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

THE GOODYEAR TIRE & RUBBER COMPANY

(Exact Name of Registrant as Specified in Its Charter)

Ohio		34-0253240
(State or Other Jurisdiction of Incorporation or Organization)		(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 þ                              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 the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

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, 2009:                               241,824,683

 

 

THE GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

		Three Months Ended
		March 31,
(In millions, except per share amounts)		2009				2008
NET SALES		$	3,536			$	4,942
Cost of Goods Sold			3,219				3,961
Selling, Administrative and General Expense			533				635
Rationalizations (Note 2)			55				13
Interest Expense			64				89
Other (Income) and Expense (Note 3)			30				(6	)
(Loss) Income before Income Taxes			(365	)			250
United States and Foreign Taxes			(17	)			77
Net (Loss) Income			(348	)			173
Less: Minority Shareholders Net (Loss) Income			(15	)			26
Goodyear Net (Loss) Income		$	(333	)		$	147
Goodyear Net (Loss) Income — Per Share
Basic		$	(1.38	)		$	0.61
Weighted Average Shares Outstanding (Note 4)			241				240
Diluted		$	(1.38	)		$	0.60
Weighted Average Shares Outstanding (Note 4)			241				244

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

		March 31,				December 31,
(In millions)		2009				2008
Assets:
Current Assets:
Cash and Cash Equivalents		$	1,896			$	1,894
Accounts Receivable, less Allowance — $92 ($93 in 2008)			2,489				2,547
Inventories:
Raw Materials			519				714
Work in Process			144				119
Finished Products			2,599				2,759
			3,262				3,592
Prepaid Expenses and Other Current Assets			321				307
Total Current Assets			7,968				8,340
Goodwill			650				683
Intangible Assets			158				160
Deferred Income Tax			52				54
Other Assets			341				355
Property, Plant and Equipment less Accumulated Depreciation — $8,222 ($8,310 in 2008)			5,476				5,634
Total Assets		$	14,645			$	15,226
Liabilities:
Current Liabilities:
Accounts Payable-Trade		$	1,989			$	2,509
Compensation and Benefits			633				624
Other Current Liabilities			561				643
United States and Foreign Taxes			192				156
Notes Payable and Overdrafts (Note 6)			317				265
Long Term Debt and Capital Leases due within one year (Note 6)			564				582
Total Current Liabilities			4,256				4,779
Long Term Debt and Capital Leases (Note 6)			4,645				4,132
Compensation and Benefits			3,392				3,487
Deferred and Other Noncurrent Income Taxes			194				193
Other Long Term Liabilities			766				763
Total Liabilities			13,253				13,354
Commitments and Contingent Liabilities (Note 9)
Minority Shareholders’ Equity (Note 1)			576				619
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Preferred Stock, no par value:
Authorized, 50 shares, unissued			—				—
Common Stock, no par value:
Authorized, 450 shares, Outstanding shares — 242 (241 in 2008) after deducting 9 treasury shares (10 in 2008)			242				241
Capital Surplus			2,767				2,764
Retained Earnings			1,130				1,463
Accumulated Other Comprehensive Loss			(3,538	)			(3,446	)
Goodyear Shareholders’ Equity			601				1,022
Minority Shareholders’ Equity — Nonredeemable			215				231
Total Shareholders’ Equity			816				1,253
Total Liabilities and Shareholders’ Equity		$	14,645			$	15,226

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)		2009				2008
Net (Loss) Income		$	(348	)		$	173
Other Comprehensive (Loss) Income:
Foreign currency translation, net of tax of $0			(172	)			260
Defined benefit plans:
Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost, net of tax of $5 ($1 in 2008)			42				32
Increase in net actuarial losses, net of tax of $0			(3	)			—
Immediate recognition of prior service cost and unrecognized gains and losses due to curtailments and settlements, net of tax of $1			4				—
Unrealized investment loss, net of tax of $0			(7	)			(5	)
Comprehensive (Loss) Income			(484	)			460
Less: Comprehensive (Loss) Income Attributable to Minority Shareholders			(59	)			102
Comprehensive (Loss) Income Attributable to Goodyear Shareholders		$	(425	)		$	358

