GT 10-K & 10-Q changes, risk factors and insider trading
Goodyear Tire & Rubber Co. · Nasdaq · Tires & Inner Tubes · CIK 42582 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
New heading “We have been, and could continue to be, negatively impacted by changes in tariffs, trade agreements or other trade restrictions on imported tires, raw materials and other goods or equipment.”
Removed heading “The consummation of the sale of the Dunlop brand to Sumitomo Rubber Industries, Ltd. is subject to closing conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all. Failure to complete the sale in a timely manner or at all could have adverse effects on us.”
Removed heading “We could be negatively impacted by changes in tariffs, trade agreements or other trade restrictions on imported tires, raw materials and other goods or equipment.”
Largest changes
“The maintenance of existing tariffs, the imposition of new tariffs, changes in existing tariff rates, changes in or the repeal of trade agreements or other trade restrictions, such as those the United States has considered with respect to Canada and Mexico, may reduce our flexibility to utilize our global manufacturing footprint to meet demand for our tires around the world. …”see in full comparison
“The imposition of new tariffs, changes in existing tariff rates, changes in or the repeal of trade agreements or other trade restrictions, such as those the United States is considering with respect to Canada and Mexico, may reduce our flexibility to utilize our global manufacturing footprint to meet demand for our tires around the world. In addition, the imposition of tariffs in the United States may result in the tires subject to such tariffs being diverted to other regions of the world, such as Europe, Latin America or Asia, or in retaliatory tariffs or other actions by affected countries. …”see in full comparison
“We have been, and could continue to be, negatively impacted by changes in tariffs, trade agreements or other trade restrictions on imported tires, raw materials and other goods or equipment.”see in full comparison
“We could be negatively impacted by changes in tariffs, trade agreements or other trade restrictions on imported tires, raw materials and other goods or equipment.”see in full comparison
“The consummation of the sale of the Dunlop brand to Sumitomo Rubber Industries, Ltd. is subject to closing conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all. Failure to complete the sale in a timely manner or at all could have adverse effects on us.”see in full comparison
“The Transaction is subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals; the absence of any judgments or orders enjoining or otherwise prohibiting the Transaction; the accuracy of the representations and warranties of the other party; the compliance by each party with its covenants in all material respects; and the absence of a material adverse effect with respect to the Dunlop business operated by us.”see in full comparison
Full comparison: every changed paragraph (74)
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.
As part of our strategic vision to be #1 in tires and service, we are pursuing important strategic initiatives. 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.
We completed our Goodyear Forward transformation plan in 2025. Although we achieved a substantial amount of savings from Goodyear Forward through 2025, these savings may not be sustainable, which may adversely affect our future operating results or cash flows.
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. 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. 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.
In addition, our ability to successfully market and sell our chemical business is subject to prevailing general and industry-specific economic conditions and certain financial, business and other factors beyond our control. We cannot assure you that we will be able to sell this business within the time frames set out in the Goodyear Forward plan or at all or, even if we were able to take such action, that we could do so at a price and on terms that are acceptable to us.
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 continue to believe that our manufacturing footprint is less cost-competitive than that of our principal competitors. 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. 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. InThese addition, plant closures, construction and modernizationactivities may temporarily disrupt our manufacturing operations and lead to temporary increases in our costs. 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 innovation excellence initiatives are designed to create leading technologies, products and services that anticipate the mobility and sustainability needs of consumers and fleets. Our sales and marketing excellence initiatives are intended to capture the value of our brands and grow our market share, helping our customers win in their markets and ensuring we are the preferred choice of consumers. Our operational excellence initiatives are aimed at improving our safety, quality and efficiency and creating an advantaged supply chain that delivers the right tire, to the right place, at the right time, at the right cost. 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.
The consummation of the sale of the Dunlop brand to Sumitomo Rubber Industries, Ltd. is subject to closing conditions, some or all of which may not be satisfied, or completed on a timely basis, if at all. Failure to complete the sale in a timely manner or at all could have adverse effects on us.
On January 7, 2025, Goodyear and SRI entered into the Dunlop Purchase Agreement relating to the sale of the Dunlop brand for consumer, commercial and other specialty tires, together with certain associated intellectual property, other intangible assets and inventory (the “Transaction”).
The Transaction is subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals; the absence of any judgments or orders enjoining or otherwise prohibiting the Transaction; the accuracy of the representations and warranties of the other party; the compliance by each party with its covenants in all material respects; and the absence of a material adverse effect with respect to the Dunlop business operated by us.
The Dunlop Purchase Agreement contains customary termination rights, including if the closing of the Transaction (the “Closing”) has not occurred on or prior to October 7, 2025 (as it may be extended, the “Outside Date”), subject to certain rights of each party to extend the Outside Date if certain regulatory conditions to Closing have not been satisfied.
Although it is not a condition to Closing, the sale of the Dunlop brand will require a waiver or an amendment of our European revolving credit facility. We cannot assure you that such waiver or amendment, or alternative financing, can be obtained, or if obtained, will be on terms acceptable to us.
If the Closing does not occur, our operating results, financial condition and liquidity may be materially adversely affected. Without realizing any of the benefits of having completed the Transaction, we will be subject to a number of risks, including the following:
the market price of Goodyear common stock could decline to the extent that the current market price reflects a market assumption that the Transaction will be completed;
if the Dunlop Purchase Agreement is terminated and we seek another buyer for the Dunlop brand, our shareholders cannot be certain that we will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms of the Dunlop Purchase Agreement;
time and resources committed by our management to matters relating to the Transaction could otherwise have been devoted to pursuing other beneficial opportunities for us;
we may experience negative reactions from the financial markets or from our customers, suppliers or employees;
we will be required to pay our costs relating to the Transaction, such as legal, accounting and financial advisory fees, whether or not the Transaction is completed; and litigation related to any failure to complete the Transaction or related to any enforcement proceeding commenced against us to perform our obligations pursuant to the Dunlop Purchase Agreement.
Similarly, delays in the completion of the Transaction could, among other things, result in additional transaction costs, loss of revenue or other negative effects associated with uncertainty about completion of the Transaction.
The sales of our OTR tire business andbusiness, the Dunlop brand and our polymer chemical business may disrupt our current and future plans or operations.
The ancillary agreements for the sale of the OTR tire business include a product supply agreement and a transition services agreement,agreement. and theThe ancillary agreements for the sale of the Dunlop brand include a transition license agreement, a transition offtake agreement and a commercial truck tire license from SRI to us. The ancillary agreements for the sale of the chemical business include a master supply agreement and a transition services agreement. As a result, we will have significant continuing obligations to the respective purchasers of these businesses.
There can be no assurance that we will be able to successfully separate these businesses or otherwise fully realize the expected benefits of these asset sales. Difficulties in separating the businesses may result in us performing differently than expected, in operational challenges or in unabsorbed overhead and other costs, especially during the implementation of the wind-down periods contemplated by the OTR product supply agreement and the Dunlop transition offtake agreement. Difficulties in transitioning to an external supplier for the purchase of certain polymer chemicals may also result in us performing differently than expected, in supply chain challenges or in increased costs, especially during the term of the 15-year chemical master supply agreement. The separation of thethese businesses 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, including retaining Goodyear brand consumer tire customers and positioning the Cooper brand as our primary second-tier brand in EMEA; the possibility of faulty assumptions underlying expectations regarding the benefits from the ancillary agreements, the separation process and associated expenses; separating corporate and administrative infrastructures, including information technology, manufacturing and other systems; coordinating these activities in geographically dispersed locations; as well as potential unknown liabilities or unforeseen expenses relating to the ancillary agreements, the business separations or any delays in separation activities.
New tires are sold under highly competitive conditions throughout the world. We compete with other tire manufacturers on the basis of product design, performance, price and terms, reputation, warranty terms, customer service and consumer convenience. 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. Other significant competitors include Continental, Hankook, Kumho, Nexen, Pirelli, Sumitomo, Toyo, Yokohama and various regional tire manufacturers. Our competitors produce significant numbers of tires in low-cost countries, and have announced plans to further increase their production capacity in countries around the globe. Increasingly, our competitors are making decisions on where to produce tires based not only on production cost, but in combination with total delivery cost, supply chain reliabilityreliability, tariffs and trade policy and sustainability considerations. These increases in production capacity may result in even greater competition in the United States and elsewhere.
Productivity improvements and manufacturing cost improvements may be required to offset potential increases in labor and raw material costs, including inflationary increases, and competitive price pressures. In addition, as part of our strategy to reduce high-cost and excess manufacturing capacity and to increase our capacity to produce higher margin tires, we may need to modernize or expand our facilities. We may also need to make additional capital expenditures in order to achieve our global climate ambition and related goals. We are currently undertaking significant construction, expansion and modernization projects globally.
Deterioration of global or regional economic conditions, including recession, financial instability, inflation, trade wars, labor shortages or energy availability and costs (including fuel surcharges), could negatively impact our business and our results of operations. A prolonged economic downturn can adversely affect OE production levels and consumer spending habits on replacement tires, resulting in lower-than-expected net sales. Inflation, which has risen significantly in recent years, has and may continue to increase our operational costs, including labor, transportation and energy costs, and increases in interest rates in response to concerns about inflation may have the effect of further increasing economic uncertainty or creating recessionary economic conditions. As a result, instability and weakness of the U.S. and global economies, including due to recession, inflation, trade wars, 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.
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 5,1004,300 of our associates in the United States at December 31, 2024,2025, expires in July 2026. Approximately 2,000 of our associates at our Texarkana and Findlay plants in the United States at December 31, 20242025 are covered by separate collective bargaining agreements with the USW, which expire in October 2028. In addition, approximately 22,00019,000 of our associates outside of the United States are covered by union contracts that have expired or are expiring in 2025,2026, primarily in Germany,Luxembourg, Poland, Brazil,China, Mexico, China,Slovenia, Slovenia,France, Turkey, Chile,Indonesia, SerbiaIndia and India.Peru. Although we believe that our relations with our associates are satisfactory, no assurance can be given that we will be able to successfully extend or renegotiate our collective bargaining agreements as they expire from time to time. If we fail to extend or renegotiate our collective bargaining agreements, if disputes with our unions arise, or if our unionized workers engage in a strike or other work stoppage or interruption, we could experience a significant disruption of, or inefficiencies in, our operations or incur higher labor costs, which could have a material adverse effect on our business, results of operations, financial condition and liquidity.
We have been, and could continue to be, negatively impacted by changes in tariffs, trade agreements or other trade restrictions on imported tires, raw materials and other goods or equipment.
The maintenance of existing tariffs, the imposition of new tariffs, changes in existing tariff rates, changes in or the repeal of trade agreements or other trade restrictions, such as those the United States has considered with respect to Canada and Mexico, may reduce our flexibility to utilize our global manufacturing footprint to meet demand for our tires around the world. In addition, the imposition of tariffs in the United States may result in the tires subject to such tariffs being diverted to other regions of the world, such as Europe, Latin America or Asia, or in retaliatory tariffs or other actions by affected countries. Broad-based tariffs and other trade restrictions have resulted in increased costs for our suppliers who have, and may in the future, increase prices to us. Finally, tariffs and other trade restrictions may weaken the economies of key markets for us, such as China, resulting in lower economic growth rates and weakened demand for our products and services. These factors, individually or together, could materially adversely affect our results of operations, financial condition and liquidity.
