UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2023
Commission File Number: 1-1927
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
(Full title of the Plan)
THE GOODYEAR TIRE & RUBBER COMPANY
(Name of Issuer of the Securities)
200 Innovation Way
Akron, Ohio 44316-0001
(Address of Issuer’s Principal Executive Office)
TABLE OF CONTENTS
THE GOODYEAR TIRE & RUBBER COMPANY
COOPER TIRE & RUBBER COMPANY PRE-TAX SAVINGS PLAN (TEXARKANA)
| ITEM 4. |
FINANCIAL STATEMENTS OF THE PLAN |
The Financial Statements of The Goodyear Tire & Rubber Company COOPER TIRE & RUBBER COMPANY PRE-TAX SAVINGS PLAN (TEXARKANA) (the
“Plan”) as of December 31, 2023 and 2022 and for the fiscal year ended December 31, 2023, together with the report of Bober, Markey, Fedorovich & Company, independent registered public accounting firm, are attached to
this Annual Report on Form 11-K as Annex A, and are by specific reference incorporated herein and filed as a part hereof. The Financial Statements and the Notes thereto are presented in lieu of the financial
statements required by Items 1, 2 and 3 of Form 11-K. The Plan is subject to the requirements of the Employee Retirement Income Security Act of 1974 (ERISA).
EXHIBITS.
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| EXHIBIT 23.1 |
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Consent of Bober, Markey, Fedorovich & Company, independent registered public accounting
firm. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Plan Administrator has duly caused this Annual Report to be signed by
the undersigned thereunto duly authorized.
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COOPER TIRE & RUBBER COMPANY |
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Plan Administrator of COOPER TIRE & RUBBER COMPANY PRE-TAX SAVINGS PLAN (TEXARKANA) |
| June 6, 2024 |
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By: |
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/s/ Margaret V. Snyder |
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Margaret V. Snyder, Vice President and Controller |
ANNEX A TO
FORM 11-K
COOPER
TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
FINANCIAL STATEMENTS AND
SUPPLEMENTAL INFORMATION
December 31, 2023 and 2022
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
TABLE OF CONTENTS
Note: Certain schedules required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974 have been omitted because of the absence of the conditions under which they are required.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Participants and Administrator of
Cooper Tire &
Rubber Company
Pre-Tax Savings Plan (Texarkana)
Akron, Ohio
Opinion on the Financial Statements
We have audited the accompanying statements of net assets available for benefits of Cooper Tire & Rubber Company
Pre-Tax Savings Plan (Texarkana) (the “Plan”) as of December 31, 2023 and 2022, the related statement of changes in net assets available for benefits for the year ended December 31, 2023,
and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31,
2023 and 2022, and the changes in net assets available for benefits for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Basis for Opinion
These financial statements are the
responsibility of the Plan’s management. Our responsibility is to express an opinion on the Plan’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board
(United States) (“PCAOB”) and are required to be independent with respect to the Plan in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We
believe that our audits provide a reasonable basis for our opinion.
1
Supplemental Information
The supplemental information in the accompanying schedule of assets (held at end of year) as of December 31, 2023 has been subjected to audit procedures
performed in conjunction with the audit of the Plan’s financial statements. The supplemental information is the responsibility of the Plan’s management. Our audit procedures included determining whether the supplemental information
reconciles to the financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. In forming our
opinion on the supplemental information, we evaluated whether the supplemental information, including its form and content, is presented in conformity with the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the financial statements as a whole.
We have served as the Plan’s auditor since 2024.
