a revolving credit facility in Mexico. At December 31, 2020, the amounts
available and utilized under this facility were $200 million and $152 million, respectively. At December 31, 2019, the amounts
available and utilized under this facility were $200 million. The facility ultimately matures in 2022, has covenants relating to
the Mexican and U.S. subsidiary, and has customary representations and warranties and default provisions relating to the
Mexican and U.S. subsidiary’s ability to perform its respective obligations under the facility.

A Chinese subsidiary has several financing arrangements in China. At December 31, 2020 and 2019, the amounts available
under these facilities were $981 million and $735 million, respectively. At December 31, 2020, the amount utilized under these
facilities was $375 million, of which $163 million represented notes payable and $212 million represented long term debt. At
December 31, 2020, $13 million of the long term debt was due within a year. At December 31, 2019, the amount utilized under
these facilities was $313 million, of which $118 million represented notes payable and $195 million represented long term
debt. At December 31, 2019, $95 million of the long term debt was due within a year. The facilities contain covenants relating
to the Chinese subsidiary and have customary representations and warranties and defaults relating to the Chinese subsidiary’s
ability to perform its obligations under the facilities. Certain of the facilities can only be used to finance the expansion of our
manufacturing facility in China and, at December 31, 2020 and 2019, the unused amounts available under these facilities were
$99 million and $106 million, respectively.

Debt Maturities

The annual aggregate maturities of our debt (excluding the impact of deferred financing fees and unamortized discounts) and
finance leases for the five years subsequent to December 31, 2020 are presented below. Maturities of debt credit agreements
have been reported on the basis that the commitments to lend under these agreements will be terminated effective at the end of
their current terms.
(In millions)
U.S. ........................................................... $
Foreign ......................................................
$

999 $
699
1,698 $

151 $
324
475 $

1 $
555
556 $

— $
88
88 $

1,199
19
1,218

2021

2025

2024

2023

2022

DERIVATIVE FINANCIAL INSTRUMENTS

Foreign Currency Contracts

We enter into foreign currency contracts in order to manage the impact of changes in foreign exchange rates on our consolidated
results of operations and future foreign currency-denominated cash flows. These contracts may be used to reduce exposure to
currency movements affecting existing foreign currency-denominated assets, liabilities, firm commitments and forecasted
transactions resulting primarily from trade purchases and sales, equipment acquisitions, intercompany loans and royalty
agreements. Contracts hedging short term trade receivables and payables normally have no hedging designation.

The following table presents the fair values for foreign currency hedge contracts that do not meet the criteria to be accounted
for as cash flow hedging instruments:

(In millions)
Fair Values — Current asset (liability):

December 31,
2020

December 31,
2019

Accounts receivable ................................................................................................ $
Other current liabilities ...........................................................................................

1 $

(27)

1
(15)

At December 31, 2020 and 2019, these outstanding foreign currency derivatives had notional amounts of $1,664 million and
$1,707 million, respectively, and were primarily related to intercompany loans. Other (Income) Expense included net
transaction losses on derivatives of $87 million in 2020 and net transaction gains on derivatives of $22 million in 2019. These
amounts were substantially offset in Other (Income) Expense by the effect of changing exchange rates on the underlying
currency exposures.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

The following table presents fair values for foreign currency hedge contracts that meet the criteria to be accounted for as cash
flow hedging instruments:

(In millions)
Fair Values — Current asset (liability):

December 31,
2020

December 31,
2019

Fair Values — Long term asset (liability):

Other assets ............................................................................................................. $
Other long term liabilities .......................................................................................

— $
(7)

— $
—

9
(3)

1
(1)

At December 31, 2020 and 2019, these outstanding foreign currency derivatives had notional amounts of $50 million and $365
million, respectively, and primarily related to U.S. dollar denominated intercompany transactions. Based on our current
forecasts, including the expected ongoing impacts of the COVID-19 pandemic, we believe that it is probable that the underlying
hedge transactions will occur within an appropriate time frame in order to continue to qualify for cash flow hedge accounting
treatment.

We enter into master netting agreements with counterparties. The amounts eligible for offset under the master netting
agreements are not material and we have elected a gross presentation of foreign currency contracts in the Consolidated Balance
Sheets.

The following table presents the classification of changes in fair values of foreign currency contracts that meet the criteria to
be accounted for as cash flow hedging instruments (before tax and minority):

(In millions)
Amount of gains (losses) deferred to AOCL(1) ................................. $
Reclassification adjustment for amounts recognized in CGS(1)........

2020

Year Ended December 31,
2019

2018

15 $
(13)

10 $
(14)

9
7

(1)

Excluded components deferred to AOCL and excluded components reclassified from AOCL to CGS for the twelve
months ended December 31, 2020, 2019 and 2018 were not material.

The estimated net amount of the deferred gains at December 31, 2020 that is expected to be reclassified to earnings within the
next twelve months is $2 million.

The counterparties to our foreign currency contracts were considered by us to be substantial and creditworthy financial
institutions that were recognized market makers at the time we entered into those contracts. We seek to control our credit
exposure to these counterparties by diversifying across multiple counterparties, by setting counterparty credit limits based on
long term credit ratings and other indicators of counterparty credit risk such as credit default swap spreads, and by monitoring
the financial strength of these counterparties on a regular basis. We also enter into master netting agreements with counterparties
when possible. By controlling and monitoring exposure to counterparties in this manner, we believe that we effectively manage
the risk of loss due to nonperformance by a counterparty. However, the inability of a counterparty to fulfill its contractual
obligations to us could have a material adverse effect on our liquidity, financial position or results of operations in the period
in which it occurs.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Note 16. Fair Value Measurements

The following table presents information about assets and liabilities recorded at fair value on the Consolidated Balance Sheet
at December 31:

(In millions)
Assets:
Investments.................................. $
Foreign Exchange Contracts........
Total Assets at Fair Value......... $
Liabilities:
Foreign Exchange Contracts........ $
Total Liabilities at Fair
Value ........................................... $

Total Carrying
Value in the
Consolidated
Balance Sheet

Quoted Prices in
Active Markets
for Identical
Assets/Liabilities
(Level 1)

Significant Other
Observable Inputs
(Level 2)

Significant
Unobservable
Inputs
(Level 3)

2020

2019

2020

2019

2020

2019

2020

2019

11 $
1
12 $

11 $
11
22 $

34 $

19 $

34 $

19 $

11 $
—
11 $

— $

11 $
—
11 $

— $

— $
1
1 $

— $
11
11 $

34 $

19 $

34 $

19 $

— $
—
— $

— $

—
—
—

—

The following table presents supplemental fair value information about long term fixed rate and variable rate debt, excluding
finance leases, at December 31:

(In millions)
Fixed Rate Debt(1):
Carrying amount — liability ......................................................................................... $
Fair value — liability ....................................................................................................
Variable Rate Debt(1):
Carrying amount — liability ......................................................................................... $
Fair value — liability ....................................................................................................

December 31,
2020

December 31,
2019

4,094 $
4,283

1,240 $
1,197

3,434
3,558

1,632
1,632

(1)

Excludes Notes Payable and Overdrafts of $406 million and $348 million at December 31, 2020 and 2019,
respectively, of which $227 million and $143 million, respectively, are at fixed rates and $179 million and $205
million, respectively, are at variable rates. The carrying value of Notes Payable and Overdrafts approximates fair
value due to the short term nature of the facilities.

Long term debt with fair values of $4,391 million and $3,808 million at December 31, 2020 and 2019, respectively, were
estimated using quoted Level 1 market prices. The carrying value of the remaining debt was based upon internal estimates of
fair value derived from market prices for similar debt.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Note 17. Pension, Other Postretirement Benefits and Savings Plans

We provide employees with defined benefit pension or defined contribution savings plans. Our hourly U.S. pension plans are
frozen and provide benefits based on length of service. The principal salaried U.S. pension plans are frozen and provide benefits
based on final five-year average earnings formulas. Salaried employees who made voluntary contributions to these plans receive
higher benefits. We also provide certain U.S. employees and employees at certain non-U.S. subsidiaries with health care
benefits or life insurance benefits upon retirement. Substantial portions of the health care benefits for U.S. salaried retirees are
not insured and are funded from operations.

During 2020, we recognized settlement charges of $28 million, primarily related to certain of our salaried U.S. pension plans,
of which $24 million was recognized in Other (Income) Expense and $4 million in Rationalizations, related to the exit of
employees under approved rationalization plans. The settlement charges resulted from total lump sum payments exceeding
annual service and interest cost of the applicable plans. In addition, we recognized a curtailment credit of $6 million in Other
(Income) Expense during 2020, related to a freeze of one of our non-U.S. defined benefit pension plans.

During 2020, we also recognized a curtailment credit of $4 million related to one of our Other Postretirement Benefits plans
and a termination benefits charge of $5 million related to our hourly U.S. pension plan in Rationalizations, related to the exit
of employees under approved rationalization plans.

During 2019, we recognized settlement charges of $6 million in Other (Income) Expense primarily related to certain of our
U.S. pension plans. The settlement charges resulted from total lump sum payments exceeding annual service and interest cost
of the applicable plans. During 2019, we also recognized curtailment and special termination benefit charges of $5 million in
Rationalizations, primarily related to the acceptance of voluntary buy-outs at our tire manufacturing facility in Gadsden,
Alabama.

During 2018, we recognized settlement charges of $13 million in Other (Income) Expense for our frozen U.K. pension plan.
These settlement charges related primarily to an offer of lump sum payments over a limited time during 2018 to non-retiree
participants of the plan. Lump sum payments of $103 million, primarily related to this offer, were made from existing plan
assets in 2018. As a result, total lump sum payments related to this plan exceeded annual interest cost for 2018.

