Core Insights - The 2024 Global Tire "75 Strong" ranking shows stability in the top positions, with Michelin leading for the sixth consecutive year, followed closely by Bridgestone [2][3] - The tire industry is experiencing a "East rises, West falls" trend, with significant sales growth in Asia, particularly China, while North American and European markets are declining [3][4] - Profitability remains a concern, with a divergence in performance among companies, as the average pre-tax operating profit margin is 10.3%, but net profit margins are under pressure [5][6] Ranking Changes - The top six companies in the 2024 ranking remain unchanged, with Michelin at $25.647 billion, Bridgestone at $24.77 billion, and Goodyear at $17.447 billion [2] - The ranking includes 39 Chinese companies, 9 from India, and a total of 75 companies from various countries, indicating China's significant role in the global tire industry [2] Sales Performance - Global tire sales revenue for 2024 is approximately $181.96 billion, reflecting a modest 8% increase from 2023 [3] - The top six companies experienced collective sales declines, with Michelin down 5.95% and Bridgestone down 5.1%, while companies ranked seventh to tenth saw positive growth [3][4] Regional Distribution - Sales growth is primarily concentrated in Asian countries, with 25 out of 39 Chinese companies reporting increases, contrasting with declines in North America and Europe [4] - The top three companies' combined sales account for 37.3% of global sales, indicating a decrease in industry concentration [4] Profitability Trends - The tire industry shows a mixed profitability landscape, with an average net profit margin of 5%, and 8 out of 15 companies reporting declines in net profit [5][6] - Major companies like Michelin and Bridgestone reported significant drops in net profit, highlighting ongoing challenges in the industry [6]

Group 1 - The Goodyear Tire & Rubber Company's second quarter results indicate that tariffs have complicated the tire industry, which was expected to be protected [1] - Retailers have stockpiled low-cost tires, leading to a 5% decline in volumes [1] - Operating margins have been affected due to the complexities introduced by tariffs [1]

Group 1 - Goodyear has partnered with Ice Cube to promote his "Truth to Power" tour, featuring the Goodyear Blimp at various concert venues across the U.S. [2][3] - The partnership was officially launched at the BIG3 Championship in Orlando, showcasing the blimp as part of the event [1]. - Goodyear is recognized as one of the world's largest tire companies, employing approximately 68,000 people and operating 53 facilities in 20 countries [4]. Group 2 - The collaboration aims to bring Ice Cube's music history and cultural impact to life, particularly referencing his iconic song that mentions the Goodyear Blimp [3]. - Concertgoers in cities like Denver, San Diego, Los Angeles, and Cleveland will have unique experiences involving the Goodyear Blimp during the tour [2]. - Goodyear's Innovation Centers in Akron, Ohio, and Colmar-Berg, Luxembourg, focus on developing advanced products and services for the tire industry [4].

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"Adam's story continues to remind us that professional truck drivers are the unsung heroes of our roads," said Joe Burke, vice president, Goodyear North America Commercial. "His quick and professional response to this unexpected situation demonstrates the integrity, dedication and compassion that define what's the best of our industry." J.B. Hunt truck driver, whose vigilance and swift action saved a person's life, joins long list of commercial truck drivers honored for courageous acts in service of others ...