•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 other changes in laws or government policies.
•other changes in laws or government policies.
We suspended all shipments of tires to Russia during the first quarter of 2022 and discontinued our Russian operations in January 2023. 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. 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.
Automotive vehicle production and global tire industry demand continues to be difficult to predict. Although sales to our OE customers accounted for approximately 18%19% of our net sales in 2024,2025, demand for our products by OE customers and production levels at our facilities are impacted by automotive vehicle production. Automotive production and sales are highly cyclical and sensitive to general economic conditions and other factors, such as credit availability, interest rates, tariffs, 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. We may experience future declines in sales volume due to declines in new vehicle production and sales, the performance, discontinuation or sale of certain OE brands, platforms or programs, increased competition, or weakness in the demand for replacement tires, which could result in us incurring under-absorbed fixed costs at our production facilities or slowing the rate at which we are able to recover those costs. At various times, some regions around the world may be more particularly impacted by these factors than other regions.
Our business substantially depends on the continued service of key members of our management. The loss of the services of a significant number of members of our management could have a material adverse effect on our business. Our future success will also depend on our ability to attract and retain highly skilled personnel, such as engineering, marketing and senior management professionals. Competition for these employees is intense, and we could experience difficulty from time to time in hiring and retaining the personnel necessary to support our business. Our ability to attract and retain employees may also be hampered by downturns in the automotive and tire industries, which could result in reduced payments under our incentive compensation plans, as well as by greater competition due to the increase in use of remote working environments. If we do not succeed in retaining our current employees and attracting new high qualityhigh-quality employees, our business could be materially adversely affected.
We operate with significant operating and financial leverage. Significant portions of our manufacturing, selling, administrative and general expenses are fixed costs that neither increase nor decrease proportionately with sales. In addition, a significant portion of our interest expense is fixed. There can be no assurance that we would be able to reduce our fixed costs proportionately in response to a decline in our net salessales, 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.
•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.
•place us at a competitive disadvantage compared to our competitors.
The agreements governing our secured credit facilities, senior unsecured notesfacilities and certain of 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. These restrictions limit our ability to, among other things:
•incur additional debt or issue redeemable preferred stock;
•pay dividends, repurchase shares or make certain other restricted payments or investments;
•incur liens;
•sell assets;
•incur restrictions on the ability of our subsidiaries to pay dividends or to make other payments to us;
Management's Discussion & Analysis (MD&A)
New heading “Cost of Goods Sold”
New heading “Selling, Administrative and General Expense”
New heading “Rationalizations”
New heading “Gains on Asset Sales”
New heading “Europe, Middle East and Africa”
Largest changes
“In the U.S., we had a cumulative loss for the three-year period ending December 31, 2025 primarily driven by non-recurring items such as goodwill and intangible asset impairments, rationalization charges, pension curtailments and settlements, and one-time costs associated with the Goodyear Forward plan. During 2025, industry disruption and various macroeconomic factors such as the impact of tariff, transportation, labor and energy costs have negatively impacted our U.S. operating results and future forecasted U.S. earnings. …”see in full comparison
“In the U.S., we had a cumulative loss for the three-year period ending December 31, 2025 primarily driven by non-recurring items such as goodwill and intangible asset impairments, rationalization charges, pension curtailments and settlements, and one-time costs associated with the Goodyear Forward plan. During 2025, industry disruption and various macroeconomic factors such as the impact of tariff, transportation, labor and energy costs have negatively impacted our U.S. operating results and future forecasted U.S. earnings. In addition, OBBBA amended the business interest expense limitation. …”see in full comparison
“At December 31, 2024, we had $810 million of Cash and Cash Equivalents as well as $3,555 million of unused availability under our various credit agreements, compared to $902 million and $4,247 million, respectively, at December 31, 2023. The decrease in cash and cash equivalents of $92 million was primarily due to capital expenditures of $1,188 million, partially offset by cash provided by operating activities of $698 million, net borrowings of $264 million, cash proceeds from asset sales of $115 million and insurance recoveries for damaged property, plant and equipment of $62 million. …”see in full comparison
“In the third quarter of 2025, we experienced continued industry disruption in Americas, which resulted in a reduction in our near-term and long-term outlook. We also experienced a decline in our market capitalization as a result of a decrease in our stock price. …”see in full comparison
“We determined the estimated fair value for the reporting units based on discounted cash flow projections. The most critical assumptions used in the calculation of the fair value of each reporting unit are the projected revenue, projected operating margin and discount rate. Our forecast of future cash flows is based on our best estimate of projected revenue and projected operating margin, based primarily on pricing, raw material costs, market share, industry outlook, general economic conditions and strategic actions to improve our operating margin. …”see in full comparison
Goodwill and Intangible Assets. Goodwill and indefinite-lived intangible assets are tested for impairment annually or more frequently if an indicator of impairment is present. Intangible assets with finite lives are amortized over their useful lives and are reviewed for impairment whenever events or circumstances warrant such review. Goodwill and intangible assets are written down to fair value if considered impaired. Goodwill and Intangible Assets totaled $42 million and $663 million, respectively, at December 31, 2025, compared to $756 million and $805 million, respectively, at December 31,see in full comparison2024,2024.comparedThetogoodwill$781associated with the reporting unit in our Asia Pacific segment was $42 millionand $969 million, respectively,at December 31,2023.2025.At December 31, 2024, theThe goodwill associated with the reporting units in our Americas and Asia Pacific segments was $715 million and $41million.million, respectively, at December 31, 2024. Goodwill associated with the reporting unit in our Americas segment was allocated to assets held for sale in the second quarter of 2025 in the amount of $41 million in connection with the anticipated sale of the Chemical Business, which was consummated in the fourth quarter of 2025. The remaining $674 million was written off, resulting in a non-cash impairment charge during the third quarter of 2025. We recorded an intangible asset impairment charge of $125 million in the third quarter of 2024 primarily related to our lower tier indefinite-lived intangible assets related to the acquisition of Cooper Tire.
Full comparison: every changed paragraph (237)
All per share amounts are diluted and refer to Goodyear net income.income (loss).
The Goodyear Tire & Rubber Company is one of the world’s leading manufacturers of tires, with one of the most recognizable brand names in the world and operations in most regions of the world. We have a broad global footprint with 5349 manufacturing facilities in 2019 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.
Our multi-year transformation plan, called “Goodyear Forward,” that was intended to optimize our portfolio, deliver margin expansion and reduce leverage was completed in 2025. In furtherance of the goals set out in our Goodyear Forward plan, key activities included delivering gross proceeds of approximately $2.2 billion from portfolio optimization by completing the sales of our off-the-road (“OTR”) tire business, the Dunlop brand and our polymer chemicals business during 2025. In addition, we executed margin enhancement actions driving an annual, run-rate benefit of approximately $1.5 billion, including actions related to our manufacturing footprint, plant optimization, further improvement of our purchasing leverage, reduction of Selling, Administrative and General expenses (“SAG”), improvements in our supply chain planning and logistics, and brand optimization and tiering. We also improved our leverage, utilizing proceeds from divestitures to reduce our debt.
On November 15, 2023, we announced a transformation plan, Goodyear Forward, that is intended to optimize our portfolio of products, deliver segment operating margin expansion and reduce our leverage in order to drive sustainable, long-term shareholder value creation. Optimization of our portfolio consisted of a strategic review of three major asset groups: our chemical operations which produces synthetic rubber and other chemical products in our Americas segment, the Dunlop brand for which we own rights in certain markets throughout the world, but is primarily used in our EMEA segment, and our global OTR tire business. Our plans for margin expansion include brand optimization and tiering to capitalize on premium tire pricing and volume and a reduction of our overall exposure related to lower-tiered products either through margin expansion or product line rationalization, resulting in an expected annual run-rate benefit of approximately $200 million by the end of 2025. Our plans for margin expansion also include a reduction of our cost structure by approximately $1.3 billion by the end of 2025, including actions related to our manufacturing footprint, plant optimization, further improvement of our purchasing leverage, reduction of Selling, Administrative and General expenses (“SAG”) and improvements in our supply chain planning and logistics. We anticipate the accumulated benefit of these actions will improve our segment operating margin to approximately 10% by the end of 2025. During the year ended December 31, 2024, the Goodyear Forward plan provided $480 million in benefits to segment operating income.
On January 7, 2025, we entered into the Dunlop Purchase Agreement with SRI relating to the sale of the Dunlop brand in Europe, North America and Oceania for consumer, commercial and other specialty tires, together with certain associated intellectual property and other intangible assets, for a purchase price of $526 million. SRI will also pay us an up-front transition support fee of $105 million for our support in transitioning the Dunlop brand, related intellectual property and Dunlop customers to SRI. SRI will also acquire our existing Dunlop tire inventory. The Dunlop Purchase Agreement also contemplates entering into a number of ancillary agreements, including (a) a transition license agreement, pursuant to which we will continue to manufacture, sell and distribute Dunlop-branded consumer tires in Europe for an initial period from the closing of the transaction until December 31, 2025, which may be extended to December 31, 2026, and during which we will pay SRI a royalty on such Dunlop sales but will otherwise retain all profits therefrom; (b) a transition offtake agreement, pursuant to which we will sell to SRI certain Dunlop-branded consumer tire products for a period of up to five years, commencing after termination or expiration of the transition license agreement, subject to the terms and conditions set forth therein; and (c) we will license back the Dunlop brand from SRI for commercial tires in Europe on a long-term basis, subject to a royalty on sales. The transaction is subject to customary closing conditions, including the receipt of required regulatory approvals.
On February 3, 2025, we completed the sale of our OTR tire business to The Yokohama Rubber Company, Limited (“Yokohama”) pursuant to the terms of the OTRShare Purchaseand Agreement. Pursuant to the OTRAsset Purchase Agreement, dated as of July 22, 2024 (the “OTR Purchase Agreement”). Yokohama acquired the Company’sour OTR tire business for a purchase price of $905 million in cash, subject to certain adjustments set forth in the OTR Purchase Agreement. In conjunction with the sale of the OTR tire business, we entered into several ancillary agreements, including a trademark license agreement, whereby we license certain trademarks to Yokohama for an initial period of ten years from the date of the sale, and a product supply agreement, pursuant to which we will supply to Yokohama certain OTR tires for an initial period of up to 5five years, subject to the terms and conditions set forth therein, including an exit and asset relocation plan to be mutually agreed upon by the parties pursuant to which, beginning no earlier than the 2ndsecond anniversary of closing of the transaction, the production of those OTR tires will transition to Yokohama’s facilities. The cash received of $905 million included $185 million for deferred amounts related to the trademark license and product supply agreements that are presented in operating activities and $720 million for proceeds that are presented in investing activities on our Consolidated Statements of Cash Flows.
