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Fourth Quarter 2013 Conference Call February 13, 2014

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Page 1: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Fourth Quarter 2013 Conference Call February 13, 2014

Page 2: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Forward-Looking Statements

Certain information contained in this presentation constitutes forward-looking statements for purposes of the

safe harbor provisions of The Private Securities Litigation Reform Act of 1995. There are a variety of factors,

many of which are beyond our control, that affect our operations, performance, business strategy and

results and could cause our actual results and experience to differ materially from the assumptions,

expectations and objectives expressed in any forward-looking statements. These factors include, but are not

limited to: our ability to implement successfully our strategic initiatives; actions and initiatives taken by both

current and potential competitors; increases in the prices paid for raw materials and energy; a labor strike,

work stoppage or other similar event; deteriorating economic conditions or an inability to access capital

markets; work stoppages, financial difficulties or supply disruptions at our suppliers or customers; the

adequacy of our capital expenditures; our failure to comply with a material covenant in our debt obligations;

potential adverse consequences of litigation involving the company; as well as the effects of more general

factors such as changes in general market, economic or political conditions or in legislation, regulation or

public policy. Additional factors are discussed in our filings with the Securities and Exchange Commission,

including our annual report on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K.

In addition, any forward-looking statements represent our estimates only as of today and should not be

relied upon as representing our estimates as of any subsequent date. While we may elect to update

forward-looking statements at some point in the future, we specifically disclaim any obligation to do so, even

if our estimates change.

2

Page 3: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Q4 and Full-Year Highlights

3

• Full-year segment operating income up 27% to record $1.6 billion

• Record Q4 segment operating income of $419 million, including Q4

record earnings in North America

• Free cash flow from operations reaches $1 billion in 2013

• Reaffirming 2014-2016 financial targets

Exceptionally strong Q4 and full-year earnings & cash flow

demonstrate sustainability of Goodyear’s strategy

Page 4: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Our Destination

4

$372

$917

$1,368 $1,248

$1,580

2009 2010 2011 2012 2013 2016

10% to 15%

growth per

year

Balanced

plan based

on growth

and cost

Our performance provides confidence in achievability of Destination

Reaffirming 2014-2016 financial targets

(a) See Segment Operating Income reconciliation in Appendix on page 31.

Segment Operating Income(a)

$ in millions

Page 5: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Strategy Roadmap

5

Where We Are

Key How To’s

Our Destination

Key Strategies

NA Adding Economic Value

Improving Volume

Pension Remains a Challenge

Executing Plan

Innovation Leader

Strong Earnings

Creating Sustainable Value

First with Customers

Innovation Leader

Leader in Targeted Segments

Competitively Advantaged

Profitable thru Economic Cycle

Cash Flow Positive

Investment Grade

Industry

MegaTrends

1. North America: Profitability

2. Asia: Winning in China

3. EMEA/LA: Continued Success

1. Market-Back Innovation Excellence

2. Target Profitable Segments

3. Operational Excellence

4. Enabling Investments

5. Top Talent/Top Teams

Page 6: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Successfully Addressed U.S. Legacy Obligations

6

Major milestone in long journey of legacy cost elimination

2007

2008

2013

2014

• Hourly plans (USW) closed to new entrants

• Froze salaried pension plans

• Addressed retiree medical obligations by

creating VEBA for USW retirees

• Capped salaried medical plans

• Fully funded and de-risked salaried pension plans

• Reached agreement with USW, giving Goodyear ability to freeze the

hourly pension plans before 2017 (assumes plans fully funded)

Goodyear fully funds & freezes U.S. hourly plans

Page 7: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Hourly U.S. Pension Plans Prefunding

