SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number: 1-1927

THE GOODYEAR TIRE & RUBBER COMPANY

(Exact Name of Registrant as Specified in Its Charter)

Ohio (State or Other Jurisdiction of Incorporation or Organization)		34-0253240 (I.R.S. Employer Identification No.)
1144 East Market Street, Akron, Ohio (Address of Principal Executive Offices)		44316-0001 (Zip Code)

(330) 796-2121
(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

     Yes þ No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

     Yes o No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

     Yes o No þ

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date.

Number of Shares of Common Stock,
Without Par Value, Outstanding at March 31, 2010:			242,919,907

 

 

PART I. FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS.

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended
		March 31,
(In millions, except per share amounts)		2010				2009
NET SALES		$	4,270			$	3,536
Cost of Goods Sold			3,456				3,219
Selling, Administrative and General Expense			605				533
Rationalizations (Note 2)			2				55
Interest Expense			74				64
Other Expense (Note 3)			104				30
Income (Loss) before Income Taxes			29				(365	)
United States and Foreign Taxes			53				(17	)
Net Loss			(24	)			(348	)
Less: Minority Shareholders Net Income (Loss)			23				(15	)
Goodyear Net Loss		$	(47	)		$	(333	)
Goodyear Net Loss — Per Share
Basic		$	(0.19	)		$	(1.38	)
Weighted Average Shares Outstanding (Note 4)			242				241
Diluted		$	(0.19	)		$	(1.38	)
Weighted Average Shares Outstanding (Note 4)			242				241

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

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(Unaudited)

		March 31,				December 31,
(In millions)		2010				2009
Assets:
Current Assets:
Cash and Cash Equivalents		$	1,774			$	1,922
Accounts Receivable, less Allowance — $108 ($110 in 2009)			2,861				2,540
Inventories:
Raw Materials			582				483
Work in Process			139				138
Finished Products			1,987				1,822
			2,708				2,443
Prepaid Expenses and Other Current Assets			328				320
Total Current Assets			7,671				7,225
Goodwill			682				706
Intangible Assets			163				164
Deferred Income Taxes			46				43
Other Assets			416				429
Property, Plant and Equipment less Accumulated Depreciation — $8,629 ($8,626 in 2009)			5,724				5,843
Total Assets		$	14,702			$	14,410
Liabilities:
Current Liabilities:
Accounts Payable-Trade		$	2,549			$	2,278
Compensation and Benefits (Note 8)			639				635
Other Current Liabilities			871				844
Notes Payable and Overdrafts (Note 6)			199				224
Long Term Debt and Capital Leases due Within One Year (Note 6)			153				114
Total Current Liabilities			4,411				4,095
Long Term Debt and Capital Leases (Note 6)			4,242				4,182
Compensation and Benefits (Note 8)			3,490				3,526
Deferred and Other Noncurrent Income Taxes			222				235
Other Long Term Liabilities			790				793
Total Liabilities			13,155				12,831
Commitments and Contingent Liabilities (Note 9)
Minority Shareholders’ Equity (Note 1)			573				593
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Preferred Stock, no par value:
Authorized, 50 shares, unissued			—				—
Common Stock, no par value:
Authorized, 450 shares, Outstanding shares – 243 (242 in 2009) after deducting 8 treasury shares (9 in 2009)			243				242
Capital Surplus			2,787				2,783
Retained Earnings			1,035				1,082
Accumulated Other Comprehensive Loss			(3,351	)			(3,372	)
Goodyear Shareholders’ Equity			714				735
Minority Shareholders’ Equity — Nonredeemable			260				251
Total Shareholders’ Equity			974				986
Total Liabilities and Shareholders’ Equity		$	14,702			$	14,410

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

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)

		Three Months Ended
		March 31,
(In millions)		2010				2009
Net Loss		$	(24	)		$	(348	)
Other Comprehensive Loss:
Foreign currency translation, net of tax of $1 ($0 in 2009)			(54	)			(172	)
Defined benefit plans:
Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost, net of tax of $3 ($5 in 2009)			41				42
Other, net of tax of $0 ($1 in 2009)			—				1
Unrealized investment loss, net of tax of $0			—				(7	)
Comprehensive Loss			(37	)			(484	)
Less: Comprehensive Loss Attributable to Minority Shareholders			(11	)			(59	)
Comprehensive Loss Attributable to Goodyear Shareholders		$	(26	)		$	(425	)

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

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

		Three Months Ended
		March 31,
(In millions)		2010				2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss		$	(24	)		$	(348	)
Adjustments to reconcile net loss to cash flows from operating activities:
Depreciation and amortization			159				152
Amortization and write-off of debt issuance costs			4				3
Net rationalization charges (Note 2)			2				55
Net gains on asset sales (Note 3)			(16	)			(1	)
Pension contributions and direct payments			(39	)			(106	)
Rationalization payments			(16	)			(70	)
Venezuela currency devaluation (Note 3)			110				—
Changes in operating assets and liabilities, net of asset acquisitions and dispositions:
Accounts receivable			(340	)			(19	)
Inventories			(300	)			250
Accounts payable – trade			349				(330	)
Compensation and benefits			91				103
Other current liabilities			86				(22	)
Other assets and liabilities			57				13
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES			123				(320	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(141	)			(221	)
Asset dispositions (Note 3)			16				1
Increase in restricted cash (Note 6)			(60	)			(3	)
Return of investment in The Reserve Primary Fund			24				24
Other transactions			—				2
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES			(161	)			(197	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Short term debt and overdrafts incurred			21				79
Short term debt and overdrafts paid			(56	)			(42	)
Long term debt incurred			201				969
Long term debt paid			(81	)			(454	)
Common stock issued			1				2
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES			86				554
Effect of exchange rate changes on cash and cash equivalents (Note 3)			(196	)			(35	)
Net Change in Cash and Cash Equivalents			(148	)			2
Cash and Cash Equivalents at Beginning of the Period			1,922				1,894
Cash and Cash Equivalents at End of the Period		$	1,774			$	1,896

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

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1. ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared by The Goodyear Tire & Rubber Company (the “Company,” “Goodyear,” “we,” “us” or “our”) in accordance with Securities and Exchange Commission rules and regulations and in the opinion of management contain all adjustments (including normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for the periods presented. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These interim consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2009 (the “2009 Form 10-K”).

