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GOODYEAR TIRE & RUBBER CO

GOODYEAR TIRE & RUBBER COGTEarnings & Financial Report

Nasdaq · Materials · Tires & Inner Tubes

Cooper Tire & Rubber Company is an American company that specializes in the design, manufacture, marketing, and sales of replacement automobile and truck tires, and has subsidiaries that specialize in medium truck, motorcycle, and racing tires. With headquarters in Findlay, Ohio, Cooper Tire has 60 manufacturing, sales, distribution, technical, and design facilities within its worldwide family of subsidiary companies, including the UK-based Avon Tyres brand, which produces tires for motorcycl...

What changed in GOODYEAR TIRE & RUBBER CO's 10-K — 2022 vs 2023

Top changes in GOODYEAR TIRE & RUBBER CO's 2023 10-K

787 paragraphs added · 759 removed · 556 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

60 edited+15 added−12 removed44 unchanged
Americas also manufactures and sells several lines of Kelly brand radial tires for passenger cars and light trucks including the Kelly Edge A/S, Edge HP and Edge AT. Cooper brand commercial tires sold throughout Americas include those sold under the Roadmaster brand. Our Americas commercial business provides commercial truck tires, retreads, services and business solutions to trucking fleets.
Americas also manufactures and sells several lines of Kelly brand radial tires for passenger cars and light trucks including the Kelly Edge A/S, Edge HP and Edge AT. Our Americas commercial business provides commercial truck tires, retreads, services and business solutions to trucking fleets. Cooper brand commercial tires sold throughout Americas include those sold under the Roadmaster brand.
Asia Pacific sells primarily Goodyear and Cooper brand tires throughout the region and also sells the Dunlop brand in Australia and New Zealand. Other brands of tires, such as Remington, Kelly, Mastercraft and Starfire, are sold in smaller quantities.
Asia Pacific sells primarily Goodyear and Cooper brand tires throughout the region and also sells the Dunlop brand in Australia and New Zealand. Other brands of tires, such as Remington, Kelly and Mastercraft, are sold in smaller quantities.
We own, control or use approximately 1,600 different trademarks, including several using the word “Goodyear,” the word “Dunlop” or the word “Cooper.” Approximately 9,300 registrations and 300 pending applications worldwide protect these trademarks.
We own, control or use approximately 1,600 different trademarks, including several using the word “Goodyear,” the word “Dunlop” or the word “Cooper.” Approximately 9,200 registrations and 300 pending applications worldwide protect these trademarks.
G ENERAL I NFORMATION R EGARDING O UR S EGMENTS For the year ended December 31, 2022, 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.
G ENERAL I NFORMATION R EGARDING O UR S EGMENTS For the year ended December 31, 2023, we operated our business through three operating segments representing our regional tire businesses: Americas; Europe, Middle East and Africa (“EMEA”); and Asia Pacific. Our principal business is the development, manufacture, distribution and sale of tires and related products and services worldwide.
Tires are sold through a network of licensed and franchised retail stores and multi-brand retailers through a network of wholesale dealers as well as through an increasing number of on-line outlets. In Australia, we also operate a network of approximately 110 retail stores, primarily under the Beaurepaires brand.
Tires are sold through a network of licensed and franchised retail stores and multi-brand retailers through a network of wholesale dealers as well as through an increasing number of on-line outlets. In Australia, we also operate a network of approximately 100 retail stores, primarily under the Beaurepaires brand.
We require our global salaried associates to complete training annually on our Business Conduct Manual and periodically on subjects such as workplace respect (including discrimination and harassment), financial integrity, privacy and data protection, competition law, anti-corruption and anti-bribery, and being a compliance leader. 6 Table of Contents Patents and Trademarks We own approximately 1,800 product, process and equipment patents issued by the United States Patent Office and approximately 4,900 patents issued or granted in other countries around the world.
We require our global salaried associates to complete training annually on our Business Conduct Manual and periodically on subjects such as workplace respect (including discrimination and harassment), financial integrity, privacy and data protection, competition law, anti-corruption and anti-bribery, and being a compliance leader. 6 Table of Contents Patents and Trademarks We own approximately 1,700 product, process and equipment patents issued by the United States Patent Office and approximately 4,400 patents issued or granted in other countries around the world.
He is Goodyear's chief legal officer. Mr. Phillips joined Goodyear in 2011 and has served as Associate General Counsel, Americas (September 2016 to June 2019). 9 Table of Contents Name Position(s) Held Age Gary S. VanderLind Senior Vice President and Chief Human Resources Officer 60 Mr. VanderLind was named Senior Vice President and Chief Human Resources Officer in February 2019.
Phillips was named Senior Vice President and General Counsel in June 2019. He is Goodyear's chief legal officer. Mr. Phillips joined Goodyear in 2011 and has served as Associate General Counsel, Americas (September 2016 to June 2019). 9 Table of Contents Name Position(s) Held Age Gary S. VanderLind Senior Vice President and Chief Human Resources Officer 61 Mr.
We manufacture and sell 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 numerous lines of rubber tires for: • automobiles • trucks • buses • aircraft • motorcycles • earthmoving and mining equipment • farm implements • industrial equipment, and • various other applications. 1 Table of Contents In each case, our tires are offered for sale to vehicle manufacturers for mounting as original equipment (“OE”) and for replacement worldwide.
We strive to comply with all applicable laws and regulations, carefully monitor our energy usage and greenhouse gas emissions, and set company-wide and facility-specific goals to reduce our operational impacts. As part of our commitment to reduce our operational impact, we continue to focus on reducing energy consumption and emissions in our factories and utilizing renewable energy sources.
We strive to comply with all applicable laws and regulations, carefully monitor our energy usage and GHG emissions, and set company-wide and facility-specific goals to reduce our operational impacts. As part of our commitment to reduce our operational impact, we continue to focus on reducing energy consumption and emissions in our factories and utilizing renewable energy sources.
We have a proven track record of producing tires for electric and autonomous vehicles, developing tires and rubber compounds that contribute to reduced greenhouse gas emissions by lowering rolling resistance and reducing tire weight, and providing fleet solution services that promote fuel efficiency.
We have a proven track record of producing tires for electric and autonomous vehicles, developing tires and rubber compounds that contribute to reduced GHG emissions by lowering rolling resistance and reducing tire weight, and providing fleet solution services that promote fuel efficiency.
Refer to Item 1A. “Risk Factors” for a discussion of these and our other risk factors. Federal, state, local and foreign governments and regulatory agencies continue to consider various options and measures to control greenhouse gas emissions in response to climate change.
Refer to Item 1A. “Risk Factors” for a discussion of these and our other risk factors. Federal, state, local and foreign governments and regulatory agencies continue to consider various options and measures to control GHG emissions in response to climate change.
Our products sold in the United States are subject to Federal Motor Vehicle Safety Standards (“FMVSS”) promulgated and enforced by the National Highway Traffic Safety Administration (“NHTSA”), which has established various standards and regulations applicable to tires sold in the United States and tires sold in a foreign country that are identical or substantially similar to tires sold in the United States.
Our products sold in the United States are subject to Federal Motor Vehicle Safety Standards (“FMVSS”) promulgated and enforced by the National Highway Traffic Safety Administration (“NHTSA”), which has established various standards and 3 Table of Contents regulations applicable to tires sold in the United States and tires sold in a foreign country that are identical or substantially similar to tires sold in the United States.
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. 1 Table of Contents Our principal products are new tires for most applications.
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.
We have several continuing programs designed to ensure compliance with foreign, federal, state and local environmental and occupational safety and health laws and regulations. We expect capital expenditures for pollution control facilities and occupational safety and health projects to be approximately $60 million in both 2023 and 2024.
We have several continuing programs designed to ensure compliance with foreign, federal, state and local environmental and occupational safety and health laws and regulations. We expect capital expenditures for pollution control facilities and occupational safety and health projects to be approximately $80 million in both 2024 and 2025.
Markets and Other Information Tire unit sales to replacement and OE customers served by Asia Pacific during the periods indicated were: ASIA PACIFIC UNIT SALES — REPLACEMENT AND OE Year Ended December 31, (In millions of tires) 2022 2021 2020 Replacement tire units 20.4 19.8 16.6 OE tire units 14.0 10.9 8.2 Total tire units 34.4 30.7 24.8 Asia Pacific’s major competitors are Bridgestone and Michelin along with many other global brands present in different parts of the region, including Continental, Dunlop, Hankook and a large number of regional and local tire producers.
Markets and Other Information Tire unit sales to replacement and OE customers served by Asia Pacific during the periods indicated were: ASIA PACIFIC UNIT SALES — REPLACEMENT AND OE Year Ended December 31, (In millions of tires) 2023 2022 2021 Replacement tire units 20.2 20.4 19.8 OE tire units 15.9 14.0 10.9 Total tire units 36.1 34.4 30.7 Asia Pacific’s major competitors are Bridgestone and Michelin along with many other global brands present in different parts of the region, including Continental, Dunlop, Hankook and a large number of regional and local tire producers.
We anticipate the continued availability of raw materials and components we will require during 2023, subject to spot shortages and unexpected disruptions caused by the COVID-19 pandemic, natural disasters, such as hurricanes, or other events. Substantial quantities of fuel and other petrochemical-based commodities are used in the production of tires, synthetic rubber and other products.
We anticipate the continued availability of raw materials and components we will require during 2024, subject to spot shortages and unexpected disruptions caused by natural disasters, such as hurricanes, or other events. Substantial quantities of fuel and other petrochemical-based commodities are used in the production of tires, synthetic rubber and other products.
Approximately 2,300 of our associates at our Texarkana and Findlay plants in the United States are covered by separate collective bargaining agreements with the USW, which expire in June 2024 and February 2024, respectively. In addition, approximately 800 of our associates in the United States are covered by other contracts with the USW and various other unions.
Approximately 2,200 of our associates at our Texarkana and Findlay plants in the United States are covered by separate collective bargaining agreements with the USW, which expire in June 2024. In addition, approximately 800 of our associates in the United States are covered by other contracts with the USW and various other unions.
Americas manufactures tires in eight plants in the United States, two plants in Canada and six plants in Brazil, Chile, Colombia, Mexico and Peru. Americas manufactures and sells tires for automobiles, trucks, buses, earthmoving, mining and industrial equipment, aircraft, and various other applications.
Americas manufactures tires in eight plants in the United States, two plants in Canada and six plants in Brazil, Chile, Colombia, Mexico and Peru. 2 Table of Contents Americas manufactures and sells tires for automobiles, trucks, buses, earthmoving, mining and industrial equipment, aircraft, and various other applications.
We operate approximately 950 retail outlets where we offer our products for sale to consumer and commercial customers and provide repair and other services. We manufacture our products in 57 manufacturing facilities in 23 countries, including the United States, and we have marketing operations in almost every country around the world. We employ approximately 74,000 full-time and temporary associates worldwide.
We operate approximately 950 retail outlets where we offer our products for sale to consumer and commercial customers and provide repair and other services. We manufacture our products in 55 manufacturing facilities in 22 countries, including the United States, and we have marketing operations in almost every country around the world. We employ approximately 71,000 full-time and temporary associates worldwide.
Additionally, we offer Dunlop brand radial tire lines, including Signature and SP Sport for the passenger and performance segments; Grandtrek tires for the cross-over and sport 2 Table of Contents utility vehicle and light truck segments; and SP Winter, Winter Maxx and Grandtrek tires for the winter tire segment.
Additionally, we offer Dunlop brand radial tire lines, including Signature and SP Sport for the passenger and performance segments; Grandtrek tires for the cross-over and sport utility vehicle and light truck segments; and SP Winter, Winter Maxx and Grandtrek tires for the winter tire segment.
Supplies of such fuels and commodities have been and are expected to continue to be available to us in quantities sufficient to satisfy our anticipated requirements, subject to spot shortages. Human Capital Management At December 31, 2022, we employed approximately 74,000 full-time and temporary associates throughout the world, including approximately 42,000 associates covered under collective bargaining agreements.
Supplies of such fuels and commodities have been and are expected to continue to be available to us in quantities sufficient to satisfy our anticipated requirements, subject to spot shortages. Human Capital Management At December 31, 2023, we employed approximately 71,000 full-time and temporary associates throughout the world, including approximately 39,700 associates covered under collective bargaining agreements.
The percentages of each segment’s sales attributable to tire units during the periods indicated were: Year Ended December 31, Tire Unit Sales 2022 2021 2020 Americas 84 % 82 % 78 % Europe, Middle East and Africa 88 89 90 Asia Pacific 94 93 91 Each segment exports tires to other segments.
The percentages of each segment’s sales attributable to tire units during the periods indicated were: Year Ended December 31, Tire Unit Sales 2023 2022 2021 Americas 84 % 84 % 82 % Europe, Middle East and Africa 88 88 89 Asia Pacific 95 94 93 Each segment exports tires to other segments.
We manufacture and sell tires under the Goodyear, Cooper, Dunlop, Kelly, Debica, Sava, Fulda, Mastercraft and Roadmaster brands and various “house” brands, and the private-label brands of certain customers.
We manufacture and sell tires under the Goodyear, Cooper, Dunlop, Kelly, Mastercraft, Roadmaster, Debica, Sava, Fulda, Mickey Thompson, Avon and Remington brands and various “house” brands, and the private-label brands of certain customers.
Markets and Other Information Tire unit sales to replacement and OE customers served by Americas during the periods indicated were: AMERICAS UNIT SALES — REPLACEMENT AND OE Year Ended December 31, (In millions of tires) 2022 2021 2020 Replacement tire units 80.5 72.6 44.4 OE tire units 14.5 13.3 12.3 Total tire units 95.0 85.9 56.7 Americas is a major supplier of tires to most manufacturers of automobiles, trucks, buses, aircraft, and earthmoving, mining and industrial equipment that have production facilities located in the Americas.
Markets and Other Information Tire unit sales to replacement and OE customers served by Americas during the periods indicated were: AMERICAS UNIT SALES — REPLACEMENT AND OE Year Ended December 31, (In millions of tires) 2023 2022 2021 Replacement tire units 73.2 80.5 72.6 OE tire units 14.1 14.5 13.3 Total tire units 87.3 95.0 85.9 Americas is a major supplier of tires to most manufacturers of automobiles, trucks, buses, aircraft, and earthmoving, mining and industrial equipment that have production facilities located in the Americas.
Tire unit sales for each segment during the periods indicated were: GOODYEAR’S ANNUAL TIRE UNIT SALES — SEGMENT Year Ended December 31, (In millions of tires) 2022 2021 2020 Americas 95.0 85.9 56.7 Europe, Middle East and Africa 55.1 52.7 44.5 Asia Pacific 34.4 30.7 24.8 Goodyear worldwide tire units 184.5 169.3 126.0 Our replacement and OE tire unit sales during the periods indicated were: GOODYEAR’S ANNUAL TIRE UNIT SALES — REPLACEMENT AND OE Year Ended December 31, (In millions of tires) 2022 2021 2020 Replacement tire units 143.9 134.1 95.0 OE tire units 40.6 35.2 31.0 Goodyear worldwide tire units 184.5 169.3 126.0 New tires are sold under highly competitive conditions throughout the world.
Tire unit sales for each segment during the periods indicated were: GOODYEAR’S ANNUAL TIRE UNIT SALES — SEGMENT Year Ended December 31, (In millions of tires) 2023 2022 2021 Americas 87.3 95.0 85.9 Europe, Middle East and Africa 49.9 55.1 52.7 Asia Pacific 36.1 34.4 30.7 Goodyear worldwide tire units 173.3 184.5 169.3 Our replacement and OE tire unit sales during the periods indicated were: GOODYEAR’S ANNUAL TIRE UNIT SALES — REPLACEMENT AND OE Year Ended December 31, (In millions of tires) 2023 2022 2021 Replacement tire units 130.2 143.9 134.1 OE tire units 43.1 40.6 35.2 Goodyear worldwide tire units 173.3 184.5 169.3 New tires are sold under highly competitive conditions throughout the world.
Markets and Other Information Tire unit sales to replacement and OE customers served by EMEA during the periods indicated were: EUROPE, MIDDLE EAST AND AFRICA UNIT SALES — REPLACEMENT AND OE Year Ended December 31, (In millions of tires) 2022 2021 2020 Replacement tire units 43.0 41.7 34.0 OE tire units 12.1 11.0 10.5 Total tire units 55.1 52.7 44.5 EMEA is a significant supplier of tires to most vehicle manufacturers across the region.
Markets and Other Information Tire unit sales to replacement and OE customers served by EMEA during the periods indicated were: EUROPE, MIDDLE EAST AND AFRICA UNIT SALES — REPLACEMENT AND OE Year Ended December 31, (In millions of tires) 2023 2022 2021 Replacement tire units 36.8 43.0 41.7 OE tire units 13.1 12.1 11.0 Total tire units 49.9 55.1 52.7 EMEA is a significant supplier of tires to most vehicle manufacturers across the region.
We have approximately 500 applications for United States patents pending and approximately 800 patent applications on file in other countries around the world.
We have approximately 400 applications for United States patents pending and approximately 600 patent applications on file in other countries around the world.
In 2022, our net sales were $20,805 million and Goodyear net income was $202 million. We develop, manufacture, distribute and sell tires for most applications. We also manufacture and sell rubber-related chemicals for various applications. We are one of the world’s largest operators of commercial truck service and tire retreading centers.
In 2023, our net sales were $20,066 million and Goodyear net loss was $689 million. We develop, manufacture, distribute and sell tires for most applications. We also manufacture and sell rubber-related chemicals for various applications. We are one of the world’s largest operators of commercial truck service and tire retreading centers.
Approximately 86% of our sales in 2022, 85% in 2021 and 84% in 2020 were for tire units. Sales of chemical products to unaffiliated customers were 3% of our consolidated sales in each of 2022, 2021 and 2020 (5%, 6% and 5% of Americas total sales in 2022, 2021 and 2020, respectively).
Approximately 86% of our sales in 2023, 86% in 2022 and 85% in 2021 were for tire units. Sales of chemical products to unaffiliated customers were 2% of our consolidated sales in 2023 and 3% in 2022 and 2021 (4%, 5% and 6% of Americas total sales in 2023, 2022 and 2021, respectively).