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)		2009				2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (Loss) Income		$	(348	)		$	173
Adjustments to reconcile net (loss) income to cash flows from operating activities:
Depreciation and amortization			152				155
Amortization and write-off of debt issuance costs			3				16
Net rationalization charges (Note 2)			55				13
Net gains on asset sales (Note 3)			(1	)			(33	)
Pension contributions and direct payments			(106	)			(53	)
Rationalization payments			(70	)			(16	)
Changes in operating assets and liabilities, net of asset acquisitions and dispositions:
Accounts receivable			(19	)			(415	)
Inventories			250				(296	)
Accounts payable — trade			(331	)			65
U.S. and foreign taxes			43				50
Compensation and benefits			96				—
Other current liabilities			(57	)			(5	)
Other assets and liabilities			8				(1	)
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES			(325	)			(347	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures			(221	)			(226	)
Asset dispositions (Note 3)			1				33
Asset acquisitions			—				(46	)
Return of investment in The Reserve Primary Fund			24				—
Other transactions			4				1
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES			(192	)			(238	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Short term debt and overdrafts incurred			79				69
Short term debt and overdrafts paid			(42	)			—
Long term debt incurred			969				6
Long term debt paid			(454	)			(769	)
Common stock issued			2				3
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES			554				(691	)
Effect of exchange rate changes on cash and cash equivalents			(35	)			29
Net Change in Cash and Cash Equivalents			2				(1,247	)
Cash and Cash Equivalents at Beginning of the Period			1,894				3,463
Cash and Cash Equivalents at End of the Period		$	1,896			$	2,216

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 (“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, 2008 (the “2008 Form 10-K”).

     We have adopted the provisions of FASB Staff Position APB 14-1, “Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)”, effective January 1, 2009. The FSP specifies that issuers of convertible debt instruments that may be settled in cash upon conversion should separately account for the liability and equity components in a manner that will reflect the entity’s nonconvertible debt borrowing rate. In July 2004, we issued $350 million of 4% convertible senior notes due 2034, and subsequently exchanged $346 million of those notes for common stock and a cash payment in December 2007. The remaining $4 million of notes were converted into common stock in May 2008. The adoption of APB 14-1 effective January 1, 2009 resulted in a $62 million reclassification in our consolidated statements of shareholders’ equity by decreasing retained earnings and increasing capital surplus. Prior period information presented in this Form 10-Q has been restated, where required. Refer to Note 12.

     We also have adopted the provisions of FASB Statement No. 160, “Noncontrolling Interests in Consolidated Financial Statements — an Amendment of ARB No. 51”, effective January 1, 2009. SFAS No. 160 establishes accounting and reporting standards for noncontrolling interests (i.e., minority interests) in a subsidiary, including changes in a parent’s ownership interest in a subsidiary, and requires, among other things, that noncontrolling interests in subsidiaries be classified as shareholders’ equity. Prior period information presented in this Form 10-Q has been reclassified, where required.

     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, 2009 are not necessarily indicative of the results expected in subsequent quarters or for the year ending December 31, 2009.

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 (Loss) Income before Income Taxes are as follows:

		Three Months Ended
		March 31,
(In millions)		2009				2008
New charges		$	57			$	14
Reversals			(2	)			(1	)
		$	55			$	13

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:

						Other Than
		Associate-				Associate-Related
(In millions)		Related Costs				Costs				Total
Balance at December 31, 2008		$	118			$	18			$	136
2009 charges			51				6				57
Incurred			(77	)			(4	)			(81	)
Reversed to the statement of operations			(2	)			—				(2	)
Balance at March 31, 2009		$	90			$	20			$	110

The rationalization actions taken in 2009 were initiated to reduce our cost structure as a result of lower sales demand due to the global economic slowdown. We initiated these actions throughout the Company. North American Tire initiated manufacturing headcount reductions at two facilities to meet lower production demand and also initiated reductions in salaried selling, administrative and general positions in Akron, Ohio. Additional salaried headcount reductions were initiated at our corporate offices in Akron, Ohio and throughout Europe, Middle East and Africa Tire (“EMEA”). Finally, Latin American Tire initiated manufacturing headcount reductions at each of its two facilities in Brazil.

     During 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. Approximately 1,800 associates will be released under 2009 plans, of which 800 were released by March 31, 2009.

     In 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.

     The accrual balance of $110 million at March 31, 2009 consists of $90 million for associate severance costs that are expected to be substantially utilized within the next twelve months and $20 million primarily for long term non-cancelable lease costs.

     Asset write-offs and accelerated depreciation charges of $10 million were recorded in cost of goods sold (“CGS”) in the first quarter of 2009, related primarily to the closure of our Somerton, Australia tire manufacturing facility. No asset write-offs and accelerated depreciation were recorded in the first quarter of 2008.

     During the first quarter of 2008, $13 million of net charges were recorded. New charges of $14 million represented $2 million for plans initiated in 2008 to exit certain unprofitable retail stores in our EMEA business unit, and $12 million for plans initiated in 2007 and prior years, primarily related to North American Tire, including the elimination of tire production at our Tyler, Texas manufacturing facility and a warehouse closure.