/s/
Bober, Markey, Fedorovich & Company
Akron, Ohio
June 6, 2024
2
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
December 31, 2023 and 2022
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| (Dollars in Thousands) |
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2023 |
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2022 |
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| Investments, at Fair Value: |
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| Plan’s Interest in Commingled Trust |
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$ |
78,662 |
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$ |
— |
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| Pooled Separate Accounts |
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2,649 |
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69,934 |
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| Common/Collective Trust Fund |
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— |
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22,600 |
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| Common Stock |
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— |
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1,344 |
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| Mutual Funds |
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— |
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221 |
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81,311 |
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94,099 |
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| Investments, at Contract Value: |
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| Plan’s Interest in Commingled Trust |
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17,613 |
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| Notes Receivable from Participants |
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4,385 |
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4,555 |
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| Contribution Receivable - Employer |
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43 |
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— |
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| Contribution Receivable - Employee |
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129 |
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— |
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| Net assets available for benefits |
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$ |
103,481 |
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$ |
98,654 |
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3
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Year Ended December 31, 2023
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| (Dollars in Thousands) |
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| Contributions: |
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| Employee |
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$ |
5,173 |
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| Employer |
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1,650 |
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| Total Contributions |
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6,823 |
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| Deductions: |
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| Benefits Paid to Participants or Their Beneficiaries |
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16,979 |
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| Total Deductions |
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16,979 |
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| Interest from Notes Receivable from Participants |
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202 |
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| Net Investment Gain from Plan’s Interest in Commingled Trust |
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10,438 |
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| Net Investment Gain from Pooled Separate Accounts |
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4,371 |
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| Administrative Expenses |
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(28 |
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| Net Increase in Net Assets Available for Benefits During the Year |
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4,827 |
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| Net Assets Available for Benefits at Beginning of Year |
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98,654 |
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| Net Assets Available for Benefits at End of Year |
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$ |
103,481 |
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4
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of
Accounting
The accounts of the Cooper Tire & Rubber Company Pre-Tax Savings Plan (Texarkana) (the
“Plan”) are maintained on the accrual basis of accounting.
Plan Year
The Plan Year is a calendar year.
Trust Assets and
Recordkeeper
Effective February 17, 2023, the Plan maintains its assets in a master trust entitled The Goodyear Tire & Rubber Company
Commingled Trust (the “Commingled Trust”) administered by The Northern Trust Company (the “Trustee”). During 2023, The Goodyear Tire & Rubber Company (“Goodyear”) and Cooper Tire & Rubber Company LLC
(the “Company” or “Plan Sponsor”) sponsored five savings plans that participated in the Commingled Trust, including the Plan. The Plan’s divided interest in the Commingled Trust is presented in the accompanying financial
statements in accordance with the allocation made by the Trustee.
Effective February 17, 2023, Empower Retirement, the retirement services business
of Great-West Financial, became the recordkeeper of the Plan.
Prior to February 17, 2023, the Plan had a trust agreement with Delaware Charter
Guarantee & Trust Company d/b/a Principal Trust Company (“Principal”) to act as trustee and recordkeeper of the Plan’s assets.
Investment Valuation and Income Recognition
Investments
held by a defined contribution plan are required to be reported at fair value, except for fully benefit-responsive investment contracts (See Note 8). Contract value is the relevant measurement attribute for that portion of the net assets available
for benefits of a defined contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants normally would receive if they initiate permitted transactions under the terms of the plan.
The fair value of investments held by the Commingled Trust is the price that would be received to sell an asset in an orderly transaction between market
participants at the measurement date (See Note 7). The value of the Plan’s interest in the Commingled Trust is based on the beginning of the period value in the Commingled Trust plus actual contributions and allocated investment income (loss)
less actual distributions and allocated administrative expenses. Investment income (loss) and investment expenses relating to the Commingled Trust are allocated on a daily basis to the Plan based on the Plan’s value in each applicable fund
within the Commingled Trust.
5
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Net appreciation (depreciation)
includes the Commingled Trust’s gains and losses on investments bought, sold, and held during the year.
Notes Receivable from Participants
The Plan document allows notes from participants. These notes are reported at the unpaid principal balance plus accrued interest. Notes are deemed
distributions by the Plan when they are determined to be in default.
Concentration of Credit Risk
The Stable Value Fund of the Commingled Trust invests part of the fund in investment contracts of financial institutions with strong credit ratings and has
established guidelines relative to diversification and maturities that are intended to maintain stability and liquidity (See Note 8).
The Goodyear Stock
Fund invests in the common stock of Goodyear. Significant changes in the price of Goodyear Stock can result in significant changes in the Net Assets Available for Benefits.
Use of Estimates
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 basic financial statements and related notes to financial
statements. Changes in such estimates may affect amounts reported in future years.