Compliance with these regulations has increased the cost of producing and distributing tires in the United States. 3 Table of Contents E UROPE, M IDDLE E AST A ND A FRICA Europe, Middle East and Africa, our second largest segment in terms of revenue, develops, manufactures, distributes and sells tires for automobiles, trucks, buses, aircraft, motorcycles, and earthmoving, mining and industrial equipment throughout Europe, the Middle East and Africa under the Goodyear, Dunlop, Debica, Sava, Fulda, Cooper and Avon brands and other house brands, and sells tires to various export markets, primarily through intersegment sales.
E UROPE, M IDDLE E AST A ND A FRICA Europe, Middle East and Africa, our second largest segment in terms of revenue, develops, manufactures, distributes and sells tires for automobiles, trucks, buses, aircraft, motorcycles, and earthmoving, mining and industrial equipment throughout Europe, the Middle East and Africa under the Goodyear, Dunlop, Debica, Sava, Fulda, Cooper and Avon brands and other house brands, and sells tires to various export markets, primarily through intersegment sales.
We continue to focus on the resiliency of our supply chain by developing alternative, more sustainable material sources and increasing our use of more sustainable materials that deliver either the same or enhanced product quality and performance. We also select suppliers that uphold fair working conditions, use sustainable harvesting practices and share our values.
We continue to focus on the resiliency of our supply chain by developing alternative, sustainable material sources and increasing our use of sustainable materials that deliver product performance while meeting our high standards of quality and safety. We also select suppliers that uphold fair working conditions, use sustainable harvesting practices and share our values.
Cooper brand radial passenger tire lines sold throughout Americas include those sold under the Mastercraft brand.
Cooper brand radial passenger tire lines sold throughout Americas include those sold under the Mastercraft and Mickey Thompson brands.
Approximately 5,700 of our associates in the 5 Table of Contents United States are covered by a new master collective bargaining agreement between Goodyear and the United Steelworkers ("USW"), which was ratified in the second half of 2022 and expires in July 2026.
Approximately 5,300 of our associates in the 5 Table of Contents United States are covered by a master collective bargaining agreement between Goodyear and the United Steelworkers ("USW"), which expires in July 2026.
Approximately 21,000 of our associates outside of the United States are covered by union contracts that currently have expired or that will expire in 2023, primarily in Germany, Poland, China, Mexico, Slovenia, France and Turkey. Unions represent a major portion of our associates in the United States and Europe.
Approximately 20,000 of our associates outside of the United States are covered by union contracts that currently have expired or that will expire in 2024, primarily in Luxembourg, Poland, Brazil, Mexico, China, Slovenia, Turkey, India and Serbia. Unions represent a major portion of our associates in the United States and Europe.
We purchase all of our requirements for natural rubber in the world market. Other important raw materials and components we use are carbon black, steel cord, fabrics and petrochemical-based commodities. Substantially all of these raw materials and components are purchased from independent suppliers, except for certain chemicals we manufacture.
Other important raw materials and components we use are carbon black, steel cord, fabrics and petrochemical-based commodities. Substantially all of these raw materials and components are purchased from independent suppliers, except for certain chemicals we manufacture.
The development of this tire signals great progress toward our goal of developing a 100% sustainable-material tire by 2030. 8 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below are: (1) the names and ages of all executive officers of the Company at February 13, 2023, (2) all positions with the Company presently held by each such person, and (3) the positions held by, and principal areas of responsibility of, each such person during the last five years.
Goodyear has a goal to introduce the industry’s first 100% sustainable material tire by 2030. 8 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Set forth below are: (1) the names and ages of all executive officers of the Company at February 13, 2024, (2) all positions with the Company presently held by each such person, and (3) the positions held by, and principal areas of responsibility of, each such person during the last five years.
EMEA manufactures tires in sixteen plants in France, Germany, Luxembourg, Poland, Serbia, Slovenia, South Africa, Turkey and the United Kingdom.
EMEA manufactures tires in fifteen plants in France, Germany, Luxembourg, Poland, Serbia, Slovenia, South Africa and Turkey.
In some areas, Goodyear brand tires, as well as Dunlop, Debica, Sava, Fulda, Cooper and Avon brand tires, are distributed through independent dealers, regional distributors and retail outlets, of which approximately 50 are owned by Goodyear.
In some areas, Goodyear brand tires, as well as Dunlop, Debica, Sava, Fulda, Cooper and Avon brand tires, are distributed through independent dealers, regional distributors and retail outlets, of which approximately 40 are owned by Goodyear. Our European operations are subject to regulation by the European Union.
We do not consider our tire businesses to be seasonal to any significant degree. A MERICAS Americas, our largest segment in terms of revenue, develops, manufactures, distributes and sells tires and related products and services in North, Central and South America, and sells tires to various export markets, primarily through intersegment sales.
A MERICAS Americas, our largest segment in terms of revenue, develops, manufactures, distributes and sells tires and related products and services in North, Central and South America, and sells tires to various export markets, primarily through intersegment sales.
He is the executive officer responsible for Goodyear’s global human resources activities. Mr. VanderLind joined Goodyear in 1985 and has served as Vice President, Human Resources - Americas (September 2016 to January 2019). Evan M. Scocos Vice President and Controller 51 Mr. Scocos was named Vice President and Controller in June 2016. He is Goodyear's principal accounting officer. Mr.
VanderLind was named Senior Vice President and Chief Human Resources Officer in February 2019. He is the executive officer responsible for Goodyear’s global human resources activities. Mr. VanderLind joined Goodyear in 1985 and has served as Vice President, Human Resources - Americas (September 2016 to January 2019). Margaret V. Snyder Vice President and Controller 39 Ms.
He is the executive officer responsible for Goodyear's operations in North, Central and South America. Mr. McClellan joined Goodyear in 1988. Christopher R. Delaney President, Europe, Middle East and Africa 61 Mr. Delaney was named President, Europe, Middle East and Africa in September 2017. He is the executive officer responsible for Goodyear’s operations in Europe, the Middle East and Africa.
McClellan was named President, Americas in January 2016. He is the executive officer responsible for Goodyear's operations in North, Central and South America. Mr. McClellan joined Goodyear in 1988. Mr. McClellan has announced his retirement effective April 1, 2024. Christopher R. Delaney President, Europe, Middle East and Africa 62 Mr.
Zamarro joined Goodyear in 2007 and has served as Vice President, Investor Relations (2014 to March 2018), Vice President, FP&A and Investor Relations (April 2018 to April 2020) and Vice President, Finance and Treasurer (May 2020 to December 31, 2022). Stephen R. McClellan President, Americas 57 Mr. McClellan was named President, Americas in January 2016.
Zamarro was named Executive Vice President and Chief Financial Officer on January 1, 2023. She is Goodyear’s principal financial officer. Ms. Zamarro joined Goodyear in 2007 and has served as Vice President, FP&A and Investor Relations (April 2018 to April 2020) and Vice President, Finance and Treasurer (May 2020 to December 31, 2022). Stephen R. McClellan President, Americas 58 Mr.
We purchase most raw materials and components in significant quantities from several suppliers, except in those instances where only one or a few qualified sources are available.
We purchase most raw materials and components in significant quantities from several suppliers, except in those instances where only one or a few qualified sources are available. The inflationary cost pressures on raw materials that we experienced in 2022 and the first half of 2023 eased in the second half of 2023.
Madarang joined Goodyear in 2008 and has served as Project Director, Finance Transformation (October 2016 to June 2018), Vice President, Finance, Asia Pacific (July 2018 to September 2019) and Managing Director, China (October 2019 to February 2021). Laura P. Duda Senior Vice President and Chief Communications Officer 53 Ms.
He is the executive officer responsible for Goodyear’s operations in Asia, Australia, New Zealand and the Western Pacific. Mr. Madarang joined Goodyear in 2008 and has served as Vice President, Finance, Asia Pacific (July 2018 to September 2019) and Managing Director, China (October 2019 to February 2021). Laura P. Duda Senior Vice President and Chief Communications Officer 54 Ms.
In 2022, EMEA launched a number of new consumer tires under the Goodyear, Dunlop, Debica, Sava and Fulda brands, including the Goodyear Eagle F1 Asymmetric 6 for the ultra-high performance segment, the Goodyear Eagle Sport 2 for the high performance segment and the Goodyear Ultra Grip Arctic 2 SUV for the winter studded segment.
In 2023, EMEA launched a number of new consumer tires under the Goodyear, Dunlop, Debica, Sava and Fulda brands, including the Goodyear Ultra Grip Performance 3 for the winter high-performance segment, the Goodyear Efficient Grip Compact 2 for the summer segment and the Goodyear Ultra Grip Ice 3 for the Nordic ice segment.
GENERAL BUSINESS INFORMATION Sources and Availability of Raw Materials The principal raw materials used by Goodyear are synthetic and natural rubber. Synthetic rubber accounted for approximately 50% of all rubber consumed by us in 2022. Our plants located in Beaumont and Houston, Texas supply a major portion of our global synthetic rubber requirements.
Synthetic rubber accounted for approximately 50% of all rubber consumed by us in 2023. Our plants located in Beaumont and Houston, Texas supply a major portion of our global synthetic rubber requirements. We purchase all of our requirements for natural rubber in the world market.
Helsel joined Goodyear in 1996 and has served as Vice President and Chief Technology Officer (September 2017 to February 2019) and Senior Vice President and Chief Technology Officer (February 2019 to February 2021). David E. Phillips Senior Vice President and General Counsel 47 Mr. Phillips was named Senior Vice President and General Counsel in June 2019.
He is the executive officer responsible for Goodyear’s global operations and research and development activities. Mr. Helsel joined Goodyear in 1996 and has served as Vice President and Chief Technology Officer (September 2017 to February 2019) and Senior Vice President and Chief Technology Officer (February 2019 to February 2021). David E. Phillips Senior Vice President and General Counsel 48 Mr.
Duda was named Senior Vice President and Chief Communications Officer in January 2019. She is the executive officer responsible for Goodyear’s communications activities worldwide. Ms. Duda joined Goodyear as Vice President, Corporate Communications in February 2016, and has served as Vice President, Communications, Americas (July 2016 to December 2018). Christopher P.
Duda was named Senior Vice President and Chief Communications Officer in January 2019. She is the executive officer responsible for Goodyear’s communications activities worldwide. Ms. Duda joined Goodyear in 2016. Christopher P. Helsel Senior Vice President, Global Operations and Chief Technology Officer 58 Mr. Helsel was named Senior Vice President, Global Operations and Chief Technology Officer in March 2021.
We have established a robust process that uses internal and external insights to identify, assess and report climate-related risks and opportunities. The move to a low-carbon economy creates growth opportunities within the tire industry that we are well positioned to leverage through our continued innovation.
The move to a low-carbon economy creates growth opportunities within the tire industry that we are well positioned to leverage through our continued innovation.
Mr. Delaney joined Goodyear as President-Elect, Asia Pacific in August 2015, and has served as President, Asia Pacific (January 2016 to September 2017). Nathaniel Madarang President, Asia Pacific 52 Mr. Madarang was named President, Asia Pacific in March 2021. He is the executive officer responsible for Goodyear’s operations in Asia, Australia, New Zealand and the Western Pacific. Mr.
Delaney was named President, Europe, Middle East and Africa in September 2017. He is the executive officer responsible for Goodyear’s operations in Europe, the Middle East and Africa. Mr. Delaney joined Goodyear in 2015. Nathaniel Madarang President, Asia Pacific 53 Mr. Madarang was named President, Asia Pacific in March 2021.
Refer to “Description of Goodyear’s Business – Americas” and “Description of Goodyear’s Business – Europe, Middle East and Africa” included in this Item 1, “Business” for information regarding compliance with government regulations in each of those segments. 7 Table of Contents Climate Change and Sustainability In 2021, we announced our climate ambition, which includes our goal to reach net-zero scope 1 and 2 and certain scope 3 greenhouse gas emissions by 2050, aligned with the Science-Based Targets initiative (“SBTi”) and its Net-Zero Standard.
Refer to “Description of Goodyear’s Business – Americas” and “Description of Goodyear’s Business – Europe, Middle East and Africa” included in this Item 1, “Business” for information regarding compliance with government regulations in each of those segments. 7 Table of Contents Climate Change and Sustainability We are committed to reaching net-zero greenhouse gas (GHG) emissions across our value chain by 2050 from a 2019 base year.
In those instances where the person is elected at other than an annual meeting, such person’s term will expire at the next annual meeting. 10 Table of Contents
Each executive officer is elected by the Board of Directors of the Company at its annual meeting to a term of one year or until his or her successor is duly elected. In those instances where the person is elected at other than an annual meeting, such person’s term will expire at the next annual meeting. 10 Table of Contents
EMEA also enhanced its commercial tire portfolio in all product tiers. In addition, the Goodyear FuelMax Endurance range, which provides better fuel efficiency and lower CO 2 emissions, was extended to additional sizes.
EMEA also enhanced its commercial tire portfolio in all product tiers. The Goodyear UrbanMax Commuter has been introduced to address the inter-city people mobility segment, while the Goodyear FuelMax Endurance range, providing better fuel efficiency and lower CO2 emissions across more applications, has been further extended to additional sizes.
Goodyear, Cooper and Dunlop branded tires enjoy a high recognition factor and have a reputation for performance and product design. The Kelly, Mastercraft, Roadmaster, Debica, Sava and Fulda brands and various house brand tire lines offered by us, and tires manufactured and sold by us to private brand customers, compete primarily on the basis of value and price.
The Kelly, Mastercraft, Roadmaster, Debica, Sava, Fulda, Avon and Remington brands and various house brand tire lines offered by us, and tires manufactured and sold by us to private brand customers, compete primarily on the basis of value and price. We do not consider our tire businesses to be seasonal to any significant degree.
Name Position(s) Held Age Richard J. Kramer Chairman, Chief Executive Officer and President 59 Mr. Kramer was elected Chief Executive Officer and President in April 2010 and Chairman in October 2010. He is the principal executive officer of the Company. Mr.
Name Position(s) Held Age Mark W. Stewart Chief Executive Officer and President 56 Mr. Stewart was named Chief Executive Officer and President on January 29, 2024. He is the principal executive officer of the Company. Mr.
Wells was named Executive Vice President and Chief Administrative Officer on January 1, 2023. He is the executive officer responsible for Goodyear’s strategic and growth initiatives, as well as information technology activities. Mr. Wells served as Goodyear’s Executive Vice President and Chief Financial Officer from September 2018 to December 31, 2022 and from October 2008 to November 2013.
Wells was named Executive Vice President and Chief Administrative Officer on January 1, 2023. Mr. Wells served as Goodyear’s Executive Vice President and Chief Financial Officer from September 2018 to December 31, 2022. Mr. Wells has announced his retirement effective February 29, 2024. Christina L. Zamarro Executive Vice President and Chief Financial Officer 52 Ms.
Americas' commercial business launched new tires under Goodyear FuelMax, ArmorMax, UrbanMax and Endurance lines for our mixed service and city service customers. Americas also launched new tires under the Cooper ProSeries and WorkSeries lines and relaunched the Kelly Armorsteel Gen-2 portfolio for long haul, mixed service and city service customers.
Americas also launched new tires under the Cooper WorkSeries and SevereSeries lines for regional and mixed service commercial customers.
In 2022, Americas launched several new consumer tires under the Goodyear and Cooper brands, including the Goodyear Wrangler Workhorse HT and Wrangler Steadfast HT, the Mastercraft Courser Quest and Quest Plus, and the Mastercraft Courser Trail and Trail HD.
In 2023, Americas launched several new consumer tires under the Goodyear and Cooper brands, including the Goodyear Wrangler DuraTrac RT, the Goodyear Wrangler Boulder MT, the Goodyear EcoReady, the Cooper ProControl, the Cooper Cobra Instinct and the Cooper Discover Road+Trail AT.
Our technology teams work to investigate and incorporate new technologies and materials, including renewable and recycled materials, that reduce our value chain greenhouse gas emissions. An example is our use of rice husk ash as an alternative to traditional silica.
Our technology teams work to investigate and incorporate new technologies and materials, including renewable and recycled materials, into our products.
Advanced forms of mobility, such as electric vehicles, ride sharing and fleets, autonomous vehicles and connected vehicles, have the potential to reduce vehicle emissions and energy use. Companies in the transportation sector are setting ambitious climate goals that require the support of the entire supply chain to achieve.
Companies in the transportation sector are setting ambitious climate goals that require the support of the entire supply chain to achieve. Additionally, we have established a robust process that uses internal and external insights to identify, assess and report climate-related risks and opportunities.
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In 2020, we launched an initiative to better align our European distribution network in order to capture the full value of our products and brands in the marketplace. We continued to make progress on the initiative throughout 2021 and 2022. Our European operations are subject to regulation by the European Union.
Added
On November 15, 2023, following a comprehensive evaluation by the Strategic and Operational Review Committee of the Board of Directors, we announced a transformation plan, known as “Goodyear Forward,” that is intended to optimize our portfolio, deliver significant margin expansion and reduce leverage in order to drive sustainable, long-term shareholder value creation.
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In 2022, Asia Pacific released new consumer tires under the Goodyear brand for the premium passenger vehicle market, including the Goodyear Assurance ComfortTred tire. In addition, Asia Pacific released the first dedicated electric vehicle ("EV") tire, the Goodyear ElectricDrive line, targeting the fast-growing EV passenger and sport utility vehicle markets.
Added
Goodyear Forward’s goals are to deliver: (1) gross proceeds in excess of $2 billion from portfolio optimization by pursuing strategic alternatives for our chemical business, the Dunlop brand and our off-the-road tire business, (2) cost reduction actions driving an annual, run-rate benefit of $1 billion by the end of 2025, (3) top line actions driving an annual, run-rate benefit of $300 million by the end of 2025, (4) segment operating income margin doubling to 10% by the end of 2025, and (5) improved leverage by the end of 2025.
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Increased demand for consumer products and supply chain disruptions as a result of the ongoing COVID-19 pandemic and other global events, including the conflict in Ukraine, has led to inflationary cost pressures, including higher costs for certain raw materials, higher transportation costs and higher energy costs.
Added
Goodyear, Cooper, Dunlop and Mickey Thompson branded tires enjoy a high recognition factor and have a reputation for performance and product design.
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We also announced our commitment to achieve near-term science-based targets by 2030, including reducing scope 1 and 2 emissions by 46% and certain scope 3 emissions by 28%, as compared to 2019.