     Approximately 3,800 associates will be released under programs initiated in 2008 and 2007, of which approximately 2,900 were released by March 31, 2009, including 1,000 in the first quarter of 2009.

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

NOTE 3. OTHER (INCOME) AND EXPENSE

		Three Months Ended March 31,
(In millions)		2009				2008
Net gains on asset sales		$	(1	)		$	(33	)
Interest income			(4	)			(29	)
Royalty income			(7	)			(9	)
Financing fees and financial instruments			11				53
Insurance fire loss expense			—				2
Foreign currency exchange			24				8
General & product liability — discontinued products (Note 9)			5				5
Miscellaneous			2				(3	)
		$	30			$	(6	)

Other (Income) and Expense was $30 million of expense in the first quarter of 2009, compared to $6 million of income in the first quarter of 2008. Gains on asset sales declined by $32 million due primarily to gains recognized in 2008. Interest income decreased by $25 million due primarily to lower average cash balances and interest rates in 2009 compared to the prior year. During the first quarter of 2009, we incurred $24 million of foreign currency exchange losses primarily as a result of the weakening Brazilian real and Polish zloty against the U.S. dollar and of the weakening of the Polish zloty against the euro. During the first quarter of 2008, we incurred $8 million of foreign currency exchange losses primarily as a result of the strengthening Chilean peso, partially offset by the weakening of the Turkish lira, both against the U.S. dollar and euro. Financing fees decreased by $42 million due primarily to the inclusion in the 2008 period of charges of $43 million related to the redemption of $650 million of senior secured notes due 2011, of which $33 million was cash premiums paid on the redemption and $10 million was the write-off of deferred financing fees and unamortized discount.

NOTE 4. PER SHARE OF COMMON STOCK

Basic earnings per share are computed based on the weighted average number of common shares outstanding.

     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)		2009				2008
Weighted average shares outstanding — basic			241				240
Stock options and other dilutive securities			—				4
Weighted average shares outstanding — diluted			241				244

Weighted average shares outstanding — diluted for the three months ended March 31, 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 15 million and 8 million equivalent shares related to options with exercise prices greater than the average market price of our common shares (i.e., “underwater” options), for 2009 and 2008, respectively.

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

NOTE 5. FAIR VALUE MEASUREMENTS

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

						Quoted Prices in				Significant
		Total Carrying				Active Markets for				Other				Significant
		Value in the				Identical				Observable				Unobservable
		Consolidated				Assets/Liabilities				Inputs				Inputs
(In millions)		Balance Sheet				(Level 1)				(Level 2)				(Level 3)
Assets:
Investments		$	28			$	28			$	—			$	—
Derivative Financial Instruments			2				—				2				—
Total Assets at Fair Value		$	30			$	28			$	2			$	—
Liabilities:
Derivative Financial Instruments		$	29			$	—			$	21			$	8
Total Liabilities at Fair Value		$	29			$	—			$	21			$	8

Derivative financial instrument valuations classified as Level 3 include our interest rate basis swap discussed in Note 6 and an embedded currency derivative in long-dated operating leases at March 31, 2009. The valuation of the basis swap is calculated using a net present value of future cash flows based on available market rates at March 31, 2009. The valuation of the embedded currency derivative is based on an extrapolation of forward rates to the assumed expiration of the leases. Other (Income) and Expense in 2009 included a loss of $3 million resulting primarily from the change in the fair value of the embedded derivative, and a gain of $5 million related to the interest rate basis swap. Other (Income) and Expense in the three months ended March 31, 2008 included a gain of $2 million resulting from the change in the fair value of the embedded currency derivative from December 31, 2007.

     The following table presents supplemental fair value information about long term fixed rate and variable rate debt, excluding capital leases, at March 31, 2009 and December 31, 2008. The fair value was estimated using quoted market prices or discounted future cash flows.

(In millions)		March 31, 2009				December 31, 2008
Fixed Rate Debt:
Carrying amount — liability		$	1,457			$	1,514
Fair value — liability			1,169				1,207
Variable Rate Debt:
Carrying amount — liability		$	3,718			$	3,164
Fair value — liability			3,115				2,531

NOTE 6. FINANCING ARRANGEMENTS

At March 31, 2009, we had total credit arrangements totaling $6,997 million, of which $1,001 million were unused, compared to $7,127 million and $1,677 million, respectively, at December 31, 2008.