During 2018, we recognized settlement charges of $8 million in Other (Income) Expense related to certain of our U.S. pension
plans. The settlement charges resulted from total lump sum payments exceeding annual service and interest cost of the
applicable plans.

We have increased the obligation for our U.K. pension plan by $16 million to recognize the estimated impact to our plan from
court rulings in 2018 and later, involving a plan with similar features to ours that was sponsored by another company, that
required equal guaranteed minimum pension benefits for males and females. The increases were recognized in AOCL as prior
service cost from plan amendments. The actual impact to our U.K. pension plan is still subject to the finalization of plan
amendments in response to the court rulings and potential future judicial decisions.

During 2018, the Brazil pension regulator approved our plan to replace certain benefits in our Brazil retiree medical plan with
an increase in benefits in our Brazil pension plan. The changes were effective in the fourth quarter of 2019 and resulted in an
increase to our pension obligation of $16 million and a decrease in our other postretirement benefits obligation of $14 million
at December 31, 2018. The increase to the pension obligation and decrease to the other postretirement benefits obligation were
recognized in AOCL as prior service cost and prior service credit, respectively.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Total benefits cost and amounts recognized in other comprehensive (income) loss follows:

Pension Plans

Other Postretirement Benefits
Non-U.S.
2020 2019 2018 2020 2019 2018 2020 2019 2018

U.S.

(In millions)
Benefits cost (credit):
Service cost .............................................. $
Interest cost ..............................................
Expected return on plan assets .................
Amortization of prior service cost
(credit) ...................................................... — — —
112
Amortization of net losses........................
54 $
Net periodic cost .................................. $

3 $
173
(223)

4 $
126
(193)

4 $
157
(219)

109
46 $

112
65 $

30 $
56
(54)

26 $
69
(59)

3
28 $
12
69
(70) — — —

2 $
11

2 $
8

1
38
71 $

2 —
29
29
56 $
67 $

(9)
4
5 $

(9)
3
7 $

(8)
4
11

Net curtailments/settlements /termination
benefits .....................................................
Total benefits cost ................................ $

31
77 $

8
73 $

8
62 $

(4)
67 $

3
70 $

13
69 $

(4) — —
11
1 $

7 $

108

Recognized in other comprehensive
(income) loss before tax and minority:
Prior service cost (credit) from plan
amendments.............................................. $ — $ — $ — $
14
Increase (decrease) in net actuarial losses
Amortization of prior service (cost)
credit in net periodic cost ......................... — — —
Amortization of net losses in net periodic
cost ...........................................................
Immediate recognition of prior service
cost and unrecognized gains and losses
due to curtailments, settlements, and
divestitures ...............................................
Total recognized in other
comprehensive (income) loss before
tax and minority .....................................

(113)

(109)

(112)

(27)

(26)

(11)

(5)

3 $
(100)

(2) $
201

31 $ — $ — $
6
5
(18)

(16)
(14)

(2)

(2) —

(38)

(29)

(30)

(4)

(3)

(5)

(9)

(3)

(14)

2 —

(146)

165

(31)

(27)

Total recognized in total benefits
cost and other comprehensive
(income) loss before tax and
minority ................................................ $

50 $

(40) $

(47) $

(79) $ 235 $

38 $

17 $

21 $

(16)

Service cost is recorded in CGS or SAG. Other components of net periodic cost are recorded in Other (Income) Expense. Net
curtailments, settlements and termination benefits are recorded in Other (Income) Expense or Rationalizations if related to a
rationalization plan.

We use the fair value of pension assets in the calculation of pension expense for all plans.

Total benefits cost for our other postretirement benefits was $1 million, $3 million and $4 million for our U.S. plans in 2020,
2019 and 2018, respectively, and $0 million, $4 million and $7 million for our non-U.S. plans in 2020, 2019 and 2018,
respectively.

The Medicare Prescription Drug Improvement and Modernization Act provides plan sponsors a federal subsidy for certain
qualifying prescription drug benefits covered under the sponsor’s postretirement health care plans. Our other postretirement
benefits cost is presented net of this subsidy, which is less than $1 million annually.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

The change in benefit obligation and plan assets for 2020 and 2019 and the amounts recognized in our Consolidated Balance
Sheets at December 31, 2020 and 2019 are as follows:

(In millions)
Change in benefit obligation:

Beginning balance .............................. $
Newly adopted plans .........................
Service cost — benefits earned .........
Interest cost .......................................
Plan amendments ..............................
Actuarial loss.....................................
Participant contributions ...................
Curtailments/settlements/termination
benefits ..............................................
Foreign currency translation..............
Benefit payments...............................
Ending balance ................................... $

Change in plan assets:

Beginning balance .............................. $
Newly adopted plans .........................
Actual return on plan assets ..............
Company contributions to plan
assets .................................................
Cash funding of direct participant
payments ...........................................
Participant contributions ...................
Settlements ........................................
Foreign currency translation..............
Benefit payments...............................
Ending balance ................................... $
Funded status at end of year................ $

Pension Plans

U.S.

Non-U.S.

Other
Postretirement
Benefits

417 $
390
366
352
339
1,578

136 $
129
130
137
138
743

16
16
15
15
14
68

(In millions)
All plans:

U.S.

Non-U.S.

2020

2019

2020

2019

Accumulated benefit obligation............................................... $

5,220 $

4,994 $

3,284 $

3,097

Plans not fully-funded:

Projected benefit obligation ..................................................... $
Accumulated benefit obligation...............................................
Fair value of plan assets...........................................................

5,235 $
5,220
4,970

5,009 $
4,994
4,780

933 $
856
185

1,059
991
370

Certain non-U.S. subsidiaries maintain unfunded pension plans consistent with local practices and requirements. At
December 31, 2020, these plans accounted for $264 million of our accumulated pension benefit obligation, $299 million of our
projected pension benefit obligation, and $90 million of our AOCL adjustment. At December 31, 2019, these plans accounted
for $247 million of our accumulated pension benefit obligation, $277 million of our projected pension benefit obligation, and
$82 million of our AOCL adjustment.

We expect to contribute $25 million to $50 million to our funded non-U.S. pension plans in 2021.

Assumed health care cost trend rates at December 31 follow:

Health care cost trend rate assumed for the next year .................................................
Rate to which the cost trend rate is assumed to decline (the ultimate trend rate)........
Year that the rate reaches the ultimate trend rate.........................................................

6.0%
5.0
2025

6.3%
5.0
2025

2020

2019

Our pension plan weighted average investment allocation at December 31, by asset category, follows:

U.S.

Non-U.S.

2020

2019

2020

2019

Cash and short term securities ...................................................
Equity securities.........................................................................
Debt securities............................................................................
Alternatives ................................................................................
Total........................................................................................

3%
4
93
—
100%

2%
6
92
—
100%

2%
4
93
1
100%

1%
3
96
—
100%

Our pension investment policy recognizes the long term nature of pension liabilities, and is primarily designed to offset the
future impact of discount rate movements on the funded status for our plans. All assets are managed externally according to
target asset allocation guidelines we have established. Manager guidelines prohibit the use of any type of investment derivative
without our prior approval. Portfolio risk is controlled by having managers comply with guidelines, establishing the maximum
size of any single holding in their portfolios, and using managers with different investment styles. We periodically undertake
asset and liability modeling studies to determine the appropriateness of the investments.

The portfolio of our U.S. pension plan assets includes holdings of global high quality and high yield fixed income securities,
short term interest bearing deposits, and private equities. The target asset allocation of our U.S. pension plans is 94% in

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

duration-matched fixed income securities and 6% in private equity and private credit securities. Actual U.S. pension fund asset
allocations are reviewed on a periodic basis and the pension funds are rebalanced to target ranges on an as needed basis.

The portfolios of our non-U.S. pension plans include holdings of U.S. and non-U.S. equities, global high quality and high yield
fixed income securities, insurance contracts, repurchase agreements, and short term interest bearing deposits. The weighted
average target asset allocation of the non-U.S. pension funds is approximately 95% fixed income and 5% equities.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

The fair values of our pension plan assets at December 31, 2020 by asset category are as follows:

U.S.

Non-U.S

Quoted
Prices
in Active
Markets
for
Identical
Assets

(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Other
Unobservable
Inputs
(Level 3)

Quoted
Prices in
Active
Markets
for
Identical
Assets

Total

(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Other
Unobservable
Inputs
(Level 3)

122 $

— $

—
—
—

2,842
1,038
—
280
—
—

—
7

— $

46 $

42 $

4 $

—
—
—

1
—
—
—
—
—

2
—

24
19
6

230
2,503
(650)
76
20
19

28
6

24
19
6

24
42
—
8
20
9

—
—

—
—
—

206
2,461
(650)
68
—
10

—
5

—
—
—

—
—
—
—
—
—

—
—

4,292 $

122 $

4,167 $

2,327 $

194 $

2,104 $

—

—
—
—

—
—
—
—
—
—

28
1

(In millions)
Cash and Short Term
Securities .................................... $
Equity Securities

Total

Common and Preferred Stock...
Commingled Funds...................
Mutual Funds ............................

—
—
—

Debt Securities

Corporate Bonds .......................
Government Bonds ...................
Repurchase Agreements ...........
Asset Backed Securities............
Commingled Funds...................
Mutual Funds ............................

2,843
1,038
—
280
—
—

Alternatives

Insurance Contracts ..................
Other Investments .....................

Total Investments in the
Fair Value Hierarchy...........

Investments Measured at Net
Asset Value, as Practical
Expedient:
Equity Securities

Commingled Funds...................
Mutual Funds ............................
Partnership Interests..................

Debt Securities

Mutual Funds ............................
Commingled Funds...................
Partnership Interests..................

