v3.24.0.1
Business Segments
 12 Months Ended
Dec. 31, 2023
Segment Reporting [Abstract]  
Business Segments

Note 9. Business Segments

Segment information reflects our strategic business units (“SBUs”), which are organized to meet customer requirements and global competition. For the year ended December 31, 2023, we operated our business through three operating segments representing our regional tire businesses: Americas; Europe, Middle East and Africa; and Asia Pacific. Segment information is reported on the basis used for reporting to our Chief Executive Officer. Each of the three regional business segments is involved in the development, manufacture, distribution and sale of tires. Certain of the business segments also provide related products and services, which include retreads and automotive and commercial truck maintenance and repair services. Each segment also exports tires to other segments. Since the Closing Date, Cooper Tire's operating results have been incorporated into each of our SBUs.

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

EMEA manufactures and sells tires for automobiles, trucks, buses, aircraft, motorcycles, and earthmoving, mining and industrial equipment throughout Europe, the Middle East and Africa. EMEA also sells retreaded aviation tires, retreading and related services for commercial truck and earthmoving, mining and industrial equipment, and automotive maintenance and repair services.

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

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

 

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Sales

 

 

 

 

 

 

 

 

 

Americas

 

$

11,993

 

 

$

12,766

 

 

$

10,051

 

Europe, Middle East and Africa

 

 

5,606

 

 

 

5,645

 

 

 

5,243

 

Asia Pacific

 

 

2,467

 

 

 

2,394

 

 

 

2,184

 

Net Sales

 

$

20,066

 

 

$

20,805

 

 

$

17,478

 

Segment Operating Income

 

 

 

 

 

 

 

 

 

Americas

 

$

749

 

 

$

1,094

 

 

$

914

 

Europe, Middle East and Africa

 

 

17

 

 

 

61

 

 

 

239

 

Asia Pacific

 

 

202

 

 

 

121

 

 

 

135

 

Total Segment Operating Income

 

$

968

 

 

$

1,276

 

 

$

1,288

 

Less:

 

 

 

 

 

 

 

 

 

Goodwill impairment (Note 12)

 

 

230

 

 

 

—

 

 

 

—

 

Rationalizations (Note 4)

 

 

502

 

 

 

129

 

 

 

93

 

Interest expense (Note 5)

 

 

532

 

 

 

451

 

 

 

387

 

Other (income) expense (Note 6)

 

 

108

 

 

 

75

 

 

 

94

 

Asset write-offs and accelerated depreciation, net (Note 4)

 

 

36

 

 

 

37

 

 

 

1

 

Corporate incentive compensation plans

 

 

70

 

 

 

56

 

 

 

87

 

Retained expenses of divested operations

 

 

18

 

 

 

14

 

 

 

12

 

Other(1)

 

 

149

 

 

 

115

 

 

 

101

 

Income (Loss) before Income Taxes

 

$

(677

)

 

$

399

 

 

$

513

 
(1)
Primarily represents unallocated corporate costs and the elimination of $27 million, $25 million and $22 million for the years ended December 31, 2023, 2022 and 2021, respectively, of royalty income attributable to the SBUs. Other in 2023 also includes $35 million of costs related to the Goodyear Forward plan, primarily related to third-party consulting fees.

The following table presents segment assets at December 31:

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

Assets

 

 

 

 

 

 

Americas

 

$

11,647

 

 

$

12,171

 

Europe, Middle East and Africa

 

 

4,873

 

 

 

5,239

 

Asia Pacific

 

 

2,767

 

 

 

2,913

 

Total Segment Assets

 

 

19,287

 

 

 

20,323

 

Corporate(1)

 

 

2,295

 

 

 

2,108

 

 

$

21,582

 

 

$

22,431

 

 

(1)
Corporate includes substantially all of our U.S. net deferred tax assets.

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

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

 

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Net Sales

 

 

 

 

 

 

 

 

 

United States

 

$

9,807

 

 

$

10,734

 

 

$

8,480

 

Other international

 

 

10,259

 

 

 

10,071

 

 

 

8,998

 

 

$

20,066

 

 

$

20,805

 

 

$

17,478

 

Long-Lived Assets

 

 

 

 

 

 

 

 

 

United States

 

$

3,891

 

 

$

3,804

 

 

 

 

China

 

 

713

 

 

 

743

 

 

 

 

Other international

 

 

3,888

 

 

 

3,747

 

 

 

 

 

$

8,492

 

 

$

8,294

 

 

 

 

At December 31, 2023, significant concentrations of cash and cash equivalents held by our international subsidiaries included the following amounts:

•
$297 million or 33% in EMEA, primarily France, England and Poland ($361 million or 29% at December 31, 2022),
•
$244 million or 27% in Asia Pacific, primarily China, India and Australia ($301 million or 25% at December 31, 2022), and
•
$237 million or 26% in Americas, primarily Brazil, Mexico and Argentina ($316 million or 26% at December 31, 2022).