     We are a party to shareholder agreements concerning certain of our less-than-wholly-owned consolidated subsidiaries. Under the terms of certain of these agreements, the minority shareholders have the right to require us to purchase their ownership interests in the respective subsidiaries if there is a change in control of Goodyear or a bankruptcy of Goodyear. Accordingly, we have reported the minority equity in those subsidiaries outside of Shareholders’ Equity.

     Operating results for the three months ended March 31, 2010 are not necessarily indicative of the results expected in subsequent quarters or for the year ending December 31, 2010.

Recently Adopted Accounting Standards

Effective January 1, 2010, we adopted a new standard pertaining to the consolidation of variable interest entities that requires an analysis to determine whether a variable interest gives the entity a controlling financial interest in a variable interest entity. This standard also requires an ongoing reassessment of the primary beneficiary of the variable interest entity and eliminates the quantitative approach previously required for determining whether an entity is the primary beneficiary. The adoption of this standard did not have a material impact on our consolidated financial statements.

     Effective January 1, 2010 we also adopted a new standard pertaining to accounting for transfers of financial assets that removes the concept of a qualifying special-purpose entity from accounting for transfers and servicing of financial assets and extinguishment of liabilities. This standard also clarifies the requirements for transfers of financial assets that are eligible for sale accounting. The adoption of this standard did not have a material impact on our consolidated financial statements.

Reclassifications

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

NOTE 2. COSTS ASSOCIATED WITH RATIONALIZATION PROGRAMS

We have implemented rationalization actions over the past several years in order to maintain our global competitiveness and more recently to respond to the global economic slowdown that began in 2008 by reducing high-cost manufacturing capacity and associate headcount.

     The net rationalization charges included in Income (Loss) before Income Taxes are as follows:

		Three Months Ended
		March 31,
(In millions)		2010				2009
New charges		$	10			$	57
Reversals			(8	)			(2	)
		$	2			$	55

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

     The following table shows the roll-forward of our liability between periods:

		Associate-				Other
(In millions)		Related Costs				Costs				Total
Balance at December 31, 2009		$	120			$	25			$	145
2010 charges			3				7				10
Incurred			(15	)			(6	)			(21	)
Reversed to the statement of operations			(6	)			(2	)			(8	)
Balance at March 31, 2010		$	102			$	24			$	126

     During the first quarter of 2010, net rationalization charges of $2 million were recorded. New charges of $10 million were comprised of $4 million for plans initiated in 2010, consisting of $2 million for associate severance and pension costs and $2 million for other exit and non-cancelable lease costs, and $6 million for plans initiated in 2009, consisting of $1 million for associate severance and pension costs and $5 million for other exit and non-cancelable lease costs. The net charges in 2010 also included the reversal of $8 million of charges for actions no longer needed for their originally intended purposes. Approximately 100 associates will be released under 2010 plans.

     In the first quarter of 2010, $15 million was incurred for associate severance payments and pension curtailment costs, and $6 million was incurred for non-cancelable lease and other exit costs.

     The accrual balance of $126 million at March 31, 2010 consists of $102 million for associate severance costs that are expected to be substantially utilized within the next twelve months and $24 million primarily for long term non-cancelable lease costs.

     Asset write-offs and accelerated depreciation charges of $3 million were recorded in cost of goods sold (“CGS”) in the first quarter of 2010.

     In the first quarter of 2009, net rationalization charges of $55 million were recorded. New charges of $57 million were comprised of $44 million for plans initiated in 2009, consisting of $43 million for associate severance and pension costs and $1 million for other exit and non-cancelable lease costs, and $13 million for plans initiated in 2008, consisting of $8 million for associate severance and pension costs and $5 million for other exit and non-cancelable lease costs. The net charges in 2009 also included the reversal of $2 million of charges for actions no longer needed for their originally intended purposes.

     In the first quarter of 2009, $77 million was incurred for associate severance payments and pension curtailment costs, and $4 million was incurred for non-cancelable lease and other exit costs. Additionally, asset write-offs and accelerated depreciation charges of $10 million were recorded in CGS, related primarily to the closure of our Somerton, Australia tire manufacturing facility.

     Approximately 7,900 associates will be released under programs initiated in 2009 and prior years, of which approximately 6,900 were released by March 31, 2010, including 200 in the first quarter of 2010.

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

NOTE 3. OTHER EXPENSE

		Three Months Ended
		March 31,
(In millions) (Income) Expense		2010				2009
Foreign currency exchange		$	109			$	24
Net gains on asset sales			(16	)			(1	)
Royalty income			(6	)			(7	)
Interest income			(3	)			(4	)
Financing fees and financial instruments			13				11
General and product liability – discontinued products (Note 9)			4				5
Miscellaneous			3				2
		$	104			$	30

Foreign currency exchange losses in the first quarter of 2010 were $109 million, compared to $24 million in the same period in 2009. Losses in 2010 included a loss of $110 million resulting from the January 8, 2010 devaluation of the Venezuelan bolivar fuerte against the U.S. dollar and the establishment of a two-tier exchange structure for essential and non-essential goods. Foreign currency exchange also reflected net gains and losses resulting from the effect of exchange rate changes on various foreign currency transactions worldwide.

     Effective January 1, 2010, Venezuela’s economy was considered to be highly inflationary under U.S. generally accepted accounting principles since it experienced a rate of general inflation in excess of 100% over the latest three year period, based upon the blended Consumer Price Index and National Consumer Price Index. Accordingly, the U.S. dollar was determined to be the functional currency of our Venezuelan subsidiary. All gains and losses resulting from the remeasurement of its financial statements are determined using official exchange rates and are reported in Other Expense.