Risk and Uncertainties
The Plan invests in various investment securities which are exposed to various risks such as interest rate, market, and credit risk. Due to the level of risk
associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and
the amounts reported in the Statements of Net Assets Available for Benefits.
Subsequent Events
The Plan has evaluated subsequent events through the date of issuance of the financial statements. There were no subsequent events which required recognition
or disclosure in the financial statements.
6
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
NOTE 2 - GENERAL DESCRIPTION AND OPERATION OF THE PLAN
Inception
The plan is a defined contribution plan, which
became effective March 17, 1999, and is subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).
Effective June 7, 2021, the Plan Sponsor was acquired by Goodyear (“Goodyear Acquisition”). As of the date the financial statements were
available to be issued, the Company remains the Plan Sponsor.
Eligibility
The Plan covers all hourly employees who have completed 30 days of continuous credited service and are covered by the collective bargaining agreement between
the United Steelworks of America Local #752 and the Company. The Plan automatically enrolls newly eligible participants into the Plan using a 3% deferral rate. Participants can elect to opt out of automatic enrollment.
Vesting
The participants are immediately vested in their
contributions plus actual earnings thereon. Participants are 100% vested in Company contributions as soon as the Company makes the contribution.
Contributions
Each year, participants may contribute up
to 75% of their pretax compensation into the Plan. Participants may also contribute amounts representing distributions from other qualified defined benefit or defined contribution plans. Participants may direct their contributions to any of the
Plan’s investment fund options with the exception of the Principal U.S. Property Pooled Separate Account fund.
The Company makes Restricted Access
Company Contributions, for employees hired on and after February 1, 2012, in an amount equal to 3% of compensation for the payroll period for each person who is an active participant on the last day of that period. All contributions are subject
to certain limitations of the Internal Revenue Code (the “Code”).
Effective February 24, 2023, participants can elect to invest employee
or employer contributions into the Goodyear Stock Fund. Participants may not elect to invest more than 10% of Company contributions in the Goodyear Stock Fund. As a result of the Goodyear Acquisition, all shares of Cooper Tire & Rubber
Company stock in the Plan were exchanged for shares of The Goodyear Tire & Rubber Company at the exchange ratio specified in the Agreement and Plan Merger dated as of February 22, 2021.
7
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Participants may transfer amounts attributable to employee or employer contributions from one fund to the other on a daily basis subject to compliance with
applicable trading policies of the Plan. Participants may not hold more than 10% of the portion of their account balance attributable to Company contributions, immediately after a transfer of funds, in the Goodyear Stock Fund.
Participant Accounts
A variety of funds have been
established for investment by participants of their accounts under the Plan. All fund accounts are valued by the Trustee at the close of business following each business day.
Interest and dividends (in funds other than the Goodyear Stock Fund) are automatically reinvested in each participant’s respective accounts and reflected
in the unit value of the fund which affects the value of the participants’ accounts.
Under the Employee Stock Ownership Plan (the “ESOP”)
portion of the plan, participants may elect to receive cash dividends on the Goodyear stock held in their employer match account. Such election results in a distribution to the participant. For the year ended December 31, 2023 total dividends
paid on the Goodyear stock held were $0.
Plan Withdrawals and Distributions
Participants may take in-service distributions of vested amounts from their accounts if they:
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• |
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Attain the age of 591⁄2, or
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• |
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Qualify for a financial hardship. |
The Internal Revenue Service (“IRS”) issued regulations governing financial hardship. Under the IRS regulations, withdrawals are permitted for
severe financial hardship.
The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was signed into law on March 27, 2020, which
allowed Plan participants who were impacted from the coronavirus to elect a distribution of up to $100,000 from the Plan through December 31, 2020, with a waiver of the 10% early withdrawal tax penalty. Participants may pay back the
distribution over a three-year period from the date of distribution, without being subject to income taxes. If the distribution is not repaid to the Plan, participants have the option to pay the income taxes on the distribution over a three-year
period.
Participant vested amounts are eligible to be paid upon retirement, death or other termination of employment.
All withdrawals and distributions are valued as of the end of the day they are processed, and may be subject to income tax upon receipt.