7

• Goodyear fully funded hourly U.S. plans with approximately $1.15

billion of balance sheet cash in early 2014

– Fully funding plans consistent with previously announced strategy

– Strong earnings and cash flow allowed for full funding without issuing debt

• Funding unlocks value of the Company

– Paves way for greater transparency to tire business, as well as stronger

and less volatile earnings and cash flow

– Action drives long-term shareholder value as part of capital allocation plan

• Accelerates path to reaching 2.5x Adjusted Debt / EBITDAP target

Prefunding marks a new beginning for Goodyear

Page 8: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Other Highlights

8

• Goodyear remains disciplined in pursuing its targeted market

segments as global industry growth rates continue to recover

– Goodyear Q4 volume +2%; growth in 3 of 4 SBUs

• North America

– Strong business performance, excellent execution, consistent momentum

• Europe

– Amiens, France facility closure in Q1 2014, ~$40 million savings in 2014

– Executing profit improvement plan

• Latin America

– Working through challenges of volatile political & economic environment

– Introduced 3 new products to drive growth in profitable segments

• Asia Pacific

– Solid return on CapEx investment in China, driving share growth

Page 9: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Summary

9

Our strategy works…and is delivering record results

Strong performance gives us confidence in 2014-

2016 financial targets and enables us to execute on

capital allocation plan

• Pension prefunding unlocks value of the tire business, creates

new beginning for Goodyear

We are staying the course on our strategy and

focusing our attention on execution

Page 10: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Financial Update

Page 11: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Fourth Quarter 2013

Income Statement

(a) See Segment Operating Income and Margin reconciliation in Appendix on page 31.

In millions, except EPS

11

December 31, December 31,

2013 2012 Change

Units 40.7 40.0 2%

Net Sales 4,791$ 5,045$ (5)%

Gross Margin 23.0% 18.7% 4.3 pts

SAG 736$ 707$ 4%

Segment Operating Income(a) 419$ 272$ 54%

Segment Operating Margin(a) 8.7% 5.4% 3.3 pts

Goodyear Net Income 235$ 7$

Less: Preferred Stock Dividends 7$ 7$

Goodyear Net Income Available to Common

Shareholders228$ -$

Goodyear Net Income Available to Common

Shareholders - Per Share of Common Stock

Basic 0.92$ -$

Diluted 0.84$ -$

Three Months Ended

Page 12: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

12 12

Fourth Quarter 2013

Segment Operating Results

$ In millions

(a) Raw material variance of $172 million excludes raw material cost saving measures of $59 million, which are included in Cost Savings above (b) Estimated impact of inflation (wages, utilities, energy, transportation and other) (c) Other includes ($28) million incentive compensation, ($9) million advertising, ($8) research and development, and $14 million China start-up

$272

$172

$114

$55 $11 ($77)

($74)

($24) ($30)

$419

Raw

Materials(a)

Cost

Savings

Inflation(b)

Volume

Un-

absorbed

Fixed

Cost

Price / Mix

Other(c) Currency

Q4

2012

Q4

2013

+$147

Page 13: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

(a) Working capital represents accounts receivable and inventories, less accounts payable – trade. (b) See Total Debt and Net Debt reconciliation in Appendix on page 32.

Fourth Quarter 2013

Balance Sheet

$ In millions

13

December 31, September 30, December 31,2013 2013 2012

Cash and cash equivalents 2,996$ 2,500$ 2,281$

Accounts receivable 2,435 3,254 2,563Inventories 2,816 2,944 3,250Accounts payable - trade (3,097) (3,084) (3,223)

Working capital(a)

2,154$ 3,114$ 2,590$

Total debt(b)

6,249$ 6,542$ 5,086$

Net debt(b)

3,253$ 4,042$ 2,805$

Memo:Net Global Pension Liability 1,855$ 3,522$

Page 14: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Free Cash Flow from Operations

$ In millions

14

(a) Pension Expense is the net periodic cost before curtailments, settlements and termination benefits as reported in the pension-related note in the

Notes to Consolidated Financial Statements.