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

At March 31, 2009, we had short term committed and uncommitted credit arrangements totaling $516 million, of which $199 million were unused, compared to $481 million and $216 million, respectively, at December 31, 2008. 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 GOODYEAR TIRE & RUBBER COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

     The following table presents amounts due within one year:

		March 31,				December 31,
(In millions)		2009				2008
Notes payable and overdrafts		$	317			$	265
Weighted average interest rate			5.25	%			6.33	%
Long term debt and capital leases due within one year:
Floating rate notes due 2009		$	499			$	498
Other domestic and international debt (including capital leases)			65				84
		$	564			$	582
Weighted average interest rate			6.23	%			6.28	%
Total obligations due within one year		$	881			$	847

Long Term Debt and Capital Leases and Financing Arrangements

At March 31, 2009, we had long term credit arrangements totaling $6,481 million, of which $802 million were unused, compared to $6,646 million and $1,461 million, respectively, at December 31, 2008.

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

		March 31, 2009								December 31, 2008
						Interest								Interest
(In millions)		Amount				Rate				Amount				Rate
Notes:
Floating rate notes due 2009		$	499				6.29	%		$	498				6.29	%
7 6/7% due 2011			650				7 6/7	%			650				7 6/7	%
8.625% due 2011			325				8.625	%			325				8.625	%
9% due 2015			260				9	%			260				9	%
7% due 2028			149				7	%			149				7	%
Credit Facilities:
€505 million revolving credit facility due 2012			651				3.17	%			182				4.75	%
$1.5 billion first lien revolving credit facility due 2013			800				1.78	%			700				1.73	%
$1.2 billion second lien term loan facility due 2014			1,200				2.28	%			1,200				2.22	%
Pan-European accounts receivable facility due 2015			376				4.11	%			483				5.81	%
Other domestic and international debt(1)			265				6.20	%			231				7.54	%
			5,175								4,678
Capital lease obligations			34								36
			5,209								4,714
Less portion due within one year			(564	)							(582	)
		$	4,645							$	4,132

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

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, 2009, we had $800 million outstanding and $487 million of letters of credit issued under the revolving credit facility. At December 31, 2008, we had $700 million outstanding and $497 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, 2009 and December 31, 2008, 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 certain of our German subsidiaries of Goodyear Dunlop Tires Europe B.V. (“GDTE”) (collectively, “German borrowers”), and a €350 million European revolving credit facility which is available to the same German borrowers 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. As of March 31, 2009, $206 million (€155 million) was outstanding under the German revolving credit facility and there were $16 million (€12 million) of letters of credit issued and $445 million (€335 million) of borrowings (including $146 million (€110 million) of borrowings by the non-German borrowers) under the European revolving credit facility. As of December 31, 2008, there were no borrowings under the German revolving credit facility and there were $10 million (€7 million) of letters of credit issued and $182 million (€130 million) of borrowings (including $84 million (€60 million) of borrowings by the non-German borrowers) under the European revolving credit facility.

     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. As of March 31, 2009 and December 31, 2008, the amount available and fully utilized under this program totaled $376 million (€283 million) and $483 million (€346 million), respectively. The program did not qualify for sale accounting, and accordingly, these amounts are included in Long-term debt and capital leases.

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

     In addition to the pan-European accounts receivable securitization facility discussed above, subsidiaries in Australia have accounts receivable programs totaling $53 million and $61 million at March 31, 2009 and December 31, 2008, respectively. 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, please refer to the Note to the Consolidated Financial Statements No. 12, Financing Arrangements and Derivative Financial Instruments, in our 2008 Form 10-K.

Other Foreign Credit Facilities

During the third quarter of 2008, we executed financing agreements in China. The facilities provide for availability of up to 3.6 billion renminbi (approximately $530 million at March 31, 2009 and $535 million at December 31, 2008) and can only be used to finance the relocation and expansion of our manufacturing facilities in China. There were no borrowings outstanding at March 31, 2009 or December 31, 2008.

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. Our policy prohibits holding or issuing derivative financial instruments for trading purposes.

Interest Rate Contracts

We manage our fixed and floating rate debt mix, within defined limitations, using refinancings and unleveraged interest rate swaps. We will enter into fixed and floating interest rate swaps to hedge against the effects of adverse changes in interest rates on our consolidated results of operations and future cash outflows for interest. Fixed rate swaps are used to reduce our risk of increased interest costs during periods of rising interest rates, and are normally designated as cash flow hedges. Floating rate swaps are used to convert the fixed rates of long term borrowings into short term variable rates, and are normally designated as fair value hedges. We use interest rate swap contracts to separate interest rate risk management from the debt funding decision. At March 31, 2009, 71% of our debt was at variable interest rates averaging 3.35% compared to 68% at an average rate of 3.83% at December 31, 2008. The decrease in the average variable interest rate was driven by decreases in the underlying market rates associated with our variable rate debt.

