This Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") presents information related to the consolidated results of
the operations of the Company and information concerning the liquidity and
capital resources of the Company. The Company's future results may differ
materially from those indicated herein, for reasons including
those indicated under the forward-looking statements heading below.
Consolidated Results of Operations
(Dollar amounts in thousands except per share amounts)
                                                               Three Months Ended March
                                                                         31,
                                                                               2021                2020               Change
Net Sales
Americas Tire                                                             $   562,321          $ 457,055          $   105,266
International Tire                                                            139,369            102,387               36,982
Eliminations                                                                  (45,863)           (27,748)             (18,115)
Net sales                                                                     655,827            531,694              124,133
Operating profit (loss):
Americas Tire                                                                  59,772             10,416               49,356
International Tire                                                              3,207            (10,279)              13,486
Unallocated corporate charges                                                 (23,032)            (6,951)             (16,081)
Eliminations                                                                   (2,169)               586               (2,755)
Operating profit                                                               37,778             (6,228)              44,006

Interest expense                                                               (5,130)            (5,007)                (123)
Interest income                                                                   699              1,696                 (997)
Other pension and postretirement benefit
expense                                                                        (2,846)            (4,210)               1,364
Other non-operating income                                                        133              1,773               (1,640)
Income (Loss) before income taxes                                              30,634            (11,976)              42,610
Income tax provision (benefit)                                                  8,544               (659)               9,203
Net income (loss)                                                              22,090            (11,317)              33,407
Net income attributable to noncontrolling
shareholders' interests                                                            31                274                 (243)
Net income (loss) attributable to Cooper Tire &
Rubber Company                                                            $ 

22,059 $ (11,591) $ 33,650



Basic earnings (loss) per share                                           $      0.44          $   (0.23)         $      0.67
Diluted earnings (loss) per share                                         $ 

0.43 $ (0.23) $ 0.66




The Merger
On February 22, 2021, the Company entered into the Merger Agreement, pursuant to
which, subject to the satisfaction or (to the extent permissible) waiver of the
conditions set forth therein, Goodyear will acquire the Company by way of the
merger of Merger Sub with and into the Company, with the Company surviving such
Merger as a wholly owned subsidiary of Goodyear. Under the terms of the Merger
Agreement, at the effective time of the Merger, the Company's stockholders will
be entitled to receive $41.75 per share in cash and a fixed exchange ratio of
0.907 shares of Goodyear common stock per share of the Company's common stock
they own at the effective time. Upon completion of the proposed Merger, it is
expected that the Company's stockholders will own approximately 16 percent and
Goodyear stockholders will own approximately 84 percent of the combined company
on a fully diluted basis.

The completion of the Merger is subject to the receipt of antitrust clearance in
the United States. Under the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended ("HSR Act"), and the rules promulgated thereunder, the Merger
may not be completed until the Company and Goodyear have each filed notification
and report forms with the United States Federal Trade Commission ("FTC"), and
the Antitrust Division of the United States Department of Justice ("DOJ"), and
                                      -24-
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the applicable waiting period (or any extension thereof) has expired or been
terminated. The completion of the Merger is also subject to a number of foreign
regulatory filings that will need to be completed.