Core Insights - Goodyear Tire & Rubber Company announced the appointment of Jan-Piet van Kesteren as Managing Director EMEA & Chief Sales Officer EMEA Consumer, effective September 1 [1][2] - Van Kesteren will lead the Consumer business across the EMEA region, focusing on sales execution, profitable growth, and alignment with the company's global strategy [3] - His extensive experience includes over 20 years in international commercial leadership, with previous roles at AkzoNobel and Unilever [4] Company Overview - Goodyear is one of the largest tire companies globally, employing approximately 68,000 people and operating 53 manufacturing facilities in 20 countries [5] - The company has two Innovation Centers located in Akron, Ohio, and Colmar-Berg, Luxembourg, dedicated to developing advanced products and services [5]

Core Insights - Goodyear Tire reported an adjusted loss per share of 17 cents in Q2 2025, missing the Zacks Consensus Estimate of earnings of 37 cents, and down from earnings of 19 cents per share in the same quarter last year [1][8] - The company generated net revenues of $4.47 billion, a decline of 2.2% year-over-year, and below the Zacks Consensus Estimate of $4.53 billion [1][8] Segment Performance - The Americas segment generated revenues of $2.67 billion, down 1.3% year-over-year, with an operating income of $141 million, a decrease of 41.5% from the previous year due to higher raw material costs and inflation [3] - Revenues in the Europe, Middle East and Africa segment were $1.34 billion, up 5.1% year-over-year, but the segment reported an operating loss of $25 million compared to an operating income of $30 million in the prior year, primarily due to increased raw material costs [4] - The Asia Pacific segment saw revenues fall 22.7% year-over-year to $459 million, with an operating profit of $43 million, down 31.8% from the previous year, attributed to the divestiture of the OTR tire business [5] Financial Position - Selling, general & administrative expenses decreased to $692 million from $731 million in the prior year [6] - Cash and cash equivalents were $785 million as of June 30, 2025, down from $810 million at the end of 2024 [6] - Long-term debt and finance leases increased to $6.56 billion as of June 30, 2025, from $6.4 billion at the end of 2024 [6] - Capital expenditure in the first half of 2025 was $466 million, down from $634 million in the same period of 2024 [6] Revised Outlook for 2025 - Goodyear expects capital expenditures to be $900 million, reduced from a previous estimate of $950 million [7] - Interest expense is projected to remain at $450 million, while depreciation and amortization are expected to be approximately $925 million [7]

Core Viewpoint - Goodyear Tire & Rubber Co reported disappointing second-quarter results, with a loss of $0.17 per share, missing analyst expectations of a profit of $0.07 per share, primarily due to the impact of tariffs and global trade disruptions [1][2][8]. Financial Performance - The company's revenue for the second quarter was $4.46 billion, slightly below analyst estimates of $4.47 billion [2]. - This marks the second consecutive quarter where Goodyear has missed earnings per share estimates and revenue expectations, having missed revenue estimates in nine of the last ten quarters [8]. Impact of Tariffs - CEO Mark Stewart indicated that the second quarter was challenging due to industry disruptions from global trade shifts, including a surge of low-cost imports [2]. - The term "tariff" was mentioned 30 times during the earnings call, highlighting its significance in the company's current challenges [3]. - Goodyear's annualized tariff costs have risen to approximately $350 million, an increase from previous estimates, affecting operations in Brazil and Vietnam [6]. Strategic Responses - The company has increased pricing in the U.S. and Canada in response to tariffs [3]. - Goodyear is implementing a transformation plan called Goodyear Forward, which includes cost-cutting measures and staffing reductions, although the impact of tariffs has overshadowed these efforts [4][5]. - Executives expect tariffs and inflation to pose headwinds amounting to hundreds of millions of dollars in the upcoming quarters [5]. Market Outlook - Despite the challenges posed by tariffs, both Stewart and CFO Christina Zamarro expressed optimism about stabilizing conditions in the coming quarters [7]. - Goodyear's stock has seen a decline of 17% to $8.53, with a year-to-date decrease of 2.6% in 2025 [9].

PART I. FINANCIAL INFORMATION This section provides a detailed overview of the company's financial performance, including statements, notes, and management's discussion and analysis for the reporting period [ITEM 1. FINANCIAL STATEMENTS](index=3&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The company reported a significant increase in net income for Q2 and H1 2025, primarily driven by substantial gains from asset sales, while net sales saw a slight decline due to lower global tire volume and divestitures [Note 2. Divestitures](index=11&type=section&id=Note%202.