(b) See page 33 for a reconciliation of “Free Cash Flow from Operations,” a non-GAAP measure, to the most directly comparable GAAP measure

2013 2012

Net Income 675$ 237$

Depreciation and Amortization 722 687

Working Capital 415 457

Pension Expense (a)

285 307

Other 75 140

Capital Expenditures (1,168) (1,127)

Free Cash Flow from Operations (non-GAAP) (b) 1,004$ 701$

Year Ended December 31,

Page 15: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Fourth Quarter 2013

Segment Results

In millions

15

2013 2012 Change 2013 2012 Change

Units 16.3 15.8 2.6% Units 14.4 14.2 1.2%

Net Sales $2,131 $2,314 (7.9%) Net Sales $1,631 $1,602 1.8%

Operating Income $199 $116 71.6% Operating Income $101 $38 165.8%

Margin 9.3% 5.0% Margin 6.2% 2.4%

2013 2012 Change 2013 2012 Change

Units 4.4 4.8 (7.8%) Units 5.6 5.2 7.7%

Net Sales $492 $541 (9.1%) Net Sales $537 $588 (8.7%)

Operating Income $52 $61 (14.8%) Operating Income $67 $57 17.5%

Margin 10.6% 11.3% Margin 12.5% 9.7%

North America Europe, Middle East and Africa

Latin America Asia Pacific

Page 16: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Pension Update

16

• Global unfunded status improved from $3.5 billion in 2012 to $1.9 billion in 2013

– Improvement driven by 2013 contributions of $1.2 billion (including prefunding of salaried U.S. plans) and benefit of rising rates

– Prefunding of hourly U.S. plans has further reduced unfunded status to $700 million, primarily non-U.S. plans

• Reduction in global pension expense from Hourly US prefunding and freezing

– Total improvement of $225 million over next three years, including ~$50 million in 2014 when compared with funding only the required amounts

– Net increase in other related costs of $35 million over the same period, including ~$5 million in 2014

• Substantial increase in operating cash flow due to prefunding and freezing; annual cash contributions reduced $175-250 million in each of next three years

Action reduces leverage while minimizing pension-related financial risk

Page 17: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

2014-2016 Financial Targets

17

• Annual 10-15% SOI growth per year through 2016

• Annual positive free cash flow from operations

• Targeting 2.5x Adjusted Debt / EBITDAP(a)

(a) Total debt plus global pension liability, divided by net income before interest expense, income tax expense, depreciation and amortization

expense, net periodic pension cost, rationalization charges and other (income) and expense

Page 18: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

2014 Key Segment Operating Income Drivers

Fourth Quarter 2011 Segment Operating Income [slightly below/similar t]o]

2010 Level Note: All referenced USD figures relate to year-over-year impact on Segment Operating Income.

Driver 2014 FY Comments

Global Volume + ~2-3% -

Price/Mix vs. Raw

Materials Neutral -

Unabsorbed

Overhead ~$75-$100 million -

Net Cost Savings Neutral • Investments in advertising and R&D offset

favorable cost savings vs. inflation

Foreign Exchange ~($50) million • Assumes current spot rates

Other Tire-Related Neutral -

Start-up Costs Neutral • Brazil modernization costs offset China

start-up benefit

Amiens Closure ~$40 million • $75 million annualized savings, including

exit of EMEA Farm tire business

18

Page 19: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

2014 Outlook Other Financial Assumptions

Assumption Comments

Interest Expense $430 - $455 million

Income Tax ~25% of international

Segment Operating Income

Global Pension

$150 - $200 million pension

expense; ~$1.3 billion in total

contributions(a)

Working Capital Not a significant source or

use

Capital Expenditures ~$0.9 - $1.0 billion

Depreciation &

Amortization ~$700 million

19 (a) Includes $1.15 billion from Hourly U.S. pension prefunding

Page 20: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Appendix

Page 21: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

2013 2012 % Change

Consumer

Units 37.0 36.5 1.3%

Sales $2,763 $2,808 (1.6%)

Commercial

Units 3.2 3.1 5.2%

Sales $1,042 $1,027 1.5%

Unit/Sales Mix

Fourth Quarter 2013

Tire Unit & Sales Summary

2013 Q4 Sales = $4,791

In millions

21

Consumer 58%

Commercial 22%

Other 11%

Retail 6%

Chemical 3%

Page 22: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

2013 2012 % Change

Consumer

Units 147.5 149.2 (1.1%)

Sales $10,946 $11,429 (4.2%)

Commercial

Units 12.7 12.8 (0.4%)

Sales $4,113 $4,202 (2.1%)

Unit/Sales Mix

Full Year 2013

Tire Unit & Sales Summary

2013 Sales = $19,540

In millions

22

Consumer 56%

Commercial 21%

Other 12%

Retail 7%

Chemical 4%

Page 23: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

$942

$207

$689

$2,356

$1,017

($321)

$712

($115)

$549

$1,822

$327

($985)

2008 2009 2010 2011 2012 2013

Price/Mix Raw Materials

Price/Mix Improvements

(a) Reflects impact on Segment Operating Income. Raw Materials include the impact of raw material cost savings measures. (b) Raw material variance of $327 million includes raw material cost savings measures of $249 million. (c) Raw material variance of ($985) million includes raw material cost savings measures of $228 million.