8
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Notes Receivable from Participants
Eligible employees may
borrow money from their participant accounts. The minimum amount that can be borrowed is $500. The maximum amount that can be borrowed is $50,000 reduced by any outstanding loan balance, if any during the
one-year period ending on the day before the new loan is made or 50% of the participant’s vested account balance. Participants may have up to one note outstanding at any time. The interest rate charged is
a fixed rate established at the time of the application based on prime rate (8.5% at December 31, 2023 and 7.5% at December 31, 2022).
The
CARES Act increased the maximum amount that participants who are eligible for a coronavirus related distribution can borrow from their Plan accounts to the lesser of $100,000 or 100% of the participant’s vested account balance, if the loan was
made within 180 days from March 27, 2020. In addition, participants with an outstanding Plan loan with repayment dates between March 27, 2020 and December 31, 2020 could delay their loan repayments for up to one year, with interest
still accruing on the deferred payments.
Repayments, with interest, are made through payroll deductions. If a note is not repaid when due, the
outstanding balance is treated as a taxable distribution from the Plan.
Rollovers
Employees, Plan participants, or former Plan participants may transfer eligible cash distributions from any other employer sponsored plan qualified under
Section 401 of the IRC into the Plan by a direct transfer from such other plan.
Expenses
Expenses of administering the Plan are paid partly by the Company and partly by the Commingled Trust. Trustee’s fees and brokerage commissions associated
with the Goodyear Stock Fund are paid by the Company. Expenses related to the asset management of the investment funds and the independent fiduciary of the Goodyear Stock Fund are paid from such funds which reduce the investment return reported and
credited to participant accounts. Recordkeeping fees are paid from funds in which a participant invests. Certain expenses of the Plan which were incurred during the period that Principal was the recordkeeper were paid directly by the Plan.
The professional management program offered by Advised Assets Group, LLC., an affiliate of Great-West Financial, is available to all participants. This
program provides personalized portfolio management for participants who elect to delegate their investment decisions about fund choices within the Plan to a professional manager. Participation in the program is paid solely by enrolled participants.
The expenses reduce the investment return reported and credited to enrolled participant accounts.
9
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Termination Provisions
The Company anticipates and
believes that the Plan will continue without interruption but reserves the right to discontinue the Plan. In the event of termination, the obligation of the Company to make further contributions ceases. All participants’ accounts would then be
fully vested with respect to Company contributions.
NOTE 3 - RELATED PARTY TRANSACTIONS
An affiliate of the Trustee serves as the fund manager of the S&P 500 Index and Russell 1000 Growth Index Funds which are offered as investment funds
available to participants under the Plan.
The Goodyear Stock Fund is designed for investment in common stock of the Company, except for short-term
investments needed for Plan operations. During 2023, the price per share of Goodyear common stock on The Nasdaq Stock Market ranged from $9.86 to $16.51. The closing price per share of Goodyear common stock on The Nasdaq Stock Market was $14.32 at
December 31, 2023 ($10.15 at December 31, 2022). The common stock of Goodyear and a Short-Term Investments Fund are the current investments of this fund. The portion of this fund related to employer matching contributions is designated as
an ESOP.
NOTE 4 - TAX STATUS OF PLAN
The IRS has
determined and informed the Company by a letter dated March 31, 2017 that the Plan is qualified and the trust established for the Plan is exempt from Federal Income Tax under the appropriate Sections of the IRC. The Company and Plan’s tax
counsel believe the Plan is currently designed and being operated in compliance with the applicable requirements of the IRC. Therefore, no provision for income taxes has been included in the Plan’s financial statements.
10
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
NOTE 5 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The
following is a reconciliation of net assets available for benefits per the financial statements at December 31, 2023 to the Form 5500:
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| (Dollars in Thousands) |
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| Net Assets Available for Benefits per the Financial Statements |
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$ |
103,481 |
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| Adjustment from Contract Value to Fair Value for Fully Benefit-Responsive Investment
Contracts |
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(911 |
) |
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| Net Assets Available for Benefits per the Form 5500 |
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$ |
102,570 |
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The following is a reconciliation of net investment gain from the Plan’s interest in the Commingled Trust per the
financial statements for the year ended December 31, 2023 to the Form 5500:
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| (Dollars in Thousands) |
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| Net Investment Gain from Plan’s Interest in Commingled Trust per the Financial
Statements |
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$ |
10,438 |
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| Impact of Reflecting Fully Benefit-Responsive Investment Contracts at Fair Value |
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(911 |
) |
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| Net Investment Gain from Plan’s Interest in Commingled Trust per the Form 5500 |
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$ |
9,527 |
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Fully benefit-responsive investment contracts are recorded at fair value on the Form 5500.