Goodwill impairment, as described in Notes to the Consolidated Financial Statements No. 12, Goodwill and Intangible Assets; rationalizations, as described in Note to the Consolidated Financial Statements No. 4, Costs Associated with Rationalization Programs; net (gains) losses on asset sales, as described in Note to the Consolidated Financial Statements No. 6, Other (Income) Expense; and asset write-offs and accelerated depreciation were not charged (credited) to the SBUs for performance evaluation purposes but were attributable to the SBUs as follows:

 

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Goodwill Impairment

 

 

 

 

 

 

 

 

 

Europe, Middle East and Africa

 

 

230

 

 

 

—

 

 

 

—

 

Total Segment Goodwill Impairment

 

$

230

 

 

$

—

 

 

$

—

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Rationalizations

 

 

 

 

 

 

 

 

 

Americas

 

$

19

 

 

$

32

 

 

$

38

 

Europe, Middle East and Africa

 

 

409

 

 

 

92

 

 

 

49

 

Asia Pacific

 

 

25

 

 

 

—

 

 

 

—

 

Total Segment Rationalizations

 

$

453

 

 

$

124

 

 

$

87

 

Corporate

 

 

49

 

 

 

5

 

 

 

6

 

 

$

502

 

 

$

129

 

 

$

93

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Net Gains on Asset Sales

 

 

 

 

 

 

 

 

 

Americas

 

$

(104

)

 

$

(122

)

 

$

(1

)

Europe, Middle East and Africa

 

 

—

 

 

 

—

 

 

 

(13

)

Total Segment Gains on Asset Sales

 

$

(104

)

 

$

(122

)

 

$

(14

)

Corporate

 

 

—

 

 

 

—

 

 

 

(6

)

 

$

(104

)

 

$

(122

)

 

$

(20

)

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Asset Write-Offs and Accelerated Depreciation, net

 

 

 

 

 

 

 

 

 

Americas

 

$

19

 

 

$

—

 

 

$

—

 

Europe, Middle East and Africa

 

 

17

 

 

 

20

 

 

 

1

 

Total Segment Asset Write-Offs and Accelerated Depreciation, net

 

$

36

 

 

$

20

 

 

$

1

 

Corporate

 

 

—

 

 

 

17

 

 

 

—

 

 

$

36

 

 

$

37

 

 

$

1

 

 

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

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Capital Expenditures

 

 

 

 

 

 

 

 

 

Americas

 

$

638

 

 

$

611

 

 

$

537

 

Europe, Middle East and Africa

 

 

255

 

 

 

258

 

 

 

270

 

Asia Pacific

 

 

126

 

 

 

144

 

 

 

135

 

Total Segment Capital Expenditures

 

$

1,019

 

 

$

1,013

 

 

$

942

 

Corporate

 

 

31

 

 

 

48

 

 

 

39

 

 

$

1,050

 

 

$

1,061

 

 

$

981

 

 

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Depreciation and Amortization

 

 

 

 

 

 

 

 

 

Americas

 

$

580

 

 

$

561

 

 

$

486

 

Europe, Middle East and Africa

 

 

239

 

 

 

208

 

 

 

213

 

Asia Pacific

 

 

141

 

 

 

144

 

 

 

146

 

Total Segment Depreciation and Amortization

 

$

960

 

 

$

913

 

 

$

845

 

Corporate

 

 

41

 

 

 

51

 

 

 

38

 

 

$

1,001

 

 

$

964

 

 

$

883

 

 

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

 

 

 

 

 

 

 

 

 

(In millions)

 

2023

 

 

2022

 

 

2021

 

Equity in (Income) Loss

 

 

 

 

 

 

 

 

 

Americas

 

$

15

 

 

$

(14

)

 

$

(18

)

Europe, Middle East and Africa

 

 

(1

)

 

 

1

 

 

 

—

 

Asia Pacific

 

 

(16

)

 

 

(12

)

 

 

(4

)

Total Segment Equity in Income

 

$

(2

)

 

$

(25

)

 

$

(22

)

 

The decrease in total segment equity in income for 2023 compared to 2022 was driven by decreased profitability of our TireHub joint venture in Americas.