     The $110 million loss primarily consisted of a $157 million remeasurement loss on bolivar-denominated net monetary assets and liabilities including deferred taxes at the time of the devaluation. The loss was primarily related to cash deposits in Venezuela that were remeasured at the official exchange rate applicable to non-essential goods, and was partially offset by $47 million related to U.S. dollar-denominated payables that will be settled at the official exchange rate applicable to essential goods. Nonmonetary assets and liabilities, which consisted primarily of inventory and property, plant and equipment, were translated at historical rates.

     Net gains on asset sales in 2010 of $16 million were due primarily to the sale of land in Thailand. Royalty income is derived primarily from licensing arrangements related to divested businesses. Interest income consisted primarily of amounts earned on cash deposits. Financing fees and financial instruments expense consisted primarily of the amortization of deferred financing fees, commitment fees and other charges incurred in connection with financing transactions.

     General and product liability — discontinued products includes charges for claims against us related primarily to asbestos personal injury claims, net of probable insurance recoveries. We recorded $7 million and $8 million of expense related to asbestos claims in the first three months of 2010 and 2009, respectively. In addition, we recorded $3 million of income related to probable insurance recoveries in each of those periods.

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

NOTE 4. PER SHARE OF COMMON STOCK

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

     The following table presents the number of incremental weighted average shares used in computing diluted per share amounts:

		Three Months Ended
		March 31,
(In millions)		2010				2009
Weighted average shares outstanding – basic			242				241
Stock options and other dilutive securities			—				—
Weighted average shares outstanding – diluted			242				241

Weighted average shares outstanding – diluted for the three months ended March 31, 2010 and 2009 exclude the effects of approximately 2 million equivalent shares related to options with exercise prices less than the average market price of our common shares (i.e., “in-the-money” options), as their inclusion would have been anti-dilutive due to the Goodyear net loss.

     Additionally, weighted average shares outstanding – diluted exclude approximately 9 million and 15 million equivalent shares related to options with exercise prices greater than the average market price of our common shares (i.e., “underwater” options), at March 31, 2010 and 2009, respectively.

NOTE 5. FAIR VALUE MEASUREMENTS

The following table presents information about assets and liabilities recorded at fair value on the Consolidated Balance Sheet at March 31, 2010 and December 31, 2009:

										Quoted Prices in Active
		Total Carrying								Markets for Identical								Significant Other								Significant Unobservable
		Value in the Consolidated								Assets/Liabilities								Observable Inputs								Inputs
		Balance Sheet								(Level 1)								(Level 2)								(Level 3)
(In millions)		2010				2009				2010				2009				2010				2009				2010				2009
Assets:
Investments		$	33			$	32			$	33			$	32			$	—			$	—			$	—			$	—
Foreign Exchange Contracts			50				28				—				—				48				27				2				1
Total Assets at Fair Value		$	83			$	60			$	33			$	32			$	48			$	27			$	2			$	1
Liabilities:
Foreign Exchange Contracts		$	13			$	6			$	—			$	—			$	13			$	6			$	—			$	—
Total Liabilities at Fair Value		$	13			$	6			$	—			$	—			$	13			$	6			$	—			$	—

Derivative financial instrument valuations classified as Level 3 included embedded currency derivatives in long-dated operating leases. The valuation of the embedded currency derivatives is based on an extrapolation of forward rates to the assumed expiration of the leases. Other Expense in the three months ended March 31, 2010 included a gain of $1 million resulting primarily from the change in the fair value of the embedded derivatives. Other Expense in the three months ended March 31, 2009 included a loss of $3 million resulting primarily from the change in the fair value of the embedded derivatives, and a gain of $5 million related to an interest rate basis swap.

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

     The following table presents changes in fair value for instruments classified as Level 3:

		Three Months Ended				Twelve Months Ended
		March 31,				December 31,
(In millions)		2010				2009
Asset (liability)
Balance at beginning of period		$	1			$	(9	)
Net realized gains			—				10
Net unrealized gains			1				—
Balance at end of period		$	2			$	1

The following table presents supplemental fair value information about long term fixed rate and variable rate debt, excluding capital leases, at March 31, 2010 and December 31, 2009. The fair value was estimated using quoted market prices or discounted future cash flows.

(In millions)		March 31, 2010				December 31, 2009
Fixed Rate Debt:
Carrying amount – liability		$	2,569			$	2,442
Fair value – liability			2,677				2,532
Variable Rate Debt:
Carrying amount – liability		$	1,809			$	1,836
Fair value – liability			1,764				1,752

NOTE 6. FINANCING ARRANGEMENTS

At March 31, 2010, we had total credit arrangements totaling $7,390 million, of which $2,310 million were unused. At that date, 43% of our debt was at variable interest rates averaging 3.37%.

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

At March 31, 2010, we had short term committed and uncommitted credit arrangements totaling $484 million, of which $285 million were unused. These arrangements are available primarily to certain of our international subsidiaries through various banks at quoted market interest rates. There are no commitment fees associated with these arrangements.

     The following table presents amounts due within one year:

		March 31,				December 31,
(In millions)		2010				2009
Notes payable and overdrafts		$	199			$	224
Weighted average interest rate			4.05	%			4.84	%
Long term debt and capital leases due within one year:
Other domestic and international debt (including capital leases)		$	153			$	114
Weighted average interest rate			6.29	%			4.78	%
Total obligations due within one year		$	352			$	338

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

Long Term Debt and Capital Leases and Financing Arrangements

At March 31, 2010, we had long term credit arrangements totaling $6,906 million, of which $2,025 million were unused.