Short Term Securities

2
7

23
—
166

148
295
102

Commingled Funds...................

Alternatives

Commingled Funds...................
Total Investments ......................
Other .........................................

—
5,048
(78)
Total Plan Assets........................ $ 4,970

62
4
—

81
665
—

6
3,148
(107)
$ 3,041

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

The fair values of our pension plan assets at December 31, 2019 by asset category are as follows:

U.S.

Non-U.S.

Quoted
Prices
in Active
Markets
for
Identical
Assets

(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Other
Unobservable
Inputs
(Level 3)

Quoted
Prices in
Active
Markets
for
Identical
Assets

Total

(Level 1)

Significant
Other
Observable
Inputs
(Level 2)

Significant
Other
Unobservable
Inputs
(Level 3)

47 $

— $

—
—
—

2,576
1,120
—
282
—

—
2

— $

33 $

29 $

4 $

—
—
—

1
—
—
1
—

2
—

24
36
5

190
2,271
(511)
74
19

22
(4)

24
36
5

10
60
—
5
9

—
—

—
—
—

180
2,211
(511)
69
10

—
(5)

—
—
—

—
—
—
—
—

—
—

4,031 $

47 $

3,980 $

2,159 $

178 $

1,958 $

—

—
—
—

—
—
—
—
—

22
1

(In millions)
Cash and Short Term
Securities .................................... $
Equity Securities

Total

Common and Preferred Stock...
Commingled Funds...................
Mutual Funds ............................

—
—
—

Debt Securities

Corporate Bonds .......................
Government Bonds ...................
Repurchase Agreements ...........
Asset Backed Securities............
Mutual Funds ............................

2,577
1,120
—
283
—

Alternatives

Insurance Contracts ..................
Other Investments .....................

Total Investments in the
Fair Value Hierarchy...........

Investments Measured at Net
Asset Value, as Practical
Expedient:
Equity Securities

Commingled Funds...................
Mutual Funds ............................
Partnership Interests..................

Debt Securities

Mutual Funds ............................
Commingled Funds...................

Short Term Securities

2
2

9
—
267

141
310

Commingled Funds...................

Alternatives

Commingled Funds...................
Total Investments ......................
Other .........................................

—
4,825
(45)
Total Plan Assets........................ $ 4,780

69
11
—

7
604

6
2,860
(120)
$ 2,740

At December 31, 2020 and 2019, the Plans did not directly hold any of our common stock.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant to
the measurement. Investments that are measured at Net Asset Value ("NAV") as a practical expedient to estimate fair value are
not classified in the fair value hierarchy. Under the practical expedient approach, the NAV is based on the fair value of the
underlying investments held by each fund less its liabilities. This practical expedient would not be used when it is determined
to be probable that the fund will sell the investment for an amount different than the reported NAV. The fair value amounts
presented in this table are intended to permit reconciliation of the fair value hierarchy to total plan assets. Valuation
methodologies used for assets and liabilities measured at fair value are as follows:

•

Cash and Short Term Securities: Cash and cash equivalents consist of U.S. and foreign currencies. Foreign currencies
are reported in U.S. dollars based on currency exchange rates readily available in active markets. Short term securities
held in commingled funds are valued at the NAV of units held at year end, as determined by the investment manager.

Equity Securities: Common and preferred stock, which are held in non-U.S. companies, are valued at the closing
price reported on the active market on which the individual securities are traded. Commingled funds are valued at the
NAV of units held at year end, as determined by a pricing vendor or the fund family. Mutual funds are valued at the
NAV of shares held at year end, as determined by the closing price reported on the active market on which the
individual securities are traded, or a pricing vendor or the fund family if an active market is not available. Partnership
interests in private equity securities are priced based on valuations using the partnership’s latest available financial
statements and the plan's percent ownership, adjusted for any cash transactions which occurred between the date of
those financial statements and our year end.

• Debt Securities: Corporate and government bonds, including asset backed securities, are valued at the closing price
reported on the active market on which the individual securities are traded, or based on institutional bid evaluations
using proprietary models if an active market is not available. Repurchase agreements are valued at the contract price
plus accrued interest. These secured borrowings are collateralized by government bonds held by the non-U.S. plans
and have maturities less than one year. Commingled funds are valued at the NAV of units held at year end, as
determined by a pricing vendor or the fund family. Mutual funds are valued at the NAV of shares held at year end, as
determined by the closing price reported on the active market on which the individual securities are traded, or a pricing
vendor or the fund family if an active market is not available. Partnership interests in private credit securities are
priced based on valuations using the partnership’s latest available financial statements and the plan's percent
ownership, adjusted for any cash transactions which occurred between the date of those financial statements and our
year end.

•

Alternatives: Commingled funds are valued based on the NAV as determined by the fund manager using the most
recent financial information available. Other investments primarily include derivative financial instruments, which are
valued using independent pricing sources which utilize industry standard derivative valuation models. Directed
insurance contracts are valued as reported by the issuer, based on discounted cash flows using weighted average
discount rates of 1.7% and 2.3% at December 31, 2020 and 2019, respectively.

The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective
of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other
market participants, the use of different methodologies or assumptions to determine the fair value of certain financial
instruments could result in a different fair value measurement at the reporting date.

The following table sets forth a summary of changes in fair value of the non-U.S. pension plan insurance contracts classified
as Level 3:

(In millions)
Balance, beginning of year ........................................................................................ $
Unrealized gains relating to instruments still held at the reporting date......................
Purchases, sales, issuances and settlements (net).........................................................
Foreign currency translation ........................................................................................
Balance, end of year ................................................................................................... $

2020

2019

22 $
3
1
2
28 $

19
1
2
—
22

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Savings Plans

Substantially all employees in the U.S. and employees of certain non-U.S. locations are eligible to participate in a defined
contribution savings plan. Expenses recognized for contributions to these plans were $100 million, $110 million and $111
million for 2020, 2019 and 2018, respectively.

Note 18. Stock Compensation Plans

Our stock compensation plans (collectively, the “Plans”) permit the grant of stock options, stock appreciation rights (“SARs”),
performance share units, restricted stock, restricted stock units and other stock-based awards to employees and directors. Our
current stock compensation plan, the 2017 Performance Plan, was adopted on April 10, 2017 and expires on April 9, 2027. A
total of 18 million shares of our common stock may be issued in respect of grants made under the 2017 Performance Plan. Any
shares of common stock that are subject to awards of stock options or SARs will be counted as one share for each share granted
for purposes of the aggregate share limit and any shares of common stock that are subject to any other awards will be counted
as 2 shares for each share granted for purposes of the aggregate share limit. In addition, shares of common stock that are subject
to awards issued under the 2017 Performance Plan or certain prior stock compensation plans that expire according to their
terms or are forfeited, terminated, canceled or surrendered or are settled, or can be paid, only in cash, or are surrendered in
payment of taxes associated with such awards (other than stock options or SARs) will be available for issuance pursuant to a
new award under the 2017 Performance Plan. Shares issued under our stock compensation plans are usually issued from shares
of our common stock held in treasury.

Stock Options

Grants of stock options and SARs (collectively referred to as “options”) under the Plans generally have a graded vesting period
of four years whereby one-fourth of the awards vest on each of the first four anniversaries of the grant date, an exercise price
equal to the fair market value of one share of our common stock on the date of grant (i.e., the closing market price on that date)
and a contractual term of ten years. The exercise of tandem SARs cancels an equivalent number of stock options and,
conversely, the exercise of stock options cancels an equivalent number of tandem SARs. Option grants are cancelled on, or 90
days following, termination of employment unless termination is due to retirement, death or disability under certain
circumstances, in which case, all outstanding options vest fully and remain outstanding for a term set forth in the related grant
agreement.

The following table summarizes the activity related to options during 2020:

Weighted
Average
Exercise
Price

Weighted
Average
Remaining
Contractual
Term (Years)

Aggregate
Intrinsic
Value (In
millions)

Options

Outstanding at January 1......................................................... 4,998,021 $
Options granted ........................................................................ 4,167,384
Options exercised .....................................................................
(20,218)
(370,938)
Options expired ........................................................................
(73,517)
Options cancelled .....................................................................
Outstanding at December 31.................................................... 8,700,732
Vested and expected to vest at December 31.............................. 8,604,644
Exercisable at December 31........................................................ 4,462,091
Available for grant at December 31 ............................................ 6,659,546

20.61
10.12
12.68
12.44
18.83
15.97
16.00
20.98

5.9
5.9

2.9

—

3
3
—

In addition, the aggregate intrinsic value of options exercised in 2019 and 2018 was $3 million and $9 million, respectively.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Significant option groups outstanding at December 31, 2020 and related weighted average exercise price and remaining
contractual term information follows:

Options

Grant Date
Outstanding
2/25/2020 .................................................................................... 4,142,384
556,409
2/27/2017 ....................................................................................
542,625
2/22/2016 ....................................................................................
493,730
2/23/2015 ....................................................................................
381,617
2/24/2014 ....................................................................................
904,580
2/28/2013 ....................................................................................
721,878
2/27/2012 ....................................................................................
523,979
2/22/2011 ....................................................................................
433,530
All Other .....................................................................................
8,700,732

Exercisable
—
465,203
542,625
493,730
381,617
904,580
721,878
523,979
428,479
4,462,091

Exercise
Price

10.12
35.26
29.90
27.16
26.44
12.98
12.94
13.91
(1 )

Remaining
Contractual
Term (Years)
9.16
6.16
5.15
4.15
3.15
2.16
1.16
0.15
(1 )

(1)

Options in the “All other” category had exercise prices ranging from $9.54 to $32.72. The weighted average exercise
price for options outstanding and exercisable in that category was $21.45 and $21.32, respectively, while the remaining
weighted average contractual term was 3.0 years for both.