Price/Mix vs. Raw Materials(a)

$ in millions

(c)

23

(b)

Page 24: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Fourth Quarter Significant Items (After Tax and Minority Interest)

24

2013

• Rationalizations, asset write-offs and accelerated depreciation, $17 million (6 cents per share)

• Income and other discrete tax benefits, $41 million (15 cents per share)

• Gains from asset sales, $2 million (1 cent per share)

2012

• Rationalizations, asset write-offs and accelerated depreciation, $85 million (34 cents per share)

• Discrete tax charges, $9 million (4 cents per share)

• Loss resulting from a strike in South Africa, $6 million (2 cents per share)

• Charges relating to labor claims with respect to a previously closed facility in Europe, $5 million (2 cents per share)

• Insurance recoveries related to flooding in Thailand, $6 million (2 cents per share)

• Gains from asset sales, $2 million (1 cent per share)

Page 25: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

$ In millions, except EPS

25

Fourth Quarter Significant Items (After Tax and Minority Interest)

Net Sales 4,791$ -$ (5)$ -$ 4,786$

Cost of Goods Sold 3,690 (8) - 3,682

Gross Margin 1,101 8 (5) - 1,104

SAG 736 - - - 736

Interest Expense 105 - (1) - 104

Rationalizations 17 (17) - - 0

Other (Income) / Expense (15) 11 2 (2)

Pre-tax Income / (Loss) 258 25 (15) (2) 266

Taxes 2 3 33 - 38

Minority Interest 21 5 (7) - 19

Goodyear Net Income 235$ 17 (41) (2) 209$

EPS (Diluted) 0.84$ 0.06$ (0.15)$ (0.01)$ 0.74$

As

Reported

Rationalizations,

Asset Write-Offs and

Accelerated

Depreciation

Asset Sales As Adjusted

Income and Other

Discrete Tax

Benefits

Page 26: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Fourth Quarter 2013

Liquidity Profile

(a) Total liquidity comprised of $2,996 million cash and cash equivalents, $2,726 million of unused availability under various credit agreements, and the additional $234 million committed under the Pan-European securitization program. Does not reflect Q1 2014 pension prefunding.

(b) Committed Pan-European securitization program of $620 million (€450 million) subject to available receivables. At December 31, 2013, the amounts available and utilized under this program totaled $386 million (€280 million) and $207 million (€150 million), respectively.

(c) Includes $443 million of cash in Venezuela denominated in bolivares fuertes at the official exchange rate of 6.3 bolivares fuertes per U.S. dollar at December 31, 2013.

26

$6.0(a)

Cash &

Equivalents(c)

Available

Credit Lines

Liquidity Profile

Pan European

Securitization(b)

$ In billions

$3.0

$2.7

$0.2

December 31, 2013

Page 27: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Note: Based on December 31, 2013 balance sheet values and excludes notes payable, capital leases and other domestic and foreign debt. Details on all other actual

outstanding debt as of December 31, 2013 in Appendix on page 34.

(a) At December 31, 2013, the amounts available and utilized under the Pan-European securitization program of $620 million (€450 million) totaled $386 million (€280

million) and $207 million (€150 million), respectively.

(b) At December 31, 2013, there were no borrowings under the European revolving credit facility. Letters of credit issued as of this date totaled $5 million (€3 million).

(c) At December 31, 2013, our borrowing base, and therefore our availability, under the U.S. revolving credit facility was $470 million below the facility’s stated amount

of $2.0 billion. Also, $375 million of letters of credit were issued under this facility.