Added
Americas' commercial business launched new tires under the Goodyear RangeMax line, providing a regional drive tire for emerging commercial electric vehicles and new premium retread products under the Fuel Max, ArmorMax and UrbanMax lines for both regional and extreme mixed service customers.
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Our climate ambition includes several other important long-term sustainability goals, including our commitments to use all renewable energy in our manufacturing facilities and processes by 2040, replace all petroleum-derived oils in our products by 2040 and develop a tire made of 100% sustainable materials by 2030. Climate considerations are driving change in the transportation sector.
Added
Compliance with these regulations has increased the cost of producing and distributing tires in the United States.
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We achieved our previously announced goal to procure 100% renewable electricity across all of our facilities in Europe and Turkey by the end of 2022.
Added
In 2023, Asia Pacific released new consumer tires under the Goodyear brand for the premium on and off road market segment, including the Goodyear Wrangler DuraTrac RT, the Goodyear Eagle F1 Asymmetric 6 for the ultra-high performance segment, and the Goodyear Assurance MaxGuard for mainstream passenger vehicles.
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In early 2023, we announced the release of a demonstration tire with 90% sustainable materials that is approved for road use.
Added
During 2023, we approved a rationalization plan in Asia Pacific to improve profitability in our Australia and New Zealand operations which is expected to lead to the sale or exit of these retail and fleet store locations. GENERAL BUSINESS INFORMATION Sources and Availability of Raw Materials The principal raw materials used by Goodyear are synthetic and natural rubber.
Removed
Kramer joined Goodyear in 2000 and has served as Executive Vice President and Chief Financial Officer (June 2004 to August 2007), President, North America (March 2007 to February 2010) and Chief Operating Officer (June 2009 to April 2010). Darren R. Wells Executive Vice President and Chief Administrative Officer 57 Mr.
Added
In addition, we are committed to reducing absolute Scope 1 and 2 GHG emissions by 46% by 2030 from a 2019 base year, and absolute Scope 3 GHG emissions from purchased goods and services, fuel and energy-related activities and upstream transportation by 28% within the same timeframe.
Removed
He was previously employed by Goodyear from 2002 to 2015 and also served as President, Europe, Middle East and Africa (December 2013 to December 2015). Prior to rejoining Goodyear in 2018, Mr. Wells was an Executive in Residence and MBA Coach at the University of South Florida’s Muma College of Business from January 2018 to September 2018. Christina L.
Added
In 2023, our science-based near-term and net-zero GHG reduction targets were validated by the Science Based Targets initiative (SBTi). Climate considerations continue to drive change in the transportation sector. Advanced forms of mobility—such as fleets, autonomous, connected, electric and sustainable vehicles—are transforming the tire industry and have the potential to make driving safer and more sustainable.
Removed
Zamarro Executive Vice President and Chief Financial Officer 51 Ms. Zamarro was named Executive Vice President and Chief Financial Officer on January 1, 2023. She is Goodyear’s principal financial officer. Ms.
Added
Goodyear has committed to using 100% renewable electricity in all manufacturing facilities by 2030 and 100% renewable energy in all manufacturing facilities by 2040.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

54 edited+13 added−31 removed121 unchanged
Our international operations are subject to certain inherent risks, including: • exposure to local economic conditions; • adverse foreign currency fluctuations; • adverse currency exchange controls; • withholding taxes and restrictions on the withdrawal of foreign investment and earnings; • tax policies and regulations; • labor regulations; • tariffs; • government price and profit margin controls; • expropriations of property; • adverse changes in the diplomatic relations of foreign countries with the United States; • the potential instability of foreign governments; • hostility from local populations and insurrections or armed conflicts; • risks of renegotiation or modification of existing agreements with governmental authorities; • export and import restrictions; and 14 Table of Contents • other changes in laws or government policies.
Our international operations are subject to certain inherent risks, including: • exposure to local economic conditions; • adverse foreign currency fluctuations; • adverse currency exchange controls; • withholding taxes and restrictions on the withdrawal of foreign investment and earnings; • tax policies and regulations; 13 Table of Contents • labor regulations; • tariffs; • government price and profit margin controls; • expropriations of property; • adverse changes in the diplomatic relations of foreign countries with the United States; • the potential instability of foreign governments; • hostility from local populations and insurrections or armed conflicts; • risks of renegotiation or modification of existing agreements with governmental authorities; • export and import restrictions; and • other changes in laws or government policies.
For example, it could: • make it more difficult for us to satisfy our obligations; • impair our ability to obtain financing in the future for working capital, capital expenditures, research and development, acquisitions or general corporate requirements; 17 Table of Contents • increase our vulnerability to adverse economic and industry conditions; • limit our ability to use cash flows from operating activities in other areas of our business or to return cash to shareholders because we would need to dedicate a substantial portion of these funds for payments on our indebtedness; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and • place us at a competitive disadvantage compared to our competitors.
For example, it could: • make it more difficult for us to satisfy our obligations; • impair our ability to obtain financing in the future for working capital, capital expenditures, research and development, acquisitions or general corporate requirements; • increase our vulnerability to adverse economic and industry conditions; • limit our ability to use cash flows from operating activities in other areas of our business or to return cash to shareholders because we would need to dedicate a substantial portion of these funds for payments on our indebtedness; • limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; and • place us at a competitive disadvantage compared to our competitors.
This landscape includes legislative proposals recently adopted or currently pending in the United States, at both the federal and state levels, as well as in other jurisdictions, implementing new or additional requirements for data protection that could further increase compliance costs, the cost and complexity of delivering our products and services, and significantly affect our business.
This landscape includes legislative proposals recently adopted or currently pending in the United States, at both the federal and state levels, as well as in other jurisdictions, 18 Table of Contents implementing new or additional requirements for data protection that could further increase compliance costs, the cost and complexity of delivering our products and services, and significantly affect our business.
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. The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations, including with respect to transfer pricing.
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. 19 Table of Contents The calculation of our tax liabilities involves dealing with uncertainties in the application of complex tax regulations, including with respect to transfer pricing.
If any of these events occur, we cannot assure you that we will have sufficient funds available 18 Table of Contents to pay in full the total amount of obligations that become due as a result of any such acceleration, or that we will be able to find additional or alternative financing to refinance any such accelerated obligations.
If any of these events occur, we cannot assure you that we will have sufficient funds available to pay in full the total amount of obligations that become due as a result of any such acceleration, or that we will be able to find additional or alternative financing to refinance any such accelerated obligations.
We collect and store sensitive data, including intellectual property, proprietary business information and the proprietary business information of our customers and suppliers, as well as personally identifiable information of our customers and associates, in data centers and on information technology networks.
We collect and store sensitive data, including intellectual property, proprietary business information and the proprietary business information of our customers and suppliers, as well as personally identifiable information of our customers and associates, in data centers and on IT networks.
However, in spite of these initiatives, we may not be able to meet all of the demand for certain of our higher margin tires, which could harm our competitive position and limit our growth. We cannot assure you that our strategic initiatives will be successful.
However, 11 Table of Contents in spite of these initiatives, we may not be able to meet all of the demand for certain of our higher margin tires, which could harm our competitive position and limit our growth. We cannot assure you that our strategic initiatives will be successful.
On a worldwide basis, we have two major competitors, Bridgestone (based in Japan) and Michelin (based in France), that have 12 Table of Contents large shares of the markets of the countries in which they are based and are aggressively seeking to maintain or improve their worldwide market share.
On a worldwide basis, we have two major competitors, Bridgestone (based in Japan) and Michelin (based in France), that have large shares of the markets of the countries in which they are based and are aggressively seeking to maintain or improve their worldwide market share.
There can also be no assurance that we will be able to enter into swap agreements or other hedging arrangements in the future if we desire to do so, or that any existing or future hedging arrangements will offset increases in interest rates. As of December 31, 2022, we had approximately $1.7 billion of variable rate debt outstanding.
There can also be no assurance that we will be able to enter into swap agreements or other hedging arrangements in the future if we desire to do so, or that any existing or future hedging arrangements will offset increases in interest rates. As of December 31, 2023, we had approximately $1.5 billion of variable rate debt outstanding.
If our earnings remain flat or decline over an extended period of time, we may not be able to utilize certain of our deferred tax assets prior to their expiration and we may need to record a valuation allowance against them that could materially adversely affect our results of operations in the period in which the valuation allowance is recorded.
If our earnings remain flat or decline over an extended period of time, we may not be able to utilize our deferred tax assets and we may need to record a valuation allowance against them that could materially adversely affect our results of operations in the period in which the valuation allowance is recorded.
Automotive production and sales are highly cyclical and sensitive to general economic conditions and other factors, such as credit availability, interest rates, fuel prices, and consumer preference and confidence. Economic declines that result in a significant reduction in automotive production would have an adverse effect on our sales to OE customers.
Automotive production and sales are highly cyclical and 14 Table of Contents sensitive to general economic conditions and other factors, such as credit availability, interest rates, fuel prices, and consumer preference and confidence. Economic declines that result in a significant reduction in automotive production would have an adverse effect on our sales to OE customers.
In addition, plant construction and modernization may temporarily disrupt our manufacturing operations and lead to temporary increases in our costs. A prolonged economic downturn or economic uncertainty could adversely affect our business and results of operations.
In addition, plant construction and modernization may temporarily disrupt our manufacturing operations and lead to temporary increases in our costs. 12 Table of Contents A prolonged economic downturn or economic uncertainty could adversely affect our business and results of operations.
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 that facility may decrease below its stated amount.
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 that facility 17 Table of Contents may decrease below its stated amount.
Our facilities and operations, and the facilities and operations of our suppliers and customers, could be disrupted by events beyond our control, such as war, acts of terror, political unrest, public health concerns, labor disputes, or severe weather conditions or natural disasters.
We manage businesses and facilities worldwide. Our facilities and operations, and the facilities and operations of our suppliers and customers, could be disrupted by events beyond our control, such as war, acts of terror, political unrest, public health concerns, labor disputes, or severe weather conditions or natural disasters.
A sustained labor shortage, lack of skilled labor, increased turnover or labor cost inflation, caused by the ongoing COVID-19 pandemic or as a result of general macroeconomic factors, could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, which could negatively affect our ability to efficiently operate our manufacturing and distribution facilities and overall business and have other adverse effects on our results of operations and financial condition.
A sustained labor shortage, lack of skilled labor, increased turnover or labor cost inflation as a result of general macroeconomic factors could lead to increased costs, such as increased overtime to meet demand and increased wage rates to attract and retain employees, which could negatively affect our ability to efficiently operate our manufacturing and distribution facilities and overall business and have other adverse effects on our results of operations and financial condition.
If we were subject to a significant adverse judgment or experienced an interruption or reduction in the availability of bonding capacity, we may be required to provide letters of credit or post cash collateral, which may have a material adverse effect on our liquidity. 20 Table of Contents We have significant deferred tax assets, including foreign tax credits.
If we were subject to a significant adverse judgment or experienced an interruption or reduction in the availability of bonding capacity, we may be required to provide letters of credit or post cash collateral, which may have a material adverse effect on our liquidity. We have significant deferred tax assets.
Our success depends in part upon our ability to use and protect our proprietary technology and other intellectual property, which generally covers various aspects of the design and manufacture of our products and processes. We own and use tradenames and trademarks worldwide.
We may not be able to protect our intellectual property rights adequately. Our success depends in part upon our ability to use and protect our proprietary technology and other intellectual property, which generally covers various aspects of the design and manufacture of our products and processes. We own and use tradenames and trademarks worldwide.
Other customers, such as dealers, retailers or distributors, may experience similar disruptions to their operations. As a result, a customer could halt or significantly reduce purchases of our products, which would harm our results of operations, financial condition and liquidity.
Such events may cause an OE customer to reduce or suspend vehicle production. Other customers, such as dealers, retailers or distributors, may experience similar disruptions to their operations. As a result, a customer could halt or significantly reduce purchases of our products, which would harm our results of operations, financial condition and liquidity.
Approximately 2,300 of our associates at our Texarkana and Findlay plants in the United States at December 31, 2022 are covered by separate collective bargaining agreements with the USW, which expire in June 2024 and February 2024, respectively.
Approximately 2,200 of our associates at our Texarkana and Findlay plants in the United States at December 31, 2023 are covered by separate collective bargaining agreements with the USW, which expire in June 2024.
The agreements governing our secured credit facilities, senior unsecured notes and our other outstanding indebtedness impose significant operating and financial restrictions on us. These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise.
The agreements governing our secured credit facilities, senior unsecured notes and our other outstanding indebtedness impose significant operating and financial restrictions on us. These restrictions may affect our ability to operate our business or implement strategic initiatives, such as the Goodyear Forward plan, and may limit our ability to take advantage of potential business opportunities as they arise.
We also face the challenge of supporting our older systems and implementing upgrades when necessary, as well as the integration of Cooper Tire’s IT systems with Goodyear’s IT systems. Our security measures are focused on the prevention, detection and remediation of damage from computer viruses, unauthorized access, cyber-attack, natural disasters and other similar disruptions.
We also face the challenge of supporting our older systems and implementing upgrades when necessary. Our security measures are focused on the prevention, detection and remediation of damage from computer viruses, unauthorized access, cyber-attack, natural disasters and other similar disruptions.
For the year ended December 31, 2022, foreign currency translation unfavorably affected sales by $1,114 million and unfavorably affected segment operating income by $16 million compared to the year ended December 31, 2021. The volatility of currency exchange rates may materially adversely affect our operating results.
For the year ended December 31, 2023, foreign currency translation unfavorably affected sales by $169 million and unfavorably affected segment operating income by $23 million compared to the year ended December 31, 2022. The volatility of currency exchange rates may materially adversely affect our operating results.
There can be no assurance that we would be able to reduce our fixed costs proportionately in response to a decline in our net sales and therefore our competitiveness could be significantly impacted. As a result, a decline in our net sales could result in a higher percentage decline in our income from operations and net income.
There can be no assurance that we would be able to reduce our fixed costs proportionately in response to a decline in our net sales and therefore our competitiveness could be significantly impacted.
We must generate sufficient earnings of the appropriate character in order to utilize our deferred tax assets prior to any applicable expiration dates.
We must generate sufficient earnings of the appropriate character in order to utilize our deferred tax assets.
Compliance with the laws and regulations described above or any of the myriad of applicable foreign, federal, state and local laws and regulations currently in effect or that may be adopted in the future could materially adversely affect our competitive position, operating results, financial condition and liquidity. 21 Table of Contents General Risk Factors We have foreign currency translation and transaction risks that may materially adversely affect our operating results, financial condition and liquidity.
Compliance with the laws and regulations described above or any of the myriad of applicable foreign, federal, state and local laws and regulations currently in effect or that may be adopted in the future could materially adversely affect our competitive position, operating results, financial condition and liquidity.
To the extent that any system failure, accident or security or privacy breach results in material disruptions to our operations or the theft, loss or disclosure of, or damage to, material data or confidential information, our reputation, business, results of operations and financial condition could be materially adversely affected. 19 Table of Contents We may not be able to protect our intellectual property rights adequately.
To the extent that any system failure, accident or security or privacy breach results in material disruptions to our operations or the theft, loss or disclosure of, or damage to, material data or confidential information, our reputation, business, results of operations and financial condition could be materially adversely affected.
In addition, approximately 21,000 of our associates outside of the United States are covered by union contracts that have expired or are expiring in 2023, primarily in Germany, Poland, China, Mexico, Slovenia, France and Turkey.
In addition, approximately 20,000 of our associates outside of the United States are covered by union contracts that have expired or are expiring in 2024, primarily in Luxembourg, Poland, Brazil, Mexico, China, Slovenia, Turkey, India and Serbia.
At various times, some regions around the world may be more particularly impacted by these factors than other regions. Automotive production can also be affected by the ongoing pandemic, labor relation issues or shortages, financial difficulties or supply disruptions.
At various times, some regions around the world may be more particularly impacted by these factors than other regions. Automotive production can also be affected by labor relation issues or shortages, financial difficulties or supply disruptions. Our OE customers could experience production disruptions resulting from their own or supplier labor, financial or supply difficulties.
These U.S. and European regulations, rules adopted to implement these regulations, or other similar regulations that may be adopted in the United States, Europe or elsewhere in the future may require us to alter or increase our capital spending and research and development plans or cease the production of certain tires, which could have a material adverse effect on our operating results.
These U.S. and European regulations, rules adopted to implement these regulations, or other similar regulations that may be adopted in the United States, Europe or elsewhere in the future may require us to alter or increase our capital spending and research and development plans or cease the production of certain tires, which could have a material adverse effect on our operating results. 20 Table of Contents Laws and regulations governing environmental and occupational safety and health are complicated, change frequently and have tended to become stricter over time.
High demand for and/or limited availability of raw materials and other energy sources could result in declining margins and operating results and adversely affect our financial condition. The volatility of raw material costs may cause our margins, operating results and liquidity to fluctuate.
Higher raw material, energy and transportation costs around the world may offset our efforts to reduce our cost structure. High demand for and/or limited availability of raw materials and other energy sources could result in declining margins and operating results and adversely affect our financial condition.
Russia’s invasion of Ukraine and the resulting government sanctions could result in significant macroeconomic consequences, including increased inflationary pressures, market volatility, economic restrictions and business disruptions, which could negatively impact our business, financial condition and results of operations.
Russia’s invasion of Ukraine and the resulting government sanctions could result in significant macroeconomic consequences, including increased inflationary pressures, market volatility, economic restrictions and business disruptions, which could negatively impact our business, financial condition and results of operations. We suspended all shipments of tires to Russia during the first quarter of 2022 and discontinued our Russian operations in January 2023.
If we do not successfully implement our strategic initiatives, our operating results, financial condition and liquidity may be materially adversely affected. We are pursuing important strategic initiatives, such as our innovation excellence, sales and marketing excellence and operational excellence initiatives.
The failure to implement successfully this or our other important strategic initiatives may materially adversely affect our operating results, financial condition and liquidity. We are pursuing other important strategic initiatives, such as our innovation excellence, sales and marketing excellence and operational excellence initiatives.
Our inability to access the capital markets or incur additional debt in the future could have a material adverse effect on our liquidity and operations, and could require us to consider further measures, including deferring planned capital expenditures, reducing discretionary spending, selling additional assets and restructuring existing debt.