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

		March 31, 2010								December 31, 2009
						Interest								Interest
(In millions)		Amount				Rate				Amount				Rate
Notes:
7.857% due 2011		$	388				7.857	%		$	650				7.857	%
8.625% due 2011			325				8.625	%			325				8.625	%
9% due 2015			260				9	%			260				9	%
10.5% due 2016			962				10.5	%			961				10.5	%
8.75% due 2020			262				8.75	%			—				—
7% due 2028			149				7	%			149				7	%
Credit Facilities:
€505 million revolving credit facility due 2012			—				—				—				—
$1.5 billion first lien revolving credit facility due 2013			—				—				—				—
$1.2 billion second lien term loan facility due 2014			1,200				2.34	%			1,200				2.34	%
Pan-European accounts receivable facility due 2015			357				3.89	%			437				3.58	%
Chinese credit facilities			80				5.35	%			—				—
Other domestic and international debt(1)			395				7.11	%			296				5.87	%
			4,378								4,278
Capital lease obligations			17								18
			4,395								4,296
Less portion due within one year			(153	)							(114	)
		$	4,242							$	4,182

NOTES

Debt Exchange Offer

On March 5, 2010, we completed an offer to exchange our outstanding 7.857% Notes due 2011 (“2011 Notes”) for a new series of 8.75% Notes due 2020 (“2020 Notes”). A total of $262 million in principal amount of the 2011 Notes were validly tendered, and $282 million in aggregate principal amount of the 2020 Notes were issued in the exchange. We will accrete the difference in the carrying amount of the 2011 Notes and the principal amount of the 2020 Notes as additional interest expense over the life of the 2020 Notes using the effective interest rate method. The direct costs of the exchange offer incurred with third parties were expensed.

     At March 31, 2010, $388 million in aggregate principal amount of the 2011 Notes were outstanding. The 2011 Notes are unsecured senior obligations and will mature on August 15, 2011.

     At March 31, 2010, $282 million in aggregate principal amount of the 2020 Notes were outstanding. The 2020 Notes are unsecured senior obligations, are guaranteed by our U.S. and Canadian subsidiaries that also guarantee our obligations under our senior secured credit facilities, and will mature on August 15, 2020.

     We have the option to redeem the 2020 Notes, in whole or in part, at any time at a redemption price equal to the greater of 100% of the principal amount of the 2020 Notes or the sum of the present values of the remaining scheduled payments on the 2020 Notes, discounted using a defined treasury rate plus 50 basis points, plus in either case accrued and unpaid interest to the redemption date.

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

     The terms of the indenture for the 2020 Notes, among other things, limit our ability and the ability of certain of our subsidiaries to (i) incur secured debt, (ii) engage in sale and leaseback transactions, and (iii) consolidate, merge, sell or otherwise dispose of all or substantially all of our assets. These covenants are subject to significant exceptions and qualifications.

CREDIT FACILITIES

$1.5 Billion Amended and Restated First Lien Revolving Credit Facility due 2013

This facility is available in the form of loans or letters of credit, with letter of credit availability limited to $800 million. Subject to the consent of the lenders whose commitments are to be increased, we may request that the facility be increased by up to $250 million. Our obligations under the facility are guaranteed by most of our wholly-owned U.S. and Canadian subsidiaries. Our obligations under the facility and our subsidiaries’ obligations under the related guarantees are secured by first priority security interests in a variety of collateral.

     This facility has customary representations and warranties including, as a condition to borrowing, that all such representations and warranties are true and correct, in all material respects, on the date of the borrowing, including representations as to no material adverse change in our financial condition since December 31, 2006.

     At March 31, 2010, we had no borrowings and $489 million of letters of credit issued under the revolving credit facility. At December 31, 2009, we had no borrowings and $494 million of letters of credit issued under the revolving credit facility.

$1.2 Billion Amended and Restated Second Lien Term Loan Facility due 2014

Our obligations under this facility are guaranteed by most of our wholly-owned U.S. and Canadian subsidiaries and are secured by second priority security interests in the same collateral securing the $1.5 billion first lien revolving credit facility. At March 31, 2010 and December 31, 2009, this facility was fully drawn.

€505 Million Amended and Restated Senior Secured European and German Revolving Credit Facilities due 2012

Our amended and restated €505 million European revolving credit facilities consist of a €155 million German revolving credit facility, which is only available to one of the German subsidiaries (the “German borrower”) of Goodyear Dunlop Tires Europe B.V. (“GDTE”), and a €350 million European revolving credit facility, which is available to the same German borrower and to GDTE and certain of its other subsidiaries with a €125 million sublimit for non-German borrowers and a €50 million letter of credit sublimit. Goodyear and its subsidiaries that guarantee our U.S. facilities provide unsecured guarantees to support the European revolving credit facilities and GDTE and certain of its subsidiaries in the United Kingdom, Luxembourg, France and Germany also provide guarantees. GDTE’s obligations under the facilities and the obligations of its subsidiaries under the related guarantees are secured by first priority security interests in a variety of collateral. At March 31, 2010 and December 31, 2009, there were no borrowings under the German or the European revolving credit facilities. Letters of credit issued under the European revolving credit facility totaled $13 million (€10 million) at March 31, 2010 and $14 million (€10 million) at December 31, 2009.

     These facilities have customary representations and warranties including, as a condition to borrowing, that all such representations and warranties are true and correct, in all material respects, on the date of the borrowing, including representations as to no material adverse change in our financial condition since December 31, 2006.

International Accounts Receivable Securitization Facilities (On-Balance Sheet)

GDTE and certain of its subsidiaries are parties to a pan-European accounts receivable securitization facility that provides up to €450 million of funding and expires in 2015. Utilization under this facility is based on current available receivable balances. The facility is subject to customary annual renewal of back-up liquidity commitments.

     The facility involves an ongoing daily sale of substantially all of the trade accounts receivable of certain GDTE subsidiaries to a bankruptcy-remote French company controlled by one of the liquidity banks in the facility. These subsidiaries retain servicing responsibilities. At March 31, 2010 and December 31, 2009, the amount available, and fully utilized under this program, totaled $357 million (€264 million) and $437 million (€304 million), respectively. The

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

program did not qualify for sale accounting, and accordingly, these amounts are included in long term debt and capital leases.

     In addition to the pan-European accounts receivable securitization facility discussed above, subsidiaries in Australia have accounts receivable programs totaling $64 million and $68 million at March 31, 2010 and December 31, 2009, respectively. The receivables sold under this program also serve as collateral for the facility. The Company retains the risk of loss related to these receivables in the event of non-payment. These amounts are included in Notes payable and overdrafts.

     For a description of the collateral securing the facilities described above as well as the covenants applicable to them, refer to the Note to the Consolidated Financial Statements No. 12, Financing Arrangements and Derivative Financial Instruments, in our 2009 Form 10-K.