On May 7, 2025, we completed the sale of our rights to the Dunlop brand in Europe, North America and Oceania for consumer, commercial and other specialty tires, together with certain associated intellectual property and other intangible assets, for a purchase price of $526 million to Sumitomo Rubber Industries, Ltd. ("SRI") pursuant to the terms of the Purchase Agreement, dated as of January 7, 2025 (as amended, the "Dunlop Purchase Agreement"). SRI also paid us an up-front transition support fee of $105 million for our support in transitioning the Dunlop brand, related intellectual property and Dunlop customers to SRI. SRI also acquired our existing Dunlop tire inventory for approximately $104 million. We also entered into a number of ancillary agreements, including (a) a transition license agreement, pursuant to which we continued to manufacture, sell and distribute Dunlop-branded consumer tires in Europe from the closing of the transaction until December 31, 2025, and during which we paid SRI a royalty on such Dunlop sales; (b) a transition offtake agreement, pursuant to which we will sell to SRI certain Dunlop-branded consumer tire products for a period of up to five years, commencing after termination or expiration of the transition license agreement; and (c) we will license back the Dunlop brand from SRI for commercial tires in Europe on a long-term basis, subject to a royalty on sales.
As a result of the transaction, we received gross proceeds of $735 million at closing for the Dunlop brand, related intellectual property and other intangible assets, the transition support fee and the tire inventory. We allocated $105 million of those proceeds related to the up-front transition support fee to deferred income, which will be recognized over the combined lives of the transition license and transition offtake agreements. We also allocated $86 million of those proceeds to deferred income for tire inventory in Europe, which will be recognized upon transfer of title. The deferred amounts related to the transition agreements and inventory are presented in operating activities and the $526 million purchase price is presented in investing activities on our Consolidated Statements of Cash Flows.
On October 31, 2025, we completed the $650 million sale of our polymer chemicals business (the “Chemical Business”) pursuant to the Asset Purchase Agreement (the “Chemical Purchase Agreement”) with G-3 Chickadee Purchaser, LLC, a Delaware limited liability company (the “Purchaser”). At the closing, we received gross cash proceeds of approximately $580 million, which reflects working capital adjustments, including an adjustment for intercompany receivables. The purchase price remains subject to customary post-closing adjustments as set forth in the Chemical Purchase Agreement. The assets acquired and the liabilities assumed by the Purchaser are generally those primarily related to the Chemical Business, including our chemical plants in Houston, Texas and Beaumont, Texas and a research and development facility in Akron, Ohio.
In conjunction with the sale of the Chemical Business, we also entered into a number of ancillary agreements including (a) a master supply agreement, pursuant to which the Purchaser will, or will cause its affiliates to, supply to us certain polymer chemical products for a period of fifteen (15) years, (b) a transition services agreement, pursuant to which we will provide certain transition services to the Purchaser for the Chemical Business for a period of up to eighteen (18) months, and (c) a patent and know-how license agreement, pursuant to which the Purchaser will license back to us certain intellectual property related to the Chemical Business for use in connection with certain retained businesses. Under the terms of the master supply agreement we are required to purchase minimum quantities on a quarterly basis or we are subject to a shortfall fee. The cash received of $580 million included $110 million for deferred amounts primarily related to the master supply agreement that are presented in operating activities and $470 million for proceeds that are presented in investing activities on our Consolidated Statements of Cash Flows.
Our results for 20242025 include a 3.9%4.7% decrease in tire unit shipments compared to 20232024 due to lower global replacement and OE tire volume, partially offset by growth in OE.volume. In 2024,2025, we experienced approximately $220$211 million of inflationary cost pressures.
Net sales were $18,280 million in 2025, compared to $18,878 million in 2024. Net sales decreased in 2025 due to the impacts of our divestitures, primarily the sale of the OTR tire business, lower global tire volume and the negative impact of changes in foreign exchange rates. These decreases were partially offset by favorable price and product mix and benefits from the Goodyear Forward plan.
Net sales were $18,878 million in 2024, compared to $20,066 million in 2023. Net sales decreased in 2024 due to lower tire volume in Americas and EMEA, global declines in price and product mix and the negative impact of changes in foreign exchange rates globally, driven by the strengthening of the U.S. dollar. These decreases were partially offset by the negative impact on sales in 2023 caused by a severe storm in the U.S. that significantly damaged our tire manufacturing facility and adjacent warehouse in Tupelo, Mississippi (the "Tupelo storm") and an increase in sales in other tire-related businesses, primarily due to Fleet Solutions in EMEA and higher third-party chemical sales in Americas.
Goodyear net incomeloss in 20242025 was $70$1,721 million, or $0.24$5.99 per share, compared to aGoodyear net lossincome of $689$46 million, or $2.42$0.16 per share, in 2023.2024. The change in Goodyear net income (loss) was primarily due to lowerthe rationalizationchange charges, higher segment operating income, lower impairment charges and lower other expense. These increases were partially offset by higherin U.S. and Foreign Tax Expense.Expense, driven by the establishment of a full valuation allowance on our net deferred tax assets in the U.S., a non-cash goodwill impairment charge in Americas and lower segment operating income, partially offset by gains on the sales of the OTR tire business, the Dunlop brand and the Chemical Business.
Our total segment operating income for 2025 was $1,057 million, compared to $1,302 million in 2024. The $245 million decrease was primarily due to higher raw material costs of $443 million, increased conversion costs of $402 million, driven by inflation, higher SAG of $199 million when excluding Goodyear Forward savings, lower tire volume of $148 million, increases in other costs of $135 million, primarily related to tariff and transportation costs, the impact of the sale of the OTR tire business of $80 million, and a net decrease of $62 million from insurance proceeds for property damages and business interruptions received in 2024 and 2025. These decreases were partially offset by benefits from the Goodyear Forward plan of $772 million and global improvements in price and product mix of $465 million. Refer to "Results of Operations — Segment Information" for additional information.
Our total segment operating income for 2024 was $1,318 million, compared to $968 million in 2023. The $350 million increase was primarily due to benefits from the Goodyear Forward plan of $480 million, lower raw material costs of $289 million, a benefit of $92 million from insurance proceeds for business interruptions and property damage resulting from storm damage events in prior years, $55 million related to the 2023 negative impact of the Tupelo storm, a benefit from insurance recoveries of $50 million related to a fire in the third quarter of 2023 that significantly damaged and caused a temporary shutdown of our tire manufacturing facility in Debica, Poland ("Debica"), partially offset by the continued impact of the fire on Debica fixed costs incurred during ramp-up of $20 million, lower transportation costs of $35 million, a favorable tax item in Brazil of $8 million and a decrease in SAG of $28 million. These decreases were partially offset by increased conversion costs of $318 million, driven by inflation, declines in price and product mix of $203 million, primarily in Americas and EMEA and lower tire volume of $185 million, primarily in Americas and EMEA. Refer to "Results of Operations — Segment Information" for additional information.
At December 31, 2025, we had $801 million of Cash and Cash Equivalents as well as $4,421 million of unused availability under our various credit agreements, compared to $810 million and $3,555 million, respectively, at December 31, 2024. Net cash used by financing activities was $1,770 million, primarily due to net debt repayments of $1,759 million. Cash provided by investing activities was $997 million, primarily representing proceeds from the sales of the OTR tire business, the Dunlop brand and the Chemical Business, as well as other asset dispositions, of $1,802 million, partially offset by capital expenditures of $826 million. Net cash provided by operating activities was $796 million, driven by current year segment operating income and deferred revenue and income from asset sales. Refer to "Liquidity and Capital Resources" for additional information.
At December 31, 2024, we had $810 million of Cash and Cash Equivalents as well as $3,555 million of unused availability under our various credit agreements, compared to $902 million and $4,247 million, respectively, at December 31, 2023. The decrease in cash and cash equivalents of $92 million was primarily due to capital expenditures of $1,188 million, partially offset by cash provided by operating activities of $698 million, net borrowings of $264 million, cash proceeds from asset sales of $115 million and insurance recoveries for damaged property, plant and equipment of $62 million. Cash provided by operating activities reflects the net income for the period of $60 million, which includes non-cash charges for depreciation and amortization of $1,049 million, a non-cash impairment charge of $125 million, non-cash rationalization charges of $86 million, a non-cash gain on asset sales of $93 million, primarily related to the sale of a distribution center in Germany, and a non-cash gain on insurance recoveries of $75 million. Operating activities also include rationalization payments of $198 million, cash used for working capital of $82 million and pension contributions and direct payments of $69 million. Net cash provided by financing activities was $225 million, primarily due to net borrowings of $264 million. Refer to "Liquidity and Capital Resources" for additional information.
With a backdrop of current macroeconomic and regulatory uncertainties, we have limited visibility to global tire unit volumes for 2026.
We expect our Goodyear Forward plan to deliver approximately $300 million of incremental savings in 2026. In addition, the 2025 sales of the Dunlop brand and Chemical Business are expected to impact segment operating income by approximately $185 million in 2026.
In the first quarter of 2025, we expect our unit volume will decline, driven by relatively high third-party channel inventories related to pre-buy of low-end imported consumer replacement products in the U.S. and lower consumer and commercial OE production globally. We expect our global tire unit volume in the first quarter of 2025 to be lower compared to the first quarter of 2024 by approximately 2% to 3%. We also expect unabsorbed overhead to be approximately $25 million higher in the first quarter of 2025 compared to the first quarter of 2024 due to lower production in the fourth quarter of 2024.
As we continue to make progress on our Goodyear Forward transformation plan, we expect first quarter benefits from the program of approximately $200 million and full year benefits of approximately $750 million in segment operating income in 2025. The expected impact of the sale of the OTR tire business on our segment operating income, inclusive of stranded costs, is approximately $20 million and $80 million for the first quarter and full year of 2025, respectively.
WeBased on current spot prices, we expect approximately $175 million of raw material headwindscosts to provide a benefit of approximately $300 million in the first quarter of 20252026 compared to the first quarter of 2024. These headwinds are expected to be partially offset by approximately $65 million of favorable price and product mix driven by previously implemented pricing actions and customer contracts indexed to changes in raw materials.2025. Natural and synthetic rubber prices and other commodity prices historically have been volatile, and our raw material costs could change based on future costprice fluctuations and changes in foreign exchange rates. We continue to focus on price and product mix, to substitute lower cost materials where possible, to work to identify additional substitution opportunities, and to reduce the amount of material required in each tire, and to pursue alternative raw materialstire to minimize the impact of higher raw material costs.
We also forecast an estimated annualized cost of tariffs on finished goods and raw materials of approximately $300 million in 2026, based on current tariff rates.
We expect non-raw material inflation and other costs, net of other expected cost improvements, to be approximately $75 million higher in the first quarter of 2025 when compared with the first quarter of 2024. We continue to focus on actions to offset costs other than raw materials through cost savings initiatives, including initiatives related to the Goodyear Forward plan, rationalization actions and improvements in price and product mix.