NOTE 6 - FINANCIAL DATA OF THE COMMINGLED TRUST
All of the
Plan’s investments are in the Commingled Trust, which was established for the investment of plan assets, except for the investment in the Principal U.S. Property Pooled Separate Account. Each participating plan has a divided interest in the
Commingled Trust. At December 31, 2023, the Plan’s interest in the net assets of the Commingled Trust was approximately 2.9%.
11
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
The Statements of Net Assets Available for Benefits of the Commingled Trust as of December 31, 2023 are as follows:
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| (Dollars in Thousands) |
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Commingled Trust |
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Plan’s Interest in
Commingled Trust |
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| Investments: |
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| Investments at Fair Value: |
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| Common Collective Trusts |
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| NT Collective S&P 500 Index Fund |
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$ |
619,304 |
|
|
$ |
1,787 |
|
| JP Morgan ACWI Ex US Fund |
|
|
178,906 |
|
|
|
295 |
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| NT Collective Russell 1000 Growth Index Fund |
|
|
213,130 |
|
|
|
2,201 |
|
| Vanguard Fiduciary Trust Target Retirement Income Fund |
|
|
59,151 |
|
|
|
1,324 |
|
| Vanguard Fiduciary Trust Target Retirement 2025 Fund |
|
|
318,050 |
|
|
|
14,556 |
|
| Vanguard Fiduciary Trust Target Retirement 2035 Fund |
|
|
476,874 |
|
|
|
28,791 |
|
| Vanguard Fiduciary Trust Target Retirement 2045 Fund |
|
|
346,319 |
|
|
|
14,209 |
|
| Vanguard Fiduciary Trust Target Retirement 2055 Fund |
|
|
141,424 |
|
|
|
8,721 |
|
| Vanguard Fiduciary Trust Target Retirement 2065 Fund |
|
|
33,026 |
|
|
|
2,963 |
|
| Western Asset Core Plus Bond Fund |
|
|
181,606 |
|
|
|
362 |
|
| Victory Small Cap Value Collective Fund |
|
|
35,027 |
|
|
|
667 |
|
| Short-Term Investments |
|
|
17,860 |
|
|
|
582 |
|
| Mutual Funds |
|
|
|
|
|
|
|
|
| JP Morgan Large Cap Value Fund |
|
|
73,762 |
|
|
|
316 |
|
| Carillon Eagle Growth & Income Fund |
|
|
57,089 |
|
|
|
5 |
|
| Charles Schwab Self Directed Account—Mutual Funds |
|
|
55,595 |
|
|
|
68 |
|
| Common Stock of The Goodyear Tire & Rubber Company |
|
|
47,983 |
|
|
|
1,824 |
|
|
|
|
|
|
|
|
|
|
| Total Investments at Fair Value |
|
|
2,855,106 |
|
|
|
78,671 |
|
| Investments at Contract Value: |
|
|
|
|
|
|
|
|
| Investment Contracts (See Note 8) |
|
|
523,979 |
|
|
|
17,613 |
|
|
|
|
|
|
|
|
|
|
| Total Investments |
|
|
3,379,085 |
|
|
|
96,284 |
|
| Receivables: |
|
|
|
|
|
|
|
|
| Pending Trades |
|
|
(1,152 |
) |
|
|
(38 |
) |
| Accrued Interest and Dividends |
|
|
1,276 |
|
|
|
43 |
|
|
|
|
|
|
|
|
|
|
| Total Receivables |
|
|
124 |
|
|
|
5 |
|
|
|
|
|
|
|
|
|
|
| Total Assets |
|
|
3,379,209 |
|
|
|
96,289 |
|
| Liabilities: |
|
|
|
|
|
|
|
|
| Administrative Expenses Payable |
|
|
(905 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
| Total Liabilities |
|
|
(905 |
) |
|
|
(14 |
) |
|
|
|
|
|
|
|
|
|
| Net Assets Available for Benefits |
|
$ |
3,378,304 |
|
|
$ |
96,275 |
|
|
|
|
|
|
|
|
|
|
12
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Net investment gain for the Commingled Trust is as follows:
|
|
|
|
|
| (Dollars in Thousands) |
|
Year Ended
December 31,
2023 |
|
| Net Appreciation in Fair Value of Investments |
|
$ |
440,600 |
|
| Interest and Dividends |
|
|
17,727 |
|
|
|
|
|
|
| Investment Gain |
|
|
458,327 |
|
| Administrative Expenses |
|
|
(2,093 |
) |
|
|
|
|
|
| Net Investment Gain |
|
$ |
456,234 |
|
|
|
|
|
|
NOTE 7 - FAIR VALUE MEASUREMENTS
Assets and liabilities measured at fair value are classified using the following hierarchy, which is based upon the transparency of inputs to the valuation as
of the measurement date:
| |
• |
|
Level 1 – Valuation is based upon quoted prices (unadjusted) for identical assets or liabilities in
active markets. |
| |
• |
|