Other Foreign Credit Facilities

Our Chinese subsidiary has entered into two financing agreements in China. At March 31, 2010, these non-revolving credit facilities had total unused availability of 3.1 billion renminbi (approximately $450 million) and can only be used to finance the relocation and expansion of our manufacturing facilities in China. The facilities contain covenants relating to our Chinese subsidiary and have customary representations and warranties and defaults relating to our Chinese subsidiary’s ability to perform its obligations under the facilities. One of the facilities (with 1.8 billion renminbi of unused availability at March 31, 2010) matures in 2016 and principal amortization begins in 2013. At March 31, 2010, there were $80 million of borrowings outstanding under this facility. The other facility (with 1.3 billion renminbi of unused availability at March 31, 2010) will mature eight years after the first borrowing and will begin principal amortization five years after the first borrowing. At March 31, 2010, there were no borrowings outstanding under this facility. There were no amounts outstanding under either of the facilities at December 31, 2009. At March 31, 2010, restricted cash of $60 million was related to funds obtained under these credit facilities.

Debt Maturities

Updates to our debt maturities as disclosed in our 2009 Form 10-K are provided below and reflect the exchange of $262 million of our 7.857% Notes due 2011 for $282 million principal amount of our 8.75% Notes due 2020.

(In millions)		2010				2011				2012				2013				2014
Domestic		$	3			$	714			$	1			$	4			$	1,200
International			111				13				95				28				7
		$	114			$	727			$	96			$	32			$	1,207

DERIVATIVE FINANCIAL INSTRUMENTS

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

Foreign Currency Contracts

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

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

     The following table presents fair values for foreign currency contracts not designated as hedging instruments:

		March 31,				December 31,
(In millions)		2010				2009
Fair Values — asset (liability):
Accounts receivable		$	49			$	27
Other assets			1				1
Other current liabilities			(12	)			(6	)

At March 31, 2010 and December 31, 2009, these outstanding foreign currency derivatives had notional amounts of $1,086 million and $1,252 million, respectively, and were primarily related to intercompany loans. Other Expense included net transaction gains of $33 million and net transaction losses of $9 million on foreign currency derivatives in the first three months of 2010 and 2009, respectively. These amounts were substantially offset in Other Expense by the effect of changing exchange rates on the underlying currency exposures.

     The counterparties to our interest rate and foreign exchange contracts were substantial and creditworthy multinational commercial banks or other financial institutions that are recognized market makers. We control our credit exposure by diversifying across multiple counterparties and by setting counterparty credit limits based on long term credit ratings and other indicators of counterparty credit risk such as credit default swap spreads. We also enter into master netting agreements with counterparties when possible. Based on our analysis, we consider the risk of counterparty nonperformance associated with these contracts to be remote. However, the inability of a counterparty to fulfill its obligations when due could have a material adverse effect on our consolidated financial position, results of operations or liquidity in the period in which it occurs.

NOTE 7. STOCK COMPENSATION PLANS

Our Board of Directors granted 1.6 million stock options, 0.3 million shares of restricted stock, 0.3 million restricted stock units and 0.1 million performance share units during the first quarter of 2010 under our 2008 Performance Plan. The 2008 Performance Plan will expire on April 8, 2018. The weighted average exercise price per share and weighted average fair value per share of the stock options was $12.74 and $6.61, respectively. We estimated the fair value of the stock options using the following assumptions in our Black-Scholes model:

     Expected term: 6.25 years

     Interest rate: 2.69%

     Volatility: 50.82%

     Dividend yield: Nil

     We measure the fair value of grants of shares of restricted stock, restricted stock units, and performance share units at the closing market price of a share of our common stock on the date of the grant. The fair value per share for grants made during the first quarter of 2010 was $12.74.

     We recognized stock-based compensation expense of $3 million during the first quarter of 2010 and 2009. At March 31, 2010, unearned compensation cost related to the unvested portion of all stock-based awards was approximately $38 million and is expected to be recognized over the remaining vesting period of the respective grants, through March 31, 2015.

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

NOTE 8. PENSION, SAVINGS AND OTHER POSTRETIREMENT BENEFIT PLANS

We provide employees with defined benefit pension or defined contribution savings plans.

     Defined benefit pension cost follows:

		U.S.								Non-U.S.
		Three Months Ended								Three Months Ended
		March 31,								March 31,
(In millions)		2010				2009				2010				2009
Service cost – benefits earned during the period		$	10			$	9			$	7			$	6
Interest cost on projected benefit obligation			75				80				37				32
Expected return on plan assets			(70	)			(60	)			(32	)			(26	)
Amortization of: — prior service cost			8				8				—				—
— net losses			33				39				9				7
Net periodic pension cost			56				76				21				19
Curtailments/settlements/termination benefits			—				—				1				5
Total defined benefit pension cost		$	56			$	76			$	22			$	24

We expect to contribute approximately $275 million to $325 million to our funded U.S. and non-U.S. pension plans in 2010. For the three months ended March 31, 2010, we contributed $29 million to our non-U.S. plans.

     The expense recognized for our contributions to defined contribution savings plans for the three months ended March 31, 2010 and 2009 was $25 million and $19 million, respectively.

     We provide certain domestic employees and employees at certain non-U.S. subsidiaries with health care benefits or life insurance benefits upon retirement. Postretirement benefit cost for the three months ended March 31, 2010 and 2009 was $2 million and $1 million, respectively.

     The Medicare Prescription Drug Improvement and Modernization Act provides plan sponsors a federal subsidy for certain qualifying prescription drug benefits covered under the sponsor’s postretirement health care plans. Our postretirement benefit costs are presented net of this subsidy.

NOTE 9. COMMITMENTS AND CONTINGENT LIABILITIES

At March 31, 2010, we had binding commitments for raw materials and investments in land, buildings and equipment of approximately $1,498 million, and off-balance-sheet financial guarantees written and other commitments totaling $101 million. In addition, we have other contractual commitments, the amounts of which cannot be estimated, pursuant to certain long-term agreements under which we will purchase minimum amounts of various raw materials and finished goods at agreed upon base prices that are subject to periodic adjustments for changes in raw material costs and market price adjustments, or in quantities that are subject to periodic adjustments for changes in our production levels.

