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Business Segments | 12 Months Ended
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Dec. 31, 2020
Segment Reporting [Abstract] |
Business Segments | Note 8. 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, 2020, 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. 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, 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 (loss), and the reconciliation of segment operating income (loss) to Income (Loss) before Income Taxes:
(In millions) |  | 2020 |  |  | 2019 |  |  | 2018 |
Sales |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 6,556 |  |  | $ | 7,922 |  |  | $ | 8,168 |
Europe, Middle East and Africa |  |  | 4,020 |  |  |  | 4,708 |  |  |  | 5,090 |
Asia Pacific |  |  | 1,745 |  |  |  | 2,115 |  |  |  | 2,217 |
Net Sales |  | $ | 12,321 |  |  | $ | 14,745 |  |  | $ | 15,475 |
Segment Operating Income (Loss) |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 9 |  |  | $ | 550 |  |  | $ | 654 |
Europe, Middle East and Africa |  |  | (72 | ) |  |  | 202 |  |  |  | 363 |
Asia Pacific |  |  | 49 |  |  |  | 193 |  |  |  | 257 |
Total Segment Operating Income (Loss) |  | $ | (14 | ) |  | $ | 945 |  |  | $ | 1,274 |
Less: |  |  |  |  |  |  |  |  |  |  |  |
Goodwill and Other Asset Impairments (Notes 11 and 12) |  |  | 330 |  |  |  | — |  |  |  | — |
Rationalizations (Note 3) |  |  | 159 |  |  |  | 205 |  |  |  | 44 |
Interest expense (Note 4) |  |  | 324 |  |  |  | 340 |  |  |  | 321 |
Other (income) expense (Note 5) |  |  | 119 |  |  |  | 98 |  |  |  | (174 | )
Asset write-offs and accelerated depreciation (Note 3) |  |  | 105 |  |  |  | 15 |  |  |  | 4 |
Corporate incentive compensation plans |  |  | 44 |  |  |  | 50 |  |  |  | 13 |
Retained expenses of divested operations |  |  | 8 |  |  |  | 10 |  |  |  | 9 |
Other(1) |  |  | 37 |  |  |  | 50 |  |  |  | 46 |
Income (Loss) before Income Taxes |  | $ | (1,140 | ) |  | $ | 177 |  |  | $ | 1,011 |
(1) | Primarily represents unallocated corporate costs and the elimination of $17 million, $17 million and $18 million for the years ended December 31, 2020, 2019 and 2018, respectively, of royalty income attributable to the strategic business units.
The following table presents segment assets at December 31:
(In millions) |  | 2020 |  |  | 2019 |  |  |
Assets |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 6,666 |  |  | $ | 7,606 |  |  |
Europe, Middle East and Africa |  |  | 4,825 |  |  |  | 4,724 |  |  |
Asia Pacific |  |  | 2,725 |  |  |  | 2,711 |  |  |
Total Segment Assets |  |  | 14,216 |  |  |  | 15,041 |  |  |
Corporate(1) |  |  | 2,290 |  |  |  | 2,144 |  |  |
|  | $ | 16,506 |  |  | $ | 17,185 |  |  |
(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, 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 consisted of property, plant and equipment. Besides Germany, management did not consider the net sales of any other individual countries outside the United States to be significant to the consolidated financial statements. For long-lived assets, only China and Germany were considered to be significant.
(In millions) |  | 2020 |  |  | 2019 |  |  | 2018 |
Net Sales |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 5,424 |  |  | $ | 6,489 |  |  | $ | 6,692 |
Germany(1) |  |  | 705 |  |  |  | 979 |  |  |  | 1,691 |
Other international |  |  | 6,192 |  |  |  | 7,277 |  |  |  | 7,092 |
|  | $ | 12,321 |  |  | $ | 14,745 |  |  | $ | 15,475 |
Long-Lived Assets |  |  |  |  |  |  |  |  |  |  |  |
United States |  | $ | 2,517 |  |  | $ | 2,681 |  |  |  |  |
China |  |  | 742 |  |  |  | 722 |  |  |  |  |
Germany |  |  | 729 |  |  |  | 653 |  |  |  |  |
Other international |  |  | 3,085 |  |  |  | 3,152 |  |  |  |  |
|  | $ | 7,073 |  |  | $ | 7,208 |  |  |  |  |
(1) | The decrease in net sales from 2018 primarily related to a business reorganization that centralized our OE sales for EMEA in Luxembourg.
At December 31, 2020, significant concentrations of cash and cash equivalents held by our international subsidiaries included the following amounts:
| • | $387 million or 25% in Asia Pacific, primarily China and Japan ($337 million or 37% at December 31, 2019),
| • | $387 million or 25% in EMEA, primarily Belgium ($214 million or 24% at December 31, 2019), and
| • | $384 million or 25% in Americas, primarily Brazil, Canada and Chile ($190 million or 21% at December 31, 2019).