Level 2 – Valuation is based upon quoted prices for similar assets and liabilities in active markets, or
other inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. |
| |
• |
|
Level 3 – Valuation is based upon other unobservable inputs that are significant to the fair value
measurement. |
13
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
The Commingled Trust’s assets measured at fair value on a recurring basis as of December 31, 2023 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in Thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
| Mutual Funds |
|
$ |
186,446 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
186,446 |
|
| Common Stock |
|
|
47,983 |
|
|
|
— |
|
|
|
— |
|
|
|
47,983 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Assets in the Fair Value Hierarchy |
|
$ |
234,429 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
234,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investments Measured at Net Asset Value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Common Collective Trusts |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,620,677 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Investments at Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
2,855,106 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Plan’s assets measured at fair value on a recurring basis as of December 31, 2022 are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (Dollars in Thousands) |
|
Level 1 |
|
|
Level 2 |
|
|
Level 3 |
|
|
Total |
|
| Mutual funds |
|
$ |
221 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
221 |
|
| Common stock |
|
|
1,344 |
|
|
|
— |
|
|
|
— |
|
|
|
1,344 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Assets in the Fair Value Hierarchy |
|
$ |
1,565 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
1,565 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Investments Measured at Net Asset Value: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92,534 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Total Investments at Fair Value |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
94,099 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The classification of fair value measurements within the hierarchy is based upon the lowest level of input that is significant
to the measurement. Investments that were measured at net asset value (“NAV”) per share are not classified in the fair value hierarchy. The fair value amounts presented in this table are intended to permit reconciliation of the fair value
hierarchy to total investments at fair value of the Commingled Trust. Valuation methodologies used for assets measured at fair value are as follows:
Mutual Funds: Valued at the NAV of shares held by the Commingled Trust at year end, as determined by the closing price reported on the active market on
which the individual securities are traded.
Common Stock: Valued at the year-end closing price reported on
the active market on which the individual securities are traded.
14
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
Common Collective Trusts: Valued at the NAV of units held by the Commingled Trust or the Plan at year end. The NAV, as provided by the trustee of each
common collective trust fund, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by each fund less its liabilities. This practical expedient would not be used when it is
determined to be probable that the fund will sell the investment for an amount different than the reported NAV. Participant transactions (purchases and sales) may occur daily. If the plan were to initiate a full redemption of any common collective
trust, each investment advisor reserves the right to temporarily delay withdrawal to ensure that securities liquidation will be carried out in an orderly business manner. The common collective trust funds held by the Commingled Trust had a fair
value of approximately $2,620,677,000 as of December 31, 2023, with no unfunded commitments, daily pricing frequency, and full redemption notice periods that extend no greater than 30 days. The fair value of the common collective trust fund
held by the Plan at December 31, 2022 was $22,599,534.