     We may also enter into interest rate contracts that change the basis of our floating interest rate exposure. There was one contract outstanding at March 31, 2009, under which we pay six-month LIBOR and receive one-month LIBOR plus a premium. This contract applies to $1.2 billion of notional principal, has a contractual life of twelve months and matures in October 2009. During the first quarter of 2009, the weighted average interest rates paid and received were 3.48% and 0.91%, respectively. The contract was not designated as a hedging instrument and accordingly, fair value gains and losses on the contract are recorded in Other (Income) and Expense. The fair value of the contract was $5 million and $10 million at March 31, 2009 and December 31, 2008, respectively, and was included in Other Current Liabilities.

Foreign Currency Contracts

We will enter into foreign currency contracts in order to reduce 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 foreign currency forward contract information:

		March 31, 2009								December 31, 2008
		Fair				Contract				Fair				Contract
(In millions)		Value				Amount				Value				Amount
Buy currency:
U.S. dollar		$	270			$	278			$	576			$	586
Japanese yen			92				101				96				97
British pound			48				48				104				104
Australian dollar			34				34				34				39
Euro			13				14				9				8
All other			13				13				32				33
		$	470			$	488			$	851			$	867
Contract maturity		4/09 – 10/09								1/09 – 6/09
Sell currency:
Brazilian real		$	78			$	76			$	155			$	148
Canadian dollar			30				30				21				20
U.S. dollar			23				21				24				24
Euro			17				16				32				33
South African rand			15				14				5				5
Czech koruna			14				14				8				8
All other			13				15				18				18
		$	190			$	186			$	263			$	256
Contract maturity		4/09 – 10/19								1/09 – 10/19

There were no foreign currency forward contracts designated as hedging instruments at March 31, 2009. The following table presents amounts included in the Consolidated Balance Sheets for foreign currency forward contracts:

		March 31,				December 31,
(In millions)		2009				2008
Accounts receivable		$	2			$	3
Other Assets			—				1
Other Current Liabilities			(22	)			(27	)
Other Long Term Liabilities			(2	)			—

Net transaction losses on foreign currency contracts totaled $9 million in the three months ended March 31, 2009, and are reported in Other (Income) and Expense. Refer to Note 3.

     We were not a party to any other types of foreign currency contracts at March 31, 2009 and December 31, 2008.

     There are no credit risk-related contingent features in our interest rate and foreign exchange contracts, and the contracts contained no provisions under which we have posted, or would be required to post, collateral. 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 effect on our consolidated financial position, results of operations or liquidity in the period in which it occurs.

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

NOTE 7. STOCK COMPENSATION PLANS

Our Board of Directors granted 2.8 million stock options and 0.2 million performance share units during the first quarter of 2009 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 these stock options was $4.81 and $3.49, respectively. The expected term was estimated using the simplified method, as historical data was not sufficient to provide a reasonable estimate. We estimated the fair values using the following assumptions in our Black-Scholes model:

Expected term: 6.25 years
Interest rate: 2.30%
Volatility: 83.6%
Dividend yield: Nil

     We recognized stock-based compensation expense of $3 million ($3 million after-tax) and $6 million ($6 million after-tax) during the first quarter of 2009 and 2008, respectively. As of March 31, 2009, unearned compensation cost related to the unvested portion of all stock-based awards was approximately $31 million and is expected to be recognized over the remaining vesting period of the respective grants, through March 31, 2013.

NOTE 8. PENSION, SAVINGS AND OTHER POSTRETIREMENT BENEFIT PLANS

We provide employees with defined benefit pension or defined contribution savings plans. In addition, we provide substantially all domestic employees and employees at certain non-U.S. subsidiaries with health care benefits or life insurance benefits upon retirement.

     Pension cost follows:

		U.S.								Non-U.S.
		Three Months Ended								Three Months Ended
		March 31,								March 31,
(In millions)		2009				2008				2009				2008
Service cost – benefits earned during the period		$	9			$	18			$	6			$	9
Interest cost on projected benefit obligation			80				79				32				43
Expected return on plan assets			(60	)			(93	)			(26	)			(37	)
Amortization of: — prior service cost			8				9				—				1
— net losses			39				11				7				13
Net periodic pension cost			76				24				19				29
Curtailments/settlements			—				—				5				—
Total pension cost		$	76			$	24			$	24			$	29

We expect to contribute approximately $325 million to $375 million to our funded U.S. and non-U.S. pension plans in 2009. For the three months ended March 31, 2009, we contributed $40 million and $43 million to our U.S. and non-U.S. plans, respectively.