The Company expects to complete the Merger in the second half of 2021. However,
the transaction could close earlier, following and subject to the satisfaction
of customary closing conditions, including receipt of required regulatory
approvals. The Company's stockholders approved the Merger on April 30, 2021.
COVID-19 Update
With the global outbreak of COVID-19 and the declaration of a pandemic by the
World Health Organization on March 11, 2020, the Company temporarily shut down
its China, U.S., Europe, and Mexico manufacturing plants for various periods of
time through the first half of 2020. By the end of the second quarter, each of
the Company's facilities were reopened.
The Company's priorities during the COVID-19 pandemic have been protecting the
health and safety of its employees, responsibilities to its broader communities,
and commitments to its customers and other key stakeholders. The Company has
taken a variety of measures to protect the health and safety of employees,
including prohibiting non-essential travel for all employees, modifying
workspaces with acrylic dividers and touchless faucets, providing additional
personal protective equipment and cleaning supplies, increasing cleaning
protocols across all locations, transitioning to remote working arrangements for
certain employees, emphasizing the importance of staying home when employees
feel sick, implementing protocols to address actual and suspected COVID-19 cases
and potential exposure, and enacting policies on face mask usage and appropriate
social distancing at the Company's locations
The fundamentals of the Company remain strong, and the Company believes it has
sufficient liquidity on hand to continue business operations during this
volatile period. As disclosed in the Liquidity and Capital Resources section,
the Company has total available liquidity of $1,093 million as of March 31,
2021, consisting of cash on hand and credit facilities. As a reaction to
COVID-19, the Company took actions to preserve liquidity beginning late in the
first quarter of 2020, including capital expenditure reductions, actions to
improve working capital, reductions in discretionary spending and additional
temporary cost actions. Based upon the Company's results and the effectiveness
of these actions, such actions were gradually reversed throughout the second
half of 2020.
COVID-19 negatively impacted the Company's business in 2020 and also presented
potential new risks to it. The Company began to see the impacts of COVID-19 on
its Asian operations early in the first quarter, and in customer demand in late
March in the Americas and Europe, which continued into the second quarter of
2020. The situation surrounding COVID-19 remains fluid and the potential for a
continued material impact on the Company increases the longer the virus effects
the level of economic activity in the United States and globally. In the future,
the COVID-19 pandemic may cause additional reduced demand for the Company's
products, including if it results in a recessionary global economic environment.
It could also lead to volatility in consumer demand for or access to Company
products, including due to government actions impacting the ability to produce
and ship products or impacting consumers' movements and access to the Company's
products. The Company believes that over the long term, there will continue to
be strong demand for the Company's products. However, the timing and extent of
demand recovery in specific markets, the resumption of travel, and product
demand trends caused by future economic trends are unclear. Accordingly, there
may be heightened volatility in net sales and earnings during and subsequent to
the duration of the COVID-19 pandemic. The Company's customers are also being
impacted by the pandemic. The success of customers in addressing the issues and
maintaining their operations, including their ability to remit timely payment,
could impact consumer access to, and as a result, sales of the Company's
products. In addition, the COVID-19 pandemic and the Company's and government
responses to it have disrupted the Company's operations, and increased its
costs, and may continue to do so.
The Company's ability to continue to operate and to mitigate the negative
impacts of the pandemic will in part depend on the ability to protect its
employees and supply chain. The Company has endeavored to follow recommended
actions of government and health authorities to protect employees world-wide,
with particular measures in place for those working in the Company's plants and
distribution facilities. The Company intends to continue to work with government
authorities and implement employee safety measures to ensure that it is able to
continue manufacturing and distributing products during the COVID-19 pandemic.
However, uncertainty resulting from the pandemic could result in an unforeseen
disruption that could impact the results of operations. For additional
information on risk factors that could impact the Company's results, refer to
"Risk Factors" in Part II, Item 1A of this Form 10-Q.
2021 versus 2020
Consolidated net sales for the first quarter of 2021 were $656 million compared
with $532 million in the first quarter of 2020, an increase of $124 million. In
2021, the Company experienced higher unit volume of $88 million. The first
quarter of 2020 was negatively impacted by the market slowdown caused by
COVID-19. The Company also experienced favorable price and mix of $30 million
and favorable foreign currency impact of $6 million in the first quarter of 2021
as compared to the first quarter of 2020.
                                      -25-