Pooled Separate Accounts: The fair value of the investments in this category have been
estimated using the net asset value (NAV) per unit provided by the administrator of the fund as a practical expedient. The NAV is not a publicly quoted price in an active market. The fair value of the pooled separate accounts held by the Plan at
December 31, 2023 and 2022 is $2,649,179, and $69,934,396, respectively. The Principal U.S. Property Pooled Separate Account has a value of $2,649,179 and $3,269,008 at December 31, 2023 and 2022, respectively, and a withdrawal limitation
effective after market close on July 1, 2022, which will be lifted when the account has sufficient liquidity, but no longer than three years from the effective date.
The methods described above may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.
Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in
a different fair value measurement at the reporting date.
NOTE 8 - INVESTMENT CONTRACTS
One investment fund available under the Commingled Trust is the Stable Value Fund, which has entered into benefit-responsive guaranteed investment contracts
and wrapper contracts with various financial institutions. The Stable Value Fund is credited with earnings on the underlying investments and charged for participant withdrawals and administrative expenses. The value of the Commingled Trust’s
investment in the Stable Value Fund was approximately $523,979,000 as of December 31, 2023.
15
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
NOTES TO FINANCIAL STATEMENTS
December 31, 2023 and 2022
As described in Note 1, because the guaranteed investment contracts held by the Commingled Trust are fully benefit-responsive, contract value is the relevant
measurement attribute for that portion of the net assets available for benefits attributable to the guaranteed investment contracts. Contract value, as reported to the Commingled Trust by the manager of the Stable Value Fund, represents
contributions made under the contract, plus earnings, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. There are no
reserves against contract value for credit risk of the contract issuers or otherwise. The crediting interest rate is based on a formula agreed upon individually with the issuers.
The Stable Value Fund has purchased wrapper contracts from the financial institutions. The wrapper contracts amortize the realized and unrealized gains and
losses on the underlying fixed income investments, typically over the duration of the investments, through adjustments to the future interest crediting rate (which is the rate earned by participants in the fund for underlying investments). The
issuers of the wrapper contracts provide assurance that the adjustments to the interest crediting rate do not result
in a future interest crediting rate
that is less than zero.
Certain events limit the ability of the Plan to transact at contract value with the issuer. These events include termination of
the Plan, a material adverse change to the provisions of the Plan, if the Commingled Trust elects to withdraw from a wrapper contract in order to switch to a different investment provider, or if the terms of a successor plan (in the event of the spin-off or sale of a division) do not meet the wrapper contract issuer’s underwriting criteria for issuance of a clone wrapper contract. The events described above that could result in the payment of benefits
at market value rather than contract value are not probable of occurring in the foreseeable future.
The wrapper contracts do not permit the issuers to
terminate the contracts unless the Plan loses its qualified status, has incurred material breaches of responsibilities, or material and adverse changes occur to the provisions of the Plan.
16
COOPER TIRE & RUBBER COMPANY
PRE-TAX SAVINGS PLAN (TEXARKANA)
SCHEDULE H, LINE 4i - SCHEDULE OF ASSETS (HELD AT END OF YEAR)
December 31, 2023
Employer
Identification Number: 34-4297750, Plan Number: 012
|
|
|
|
|
|
|
|
|
| (a) |
|
(b) |
|
(c) |
|
(d) |
|
(e) |
|
|
Identity of issue, borrower lessor or similar party |
|
Description of investment
including maturity date, rate of interest, collateral par, or maturity value |
|
Cost |
|
Current Value |
| * |
|
Notes Receivable from Participants |
|
3.25% - 8.5% |
|
$— |
|
$ 4,385,532 |
|
|
Principal Life Insurance Company |
|
16,253 units, U.S. Property Separate Account |
|
** |
|
2,649,179 |
Note: This schedule excludes the Plan’s interest in the Commingled Trust, which is not required to be reported on the
schedule pursuant to the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974.
| * |
Represents a party-in-interest
to the Plan, as defined by ERISA. |
| ** |
Cost is not a required disclosre on participant directed investments. |
17
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-269857)
pertaining to Cooper Tire & Rubber Company Pre-Tax Savings Plan (Texarkana) for our report dated June 6, 2024 with respect to the financial statements and schedule of Cooper Tire &
Rubber Company Pre-Tax Savings Plan (Texarkana) included in this Annual Report (Form 11-K) as of and for the year ended December 31, 2023.
/s/ Bober, Markey, Fedorovich & Company
Akron, Ohio
June 6, 2024
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