%20Divestitures) The company completed major divestitures, including the OTR tire business for $905 million and Dunlop brand rights for $526 million, generating significant pre-tax gains as part of its transformation plan - Completed the sale of the OTR tire business to Yokohama for a purchase price of **$905 million**, recording a pre-tax gain of **$260 million** in Q1 2025[42](index=42&type=chunk)[43](index=43&type=chunk) - Completed the sale of Dunlop brand rights in Europe, North America, and Oceania to SRI for a purchase price of **$526 million**, recognizing a pre-tax gain of **$385 million** in Q2 2025[45](index=45&type=chunk)[46](index=46&type=chunk) - Entered into an agreement to sell the polymer chemicals business for approximately **$650 million** in cash, subject to customary closing conditions[47](index=47&type=chunk) Net Gains on Asset Sales | Period | Net Gains on Asset Sales | | :--- | :--- | | **Three Months Ended June 30, 2025** | $439 million | | **Three Months Ended June 30, 2024** | $96 million | | **Six Months Ended June 30, 2025** | $701 million | | **Six Months Ended June 30, 2024** | $94 million | [Note 4. Costs Associated with Rationalization Programs](index=15&type=section&id=Note%204.%20Costs%20Associated%20with%20Rationalization%20Programs) As part of the Goodyear Forward plan, the company is implementing rationalization actions, including facility closures and production cessation, resulting in significantly higher charges in 2025 Total Net Rationalization Charges | Period | Total Net Rationalization Charges | | :--- | :--- | | **Three Months Ended June 30, 2025** | $59 million | | **Three Months Ended June 30, 2024** | $19 million | | **Six Months Ended June 30, 2025** | $140 million | | **Six Months Ended June 30, 2024** | $41 million | - Approved a plan to close the manufacturing facility in Kariega, South Africa, expecting total charges of **$100 million to $110 million** and affecting approximately **900 jobs**[54](index=54&type=chunk) - Approved a plan to cease commercial tire production at the Danville, Virginia facility, expecting total pre-tax charges of **$130 million to $140 million** and affecting approximately **850 jobs**[55](index=55&type=chunk) [Note 6. Income Taxes](index=17&type=section&id=Note%206.%20Income%20Taxes) The company's H1 2025 effective tax rate was favorably impacted by tax-free gains from asset sales, while it maintains significant U.S. deferred tax assets but faces an IRS challenge on a 2021 intercompany transaction - The effective tax rate for H1 2025 was favorably impacted by gains from the OTR and Dunlop sales in jurisdictions with no tax, offset by losses in foreign jurisdictions where no tax benefits are recorded[71](index=71&type=chunk) - As of June 30, 2025, the company had U.S. net deferred tax assets of approximately **$1.4 billion** and believes they will be fully utilized, supported by forecasts of future profitability and tax planning strategies[75](index=75&type=chunk)[77](index=77&type=chunk) - The IRS issued a Notice of Proposed Adjustment (NOPA) in Q2 2025, proposing to disallow **$1.5 billion** in income recognition from a 2021 intercompany IP sale, which Goodyear is challenging[81](index=81&type=chunk)[82](index=82&type=chunk) [Note 8. Business Segments](index=20&type=section&id=Note%208.%20Business%20Segments) Total segment operating income decreased significantly in Q2 2025, with all segments experiencing declines due to higher costs, lower volumes, and divestiture impacts, partially offset by pricing and transformation plan benefits Segment Operating Income (Loss) | Segment Operating Income (Loss) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Americas** | $141 million | $241 million | | **Europe, Middle East and Africa** | ($25 million) | $30 million | | **Asia Pacific** | $43 million | $63 million | | **Total Segment Operating Income** | $159 million | $334 million | Net Sales by Segment | Net Sales by Segment | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Americas** | $2,662 million | $2,697 million | | **Europe, Middle East and Africa** | $1,344 million | $1,279 million | | **Asia Pacific** | $459 million | $594 million | | **Total Net Sales** | $4,465 million | $4,570 million | [Note 9. Financing Arrangements and Derivative Financial Instruments](index=25&type=section&id=Note%209.%20Financing%20Arrangements%20and%20Derivative%20Financial%20Instruments) Goodyear actively managed its debt profile, issuing $500 million in new senior notes, redeeming existing notes, and extending its U.S. first lien revolving credit facility to 2030, maintaining $3.2 billion in unused credit - On June 3, 2025, the company issued **$500 million** of 6.625% senior notes due 2030[98](index=98&type=chunk) - On June 30, 2025, redeemed **$400 million** of its 5% senior notes due 2026, with the remaining **$500 million** redeemed on July 3, 2025[101](index=101&type=chunk) - On May 19, 2025, the company amended and restated its U.S. first lien revolving credit facility, extending the maturity to May 19, 2030[102](index=102&type=chunk) Key Financial Metrics | Financial Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $4,465 million | $4,570 million | $8,718 million | $9,107 million | | **Net Income** | $281 million | $73 million | $399 million | $3 million | | **Goodyear Net Income** | $254 million | $79 million | $369 million | $10 million | | **Diluted EPS** | $0.87 | $0.28 | $1.27 | $0.04 | Balance Sheet Summary | Balance Sheet Item | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $8,885 million | $7,589 million | | **Total Assets** | $22,259 million | $20,921 million | | **Total Current Liabilities** | $7,701 million | $7,377 million | | **Total Liabilities** | $16,965 million | $16,098 million | | **Total Shareholders' Equity** | $5,294 million | $4,823 million | Cash Flow Summary | Cash Flow Item | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | **Cash Flows from Operating Activities** | ($718 million) | ($518 million) | | **Cash Flows from Investing Activities** | $837 million | ($488 million) | | **Cash Flows from Financing Activities** | ($107 million) | $896 million | - The company