Goodwill and other asset impairments, as described in Notes to the Consolidated Financial Statements No. 11, Goodwill and Intangible Assets, and No. 12, Other Assets and Investments; rationalizations, as described in Note to the Consolidated Financial Statements No. 3, Costs Associated with Rationalization Programs; net (gains) losses on asset sales, as described in Note to the Consolidated Financial Statements No. 5, 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) |  | 2020 |  |  | 2019 |  |  | 2018 |
Goodwill and Other Asset Impairments |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 148 |  |  | $ | — |  |  | $ | — |
Europe, Middle East and Africa |  |  | 182 |  |  |  | — |  |  |  | — |
Total Segment Goodwill and Other Asset Impairments |  | $ | 330 |  |  | $ | — |  |  | $ | — |
(In millions) |  | 2020 |  |  | 2019 |  |  | 2018 |
Rationalizations |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 94 |  |  | $ | 90 |  |  | $ | 3 |
Europe, Middle East and Africa |  |  | 59 |  |  |  | 115 |  |  |  | 36 |
Asia Pacific |  |  | 4 |  |  |  | — |  |  |  | 3 |
Total Segment Rationalizations |  | $ | 157 |  |  | $ | 205 |  |  | $ | 42 |
Corporate |  |  | 2 |  |  |  | — |  |  |  | 2 |
|  | $ | 159 |  |  | $ | 205 |  |  | $ | 44 |
(In millions) |  | 2020 |  |  | 2019 |  |  | 2018 |
Net (Gains) Losses on Asset Sales |  |  |  |  |  |  |  |  |  |  |  |
Americas(1) |  | $ | — |  |  | $ | — |  |  | $ | (275 | )
Europe, Middle East and Africa |  |  | 2 |  |  |  | (16 | ) |  |  | 2 |
Total Segment Asset Sales |  | $ | 2 |  |  | $ | (16 | ) |  | $ | (273 | )
(1) | Americas Net (Gains) Losses on Asset Sales for the year ended December 31, 2018 includes the gain of $272 million related to the TireHub transaction, net of transaction costs.
(In millions) |  | 2020 |  |  | 2019 |  |  | 2018 |
Asset Write-Offs and Accelerated Depreciation |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 103 |  |  | $ | 13 |  |  | $ | — |
Europe, Middle East and Africa |  |  | 2 |  |  |  | 2 |  |  |  | 4 |
Total Segment Asset Write-Offs and Accelerated Depreciation |  | $ | 105 |  |  | $ | 15 |  |  | $ | 4 |
The following tables present segment capital expenditures and depreciation and amortization:
(In millions) |  | 2020 |  |  | 2019 |  |  | 2018 |
Capital Expenditures |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 302 |  |  | $ | 369 |  |  | $ | 406 |
Europe, Middle East and Africa |  |  | 235 |  |  |  | 227 |  |  |  | 180 |
Asia Pacific |  |  | 91 |  |  |  | 141 |  |  |  | 188 |
Total Segment Capital Expenditures |  | $ | 628 |  |  | $ | 737 |  |  | $ | 774 |
Corporate |  |  | 19 |  |  |  | 33 |  |  |  | 37 |
|  | $ | 647 |  |  | $ | 770 |  |  | $ | 811 |
(In millions) |  | 2020 |  |  | 2019 |  |  | 2018 |
Depreciation and Amortization |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 490 |  |  | $ | 430 |  |  | $ | 414 |
Europe, Middle East and Africa |  |  | 201 |  |  |  | 197 |  |  |  | 201 |
Asia Pacific |  |  | 133 |  |  |  | 133 |  |  |  | 131 |
Total Segment Depreciation and Amortization |  | $ | 824 |  |  | $ | 760 |  |  | $ | 746 |
Corporate |  |  | 35 |  |  |  | 35 |  |  |  | 32 |
|  | $ | 859 |  |  | $ | 795 |  |  | $ | 778 |
The following table presents segment equity in the net income (loss) of investees accounted for by the equity method:
(In millions) |  | 2020 |  |  | 2019 |  |  | 2018 |
Equity in (Income) Loss |  |  |  |  |  |  |  |  |  |  |  |
Americas |  | $ | 31 |  |  | $ | 32 |  |  | $ | 11 |
Europe, Middle East and Africa |  |  | — |  |  |  | — |  |  |  | (1 | )
Total Segment Equity in (Income) Loss |  | $ | 31 |  |  | $ | 32 |  |  | $ | 10 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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