     Substantially all employees in the U.S. and employees of certain non-U.S. locations are eligible to participate in a defined contribution savings plan. The expenses recognized for our contributions to these plans for the three months ended March 31, 2009 and 2008 were $19 million and $9 million, respectively.

     As announced in 2007, we froze our U.S. salaried pension plans effective December 31, 2008 and implemented improvements to our U.S. defined contribution savings plan effective January 1, 2009.

     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.

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

     Postretirement benefit cost follows:

		Three Months Ended
		March 31,
(In millions)		2009				2008
Service cost – benefits earned during the period		$	1			$	3
Interest cost on projected benefit obligation			8				26
Amortization of: — prior service credit			(10	)			(3	)
— net losses			2				2
Net periodic postretirement benefit cost		$	1			$	28

Effective August 22, 2008, health care benefits for current and future domestic retirees who were represented by the United Steelworkers (“USW”) became the responsibility of an independent Voluntary Employees’ Beneficiary Association (“VEBA”), which resulted in the settlement of the OPEB obligation for the affected plans in the 2008 third quarter. Postretirement benefit cost recognized in the 2008 first quarter for these plans was $25 million.

NOTE 9. COMMITMENTS AND CONTINGENT LIABILITIES

At March 31, 2009, we had binding commitments for raw materials and investments in land, buildings and equipment of approximately $876 million, and off-balance-sheet financial guarantees written and other commitments totaling $38 million.

Environmental Matters

We have recorded liabilities totaling $39 million and $40 million at March 31, 2009 and December 31, 2008, respectively, 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, $7 million and $8 million were included in Other Current Liabilities at March 31, 2009 and December 31, 2008. 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.

Workers’ Compensation

We have recorded liabilities, on a discounted basis, totaling $297 million and $288 million for anticipated costs related to workers’ compensation at March 31, 2009 and December 31, 2008, respectively. Of these amounts, $83 million and $75 million were included in Current Liabilities as part of Compensation and Benefits at March 31, 2009 and December 31, 2008, 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.

General and Product Liability and Other Litigation

We have recorded liabilities totaling $287 million and $291 million, including related legal fees expected to be incurred, for potential product liability and other tort claims presently asserted against us at March 31, 2009 and December 31, 2008, respectively. Of these amounts, $74 million and $86 million were included in Other Current Liabilities at March 31, 2009 and December 31, 2008, respectively. The amounts recorded were estimated on the basis of 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. We have recorded insurance receivables for potential product liability and other tort claims of $66 million at March 31, 2009 and $65 million at December 31, 2008. Of these amounts, $10 million was included in Current Assets as part of Accounts Receivable at March 31, 2009 and December 31, 2008, respectively.

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 73,100 claims by defending and obtaining the dismissal thereof or by entering into a settlement. The sum of

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

our accrued asbestos-related liability and gross payments to date, including legal costs, totaled approximately $333 million through March 31, 2009 and $325 million through December 31, 2008.

     A summary of approximate asbestos claims activity in recent years 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 from period to period.

		Three Months Ended				Year Ended
(Dollars in millions)		March 31, 2009				December 31, 2008
Pending claims, beginning of period			99,000				117,400
New claims filed			400				4,600
Claims settled/dismissed			(1,000	)			(23,000	)
Pending claims, end of period			98,400				99,000
Payments (1)		$	5			$	23

We engaged an independent asbestos valuation firm, Bates White, LLC (“Bates”), to review our existing reserves for pending claims, provide 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 $135 million and $132 million at March 31, 2009 and December 31, 2008, respectively. The portion of the liability associated with unasserted asbestos claims and related defense costs was $72 million and $71 million at March 31, 2009 and December 31, 2008, respectively. Our liability with respect to asserted claims and related defense costs was $63 million at March 31, 2009 and $61 million at December 31, 2008. At March 31, 2009, we estimate that it is reasonably possible that our gross liabilities could exceed our recorded reserve by $35 million to $40 million, approximately 50% of which would be recoverable by our accessible policy limits.

     Based upon a model employed by Bates, as of March 31, 2009, (i) we had recorded a receivable related to asbestos claims of $66 million, compared to $65 million at December 31, 2008, and (ii) we expect that approximately 50% of asbestos claim related losses would be recoverable up to our accessible policy limits through the period covered by the estimated liability. Of these amounts, $10 million was included in Current Assets as part of Accounts Receivable at March 31, 2009 and December 31, 2008. The receivable recorded 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, 2009, we had at least $180 million in aggregate limits of excess level policies potentially applicable to indemnity payments for asbestos products claims, in addition to limits of available 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 $66 million insurance receivable recorded at March 31, 2009. 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, 2009.

