Business Overview

The worldwide tire unit sales in the replacement and OE markets during the period indicated were as follows.

(In million of tires)		2009	2008	2007
North American	Replacement tire units	50.0	51.4	55.7
	OE	12.7	19.7	25.6
Europe, Middle East and Africa Tire	Replacement tire units	52.8	55.9	58.8
	OE	13.2	17.7	20.8
Latin America	Replacement tire units	13.1	13.9	14.7
	OE	6.0	6.1	7.1
Asia pacific	Replacement tire units	12.1	12.9	12.7
	OE	7.1	6.9	6.3
Total	Replacement tire units	128.0	134.1	141.9
	OE	39.0	50.4	59.8
Total		167.0	184.5	201.7

-The decrease in worldwide tire unit sales of 17.5 million units, or 9.5% compared to 2008, included a decrease of 11.4 million OE units, or 22.5%, due primarily to decreases in the consumer markets in North American Tire and EMEA due to recessionary economic conditions resulting in lower demand for new vehicles, and a decrease of 6.1 million units, or 4.6%, in replacement units, primarily in North American Tire and EMEA. North American. Tire consumer replacement volume decreased 1.1 million units, or 2.3%, and EMEA consumer replacement volume decreased 2.7 million units, or 5.1%. The decline in consumer replacement volume is due in part to recessionary economic conditions in the U.S. and Europe.

Acquisition

-Luxembourg-based Goodyear S.A. will commence a tender offer to acquire any and all outstanding shares of Polish tire company TC Debica. Goodyear S.A. currently owns 65.99 percent of TC Debica's shares. (From a press release on September 22, 2009)

Rationalizations

-The Company announced that it will close the tire plant in Las Pinas, the Philippines, by the end of the third quarter of 2009. This action is based on its strategy to realign uncompetitive manufacturing capacity globally. (From a press release on Jul 17, 2009)

-The Company announced that it will reduce production at its passenger and light truck tire plant in Union City, Tennessee, USA. This move will cost approximately 550 workers their jobs. (From a press release on Jun. 19, 2009)

- The Company announced a plan to stop producing passenger car and light truck tires by the third quarter of 2010 at a plant in Amiens, France, as part of its strategy to reduce high-cost manufacturing capacity globally. This measure would result in the reduction of approximately 6 million units of production. (From a press release on May 26, 2009)

R&D Expenditure

(In millions US$)	2009	2008	2007
Total	337	366	372

R&D structure

-The Company owns and operates three research and development facilities and technical centers, and three tire proving grounds.

Capital Expenditure

(in millions US$)	FY2009	FY2008	FY2007
North American Tire	306	449	281
Europe, Middle East and Africa Tire	212	315	241
Latin American Tire	76	150	115
Asia Pacific Tire	134	106	74
Total Segment Capital Expenditures	728	1,020	711
Corporate	18	29	28
Total	746	1,049	739

-Capital expenditures were $746 million in 2009, compared to $1,049 million in 2008 and $739 million in 2007. The increase in capital expenditures in 2008 primarily related to projects targeted at increasing their capacity for high value-added tires, which were scaled back in 2009 due to the recessionary economic conditions.