Weighted average grant date fair values of stock options and the assumptions used in estimating those fair values are as follows:

Weighted average grant date fair value .................................................................................................. $
Black-Scholes model assumptions(1):

Expected term (years) ..........................................................................................................................
Interest rate...........................................................................................................................................
Volatility ..............................................................................................................................................
Dividend yield......................................................................................................................................

2020

10.12

7.50
1.29%
41.28%
6.54%

(1)

We review the assumptions used in our Black-Scholes model in conjunction with estimating the grant date fair value
of grants of options by our Board of Directors. There were no stock options granted during 2019 or 2018.

Performance Share Units

Performance share units granted under the Plans are earned over a three-year period beginning January 1 of the year of grant.
Total units earned for grants made in 2020 may vary between 0% and 133%, and grants made during 2019 and 2018 may vary
between 0% and 200% of the units granted based on the attainment of performance targets during the related three-year period
and continued service. The performance targets are established by the Board of Directors. All of the units earned will be settled
through the issuance of an equivalent number of shares of our common stock and are equity classified.

The following table summarizes the activity related to performance share units during 2020:

Unvested at January 1................................................................................................
Units granted.................................................................................................................
Units vested ..................................................................................................................
Units forfeited...............................................................................................................
Unvested at December 31...........................................................................................

Weighted
Average
Grant Date
Fair Value

20.98
7.59
29.04
20.92
15.02

Units

588,000 $
171,871
(154,141)
(10,950)
594,780

We measure the fair value of grants of performance share units based primarily on the closing market price of a share of our
common stock on the date of the grant, modified as appropriate to take into account the features of such grants.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Restricted Stock Units

Restricted stock units granted under the Plans typically vest over a three-year period beginning on the date of grant. Restricted
stock units will be settled through the issuance of an equivalent number of shares of our common stock and are equity classified.

The following table summarizes the activity related to restricted stock units during 2020:

Unvested at January 1................................................................................................
Units granted.................................................................................................................
Units vested and settled ................................................................................................
Units forfeited...............................................................................................................
Unvested at December 31...........................................................................................

Weighted
Average
Grant Date
Fair Value

23.21
9.86
24.50
18.80
19.50

Units
2,734,475 $
600,712
(646,444)
(119,870)
2,568,873

We measure the fair value of grants of restricted stock units based on the closing market price of a share of our common stock
on the date of the grant.

Other Information

Stock-based compensation expense, cash payments made to settle SARs and cash received from the exercise of stock options
follows:
(In millions)
Stock-based compensation expense recognized........................................ $
Tax benefit.................................................................................................
After-tax stock-based compensation expense ........................................... $

16
(4)
12

2018

2020

2019

31
(8)
23
—
—

$
$

27
(7)
20
—
2

$
$

1
9

Cash payments to settle SARs................................................................... $
Cash received from stock option exercises ............................................... $

As of December 31, 2020, unearned compensation cost related to the unvested portion of all stock-based awards was $22
million and is expected to be recognized over the remaining vesting period of the respective grants, through the fourth quarter
of 2024.

Note 19. Commitments and Contingent Liabilities

Environmental Matters

We have recorded liabilities totaling $64 million and $48 million at December 31, 2020 and 2019, respectively, for anticipated
costs related to various environmental matters, primarily the remediation of numerous waste disposal sites and certain
properties sold by us. The increase in our recorded reserve was primarily related to a $13 million charge for an environmental
remediation liability at a closed facility during 2020. Of these amounts, $16 million and $13 million was included in Other
Current Liabilities at December 31, 2020 and 2019, respectively. The costs include legal and consulting fees, site studies, the
design and implementation of remediation plans, post-remediation monitoring and related activities, and will be paid over
several years. The amount of our ultimate liability in respect of these matters may be affected by several uncertainties, primarily
the ultimate cost of required remediation and the extent to which other responsible parties contribute. We have limited potential
insurance coverage for future environmental claims.

Since many of the remediation activities related to environmental matters vary substantially in duration and cost from site to
site and the associated costs for each vary depending on the mix of unique site characteristics, in some cases we cannot
reasonably estimate a range of possible losses. Although it is not possible to estimate with certainty the outcome of all of our
environmental matters, management believes that potential losses in excess of current reserves for environmental matters,
individually and in the aggregate, will not have a material adverse effect on our financial position, cash flows or results of
operations.

Workers’ Compensation

We have recorded liabilities, on a discounted basis, totaling $196 million and $198 million for anticipated costs related to
workers’ compensation at December 31, 2020 and 2019, respectively. Of these amounts, $29 million and $39 million were

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

included in Current Liabilities as part of Compensation and Benefits at December 31, 2020 and 2019, respectively. The costs
include an estimate of expected settlements on pending claims, defense costs and a provision for claims incurred but not
reported. These estimates are based on our assessment of potential liability using an analysis of available information with
respect to pending claims, historical experience, and current cost trends. The amount of our ultimate liability in respect of these
matters may differ from these estimates. We periodically, and at least annually, update our loss development factors based on
actuarial analyses. At December 31, 2020 and 2019, the liability was discounted using a risk-free rate of return. At December
31, 2020, we estimate that it is reasonably possible that the liability could exceed our recorded amounts by approximately $25
million.

General and Product Liability and Other Litigation

We have recorded liabilities totaling $285 million and $293 million, including related legal fees expected to be incurred, for
potential product liability and other tort claims, including asbestos claims, at December 31, 2020 and 2019, respectively. Of
these amounts, $38 million and $43 million were included in Other Current Liabilities at December 31, 2020 and 2019,
respectively. The amounts recorded were estimated based on an assessment of potential liability using an analysis of available
information with respect to pending claims, historical experience and, where available, recent and current trends. Based upon
that assessment, at December 31, 2020, we do not believe that estimated reasonably possible losses associated with general and
product liability claims in excess of the amounts recorded will have a material adverse effect on our financial position, cash
flows or results of operations. However, the amount of our ultimate liability in respect of these matters may differ from these
estimates.

We have recorded an indemnification asset within Accounts Receivable of $1 million and within Other Assets of $23 million
for Sumitomo Rubber Industries, Ltd.'s ("SRI") obligation to indemnify us for certain product liability claims related to products
manufactured by a formerly consolidated joint venture entity, subject to certain caps and restrictions.

Asbestos. We are a defendant in numerous lawsuits alleging various asbestos-related personal injuries purported to result from
alleged exposure to asbestos in certain products manufactured by us or present in certain of our facilities. Typically, these
lawsuits have been brought against multiple defendants in state and federal courts. To date, we have disposed of approximately
154,200 claims by defending, obtaining a dismissal thereof, or entering into a settlement. The sum of our accrued asbestos-
related liability and gross payments to date, including legal costs, by us and our insurers totaled $563 million and $554 million
through December 31, 2020 and 2019, respectively.

A summary of recent approximate asbestos claims activity follows. Because claims are often filed and disposed of by dismissal
or settlement in large numbers, the amount and timing of settlements and the number of open claims during a particular period
can fluctuate significantly.

(Dollars in millions)
Pending claims, beginning of year .........................................................
New claims filed during the year...............................................................
Claims settled/dismissed ...........................................................................
Pending claims, end of year ....................................................................
Payments(1)................................................................................................. $

2020

2019

2018

39,600
1,100
(2,000)
38,700
13

43,100
1,500
(5,000)
39,600
22

54,300
1,300
(12,500)
43,100
18

(1)

Represents cash payments made during the period by us and our insurers on asbestos litigation defense and claim
resolution.

We periodically, and at least annually, review our existing reserves for pending claims, including a reasonable estimate of the
liability associated with unasserted asbestos claims, and estimate our receivables from probable insurance recoveries. We
recorded gross liabilities for both asserted and unasserted claims, inclusive of defense costs, totaling $149 million and $153
million at December 31, 2020 and 2019, respectively. In determining the estimate of our asbestos liability, we evaluated claims
over the next ten-year period. Due to the difficulties in making these estimates, analysis based on new data and/or a change in
circumstances arising in the future may result in an increase in the recorded obligation, and that increase could be significant.

We maintain certain primary and excess insurance coverage under coverage-in-place agreements, and also have additional
excess liability insurance with respect to asbestos liabilities. After consultation with our outside legal counsel and giving
consideration to agreements with certain of our insurance carriers, the financial viability and legal obligations of our insurance
carriers and other relevant factors, we determine an amount we expect is probable of recovery from such carriers. We record a

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

receivable with respect to such policies when we determine that recovery is probable and we can reasonably estimate the
amount of a particular recovery.

We recorded an insurance receivable related to asbestos claims of $90 million and $95 million at December 31, 2020 and 2019,
respectively. We expect that approximately 60% of asbestos claim related losses would be recoverable through insurance during
the ten-year period covered by the estimated liability. Of these amounts, $13 million was included in Current Assets as part of
Accounts Receivable at both December 31, 2020 and 2019. The recorded receivable consists of an amount we expect to collect
under coverage-in-place agreements with certain primary and excess insurance carriers as well as an amount we believe is
probable of recovery from certain of our other excess insurance carriers.

We believe that, at December 31, 2020, we had approximately $550 million in excess level policy limits applicable to indemnity
and defense costs for asbestos products claims under coverage-in-place agreements. We also had additional unsettled excess
level policy limits potentially applicable to such costs. In addition, we had coverage under certain primary policies for
indemnity and defense costs for asbestos products claims under remaining aggregate limits pursuant to a coverage-in-place
agreement, as well as coverage for indemnity and defense costs for asbestos premises claims pursuant to coverage-in-place
agreements.