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The Company recorded an operating profit of $38 million in the first quarter of
2021, compared to an operating loss of $6 million in 2020. The Company's 2021
operating profit benefited from $29 million of higher unit volume, $13 million
of favorable price and mix, $3 million of decreased manufacturing costs and $2
million of lower product liability expense compared to the first quarter of
2020. The first quarter of 2020 unit volume was negatively impacted by the
market slowdown caused by COVID-19, which also included production days lost due
to plant shut downs as a result of the pandemic. The first quarter of 2021
included $7 million of lower raw material costs, with reduction in tariff costs
as a result of the Company's sourcing strategy offsetting higher raw material
costs. The first quarter of 2021 also included $20 million of higher selling,
general and administrative expenses. The first quarter of 2020 included $11
million of restructuring costs within the Americas Tire Operations segment
related to the Company's acquisition of the remaining noncontrolling interest in
COOCSA. Other costs increased $1 million in the first quarter of 2021 compared
to the first quarter of 2020.
The principal raw materials for the Company include natural rubber, synthetic
rubber, carbon black, chemicals and steel reinforcement components.
Approximately 70 percent of the Company's raw materials are petroleum-based.
Substantially all U.S. inventories have been valued using the LIFO method of
inventory costing, which accelerates the impact to cost of goods sold from
changes to raw material prices.
The Company strives to assure raw material and energy supply and to obtain the
most favorable pricing possible. For natural rubber, natural gas and certain
principal materials, procurement is managed through a combination of buying
forward of production requirements and utilizing the spot market. For other
principal materials, procurement arrangements include supply agreements that may
contain formula-based pricing based on commodity indices, multi-year agreements
or spot purchase contracts. While the Company uses these arrangements to satisfy
normal manufacturing demands, the pricing volatility in these commodities
contributes to the difficulty in managing the costs of raw materials.
Product liability expense related to normal claim activity decreased $2 million
in the first quarter of 2021 compared to the first quarter of 2020. Insurance
premium costs and legal costs related to product liability claims in the first
quarter of 2021 were comparable to the first quarter of 2020. Additional
information related to the Company's accounting for product liability costs
appears in the Notes to the Condensed Consolidated Financial Statements.
Selling, general, and administrative expenses were $71 million in the first
quarter of 2021 (10.9 percent of net sales) and $51 million in the first quarter
of 2020 (9.6 percent of net sales).
During the first quarter of 2021, the Company incurred approximately $10,655 of
expenses associated with the Merger. These expenses are recorded in Selling,
general & administrative expenses on the Condensed Consolidated Statements of
Operations. These expenses include $4,923 of advisory, legal and other
professional fees, as well as an increase in mark to market costs of stock-based
liabilities subsequent to the Merger announcement of $5,732. The mark to market
cost represents the impact of the movement in the Company's closing stock price
from the day prior to the Merger Agreement announcement as compared to the
closing price of Company's stock on the day of the Merger Agreement
announcement.
In the first quarter of 2020, the Company recorded $11 million of restructuring
expense in the Americas Tire Operations segment related to the Company's
acquisition of the remaining noncontrolling ownership interest in COOCSA.
Interest expense was $5 million for the first quarter of each 2021 and 2020.
Interest income was $1 million in the first quarter of 2021, which was a
decrease from $2 million in the first quarter of 2020.
For the period ended March 31, 2021, other pension and postretirement benefit
expense was $3 million as compared to $4 million for the period ended March 31,
2020. This decrease is primarily the result of the Company's improved funded
status at December 31, 2020, as a result of favorable returns on plan assets in
2020, which improved the Company's funding position and lowered the actuarially
determined expense for 2021 as compared to 2020.
Other non-operating income decreased $2 million in the first quarter of 2021 as
compared to the first quarter of 2020. This decrease was primarily due to the
impact of foreign currency forward contracts.
For the quarter ended March 31, 2021, the Company recorded income tax expense of
$9 million (effective tax rate of 27.9 percent) compared to an income tax
benefit of $1 million (effective tax rate of 5.5 percent) for the quarter ended
March 31, 2020. The first quarter 2021 effective tax rate was influenced by $5
million of Merger-related costs which are not tax deductible, the projected mix
of earnings in international jurisdictions with differing tax rates and
jurisdictions where valuation allowances are recorded. The effective tax rate
for the first quarter of 2020 was impacted by $4 million of unrecognized tax
benefit related to the tax deductibility of certain business expenses incurred
during the quarter, the projected mix of earnings in international jurisdictions
with differing tax rates and jurisdictions where valuation allowances are
recorded.