Our inability to access the capital markets or incur additional debt in the future could have a material adverse effect on our liquidity and operations, and could require us to consider further measures, including deferring planned capital expenditures, reducing discretionary spending, selling additional assets and restructuring existing debt. 16 Table of Contents 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.
There is also growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters.
In addition, we have contractual indemnification obligations for environmental remediation costs and liabilities that may arise relating to certain divested operations. There is also growing concern that carbon dioxide and other greenhouse gases in the atmosphere may have an adverse impact on global temperatures, weather patterns, and the frequency and severity of extreme weather and natural disasters.
We have taken steps to offset the increased cost, but we cannot predict the degree to or the time period over which energy costs will increase.
The conflict has led to increases in the cost of energy and the potential for energy shortages, especially in Europe. We have taken steps to offset the increased cost, but we cannot predict the degree to or the time period over which energy costs will increase.
The financial position and results of operations of many of our international subsidiaries are initially recorded in various foreign currencies and then translated into U.S. dollars at the applicable exchange rate for inclusion in our financial statements.
General Risk Factors We have foreign currency translation and transaction risks that may materially adversely affect our operating results, financial condition and liquidity. The financial position and results of operations of many of our international subsidiaries are initially recorded in various foreign currencies and then translated into U.S. dollars at the applicable exchange rate for inclusion in our financial statements.
Any such production disruptions may result in the unexpected closure of our suppliers' facilities or increases in the cost of our raw materials, which would adversely affect our results of operations and financial condition.
Our suppliers could also experience production disruptions due to labor, financial, supply or transportation difficulties, or new environmental laws or stricter enforcement of existing environmental laws. Any such production disruptions may result in the unexpected closure of our suppliers' facilities or increases in the cost of our raw materials, which would adversely affect our results of operations and financial condition.
We believe that our future success depends, in part, on preserving, enhancing, and leveraging the value of our brands and executing our brand strategies, discussed above, which are designed to drive end-user demand for our products.
Damage to our brand and reputation could have an adverse effect on our business. Our well-known and trusted brand names are a key competitive advantage. We believe that our future success depends, in part, on preserving, enhancing, and leveraging the value of our brands and executing our brand strategies, which are designed to drive end-user demand for our products.
We may be impacted by economic and supply disruptions associated with events beyond our control, such as war, including the current conflict between Russia and Ukraine, acts of terror, political unrest, public health concerns, labor disputes or natural disasters. We manage businesses and facilities worldwide.
For the year ended December 31, 2023, net foreign currency exchange losses were $87 million. We may be impacted by economic and supply disruptions associated with events beyond our control, such as war, including the current conflicts between Russia and Ukraine and between Israel and Hamas, acts of terror, political unrest, public health concerns, labor disputes or natural disasters.
As a result of these factors, automotive vehicle production and global tire industry demand continues to be difficult to predict. Although sales to our OE customers accounted for approximately 15% of our net sales in 2022, demand for our products by OE customers and production levels at our facilities are impacted by automotive vehicle production.
Although sales to our OE customers accounted for approximately 17% of our net sales in 2023, demand for our products by OE customers and production levels at our facilities are impacted by automotive vehicle production.
Environmental issues, including climate change, or legal, regulatory or market measures to address environmental issues, may negatively affect our business and operations and cause us to incur significant costs.
As a result, a decline in our net sales could result in a higher percentage decline in our income from operations and net income. 15 Table of Contents Environmental issues, including climate change, or legal, regulatory or market measures to address environmental issues, may negatively affect our business and operations and cause us to incur significant costs.
In addition, lower raw material costs may put downward pressure on the price of tires, which could ultimately reduce our margins and adversely affect our results of operations. If the Company is unable to obtain adequate sources of raw materials, energy or transportation, its operations could be interrupted.
The volatility of raw material costs may cause our margins, operating results and liquidity to fluctuate. In addition, lower raw material costs may put downward pressure on the price of tires, which could ultimately reduce our margins and adversely affect our results of operations.
If the frequency or severity of extreme weather and natural disasters increases over time, we may experience a greater number of losses at certain of our facilities. Such losses could lead to an increase in the deductibles or cost of insurance for those facilities, or to the unavailability of insurance on terms that are acceptable to us.
If the frequency or severity of extreme weather and natural disasters increases over time, we may experience a greater number of losses at certain of our facilities.
We are a party to collective bargaining contracts with our labor unions, which represent a significant number of our employees, including our collective bargaining agreements with the USW.
We are a party to collective bargaining contracts with our labor unions, which represent a significant number of our employees, including our collective bargaining agreements with the USW. Our primary collective bargaining agreement with the USW, which covers approximately 5,300 of our associates in the United States at December 31, 2023, expires in July 2026.
As a result, instability and weakness of the U.S. and global economies, including due to recession, inflation, high unemployment, disruptions to financial markets, geopolitical events and other effects caused directly or indirectly by the COVID-19 pandemic, and the corresponding negative effects on consumer spending, may materially negatively affect our business and results of operations. 13 Table of Contents Raw material, energy and transportation costs may materially adversely affect our operating results and financial condition.
As a result, instability and weakness of the U.S. and global economies, including due to recession, inflation, high unemployment, disruptions to financial markets, geopolitical events and public health crises, and the corresponding negative effects on consumer spending, may materially negatively affect our business and results of operations, including impairment charges relating to goodwill, intangible assets, investments and other long-lived assets.
While we continue to take actions to ensure the safety of our associates and the continuity of our business operations, the extent of the conflict’s impact on the global economy cannot be predicted. Financial difficulties, work stoppages, supply disruptions or economic conditions affecting our major customers, dealers or suppliers could harm our business.
While we continue to take actions to ensure the safety of our associates and the continuity of our business operations, the extent of the conflict’s impact on the global economy cannot be predicted, particularly if the conflict were to intensify or expand.
Laws and regulations governing environmental and occupational safety and health are complicated, change frequently and have tended to become stricter over time. As a manufacturing company, we are subject to these laws and regulations both inside and outside the United States. We may not be in complete compliance with such laws and regulations at all times.
As a manufacturing company, we are subject to these laws and regulations both inside and outside the United States. We may not be in complete compliance with such laws and regulations at all times. Our costs or liabilities relating to them may be more than the amount we have reserved, and that difference may be material.
Raw material, energy and transportation costs can be volatile. Inflationary cost pressures, among other factors, may cause increases in the prices of natural and synthetic rubber, carbon black and petrochemical-based commodities. Market conditions, including actions by competitors, or contractual obligations may prevent us from passing any such increased costs on to our customers through timely price increases.
Raw material, energy and transportation costs may materially adversely affect our operating results and financial condition. Raw material, energy and transportation costs can be volatile. Inflationary cost pressures, among other factors, may cause increases in the prices of natural and synthetic rubber, carbon black and petrochemical-based commodities.
The failure to implement successfully this or our other important strategic initiatives may materially adversely affect our operating results, financial condition and liquidity. Our performance is also dependent on our ability to improve the volume and mix of higher margin tires we sell in our targeted market segments.
If we fail to execute these initiatives successfully or if the assumptions used in developing the initiatives vary significantly from actual conditions, we may fail to achieve our financial goals. Our performance is also dependent on our ability to improve the volume and mix of higher margin tires we sell in our targeted market segments.
In addition, fluctuations in the price of gasoline for consumers can affect driving and purchasing habits and impact demand for tires.
If the Company is unable to obtain adequate sources of raw materials, energy or transportation, its operations could be interrupted. In addition, fluctuations in the price of gasoline for consumers can affect driving and purchasing habits and impact demand for tires.
Additionally, increased demand for consumer products and supply chain disruptions as a result of the pandemic and other global events, including port congestion and container shortages, has led to inflationary cost pressures on transportation. Higher raw material, energy and transportation costs around the world may offset our efforts to reduce our cost structure.
Market conditions, including actions by competitors, or contractual obligations may prevent us from passing any such increased costs on to our customers through timely price increases. Additionally, increased demand for consumer products and supply chain disruptions as a result of global events, including disruptions to transportation routes, port congestion and container shortages, has led to inflationary cost pressures on transportation.
Nonetheless, the ongoing conflict has aggravated already challenging macroeconomic trends, including global supply chain disruptions, higher costs for certain raw materials and higher energy and transportation costs. The conflict has led to increases in the cost of energy and the potential for energy shortages, especially in Europe.
The war between Russia and Ukraine has not had and is not expected to have a direct material impact on our financial results. Nonetheless, the ongoing conflict has aggravated already challenging macroeconomic trends, including global supply chain disruptions, higher costs for certain raw materials and higher energy and transportation costs.
To begin to address this competitive disadvantage, we are curtailing production of tires for declining, less profitable segments of the tire market (including closure of our Melksham, United Kingdom tire manufacturing facility) and undertaking significant capital investments in building, expanding and modernizing certain manufacturing facilities around the world to strengthen the competitiveness of our manufacturing footprint and increase production of premium, large-rim diameter consumer tires.
We are also undertaking significant capital investments in building, expanding and modernizing certain manufacturing facilities around the world to strengthen the competitiveness of our manufacturing footprint and increase production of premium, large-rim diameter consumer tires. In addition, plant closures, construction and modernization may temporarily disrupt our manufacturing operations and lead to temporary increases in our costs.
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. We have a substantial amount of debt. As of December 31, 2022, our debt (including finance leases) on a consolidated basis was approximately $7.9 billion.
We have a substantial amount of debt. As of December 31, 2023, our debt (including finance leases) on a consolidated basis was approximately $7.6 billion. Our substantial amount of debt and other obligations could have important consequences.
Removed
Risks Related to the Cooper Tire Acquisition We may not achieve all of the intended benefits of the acquisition of Cooper Tire and our integration efforts may disrupt our current plans or operations.
Added
Risks Related to Strategic Initiatives and Operations If we do not successfully implement the Goodyear Forward plan and our other strategic initiatives, our operating results, financial condition and liquidity may be materially adversely affected.
Removed
Although we are on track to achieve the expected synergies from the Cooper Tire acquisition, there can be no assurance that we will be able to successfully complete the integration of Cooper Tire’s operations and assets or otherwise realize the remaining expected benefits of the acquisition (including additional operating and other cost synergies).
Added
On November 15, 2023, we announced a transformation plan, known as “Goodyear Forward,” that is intended to optimize our portfolio, deliver significant margin expansion and reduce leverage in order to drive sustainable and substantial shareholder value creation. We believe that the Goodyear Forward plan has ambitious, but achievable, goals.
Removed
We expect to continue our efforts to integrate Cooper Tire during the first half of 2023.
Added
However, the successful implementation of the Goodyear Forward plan may face material challenges, including the ability of management and our employees to focus on implementing the Goodyear Forward plan as well as attending to our ongoing business; retaining key management and other employees; the possibility of faulty assumptions underlying the specific initiatives and goals included within the Goodyear Forward plan and the associated costs of implementing the plan; as well as potential unknown or unforeseen challenges, expenses or delays in implementing the Goodyear Forward plan.
Removed
Difficulties in integrating Cooper Tire and Goodyear may result in Goodyear performing differently than expected, in operational challenges, in the failure to realize or sustain anticipated run-rate cost synergies and efficiencies in the expected timeframe or at all, or in the difficulty or failure of utilizing our available U.S. tax attributes, in which case the Cooper Tire acquisition may not be accretive to earnings per share, may not improve our balance sheet position, may not enhance our ability to delever, and may not generate additional free cash flow due to reduced cash tax payments.
Added
As a result, we cannot assure you that we will be able to successfully implement the cost reduction or top line actions in the Goodyear Forward plan or to realize or sustain the anticipated run-rate benefits within the time frames set out in the Goodyear Forward plan or at all.
Removed
The continued integration of the two companies may result in material challenges, including the diversion of management’s attention from ongoing business concerns; retaining key management and other employees; retaining or attracting business and operational relationships; the possibility of faulty assumptions underlying expectations regarding the integration process and associated expenses; consolidating corporate and administrative infrastructures and eliminating duplicative operations; coordinating geographically separate organizations; unanticipated issues in integrating information technology, communications and other systems; as well as potential unknown liabilities or unforeseen expenses or delays relating to integration.
Added
In addition, our ability to successfully market and sell our chemical business, the Dunlop brand and our OTR tire business is subject to prevailing general and industry-specific economic conditions and certain financial, business and other factors beyond our control.
Removed
Risks Related to Operations Our results of operations and financial condition have been, and may continue to be, adversely impacted by the ongoing COVID-19 pandemic, or similar public health crises, and that impact may be material. The COVID-19 pandemic has caused, and continues to cause, volatility in the global economy, the tire industry and our business.
Added
We cannot assure you that we will be able to sell these assets or operations within the time frames set out in the Goodyear Forward plan or at all or, even if we were able to take such actions, that we could do so at prices and on terms that are acceptable to us.
Removed
In response to the pandemic, international, federal, state and local public health and governmental authorities took extraordinary actions to contain and combat the outbreak and spread of COVID-19 throughout most regions of the world, including travel bans, quarantines, “stay-at-home” orders and similar mandates that caused many individuals to substantially restrict their daily activities and many businesses to curtail or cease normal operations, and they may take additional or further actions in the future.
Added
If we are unable to successfully implement the actions set forth in the Goodyear Forward plan or other strategic initiatives, we may not be able to improve our operating results, including our operating margin, generate additional cash flow, or reduce our debt levels and leverage. We believe that our manufacturing footprint is less cost-competitive than that of our principal competitors.
Removed
The tire industry has been negatively impacted by this evolving situation. In 2020, there was a sudden and sharp decline in replacement tire demand and original equipment manufacturers suspended or severely limited automobile production globally.
Added
To begin to address this competitive disadvantage, we are closing several high-cost manufacturing facilities and curtailing production of tires for declining, less profitable segments of the tire market.
Removed
Recovery in automobile production globally has been constrained by supply chain disruptions, including an insufficient availability of semiconductor chips, caused by COVID-19 and a variety of global factors.
Added
Financial difficulties, work stoppages, supply disruptions or economic conditions affecting our major customers, dealers or suppliers could harm our business. Automotive vehicle production and global tire industry demand continues to be difficult to predict.
Removed
The ongoing COVID-19 pandemic, or similar public health crises, may result in decisions to change future production levels 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.
Added
Such losses could lead to an increase in the deductibles or cost of insurance for those facilities, a reduction of insurance available to us, or the unavailability of insurance on terms that are acceptable to us.
Removed
We have experienced, and may experience in the future, unexpected delays or obstacles, such as disruptions in our and our customers' supply chains or government mandates, that may hamper our ability to achieve planned production levels.
Added
Certain of the strategic alternatives that we may pursue for our chemical business, the Dunlop brand or our OTR tire business may, depending on the terms of any particular transaction, require a waiver or an amendment of our credit facilities.
Removed
Due to national and local efforts to contain the spread of COVID-19 and its related variants in certain countries, such as China, renewed stay-at-home orders and other restrictions on mobility required us to temporarily shut down or limit production at some of our facilities, including our facilities in Pulandian and Kunshan, China, at various times throughout 2022.
Added
We cannot assure you that we will be able to obtain waivers from our lenders or amend the relevant covenants in our credit facilities.
Removed
Any suspension of production at our manufacturing facilities, or difficulties or inefficiencies in resuming or increasing production, is likely to adversely impact our future results of operations, financial condition and liquidity, and that impact may be material.
Added
Such losses could lead to an increase in the deductibles or cost of insurance for those facilities, a reduction of insurance available to us, or the unavailability of insurance on terms that are acceptable to us.

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Item 2. Properties

Properties — owned and leased real estate

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Americas owns or leases and operates 29 manufacturing facilities in 7 countries, including: • 16 tire plants, • 4 chemical plants, • 3 tire manufacturing equipment plants, • 2 tire retread plants, • 3 aviation retread plants, and • 1 mix plant. EUROPE, MIDDLE EAST AND AFRICA MANUFACTURING FACILITIES.
Americas owns or leases and operates 28 manufacturing facilities in 7 countries, including: • 16 tire plants, • 4 chemical plants, • 3 tire manufacturing equipment plants, • 2 tire retread plants, • 2 aviation retread plants, and • 1 mix plant. EUROPE, MIDDLE EAST AND AFRICA MANUFACTURING FACILITIES.
ITEM 2. PROPERTIES. We manufacture our products in 57 manufacturing facilities located around the world including 18 plants in the United States. AMERICAS MANUFACTURING FACILITIES.
ITEM 2. PROPERTIES. We manufacture our products in 55 manufacturing facilities located around the world, including 18 plants in the United States. AMERICAS MANUFACTURING FACILITIES.
EMEA owns or leases and operates 18 manufacturing facilities in 10 countries, including: • 16 tire plants, • 1 tire retread plant, and • 1 aviation retread plant. ASIA PACIFIC MANUFACTURING FACILITIES. Asia Pacific owns and operates 10 manufacturing facilities in 6 countries, including 9 tire plants and 1 aviation retread plant. PLANT UTILIZATION.
EMEA owns or leases and operates 17 manufacturing facilities in 9 countries, including: • 15 tire plants, • 1 tire retread plant, and • 1 aviation retread plant. ASIA PACIFIC MANUFACTURING FACILITIES. Asia Pacific owns and operates 10 manufacturing facilities in 6 countries, including 9 tire plants and 1 aviation retread plant. PLANT UTILIZATION.
We do not consider any one of these leased properties to be material to our operations. For additional information regarding leased properties, refer to Notes to the Consolidated Financial Statements No. 14, Property, Plant and Equipment, and No. 15, Leases. Certain of our manufacturing facilities are mortgaged as collateral for our secured credit facilities.
For additional information regarding leased properties, refer to Notes to the Consolidated Financial Statements No. 14, Property, Plant and Equipment, and No. 15, Leases. Certain of our manufacturing facilities are mortgaged as collateral for our secured credit facilities. Refer to Note to the Consolidated Financial Statements No. 16, Financing Arrangements and Derivative Financial Instruments. 23 Table of Contents
We lease our Corporate and Americas headquarters and our research and development facility and technical center in Akron, Ohio. We operate approximately 950 retail outlets for the sale of our tires to consumer and commercial customers, approximately 40 tire retreading facilities and approximately 300 warehouse distribution facilities. Substantially all of these facilities are leased.