For the full year of 2025, we expect working capital to be a $100 million to $150 million source of operating cash flows. We anticipate our capital expenditures to be approximately $950 million. We anticipate our cash flows will include rationalization payments of approximately $400 million, as we continue to implement elements of our Goodyear Forward plan to improve our cost structure.
Refer also to "“Liquidity and Capital Resources” for commentary regarding our outlook on 2026 cash flows; “Item 1A. 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.
Goodyear net incomeloss in 20242025 was $70$1,721 million, or $0.24$5.99 per share, compared to aGoodyear net lossincome of $689$46 million, or $2.42$0.16 per share, in 2023.2024. The change in Goodyear net income (loss) was primarily due to lowerthe rationalizationchange charges, higher segment operating income, lower impairment charges and lower other expense. These increases were partially offset by higherin U.S. and Foreign Tax Expense.Expense, driven by the establishment of a full valuation allowance on our net deferred tax assets in the U.S., a non-cash goodwill impairment charge in Americas and lower segment operating income, partially offset by gains on the sales of the OTR tire business, the Dunlop brand and the Chemical Business.
Net Sales
Net sales in 20242025 of $18,280 million decreased $598 million, or 3.2%, compared to $18,878 million decreased $1,188 million, or 5.9%, compared to $20,066 million in 2023,2024, due to the impacts of divestitures, primarily the sale of the OTR tire business, of $671 million, excluding product supply agreement revenue of $268 million, lower global tire volume of $900 million, primarily in Americas and EMEA, global declines in price and product mix of $349$669 million and the negative impact of changes in foreign exchange rates globally of $192$18 million,million. drivenThese bydecreases the strengthening of the U.S. dollar,were partially offset by thefavorable unfavorableglobal impactprice and product mix of the Tupelo storm on sales in 2023 of $110$370 million and anbenefits increasefrom inthe salesGoodyear inForward other tire-related businessesplan of $91$64 million, primarily due to Fleet Solutions in EMEA and higher third-party chemical sales in Americas.million. Goodyear worldwide tire unit net sales were $15,993$15,390 million and $17,288$15,993 million in 20242025 and 2023,2024, respectively. Consumer and commercial net sales were $12,234 million and $3,124 million in 2025, respectively. Consumer and commercial net sales were $12,303 million and $3,247 million in 2024, respectively. Consumer and commercial net sales were $12,894 million and $3,731 million in 2023, respectively.
The decrease in worldwide tire unit sales of 6.77.9 million units, or 3.9%,4.7%, compared to 2023,2024, included a decrease of 9.57.6 million replacement tire units, or 7.3%,6.3%, reflecting decreases in each region. OE tire units increaseddecreased by 2.80.3 million units, or 6.3%,0.5%. reflectingConsumer anand increasecommercial unit sales in EV2025 fitmentswere in147.1 Asiamillion Pacific.and 10.0 million, respectively. Consumer and commercial unit sales in 2024 were 154.0 million and 10.9 million, respectively. Consumer and commercial unit sales in 2023 were 159.4 million and 12.1 million, respectively.
Cost of Goods Sold
Cost of Goods Sold ("CGS") was $14,909 million in 2025, decreasing $283 million, or 1.9%, from $15,192 million in 2024. CGS was 81.6% of sales in 2025 compared to 80.5% of sales in 2024. CGS in 2025 decreased primarily due to savings related to the Goodyear Forward plan of $578 million, lower tire volume of $521 million, benefits from divestitures, primarily related to the sale of the OTR tire business, of $262 million, and foreign currency translation of $19 million. These decreases were partially offset by higher raw material costs of $443 million, higher conversion costs of $402 million, an increase in other costs of $138 million, primarily related to tariff and transportation costs, a net decrease of $62 million ($30 million after-tax and minority) from insurance proceeds for property damages and business interruptions received in 2024 and 2025, an increase in asset write-offs, accelerated depreciation and accelerated lease charges of $32 million, primarily related to the closures of our Fulda, Germany ("Fulda"), Fürstenwalde, Germany ("Fürstenwalde"), and Kariega, South Africa ("Kariega") tire manufacturing facilities and the elimination of commercial tire production at our Danville, Virginia tire manufacturing facility ("Danville"), and a benefit received in 2024 related to a reduction in U.S. duty rates on various commercial tires from China of $14 million. CGS in 2024 included a favorable $8 million ($6 million after-tax and minority) tax item in Brazil and a $3 million ($3 million after-tax and minority) charge related to a flood in South Africa.
Cost of Goods Sold ("CGS") was $15,176 million in 2024, decreasing $1,381 million, or 8.3%, from $16,557 million in 2023. CGS was 80.4% of sales in 2024 compared to 82.5% of sales in 2023. CGS in 2024 decreased primarily due to lower tire volume of $715 million, savings related to the Goodyear Forward plan of $335 million, lower raw material costs of $289 million, foreign currency translation of $154 million, driven by the strengthening of the U.S. dollar, lower costs related to product mix of $146 million globally, a benefit of $92 million ($69 million after-tax and minority) from insurance proceeds for property damage and business interruptions resulting from storm damage events in Americas in prior years, a benefit of $26 million ($17 million after-tax and minority) from insurance recoveries related to the fire at our Debica, Poland tire manufacturing facility, net of fixed costs incurred during the ramp-up of the facility, and a favorable $8 million ($6 million after-tax and minority) tax item in Brazil. These decreases were partially offset by higher conversion costs of $318 million, driven by inflation and the effect of lower tire production on fixed cost absorption, an increase in accelerated depreciation and asset write-offs of $70 million, primarily related to the announced plant closures in Asia Pacific and EMEA, higher costs in other tire-related business of $64 million, driven by Fleet Solutions in EMEA and higher third-party chemical sales in Americas, and a $3 million ($3 million after-tax and minority) charge related to a flood in South Africa.
CGS in 2024 and 2023 included pension expense of $15 million. CGS in 2023 also included the favorable impact of a successful legal claim of $3 million ($3 million after-tax and minority) related to a 2005 warehouse fire in Spain.
SAG was $2,782 million in 2024, decreasing $32 million, or 1.1%, from $2,814 million in 2023. SAG was 14.7% of sales in 2024 compared to 14.0% of sales in 2023. SAG decreased primarily due to lower wages and benefits of $92 million driven by Goodyear Forward savings and lower incentive compensation, lower advertising costs of $26 million and lower foreign currency translation of $22 million. These decreases were partially offset by higher asset write-offs, accelerated depreciation and accelerated lease costs of $40 million. SAG in 2024 also included costs related to the Goodyear Forward plan of $105 million ($80 million after-tax and minority) compared to $35 million ($26 million after-tax and minority) in 2023, primarily consisting of advisory, legal and consulting fees incurred to support development and execution of the plan, including costs associated with planned asset sales.
SAGCGS in 20242025 and 20232024 included pension expense of $11 million. SAG in 2024 included incremental savings from rationalization plans of $46$12 million comparedand to$15 $50million, million in 2023.respectively.
Selling, Administrative and General Expense
SAG was $2,719 million in 2025, decreasing $63 million, or 2.3%, from $2,782 million in 2024. SAG was 14.9% of sales in 2025 compared to 14.7% of sales in 2024. SAG decreased primarily due to savings related to the Goodyear Forward plan of $132 million, benefits related to divestitures, primarily the sale of the OTR tire business, of $56 million, and a decrease in asset write-offs, accelerated depreciation and accelerated lease charges of $18 million. These decreases were partially offset by an increase in other costs of $151 million, including an investment in systems and technology for customer facing support and higher costs associated with product liability claims, an increase of $53 million related to inflation and wages and benefits and increased advertising costs of $30 million. SAG in 2025 also included costs related to the Goodyear Forward plan of $15 million ($15 million after-tax and minority) compared to $105 million ($80 million after-tax and minority) in 2024, primarily consisting of advisory, legal and consulting fees incurred to support development and execution of the plan, including costs associated with planned asset sales.
SAG in 2025 and 2024 included pension expense of $9 million and $11 million, respectively. SAG in 2025 included incremental savings from rationalization plans of $44 million compared to $46 million in 2024.
CGS and SAG in 2025 included $160 million ($149 million after-tax and minority) of asset write-offs, accelerated depreciation and accelerated lease charges, primarily relate to the announced closures of Fulda, Fürstenwalde and Kariega and the plan to reduce our production capacity at Danville. Asset write-offs, accelerated depreciation and accelerated lease charges for 2025 were primarily recorded in CGS.
Rationalizations
CGS and SAG in 2023 included $46 million ($42 million after-tax and minority) of accelerated depreciation and asset write-offs and $10 million ($10 million after-tax and minority) of recoveries of previously written-off accounts receivable and other assets related to our exited business in Russia, which related to rationalization activities.
We recorded net rationalization charges of $86$194 million ($72$172 million after-tax and minority) in 2024.2025. Net rationalization charges include $52$73 million related to the proposedelimination planof to close ourcommercial tire manufacturingproduction facilitiesat inDanville, Fulda and Fürstenwalde, Germany, $15$61 million related to the workforce reorganization plan in EMEA, $15 million related to the openingclosures of a shared service center in Costa Rica, the exit of certain Commercial TireFulda and ServiceFürstenwalde, Center locations and global SAG, $12$34 million related to the closure of Kariega, $13 million related to the plan to reduce headcount at our Fayetteville, North Carolina tire manufacturing facility ("Fayetteville"), $9 million related to the rationalization and workforce reorganization plan in Malaysia,EMEA, $11$5 million related to the closure of our tire manufacturing facility in Melksham, United Kingdom,Kingdom $4("Melksham"), millionand relatedvarious other plans to thereduce closure of certain retailheadcount and warehouseimprove locationsoperating in Americas, $3 million related to the permanent closure of our Gadsden, Alabama tire manufacturing facility, $3 million related to the global rationalization and workforce reorganization plan and $3 million related to the plan to streamline our EMEA distribution network.efficiency. These charges were partially offset by reversals of $45$21 million, primarily related to voluntary attrition in our rationalization and workforce reorganization plan in EMEA.
We recorded net rationalization charges of $86 million ($72 million after-tax and minority) in 2024. Net rationalization charges include $52 million related to Fulda and Fürstenwalde, $15 million related to the rationalization and workforce reorganization plan in EMEA, $15 million related to opening a shared service center in Costa Rica, the exit of certain Commercial Tire and Service Center locations and global SAG reductions, $12 million related to the closure of our tire manufacturing facility in Malaysia, $11 million related to the closure of Melksham, $4 million related to the closure of certain retail and warehouse locations in Americas, $3 million related to the permanent closure of our Gadsden, Alabama tire manufacturing facility, $3 million related to a plan to reduce SAG headcount globally and $3 million related to the plan to streamline our EMEA distribution network. These charges were partially offset by reversals of $45 million, primarily related to voluntary attrition in our rationalization and workforce reorganization plan in EMEA.
We recorded net rationalization charges of $502 million ($436 million after-tax and minority) in 2023. Net rationalization charges include $250 million related to the proposed plan to close Fulda and Fürstenwalde, $166 million for the proposed rationalization and workforce reorganization plan in EMEA, $21 million for the plan to improve profitability in our Australia and New Zealand operations, and $18 million related to the plan to streamline our EMEA distribution network.