                                      -26-
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Segment Operating Results
The Company has four segments under ASC 280:
•North America, composed of the Company's operations in the U.S. and Canada;
•Latin America, composed of the Company's operations in Mexico, Central America
and South America;
•Europe; and
•Asia.
North America and Latin America meet the criteria for aggregation in accordance
with ASC 280, as they are similar in their production and distribution processes
and exhibit similar economic characteristics. The aggregated North America and
Latin America segments are presented as "Americas Tire Operations" in the
segment disclosure.
Both the Europe and Asia segments have been determined to be individually
immaterial, as they do not meet the quantitative requirements for segment
disclosure under ASC 280. In accordance with ASC 280, information about
operating segments that are not reportable shall be combined and disclosed in an
all other category separate from other reconciling items. As a result, these two
segments have been combined in the segment operating results discussion. The
results of the combined Europe and Asia segments are presented as "International
Tire Operations" in the segment disclosure.
Americas Tire Operations Segment
(Dollar amounts in thousands)                                Three Months Ended March 31,
                                                                            2021                 Change                2020
Sales                                                                   $  562,321               23.0%             $  457,055
Operating profit                                                        $   59,772               473.8%            $   10,416
Operating margin                                                            10.6%              8.3 points              2.3%
Total unit sales change                                                                          13.6%
United States replacement market unit shipment
changes:
Passenger tires
Segment                                                                                          15.2%
USTMA members                                                                                    12.0%
Total Industry                                                                                    8.8%
Light truck tires
Segment                                                                                          29.5%
USTMA members                                                                                    24.6%
Total Industry                                                                                   25.0%
Total light vehicle tires
Segment                                                                                          18.4%
USTMA members                                                                                    13.7%
Total Industry                                                                                   10.9%