Environmental Matters

We have recorded liabilities totaling $43 million at March 31, 2010 and December 31, 2009 for anticipated costs related to various environmental matters, primarily the remediation of numerous waste disposal sites and certain properties sold by us. Of these amounts, $8 million and $9 million were included in Other Current Liabilities at March 31, 2010 and December 31, 2009, respectively. The costs include legal and consulting fees, site studies, the design and implementation of remediation plans, post-remediation monitoring and related activities, and will be paid over several years. The amount of our ultimate liability in respect of these matters may be affected by several uncertainties, primarily the ultimate cost of required remediation and the extent to which other responsible parties contribute. We have limited potential insurance coverage for future environmental claims.

Workers’ Compensation

We have recorded liabilities, on a discounted basis, totaling $310 million and $301 million for anticipated costs related to workers’ compensation at March 31, 2010 and December 31, 2009, respectively. Of these amounts, $73 million and $75

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

million were included in Current Liabilities as part of Compensation and Benefits at March 31, 2010 and December 31, 2009, respectively. The costs include an estimate of expected settlements on pending claims, defense costs and a provision for claims incurred but not reported. These estimates are based on our assessment of potential liability using an analysis of available information with respect to pending claims, historical experience, and current cost trends. The amount of our ultimate liability in respect of these matters may differ from these estimates. We periodically, and at least annually, update our loss development factors based on actuarial analyses. At March 31, 2010 and December 31, 2009, the liability was discounted using a risk-free rate of return.

General and Product Liability and Other Litigation

We have recorded liabilities totaling $302 million and $300 million, including related legal fees expected to be incurred, for potential product liability and other tort claims presently asserted against us at March 31, 2010 and December 31, 2009, respectively. Of these amounts, $63 million and $73 million were included in Other Current Liabilities at March 31, 2010 and December 31, 2009, respectively. The amounts recorded were estimated based on an assessment of potential liability using an analysis of available information with respect to pending claims, historical experience and, where available, recent and current trends. The amount of our ultimate liability in respect of these matters may differ from these estimates.

Asbestos. We are a defendant in numerous lawsuits alleging various asbestos-related personal injuries purported to result from alleged exposure to certain asbestos products manufactured by us or present in certain of our facilities. Typically, these lawsuits have been brought against multiple defendants in state and Federal courts. To date, we have disposed of approximately 82,600 claims by defending and obtaining the dismissal thereof or by entering into a settlement. The sum of our accrued asbestos-related liability and gross payments to date, including legal costs, totaled approximately $355 million through March 31, 2010 and $349 million through December 31, 2009.

     A summary of recent approximate asbestos claims activity follows. Because claims are often filed and disposed of by dismissal or settlement in large numbers, the amount and timing of settlements and the number of open claims during a particular period can fluctuate significantly. The passage of tort reform laws and creation of deferred dockets for non-malignancy claims in several states has contributed to a decline in the number of claims filed in recent years.

		Three Months Ended				Year Ended
(Dollars in millions)		March 31, 2010				December 31, 2009
Pending claims, beginning of period			90,200				99,000
New claims filed			400				1,600
Claims settled/dismissed			(100	)			(10,400	)
Pending claims, end of period			90,500				90,200
Payments (1)		$	12			$	20

We periodically, and at least annually, review our existing reserves for pending claims, including a reasonable estimate of the liability associated with unasserted asbestos claims, and estimate our receivables from probable insurance recoveries.

     We had recorded gross liabilities for both asserted and unasserted claims, inclusive of defense costs, totaling $130 million and $136 million at March 31, 2010 and December 31, 2009, respectively. At March 31, 2010, we estimate that it is reasonably possible that our gross liabilities, net of our estimate for probable insurance recoveries, could exceed our recorded amounts by $15 million.

     We recorded a receivable related to asbestos claims of $69 million as of March 31, 2010 and December 31, 2009. We expect that approximately 50% of asbestos claim related losses would be recoverable through insurance through the period covered by the estimated liability. Of these amounts, $11 million was included in Current Assets as part of Accounts receivable at March 31, 2010 and December 31, 2009. The recorded receivable consists of an amount we expect to collect under coverage-in-place agreements with certain primary carriers as well as an amount we believe is probable of recovery from certain of our excess coverage insurance carriers.

     We believe that, at March 31, 2010, we had approximately $180 million in aggregate limits of excess level policies potentially applicable to indemnity payments for asbestos products claims, in addition to limits of available

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

primary insurance policies. Some of these excess policies provide for payment of defense costs in addition to indemnity limits. A portion of the availability of the excess level policies is included in the $69 million insurance receivable recorded at March 31, 2010. We also had approximately $15 million in aggregate limits for products claims, as well as coverage for premise claims on a per occurrence basis, and defense costs available with our primary insurance carriers through coverage-in-place agreements at March 31, 2010.

Other Actions. We are currently a party to various claims and legal proceedings in addition to those noted above. If management believes that a loss arising from these matters is probable and can reasonably be estimated, we record the amount of the loss, or the minimum estimated liability when the loss is estimated using a range, and no point within the range is more probable than another. As additional information becomes available, any potential liability related to these matters is assessed and the estimates are revised, if necessary. Based on currently available information, management believes that the ultimate outcome of these matters, individually and in the aggregate, will not have a material adverse effect on our financial position or overall trends in results of operations. However, litigation is subject to inherent uncertainties, and unfavorable rulings could occur. An unfavorable ruling could include monetary damages or an injunction prohibiting us from selling one or more products. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the financial position and results of operations of the period in which the ruling occurs, or in future periods.

Tax Matters

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

Guarantees

We will from time to time issue guarantees to financial institutions or other entities, on behalf of certain of our affiliates, lessors or customers. Normally there is no separate premium received by us as consideration for the issuance of guarantees. We also generally do not require collateral in connection with the issuance of these guarantees. If our performance under these guarantees is triggered by non-payment or another specified event, we would be obligated to make payment to the financial institution or the other entity, and would typically have recourse to the assets of the affiliate, lessor or customer. The guarantees expire at various times through 2023. We are unable to estimate the extent to which our affiliates’, lessors’ or customers’ assets would be adequate to recover any payments made by us under the related guarantees.