Fourth Quarter 2013

Maturity Schedule

$ In millions

27

$207

$1,539

$1,262

$900 $700

$150

2014 2015 2016 2017 2018 2019 2020 2021 2022 ≥ 2023

Undrawn Credit Lines

Funded Debt

$620 (a) $551 (b)

$2,000 (c)

Page 28: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

28

a) Reflects discretionary contributions to fully fund U.S. pension plans in 2013 and 2014 (and freeze hourly U.S. pension plans in 2014)

b) Includes cash funding for direct benefit payments for 2012 - 2013 only

c) Excludes one-time charges; also excludes expense of approximately $13 million in 2013, $20 million in 2014, and $25 million to $30 million in 2015 - 2016 related to

transition to defined contribution plans from pension freeze

U.S. D.R. 3.71% 4.51% 4.51% 4.51% 4.51%

Impact of Pension Prefunding & Freezing

$684

$1,162 $1,275

$75 $75

$375 $300 $250

$-

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

2012 2013 2014E 2015E 2016E

$ in

mil

lio

ns

Global Cash Flow Impact(a) (b)

Assumes Fully Fund and Freeze Hourly U.S. Plans 12/31/13 Assumption

$3,522

$1,855

$700 $550 $500

$1,525

$1,225 $1,000

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

2012 2013 2014E 2015E 2016E

$ in

mil

lio

ns

Global Unfunded Obligations(a)

Assumes Fully Fund and Freeze Hourly U.S. Plans 12/31/13 Assumption

$307 $285

$150- $200

$125- $175

$125- $175

$200- $250

$225- $275

$200- $250

$-

$100

$200

$300

$400

$500

$600

2012 2013 2014E 2015E 2016E

$ in

mil

lio

ns

Global Pension Expense(a) (c)

Assumes Fully Fund and Freeze Hourly U.S. Plans 12/31/13 Assumption

2012 unfunded of $3.5B reduced to $700M in 2014

Page 29: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

2014 Full-Year Industry Outlook

29

NA EMEA

Consumer

Replacement ~ +1-2% ~ +3-5%

Consumer OE ~ +3-5% ~ +2-3%

Commercial

Replacement ~ +1-2% ~ +1-2%

Commercial OE ~ +2-3% ~Flat

Page 30: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Mandatory Convertible Preferred Stock Common Share Impact Upon Conversion

30

(a) Subject to customary anti-dilution adjustments (including in connection with the declaration of dividends on our common shares). Adjusting for the

cash dividends on our common stock paid on December 1, 2013 and payable on March 3, 2014, the conversion rate will be 2.7574 so long as our share

price is $18.13 or more.

(b) Assumes 248 million common shares outstanding as of 1/31/14

(c) Appreciation from Goodyear common share price of $14.57 on date of issuance of Mandatory Convertible Preferred Stock

Common

Share Price

Conversion

Rate (a)

Common Shares

Issuable upon

Conversion % Dilution (b)

Common Share

Price

Appreciation (c)

$14.57 3.4317 34,317,000 13.8% 0%and below

$15.00 3.3333 33,333,333 13.4% 3%

$16.00 3.1250 31,250,000 12.6% 10%

$17.00 2.9412 29,411,765 11.9% 17%

$18.00 2.7778 27,777,778 11.2% 24%

$18.21 2.7454 27,454,000 11.1% 25%and above

Page 31: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Reconciliation for Segment Operating Income / Margin

$ In millions

31

2013 2012 2013 2012 2011 2010 2009

Total Segment Operating Income 419$ 272$ 1,580$ 1,248$ 1,368$ 917$ 372$

Rationalizations (17) (108) (58) (175) (103) (240) (227)

Interest expense (105) (87) (392) (357) (330) (316) (311)

Other income / (expense) 15 (11) (97) (139) (73) (186) (40)

Asset write-offs & accelerated depreciation (8) (1) (23) (20) (50) (15) (43)

Corporate incentive compensation plans (29) (22) (108) (69) (70) (71) (41)

Corporate pension curtailments/settlements - (1) - 1 (15) - -

Intercompany profit elimination 9 (10) 4 (1) (5) (14) (13)

Retained expenses of divested operations (7) (2) (24) (14) (29) (20) (17)