During 2025, we recorded a non-cash impairment charge of $674 million ($674 million after-tax and minority) to fully impair our North America reporting unit's goodwill in our Americas segment. During 2024, we recorded a non-cash impairment charge of $125 million ($94 million after-tax and minority) primarily related to our lower tier indefinite-lived intangible assets related to the acquisition of Cooper Tire as a result of increased competition from lower tier imports in the market. During 2023, we recorded a non-cash impairment charge of $230 million ($216 million after-tax and minority) to write off all of the goodwill of our EMEA reporting unit. For further information, refer to "Critical Accounting Policies - Goodwill and Intangible Assets" and Notes to the Consolidated Financial Statements No. 11,12, Goodwill and Intangible Assets, in this Form 10-K.
Interest expense was $445 million in 2025, decreasing $77 million from $522 million in 2024. The decrease is due to lower interest rates on lower average debt levels in 2025, due to the repayment of debt with proceeds from asset sales. The average interest rate was 5.76% in 2025 compared to 6.24% in 2024. The average debt balance was $7,729 million in 2025 compared to $8,368 million in 2024.
Gains on Asset Sales
During 2025, net gains on asset sales of $816 million ($747 million after-tax and minority) primarily relate to an estimated gain of $385 million ($368 million after-tax and minority) on the sale of the Dunlop brand, an estimated gain of $255 million ($232 million after-tax and minority) on the sale of the OTR tire business, an estimated gain of $104 million ($104 million after-tax and minority) on the sale of the Chemical Business, and other asset sales of $72 million ($43 million after-tax and minority), compared to net gains on asset sales of $93 million ($66 million after-tax and minority) during 2024, primarily due to the sale of a distribution center in EMEA.
For further information, refer to Note to the Consolidated Financial Statements No. 2, Divestitures.
Interest expense was $522 million in 2024, decreasing $10 million from $532 million in 2023. The decrease was primarily due to an increase in capitalized interest of $9 million.
Other (Income) Expense in 2025 was $288 million of expense, compared to $134 million of expense 2024. The change in Other (Income) Expense was primarily due to pension settlement charges of $201 million ($200 million after-tax and minority) in 2025 compared to pension settlement credits of $3 million ($2 million after-tax and minority) in 2024 and a decrease in interest income of $17 million, partially offset by an increase in royalty and other income of $43 million. 2024 included transaction costs of $19 million ($14 million after-tax and minority) related to the sale of the OTR tire business, an $8 million ($6 million after-tax and minority) loss related to the sale of receivables in Argentina and a favorable $2 million ($1 million after-tax and minority) tax item in Brazil.
Other (Income) Expense was $32 million and $108 million of expense in 2024 and 2023, respectively. The $76 million decrease in expense was primarily due to a $78 million net decrease in foreign currency exchange losses driven by fluctuations in the Argentine peso and the Turkish lira, a net decrease in non-service related pension and other postretirement benefits cost of $49 million primarily due to settlement credits of $3 million ($2 million after-tax and minority) in 2024 compared to pension settlement charges of $40 million ($30 million after-tax and minority) in 2023. Additionally, the change in Other (Income) Expense reflects net gains on asset and other sales of $85 million ($60 million after-tax and minority), primarily related to the sale of distribution centers in EMEA and Americas, compared to a net gain on asset and other sales of $94 million ($69 million after-tax and minority) in 2023, primarily related to a sale and leaseback transaction in Americas. Other (Income) Expense in 2024 had lower interest income of $30 million compared to 2023 and lower royalty income of $9 million compared to 2023.
Other (Income) Expense in 2024 also includes transaction costs of $19 million ($14 million after-tax and minority) related to the anticipated sale of the OTR business and a favorable $2 million ($1 million after-tax and minority) tax item in Brazil. Other (Income) Expense in 2023 included $31 million ($24 million after-tax and minority) of expense in 2023 for non-indemnified costs for product liability claims related to products manufactured by a formerly consolidated joint venture entity, $11 million ($8 million after-tax and minority) of income related to a favorable court decision setting aside a previous unfavorable verdict on intellectual property-related legal claims and $5 million ($5 million after-tax and minority) of income for the write-off of accumulated foreign currency translation related to our exited business in Russia.
Income tax expense in 2024 was $95 million on income before income taxes of $155 million. In 2024, income tax expense includes a net discrete tax benefit totaling $2 million ($2 million after minority interest).
Income tax expense in 20232025 was $10$1,567 million on a loss before income taxes of $677$133 million. In 2023,2025, income tax expense includes net discrete tax benefitsexpense totaling $9$1,453 million ($10$1,450 million after minority interest),. Discrete tax expense was primarily related to additionalthe priorestablishment yearof withholdinga full valuation allowance on our net deferred tax creditableassets in the U.S. as a result of a tax law change.
Income tax expense in 2024 was $95 million on income before income taxes of $130 million. In 2024, income tax expense includes net discrete tax benefits totaling $2 million ($2 million after minority interest).
The difference between our effective tax rate and the U.S. statutory rate of 21% for both2025 2024is mainly impacted by the establishment of a full valuation allowance on our net deferred tax assets of $1.4 billion in the U.S. The difference between our effective tax rate and 2023the U.S. statutory rate of 21% for 2024 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 describednoted above.
In the U.S., we had a cumulative loss for the three-year period ending December 31, 2025 primarily driven by non-recurring items such as goodwill and intangible asset impairments, rationalization charges, pension curtailments and settlements, and one-time costs associated with the Goodyear Forward plan. During 2025, industry disruption and various macroeconomic factors such as the impact of tariff, transportation, labor and energy costs have negatively impacted our U.S. operating results and future forecasted U.S. earnings. In addition, the One Big Beautiful Bill Act ("OBBBA") amended the business interest expense limitation. The reduction in current and expected future earnings, as a result of industry disruption, represented significant negative evidence in the assessment of the realizability of our deferred tax assets. We concluded that it is more likely than not that our U.S. net deferred tax assets will not be fully realized and recorded a non-cash charge of $1.4 billion to establish a full valuation allowance in the U.S. during the third quarter of 2025. We intend to maintain a valuation allowance until sufficient positive evidence exists to support realization of these deferred tax assets. At December 31, 2025 and December 31, 2024, we had approximately $1.4 billion and $1.3 billion of U.S. federal, state and local net deferred tax assets, respectively, and related valuation allowances totaling $1.4 billion and $26 million, respectively.
What changed in the latest 10-Q
Risk Factors
Refer to “Item 1A. Risk Factors” in our 2025 Form 10-K for a discussion of our risk factors.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “$1,050 million 8.875% Senior Notes due 2032”
Largest changes
Cost of Goods Sold ("CGS") in thesee in full comparisonfirstsecondthree monthsquarter of 2026 was$3,188$3,569 million, decreasing$325$136 million, or9.3%,3.7%, from$3,513$3,705 million in thefirstsecondthree monthsquarter of 2025. CGS decreased primarily due to lower tire volume of$321 million, savings related to the Goodyear Forward plan of $95$143 million, impacts related to divestitures, including$89$82 million related to the sale of theChemicalchemical business and$81$70 million related to the sale of the Dunlop brand, excluding increased offtake supply agreement costs of$36$48 million, lower raw material costs of$88$91millionmillion, savings related to the Goodyear Forward plan of $81 million, and a decrease in asset write-offs, accelerated depreciation and accelerated lease charges of$27$40 million. These decreases were partially offset by higher conversion costs of$155$165 million, an increase in other costs of $48 million, primarily related to inflation, foreign currency translation of$134$43 million, unfavorable product mix of $38 million, higher tariff costs of$58$32million, offset by an estimated tariff refund of $46 million,million andathechargenegativerelated to an expected settlementimpacts of apriornationalyear tax matterstrike inoneColombia ofour foreign locations of $8$7 million ($8$7 million after-tax and minority).
In thesee in full comparisonfirstsecond quarter of 2026,macroeconomicwefactorsexperienced continued volume declines, primarily in Americas andgeopoliticalEMEA.eventsWeadverselyviewedimpactedthisoureventresultsas a triggering event andcontributed toperformed adeclinequantitativeinanalysisour volume. We considered the impact onof the fair value of $425 million of ourgoodwill reporting unit andindefinite-lived intangibleassets.assetsDuringrelatedthis review, we consideredto thenature and extentacquisition ofcurrentCoopermarket conditions, forecasts for reporting units and individual brands,Tire aswellofasJune 30, 2026. Based on the results of the quantitativeanalysis performed during our annual 2025impairmenttest. Based on our review of external and internal factors compared to our latest quantitative assessment, we determined it was not more likely than not thatassessments, the fair value ofour goodwill orthe indefinite-lived intangible assetsisapproximatedless than thetheir respective carryingvalue,values. We determined the fair value of the indefinite-lived intangible assets using the relief-from-royalty method, which calculates the cost savings associated with owning rather than licensing the assets. The most critical assumptions used in the calculation of the fair value are projected revenue, discount rate andthus,royaltya triggering event had not occurred which would require an interim impairment test to be performed. We will continue to monitor our results and market conditions to determine if a future analysis would be required.rate. The fair value of the indefinite-lived intangible assets is sensitive to differences between estimated and actual revenue, including changes in the discount rate and royalty rate used to evaluate the fair value of these assets. Although we believe our estimate of fair value is reasonable, the performance of these indefinite-lived intangibleasset performanceassets is dependent on our ability to execute our business plan. If our future financial performance falls below ourexpectations, which may include a continued and sustained decline in volumes,expectations or there are adverse revisions to significant assumptions, including projected revenues, discount rates or royalty rates, this could be indicative that the fair values of these indefinite-lived intangible assets have declined below their carrying values, and therefore we may need to record a material, non-cash impairment charge in a future period.
“At June 30, 2026, after evaluating macroeconomic conditions and our current and future results of operations, we concluded that there were no triggering events and it was not more likely than not that the fair value of goodwill of our reporting unit within our Asia Pacific segment was less than its carrying value and, therefore, did not have any impairment. Future changes in the judgments, assumptions and estimates that are used in our impairment testing for goodwill, including discount rates and cash flow projections, could result in significantly different estimates of the fair values. …”see in full comparison
“CGS in the first six months of 2026 was $6,757 million, decreasing $461 million, or 6.4%, from $7,218 million in the first six months of 2025. …”see in full comparison
“Total segment operating income for the first six months of 2026 was $131 million, compared to $354 million in the first six months of 2025. …”see in full comparison
“Operating income in the first six months of 2026 was $27 million, decreasing $269 million, or 90.9%, from $296 million in the first six months of 2025. The decrease in operating income was due to higher conversion costs of $211 million, driven by the effect of lower tire production on fixed cost absorption and inflation, lower tire volume of $112 million, the impact of the sale of the chemical business of $64 million, unfavorable price and product mix of $51 million, higher tariff costs of $90 million, offset by an estimated tariff refund of $46 million, and higher SAG of $30 million. …”see in full comparison
Full comparison: every changed paragraph (103)
Our results for the firstsecond quarter of 2026 include ana 11.6%4.0% decrease in tire unit shipments compared to 2025 driven by planned rationalization of lower-tier product offerings, weakness in the replacement industry and consumer trends, increased competitiveness globally and planned rationalization of lower-tier product offerings.competitiveness. In the firstsecond quarter of 2026, we also experienced approximately $50$53 million of inflationary cost pressures.