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

NOTE 10. BUSINESS SEGMENTS

		Three Months Ended
		March 31,
(In millions)		2010				2009
Sales:
North American Tire		$	1,779			$	1,544
Europe, Middle East and Africa Tire			1,529				1,268
Latin American Tire			478				383
Asia Pacific Tire			484				341
Net Sales		$	4,270			$	3,536
Segment Operating Income (Loss):
North American Tire		$	(14	)		$	(189	)
Europe, Middle East and Africa Tire			109				(50	)
Latin American Tire			76				48
Asia Pacific Tire			69				15
Total Segment Operating Income (Loss)			240				(176	)
Rationalizations			(2	)			(55	)
Interest expense			(74	)			(64	)
Other expense			(104	)			(30	)
Asset write-offs and accelerated depreciation			(3	)			(10	)
Corporate incentive compensation plans			(7	)			6
Intercompany profit elimination			(9	)			(26	)
Other			(12	)			(10	)
Income (Loss) before Income Taxes		$	29			$	(365	)

Rationalizations, asset writeoffs and accelerated depreciation, as described in Note 2, Costs Associated with Rationalization Programs, and Asset Sales, as described in Note 3, Other Expense, are not charged (credited) to the strategic business units (“SBUs”) for performance evaluation purposes, but were attributable to the SBUs as follows:

		Three Months Ended
		March 31,
(In millions)		2010				2009
Rationalizations:
North American Tire		$	6			$	28
Europe, Middle East and Africa Tire			(6	)			14
Latin American Tire			2				7
Asia Pacific Tire			1				4
Total Segment Rationalizations			3				53
Corporate			(1	)			2
		$	2			$	55
Asset Sales:
North American Tire		$	—			$	—
Europe, Middle East and Africa Tire			(1	)			(1	)
Latin American Tire			—				—
Asia Pacific Tire			(15	)			—
Total Segment Asset Sales		$	(16	)		$	(1	)
Asset Writeoffs and Accelerated Depreciation:
North American Tire		$	1			$	2
Europe, Middle East and Africa Tire			—				—
Latin American Tire			—				—
Asia Pacific Tire			2				8
Total Segment Asset Writeoffs and Accelerated Depreciation		$	3			$	10

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

NOTE 11. INCOME TAXES

For the first three months of 2010, we recorded tax expense of $53 million on income before income taxes of $29 million. Income tax expense was favorably impacted by $5 million due to various discrete items. For the first three months of 2009, we recorded a tax benefit of $17 million on a loss before income taxes of $365 million. Income tax for the first three months of 2009 was favorably impacted by $10 million due primarily to an enacted tax law change.

     The difference between our effective tax rate and the U.S. statutory rate was primarily attributable to continuing to maintain a full valuation allowance against our net Federal and state deferred tax assets.

     At January 1, 2010, we had unrecognized tax benefits of $112 million that, if recognized, would have a favorable impact on our tax expense of $108 million. We had accrued interest of $17 million as of January 1, 2010. If not favorably settled, $49 million of the unrecognized tax benefits and $17 million of the accrued interest would require the use of our cash. It is reasonably possible that our unrecognized tax benefits may decrease by up to $20 million during the next 12 months as a consequence of settlement of prior tax years in our European operations. We do not expect changes during the next 12 months to have a significant impact on our financial position or results of operations.

     Generally, years beginning after 2004 are still open to examination by foreign taxing authorities, including Germany, where we are open to examinations from 2003 onward. In the United States, we are open to examination from 2009 onward.

NOTE 12. CHANGES IN SHAREHOLDERS’ EQUITY

The following tables present the changes in shareholders’ equity during the first three months of 2010 and 2009:

																		Accumulated								Minority
																		Other				Goodyear				Shareholders’				Total
		Common Stock								Capital				Retained				Comprehensive				Shareholders’				Equity-				Shareholders’
(Dollars in millions)		Shares				Amount				Surplus				Earnings				Loss				Equity				Nonredeemable				Equity
Balance at December 31, 2009
(after deducting 8,687,196 treasury shares)			242,202,419			$	242			$	2,783			$	1,082			$	(3,372	)		$	735			$	251			$	986
Comprehensive (loss) income:
Net (loss) income															(47	)							(47	)			7				(40	)
Foreign currency translation (net of tax of $1)																			(19	)			(19	)			2				(17	)
Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost (net of tax of $3)																			40				40				—				40
Increase in net actuarial losses (net of tax of $0)																			(1	)			(1	)			—				(1	)
Immediate recognition of prior service cost and unrecognized gains and losses due to curtailments and settlements (net of tax of $0)																			1				1				—				1
Other comprehensive (loss) income																							21				2				23
Total comprehensive (loss) income																							(26	)			9				(17	)
Common stock issued from treasury:
Stock-based compensation plans			717,488				1				3												4				—				4
Stock-based compensation											1												1				—				1
Balance at March 31, 2010
(after deducting 7,969,785 treasury shares)			242,919,907			$	243			$	2,787			$	1,035			$	(3,351	)		$	714			$	260			$	974