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 future periods.

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

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 year of resolution. A favorable tax settlement would be recognized as a reduction in our effective tax rate in the year of resolution.

Guarantees

We are a party to various agreements under which we have undertaken obligations resulting from the issuance of certain guarantees. Guarantees have been issued on behalf of certain of our affiliates and customers. Normally there is no separate premium received by us as consideration for the issuance of guarantees. Our performance under these guarantees would normally be triggered by the occurrence of one or more events as provided in the specific agreements. Collateral and recourse provisions available to us under these agreements were not significant.

NOTE 10. BUSINESS SEGMENTS

		Three Months Ended March 31,
(In millions)		2009				2008
Sales:
North American Tire		$	1,544			$	1,997
Europe, Middle East and Africa Tire			1,268				1,950
Latin American Tire			383				530
Asia Pacific Tire			341				465
Net Sales		$	3,536			$	4,942
Segment Operating (Loss) Income:
North American Tire		$	(189	)		$	32
Europe, Middle East and Africa Tire			(50	)			172
Latin American Tire			48				114
Asia Pacific Tire			15				49
Total Segment Operating (Loss) Income			(176	)			367
Rationalizations			(55	)			(13	)
Interest expense			(64	)			(89	)
Other income and (expense)			(30	)			6
Asset write-offs and accelerated depreciation			(10	)			—
Corporate incentive compensation plans			6				(4	)
Intercompany profit elimination			(26	)			(9	)
Other			(10	)			(8	)
(Loss) Income before Income Taxes		$	(365	)		$	250

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

Rationalizations, as described in Note 2, Costs Associated with Rationalization Programs, and Asset Sales, as described in Note 3, Other (Income) and 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)		2009				2008
Rationalizations:
North American Tire		$	28			$	9
Europe, Middle East and Africa Tire			14				5
Latin American Tire			7				(1	)
Asia Pacific Tire			4				—
Total Segment Rationalizations			53				13
Corporate			2				—
		$	55			$	13
Asset Sales:
Europe, Middle East and Africa Tire		$	(1	)		$	(18	)
Latin American Tire			—				(5	)
Asia Pacific Tire			—				(10	)
Total Segment Asset Sales		$	(1	)		$	(33	)

NOTE 11. INCOME TAXES

For the first three months of 2009, we recorded a tax benefit of $17 million on a loss before income taxes of $365 million. The income tax benefit was favorably impacted by $10 million primarily due to a recently 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. For the first three months of 2008, we recorded tax expense of $77 million on income before income taxes of $250 million.

     Our losses in recent periods represented sufficient negative evidence to require us to maintain a full valuation allowance against our net deferred tax assets. However, in certain foreign locations it is reasonably possible that sufficient positive evidence required to release all, or a portion, of these valuation allowances within the next 12 months will exist, resulting in one-time tax benefits of up to $30 million.

     At January 1, 2009, we had unrecognized tax benefits of $143 million that if recognized, would have a favorable impact on our tax expense of $135 million. We report interest and penalties as income taxes and have accrued interest of $11 million as of January 1, 2009.

     Generally, years beginning after 2003 are still open to examination by foreign taxing authorities, including several major taxing jurisdictions. In Germany, we are open to examination from 2003 onward. In the United States, we are open to examination from 2008 forward. We are also involved in a United States/Canada Competent Authority resolution process that deals with transactions between our operations in these countries from 1997 through 2003.

     It is reasonably possible that the Company’s Competent Authority resolution process between the United States and Canada will be concluded within the next 12 months, which may result in the settlement of our unrecognized tax benefits for a refund claim related to this matter of $43 million. It is expected that the amount of unrecognized tax benefits will also change for other reasons in the next 12 months; however, we do not expect that change to have a significant impact on our financial position or results of operations.

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

NOTE 12. CHANGES IN SHAREHOLDERS’ EQUITY

The following tables present the changes in shareholder’s equity for the first quarter of 2009 and 2008.