Other (19) 2 (69) (34) (75) (47) (37)

Income before Income Taxes 258$ 32$ 813$ 440$ 618$ 8$ (357)$

United States and Foreign Taxes 2 39 138 203 201 172 7

Less: Minority Shareholders Net Income (Loss) 21 (14) 46 25 74 52 11

Goodyear Net Income (Loss) 235$ 7$ 629$ 212$ 343$ (216)$ (375)$

Sales $4,791 $5,045 $19,540 $20,992 $22,767 $18,832 $16,301

Return on Sales 4.9% 0.1% 3.2% 1.0% 1.5% (1.1)% (2.3)%

Total Segment Operating Margin 8.7% 5.4% 8.1% 5.9% 6.0% 4.9% 2.3%

Three Months Ended

December 31,

Twelve Months Ended

December 31,

Page 32: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Reconciliation for Total Debt and Net Debt

$ In millions

32

($ in millions)

December 31, September 30, December 31,

2013 2013 2012

Long term debt and capital leases 6,162$ 6,366$ 4,888$

Notes payable and overdrafts 14 44 102

Long term debt and capital leases due within one year 73 132 96

Total debt 6,249$ 6,542$ 5,086$

Less: Cash and cash equivalents 2,996 2,500 2,281

Net debt 3,253$ 4,042$ 2,805$

Memo:

Net Global Pension Liability 1,855$ 3,522$

Page 33: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Reconciliation for Free Cash Flow from Operations

a) Working capital represents total changes in accounts receivable, inventories and accounts payable – trade.

b) Pension expense is the net periodic cost before curtailments, settlements and termination benefits as reported in the pension-related note in the Notes to

Consolidated Financial Statements.

c) Other includes amortization and write-off of debt issuance costs, net rationalization charges, net (gains) losses on asset sales, Venezuela currency devaluation,

customer prepayments and government grants, insurance proceeds, compensation and benefits less pension expense, other current liabilities, and other assets

and liabilities. 33

($ in millions)

Dec. 31,

2013

Dec. 31,

2012

Net Income 675$ 237$

Depreciation and Amortization 722 687

Change in Working Capital (a)

415 457

Pension Expense (b)

285 307

Other (c)

75 140

Capital Expenditures (1,168) (1,127)

Free Cash Flow from Operations (non-GAAP) 1,004$ 701$

Capital Expenditures 1,168 1,127

Pension Contributions & Direct Payments (1,162) (684)

Rationalization Payments (72) (106)

Cash Flow from Operating Activities (GAAP) 938$ 1,038$

Year Ended

The amounts below are calculated from the Consolidated Statements of Cash Flows except

for pension expense, which is as reported in the pension-related note in the Notes to

Consolidated Financial Statements.

Page 34: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419

Financing Arrangements

$ In millions

34

Dec 31, September 30, June 30, March 31,

2013 2013 2013 2013

Notes Payable:

Notes Payable and Overdrafts 14$ 44$ 79$ 107$

Long-Term Debt:

Notes:6.75% Euro Notes due 2019 344$ 338$ 326$ 321$

8.25% due 2020 995 995 995 995

8.75% due 2020 267 267 267 266

6.5% due 2021 900 900 900 900

7% due 2022 700 700 700 700

7% due 2028 150 149 149 149

Credit Facilities:

$2.0 billion first lien revolving credit facility due 2017 - - - -

$1.2 billion second lien term loan facility due 2019 1,195 1,195 1,194 1,194

€400 million revolving credit facility due 2016 - - - 256 Pan-European accounts receivable facility due 2015 207 394 345 186 Chinese credit facilities 537 533 531 505

Other domestic and international debt 878 962 976 933

6,173$ 6,433$ 6,383$ 6,405$

Capital lease obligations 62 65 67 69

Long-Term Debt Total: 6,235$ 6,498$ 6,450$ 6,474$

Total Debt 6,249$ 6,542$ 6,529$ 6,581$

Page 35: Fourth Quarter 2013 Conference Call...Q4 and Full-Year Highlights 3 •Full-year segment operating income up 27% to record $1.6 billion •Record Q4 segment operating income of $419