We operate approximately 950 retail outlets for the sale of our tires to consumer and commercial customers, approximately 40 tire retreading facilities and approximately 300 warehouse distribution facilities. Substantially all of these facilities are leased. We do not consider any one of these leased properties to be material to our operations.
Our utilization rate can vary significantly between product lines, depending on the complexity of the tires, and between consumer and commercial tires, and can also vary between business segments. OTHER FACILITIES. We also own and operate five research and development facilities and technical centers, three development centers, one innovation lab, and seven tire proving grounds.
Our worldwide tire capacity utilization rate was approximately 81% during 2023 compared to approximately 89% in 2022 and 87% in 2021. Our utilization rate can vary significantly between product lines, depending on the complexity of the tires, and between consumer and commercial tires, and can also vary between business segments.
Removed
Our worldwide tire capacity utilization rate was approximately 89% during 2022 compared to approximately 87% in 2021 and 68% in 2020. The utilization rate in 2022 was reflective of our continued recovery from the pandemic-related factory shutdowns in 2020. The reported capacity utilization is an overall average for the Company.
Added
The reported capacity utilization is an overall average for the Company. In addition to the impact of a storm on production at our tire manufacturing facility in Tupelo, Mississippi ("Tupelo"), we reduced utilization in 2023 to address softening industry demand and prevent the buildup of excess inventory. OTHER FACILITIES.
Removed
Refer to Note to the Consolidated Financial Statements No. 16, Financing Arrangements and Derivative Financial Instruments. 23 Table of Contents
Added
We also own and operate three research and development facilities and technical centers, three development centers, one innovation lab, and seven tire proving grounds. We lease our Corporate and Americas headquarters and our research and development facility and technical center in Akron, Ohio.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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It is expected that in a substantial portion of these cases there will be no evidence of exposure to a Goodyear manufactured product containing asbestos or asbestos in our facilities. The amount expended by us and our insurers on defense and claim resolution was $16 million during 2022.
It is expected that in a substantial portion of these cases there will be no evidence of exposure to a Goodyear manufactured product containing asbestos or asbestos in our facilities. The amount expended by us and our insurers on defense and claim resolution was $15 million during 2023.
ITEM 3. LEGA L PROCEEDINGS. Asbestos Litigation We are currently one of numerous defendants in legal proceedings in certain state and federal courts involving approximately 37,200 claimants at December 31, 2022 relating to their alleged exposure to materials containing asbestos in products allegedly manufactured by us or asbestos materials present at our facilities.
ITEM 3. LEGA L PROCEEDINGS. Asbestos Litigation We are currently one of numerous defendants in legal proceedings in certain state and federal courts involving approximately 35,800 claimants at December 31, 2023 relating to their alleged exposure to materials containing asbestos in products allegedly manufactured by us or asbestos materials present at our facilities.
Removed
Shareholder Derivative Litigation On October 24, 2018, a purported shareholder of the Company filed a derivative action on behalf of the Company in the Court of Common Pleas for Summit County, Ohio against certain of our directors, our chief executive officer, and certain former officers and directors. The complaint also names the Company as a nominal defendant.
Added
European Commission Antitrust Investigation On January 30, 2024, the European Commission carried out unannounced inspections at the premises of companies active in the tire industry in several Member States in the European Union in connection with an investigation into potential violations of European Union antitrust rules with respect to new replacement tires for passenger cars, vans, trucks and busses sold in the European Economic Area.
Removed
The lawsuit alleges, among other things, breach of fiduciary duties, waste of corporate assets and fraudulent concealment in connection with certain G159 tires manufactured by us from 1996 until 2003. The lawsuit seeks unspecified monetary damages, an award of attorney’s fees and expenses, and other legal and equitable relief.
Added
Goodyear was one of the companies that was inspected. We are cooperating with the European Commission’s investigation.
Removed
On September 25, 2020, the Court of Common Pleas dismissed the derivative action and the purported shareholder appealed that dismissal. On June 30, 2021, the Ohio Court of Appeals for the Ninth Judicial District reversed the trial court's judgment and remanded the case for further proceedings.
Added
In addition, several civil lawsuits have been subsequently filed in the United States and elsewhere against companies active in the tire industry, including the Company, alleging violations of antitrust laws with respect to new replacement tires for passenger cars, vans, trucks and busses sold in the relevant jurisdictions, and similar additional lawsuits could be brought against us in the future.
Added
We intend to defend these lawsuits, the ultimate outcome of which cannot be predicted at this time.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Set forth in the table below is certain information regarding the number of shares of our common stock that were subject to outstanding stock options or other compensation plan awards at December 31, 2022.
Set forth in the table below is certain information regarding the number of shares of our common stock that were subject to outstanding stock options or other compensation plan awards at December 31, 2023.
In addition, up to 34,598 shares of common stock may be issued in respect of the deferred payout of awards made under our equity compensation plans. The number of performance shares indicated assumes the maximum possible payout that may be earned during the relevant performance periods. 25 Table of Contents
In addition, up to 593 shares of common stock may be issued in respect of the deferred payout of awards made under our equity compensation plans. The number of performance shares indicated assumes the maximum possible payout that may be earned during the relevant performance periods. 25 Table of Contents
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The principal market for our common stock is the Nasdaq Global Select Market (Stock Exchange Symbol: GT). At December 31, 2022, there were 12,009 holders of record of the 282,896,352 shares of our common stock then outstanding.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOC KHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. The principal market for our common stock is the Nasdaq Global Select Market (Stock Exchange Symbol: GT). At December 31, 2023, there were 10,337 holders of record of the 283,786,263 shares of our common stock then outstanding.
Plan Category Number of Shares to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Shares Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Shares Reflected in Column (a)) (a) Equity compensation plans approved by shareholders 5,927,398 $ 17.20 21,697,291 (1) Equity compensation plans not approved by shareholders — — — Total 5,927,398 $ 17.20 21,697,291 (1) Under our equity compensation plans, up to a maximum of 2,229,290 performance shares in respect of performance periods ending on or subsequent to December 31, 2022, 103,492 shares of restricted stock and 1,374,608 restricted stock units have been awarded.
Plan Category Number of Shares to be Issued upon Exercise of Outstanding Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Shares Remaining Available for Future Issuance under Equity Compensation Plans (Excluding Shares Reflected in Column (a)) (a) Equity compensation plans approved by shareholders 5,064,815 $ 17.74 18,710,713 (1) Equity compensation plans not approved by shareholders — — — Total 5,064,815 $ 17.74 18,710,713 (1) Under our equity compensation plans, up to a maximum of 1,718,593 performance shares in respect of performance periods ending on or subsequent to December 31, 2023, 103,492 shares of restricted stock and 1,402,131 restricted stock units have been awarded.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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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 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 default probabilities, and by monitoring the financial strength of these financial institutions on a regular basis.
For a further description of the terms of our outstanding notes, first lien revolving credit facility, European revolving credit facility and pan-European accounts receivable securitization facility, refer to Note to the Consolidated Financial Statements No. 16, Financing Arrangements and Derivative Financial Instruments.
Further Information For a further description of the terms of our outstanding notes, first lien revolving credit facility, European revolving credit facility and pan-European accounts receivable securitization facility, refer to Note to the Consolidated Financial Statements No. 16, Financing Arrangements and Derivative Financial Instruments.
In addition, our European revolving credit facility contains non-financial covenants similar to the non-financial covenants in our first lien revolving credit facility that are described above and a financial covenant applicable only to GEBV and its subsidiaries.
In addition, our European revolving credit facility contains non-financial covenants similar to the non-financial covenants in our first lien revolving credit facility that are described above, similar non-financial covenants specifically applicable to GEBV and its subsidiaries, and a financial covenant applicable only to GEBV and its subsidiaries.
Our critical accounting policies relate to: • acquisitions, • general and product liability and other litigation, • workers’ compensation, • goodwill and intangible assets, • deferred tax asset valuation allowances and uncertain income tax positions, and • pensions and other postretirement benefits. Acquisitions.
Our critical accounting policies relate to: • goodwill and intangible assets, • general and product liability and other litigation, • workers’ compensation, • deferred tax asset valuation allowances and uncertain income tax positions, and • pensions and other postretirement benefits. Goodwill and Intangible Assets.
(7) 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 $187 million. (8) 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.
(7) 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 $167 million. (8) 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.
For further information about our guarantees, refer to Note to the Consolidated Financial Statements No. 20, Commitments and Contingent Liabilities. 45 Table of Contents 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.
For further information about our guarantees, refer to Note to the Consolidated Financial Statements No. 20, Commitments and Contingent Liabilities. 44 Table of Contents 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.
The difference between our effective tax rate and the U.S. statutory rate of 21% for both 2022 and 2021 primarily relates to losses in certain foreign jurisdictions in which no tax benefits are recorded, income in certain foreign jurisdictions taxed at rates higher than the U.S. statutory rate, and the discrete items described above.
The difference between our effective tax rate and the U.S. statutory rate of 21% for both 2023 and 2022 primarily relates to losses in certain foreign jurisdictions in which no tax benefits are recorded, income in certain foreign jurisdictions taxed at rates higher than the U.S. statutory rate, and the discrete items described above.
If our future experience is consistent with our assumptions as of December 31, 2022, actuarial loss recognition over the next few years will remain at an amount near that to be recognized in 2023 before it begins to gradually decline.
If our future experience is consistent with our assumptions as of December 31, 2023, actuarial loss recognition over the next few years will remain at an amount near that to be recognized in 2024 before it begins to gradually decline.
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 approximately 85% 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 approximately 95% of the expected change in our U.S. pension benefit obligation.
(2) The minimum lease payments for finance lease obligations are $759 million. (3) 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.
(2) The minimum lease payments for finance lease obligations are $755 million. (3) 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.
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 $187 million for anticipated costs related to U.S. workers’ compensation claims at December 31, 2022.
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 $167 million and $187 million for anticipated costs related to U.S. workers’ compensation claims at December 31, 2023 and December 31, 2022, respectively.
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, 2022, we were in compliance with this financial covenant.
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, 2023, we were in compliance with this financial covenant.
In 2022, income tax expense includes net discrete tax expense totaling $23 million ($23 million after minority interest), including a charge of $14 million to write off deferred tax assets related to tax loss carryforwards in the UK and a charge of $11 million to establish a full valuation allowance on our net deferred tax assets in Russia, partially offset by a net benefit of $2 million for various other items.
In 2022, income tax expense includes net discrete tax expense totaling $23 million ($23 million after minority interest), including a charge of $14 million to write off deferred tax assets related to tax loss carryforwards in the U.K. and a charge of $11 million to establish a full valuation allowance on our net deferred tax assets in Russia, partially offset by a net benefit of $2 million for various other items.
For a comparison of the years ended December 31, 2021 and 2020, 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, 2021.
For a comparison of the years ended December 31, 2022 and 2021, 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, 2022.
Actual results and experience may differ materially from the forward-looking statements as a result of many factors, including: • a prolonged economic downturn or economic uncertainty could adversely impact our business and results of operations; • there are risks and uncertainties regarding our acquisition of Cooper Tire and our ability to achieve the remaining expected benefits of that acquisition; • our future results of operations, financial condition and liquidity may continue to be adversely impacted by the COVID-19 pandemic, and that impact may be material; • raw material cost increases may materially adversely affect our operating results and financial condition; • we are experiencing inflationary cost pressures, including with respect to wages, benefits, transportation and energy costs, that may materially adversely affect our operating results and financial condition; • delays or disruptions in our supply chain or in the provision of services, including utilities, to us could result in increased costs or disruptions in our operations; • changes to tariffs, trade agreements or trade restrictions may materially adversely affect our operating results; • 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; • if we experience a labor strike, work stoppage, labor shortage or other similar event at the Company or its joint ventures, our business, results of operations, financial condition and liquidity could be materially adversely affected; • financial difficulties, work stoppages, labor shortages, 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; • 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; • 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 first lien 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; 51 Table of Contents • 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; • environmental issues, including climate change, or legal, regulatory or market measures to address environmental issues, may negatively affect our business and operations and cause us to incur significant costs; • 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; • we may not be able to protect our intellectual property rights adequately; • 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, including the current conflict between Russia and Ukraine, acts of terror, political unrest, public health concerns, labor disputes or natural disasters.
Actual results and experience may differ materially from the forward-looking statements as a result of many factors, including: • if we do not successfully implement the Goodyear Forward plan and our other 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; • raw material cost increases may materially adversely affect our operating results and financial condition; • we are experiencing inflationary cost pressures, including with respect to wages, benefits, transportation and energy costs, that may materially adversely affect our operating results and financial condition; • delays or disruptions in our supply chain or in the provision of services, including utilities, to us could result in increased costs or disruptions in our operations; • a prolonged economic downturn or economic uncertainty could adversely affect our business and results of operations; • 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; • if we experience a labor strike, work stoppage, labor shortage or other similar event at the Company or its joint ventures, our business, results of operations, financial condition and liquidity could be materially adversely affected; • financial difficulties, work stoppages, labor shortages, 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; • changes to tariffs, trade agreements or trade restrictions may materially adversely affect our operating results; • 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; • 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 first lien 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; • environmental issues, including climate change, or legal, regulatory or market measures to address environmental issues, may negatively affect our business and operations and cause us to incur significant costs; 51 Table of Contents • 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; • we may not be able to protect our intellectual property rights adequately; • 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, including the current conflicts between Russia and Ukraine and between Israel and Hamas, acts of terror, political unrest, public health concerns, labor disputes or natural disasters.
At December 31, 2022, there were no borrowings outstanding under the German tranche, $374 million (€350 million) of borrowings outstanding under the all-borrower tranche and no letters of credit outstanding under the European revolving credit facility. At December 31, 2021, we had no borrowings and no letters of credit outstanding under the European revolving credit facility.
At December 31, 2023, we had no borrowings and no letters of credit outstanding under the European revolving credit facility. At December 31, 2022, there were no borrowings outstanding under the German tranche, $374 million (€350 million) of borrowings outstanding under the all-borrower tranche and no letters of credit outstanding under the European revolving credit facility.
In 2022, 2021 and 2020, the amount of service cost included in CGS and SAG is approximately equal. Non-service related net periodic pension costs were recorded in Other (Income) Expense.
In 2023, 2022 and 2021, the amount of service cost included in CGS and SAG is approximately equal. Non-service related net periodic pension costs were recorded in Other (Income) Expense.
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 health care costs, and • maximum company-covered benefit costs.
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, 48 Table of Contents • long term rates of return on plan assets, • inflation rates, • future health care costs, and • maximum company-covered benefit costs.
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 48 Table of Contents extent to which, additional taxes will be due.
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.
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.
Certain Non-Guarantor Subsidiaries are limited in their ability to remit funds to us by means of dividends, advances or loans 40 Table of Contents due to required foreign government and/or currency exchange board approvals or limitations in credit agreements or other debt instruments of those subsidiaries.
The present value of the net operating lease payments, including sublease rentals, is $991 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 present value of the net operating lease payments, including sublease rentals, is $1,001 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.
We have recorded liabilities for both asserted and unasserted claims totaling $412 million, including related legal fees expected to be incurred, for potential product liability and other tort claims, including asbestos claims, at December 31, 2022. General and product liability and other litigation liabilities are recorded based on management’s assessment that a loss arising from these matters is probable.
We have recorded liabilities for both asserted and unasserted claims totaling $438 million, including related legal fees expected to be incurred, for potential product liability and other tort claims, including asbestos claims, at December 31, 2023. General and product liability and other litigation liabilities are recorded based on management’s assessment that a loss arising from these matters is probable.
This management's discussion and analysis provides comparisons of material changes in the consolidated financial statements for the years ended December 31, 2022 and 2021.
This management's discussion and analysis provides comparisons of material changes in the consolidated financial statements for the years ended December 31, 2023 and 2022.
Total segment operating margin (segment operating income divided by segment sales) in 2022 was 6.1% compared to 7.4% in 2021. 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 margin (segment operating income divided by segment sales) in 2023 was 4.8% compared to 6.1% in 2022. 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.
Net rationalization charges include $37 million for the plan primarily to reduce salaried staff globally, $34 million for the plan to close Melksham, $24 million for a plan to reduce duplicative global SAG headcount and close redundant warehouse locations in Americas as part of our ongoing Cooper Tire integration efforts, $16 million related to the permanent closure of our tire manufacturing facility in Gadsden, Alabama, and $14 million related to the exit of our retail operations in South Africa.
Net rationalization charges include $37 million for the plan primarily to reduce salaried staff globally, $34 million for the plan to close Cooper Tire's Melksham, United Kingdom facility, $24 million for a plan to reduce duplicative global SAG headcount and close redundant warehouse locations in Americas as part of the integration of Cooper Tire, $16 million related to the permanent closure of our tire manufacturing facility in Gadsden, Alabama, and $14 million related to the exit of our retail operations in South Africa.
If this were to occur, our ratio of EBITDA to Consolidated Interest Expense may not 39 Table of Contents be less than 2.0 to 1.0 for the most recent period of four consecutive fiscal quarters.
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.
We will recognize approximately $10 million of net actuarial gains in 2023. If our future experience is consistent with our assumptions as of December 31, 2022, actuarial gain recognition over the next few years will remain at an amount near that to be recognized in 2023.
We will recognize approximately $9 million of net actuarial gains in 2024. If our future experience is consistent with our assumptions as of December 31, 2023, actuarial gain recognition over the next few years will remain at an amount near that to be recognized in 2024.
EMEA’s results are highly dependent upon Germany, which accounted for 15% of EMEA’s net sales in both 2022 and 2021.
EMEA’s results are highly dependent upon Germany, which accounted for 15% of EMEA’s net sales in both 2023 and 2022.
(5) The obligation related to pension benefits is actuarially determined and is reflective of obligations as of December 31, 2022.
(5) The obligation related to pension benefits is actuarially determined and is reflective of obligations as of December 31, 2023.
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, 2022, we were in compliance with the currently applicable material covenants imposed by our principal credit facilities and indentures.
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. 39 Table of Contents As of December 31, 2023, we were in compliance with the currently applicable material covenants imposed by our principal credit facilities and indentures.
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.
We do not believe that sufficient positive evidence required to release valuation allowances on our foreign deferred tax assets having a significant impact on our financial position or results of operations will exist within the next twelve months.
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, 2022, the gross amount of receivables sold was $744 million, compared to $605 million at December 31, 2021.
