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Divestitures | 6 Months Ended
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Jun. 30, 2025
Discontinued Operations and Disposal Groups [Abstract] |
Divestitures | DIVESTITURES Net gains on asset sales were $439 million and $96 million for the three months ended June 30, 2025 and 2024, respectively. Net gains on asset sales were $701 million and $94 million for the six months ended June 30, 2025 and 2024, respectively. None of our divestitures meet the criteria for presentation as discontinued operations as they do not represent a strategic shift that will have a major effect on our operations or financial results. On February 3, 2025, we completed the sale of our OTR tire business to The Yokohama Rubber Company, Limited (“Yokohama”) pursuant to the terms of the Share and Asset Purchase Agreement, dated as of July 22, 2024 (the “OTR Purchase Agreement”). In conjunction with the sale of the OTR tire business, we entered into several ancillary agreements, including a trademark license agreement, whereby we license certain trademarks to Yokohama for an initial period of ten years from the date of the sale, a product supply agreement, pursuant to which we supply to Yokohama certain OTR tires for an initial period of up to five years, and a transition services agreement, pursuant to which we are providing certain support services for a period of up to eighteen months. The activity related to these agreements is primarily recorded in Prepaid Expenses and Other Current Assets and Other Current Liabilities in the Consolidated Balance Sheets. As a result of the transaction, considering the receipt of the purchase price of $905 million, subject to certain adjustments set forth in the OTR Purchase Agreement, amounts allocated to deferred income related to the trademark license agreement of $90 million, amounts allocated to deferred revenue related to the product supply agreement of $95 million, and transaction costs of $26 million, and based upon the net assets of the OTR tire business of $434 million, we recorded an estimated pre-tax gain of $260 million during the first quarter of 2025. We estimated the fair value of the deferred income related to the trademark license agreement using the relief-from-royalty method, with the most critical assumptions based on projected revenue, royalty rate and discount rate. We estimated the fair value of the deferred revenue related to the product supply agreement using a cost-plus-margin approach, with the most critical assumption based on projected cost of goods sold. The pre-tax income from the assets sold included within the Consolidated Statements of Operations was $23 million for the three months ended June 30, 2024 and $35 million for the six months ended June 30, 2024. These amounts exclude any ongoing obligations related to the product supply agreement and transition services agreement, as well as any amortization of deferred revenue or income. On May 7, 2025, we completed the sale of our rights to the Dunlop brand in Europe, North America and Oceania for consumer, commercial and other specialty tires, together with certain associated intellectual property and other intangible assets, for a purchase price of $526 million to Sumitomo Rubber Industries, Ltd. ("SRI") pursuant to the terms of the Purchase Agreement, dated as of January 7, 2025 (as amended, the "Dunlop Purchase Agreement"). SRI also paid us an up-front transition support fee of $105 million for our support in transitioning the Dunlop brand, related intellectual property and Dunlop customers to SRI. SRI also acquired our existing Dunlop tire inventory for approximately $104 million. We also entered into a number of ancillary agreements, including (a) a transition license agreement, pursuant to which we will continue to manufacture, sell and distribute Dunlop-branded consumer tires in Europe from the closing of the transaction until December 31, 2025, and during which we will pay SRI a royalty on such Dunlop sales; (b) a transition offtake agreement, pursuant to which we will sell to SRI certain Dunlop-branded consumer tire products for a period of up to five years, commencing after termination or expiration of the transition license agreement; and (c) we will license back the Dunlop brand from SRI for commercial tires in Europe on a long-term basis, subject to a royalty on sales. As a result of the transaction, we received gross proceeds of $735 million at closing for the Dunlop brand, related intellectual property and other intangible assets, the transition support fee and the tire inventory. We allocated $105 million of those proceeds related to the up-front transition support fee to deferred income, which will be recognized over the combined lives of the transition license and transition offtake agreements. We also allocated $86 million of those proceeds to deferred income for tire inventory in Europe that will not transfer ownership until the termination of the transition license agreement. We recognized an estimated pre-tax gain of $385 million based on the net assets sold of $133 million during the second quarter of 2025, net of transaction costs of $26 million. On May 22, 2025, we entered into an Asset Purchase Agreement (the “Chemical Purchase Agreement”) with G-3 Chickadee Purchaser, LLC, a Delaware limited liability company (the “Purchaser”). Pursuant to the Chemical Purchase Agreement and upon the terms and subject to the conditions set forth therein, we have agreed to sell to the Purchaser, and the Purchaser has agreed to acquire from us, the polymer chemicals business of the Company (the “Chemical Business”) for a purchase price of approximately $650 million in cash, subject to certain adjustments. The assets to be acquired, and the liabilities to be assumed, by the Purchaser are generally those primarily related to the Chemical Business, including our chemical plants in Houston, Texas and Beaumont, Texas and a research and development facility in Akron, Ohio. The closing of the transaction is subject to the satisfaction of customary closing conditions. The Chemical Purchase Agreement contains customary termination rights, including if the closing of the transaction has not occurred on or prior to November 22, 2025, subject to certain limitations. The Chemical Purchase Agreement also contemplates that, at the closing date, we will enter into a number of ancillary agreements with the Purchaser (or their respective affiliates). These agreements include, among others: (a) a master supply agreement, pursuant to which the Purchaser will, or will cause its affiliates to, supply to us certain polymer chemical products for a period of fifteen (15) years after the closing, (b) a transition services agreement, pursuant to which we will provide certain transition services to the Purchaser for the Chemical Business for a period of up to eighteen (18) months from the closing, and (c) a patent and know-how license agreement, pursuant to which the Purchaser will license back to us certain intellectual property related to the Chemical Business for use in connection with certain retained businesses. Net gains on asset sales for the three and six months ended June 30, 2025 also include a $55 million ($26 million after-tax and minority) gain related to the sale of property in Asia Pacific. Net gains on asset sales for the three and six months ended June 30, 2024 also include an $80 million gain related to the sale of a distribution center in Europe, Middle East and Africa ("EMEA").

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