The source of this information is the United States Tire Manufactures
Association ("USTMA") and internal sources.
Overview
The Americas Tire Operations segment manufactures and markets passenger car and
light truck tires, primarily for sale in the U.S. replacement market. The
segment also has a manufacturing operation in Mexico, COOCSA, which supplies
passenger car and light truck tires to the Mexican, North American, Central
American and South American markets. On January 24, 2020, the Company acquired
the remaining noncontrolling ownership interest in COOCSA, making COOCSA a
wholly-owned subsidiary. The segment also markets and distributes wheels and
racing, TBR and motorcycle tires. The racing and motorcycle tires are
manufactured by the Company's European segment and by others. TBR tires are
sourced from GRT and ACTR. TBR tires had also been sourced through off-take
agreements with PCT and Sailun Vietnam through December 31, 2020.
Major distribution channels and customers include independent tire dealers,
wholesale distributors, regional and national retail tire chains, large retail
chains that sell tires as well as other automotive products, mass merchandisers
and digital channels. The
                                      -27-
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segment does not currently sell its products directly to end users, except
through three Company-owned retail stores. The segment sells a limited number of
tires to OEMs.
Sales
Net sales of the Americas Tire Operations segment increased from $457 million in
the first quarter of 2020 to $562 million in the first quarter of 2021. In 2021,
the segment experienced higher unit volume of $62 million, as well as favorable
price and mix of $43 million. Unit shipments for the segment increased 13.6
percent in the first quarter of 2021 compared with the first quarter of 2020. In
the U.S., the segment's unit shipments of total light vehicle tires increased
18.4 percent in 2021 compared with the same period in 2020. This increase
compares with a 13.7 percent increase in total light vehicle tire shipments
experienced by USTMA members, and a 10.9 percent increase in total light vehicle
tire shipments experienced for the total industry (including an estimate for
non-USTMA members). In the first quarter of 2020, Americas Tire Operations
volume, as well as that of the USTMA and total industry, were negatively
impacted by reduced demand as a result of the COVID-19 pandemic.
Operating Profit
Operating profit for the segment increased from $10 million for the three months
ended March 31, 2020 to $60 million for the three months ended March 31, 2021.
Operating profit in the first quarter of 2021 included $22 million of higher
unit volume, $15 million of favorable price and mix, $2 million of lower product
liability expense and $1 million of favorable manufacturing costs compared to
the first quarter of 2020. The first quarter of 2020 unit volume was negatively
impacted by the market slowdown caused by COVID-19, which also included
production days lost due to plant shut downs as a result of the pandemic. The
first quarter of 2021 included $4 million of lower raw material costs, with
reduction in tariff costs as a result of the Company's sourcing strategy
offsetting higher raw material costs. The first quarter of 2021 also included $3
million of higher selling, general and administrative expenses and $2 million of
higher other costs compared to the first quarter of 2020. Operating profit in
the first quarter of 2020 also included $11 million of restructuring costs
related to the Company's acquisition of the remaining noncontrolling ownership
interest in COOCSA.
The segment utilizes an internal raw material index which is calculated based
upon the underlying costs of the segment's key raw materials for the period and
is utilized in comparing the cost of raw materials from period to period. The
segment's internally calculated raw material index of 153.6 for the quarter
ended March 31, 2021 was an increase of 1.9 percent from the quarter ended March
31, 2020. The raw material index increased 6.1 percent from the quarter ended
December 31, 2020.
International Tire Operations Segment
(Dollar amounts in thousands)                    Three Months Ended March 31,
                                                                            2021            Change           2020
Sales                                                                    $ 139,369          36.1%         $ 102,387
Operating profit (loss)                                                  $   3,207           n/m          $ (10,279)
Operating margin                                                            2.3%         12.3 points        (10.0)%
Total unit sales change                                                                     47.2%