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, 2023, the gross amount of receivables sold was $693 million, compared to $744 million at December 31, 2022.
We consider our current forecasts of future profitability in assessing our ability to realize our deferred tax assets, including our foreign tax credits. These forecasts include the impact of recent trends, including various macroeconomic factors such as the impact of higher raw material, transportation, labor and energy costs, on our profitability, as well as the impact of tax planning strategies.
In addition, we consider our current forecasts of future profitability in assessing our ability to realize our deferred tax assets as well as the impact of tax planning strategies. These forecasts include the impact of recent trends and various macroeconomic factors such as the impact of raw material, transportation, labor and energy costs on our profitability.
We consider our current forecasts of future profitability in assessing our ability to realize our deferred tax assets, including our foreign tax credits. These forecasts include the impact of recent trends, including various macroeconomic factors such as the impact of higher raw material, transportation, labor and energy costs, on our profitability, as well as the impact of tax planning strategies.
In addition, we consider our current forecasts of future profitability in assessing our ability to realize our deferred tax assets as well as the impact of tax planning strategies. These forecasts include the impact of recent trends and various macroeconomic factors such as the impact of raw material, transportation, labor and energy costs on our profitability.
Those with variable prices are based on index rates for those commodities at December 31, 2022. 44 Table of Contents (9) These amounts primarily represent expected payments with interest for uncertain income tax positions as of December 31, 2022.
Those with variable prices are based on index rates for those commodities at December 31, 2023. 43 Table of Contents (9) These amounts primarily represent expected payments with interest for uncertain income tax positions as of December 31, 2023.
At December 31, 2022 and December 31, 2021, we had approximately $1.1 billion and $1.2 billion of U.S. federal, state and local net deferred tax assets, respectively, inclusive of valuation allowances totaling $26 million in each year primarily for state tax loss carryforwards with limited lives.
At December 31, 2023 and December 31, 2022, we had approximately $1.2 billion and $1.1 billion of U.S. federal, state and local net deferred tax assets, respectively, inclusive of valuation allowances totaling $22 million and $26 million in each period, respectively, primarily for state tax loss carryforwards with limited lives.
At December 31, 2022 and December 31, 2021, we had approximately $1.1 billion and $1.2 billion of U.S. federal, state and local net deferred tax assets, respectively, inclusive of valuation allowances totaling $26 million in each year primarily for state tax loss carryforwards with limited lives.
At December 31, 2023 and December 31, 2022, we had approximately $1.2 billion and $1.1 billion of U.S. federal, state and local net deferred tax assets, respectively, inclusive of valuation allowances totaling $22 million and $26 million in each period, respectively, primarily for state tax loss carryforwards with limited lives.
We have entered into certain arrangements under which we have provided guarantees that are off-balance sheet arrangements. Those guarantees totaled $32 million at December 31, 2022.
We have entered into certain arrangements under which we have provided guarantees that are off-balance sheet arrangements. Those guarantees totaled $31 million at December 31, 2023.
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 5.45% and 5.51%, respectively, at December 31, 2022, compared to 2.82% and 2.87%, respectively, at December 31, 2021.
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 5.12% and 5.16%, respectively, at December 31, 2023, compared to 5.45% and 5.51%, respectively, at December 31, 2022.
We have a broad global footprint with 57 manufacturing facilities in 23 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.
We have a broad global footprint with 55 manufacturing facilities in 22 countries, including the United States. We operate our business through three operating segments representing our regional tire businesses: Americas; Europe, Middle East and Africa ("EMEA"); and Asia Pacific.
We had recorded gross liabilities for both asserted and unasserted asbestos claims, inclusive of defense costs, totaling $125 million at December 31, 2022. 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 had recorded gross liabilities for 46 Table of Contents both asserted and unasserted asbestos claims, inclusive of defense costs, totaling $120 million and $125 million, respectively, at December 31, 2023 and December 31, 2022. 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.
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 19, 2021 through October 19, 2022, the designated maximum amount of the facility was €300 million.
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 20, 2022 through October 18, 2023, the designated maximum amount of the facility was €300 million.
Each reporting period, we assess available positive and negative 31 Table of Contents evidence and estimate if sufficient future taxable income will be generated to utilize these existing 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.
For purposes of determining our 2022 U.S. pension total benefits cost, we recognized $225 million of the net actuarial losses in 2022. We will recognize approximately $100 million of net actuarial losses in 2023 U.S. net periodic pension cost.
For purposes of determining our 2023 U.S. pension total benefits cost, we recognized $132 million of the net actuarial losses in 2023. We will recognize approximately $100 million of net actuarial losses in 2024 U.S. net periodic pension cost.
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 $873 million on all of our net deferred tax assets.
Our losses in various foreign taxing jurisdictions in recent periods represented sufficient negative evidence to require us to maintain a full valuation allowance against certain of these net foreign deferred tax assets. Most notably, in Luxembourg, we maintain a valuation allowance of approximately $1.0 billion on all of our net deferred tax assets.
Up to €175 million of swingline loans and €75 million in letters of credit are available for issuance under the all-borrower tranche. 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.
("GEBV"), Goodyear Germany and Goodyear 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. 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.
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 $873 million on all of our net deferred tax assets.
Our losses in various foreign taxing jurisdictions in recent periods represented sufficient negative evidence to require us to maintain a full valuation allowance against certain of these net foreign deferred tax assets. Most notably, in Luxembourg, we maintain a valuation allowance of approximately $1.0 billion on all of our net deferred tax assets.
At December 31, 2022, we had short term committed and uncommitted credit arrangements totaling $881 million, of which $469 million were unused, compared to $1,004 million and $560 million, respectively, at December 31, 2021. The continued availability of the short term uncommitted arrangements is at the discretion of the relevant lender and may be terminated at any time.
At December 31, 2023, we had short term committed and uncommitted credit arrangements totaling $760 million, of which $380 million were unused, compared to $881 million and $469 million, respectively, at December 31, 2022. The continued availability of the short term uncommitted arrangements is at the discretion of the relevant lender and may be terminated at any time.
Results of operations in Germany are expected to continue to have a significant impact on EMEA’s future performance. 34 Table of Contents Asia Pacific Year Ended December 31, (In millions) 2022 2021 2020 Tire Units 34.4 30.7 24.8 Net Sales $ 2,394 $ 2,184 $ 1,745 Operating Income 121 135 49 Operating Margin 5.1 % 6.2 % 2.8 % Asia Pacific unit sales in 2022 increased 3.7 million units, or 12.1%, to 34.4 million units.
Results of operations in Germany are expected to continue to have a significant impact on EMEA’s future performance. 34 Table of Contents Asia Pacific Year Ended December 31, (In millions) 2023 2022 2021 Tire Units 36.1 34.4 30.7 Net Sales $ 2,467 $ 2,394 $ 2,184 Operating Income 202 121 135 Operating Margin 8.2 % 5.1 % 6.2 % Asia Pacific unit sales in 2023 increased 1.7 million units, or 4.9%, to 36.1 million units.
Decisions to change production levels in the future will be based on an evaluation of market demand signals and inventory and supply levels, as well as the availability of sufficient qualified labor and our ability to continue to safeguard the health of our associates.
Decisions to change production levels in the future will be based on an evaluation of market demand signals and inventory and supply levels, as well as the availability of sufficient qualified labor.
At December 31, 2022, our net actuarial loss included in Accumulated Other Comprehensive Loss ("AOCL") related to global pension plans was $2,271 million, $1,836 million of which related to our U.S. pension plans.
At December 31, 2023, our net actuarial loss included in Accumulated Other Comprehensive Loss ("AOCL") related to global pension plans was $2,268 million, $1,744 million of which related to our U.S. pension plans.
The actual rate of return on our U.S. pension fund was (17.00%), 1.80% and 13.20% in 2022, 2021 and 2020, respectively, as compared to the expected rate of 4.23%, 3.74% and 4.22% in 2022, 2021 and 2020, 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 actual rate of return on our U.S. pension fund was 7.90%, (17.00%) and 1.80% in 2023, 2022 and 2021, respectively, as compared to the expected rate of 6.27%, 4.23% and 3.74% in 2023, 2022 and 2021, 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 increase in the discount rate at December 31, 2022 was due primarily to higher yields on highly rated corporate bonds. Interest cost included in our U.S. net periodic pension cost was $133 million in 2022, compared to $94 million in 2021 and $126 million in 2020.
The decrease in the discount rate at December 31, 2023 was due primarily to lower yields on highly rated corporate bonds. Interest cost included in our U.S. net periodic pension cost was $195 million in 2023, compared to $133 million in 2022 and $94 million in 2021.
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. 28 Table of Contents RESULTS OF OPERATIONS — CONSOLIDATED Goodyear net income in 2022 was $202 million, or $0.71 per share, compared to net income of $764 million, or $2.89 per share, in 2021.
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. 28 Table of Contents RESULTS OF OPERATIONS — CONSOLIDATED Goodyear net loss in 2023 was $689 million, or $2.42 per share, compared to net income of $202 million, or $0.71 per share, in 2022.
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 $275 million.
Undrawn amounts under the facility are subject to an annual commitment fee of 25 basis points. 37 Table of Contents 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 $275 million.
We have recorded liabilities for pension and other postretirement benefits of $94 million and $292 million, respectively, at December 31, 2022.
We have recorded liabilities for pensions of $181 million and $94 million and other postretirement benefits of $287 million and $292 million, respectively, at December 31, 2023 and December 31, 2022.
Our total segment operating income for 2022 was $1,276 million, compared to $1,288 million in 2021.
Our total segment operating income for 2023 was $968 million, compared to $1,276 million in 2022.
The facility’s current back-up liquidity commitments will expire on October 18, 2023. At December 31, 2022, the amounts available and utilized under this program totaled $267 million (€250 million). At December 31, 2021, the amounts available and utilized under this program totaled $279 million (€246 million).
The facility’s current back-up liquidity commitments will expire on October 16, 2024. At December 31, 2023, the amounts available and utilized under this program totaled $244 million (€221 million). At December 31, 2022, the amounts available and utilized under this program totaled $267 million (€250 million).
At December 31, 2022 and December 31, 2021, we also had approximately $1.2 billion and $1.3 billion of foreign net deferred tax assets, respectively, and related valuation allowances of approximately $1.0 billion in each year.
At December 31, 2023 and December 31, 2022, we also had approximately $1.5 billion and $1.2 billion of foreign net deferred tax assets, respectively, and related valuation allowances of approximately $1.2 billion and $1.0 billion, respectively.
At December 31, 2022 and December 31, 2021, we also had approximately $1.2 billion and $1.3 billion of foreign net deferred tax assets, respectively, and related valuation allowances of approximately $1.0 billion in each year.
At December 31, 2023 and December 31, 2022, we also had approximately $1.5 billion and $1.2 billion of foreign net deferred tax assets, respectively, and related valuation allowances of approximately $1.2 billion and $1.0 billion, respectively.
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.
To reduce our risk of an unfavorable transfer price settlement, we apply consistent transfer pricing policies and practices globally, support pricing with economic studies and seek advance pricing agreements and joint audits to the extent possible.
(4) Operating lease obligations have not been reduced by minimum sublease rentals of $11 million, $9 million, $7 million, $4 million, $2 million and $3 million in each of the periods above, respectively, for a total of $36 million. Payments, net of minimum sublease rentals, total $1,292 million.
(4) Operating lease obligations have not been reduced by minimum sublease rentals of $8 million, $8 million, $5 million, $3 million, $2 million and $3 million in each of the periods above, respectively, for a total of $29 million. Payments, net of minimum sublease rentals, total $1,305 million.
The net actuarial gain of $96 million included in AOCL for our worldwide other postretirement benefit plans as of December 31, 2022 is a result of recent increases in discount rates. For purposes of determining 2022 worldwide net periodic other postretirement benefits cost, we recognized $2 million of net actuarial losses in 2022.
The net actuarial gain of $85 million included in AOCL for our worldwide other postretirement benefit plans as of December 31, 2023 is a result of past increases in discount rates. For purposes of determining 2023 worldwide net periodic other postretirement benefits cost, we recognized $9 million of net actuarial gains in 2023.
For the period from October 20, 2022 through October 18, 2023, the designated maximum amount of the facility remains at €300 million. 38 Table of Contents 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.
For the period from October 19, 2023 through October 16, 2024, the designated maximum amount of the facility will remain €300 million. 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.
Interest cost included in our worldwide net periodic other postretirement benefits cost was $12 million in 2022, compared to $9 million in 2021 and $8 million in 2020. 49 Table of Contents 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: + / − Change at December 31, 2022 (Dollars in millions) Change PBO/ABO Annual Expense Assumption: Pensions +/- 0.5% $ 155 $ — Other Postretirement Benefits +/- 0.5% 9 1 Changes in general interest rates and corporate (AA or better) credit spreads impact our discount rate and thereby our U.S. pension benefit obligation.
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: + / − Change at December 31, 2023 (Dollars in millions) Change PBO/ABO Annual Expense Assumption: Pensions +/- 0.5% $ 153 $ — Other Postretirement Benefits +/- 0.5% 8 1 Changes in general interest rates and corporate (AA or better) credit spreads impact our discount rate and thereby our U.S. pension benefit obligation.
Segment operating income does not include net rationalization charges (credits), asset sales, goodwill and other asset impairment charges and certain other items. Total segment operating income in 2022 was $1,276 million, a decrease of $12 million, or 0.9%, from $1,288 million in 2021.
Segment operating income does not include net rationalization charges, asset sales, goodwill and other asset impairment charges and certain other items. Total segment operating income in 2023 was $968 million, a decrease of $308 million, or 24.1%, from $1,276 million in 2022.
The table below provides unused availability by our significant credit facilities as of December 31: (In millions) 2022 2021 First lien revolving credit facility $ 2,747 $ 2,314 European revolving credit facility 480 908 Chinese credit facilities 516 622 Mexican credit facility — 42 Other foreign and domestic debt 292 459 $ 4,035 $ 4,345 We expect our 2023 cash flow needs to include capital expenditures of approximately $1.0 billion.
The table below provides unused availability by our significant credit facilities as of December 31: (In millions) 2023 2022 First lien revolving credit facility $ 2,241 $ 2,747 European revolving credit facility 884 480 Chinese credit facilities 657 516 Mexican credit facility 116 — Other foreign and domestic debt 349 292 $ 4,247 $ 4,035 We expect our 2024 cash flow needs to include capital expenditures of $1.2 billion to $1.3 billion.
We have an agreement to provide a revolving loan commitment to TireHub, LLC of up to $100 million. At December 31, 2022, $17 million was drawn on this commitment.
We have an agreement to provide a revolving loan commitment to TireHub, LLC of up to $100 million. At December 31, 2023, $96 million was drawn on this commitment, which includes $2 million of interest.
Americas Year Ended December 31, (In millions) 2022 2021 2020 Tire Units 95.0 85.9 56.7 Net Sales $ 12,766 $ 10,051 $ 6,556 Operating Income 1,094 914 9 Operating Margin 8.6 % 9.1 % 0.1 % Americas unit sales in 2022 increased 9.1 million units, or 10.6%, to 95.0 million units.
Americas Year Ended December 31, (In millions) 2023 2022 2021 Tire Units 87.3 95.0 85.9 Net Sales $ 11,993 $ 12,766 $ 10,051 Operating Income 749 1,094 914 Operating Margin 6.2 % 8.6 % 9.1 % Americas unit sales in 2023 decreased 7.7 million units, or 8.0%, to 87.3 million units.
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.
The weighted average amortization period for our U.S. pension plans is approximately 15 years. 49 Table of Contents 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.
At December 37 Table of Contents 31, 2022, we had long term credit arrangements totaling $10,925 million, of which $3,566 million were unused, compared to $10,624 million and $3,785 million, respectively, at December 31, 2021.
At December 31, 2023, we had long term credit arrangements totaling $10,983 million, of which $3,867 million were unused, compared to $10,925 million and $3,566 million, respectively, at December 31, 2022.
As of December 31, 2022, our unused availability under this facility of $2,747 million plus our Available Cash of $174 million totaled $2,921 million, which is in excess of $275 million.
As of December 31, 2023, our unused availability under this facility of $2,241 million plus our Available Cash of $121 million totaled $2,362 million, which is in excess of $275 million.
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.
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.
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.
Of this amount, $10 million was included in Current Assets as part of Accounts Receivable at December 31, 2023. 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 also expect interest expense to be approximately $500 million; rationalization payments to be approximately $100 million; income tax payments to be approximately $200 million, excluding one-time items; and contributions to our funded pension plans to be $25 million to $50 million.
We also expect interest expense to be $520 million to $540 million; rationalization payments to be approximately $300 million; income tax payments to be approximately $200 million, excluding one-time items; and contributions to our funded pension plans to be $25 million to $50 million. We expect working capital to be flat as compared to 2023.
As of December 31, 2022, we recorded a receivable related to asbestos claims of $70 million, and we expect that approximately 55% of asbestos claim related losses would be recoverable through insurance through the period covered by the estimated liability. Of this amount, $11 million was included in Current Assets as part of Accounts Receivable at December 31, 2022.
As of December 31, 2023 and December 31, 2022, we recorded a receivable related to asbestos claims of $66 million and $70 million, respectively, and we expect that approximately 55% of asbestos claim related losses would be recoverable through insurance through the period covered by the estimated liability.
Minority shareholders' net income in 2021 includes $3 million ($3 million after-tax) related to a settlement with a minority interest in Turkey. 32 Table of Contents RESULTS OF OPERATIONS — SEGMENT INFORMATION Segment information reflects our strategic business units ("SBUs"), which are organized to meet customer requirements and global competition and are segmented on a regional basis.
Minority Shareholders’ Net Income Minority shareholders’ net income was $2 million in 2023, compared to $7 million in 2022. 32 Table of Contents RESULTS OF OPERATIONS — SEGMENT INFORMATION Segment information reflects our strategic business units ("SBUs"), which are organized to meet customer requirements and global competition and are segmented on a regional basis.
No cash dividends were paid in 2022 or 2021. Credit Sources In aggregate, we had total credit arrangements of $11,806 million available at December 31, 2022, of which $4,035 million were unused, compared to $11,628 million available at December 31, 2021, of which $4,345 million were unused.