We believe that our reserve for asbestos claims, and the receivable for recoveries from insurance carriers recorded in respect
of these claims, reflects reasonable and probable estimates of these amounts. The estimate of the liabilities and assets related
to pending and expected future asbestos claims and insurance recoveries is subject to numerous uncertainties, including, but
not limited to, changes in:

•

the litigation environment,

federal and state law governing the compensation of asbestos claimants,

recoverability of receivables due to potential insolvency of insurance carriers,

our approach to defending and resolving claims, and

the level of payments made to claimants from other sources, including other defendants and 524(g) trusts.

As a result, with respect to both asserted and unasserted claims, it is reasonably possible that we may incur a material amount
of cost in excess of the current reserve; however, such amounts cannot be reasonably estimated. Coverage under insurance
policies is subject to varying characteristics of asbestos claims including, but not limited to, the type of claim (premise vs.
product exposure), alleged date of first exposure to our products or premises and disease alleged. Recoveries may also be
limited by insurer insolvencies or financial difficulties. Depending upon the nature of these characteristics or events, as well as
the resolution of certain legal issues, some portion of the insurance may not be accessible by us.

Amiens Labor Claims

Approximately 850 former employees of the closed Amiens, France manufacturing facility have asserted wrongful termination
or other claims totaling approximately €140 million ($172 million) against Goodyear France SAS. On May 28, 2020, Goodyear
France SAS received a judgment from the labor court with respect to approximately 790 of these former employees. As a result
of this ruling and settlement discussions to resolve these claims and other similar claims, we accrued approximately €27 million
($30 million) during 2020 for estimated additional termination benefits. We have appealed this ruling and will continue to
defend ourselves against these claims and any additional claims that may be asserted against us.

Other Actions

We are currently a party to various claims, indirect tax assessments and legal proceedings in addition to those noted above. If
management believes that a loss arising from these matters is probable and can reasonably be estimated, we record the amount
of the loss, or the minimum estimated liability when the loss is estimated using a range and no point within the range is more
probable than another. As additional information becomes available, any potential liability related to these matters is assessed
and the estimates are revised, if necessary. Based on currently available information, management believes that the ultimate
outcome of these matters, individually and in the aggregate, will not have a material adverse effect on our financial position or
overall trends in results of operations.

Our recorded liabilities and estimates of reasonably possible losses for the contingent liabilities described above are based on
our assessment of potential liability using the information available to us at the time and, where applicable, any past experience
and recent and current trends with respect to similar matters. Our contingent liabilities are subject to inherent uncertainties, and

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

unfavorable judicial or administrative decisions could occur which we did not anticipate. Such an unfavorable decision could
include monetary damages, fines or other penalties or an injunction prohibiting us from taking certain actions or selling certain
products. If such an unfavorable decision were to occur, it could result in a material adverse impact on our financial position
and results of operations in the period in which the decision occurs or in future periods.

Income Tax Matters

The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations. We
recognize liabilities for anticipated tax audit issues based on our estimate of whether, and the extent to which, additional taxes
will be due. If we ultimately determine that payment of these amounts is unnecessary, we reverse the liability and recognize a
tax benefit during the period in which we determine that the liability is no longer necessary. We also recognize income tax
benefits to the extent that it is more likely than not that our positions will be sustained when challenged by the taxing authorities.
We derecognize income tax benefits when based on new information we determine that it is no longer more likely than not that
our position will be sustained. To the extent we prevail in matters for which liabilities have been established, or determine we
need to derecognize tax benefits recorded in prior periods, our results of operations and effective tax rate in a given period
could be materially affected. An unfavorable tax settlement would require use of our cash, and lead to recognition of expense
to the extent the settlement amount exceeds recorded liabilities and, in the case of an income tax settlement, result in an increase
in our effective tax rate in the period of resolution. A favorable tax settlement would be recognized as a reduction of expense
to the extent the settlement amount is lower than recorded liabilities and, in the case of an income tax settlement, would result
in a reduction in our effective tax rate in the period of resolution.

While the Company applies consistent transfer pricing policies and practices globally, supports transfer prices through
economic studies, seeks advance pricing agreements and joint audits to the extent possible and believes its transfer prices to be
appropriate, such transfer prices, and related interpretations of tax laws, are occasionally challenged by various taxing
authorities globally. We have received various tax assessments challenging our interpretations of applicable tax laws in various
jurisdictions. Although we believe we have complied with applicable tax laws, have strong positions and defenses and have
historically been successful in defending such claims, our results of operations could be materially adversely affected in the
case we are unsuccessful in the defense of existing or future claims.

Binding Commitments and Guarantees

At December 31, 2020, we had binding commitments for raw materials, capital expenditures, utilities and various other types
of contracts. Total commitments on contracts that extend beyond 2021 are expected to total approximately $1.0 billion. In
addition, we have other contractual commitments, the amounts of which cannot be estimated, pursuant to certain long term
agreements under which we will purchase varying amounts of certain raw materials and finished goods at agreed upon base
prices that may be subject to periodic adjustments for changes in raw material costs and market price adjustments, or in
quantities that may be subject to periodic adjustments for changes in our or our suppliers' production levels.

We have off-balance sheet financial guarantees and other commitments totaling $73 million and $74 million at December 31,
2020 and 2019, respectively. We issue guarantees to financial institutions or other entities on behalf of certain of our affiliates,
lessors or customers. We generally do not receive a separate premium as consideration for, and do not require collateral in
connection with, the issuance of these guarantees.

In 2017, we issued a guarantee of approximately PLN 165 million ($44 million) in connection with an indirect tax assessment
in EMEA. As of December 31, 2020, this guarantee amount has been increased to PLN 181 million ($49 million). We have
concluded our performance under this guarantee is not probable and, therefore, have not recorded a liability for this guarantee.
In 2015, as a result of the dissolution of the global alliance with SRI, we issued a guarantee of $46 million to an insurance
company related to SRI's obligation to pay certain outstanding workers' compensation claims of a formerly consolidated joint
venture entity. As of December 31, 2020, this guarantee amount has been reduced to $23 million. We have concluded the
probability of our performance to be remote and, therefore, have not recorded a liability for this guarantee. While there is no
fixed duration of this guarantee, we expect the amount of this guarantee to continue to decrease over time as the formerly
consolidated joint venture entity pays its outstanding claims. If our performance under these guarantees is triggered by non-
payment or another specified event, we would be obligated to make payment to the financial institution or the other entity, and
would typically have recourse to the affiliate, lessor, customer, or SRI. Except for the workers' compensation guarantee
described above, the guarantees expire at various times through 2021. We are unable to estimate the extent to which our
affiliates’, lessors’, customers’, or SRI's assets would be adequate to recover any payments made by us under the related
guarantees.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

At December 31, 2020, we had an agreement to provide a revolving loan commitment to TireHub of up to $100 million. As
of December 31, 2020, $14 million was drawn on this commitment.

Indemnifications

At December 31, 2020, we were a party to various agreements under which we had assumed obligations to indemnify the
counterparties from certain potential claims and losses. These agreements typically involve standard commercial activities
undertaken by us in the normal course of business; the sale of assets by us; the formation or dissolution of joint venture
businesses to which we had contributed assets in exchange for ownership interests; and other financial transactions.
Indemnifications provided by us pursuant to these agreements relate to various matters including, among other things,
environmental, tax and shareholder matters; intellectual property rights; government regulations; employment-related matters;
and dealer, supplier and other commercial matters.

Certain indemnifications expire from time to time, and certain other indemnifications are not subject to an expiration date. In
addition, our potential liability under certain indemnifications is subject to maximum caps, while other indemnifications are
not subject to caps. Although we have been subject to indemnification claims in the past, we cannot reasonably estimate the
number, type and size of indemnification claims that may arise in the future. Due to these and other uncertainties associated
with the indemnifications, our maximum exposure to loss under these agreements cannot be estimated.

We have determined that there are no indemnifications or guarantees other than liabilities for which amounts are already
recorded or reserved in our consolidated financial statements under which it is probable that we have incurred a liability.

Warranty

We recorded $22 million for potential claims under warranties offered by us at both December 31, 2020 and 2019, the majority
of which are recorded in Other Current Liabilities.

The following table presents changes in the warranty reserve during 2020 and 2019:
(In millions)
Balance at January 1 .................................................................................................. $
Payments made during the period..............................................................................
Expense recorded during the period ..........................................................................
Translation adjustment...............................................................................................
Balance at December 31 ............................................................................................. $

2020

2019

22 $
(21)
21
—
22 $

18
(25)
29
—
22

Note 20. Capital Stock

Dividends

During 2020, 2019 and 2018, we paid cash dividends of $37 million, $148 million and $138 million, respectively, on our
common stock. This excludes dividends earned on stock based compensation plans of $1 million, $2 million and $1 million for
the years 2020, 2019 and 2018, respectively. On April 16, 2020, we announced that we have suspended the quarterly dividend
on our common stock.