n/m - not meaningful
Overview
The International Tire Operations segment is the combination of the Europe and
Asia operating segments. The European operations include manufacturing
operations in the U.K. and Serbia. The U.K. entity primarily manufactures and
markets motorcycle and racing tires and tire retread material for domestic and
global markets. The Serbian entity manufactures passenger car and light truck
tires primarily for the European markets and for export to the North American
segment. The Asian operations are located in the PRC and Vietnam. Cooper Kunshan
Tire, in the PRC, manufactures passenger car and light truck tires both for the
Chinese domestic market and for export to markets outside of the PRC. GRT, a
joint venture manufacturing facility located in the PRC, and ACTR, a joint
venture manufacturing facility located in Vietnam, serve as global sources of
TBR tire production for the Company. The segment also procured certain TBR tires
under off-take agreements with PCT and Sailun Vietnam through December 31, 2020.
The segment sells a majority of its tires in the replacement market, with a
portion also sold to OEMs.
Sales
Net sales of the International Tire Operations segment were $139 million for the
quarter ended March 31, 2021, compared to $102 million for the quarter ended
March 31, 2020. The segment experienced $48 million of higher unit volume and $6
million of favorable foreign currency impact, partially offset by $17 million of
unfavorable price and mix. Segment unit volume was up 47.2 percent compared to
the first quarter of 2020. Demand in the first quarter of 2020 was negatively
impacted by the COVID-19 pandemic.
                                      -28-
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Operating Profit (Loss)
In the first quarter of 2021, the segment's operating profit of $3 million
compared to an operating loss of $10 million in the first quarter of 2020. The
segment experienced $7 million of higher unit volume, $3 million of lower raw
material costs, as the segment utilizes the FIFO method of inventory valuation,
$2 million of favorable manufacturing efficiencies and $2 million of favorable
price and mix. The first quarter of 2020 unit volume was negatively impacted by
the market slowdown caused by COVID-19, and also included production days lost
due to plant shut downs as a result of the pandemic. Selling, general and
administrative costs increased $1 million in the first quarter of 2021 compared
to the first quarter of 2020.
Liquidity and Capital Resources
Sources and uses of cash in operating activities
Net cash used by operating activities was $40 million in the first quarter of
2021 compared to $114 million of net cash used by operating activities in the
first quarter of 2020. The improvement in operating cash flows was partially
driven by the Company's increased net income in 2021 of $22 million, as compared
to a net loss of $11 million in 2020. Changes in operating assets and
liabilities in 2021 used $145 million of net cash, as compared to the usage of
$141 million in 2020. Lower sales volume and decreased production activity in
the first quarter of 2020 as a result of the COVID-19 pandemic resulted in
favorable movement in accounts and notes receivable and inventory in 2020. In
the first quarter of 2021, movement in accounts and notes receivable was
unfavorable due to increased sales volume, while the Company is building
inventory to meet forecasted demand and replenishing its inventory on hand from
depleted levels at December 31, 2020. The Company also experienced favorable
movement in accounts payable in the first quarter of 2021 due to increased
purchasing related to inventory, coupled with continuing capital spending.
Non-cash items contributed $83 million of favorable cash flow movement in the
first quarter of 2021, compared to $38 million contributed in the first quarter
of 2020, with the Company experiencing growth in its LIFO reserve in the first
quarter of 2021 as a result of the Company's growth in inventory from December
31, 2020.
Sources and uses of cash in investing activities
Net cash used in investing activities reflects capital expenditures of $57
million and $55 million in 2021 and 2020, respectively.
Sources and uses of cash in financing activities
In the first quarter of 2020, the Company had $269 million of net short term
borrowings, as the Company utilized its revolving credit facility and accounts
receivable securitization facility to increase cash on hand for working capital
and general corporate purposes as it managed the impacts of the COVID-19
pandemic prior to repaying the borrowings in the third quarter of 2020. In the
first quarter of 2021, the Company did not repay any of its net short-term debt
at its Asian operations as compared to $4 million of such payments in the first
quarter of 2020. In the first quarter of 2021, the Company repaid $10 million of
long-term debt and finance lease obligations as compared to $3 million in the
first quarter of 2020.
In the first quarter of 2020, the Company paid $62 million for the acquisition
of the remaining noncontrolling ownership interest in COOCSA, as well as for
services rendered by members of the joint venture workforce that were also
shareholders of the non-controlling interest.
Dividends paid on the Company's common shares were $5 million in the first
quarter of both 2021 and 2020.
Available cash, credit facilities and contractual commitments
At March 31, 2021, the Company had cash and cash equivalents of $460 million.
This does not include restricted cash of $71 million, which includes amounts in
a trust to provide funding for benefits payable and other potential payments to
directors, executive officers and certain other employees under various plans
and agreements of the Company as a result of the Merger.
Domestically, the Company's Credit Facility with a consortium of several banks
provides up to $700 million and expires in June 2024. Of this borrowing
capacity, $200 million is allocated to the Term Loan A, while the remaining $500
million is allocated to a revolving credit facility. The Term Loan A was drawn
in December 2019 primarily to pay for maturing unsecured notes. The Credit
Facility also includes a $110 million letter of credit sub-facility.
The Company also has an accounts receivable securitization facility with a
borrowing limit of up to $100 million, based on eligible receivables, which
expires in December 2022.
At March 31, 2021, the Company has no borrowing drawn on its revolving credit
facility or accounts receivable securitization facility. These credit facilities
have been used to secure letters of credit of $18 million at March 31, 2021. The
Company's additional borrowing capacity under these facilities, net of amounts
used to back letters of credit and based on available collateral at March 31,
2021, was $570 million. The Company's revolving credit facilities contain
restrictive covenants which limit or preclude certain actions based upon the
measurement of certain financial covenant metrics. However, the covenants are
structured such that the Company expects to have sufficient flexibility to
conduct its operations. The Company was in compliance with all of its debt
covenants as of March 31, 2021.
                                      -29-
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The Company's operations in Asia have annual renewable unsecured credit lines
that provide up to $68 million of borrowings and do not contain significant
financial covenants. The additional borrowing capacity on the Asian credit lines
totaled $63 million at March 31, 2021.
The Company believes that its cash and cash equivalent balances, along with
available cash from operating cash flows and credit facilities, will be adequate
to fund its typical needs, including working capital requirements, projected
capital expenditures, and dividend goals as it navigates the COVID-19 pandemic.
The Company also believes it has access to additional funds from capital markets
to fund potential strategic initiatives. Short-term borrowings at March 31, 2021
include $5 million of short-term notes of consolidated subsidiaries. The Company
expects to refinance or pay the short-term notes within the next twelve months.