Net sales in the firstsecond three monthsquarter of 2026 were $3,881$4,250 million, compared to $4,253$4,465 million in the firstsecond three monthsquarter of 2025. Net sales decreased in 2026 primarily due to lower global tire volume and the impacts of our divestitures. These decreases were partially offset by favorable price and product mix and the positive impact of changes in foreign exchange rates globally and favorable price and product mix.rates.
In the firstsecond three monthsquarter of 2026, Goodyear net loss was $249$204 million, or $0.86$0.71 per share, compared to Goodyear net income of $115$254 million, or $0.40$0.87 per share, in the firstsecond three monthsquarter of 2025. The change in Goodyear net income (loss) was primarily due to a gain on the sale of ourthe off-the-roadDunlop ("OTR") tire businessbrand in 2025, lower segment operating income and higher U.S. and Foreign tax expense, partially offset by lower interestrationalization expense.charges.
Total segment operating income for the firstsecond three monthsquarter of 2026 was $95$36 million, compared to $195$159 million in the firstsecond three monthsquarter of 2025. The $100$123 million decrease was primarily due to increased conversion costs of $155$165 million, driven by the effect of lower tire production on fixed cost absorption and inflation, lower tire volume of $87 million, higher tariff costs of $58 million, offset by an estimated tariff refund of $46 million, the impact of our divestitures, including $30$32 million related to the sale of the Chemicalchemical business and $13$17 million related to the sale of the Dunlop brand, excluding the favorable impact of the Dunlop offtake supply agreement of $6$5 million, lower tire volume of $34 million, higher tariff costs of $32 million and higher Selling, Administrative and General expensesExpense (“"SAG”") of $17 million, and increased costs related to other-tire related businesses of $9$28 million. These decreases were partially offset by benefits from our Goodyear Forward transformation plan ("Goodyear Forward") of $107$95 million,million and lower raw material costs of $88 million and favorable price and product mix of $15$91 million. Refer to "Results of Operations — Segment Information" for additional information.
Net sales in the first six months of 2026 were $8,131 million, compared to $8,718 million in the first six months of 2025. Net sales decreased in 2026 primarily due to lower tire volume and the impacts of our divestitures. These decreases were partially offset by the positive impact of changes in foreign exchange rates and favorable price and product mix.
In the first six months of 2026, Goodyear net loss was $453 million, or $1.57 per share, compared to Goodyear net income of $369 million, or $1.27 per share, in the first six months of 2025. The change in Goodyear net income (loss) was primarily due to a gain on the sale of the Dunlop brand and off-the-road ("OTR") tire business in 2025, lower segment operating income and higher U.S. and Foreign tax expense, partially offset by lower interest expense.
Total segment operating income for the first six months of 2026 was $131 million, compared to $354 million in the first six months of 2025. The $223 million decrease was primarily due to increased conversion costs of $320 million, driven by the effect of lower tire production on fixed cost absorption and inflation, lower tire volume of $121 million, the impact of our divestitures, including $62 million related to the sale of the chemical business and $30 million related to the sale of the Dunlop brand, excluding the favorable impact of the Dunlop offtake supply agreement of $11 million, higher SAG of $45 million and higher tariff costs of $90 million, offset by an estimated tariff refund of $46 million. These decreases were partially offset by benefits from the Goodyear Forward plan of $202 million and lower raw material costs of $179 million. Refer to "Results of Operations —Segment Information" for additional information.
On July 16, 2026, we reached an agreement with the United Steelworkers and approved a plan to permanently close our Fayetteville, North Carolina tire manufacturing facility to reduce our production capacity and production cost per tire in Americas. The plan includes approximately 1,750 job reductions. We expect to substantially complete this rationalization plan by the end of 2027 and estimate the total pre-tax charges associated with this action to be between $535 million and $565 million, of which $190 million to $210 million are expected to be cash charges primarily for associate-related and other exit costs, and the remaining costs are expected to be non-cash charges primarily for accelerated depreciation and other asset-related charges ($290 million to $310 million) and pension special termination benefits ($40 million to $50 million). We expect to record approximately $205 million to $225 million of pre-tax charges in the third quarter of 2026 and approximately $65 million to $85 million of pre-tax charges during the remainder of 2026.
On July 30, 2026, we reached a tentative agreement with the United Steelworkers ("USW") on a new master labor contract that will remain in effect through April 28, 2029, covering nearly 2,400 workers at three plants in the United States. The tentative agreement is subject to a ratification vote by USW members at the plants covered by the contract.
On June 4, 2026, we issued $1,050 million in aggregate principal amount of 8.875% senior notes due 2032. We intend to use the net proceeds from this offering to repay, redeem or repurchase our 4.875% senior notes due 2027 and our 7.625% senior notes due 2027 at or prior to their respective maturity. Pending such repayment, redemption or repurchase, we temporarily applied the proceeds to repay outstanding balances under certain revolving credit facilities.
At MarchJune 31,30, 20262026, we had $723$861 million in cash and cash equivalents as well as $2,975$3,891 million of unused availability under our various credit agreements, compared to $801 million and $4,421 million, respectively, at December 31, 2025. For the threesix months ended MarchJune 31,30, 2026, net cash used for operating activities was $718$620 million, reflecting the Company'sour cash used for working capital of $650 million and rationalization payments of $83$620 million. Net cash used for investing activities was $174$339 million, primarily representing capital expenditures of $175$342 million. Net cash provided by financing activities was $820$1,020 million, primarily due to net borrowings of $807$1,029 million.million, including the issuance of $1,050 million of new senior notes. Refer to "Liquidity and Capital Resources" for additional information.
A combination ofDespite macroeconomic, regulatory and geopolitical uncertaintiesuncertainties, provideswe limited visibility toexpect global tire unit volumes forin the remainderthird quarter of 2026.2026 to be roughly flat versus the third quarter of 2025 due to new assortment wins, stabilization of the consumer replacement market in Americas and normalization of channel inventories. Given our production levels in the firstsecond quarter of 2026, we expect unabsorbed overhead to be approximately $90$70 million in the secondthird quarter of 2026.
We expect our Goodyear Forward plan to deliver approximately $325$70 million of incremental savings in 2026.the third quarter of 2026 compared to the third quarter of 2025.
Based on current spot prices, we expect raw material costs to providebe aunfavorable benefit ofby approximately $100$20 million in the secondthird quarter of 2026 compared to the secondthird quarter of 2025. In the second half of 2026, we expect raw material costs to be a headwind of approximately $200 million compared to the second half of 2025. Natural and synthetic rubber prices and other commodity prices historically have been volatile, and our raw material costs could change based on future price fluctuations and changes in foreign exchange rates. We continue to focus on price and product mix, to substitute lower cost materials where possible, to work to identify additional substitution opportunities, and to reduce the amount of material required in each tire to minimize the impact of higher raw material costs.
We expect inflation, tariffsinflation and other costs will increase approximately $420$95 million in 2026,the netthird quarter of expected2026 IEEPAcompared tariffto refunds.the third quarter of 2025.
Net sales in the firstsecond three monthsquarter of 2026 were $3,881$4,250 million, adecreasing decrease of $372$215 million, or 8.7%,4.8%, from $4,253$4,465 million in the firstsecond three monthsquarter of 2025. Goodyear net loss was $249$204 million, or $0.86$0.71 per share, in the firstsecond three monthsquarter of 2026, compared to Goodyear net income of $115$254 million, or $0.40$0.87 per share, in the firstsecond three monthsquarter of 2025.
Net sales decreased in the firstsecond three monthsquarter of 2026 primarily due to lower global tire volume of $408$177 million and the impacts of our divestitures, including $125$119 million related to the sale of the Chemicalchemical business and $94$87 million related to the sale of the Dunlop brand, excluding the favorable impact of the Dunlop offtake supply agreement of $42$53 million. These decreases were partially offset by favorable price and product mix of $70 million and the positive impact of changes in foreign exchange rates globally of $165 million and favorable price and product mix of $37$57 million.
Worldwide tire unit sales in the firstsecond three monthsquarter of 2026 were 34.036.5 million units, decreasing 4.51.4 million units, or 11.6%,4.0%, from 38.537.9 million units in the firstsecond three monthsquarter of 2025 due to planned rationalization of lower-tier product offerings, weakness in the replacement industry and consumer trends, increased competitiveness globally and planned rationalization of lower-tier product offerings.competitiveness. Replacement tire volume decreased globally by 4.82.3 million units, or 17.8%.8.6%. OE tire volume increased by 0.30.9 million units, or 3.4%,7.0%, driven by Americas and EMEA.
Cost of Goods Sold ("CGS") in the firstsecond three monthsquarter of 2026 was $3,188$3,569 million, decreasing $325$136 million, or 9.3%,3.7%, from $3,513$3,705 million in the firstsecond three monthsquarter of 2025. CGS decreased primarily due to lower tire volume of $321 million, savings related to the Goodyear Forward plan of $95$143 million, impacts related to divestitures, including $89$82 million related to the sale of the Chemicalchemical business and $81$70 million related to the sale of the Dunlop brand, excluding increased offtake supply agreement costs of $36$48 million, lower raw material costs of $88$91 millionmillion, savings related to the Goodyear Forward plan of $81 million, and a decrease in asset write-offs, accelerated depreciation and accelerated lease charges of $27$40 million. These decreases were partially offset by higher conversion costs of $155$165 million, an increase in other costs of $48 million, primarily related to inflation, foreign currency translation of $134$43 million, unfavorable product mix of $38 million, higher tariff costs of $58$32 million, offset by an estimated tariff refund of $46 million,million and athe chargenegative related to an expected settlementimpacts of a priornational year tax matterstrike in oneColombia of our foreign locations of $8$7 million ($8$7 million after-tax and minority).
CGS in the firstsecond three monthsquarter of 2026 and 2025 included pension expense of $3 million and $2$4 million, respectively. CGS in the first three months of 2026 included $2 million of incremental savings from rationalization plans. CGS was 82.1%84.0% of sales in the firstsecond three monthsquarter of 2026, compared to 82.6%83.0% in the firstsecond three monthsquarter of 2025.
SAG in the firstsecond three monthsquarter of 2026 was $668$703 million, increasing $18$11 million, or 2.8%,1.6%, from $650$692 million in the firstsecond three monthsquarter of 2025. SAG increased primarily due to increased advertising expenses of $13 million, foreign currency translation of $28$10 million, increasesand an increase in inflation of $9 million and higher advertisingother costs of $4$10 million.million, primarily related to inflation. These increases were partially offset by savings related to the Goodyear Forward plan of $9$14 million,million benefitsand impacts related to divestituresdivestitures, ofincluding $6$5 million,million primarily duerelated to the sale of the Chemicalchemical business, a decrease in corporate information technology costs of $4 million, and a decrease in asset write-offs, accelerated depreciation and accelerated lease charges of $3 million.business. SAG in the firstsecond three monthsquarter of 2025 also included costs related to the Goodyear Forward plan of $2$3 million ($2 million after-tax and minority) and asset write-offs, accelerated depreciation and accelerated lease charges of $1 million ($1 million after-tax and minority).