Credit Sources In aggregate, we had total credit arrangements of $11,743 million available at December 31, 2023, of which $4,247 million were unused, compared to $11,806 million available at December 31, 2022, of which $4,035 million were unused.
We recorded net rationalization charges of $93 million ($82 million after-tax and minority) in 2021.
We recorded net rationalization charges of $129 million ($120 million after-tax and minority) in 2022.
Financing Activities Net cash provided by financing activities was $575 million in 2022, compared to net cash provided by financing activities of $1,309 million in 2021.
Financing Activities Net cash used for financing activities was $333 million in 2023, compared to cash provided by financing activities of $575 million in 2022.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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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.
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.
A valuation allowance is not required to the extent that, in management’s judgment, positive evidence exists with a magnitude and duration sufficient to result in a conclusion that it is more likely than not that the Company’s deferred tax assets will be realized.
A valuation allowance is not required to the extent that, in management’s judgment, positive evidence exists with a magnitude and duration sufficient to result in a conclusion that it is more likely than not the Company’s deferred tax assets will be realized.
We have the option to redeem these notes, in whole or in part, at any time prior to their maturity.
We have the option to redeem these notes, in whole or in part, at any time prior to their maturity.
The indenture for these notes includes redemption provisions that are substantially similar to those contained in the indenture governing our 5 % senior notes due 2029, described above.
The indenture for these notes includes redemption provisions that are substantially similar to those contained in the indenture governing our 5% senior notes due 2029, described above.
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.
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.
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 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 default probabilities, and by monitoring the financial strength of these counterparties on a regular basis.
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is presented in this Annual Report on Form 10-K. 55 Table of Contents REPORT OF INDEPENDENT REGIS TERED 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 consolidated financial statements, including the related notes and financial statement schedule, of The Goodyear Tire & Rubber Company and its subsidiaries (the “Company”) as listed in the index appearing under Item 8 (collectively referred to as the “consolidated financial statements”).
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is presented in this Annual Report on Form 10-K. 55 Table of Contents REPORT OF INDEPENDENT REGIS TERED 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 consolidated financial statements, including the related notes and financial statement schedule, of The Goodyear Tire & Rubber Company and its subsidiaries (the “Company”) as listed in the index appearing under Item 8 (collectively referred to as the “consolidated financial statements”).
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 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.
Principal changes since our initial measurement in the second quarter of 2021 included (i) decreasing the value attributed to customer relationships primarily to reflect updated assumptions related to customer attrition rates, (ii) updating the value attributed to trade names to reflect our long-term view of how each acquired brand fits into the overall product portfolio of the combined company and the appropriate royalty rate to value each acquired brand based on expected profitability, (iii) decreasing the value attributed to Property, Plant and Equipment primarily to reflect updated assumptions related to the estimated economic value of certain underlying assets, (iv) decreasing the value attributed to pension and other postretirement benefit liabilities primarily to reflect updated plan population data, (v) increasing the value attributed to a liability for environmental matters primarily to reflect updated estimated lifecycle remediation cost data and recording other liabilities identified during the measurement period, and (vi) a reclassification between Accounts Receivable and Accounts Payable to conform to Goodyear's classification of customer 71 Table of Contents rebate and discount program liabilities.
Principal changes since our initial measurement in the second quarter of 2021 included (i) decreasing the value attributed to customer relationships primarily to reflect updated assumptions related to customer attrition rates, (ii) updating the value attributed to trade names to reflect our long-term view of how each acquired brand fits into the overall product portfolio of the combined company and the appropriate royalty rate to value each acquired brand based on expected profitability, (iii) decreasing the value attributed to Property, Plant and Equipment primarily to reflect updated assumptions related to the estimated economic value of certain underlying assets, (iv) decreasing the value attributed to pension and other postretirement benefit liabilities primarily to reflect updated plan population data, (v) increasing the value attributed to a liability for environmental matters primarily to reflect updated estimated lifecycle remediation cost data and recording other liabilities identified during the measurement period, and (vi) a reclassification between Accounts Receivable and Accounts Payable to conform to Goodyear's classification of customer rebate and discount program liabilities.
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. 101 Table of Contents The portfolios of our non-U.S. pension plans include holdings of global high quality and high yield fixed income securities, U.S. and non-U.S. equities, real estate funds, insurance contracts, repurchase agreements, and short term interest bearing deposits.
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. 103 Table of Contents The portfolios of our non-U.S. pension plans include holdings of global high quality and high yield fixed income securities, U.S. and non-U.S. equities, real estate funds, insurance contracts, repurchase agreements, and short term interest bearing deposits.
These notes also included a $ 19 million fair value step-up, which is being amortized against interest expense over the remaining life of the notes. Amortization since the Closing Date was approximatel y $ 5 million . These notes are unsecured senior obligations and will mature on March 15, 2027 . These notes are not redeemable prior to maturity.
These notes also included a $ 19 million fair value step-up, which is being amortized against interest expense over the remaining life of the notes. Amortization since the Closing Date was approximatel y $ 8 million . These notes are unsecured senior obligations and will mature on March 15, 2027 . These notes are not redeemable prior to maturity.
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, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022 in conformity with accounting principles generally accepted in the United States of America.
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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America.
Based upon that assessment, at December 31, 2022, 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.
Based upon that assessment, at December 31, 2023, 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.
Segment operating income does not include net rationalization charges, asset sales, goodwill and other asset impairment charges and certain other items. 82 Table of Contents The following table presents geographic information. Net sales by country were determined based on the location of the selling subsidiary. Long-lived assets consist of property, plant and equipment.
Segment operating income does not include net rationalization charges, asset sales, goodwill and other asset impairment charges, and certain other items. 84 Table of Contents The following table presents geographic information. Net sales by country were determined based on the location of the selling subsidiary. Long-lived assets consist of property, plant and equipment.
Our U.K. pension plan obligations include $ 21 million to recognize the estimated impact to our plans 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.
Our U.K. pension plan obligations include $ 37 million to recognize the estimated impact to our plans 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.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Management's Report on Internal Control over Financial Reporting 55 Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 56 Consolidated Financial Statements of The Goodyear Tire & Rubber Company: Consolidated Statements of Operations for each of the three years ended December 31, 2022, 2021 and 2020 58 Consolidated Statements of Comprehensive Income (Loss) for each of the three years ended December 31, 2022, 2021 and 2020 59 Consolidated Balance Sheets at December 31, 2022 and December 31, 2021 60 Consolidated Statements of Shareholders’ Equity for each of the three years ended December 31, 2022, 2021 and 2020 61 Consolidated Statements of Cash Flows for each of the three years ended December 31, 2022, 2021 and 2020 64 Notes to Consolidated Financial Statements 65 Financial Statement Schedule: The following consolidated financial statement schedule of The Goodyear Tire & Rubber Company is filed as part of this Annual Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements of The Goodyear Tire & Rubber Company: Schedule II – Valuation and Qualifying Accounts for each of the three years ended December 31, 2022, 2021 and 2020 FS- 2 Schedules not listed above have been omitted since they are not applicable or are not required, or the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto. 54 Table of Contents 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.
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Management's Report on Internal Control over Financial Reporting 55 Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 56 Consolidated Financial Statements of The Goodyear Tire & Rubber Company: Consolidated Statements of Operations for each of the three years ended December 31, 2023, 2022 and 2021 59 Consolidated Statements of Comprehensive Income (Loss) for each of the three years ended December 31, 2023, 2022 and 2021 60 Consolidated Balance Sheets at December 31, 2023 and December 31, 2022 61 Consolidated Statements of Shareholders’ Equity for each of the three years ended December 31, 2023, 2022 and 2021 62 Consolidated Statements of Cash Flows for each of the three years ended December 31, 2023, 2022 and 2021 65 Notes to Consolidated Financial Statements 66 Financial Statement Schedule: The following consolidated financial statement schedule of The Goodyear Tire & Rubber Company is filed as part of this Annual Report on Form 10-K and should be read in conjunction with the Consolidated Financial Statements of The Goodyear Tire & Rubber Company: Schedule II – Valuation and Qualifying Accounts for each of the three years ended December 31, 2023, 2022 and 2021 FS- 2 Schedules not listed above have been omitted since they are not applicable or are not required, or the information required to be set forth therein is included in the Consolidated Financial Statements or Notes thereto. 54 Table of Contents 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.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 4.875 % senior notes due 2027, described above. $550 million 5.25% Senior Notes due April 2031 At December 31, 2022, $ 550 million in aggregate principal amount of 5.25 % senior notes due April 2031 were outstanding.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 4.875 % senior notes due 2027, described above. $550 million 5.25% Senior Notes due April 2031 At December 31, 2023, $ 550 million in aggregate principal amount of 5.25 % senior notes due April 2031 were outstanding.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 4.875 % senior notes due 2027, described above. $600 million 5.25% Senior Notes due July 2031 At December 31, 2022, $ 600 million in aggregate principal amount of 5.25 % senior notes due July 2031 were outstanding.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 4.875 % senior notes due 2027, described above. $600 million 5.25% Senior Notes due July 2031 At December 31, 2023, $ 600 million in aggregate principal amount of 5.25 % senior notes due July 2031 were outstanding.
Although we believe we have complied with applicable tax laws, have strong positions and defenses and have 109 Table of Contents 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.
Although we believe we have complied with applicable tax laws, have strong positions and defenses and have historically been successful 111 Table of Contents 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.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 9.5 % senior notes due 2025, described above. $700 million 4.875% Senior Notes due 2027 At December 31, 2022, $ 700 million aggregate principal amount of 4.875 % senior notes due 2027 were outstanding.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 9.5 % senior notes due 2025, described above. $700 million 4.875% Senior Notes due 2027 At December 31, 2023, $ 700 million aggregate principal amount of 4.875 % senior notes due 2027 were outstanding.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 4.875 % senior notes due 2027, described above. $450 million 5.625% Senior Notes due 2033 At December 31, 2022, $ 450 million in aggregate principal amount of 5.625 % senior notes due 2033 were outstanding.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 4.875 % senior notes due 2027, described above. $450 million 5.625% Senior Notes due 2033 At December 31, 2023, $ 450 million in aggregate principal amount of 5.625 % senior notes due 2033 were outstanding.
Note 20. Commitments and Contingent Liabilities Environmental Matters We have recorded liabilities totaling $ 80 million at both December 31, 2022 and 2021, for anticipated costs related to various environmental matters, primarily the remediation of numerous waste disposal sites and certain properties sold by us.
Note 20. Commitments and Contingent Liabilities Environmental Matters We have recorded liabilities totaling $ 80 million at both December 31, 2023 and 2022, for anticipated costs related to various environmental matters, primarily the remediation of numerous waste disposal sites and certain properties sold by us.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 4.875 % senior notes due 2027, described above. $850 million 5% Senior Notes due 2029 At December 31, 2022, $ 850 million in aggregate principal amount of 5 % senior notes due 2029 were outstanding.
The indenture for these notes includes covenants that are substantially similar to those contained in the indenture governing our 4.875 % senior notes due 2027, described above. $850 million 5% Senior Notes due 2029 At December 31, 2023, $ 850 million in aggregate principal amount of 5 % senior notes due 2029 were outstanding.
These covenants are subject to significant exceptions and qualifications. €400 million 2.75% Senior Notes due 2028 of GEBV At December 31, 2022, € 400 million in aggregate principal amount of GEBV 2.75 % senior notes due 2028 were outstanding. These notes were sold at 100 % of the principal amount and will mature on August 15, 2028 .
These covenants are subject to significant exceptions and qualifications. €400 million 2.75% Senior Notes due 2028 of GEBV At December 31, 2023, € 400 million in aggregate principal amount of GEBV 2.75 % senior notes due 2028 were outstanding. These notes were sold at 100 % of the principal amount and will mature on August 15, 2028 .
The weighted average target asset allocation of the non-U.S. pension funds is approximately 90 % fixed income, 5 % equities and 5 % in real estate funds. The fair values of our pension plan assets at December 31, 2022 by asset category are as follows: U.S.
The weighted average target asset allocation of the non-U.S. pension funds is approximately 90 % fixed income, 5 % equities and 5 % in real estate funds. The fair values of our pension plan assets at December 31, 2023 by asset category are as follows: U.S.
For the year ended December 31, 2021, $ 50 million of these costs are included in Other (Income) Expense, with the remainder included in CGS and SAG in our Consolidated Statements of Operations. There were no transaction-related costs incurred during the year ended December 31, 2022.
For the year ended December 31, 2021, $ 50 million of these costs are included in Other (Income) Expense, with the remainder included in CGS and SAG in our Consolidated Statements of Operations. There were no transaction-related costs incurred during the years ended December 31, 2023 and 2022.
The principal considerations for our determination that performing procedures relating to the valuation of U.S. deferred tax assets related to foreign tax credits is a critical audit matter are (i) the significant judgment by management in determining whether the U.S. deferred tax assets related to foreign tax credits are more likely than not to be realized in the future and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence relating to management’s assessment of the realizability of U.S. deferred tax assets related to foreign tax credits.
The principal considerations for our determination that performing procedures relating to the valuation of U.S. deferred tax assets is a critical audit matter are (i) the significant judgment by management in determining whether the U.S. deferred tax assets are more likely than not to be realized in the future and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence relating to management’s assessment of the realizability of U.S. deferred tax assets.
Pro forma financial information The following table summarizes, on a pro forma basis, the combined results of operations of Goodyear and Cooper Tire for the years ended December 31, 2021 and 2020 as though the acquisition and the related financing had occurred as of January 1, 2020.
Pro forma financial information The following table summarizes, on a pro forma basis, the combined results of operations of Goodyear and Cooper Tire for the year ended December 31, 2021 as though the acquisition and the related financing had occurred as of January 1, 2020.
The indenture has customary defaults, including a cross-default to material indebtedness of Goodyear and our subsidiaries. $900 million 5% Senior Notes due 2026 At December 31, 2022, $ 900 million aggregate principal amount of 5 % senior notes due 2026 were outstanding.
The indenture has customary defaults, including a cross-default to material indebtedness of Goodyear and our subsidiaries. $900 million 5% Senior Notes due 2026 At December 31, 2023, $ 900 million aggregate principal amount of 5 % senior notes due 2026 were outstanding.
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 108 Table of Contents agreement, as well as coverage for indemnity and defense costs for asbestos premises claims pursuant to coverage-in-place agreements.
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 110 Table of Contents agreement, as well as coverage for indemnity and defense costs for asbestos premises claims pursuant to coverage-in-place agreements.
These covenants are subject to significant exceptions and qualifications. $117 million 7.625% Senior Notes due 2027 Following the Cooper Tire acquisition and at December 31, 2022, $ 117 million aggregate principal amount of 7.625 % senior notes due 2027 were outstanding.
These covenants are subject to significant exceptions and qualifications. $117 million 7.625% Senior Notes due 2027 Following the Cooper Tire acquisition and at December 31, 2023, $ 117 million aggregate principal amount of 7.625 % senior notes due 2027 were outstanding.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
For further information, refer to Note to the Consolidated Financial Statements No. 2, Cooper Tire Acquisition.
For further information about the acquisition, refer to Note to the Consolidated Financial Statements No. 2, Cooper Tire Acquisition.
NOTES $ 800 million 9.5 % Senior Notes due 2025 At December 31, 2022, $ 800 million aggregate principal amount of 9.5 % senior notes due 2025 were outstanding. $ 600 million of these notes were sold at 100 % of the principal amount and $ 200 million of these notes were sold at 101.75 % of the principal amount at an effective yield of 9.056 %.
NOTES $ 800 million 9.5 % Senior Notes due 2025 At December 31, 2023, $ 800 million aggregate principal amount of 9.5 % senior notes due 2025 were outstanding. $ 600 million of these notes were sold at 100 % of the principal amount and $ 200 million of these notes were sold at 101.75 % of the principal amount at an effective yield of 9.056 %.
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 continuing, certain covenants will be suspended and we may elect to suspend the subsidiary guarantees.
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 91 Table of Contents continuing, certain covenants will be suspended and we may elect to suspend the subsidiary guarantees.
Management conducted an assessment of the Company’s internal control over financial reporting as of December 31, 2022 using the framework specified in Internal Control — Integrated Framework (2013) , published by the Committee of Sponsoring Organizations of the Treadway Commission.
Management conducted an assessment of the Company’s internal control over financial reporting as of December 31, 2023 using the framework specified in Internal Control — Integrated Framework (2013) , published by the Committee of Sponsoring Organizations of the Treadway Commission.
The Consolidated Statements of Cash Flows are presented net of finance leases o f $ 25 m illion, $ 39 million and $ 3 million originating in the year s ended December 31, 2022, 2021 and 2020, respectively, and accrued capital expenditures financed with extended terms of $ 15 million in 2020 which were paid in 2021.
The Consolidated Statements of Cash Flows are presented net of finance leases o f $ 19 m illion, $ 25 million and $ 39 million originating in the year s ended December 31, 2023, 2022 and 2021, respectively, and accrued capital expenditures financed with extended terms of $ 15 million in 2020 which were paid in 2021.
We have the option to redeem these notes, in whole or in part, at any time 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.
We have the option to redeem these notes, in whole or in part, at any time at a redemption price of 102.375 % and 100 % during the 12-month periods commencing on May 31, 2023 and 2024 and thereafter, respectively, plus accrued and unpaid interest to the redemption date.
We have the option to redeem these notes, in whole or in part, at any time at a redemption price of 101.667 %, 100.833 % 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.
We have the option to redeem these notes, in whole or in part, at any time at a redemption price of 100.833 % and 100 % during the 12-month periods commencing on May 31, 2023 and 2024 and thereafter, respectively, plus accrued and unpaid interest to the redemption date.
These notes were sold at 100 % of the principal amount and will mature on July 15, 2031 . These notes are unsecured senior 91 Table of Contents obligations and are guaranteed by our U.S. and Canadian subsidiaries that also guarantee our obligations under our U.S. first lien revolving credit facility described below.
These notes were sold at 100 % of the principal amount and will mature on July 15, 2031 . 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. first lien revolving credit facility described below.