Forward-Looking Statements



This Quarterly Report on Form 10-Q includes "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of 1995. You can
identify forward-looking statements by words such as "anticipate," "believe,"
"could," "design," "estimate," "expect," "forecast," "goal," "guidance,"
"imply," "intend," "may," "objective," "opportunity," "outlook," "plan,"
"position," "potential," "predict," "project," "prospective," "pursue," "seek,"
"should," "strategy," "target," "will," "would" or other similar expressions
that convey the uncertainty of future events or outcomes. In accordance with
"safe harbor" provisions of the Private Securities Litigation Reform Act of
1995, these statements are accompanied by cautionary language identifying
important factors, though not necessarily all such factors, that could cause
future outcomes to differ materially from those set forth in the forward-looking
statements.

Forward-looking statements include, but are not limited to, statements that
relate to, or statements that are subject to risks, contingencies or
uncertainties that relate to:
•the ability to complete the proposed Merger of the Company and Goodyear on
anticipated terms and timetable;
•the effect of restructuring or reorganization of business components;
•uncertainty and weaknesses in global economic conditions, including the impact
of the ongoing coronavirus (COVID-19) pandemic, or similar public health crises,
on the Company's and Goodyear's financial condition, operations, distribution
channels, customers and suppliers, as well as potentially exacerbating other
factors discussed herein?
•continued volatility in raw material and energy prices, including those of
rubber, steel, petroleum-based products and natural gas or the unavailability of
such raw materials or energy sources, which may impact the price-adjustment
calculations under sales contracts?
•delays or disruptions in the supply chain resulting in increased costs or
disruptions in operations;
•the ability to cost-effectively achieve planned production rates or levels?
•the ability to successfully identify and consummate any strategic investments
or development projects?
•the outcome of any contractual disputes with customers, joint venture partners
or any other litigation or arbitration?
•impacts of existing and increasing governmental regulation and related costs
and liabilities, including failure to receive or maintain required operating and
environmental permits, approvals, modifications or other authorization of, or
from, any governmental or regulatory entity and costs related to implementing
improvements to ensure compliance with regulatory changes;
•the ability to maintain adequate liquidity, level of indebtedness and the
availability of capital could limit cash flow available to fund working capital,
planned capital expenditures, acquisitions and other general corporate purposes
or ongoing needs of the business?
•the ability to continue to pay cash dividends, and the amount and timing of any
cash dividends;
•availability of capital and ability to maintain adequate liquidity?
•the impact of labor problems, including labor disruptions at the Company, its
joint ventures, or at one or more of its large customers or suppliers?
•the ability of our customers, joint venture partners and third party service
providers to meet their obligations on a timely basis or at all?
•adverse changes in interest rates and tax laws? and
•the potential existence of significant deficiencies or material weakness in our
internal control over financial reporting.


We have based our forward-looking statements on our current expectations,
estimates and projections about our industry and our partnership. We caution
that these statements are not guarantees of future performance and you should
not rely unduly on them, as they involve risks, uncertainties, and assumptions
that we cannot predict. In addition, we have based many of these forward-looking
statements on assumptions about future events that may prove to be inaccurate.
While our management considers these assumptions to be reasonable, they are
inherently subject to significant business, economic, competitive, regulatory
and other risks, contingencies and uncertainties, most of which are difficult to
predict and many of which are beyond our control. Accordingly, our actual
results may differ materially from the future performance that we have expressed
or forecast in our forward-looking statements. Differences between actual
results and any future performance suggested in our forward-looking statements
could result from a variety of factors, including the following:

                                      -30-
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•the failure to satisfy various other conditions to the closing of the
transaction contemplated by the Merger Agreement;
•the failure to obtain governmental approvals of the transaction on the proposed
terms and schedule, and any conditions imposed on the combined company in
connection with consummation of the transaction;
•the risk that the cost savings and any other synergies from the transaction may
not be fully realized or may take longer to realize than expected;
•disruption from the proposed transaction making it more difficult to maintain
relationships with customers, partners, employees or suppliers;
•the risk that the proposed transaction may be less accretive than expected, or
may be dilutive, and that the combined company may fail to realize the benefits
expected from the Merger;
•risks relating to any unforeseen liabilities of Goodyear or the Company;
•the volatility in raw material and energy prices, including those of rubber,
steel, petroleum-based products and natural gas or the unavailability of such
raw materials or energy sources;
•governmental regulation;
•changes to tariffs or trade agreements, or the imposition of new or increased
tariffs or trade restrictions, imposed on tires, raw materials or manufacturing
equipment which the Company uses, including changes related to tariffs on tires,
raw materials and tire manufacturing equipment imported into the U.S. from China
or other countries, as well as changes to trade agreements resulting from the
United Kingdom's withdrawal from the European Union;
•future laws and regulations or the manner in which they are interpreted and
enforced;
•the inability to obtain and/or renew permits necessary for the operations;
•existing and future indebtedness may limit cash flow available;
•operating expenses could increase significantly if the price of electrical
power, fuel or other energy sources increases;
•changes in credit ratings issued by nationally recognized statistical rating
organizations;
•risks involving the acts or omissions of our joint venture partners;
•natural disasters, weather conditions, disruption of energy, unanticipated
geological conditions, equipment failures, and other unexpected events;
•a disruption in, or failure of our information technology systems, including
those related to cybersecurity; failure of outside contractors and/or suppliers
to perform;
•the cost and time to implement a strategic capital project may be greater than
originally anticipated;
•reliance on estimates of recoverable reserves; and
•the risks that are described from time to time in Goodyear's and the Company's
respective reports filed with the SEC.

We undertake no obligation to update any forward-looking statements except to the extent required by applicable law.

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