SAG in the firstsecond three monthsquarter of 2026 and 2025 included pension expense of $2 million andfor $3each million, respectively. SAG in the first three months of 2026 included $3 million of incremental savings from rationalization plans.period. SAG was 17.2%16.5% of sales in the firstsecond three monthsquarter of 2026, compared to 15.3%15.5% in the firstsecond three monthsquarter of 2025.
We recorded net rationalization charges of $104$29 million ($95$29 million after-tax and minority) in the firstsecond three monthsquarter of 2026 and $81$59 million ($64$55 million after-tax and minority) in the firstsecond three monthsquarter of 2025. Net rationalization charges in the firstsecond three monthsquarter of 2026 primarily related to a plan in EMEA to improvereduce itsheadcount costglobally structure,and the closures of our Fulda and Fürstenwalde, Germany tire manufacturing facilities ("Fulda and Fürstenwalde") and a global SAG plan.. Net rationalization charges in the firstsecond three monthsquarter of 2025 primarily related to the plan to close our manufacturing facility in Kariega, South Africa ("Kariega") in EMEA, the elimination of commercial tire production at our Danville, Virginia tire manufacturing facility ("Danville"), the closures of Fulda and Fürstenwalde, and athe plan to reduce SAG headcount in Americas and Corporate. For further information, refer to Note to the Consolidated Financial Statements No. 3, Costs Associated with Rationalization Programs.
CGS and SAG in the firstsecond three monthsquarter of 20262025 included $16$41 million ($16$37 million after-tax and minority) of asset write-offs, accelerated depreciation and accelerated lease charges, primarily related to the closures of Fulda and Fürstenwalde and the announced closureelimination of thecommercial Talltire Timbersproduction mold plant in Americas. CGS and SAG in the first three months of 2025 included $46 million ($39 million after-tax and minority) of asset write offs, accelerated depreciation and accelerated lease charges, primarily related to Fulda, Fürstenwalde andat Danville.
Interest expense in the firstsecond three monthsquarter of 2026 was $95$105 million, decreasing $20$7 million, or 17.4%,6.3%, from $115$112 million in the firstsecond three monthsquarter of 2025. The average interest rate was 5.76%5.93% in the firstsecond three monthsquarter of 2026 compared to 5.82%5.65% in the firstsecond three monthsquarter of 2025. The average debt balance was $6,592$7,088 million in the firstsecond three monthsquarter of 2026 compared to $7,910$7,936 million in the firstsecond three monthsquarter of 2025.
The firstsecond three monthsquarter of 2026 includeincluded net gains on asset sales of $3$17 million ($3$14 million after-tax and minority), compared to net gains on asset and other sales of $262 million$439 ($237$393 million after-tax and minority) in the firstsecond three monthsquarter of 2025, primarily due to the gain of $260$385 million ($367 million after-tax and minority) on the sale of the OTRDunlop tirebrand business.and other asset sales of $54 million ($26 million after-tax and minority).
Other (Income) Expense in the firstsecond three monthsquarter of 2026 was $9$22 million of expense, compared to $25$31 million of expense in the firstsecond three monthsquarter of 2025. The decrease in Other (Income) Expense was primarily due to an increase in royalty and other income of $10$4 million, a decrease in non-service related pension and other postretirement benefits cost of $4 million, a decrease in net foreign currency exchange losses of $3 million and a decrease in financing fees and financial instruments expense of $2 million. These decreases were partially offset by an increase in general and product liability expense from discontinued products of $6 million. The firstsecond three monthsquarter of 2025 also included transaction and other costs of $5$2 million ($3$1 million after-tax and minority), primarily related to the sale of the Dunlopchemical brand and a pension settlement charge of $4 million ($3 million after-tax and minority).business.
ForIn the firstsecond three monthsquarter of 2026, we recorded income tax expense of $66$46 million on a loss before income taxes of $180$161 million. Income tax expense for the three months ended MarchJune 31,30, 2026 includesincluded net discrete tax expense of $21$5 million ($21$5 million after minority interest), primarily related to an expected settlement of a prior year tax matter in one of our foreign locations.. In the firstsecond three monthsquarter of 2025, we recorded income tax expense of $13$24 million on income before income taxes of $131$305 million. Income tax expense for the three months ended June 30, 2025 included a net discrete tax benefit of $4 million ($4 million after minority interest).
We record taxes based on overall estimated annual effective tax rates. The difference between our effective tax rate and the U.S. statutory rate of 21% for the three months ended MarchJune 31,30, 2026 primarily relatedrelates to losses in the U.S. and foreign jurisdictions in which no tax benefits wereare recorded and the discrete item noted above. The difference between our effective tax rate and the U.S. statutory rate of 21% for the three months ended MarchJune 31,30, 2025 was favorably impacted by gains recognized as a result of the sale of the OTRDunlop tirebrand, businesswhich included certain associated intellectual property and other intangible assets, in foreign jurisdictions where no taxes are recorded, net of losses in foreign jurisdictions in which no tax benefits are recorded.recorded, and the discrete item noted above.
For further information regarding income taxes and the realizability of our deferred tax assets, refer to Note to the Consolidated Financial Statements No. 5, Income Taxes.
There was $3 million of minority shareholders’ net loss in the second quarter of 2026, compared to $27 million of net income in the second quarter of 2025, primarily related to the sale of property in Asia Pacific.
Net sales in the first six months of 2026 were $8,131 million, a decrease of $587 million, or 6.7%, from $8,718 million in the first six months of 2025. Goodyear net loss was $453 million, or $1.57 per share, in the first six months of 2026, compared to Goodyear net income of $369 million, or $1.27 per share, in the first six months of 2025.
Net sales decreased in the first six months of 2026 primarily due to lower tire volume of $585 million and the impacts of our divestitures, including $244 million related to the sale of the chemical business and $181 million related to the sale of the Dunlop brand, excluding the favorable impact of the Dunlop offtake supply agreement of $95 million. These decreases were partially offset by the positive impact of changes in foreign exchange rates of $222 million and favorable price and product mix of $114 million.
Worldwide tire unit sales in the first six months of 2026 were 70.5 million units, decreasing 5.9 million units, or 7.8%, from 76.4 million units in the first six months of 2025 due to weakness in the replacement industry, increased competitiveness and planned rationalization of lower-tier product offerings. Replacement tire volume decreased globally by 7.1 million units, or 13.3%. OE tire volume increased by 1.2 million units, or 5.2%, driven by Americas and EMEA.
CGS in the first six months of 2026 was $6,757 million, decreasing $461 million, or 6.4%, from $7,218 million in the first six months of 2025. CGS decreased primarily due to lower tire volume of $464 million, impacts related to divestitures, including $171 million related to the sale of the chemical business and $151 million related to the sale of the Dunlop brand, excluding increased offtake supply agreement costs of $84 million, lower raw material costs of $179 million, savings related to the Goodyear Forward plan of $176 million and a decrease in asset write-offs, accelerated depreciation and accelerated lease charges of $68 million. These decreases were partially offset by higher conversion costs of $320 million, foreign currency translation of $177 million, unfavorable product mix of $67 million, higher tariff costs of $90 million, offset by an estimated tariff refund of $46 million, a charge related to an expected settlement of a prior year tax matter in one of our foreign locations of $8 million ($8 million after-tax and minority) and the negative impacts of a national strike in Colombia of $7 million ($7 million after-tax and minority).
CGS in the first six months of 2026 and 2025 included pension expense of $6 million for each period. CGS was 83.1% of sales in the first six months of 2026, compared to 82.8% in the first six months of 2025.
SAG in the first six months of 2026 was $1,371 million, increasing $29 million, or 2.2%, from $1,342 million in the first six months of 2025. SAG increased primarily due to foreign currency translation of $38 million, an increase in other costs of $30 million, primarily related to inflation, and higher advertising costs of $3 million. These increases were partially offset by savings related to the Goodyear Forward plan of $23 million, impacts related to divestitures, including $11 million related to the sale of the chemical business, and a decrease in asset write-offs, accelerated depreciation and accelerated lease charges of $3 million. SAG in the first six months of 2025 also included costs related to the Goodyear Forward plan of $5 million ($4 million after-tax and minority).
SAG in the first six months of 2026 and 2025 included pension expense of $4 million and $5 million, respectively. SAG was 16.9% of sales in the first six months of 2026, compared to 15.4% in the first six months of 2025.
We recorded net rationalization charges of $133 million ($124 million after-tax and minority) in the first six months of 2026 and $140 million ($119 million after-tax and minority) in the first six months of 2025. Net rationalization charges in the first six months of 2026 primarily related to a plan in EMEA to improve its cost structure, a plan to reduce headcount globally, the closure of the Tall Timbers mold plant in Findlay, Ohio ("Tall Timbers"), a global SAG plan and the closures of Fulda and Fürstenwalde. Net rationalization charges in the first six months of 2025 primarily related to the closure of Kariega, the elimination of commercial tire production at Danville, the closures of Fulda and Fürstenwalde, and the plan to reduce SAG headcount in Americas and Corporate. For further information, refer to Note to the Consolidated Financial Statements No. 3, Costs Associated with Rationalization Programs.
CGS and SAG in the first six months of 2026 included $16 million ($16 million after-tax and minority) of asset write-offs, accelerated depreciation and accelerated lease charges, primarily related to the closures of Fulda, Fürstenwalde and Tall Timbers. CGS and SAG in the first six months of 2025 included $87 million ($77 million after-tax and minority) of asset write offs, accelerated depreciation and accelerated lease charges, primarily related to Fulda, Fürstenwalde and Danville.
Interest expense in the first six months of 2026 was $200 million, decreasing $27 million, or 11.9%, from $227 million in the first six months of 2025. The average interest rate was 5.85% in the first six months of 2026 compared to 5.73% in the first six months of 2025. The average debt balance was $6,840 million in the first six months of 2026 compared to $7,923 million in the first six months of 2025.
The first six months of 2026 include net gains on asset and other sales of $20 million ($17 million after-tax and minority), compared to net gains on asset and other sales of $701 million ($630 million after-tax and minority) in the first six months of 2025, primarily due to the gain of $385 million ($367 million after-tax and minority) on the sale of Dunlop brand, the gain of $260 million ($236 million after-tax and minority) on the sale of the OTR tire business and other asset sales of $56 million ($27 million after-tax and minority).
Other (Income) Expense in the first six months of 2026 was $31 million of expense, compared to $56 million of expense in the first six months of 2025. The decrease in Other (Income) Expense was primarily due to an increase in royalty and other income of $14 million and a decrease in non-service related pension and other postretirement benefits cost of $11 million, including a pension settlement charge of $4 million ($3 million after-tax and minority) in the first six months of 2025. These decreases were partially offset by an increase in general and product liability expense from discontinued products of $5 million. The first six months of 2025 included transaction costs of $6 million ($4 million after-tax and minority), primarily related to the sale of the chemical business.