Year Ended December 31, (In millions) 2021 2020 Net Sales $ 18,732 $ 14,902 Income (Loss) before Income Taxes 791 ( 1,281 ) Goodyear Net Income (Loss) 974 ( 1,369 ) These pro forma amounts have been calculated after applying Goodyear’s accounting policies and making certain adjustments, which primarily include: (i) depreciation adjustments relating to fair value step-ups to property, plant and equipment; (ii) amortization adjustments relating to fair value estimates of acquired intangible assets; (iii) incremental interest expense associated with the $ 1.45 billion senior note issuance and additional borrowings under our first lien revolving credit facility used, in part, to fund the acquisition, related debt issuance costs, and fair value adjustments related to Cooper Tire's debt; (iv) CGS adjustments relating to the change from LIFO to FIFO; (v) fair value adjustments for certain Cooper Tire stock-based compensation; and (vi) transaction-related costs of both Goodyear and Cooper Tire. 73 Table of Contents Note 3.
Year Ended December 31, (In millions) 2021 Net Sales $ 18,732 Income before Income Taxes 791 Goodyear Net Income 974 These pro forma amounts have been calculated after applying Goodyear’s accounting policies and making certain adjustments, which primarily include: (i) depreciation adjustments relating to fair value step-ups to property, plant and equipment; (ii) amortization adjustments relating to fair value estimates of acquired intangible assets; (iii) incremental interest expense associated with the $ 1.45 billion senior note issuance and additional borrowings under our first lien revolving credit facility used, in part, to fund the acquisition, related debt issuance costs, and fair value adjustments related to Cooper Tire's debt; (iv) CGS adjustments relating to the change from LIFO to FIFO; (v) fair value adjustments for certain Cooper Tire stock-based compensation; and (vi) transaction-related costs of both Goodyear and Cooper Tire. 74 Table of Contents Note 3.
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.
The program does not qualify for sale accounting, and accordingly, these amounts are included in Long Term Debt and Finance Leases. 95 Table of Contents Accounts Receivable Factoring Facilities (Off-Balance Sheet) We have sold certain of our trade receivables under off-balance sheet programs.
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 92 Table of Contents material adverse change in our business or financial condition since December 31, 2020.
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, 2020.
The carrying value of the remaining debt was based upon internal estimates of fair value derived from market prices for similar debt. 96 Table of Contents Note 18. Pension, Other Postretirement Benefits and Savings Plans We provide employees with defined benefit pension or defined contribution savings plans.
The carrying value of the remaining debt was based upon internal estimates of fair value derived from market prices for similar debt. Note 18. Pension, Other Postretirement Benefits and Savings Plans We provide employees with defined benefit pension or defined contribution savings plans.
The following table presents fair values for foreign currency hedge contracts that meet the criteria to be accounted for as cash flow hedging instruments: December 31, December 31, (In millions) 2022 2021 Fair Values — Current asset (liability): Accounts receivable $ 1 $ 1 Other current liabilities ( 3 ) ( 1 ) At December 31, 2022 and 2021, these outstanding foreign currency derivatives had notional amounts of $ 71 million an d $ 63 million, respectively, and primarily related to U.S. dollar denominated intercompany transactions.
The following table presents fair values for foreign currency hedge contracts that meet the criteria to be accounted for as cash flow hedging instruments: December 31, December 31, (In millions) 2023 2022 Fair Values — Current asset (liability): Accounts receivable $ — $ 1 Other current liabilities ( 2 ) ( 3 ) At December 31, 2023 and 2022, these outstanding foreign currency derivatives had notional amounts of $ 27 million an d $ 71 million, respectively, and primarily related to U.S. dollar denominated intercompany transactions.
In 2021, income tax benefit of $ 267 million includes net discrete tax benefits totaling $ 409 million, including a reduction in our valuation allowances of $ 340 million for certain U.S. deferred tax assets for foreign tax credits and state tax loss carryforwards, a $ 39 million benefit to adjust our deferred tax assets in England for a second quarter enacted change in the tax rate, a $ 21 million benefit to reflect an increase in our estimated state tax rate used in calculating our U.S. net deferred tax assets as a result of a change in the overall mix of our earnings by state after including the impact of the acquisition of Cooper Tire, an $ 8 million benefit related to a favorable court ruling in Brazil, and a net benefit of $ 1 million for various other items.
In 2021, income tax benefit of $ 267 million on income before income taxes of $ 513 million includes net discrete tax benefits totaling $ 409 million, including a reduction in our valuation allowances of $ 340 million for certain U.S. deferred tax assets for foreign tax credits and state tax loss carryforwards, a $ 39 million benefit to adjust our deferred tax assets in England for an enacted change in the tax rate, a $ 21 million benefit to reflect an increase in our estimated state tax rate used in calculating our U.S. net deferred tax assets as a result of a change in the overall mix of our earnings by state after including the impact of the acquisition of Cooper Tire, an $ 8 million benefit related to a favorable court ruling in Brazil, and a net benefit of $ 1 million for various other items.
Our other postretirement benefits cost is presented net of this subsidy, which is less than $ 1 million annually. 98 Table of Contents The change in benefit obligation and plan assets for 2022 and 2021 and the amounts recognized in our Consolidated Balance Sheets at December 31, 2022 and 2021 are as follows: Pension Plans U.S. Non-U.S.
Our other postretirement benefits cost is presented net of this subsidy, which is less than $ 1 million annually. 100 Table of Contents The change in benefit obligation and plan assets for 2023 and 2022 and the amounts recognized in our Consolidated Balance Sheets at December 31, 2023 and 2022 are as follows: Pension Plans U.S. Non-U.S.
We are currently assessing the impact of this standards update on our disclosures in the notes to the consolidated financial statements. Acquisitions We include the results of operations of the businesses in which we acquire a controlling financial interest in our consolidated financial statements beginning as of the acquisition date.
We are currently assessing the impact of this standards update on our disclosures in the notes to the consolidated financial statements. 66 Table of Contents Acquisitions We include the results of operations of the businesses in which we acquire a controlling financial interest in our consolidated financial statements beginning as of the acquisition date.
We expect that approximat ely 55 % of asbestos claim related losses would be recoverable through insurance during the ten-year period covered by the estimated liability. Of these amounts, $ 11 million and $ 12 million were included in Current Assets as part of Accounts Receivable at December 31, 2022 and December 31, 2021, respectively.
We expect that approximat ely 55 % of asbestos claim related losses would be recoverable through insurance during the ten-year period covered by the estimated liability. Of these amounts, $ 10 million and $ 11 million were included in Current Assets as part of Accounts Receivable at December 31, 2023 and December 31, 2022, respectively.
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. first lien revolving credit facility described below.
These notes are unsecured senior 92 Table of Contents 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. first lien revolving credit facility described below.
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. Note 17.
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. 97 Table of Contents Note 17.
Based on such assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2022.
Based on such assessment, management has concluded that the Company’s internal control over financial reporting was effective as of December 31, 2023.
In developing the long term rate of return, we evaluated input from our pension fund consultant on asset class return expectations, including determining the appropriate rate of return for our plans, which are substantially invested in fixed income securities. For our non-U.S. locations, an assumed weighted average long term rate of return of 2.64 % was used.
In developing the long term rate of return, we evaluated input from our pension fund consultant on asset class return expectations, including determining the appropriate rate of return for our plans, which are substantially invested in fixed income securities. For our non-U.S. locations, an assumed weighted average long term rate of return of 4.79 % was used.
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, 2022, this guarantee amount has been reduced to $ 18 million.
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, 2023, this guarantee amount has been reduced to $ 17 million.
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.
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 contract termination and relocation costs. A liability for these costs is recognized in the period in which the liability is incurred.
We have off-balance sheet financial guarantees and other commitments totaling $ 32 million and $ 34 million at December 31, 2022 and 2021, respectively. We issue guarantees to financial institutions or other entities on behalf of certain of our affiliates, lessors or customers.
We have off-balance sheet financial guarantees and other commitments totaling $ 31 million and $ 32 million at December 31, 2023 and 2022, respectively. We issue guarantees to financial institutions or other entities on behalf of certain of our affiliates, lessors or customers.
Assumed health care cost trend rates at December 31 follow: 2022 2021 Health care cost trend rate assumed for the next year 7.0 % 6.5 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.0 5.0 Year that the rate reaches the ultimate trend rate 2031 2028 Our pension plan weighted average investment allocation at December 31, by asset category, follows: U.S.
Assumed health care cost trend rates at December 31 follow: 2023 2022 Health care cost trend rate assumed for the next year 6.75 % 7.0 % Rate to which the cost trend rate is assumed to decline (the ultimate trend rate) 5.0 5.0 Year that the rate reaches the ultimate trend rate 2031 2031 Our pension plan weighted average investment allocation at December 31, by asset category, follows: U.S.
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) 2022 2021 Balance, beginning of year $ 25 $ 28 Unrealized gains relating to instruments still held at the reporting date ( 3 ) ( 1 ) Foreign currency translation ( 2 ) ( 2 ) Balance, end of year $ 20 $ 25 104 Table of Contents 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.
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) 2023 2022 Balance, beginning of year $ 20 $ 25 Unrealized gains relating to instruments still held at the reporting date 1 ( 3 ) Foreign currency translation — ( 2 ) Balance, end of year $ 21 $ 20 106 Table of Contents Savings Plans Substantially all employees in the U.S. and employees of certain non-U.S. locations are eligible to participate in defined contribution savings plans.
Of these amounts, $ 39 million and $ 41 million were included in Other Current Liabilities at December 31, 2022 and 2021, 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.
Of these amounts, $ 46 million and $ 39 million were included in Other Current Liabilities at December 31, 2023 and 2022, 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.
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.
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. 70 Table of Contents 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.
We, along with other companies, had previously filed various claims with the Brazilian tax authorities challenging the legality of the government's calculation of certain indirect taxes. During the second quarter of 2021, the Brazilian Supreme Court rendered a final ruling that was favorable to companies on the remaining open aspects of these claims.
We, along with other companies, had previously filed various claims with the Brazilian tax authorities challenging the legality of the government's calculation of certain indirect taxes. In 2021, the Brazilian Supreme Court rendered a final ruling that was favorable to companies on the remaining open aspects of these claims.
Non-U.S. 2022 2021 2022 2021 Cash and short term securities — % 1 % 3 % 2 % Equity securities 6 6 5 6 Debt securities 93 92 88 90 Alternatives 1 1 4 2 Total 100 % 100 % 100 % 100 % Our pension investment policies recognize the long-term nature of pension liabilities, and are primarily designed to offset the future impact of discount rate movements on the funded status for our plans, with target return-seeking allocations based upon given funded ratio levels.
Non-U.S. 2023 2022 2023 2022 Cash and short term securities — % — % 2 % 3 % Equity securities 3 6 4 5 Debt securities 97 93 91 88 Alternatives — 1 3 4 Total 100 % 100 % 100 % 100 % Our pension investment policies recognize the long-term nature of pension liabilities, and are primarily designed to offset the future impact of discount rate movements on the funded status for our plans, with target return-seeking allocations based upon given funded ratio levels.
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 $ 928 mill ion, $ 862 million and $ 857 million in 2022, 2021 and 2020, respectively.
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 $ 967 mill ion, $ 928 million and $ 862 million in 2023, 2022 and 2021, respectively.
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. We recorded an insurance receivable related to asbestos claims of $ 70 million and $ 77 million at December 31, 2022 and 2021, respectively.
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. We recorded an insurance receivable related to asbestos claims of $ 66 million and $ 70 million at December 31, 2023 and 2022, respectively.
Fair values are recognized on the Consolidated Balance Sheets at December 31 as follows: (In millions) 2022 2021 Current asset (liability): Accounts receivable $ 5 $ 10 Other current liabilities (13 ) (5 ) For further information on foreign currency contracts, refer to Note to the Consolidated Financial Statements No. 16, Financing Arrangements and Derivative Financial Instruments.
Fair values are recognized on the Consolidated Balance Sheets at December 31 as follows: (In millions) 2023 2022 Current asset (liability): Accounts receivable $ 2 $ 5 Other current liabilities (29 ) (13 ) For further information on foreign currency contracts, refer to Note to the Consolidated Financial Statements No. 16, Financing Arrangements and Derivative Financial Instruments.
If not favorably settled, $ 14 million of the unrecognized tax benefits and all the accrued interest would require the use of our cash. We do not expect changes during 2023 to our unrecognized tax benefits to have a significant impact on our financial position or results of operations.
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 2024 to our unrecognized tax benefits to have a significant impact on our financial position or results of operations.
We recorded gross liabilities for both asserted and unasserted claims, inclusive of defense costs, totaling $ 125 million and $ 131 million at December 31, 2022 and 2021, respectively. In determining the estimate of our asbestos liability, we evaluated claims over the next ten-year period.
We recorded gross liabilities for both asserted and unasserted claims, inclusive of defense costs, totaling $ 120 million and $ 125 million at December 31, 2023 and 2022, respectively. In determining the estimate of our asbestos liability, we evaluated claims over the next ten-year period.
We have recorded an indemnification asset within Accounts Receivable of $ 1 million and within Other Assets of $ 20 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 have recorded an indemnification asset within Accounts Receivable of $ 11 million and within Other Assets of $ 4 million from 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.
A summary of our unrecognized tax benefits and changes during the year follows: (In millions) 2022 2021 2020 Balance at January 1 $ 90 $ 85 $ 82 Increases related to prior year tax positions 10 28 26 Decreases related to prior year tax positions — ( 12 ) ( 1 ) Settlements ( 12 ) ( 5 ) ( 15 ) Foreign currency impact ( 1 ) ( 7 ) ( 7 ) Increases related to current year tax positions 2 3 — Lapse of statute of limitations ( 2 ) ( 2 ) — Balance at December 31 $ 87 $ 90 $ 85 We are open to examination in the U.S. for 2021 and in Germany from 2018 onward.
A summary of our unrecognized tax benefits and changes during the year follows: (In millions) 2023 2022 2021 Balance at January 1 $ 87 $ 90 $ 85 Increases related to prior year tax positions 5 10 28 Decreases related to prior year tax positions — — ( 12 ) Settlements ( 1 ) ( 12 ) ( 5 ) Foreign currency impact 4 ( 1 ) ( 7 ) Increases related to current year tax positions — 2 3 Lapse of statute of limitations ( 3 ) ( 2 ) ( 2 ) Balance at December 31 $ 92 $ 87 $ 90 We are open to examination in the U.S. for 2021 and in Germany from 2018 onward.
We believe that, at December 31, 2022, we had approximately $ 530 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.
We believe that, at December 31, 2023, we had approximately $ 520 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.
Intangible assets are primarily comprised of the rights to use the Cooper and Dunlop brand names and related trademarks, Cooper Tire customer relationships, and certain other brand names and trademarks. Amortization expense for intangible assets totaled $ 35 million in 2022, $ 21 million in 2021 and $ 2 million in 2020.
Intangible assets are primarily comprised of rights to use the Cooper and Dunlop brand names and related trademarks, Cooper Tire customer relationships, and certain other brand names and trademarks. Amortization expense for intangible assets totaled $ 33 million in 2023, $ 35 million in 2022, and $ 21 million in 2021.
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, 2022, the gross amount of receivables sold was $ 744 million, compared to $ 605 million at December 31, 2021.
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, 2023, the gross amount of receivables sold was $ 693 million, compared to $ 744 million at December 31, 2022.
These procedures also included, among others (i) evaluating the positive and negative evidence available to support management’s assessment of the realizability of U.S. deferred tax assets related to foreign tax credits; (ii) testing the completeness and accuracy of underlying data used in management’s assessment; and (iii) evaluating the reasonableness of management’s projections of future profitability by year of the U.S. business.
These procedures also included, among others (i) evaluating the positive and negative evidence available to support management’s assessment of the realizability of U.S. deferred tax assets; (ii) testing the completeness and accuracy of underlying data used in management’s assessment; and (iii) evaluating the reasonableness of management’s projections of future profitability of the U.S. business.
These notes will mature on May 31, 2025 . These notes are unsecured senior obligations 89 Table of Contents and are guaranteed by our U.S. and Canadian subsidiaries that also guarantee our obligations under our U.S. first lien revolving credit facility described below.
These notes will mature on May 31, 2025 . 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. first lien revolving credit facility described below.
We consider our current forecasts of future profitability in assessing our ability to realize our deferred tax assets, including our foreign tax credits. These forecasts include the impact of recent trends, including various macroeconomic factors such as the impact of higher raw material, transportation, labor and energy costs, on our profitability, as well as the impact of tax planning strategies.
In addition, we consider our current forecasts of future profitability in assessing our ability to realize our deferred tax assets as well as the impact of tax planning strategies. These forecasts include the impact of recent trends and various macroeconomic factors such as the impact of raw material, transportation, labor and energy costs on our profitability.
Each segment also exports tires to other segments. Since the Closing Date, Cooper Tire's operating results have been incorporated into each of our SBUs. Americas manufactures and sells tires for automobiles, trucks, buses, earthmoving, mining and industrial equipment, aircraft, and for various other applications throughout North, Central and South America.
Since the Closing Date, Cooper Tire's operating results have been incorporated into each of our SBUs. Americas manufactures and sells tires for automobiles, trucks, buses, earthmoving, mining and industrial equipment, aircraft, and for various other applications throughout North, Central and South America.
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, fixed income, equity and real estate collective trust funds, short term interest bearing deposits, and private equity and credit securities.
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 equity and credit securities.
We also have audited the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”).
We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
This rate was derived from spot rates along a yield curve developed from a portfolio of corporate bonds from issuers rated AA or higher by established rating agencies as of December 31, 2021, applied to our expected benefit payment cash flows. For our non-U.S. locations, a weighted average discount rate of 2.32 % was used.
This rate was derived from spot rates along a yield curve developed from a portfolio of corporate bonds from issuers rated AA or higher by established rating agencies as of December 31, 2022, applied to our expected benefit payment cash flows. For our non-U.S. locations, a weighted average discount rate of 4.72 % was used.
These carryforwards are primarily from countries with unlimited carryforward periods, but include $ 72 million of tax credit carryforwards in various European countries that are subject to expiration from 2023 to 2032 . A valuation allowance totaling $ 1,046 million has been recorded against these and other deferred tax assets where recovery of the asset or carryforward is uncertain.
These carryforwards are primarily from countries with unlimited carryforward periods, but include $ 72 million of tax credit carryforwards in various European countries that are subject to expiration from 2024 to 2033 . A valuation allowance totaling $ 1,253 million has been recorded against these and other deferred tax assets where recovery of the asset or carryforward is uncertain.

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