Common Stock Repurchases

We may repurchase shares delivered to us by employees as payment for the exercise price of stock options and the withholding
taxes due upon the exercise of stock options or the vesting or payment of stock awards. During 2020, 2019 and 2018, we did
not repurchase any shares from employees.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

Note 21. Reclassifications out of Accumulated Other Comprehensive Loss

The following table presents changes in AOCL by component for the years ended December 31, 2020, 2019 and 2018, after
tax and minority interest:

(In millions) Income (Loss)
Balance at December 31, 2017.................................................. $
Other comprehensive income (loss) before reclassifications ...
Amounts reclassified from accumulated other comprehensive
loss ............................................................................................
Balance at December 31, 2018.................................................. $

Other comprehensive income (loss) before
reclassifications(1)......................................................................
Amounts reclassified from accumulated other comprehensive
loss ............................................................................................
Balance at December 31, 2019.................................................. $

Other comprehensive income (loss) before
reclassifications(1)......................................................................
Amounts reclassified from accumulated other comprehensive
loss ............................................................................................
Balance at December 31, 2020.................................................. $

Foreign
Currency
Translation
Adjustment

Unrecognized
Net Actuarial
Losses and
Prior Service
Costs

Deferred
Derivative

Gains (Losses)

Total

(915) $
(245)

(3,052) $
4

—
(1,160) $

125
(2,923) $

(9) $
9

7
7 $

(3,976)
(232)

132
(4,076)

(168)

(154)

—
(1,156) $

108
(2,983) $

(14)
3 $

94
(4,136)

(128)

(4)

(117)

—
(1,284) $

131
(2,856) $

(13)
5 $

118
(4,135)

(1)

Includes adjustments to AOCL of $27 million and $(32) million in 2020 and 2019, respectively, to adjust the respective
prior year obligation of our frozen U.K. pension plan.

The following table presents reclassifications out of AOCL for the years ended December 31, 2020, 2019 and 2018:

(In millions) (Income) Expense

Component of AOCL
Amortization of prior service cost and unrecognized gains
and losses............................................................................... $
Immediate recognition of prior service cost and
unrecognized gains and losses due to curtailments,
settlements and divestitures...................................................

Unrecognized Net Actuarial Losses and Prior Service
Costs, before tax ................................................................. $
Tax effect ............................................................................
Net of tax.......................................................................... $
Deferred Derivative (Gains) Losses ...................................... $
Tax effect ............................................................................
Net of tax.......................................................................... $
Total reclassifications.......................................................... $

2020

Year Ended
December 31,
2019
Amount Reclassified from
AOCL

2018

Affected Line Item in the Consolidated
Statements of Operations

144 $

137 $

139 Other (Income) Expense

Other (Income) Expense /
Rationalizations

173 $
(42)
131 $
(13) $
—
(13) $
118 $

143 $
(35)
108 $
(14) $
—
(14) $
94 $

164
(39) United States and Foreign Taxes
125 Goodyear Net Income (Loss)

7 Cost of Goods Sold
— United States and Foreign Taxes
7 Goodyear Net Income (Loss)
132 Goodyear Net Income (Loss)

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting
as such term is defined under Rule 13a-15(f) promulgated under the Securities Exchange Act of 1934, as amended.

Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of the Company’s consolidated financial statements for external purposes in accordance
with generally accepted accounting principles.

Internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit the preparation of the consolidated financial
statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are
being made only in accordance with appropriate authorizations of management and directors of the Company; and (iii) provide
reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s
assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also,
projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an assessment of the Company’s internal control over financial reporting as of December 31, 2020
using the framework specified in Internal Control — Integrated Framework (2013), published by the Committee of Sponsoring
Organizations of the Treadway Commission. Based on such assessment, management has concluded that the Company’s
internal control over financial reporting was effective as of December 31, 2020.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2020 has been audited by
PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is presented in
this Annual Report.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders of The Goodyear Tire & Rubber Company

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of The Goodyear Tire & Rubber Company and its subsidiaries
as of December 31, 2020 and 2019 and the related consolidated statements of operations, comprehensive income (loss),
shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2020, including the related
notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control
over financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework
(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2020 and 2019, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2020 in conformity with accounting principles generally accepted in the United
States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2020, based on criteria established in Internal Control - Integrated Framework (2013)
issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for
leases as of January 1, 2019.

Basis for Opinions

The Company's management is responsible for these consolidated financial statements, for maintaining effective internal
control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included
in the accompanying Management's Report on Internal Control over Financial Reporting. Our responsibility is to express
opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting
based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United
States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal
securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform
the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,
whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material
respects.

Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement
of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.
Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated
financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control
over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that
a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We
believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures
that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and
expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial
statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or
disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or
complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated
financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate
opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Goodwill Impairment – EMEA Reporting Unit

As described in Notes 1 and 11 to the consolidated financial statements, the Company’s consolidated goodwill balance was
$408 million as of December 31, 2020, and the goodwill associated with the Europe, Middle East and Africa (“EMEA”)
reporting unit was $250 million. Goodwill is assessed for impairment annually with the option to perform a qualitative
assessment to determine whether further impairment testing is necessary or to perform a quantitative assessment by comparing
the fair value of the reporting unit to its carrying amount. In addition to annual testing, impairment testing is conducted when
events occur or circumstances change that would more likely than not reduce the fair value of the asset below its carrying
amount. As a result of the COVID-19 pandemic and the resulting decline in the macroeconomic environment, as well as a
significant decrease in the Company’s market capitalization, management performed an interim impairment analysis as of
March 31, 2020 utilizing a discounted cash flow model. Based on the results of management’s interim quantitative assessment,
management recorded a non-cash impairment charge of $182 million for the EMEA reporting unit during the first quarter of
2020. The most critical assumptions used in the calculation of the estimated fair value of the Company’s EMEA reporting unit
are the timing of the recovery in sales from the COVID-19 pandemic, the projected long term operating margin, and the discount
rate.

The principal considerations for our determination that performing procedures relating to the goodwill impairment of the
EMEA reporting unit is a critical audit matter are (i) the significant judgment by management when developing the fair value
measurement of the reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and
evaluating audit evidence relating to management’s significant assumptions for the timing of the recovery in sales from the
COVID-19 pandemic, the projected long term operating margin, and the discount rate; and (iii) the audit effort involved the
use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s goodwill impairment assessment, including controls over the valuation of the Company’s EMEA reporting unit.
These procedures also included, among others (i) testing management’s process for developing the fair value of the EMEA
reporting unit, (ii) evaluating the appropriateness of the discounted cash flow model, (iii) testing the completeness and accuracy
of underlying data used in the model, and (iv) evaluating the significant assumptions used by management related to the timing
of the recovery in sales from the COVID-19 pandemic, the projected long term operating margin, and the discount rate.
Evaluating management’s assumptions related to the timing of the recovery in sales from the COVID-19 pandemic and the
projected long term operating margin involved evaluating whether the assumptions used by management were reasonable
considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry
data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. Professionals with
specialized skill and knowledge were used to assist in the evaluation of the Company’s discounted cash flow model and the
discount rate assumption.

Income Taxes - Valuation of U.S. Deferred Tax Assets

As described in Notes 1 and 6 to the consolidated financial statements, as of December 31, 2020, the Company has
approximately $1.2 billion of U.S. federal, state and local deferred tax assets, net of valuation allowances totaling $368 million
primarily for foreign tax credits with limited lives. Approximately $900 million of these U.S. net deferred tax assets have
unlimited lives and approximately $300 million have limited lives and expire between 2025 and 2040. Management records
valuation allowances unless it is more likely than not that all or a portion of the deferred tax assets will be realized. As disclosed
by management, the valuation of deferred tax assets requires judgment in assessing future profitability, including the impact of
tax planning strategies and the expiration date of the asset. During the first quarter of 2020, management established a valuation

allowance of $295 million against all of the foreign tax credits with expiration dates through 2024 and a portion of those
expiring in 2025 due to the significant U.S. tax loss in 2020 driven by the impact of the COVID-19 pandemic, including the
temporary suspension of production at the Company’s U.S. manufacturing facilities. As loss carryforwards must be utilized
prior to foreign tax credits in offsetting future income for tax purposes, management concluded that it was no longer more
likely than not that they will be able to utilize these foreign tax credits prior to their expiration. During 2020, the Company’s
U.S. business went into a cumulative three-year loss position due to the significant impact of the COVID-19 pandemic on the
Company’s 2020 results. Management concluded that the Company’s future taxable income provides positive, objectively
verifiable information to conclude that it is more likely than not that the Company will be able to utilize the remaining deferred
tax assets expiring from 2025 onward.

The principal considerations for our determination that performing procedures relating to the income taxes - valuation of U.S.
deferred tax assets is a critical audit matter are the significant judgment by management in determining whether the net deferred
tax assets are more likely than not to be realized in the future, which in turn led to a high degree of auditor judgment and effort
in performing procedures and evaluating audit evidence relating to management’s assessment of the realization of net deferred
tax assets.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall
opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to
management’s assessment of the realization of net deferred tax assets, including controls over projected taxable income. These
procedures also included, among others, evaluating the positive and negative evidence available in management’s assessment
of the realization of net deferred tax assets, testing the completeness and accuracy of underlying data used in management’s
assessment, and evaluating the reasonableness of management’s assumption related to projected taxable income. Evaluating
management’s assumption related to projected taxable income involved evaluating whether the assumption used by
management was reasonable considering (i) the current and past performance of the Company’s U.S. business, (ii) the
consistency with external market and industry data, (iii) evaluating whether tax planning strategies are prudent and feasible,
and (iv) whether the assumption was consistent with evidence obtained in other areas of the audit.

Cleveland, Ohio
February 9, 2021

We have served as the Company’s auditor since 1898.

Supplementary Data
(Unaudited)
Quarterly Data

(In millions, except per share amounts)
2020
Net Sales .......................................................................... $
Gross Profit (Loss)...........................................................
Net Income (Loss) ........................................................... $
Less: Minority Shareholders’ Net Income (Loss) ......
Goodyear Net Income (Loss) ........................................ $
Goodyear Net Income (Loss) - Per Share of Common
Stock:*

— Basic ...................................................................... $
— Diluted ................................................................... $
Weighted Average Shares Outstanding — Basic.............
— Diluted .........
Dividends Declared per Share of Common Stock ........... $
Selected Balance Sheet Items at Quarter-End:

First

Second

Quarter
Third

Fourth

Year

3,056 $
504
(617) $
2
(619) $

2,144 $
(72)
(703) $
(7)
(696) $

3,465 $
690
3 $
5
(2) $

3,656 $
862
67 $
4
63 $

12,321
1,984
(1,250)
4
(1,254)

(2.65) $
(2.65) $
234
234
0.16 $

(2.97) $
(2.97) $
234
234
— $

(0.01) $
(0.01) $
234
234
— $

0.27 $
0.27 $
235
235
— $

(5.35)
(5.35)
234
234
0.16

Total Assets ................................................................ $
Total Debt and Finance Leases ..................................
Goodyear Shareholders’ Equity..................................
Total Shareholders’ Equity .........................................