For the first six months of 2026, we recorded income tax expense of $112 million on a loss before income taxes of $341 million. Income tax expense for the six months ended June 30, 2026 included net discrete tax expense of $25 million ($25 million after minority interest), primarily related to an expected settlement of a prior year tax matter in one of our foreign locations. In the first six months of 2025, we recorded income tax expense of $37 million on income before income taxes of $436 million. Income tax expense for the six months ended June 30, 2025 included a net discrete tax benefit of $5 million ($5 million after minority interest).
We record taxes based on overall estimated annual effective tax rates. The difference between our effective tax rate and the U.S. statutory rate of 21% for the six months ended June 30, 2026 primarily relates to losses in the U.S. and foreign jurisdictions in which no tax benefits are recorded and the discrete item noted above. The difference between our effective tax rate and the U.S. statutory rate of 21% for the six months ended June 30, 2025 was favorably impacted by gains recognized as a result of the sales of the OTR tire business and the Dunlop brand, which included certain associated intellectual property and other intangible assets, in jurisdictions where no taxes are recorded, net of losses in foreign jurisdictions in which no tax benefits are recorded, and the discrete item noted above.
At MarchJune 31,30, 2026 and December 31, 2025, we had approximately $1.5$1.6 billion and $1.4 billion, respectively, of U.S. federal, state and local net deferred tax assets and related valuation allowances totaling $1.5$1.6 billion and $1.4 billion, respectively. At bothJune March 31,30, 2026 and December 31, 2025, we also had foreign net deferred tax assets of approximately $1.6 billion and $1.5 billionbillion, respectively, and related valuation allowances of approximately $1.3 billion. Our foreign valuation allowances include a $1.1 billion full valuation allowance on our net deferred tax assets in Luxembourg. Our losses in the U.S. and 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 deferred tax assets. Each reporting period, we assess available positive and negative evidence and estimate if sufficient future taxable income will be generated to utilize these existing deferred tax assets. We do not believe that sufficient positive evidence required to release valuation allowances on our U.S. and foreign deferred tax assets will exist within the next twelve months.
Minority shareholders’ net income was $3zero in the first six months of 2026, compared to $30 million in both the first threesix months of 20262025, andprimarily 2025.related to the sale of property in Asia Pacific.
Total segment operating income for the firstsecond quarter of 2026 was $95$36 million, a decrease of $100$123 million, or 51.3%,77.4%, from $195$159 million in the firstsecond quarter of 2025. Total segment operating margin in the firstsecond quarter of 2026 was 2.4%,0.8%, compared to 4.6%3.6% in the second quarter of 2025. Total segment operating income for the first six months of 2026 was $131 million, a decrease of $223 million, or 63.0%, from $354 million in the first quartersix months of 2025. Total segment operating margin in the first six months of 2026 was 1.6%, compared to 4.1% in the first six months of 2025.
Americas unit sales in the firstsecond three monthsquarter of 2026 decreased 3.11.7 million units, or 17.0%,8.7%, to 15.317.4 million units. Replacement tire volume decreased 3.42.1 million units, or 23.2%,13.0%, primarily due to planned rationalization of lower-tier product offerings, weakness in the replacement industry and consumer trends, as well as increased competitiveness and planned rationalization of lower-tier product offerings.competitiveness. OE tire volume increased 0.30.4 million units, or 8.2%,8.7%, primarily in the U.S.U.S., Brazil and Brazil.Canada.
Net sales in the firstsecond three monthsquarter of 2026 were $2,063$2,382 million, decreasing $439$280 million, or 17.5%,10.5%, from $2,502$2,662 million in the firstsecond three monthsquarter of 2025. The decrease in net sales was primarily due to lower tire volume of $341$186 million and the impact of the sale of the Chemicalchemical business of $125$119 million. These decreases were partially offset by the positive impact of changes in foreign exchange rates of $40$32 million, primarily related to the strengthening of the Brazilian real and Mexican peso.
Operating incomeloss in the firstsecond three monthsquarter of 2026 was $37$10 million, decreasing $118$151 million, or 76.1%,107.1%, from $155operating income of $141 million in the firstsecond three monthsquarter of 2025. The decrease in operating income was due to higher conversion costs of $101$110 million, driven by the effect of lower tire production on fixed cost absorption and inflation, lower tire volume of $75 million, higher tariff costs of $58 million, offset by an estimated tariff refund of $46$37 million, the impact of the sale of the Chemicalchemical business of $31$33 million, higher tariff costs of $32 million, unfavorable price and product mix of $25$26 million, and higher SAG of $18$12 million, primarily driven by higher advertising costs.million. These decreases were partially offset by lower raw material costs of $60 million and a $75$54 million benefit related to the Goodyear Forward plan and lower raw material costs of $63 million.plan.
Operating incomeloss in the firstsecond three monthsquarter of 2026 excluded net gains on asset sales of $14 million and net rationalization charges of $11$3 millionmillion. andOperating income in the second quarter of 2025 excluded asset write-offs, accelerated depreciation and accelerated lease costs of $7$14 million.million Operating income in the first three months of 2025 excludedand net rationalization charges of $62 million, asset write-offs, accelerated depreciation and accelerated lease costs of $28 million, and net gains on asset sales of $1$10 million.
Americas unit sales in the first six months of 2026 decreased 4.8 million units, or 12.8%, to 32.7 million units. Replacement tire volume decreased 5.5 million units, or 18.0%, primarily due to weakness in the replacement industry, increased competitiveness and planned rationalization of lower-tier product offerings. OE tire volume increased 0.7 million units, or 8.5%, primarily in the U.S. and Brazil.
Net sales in the first six months of 2026 were $4,445 million, decreasing $719 million, or 13.9%, from $5,164 million in the first six months of 2025. The decrease in net sales was primarily due to lower tire volume of $527 million and the impact of the sale of the chemical business of $244 million. These decreases were partially offset by the positive impact of changes in foreign exchange rates of $72 million, primarily related to the strengthening of the Brazilian real and Mexican peso.
Operating income in the first six months of 2026 was $27 million, decreasing $269 million, or 90.9%, from $296 million in the first six months of 2025. The decrease in operating income was due to higher conversion costs of $211 million, driven by the effect of lower tire production on fixed cost absorption and inflation, lower tire volume of $112 million, the impact of the sale of the chemical business of $64 million, unfavorable price and product mix of $51 million, higher tariff costs of $90 million, offset by an estimated tariff refund of $46 million, and higher SAG of $30 million. These decreases were partially offset by a $129 million benefit related to the Goodyear Forward plan and lower raw material costs of $123 million.
Operating income in the first six months of 2026 excluded net gains on asset sales of $14 million, net rationalization charges of $14 million, and asset write-offs, accelerated depreciation and accelerated lease costs of $7 million. Operating income in the first six months of 2025 excluded net rationalization charges of $72 million, asset write-offs, accelerated depreciation and accelerated lease costs of $42 million, and net gains on asset sales of $1 million.
EMEA unit sales in the firstsecond three monthsquarter of 2026 decreased 1.10.1 million units, or 8.5%,2.1%, to 11.2 million units. Replacement tire volume decreased 1.30.5 million units, or 15.2%,7.1%, primarily in our consumer business, reflecting market softness, increased competition and planned rationalization of lower-tier product offerings. OE tire volume increased 0.20.4 million units, or 8.1%,8.3%, primarily in our consumer business, reflecting share gains driven by new fitments.
Net sales in the firstsecond three monthsquarter of 2026 were $1,363$1,372 million, increasing $86$28 million, or 6.7%,2.1%, from $1,277$1,344 million in the firstsecond three monthsquarter of 2025. The increase in net sales was primarily driven by improvements in price and product mix of $49 million and the positive impact of changes in foreign exchange rates of $122$30 million, driven by a stronger euro, British pound and Polish zloty, partially offset by a weaker Turkish lira, improvements in price and product mix of $55 million, and higher sales in the other tire-related businesses of $11 million, primarily due to growth in fleet solutions.lira. These increases were partially offset by the impact of the sale of the Dunlop brand of $93$87 million, excluding the favorable impact of the offtake supply agreement of $42$53 million, and lower tire volume of $51$14 million and lower sales in the other tire-related businesses of $2 million.
Operating incomeloss in the firstsecond three monthsquarter of 2026 was $1$17 million, increasingdecreasing $6$8 million from an operating loss of $5$25 million in the firstsecond three monthsquarter of 2025. The changedecrease in operating income (loss) was primarily due to favorable price and product mix of $36$46 million, benefits related to the Goodyear Forward plan of $26$35 millionmillion, and lower raw material costs of $16$32 million. These increases were partially offset by higher conversion costs of $51$54 million, higher SAG of $19 million, an increase in other costs of $14 million, primarily related to higher transportation costs, lower earnings related to the sale of the Dunlop brand of $13$17 million, excluding the favorable impact of the offtake supply agreement of $6$5 million, lower earnings in other tire-related businesses of $4 million, and lower tire volume of $8 million, foreign currency translation of $4 million, and higher administrative and professional expenses of $2 million.
Operating loss in the second quarter of 2026 excluded net rationalization charges of $23 million and net gains on asset sales of $2 million. Operating loss in the second quarter of 2025 excluded net rationalization charges of $43 million, asset write-offs, accelerated depreciation and accelerated lease costs of $26 million and a net loss on asset sales of $1 million.
GT insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-01 | Van Kesteren Jan-Piet |
Shares withheld for tax | 6,324 | $5.99 | $37.9K |
| 2026-09-01 | Van Kesteren Jan-Piet |
Option exercise | 12,775 | — | — |
| 2026-07-01 | Gray Nicole |
Option exercise | 5,114 | — | — |
| 2026-07-01 | Gray Nicole |
Shares withheld for tax | 2,281 | $6.46 | $14.7K |
| 2026-05-15 | Stewart Mark Wynn |
Shares withheld for tax | 163,903 | $5.64 | $924.4K |
| 2026-05-15 | Stewart Mark Wynn |
Option exercise | 355,537 | — | — |
| 2026-05-15 | Boucharlat Gregory |
Shares withheld for tax | 2,111 | $5.64 | $11.9K |
| 2026-05-15 | Boucharlat Gregory |
Option exercise | 3,170 | — | — |
| 2026-04-13 | Firestone James A |
Option exercise | 19,047 | — | — |
| 2026-04-13 | Siu Hera K |
Option exercise | 9,523 | — | — |
| 2026-04-13 | Geissler Werner |
Option exercise | 19,047 | — | — |
| 2026-04-13 | Geissler Werner |
Shares withheld for tax | 4,572 | $7.03 | $32.1K |
| 2026-04-13 | Lewis Karla R |
Option exercise | 19,047 | — | — |
Well-known investors holding GT (13F)
None of the 59 investors we track reported a position in their latest 13F.