NOTE 4. COSTS ASSOCIATED WITH RATIONALIZATION PROGRAMS

In order to improve our global competitiveness and as part of our execution of the Goodyear Forward transformation plan ("Goodyear Forward"), we have implemented, and are implementing, rationalization actions to reduce high-cost and excess manufacturing capacity and operating and administrative costs.

During the first quarter of 2025, we reached an agreement with the United Steelworkers and approved a rationalization plan to eliminate our production of commercial tires in our Danville, Virginia tire manufacturing facility ("Danville") in order to reduce our production cost per tire in Americas. The plan includes approximately 850 job reductions, including associates and contracted positions. Danville will continue to produce aviation tires and conduct mixing operations. We expect to substantially complete this rationalization plan by the end of 2025. Total pre-tax charges are expected to be between $130 million and $140 million, of which $80 million to $90 million is expected to be cash charges primarily for associate-related and other exit costs and the remaining costs are expected to be non-cash charges primarily for accelerated depreciation, pension termination benefit charges and other asset-related charges. We have accrued approximately $50 million for this plan at March 31, 2025.

During the first quarter of 2025, we approved a plan to reduce Selling, Administrative and General expenses (“SAG”) headcount in Americas and Corporate. The proposed plan includes approximately 80 net headcount reductions. Total estimated pre-tax charges are expected to be approximately $6 million. We have accrued approximately $5 million for this plan at March 31, 2025.

The remainder of the accrual balance at March 31, 2025 includes $271 million related to the closures of our Fulda, Germany ("Fulda") and our Fürstenwalde, Germany ("Fürstenwalde") tire manufacturing facilities, $59 million related to the rationalization and workforce reorganization plan in Europe, Middle East and Africa ("EMEA"), which reflects $6 million of reversals due to voluntary attrition, $9 million related to the plan to open a shared service center in Costa Rica and to exit certain Commercial Tire and Service Center ("CTSC") locations, $5 million related to the closed Amiens, France tire manufacturing facility, $4 million related to plans to reduce SAG headcount, $4 million related to a global workforce reorganization plan to improve our cost structure, $2 million related to the closure of Cooper Tire's Melksham, United Kingdom tire manufacturing facility ("Melksham"), and various other plans to reduce headcount and improve operating efficiency.

At March 31, 2025 and December 31, 2024, $338 million and $296 million were recorded in Other Current Liabilities in the Consolidated Balance Sheets, respectively.

Substantially all of the new charges for the three months ended March 31, 2025 and 2024 relate to future cash outflows. Net current year plan charges for the three months ended March 31, 2025 primarily relate to the plans approved during the first quarter of 2025 described above and also include a $4 million termination benefits charge for one of our defined benefit pension plans related to headcount reductions at Danville. Net current year plan charges for the three months ended March 31, 2024 primarily relate to the closure of our tire manufacturing facility in Malaysia.

Net prior year plan charges for the three months ended March 31, 2025 include $15 million related to the closures of Fulda and Fürstenwalde, $2 million related to the workforce reorganization plan in EMEA, $1 million related to the closure of Melksham, $1 million related to our closure of certain retail and warehouse locations in Americas, $1 million related to the plan to open a shared service center in Costa Rica and to exit certain CTSC locations, $1 million related to plans to reduce SAG headcount, and reversals of $6 million primarily related to voluntary attrition. Net prior year plan charges for the three months ended March 31, 2024 include $4 million related to the closure of Melksham, $2 million related to the closure of Fulda and Fürstenwalde, $2 million related to the permanent closure of our Gadsden, Alabama tire manufacturing facility, $1 million related to our global workforce reorganization plan to improve our cost structure, $1 million related to the rationalization and workforce reorganization plan in EMEA, $1 million related to a plan in Australia and New Zealand, $1 million related to the closure of certain retail and warehouse locations in Americas, and reversals of $1 million for actions no longer needed for their originally intended purpose.

Asset write-offs (recoveries), accelerated depreciation, and accelerated lease costs for the three months ended March 31, 2025 primarily relate to the announced closures of Fulda and Fürstenwalde, as well as the plan to reduce our production capacity at Danville.

Asset write-offs (recoveries) and accelerated depreciation for the three months ended March 31, 2024 primarily relate to plans to improve our cost structure through announced closures of a development center in the U.S. and certain plants and facilities globally.

Ongoing rationalization plans had approximately $1,050 million in charges incurred prior to 2025 and have approximately $150 million in expected charges to be incurred in future periods.

Approximately 950 associates will be released under plans initiated in 2025, of which approximately 650 were released through March 31, 2025. In the first three months of 2025, approximately 200 associates were released under plans initiated in prior years. Approximately 2,450 associates remain to be released under all ongoing rationalization plans.