16,691 $
6,524
3,510
3,697

15,827 $
6,981
2,833
3,013

16,192 $
6,648
2,860
3,039

16,506
5,990
3,078
3,259

Due to the anti-dilutive impact of potentially dilutive securities on periods with a Goodyear net loss, as well as
weighted average shares changing throughout the year, the quarterly earnings per share amounts may not add to the
full year.

All numbers presented below are after-tax and minority.

The first quarter of 2020 included net discrete tax charges of $290 million, a goodwill impairment charge of $178 million,
rationalization charges of $7 million, and accelerated depreciation of $4 million.

The second quarter of 2020 included an impairment charge related to our investment in TireHub of $113 million, rationalization
charges of $76 million, accelerated depreciation of $65 million, net losses on asset sales of $3 million, and net discrete tax
charges of $2 million.

The third quarter of 2020 included rationalization charges of $20 million, pension settlement charges of $12 million, net charges
of $5 million related to indirect tax items, and accelerated depreciation of $3 million. The third quarter of 2020 also included
net discrete tax benefits of $14 million.

The fourth quarter of 2020 included net discrete tax charges of $26 million, rationalization charges of $23 million, an
environmental remediation charge of $10 million, accelerated depreciation of $9 million, and legal claims related to
discontinued operations of $2 million. The fourth quarter of 2020 also included a gain for a one-time legal settlement of $26
million and favorable indirect tax items of $4 million.

(In millions, except per share amounts)
2019
Net Sales .......................................................................... $
Gross Profit......................................................................
Net Income (Loss) ........................................................... $
Less: Minority Shareholders’ Net Income (Loss) ......
Goodyear Net Income (Loss) ........................................ $
Goodyear Net Income (Loss) - Per Share of Common
Stock:*

First

Second

Quarter
Third

Fourth

Year

3,598 $
719
(44) $
17
(61) $

3,632 $
777
56 $
2
54 $

3,802 $
837
90 $
2
88 $

3,713 $
810
(399) $
(7)
(392) $

14,745
3,143
(297)
14
(311)

(0.26) $

232
232
0.16 $

0.23 $

233
234
0.16 $

0.38 $

233
234
0.16 $

(1.68) $

234
234
0.16 $

(1.33)

233
233
0.64

Total Assets ................................................................ $
Total Debt and Capital Leases ...................................
Goodyear Shareholders’ Equity..................................
Total Shareholders’ Equity.........................................

18,273 $
6,506
4,808
5,031

18,470 $
6,737
4,847
5,049

18,299 $
6,676
4,835
5,035

17,185
5,663
4,351
4,545

All numbers presented below are after-tax and minority.

The first quarter of 2019 included rationalization charges of $85 million, net charges of $17 million related to indirect tax items,
net discrete tax charges of $6 million, and legal claims related to discontinued operations of $4 million. The first quarter of
2019 also included net gains on asset sales of $4 million and a gain of $2 million for hurricane-related net insurance recoveries.

The second quarter of 2019 included net discrete tax charges of $6 million, rationalization charges of $3 million, and accelerated
depreciation of $1 million. The second quarter of 2019 also included favorable indirect tax items of $6 million.

The third quarter of 2019 included rationalization charges of $17 million, charges of $5 million related to flooding at our
Beaumont, Texas chemical facility, and accelerated depreciation of $1 million. The third quarter of 2019 also included a net
discrete tax benefit of $6 million.

The fourth quarter of 2019 included net discrete tax charges of $380 million, rationalization charges of $60 million, charges of
$20 million related to flooding at our Beaumont, Texas chemical facility, accelerated depreciation of $10 million, and pension
settlement charges of $4 million. The fourth quarter of 2019 also included favorable indirect tax items of $24 million, net gains
on asset sales of $11 million, and a gain related to an acquisition of $2 million.

SELECTED FINANCIAL DATA.

(In millions, except per share amounts)
Net Sales .................................................................................... $
Net Income (Loss) ..................................................................... $
Less: Minority Shareholders’ Net Income ..............................
Goodyear Net Income (Loss)..................................................... $
Goodyear Net Income (Loss) — Per Share of Common Stock:
Basic........................................................................................ $
Diluted..................................................................................... $
Cash Dividends Declared per Common Share .......................... $
Total Assets................................................................................ $
Long Term Debt and Finance Leases Due Within One Year ....
Long Term Debt and Finance Leases ........................................
Goodyear Shareholders’ Equity .................................................
Total Shareholders’ Equity ........................................................

2020
12,321 $
(1,250) $
4
(1,254) $

(5.35) $
(5.35) $
0.16 $
16,506 $
152
5,432
3,078
3,259

Year Ended December 31,(1)

2019(2)

2018(2)

2017(2)

2016(2)

14,745 $
(297) $
14
(311) $

15,475 $
708 $
15
693 $

15,377 $15,158
365 $ 1,284
19
20
346 $ 1,264

(1.33) $
(1.33) $
0.64 $
17,185 $
562
4,753
4,351
4,545

2.92 $
2.89 $
0.58 $
16,872 $
243
5,110
4,864
5,070

1.39 $
1.37 $
0.44 $

4.81
4.74
0.31
17,064 $16,511
436
5,076 4,798
4,603 4,507
4,850 4,725

391

(1)

(2)

Refer to “Basis of Presentation” and “Principles of Consolidation” in the Note to the Consolidated Financial
Statements No. 1, Accounting Policies.

Effective January 1, 2019, we adopted, using the modified retrospective adoption approach, an accounting standards
update with new guidance relating to leases. Our adoption of this standards update resulted in adjustments that
increased Total Assets by $873 million, increased Long Term Debt and Finance Leases by $14 million, and decreased
Goodyear Shareholders’ Equity and Total Shareholders’ Equity by $23 million. Periods prior to 2019 have not been
restated for the adoption of this standards update.

GENERAL INFORMATION REGARDING OUR SEGMENTS

For the year ended December 31, 2020, we operated our business through three operating segments representing our regional
tire businesses: Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific.

Our principal business is the development, manufacture, distribution and sale of tires and related products and services
worldwide. We manufacture and market numerous lines of rubber tires for:

•
automobiles
•
trucks
•
buses
•
aircraft
• motorcycles
•
•
•
•

earthmoving and mining equipment
farm implements
industrial equipment, and
various other applications.

In each case, our tires are offered for sale to vehicle manufacturers for mounting as original equipment (“OE”) and for
replacement worldwide. We manufacture and sell tires under the Goodyear, Dunlop, Kelly, Debica, Sava and Fulda brands and
various other Goodyear owned “house” brands, and the private-label brands of certain customers. In certain geographic areas
we also:

retread truck, aviation and off-the-road ("OTR") tires,

•
• manufacture and sell tread rubber and other tire retreading materials,
•
•

sell chemical products, and/or
provide automotive and commercial repair services and miscellaneous other products and services.

Our principal products are new tires for most applications. Approximately 84% of our sales in 2020, 85% in 2019 and 84% in
2018 were for tire units. Sales of chemical products to unaffiliated customers were 3% in 2020, 3% in 2019 and 4% in 2018
of our consolidated sales (5%, 5% and 7% of Americas total sales in 2020, 2019 and 2018, respectively). The percentages of
each segment’s sales attributable to tire units during the periods indicated were:

Tire Unit Sales
Americas ...................................................................................................
Europe, Middle East and Africa................................................................
Asia Pacific ...............................................................................................

2020

Year Ended December 31,
2019

2018

78%
90
91

80%
91
91

78%
92
91

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.

Goodyear does not include motorcycle, aviation or race tires in reported tire unit sales.

PERFORMANCE GRAPH

The graph below compares the cumulative total shareholder returns of Goodyear Common Stock, the Standard & Poor’s
Midcap 400 Index (the “S&P Midcap 400”) and the Dow Jones US Auto Parts Index (the “Dow Auto Parts”) at each
December 31 during the period beginning December 31, 2015 and ending December 31, 2020. The graph assumes the
investment of $100 on December 31, 2015 in Goodyear Common Stock, in the S&P Midcap 400 and in the Dow Auto Parts.
Total shareholder return was calculated on the basis that in each case all dividends were reinvested.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*
Among The Goodyear Tire & Rubber Company, the S&P M idcap 400
and the Dow Auto Parts

$200

$180

$160

$140

$120

$100

$80

$60

$40

$20

12/15

12/16

12/17

12/18

12/19

12/20

The Goodyear Tire & Rubber Company

S&P Midcap 400

Dow Auto Parts

*$100 invested on 12/31/15 in stock or index, including reinvestment of dividends.
Fiscal year ending December 31.