identified and corrected non-material errors in previously issued financial statements (2022-2024) related to the currency remeasurement of its Turkish operations, primarily impacting Cost of Goods Sold, Other Expense, and Net Income[33](index=33&type=chunk)[34](index=34&type=chunk)[168](index=168&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=41&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management attributes the Q2 2025 net sales decrease to lower tire volume and divestitures, while net income significantly increased due to asset sale gains, despite a decline in segment operating income from higher costs - The Goodyear Forward transformation plan is intended to optimize the product portfolio, expand margins, and reduce leverage, providing **$395 million** in benefits to segment operating income during H1 2025[177](index=177&type=chunk) - Q2 2025 net income was **$254 million**, up from **$79 million** in Q2 2024, primarily due to a gain on the sale of the Dunlop brand, partially offset by lower segment operating income and higher rationalization charges[186](index=186&type=chunk) - Total segment operating income for Q2 2025 decreased by **$175 million** to **$159 million**, primarily due to higher raw material costs (**$174 million**), increased conversion costs (**$90 million**), and lower tire volume (**$37 million**), partially offset by Goodyear Forward benefits (**$195 million**) and price/mix improvements (**$91 million**)[187](index=187&type=chunk) - For the full year 2025, the company expects capital expenditures of approximately **$900 million** and rationalization payments of about **$400 million**, with working capital expected to be neutral[198](index=198&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) Consolidated net sales for Q2 2025 decreased 2.3% to $4.5 billion due to a 5.3% decline in worldwide tire unit sales, while Cost of Goods Sold increased as a percentage of sales, and SAG expenses decreased Key Operating Metrics | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | **Net Sales** | $4,465 million | $4,570 million | -2.3% | | **Tire Unit Sales** | 37.9 million | 40.1 million | -5.3% | | **Cost of Goods Sold** | $3,705 million | $3,627 million | +2.2% | | **SAG** | $692 million | $731 million | -5.3% | - The decrease in net sales was primarily due to lower global tire volume (**$157 million** impact) and the sale of the OTR business (**$149 million** impact), partially offset by price/mix improvements (**$93 million**)[202](index=202&type=chunk) [Segment Information](index=48&type=section&id=Segment%20Information) In Q2 2025, all segments experienced a decline in operating income, with Americas, EMEA, and Asia Pacific impacted by higher raw material and conversion costs, lower volumes, and divestitures - **Americas:** Operating income decreased by **$100 million**, driven by higher raw material costs (**$108 million**) and conversion costs (**$82 million**), partially offset by **$149 million** in benefits from the Goodyear Forward plan[247](index=247&type=chunk) - **EMEA:** Swung to a **$25 million** operating loss, a decrease of **$55 million**, primarily due to higher raw material costs (**$48 million**) and a **$43 million** net benefit from insurance recoveries in the prior year that did not repeat[257](index=257&type=chunk) - **Asia Pacific:** Operating income decreased by **$20 million**, mainly due to a **$21 million** negative impact from the OTR and Dunlop divestitures and a **$19 million** impact from lower tire volume[266](index=266&type=chunk) [Liquidity and Capital Resources](index=51&type=section&id=Liquidity%20and%20Capital%20Resources) As of June 30, 2025, the company maintained $785 million in cash and $3.2 billion in unused credit, with net cash from investing activities offsetting negative operating cash flow due to significant asset dispositions - At June 30, 2025, the company had **$785 million** in cash and cash equivalents and **$3,158 million** of unused availability under its credit agreements[193](index=193&type=chunk)[275](index=275&type=chunk) - Net cash used in operating activities for H1 2025 was **$718 million**, while net cash provided by investing activities was **$837 million**, primarily from asset sales[274](index=274&type=chunk) - The company was in compliance with all material debt covenants as of June 30, 2025[308](index=308&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=62&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to commodity price risk for raw materials, manages interest rate risk with approximately 30% variable-rate debt, and uses derivative contracts to mitigate foreign currency risk - The company's primary raw material cost exposures are to natural rubber, synthetic rubber, and other petrochemical-based commodities, which it does not currently hedge[334](index=334&type=chunk) - As of June 30, 2025, approximately **30%** of the company's debt was at variable interest rates, averaging **6.42%**[335](index=335&type=chunk) - The company uses foreign currency contracts to manage exposure from trade, intercompany loans, and royalty agreements, where a hypothetical **10%** adverse change in exchange rates would result in a pro forma decrease in the fair value of these contracts by **$217 million**[336](index=336&type=chunk)[337](index=337&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=63&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation, the principal executive and financial officers concluded that the company's disclosure controls and procedures were effective as of June 30, 2025[340](index=340&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, internal