																		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

																		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, 2007 as reported
(after deducting 10,438,287 treasury shares)			240,122,374			$	240			$	2,660			$	1,602			$	(1,652	)		$	2,850			$	300			$	3,150
Adjustment to initially apply FASB Staff Position APB 14-1 for convertible debt (Note 1)											62				(62	)							—								—
Balance at December 31, 2007 as restated
(after deducting 10,438,287 treasury shares)			240,122,374				240				2,722				1,540				(1,652	)			2,850				300				3,150
Comprehensive (loss) income:
Net (loss) income															147								147				8				155
Foreign currency translation (net of tax of $0)																			186				186				18				204
Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost (net of tax of $1)																			30				30				—				30
Unrealized investment loss (net of tax of $0)																			(5	)			(5	)			—				(5	)
Other comprehensive (loss) income																							211				18				229
Total comprehensive (loss) income																							358				26				384
Transactions between Goodyear and Minority Shareholders																							—				(18	)			(18	)
Common stock issued from treasury:
Stock-based compensation plans (Note 7)			440,415				1				2												3				—				3
Stock-based compensation											6												6				—				6
Balance at March 31, 2008
(after deducting 9,997,872 treasury shares)			240,562,789			$	241			$	2,730			$	1,687			$	(1,441	)		$	3,217			$	308			$	3,525

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

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

		March 31,				March 31,
(In millions)		2009				2008
Balance at beginning of period		$	619			$	703
Comprehensive income (loss):
Net income			(19	)			18
Foreign currency translation, net of tax of $0			(25	)			56
Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost, net of tax of $1			1				2
Total comprehensive income (loss)			(43	)			76
Balance at end of period		$	576			$	779

NOTE 13. CONSOLIDATING FINANCIAL INFORMATION

Certain of our subsidiaries have guaranteed Goodyear’s obligations under the $260 million outstanding principal amount of 9% senior notes due 2015 and the $825 million outstanding principal amount of senior notes (consisting of $325 million outstanding principal amount of 8.625% senior notes due 2011 and $500 million outstanding principal amount of senior floating rate notes due 2009) (collectively, the “notes”). The following presents the condensed consolidating financial information separately for:

(i)		The Goodyear Tire & Rubber Company (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.

     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, 2009
										Non-				Consolidating
		Parent				Guarantor				Guarantor				Entries and
(In millions)		Company				Subsidiaries				Subsidiaries				Eliminations				Consolidated
Assets:
Current Assets:
Cash and cash equivalents		$	493			$	14			$	1,389			$	—			$	1,896
Accounts receivable			713				141				1,635				—				2,489
Accounts receivable from affiliates			—				870				—				(870	)			—
Inventories			1,466				244				1,629				(77	)			3,262
Prepaid expenses and other current assets			100				1				210				10				321
Total Current Assets			2,772				1,270				4,863				(937	)			7,968
Goodwill			—				24				452				174				650
Intangible Assets			110				6				47				(5	)			158
Deferred Income Taxes			—				1				52				(1	)			52
Other Assets			160				50				131				—				341
Investments in Subsidiaries			3,968				585				3,917				(8,470	)			—
Property, Plant and Equipment			2,154				168				3,142				12				5,476
Total Assets		$	9,164			$	2,104			$	12,604			$	(9,227	)		$	14,645
Liabilities:
Current Liabilities:
Accounts payable-trade		$	533			$	65			$	1,391			$	—			$	1,989
Accounts payable to affiliates			410				—				460				(870	)			—
Compensation and benefits			352				27				254				—				633
Other current liabilities			258				15				288				—				561
United States and foreign taxes			49				17				128				(2	)			192
Notes payable and overdrafts			—				—				317				—				317
Long term debt and capital leases due within one year			502				—				62				—				564
Total Current Liabilities			2,104				124				2,900				(872	)			4,256
Long Term Debt and Capital Leases			3,399				—				1,246				—				4,645
Compensation and Benefits			2,425				145				822				—				3,392
Deferred and Other Noncurrent Income Taxes			24				3				163				4				194
Other Long Term Liabilities			611				32				123				—				766
Total Liabilities			8,563				304				5,254				(868	)			13,253
Commitments and Contingent Liabilities
Minority Shareholders’ Equity			—				—				368				208				576
Shareholders’ Equity:
Goodyear Shareholders’ Equity:
Preferred Stock			—				—				—				—				—
Common Stock			242				440				4,909				(5,349	)			242
Capital Surplus			2,767				5				777				(782	)			2,767
Retained Earnings			1,130				1,637				2,438				(4,075	)			1,130
Accumulated Other Comprehensive Loss			(3,538	)			(282	)			(1,357	)			1,639				(3,538	)
Goodyear Shareholders’ Equity			601				1,800				6,767				(8,567	)			601
Minority Shareholders’ Equity — Nonredeemable			—				—				215				—				215
Total Shareholders’ Equity			601				1,800				6,982				(8,567	)			816
Total Liabilities and Shareholders’ Equity		$	9,164			$	2,104			$	12,604			$	(9,227	)		$	14,645