DIRECTORS AND OFFICERS

BOARD OF DIRECTORS

James A. Firestone, 66

Richard J. Kramer, 57

Hera Kitwan Siu, 61

Retired Executive Vice President
and President,
Corporate Strategy and Asia Operations
Xerox Corporation
Elected 2007 2, 4, 6

Werner Geissler, 67

Retired Vice Chairman, Global Operations
The Procter & Gamble Company
Elected 2011 1, 3

Peter S. Hellman, 71
Retired President
Nordson Corporation
Elected 2010 1, 4

Laurette T. Koellner, 66
Retired President
Boeing International
Elected 2015 2, 5, 6

Chairman of the Board,
Chief Executive Officer and President
The Goodyear Tire & Rubber Company
Elected 2010 6

W. Alan McCollough, 71
Retired Chairman and
Chief Executive Officer
Circuit City Stores, Inc.
Elected 2007 2, 5

John E. McGlade, 67

Retired Chairman, President and
Chief Executive Officer
Air Products and Chemicals, Inc.
Elected 2012 1, 5, 6

Roderick A. Palmore, 69

Retired Executive Vice President,
General Counsel, Chief Compliance and
Risk Management Officer and Secretary
General Mills, Inc.
Elected 2012 1, 3, 6

Retired Chief Executive Officer,
Greater China, Cisco Systems, Inc.
Elected 2019 3, 4

Stephanie A. Streeter, 63

Retired Chief Executive Officer
Libbey Inc.
Elected 2008 2, 4, 6

Michael R. Wessel, 61

President
The Wessel Group Inc.
Elected 2005 3

Thomas L. Williams, 62

Chairman and Chief Executive Officer
Parker-Hannifin Corporation
Elected 2019 4, 5, 6

1 Audit Committee 2 Compensation Committee
3 Committee on Corporate Responsibility and Compliance
4 Finance Committee 5 Governance Committee
6 Executive Committee

CORPORATE OFFICERS

BUSINESS UNIT OFFICERS

Richard J. Kramer, 57*

David E. Phillips, 45

Christopher R. Delaney, 59

Chairman of the Board, Chief Executive
Officer and President
21 years of service, officer since 2000

Senior Vice President and
General Counsel
Nine years of service, officer since 2019

Darren R. Wells, 55

Gary S. VanderLind, 58

Executive Vice President and
Chief Financial Officer
16 years of service, officer since 2018

Senior Vice President and
Chief Human Resources Officer
35 years of service, officer since 2019

Laura P. Duda, 51

Evan M. Scocos, 50

Senior Vice President and
Chief Communications Officer
Five years of service, officer since 2019

Christopher P. Helsel, 55

Senior Vice President, Global Operations
and Chief Technology Officer
24 years of service, officer since 2018

Ryan G. Patterson, 47

Senior Vice President, Business Integration
18 years of service, officer since 2017

Vice President and Controller
16 years of service, officer since 2016

Daniel T. Young, 53
Secretary and
Associate General Counsel
13 years of service, officer since 2016

Christina L. Zamarro, 49

Vice President, Finance and Treasurer
13 years of service, officer since 2020

President, Europe, Middle East and Africa
Five years of service, officer since 2016

Nathaniel Madarang, 50
President, Asia Pacific
12 years of service, officer since 2021

Stephen R. McClellan, 55
President, Americas
33 years of service, officer since 2008

* Also a director

ASIA PACIFIC

China
Pulandian Development Center, Consumer Tires,

Commercial Tires

Shanghai Asia Pacific Headquarters

India
Aurangabad Consumer Tires
Ballabgarh Commercial Tires, Agricultural Tires

Indonesia
Bogor Consumer Tires, Commercial Tires,

Agricultural Tires, OTR Tires

Japan
Tatsuno OTR Tires

Malaysia
Kuala Lumpur Consumer Tires, Commercial
Tires, Agricultural Tires, OTR Tires

Singapore
Singapore Natural Rubber Purchasing

Thailand
Bangkok Consumer Tires, Aircraft Tires,

Aircraft Tire Retreading, Test Fleet Center

Lampang Test Fleet Center

FACILITIES

AMERICAS

United States
Akron, Ohio

Global Headquarters, Americas Headquarters,
Innovation Center, Tire Proving Grounds,
Airship Operations, Chemicals, Racing Tires,
Tire Test Lab

Bayport, Texas Chemicals
Beaumont, Texas Synthetic Rubber
Carson, California Airship Operations
Danville, Virginia Aircraft Tires, Commercial Tires
Fayetteville, North Carolina Consumer Tires
Hebron, Ohio Development Center
Houston, Texas Synthetic Rubber
Kingman, Arizona Aircraft Tire Retreading
Lawton, Oklahoma Consumer Tires
Niagara Falls, New York Chemicals
Pompano Beach, Florida Airship Operations
San Angelo, Texas Tire Proving Grounds
Social Circle, Georgia Tread Rubber
Statesville, North Carolina Tire Molds
Stockbridge, Georgia Aircraft Tire Retreading
San Francisco, California Innovation Lab
Topeka, Kansas Commercial Tires, OTR Tires

Brazil
Americana Tire Proving Grounds, Consumer
Tires, Commercial Tires, OTR Tires

Santa Barbara Retread Materials,

Aircraft Tire Retreading

Canada
Medicine Hat, Alberta Consumer Tires
Napanee, Ontario Consumer Tires
Valleyfield, Quebec Mixing Center

Chile
Santiago Consumer Tires

Colombia
Cali Commercial Tires, OTR Tires

Mexico
San Luis Potosi Consumer Tires

Peru
Lima Consumer Tires, Commercial Tires

EUROPE, MIDDLE EAST and
AFRICA

Belgium
Brussels Europe, Middle East and Africa

Headquarters

Finland
Ivalo (Saariselka) Tire Proving Grounds

France
Amiens Consumer Tires
Mireval Tire Proving Grounds
Montlucon Consumer Tires, Motorcycle Tires,

Racing Tires
Riom Retreading

Germany
Furstenwalde Consumer Tires
Fulda Consumer Tires
Hanau Development Center, Consumer Tires,

Tire Test Lab
Riesa Consumer Tires
Wittlich Tire Proving Grounds, Commercial Tires,

Retreading

Luxembourg
Colmar-Berg Innovation Center, Tire Proving
Grounds, Commercial Tires, Regional
Calendering Center, OTR Tires,
Tire Molds, Tire Test Lab

Netherlands
Tilburg Aircraft Tire Retreading

Poland
Debica Consumer Tires, Commercial Tires

Slovenia
Kranj Consumer Tires, Commercial Tires

South Africa
Uitenhage Consumer Tires, OTR Tires

Turkey
Adapazari Consumer Tires
Izmit Commercial Tires

SHAREHOLDER INFORMATION

CORPORATE OFFICES
The Goodyear Tire & Rubber Company
200 Innovation Way
Akron, Ohio 44316-0001
(330) 796-2121
www.goodyear.com

GOODYEAR COMMON STOCK
The principal market for Goodyear common stock is the Nasdaq Global
Select Market (symbol GT).

On February 16, 2021, there were 11,951 shareholders of record of
Goodyear common stock. The closing price of Goodyear common stock
on the Nasdaq Global Select Market on February 16, 2021, was $14.20.

VIRTUAL ANNUAL MEETING
4:30 p.m., Monday, April 12, 2021
www.virtualshareholdermeeting.com/GT2021
Please direct meeting inquiries to:
Office of the Secretary, Dept. 822
The Goodyear Tire & Rubber Company
200 Innovation Way
Akron, Ohio 44316-0001

SHAREHOLDER INQUIRIES
Transfer Agent and Registrar:
Computershare Trust Company, N.A.
P.O. Box 505000
Louisville, KY 40233-5000
(800) 317-4445
www.computershare.com

Inquiries concerning the issuance or transfer of stock certificates or
share account information should be directed to Computershare. Provide
Social Security number, account number and Goodyear’s ID, GTR.
Hearing-impaired shareholders can communicate directly with
Computershare via a TDD by calling (800) 952-9245. Other shareholder
inquiries should be directed to:
Investor Relations, Dept. 635
The Goodyear Tire & Rubber Company
200 Innovation Way
Akron, Ohio 44316-0001
(330) 796-3751
E-mail: goodyear.investor.relations@goodyear.com

FORM 10-K AND OTHER REPORTS
Paper copies of Goodyear’s Annual Report on Form 10-K are available upon
request. Quarterly reports on Form 10-Q are also available on request.
Copies of any of the above or Goodyear’s Proxy Statement may be obtained
without charge from:
Investor Relations, Dept. 635
The Goodyear Tire & Rubber Company
200 Innovation Way
Akron, Ohio 44316-0001
(330) 796-3751

Copies of these reports may also be obtained from the company’s

Investor Website http://investor.goodyear.com.

Goodyear has included as Exhibits 31.1, 31.2 and 32.1 to its Annual
Report on Form 10-K for the year ended December 31, 2020, filed with the
Securities and Exchange Commission, certificates of Goodyear’s Chief
Executive Officer and Chief Financial Officer with respect to the Form 10-K.

CD COPY
A CD copy of the 2020 Annual Report is available for visually impaired
shareholders by contacting Goodyear Investor Relations at (330) 796-3751.

COMPUTERSHARE INVESTMENT PLAN
Computershare sponsors and administers a direct stock purchase and
dividend reinvestment plan for current shareholders and new investors in
Goodyear common stock. A brochure explaining the program may be
obtained by contacting:
Computershare
c/o Shareholder Services
P.O. Box 505000
Louisville, KY 40233-5000
(800) 317-4445
www.computershare.com/investor

INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM
PricewaterhouseCoopers LLP
200 Public Square, 19th Floor
Cleveland, Ohio 44114-2301

OTHER INFORMATION
Persons seeking information about Goodyear’s corporate responsibility
initiatives can access the company’s Corporate Responsibility Website at:
www.goodyear.com/responsibility.

Persons seeking general information about Goodyear or its products

can access the company’s Corporate Website at: www.goodyear.com/
corporate.

Media representatives seeking information about Goodyear or contact
information for spokespersons can access the company’s Media Website
at: www.goodyearnewsroom.com.

100