controls[341](index=341&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, and other miscellaneous information not included in the financial statements [ITEM 1. LEGAL PROCEEDINGS](index=64&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) The company remains a defendant in numerous asbestos-related lawsuits, with 32,860 claims pending as of June 30, 2025, and $7 million expended on defense and resolution in H1 2025 Asbestos Claims Activity | Asbestos Claims Activity | Six Months Ended June 30, 2025 | | :--- | :--- | | **Pending Claims (Start of Period)** | 35,400 | | **New Claims Filed** | 360 | | **Claims Settled/Dismissed** | (2,900) | | **Pending Claims (End of Period)** | 32,860 | | **Payments (by company & insurers)** | $7 million | [ITEM 1A. RISK FACTORS](index=64&type=section&id=ITEM%201A.%20RISK%20FACTORS) The report refers to the comprehensive discussion of potential risks detailed in the company's 2024 Form 10-K - For a discussion of risk factors, the report directs readers to "Item 1A. Risk Factors" in the company's 2024 Form 10-K[346](index=346&type=chunk) [ITEM 5. OTHER INFORMATION](index=64&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No directors or officers reported any changes to their Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the second quarter of 2025 - No directors or officers informed the company of changes to their trading arrangements (as defined in Regulation S-K, Item 408) during the quarter ended June 30, 2025[347](index=347&type=chunk)

Financial Data and Key Metrics Changes - Second quarter sales were $4.5 billion, down 2% from last year due to lower volume and the sale of OTR, partly offset by increases in price mix [22][23] - Unit volume declined 5%, reflecting the impacts of global trade disruption on OE production and consumer sell-out trends [22][23] - Gross margin declined by 360 basis points, while SG&A costs were lower by $39 million [22][23] Business Line Data and Key Metrics Changes - The commercial business experienced a significant decline, with OEM replacement demand globally being materially weaker, contributing to about half of the sales miss [22][23] - The Americas unit volume decreased by 2.6%, driven by headwinds in consumer OE and replacement, while commercial OE volume declined by 22% [27][28] - EMEA's unit volume decreased by 2%, with significant weakness in the commercial business, while consumer OE volume grew by 11% [30][31] Market Data and Key Metrics Changes - The consumer replacement market in the U.S. was characterized by increased competition, particularly with low-end imports growing approximately 15% during the quarter [12][27] - Non-member imports in the U.S. increased over 30% in the quarter, while European imports also rose [18][28] - The truck tire market has been running at recessionary levels, with expectations for full-year volume and mix to register below COVID year levels [17][33] Company Strategy and Development Direction - The company is focused on executing the Goodyear Forward strategy, which aims to control costs and improve margins, with benefits already being realized ahead of schedule [6][8] - New product launches are planned, including 11 new products in North America and an extensive winter tire offering in Europe, aimed at gaining share in the premium segment [20][52] - The company is committed to strengthening its balance sheet through divestitures and cost control measures [8][26] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the near-term outlook remains turbulent due to global trade disruptions but expressed confidence in regaining momentum as market conditions stabilize [5][19] - The company expects to see benefits from raw material costs beginning in Q4 and anticipates a decline in imports in the U.S. market [9][16] - Management highlighted the importance of adapting to changes in the market, including potential tariffs in Europe and the need to manage distribution effectively [16][19] Other Important Information - The company reported a net income increase to $254 million, driven by a gain on the sale of the Dunlop brand, despite rationalization charges of $59 million impacting results [23][24] - Free cash flow was stable versus last year, with significant proceeds from asset sales contributing positively [26][82] - The company expects to receive gross proceeds of $650 million from the sale of its Chemical business later this year [26] Q&A Session Summary Question: Impact of low-cost imports on key markets - Management clarified that there was a surge in imports across key markets, particularly in the U.S. and Europe, despite tariffs being in place [44][45] Question: Contribution of price versus mix - Management indicated that pricing actions implemented in May are effective, but commercial truck mix has been a significant offset [48][50] Question: Future SOI impact from commercial vehicle headwinds - Management expects continued headwinds from commercial truck mix but anticipates adjustments in production to mitigate impacts [61][62] Question: Mitigation efforts for increasing tariffs - Management confirmed that adjustments to the supply chain are being considered to limit tariff impacts on the P&L [66][67] Question: Disruption from exiting ATD - Management noted that the transition to new distributors has been largely successful, with 95% of the retail base making the switch [74][75] Question: Full-year outlook on SOI and free cash flow - Management provided insights on expected drivers for Q4, including favorable raw materials and Goodyear Forward benefits, but noted uncertainty in volume [80][82]