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

																		Accumulated								Minority
																		Other				Goodyear				Shareholders’				Total
		Common Stock								Capital				Retained				Comprehensive				Shareholders’				Equity-				Shareholders’
(Dollars in millions)		Shares				Amount				Surplus				Earnings				Loss				Equity				Nonredeemable				Equity
Balance at December 31, 2008 as reported
(after deducting 9,599,694 treasury shares)			241,289,921			$	241			$	2,702			$	1,525			$	(3,446	)		$	1,022			$	231			$	1,253
Adjustment to initially apply FASB Staff Position APB 14-1 for convertible debt (Note 1)											62				(62	)							—								—
Balance at December 31, 2008 as restated
(after deducting 9,599,694 treasury shares)			241,289,921				241				2,764				1,463				(3,446	)			1,022				231				1,253
Comprehensive (loss) income:
Net (loss) income															(333	)							(333	)			4				(329	)
Foreign currency translation (net of tax of $0)																			(127	)			(127	)			(20	)			(147	)
Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost (net of tax of $4)																			41				41				—				41
Increase in net actuarial losses (net of tax of $0)																			(3	)			(3	)			—				(3	)
Immediate recognition of prior service cost and unrecognized gains and losses due to curtailments and settlements (net of tax of $1)																			4				4				—				4
Unrealized investment loss (net of tax of $0)																			(7	)			(7	)			—				(7	)
Other comprehensive (loss) income																							(92	)			(20	)			(112	)
Total comprehensive (loss) income																							(425	)			(16	)			(441	)
Common stock issued from treasury:
Stock-based compensation plans (Note 7)			534,762				1				1												2				—				2
Stock-based compensation											2												2				—				2
Balance at March 31, 2009
(after deducting 9,064,932 treasury shares)			241,824,683			$	242			$	2,767			$	1,130			$	(3,538	)		$	601			$	215			$	816

The following table presents changes in Minority Equity presented outside of Shareholders’ Equity:

(In millions)		March 31, 2010				March 31, 2009
Balance at beginning of period		$	593			$	619
Comprehensive income (loss):
Net income			16				(19	)
Foreign currency translation, net of tax of $0			(37	)			(25	)
Pension and other postretirement benefits			1				1
Total comprehensive loss			(20	)			(43	)
Balance at end of period		$	573			$	576

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

NOTE 13. CONSOLIDATING FINANCIAL INFORMATION

Certain of our subsidiaries have guaranteed Goodyear’s obligations under the $325 million outstanding principal amount of 8.625% senior notes due 2011, the $260 million outstanding principal amount of 9% senior notes due 2015, the $1.0 billion outstanding principal amount of 10.5% senior notes due 2016, and the $282 million outstanding principal amount of 8.75% senior notes due 2020 (collectively, the “notes”). The following presents the condensed consolidating financial information separately for:

(i)		The Parent Company, the issuer of the guaranteed obligations;
(ii)		Guarantor subsidiaries, on a combined basis, as specified in the indentures related to Goodyear’s obligations under the notes;
(iii)		Non-guarantor subsidiaries, on a combined basis;
(iv)		Consolidating entries and eliminations representing adjustments to (a) eliminate intercompany transactions between or among the Parent Company, the guarantor subsidiaries and the non-guarantor subsidiaries, (b) eliminate the investments in our subsidiaries, and (c) record consolidating entries; and
(v)		The Goodyear Tire & Rubber Company and Subsidiaries on a consolidated basis.

     Each guarantor subsidiary is 100% owned by the Parent Company at the date of each balance sheet presented. The notes are fully and unconditionally guaranteed on a joint and several basis by each guarantor subsidiary. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use by the Parent Company and guarantor subsidiaries of the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation. Intercompany cash advances and loans made primarily for the purpose of short-term operating needs are included in cash flows from operating activities. Intercompany transactions reported as investing or financing activities include the sale of the capital stock of various subsidiaries and other capital transactions between members of the consolidated group.

     Certain non-guarantor subsidiaries of the Parent Company are restricted from remitting funds to it by means of dividends, advances or loans due to required foreign government and/or currency exchange board approvals or restrictions in credit agreements or other debt instruments of those subsidiaries.

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

		Consolidating Balance Sheet
		March 31, 2010
														Consolidating
						Guarantor				Non-Guarantor				Entries and
(In millions)		Parent Company				Subsidiaries				Subsidiaries				Eliminations				Consolidated
Assets:
Current Assets:
Cash and cash equivalents		$	766			$	28			$	980			$	—			$	1,774
Accounts receivable			782				182				1,897				—				2,861
Accounts receivable from affiliates			—				774				—				(774	)			—
Inventories			1,115				238				1,417				(62	)			2,708
Prepaid expenses and other current assets			53				6				262				7				328
Total Current Assets			2,716				1,228				4,556				(829	)			7,671
Goodwill			—				24				472				186				682
Intangible Assets			110				1				52				—				163
Deferred Income Taxes			—				2				45				(1	)			46
Other Assets			211				44				161				—				416
Investments in Subsidiaries			4,033				280				4,322				(8,635	)			—
Property, Plant and Equipment			2,062				178				3,464				20				5,724
Total Assets		$	9,132			$	1,757			$	13,072			$	(9,259	)		$	14,702
Liabilities:
Current Liabilities:
Accounts payable-trade		$	646			$	99			$	1,804			$	—			$	2,549
Accounts payable to affiliates			669				—				105				(774	)			—
Compensation and benefits			323				31				285				—				639
Other current liabilities			296				31				546				(2	)			871
Notes payable and overdrafts			—				—				199				—				199
Long term debt and capital leases due within one year			1				—				152				—				153
Total Current Liabilities			1,935				161				3,091				(776	)			4,411
Long Term Debt and Capital Leases			3,548				—				694				—				4,242
Compensation and Benefits			2,293				238				959				—				3,490
Deferred and Other Noncurrent Income Taxes			30				2				185				5				222
Other Long Term Liabilities			612				41				137				—				790
Total Liabilities			8,418				442				5,066				(771	)			13,155
Commitments and Contingent Liabilities
Minority Shareholders’ Equity			—				—				361				212				573
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Preferred Stock			—				—				—				—				—
Common Stock			243				333				4,931				(5,264	)			243
Capital Surplus			2,787				118				1,026				(1,144	)			2,787
Retained Earnings			1,035				1,352				2,633				(3,985	)			1,035
Accumulated Other Comprehensive Loss			(3,351	)			(488	)			(1,205	)			1,693				(3,351	)
Goodyear Shareholders’ Equity			714				1,315				7,385				(8,700	)			714
Minority Shareholders’ Equity — Nonredeemable			—				—				260				—				260
Total Shareholders’ Equity			714				1,315				7,645				(8,700	)			974
Total Liabilities and Shareholders’ Equity		$	9,132			$	1,757			$	13,072			$	(9,259	)		$	14,702