Deutsche Bank Global Automotive Conference 2016January 12, 2016
Forward-Looking Statements
2
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; foreign currency translation and transaction risks; 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.
Company Overview
.
Goodyear tires are sold
in two distinct tire markets...
(% of 2014 Units of 162 million)
...and serve customers
around the world
(% of 2014 Revenue of ~$18 billion)
…available in a diverse
selection of products...
(% of 2014 Revenue of ~$18 billion)
OE ~20% of 2014 Revenue
3
Goodyear Is a Tire Industry Leader with Powerful Brands, a Broad
Product Offering and Global Distribution
Consumer
21%
Retail
8%
Other
10%
Chemical
3%
Commercial
Includes:
OTR, Farm,
Race, &
Aviation
58%North
America
45%
Europe, Middle
East & Africa
34%
Latin
America
10%
Asia Pacific
11%
Replacement Market70%
OE Market
30%
2015 Key Segment Operating Income Drivers as of October 29, 2015
DriverJuly Outlook
2015 FY vs 2014
October Outlook
2015 FY vs 2014Comments
Global Volume +1-2% +1-2% • No change
Price/Mix vs. Raw
Materials~$330 million ~$370 million • Updated for Q3 performance
Overhead
AbsorptionNeutral Neutral • No change
Cost Savings vs.
Inflation~$70 million ~$0 million
• Operational Excellence delivering
on plan; reflects higher than
expected inflation in Venezuela
Foreign Exchange ~($200) million ~($160) million • Based on October spot rates
Amiens Closure ~$20 million ~$20 million • No change
Other Tire Related ~$0 million ~$20 million • Based on Q3 year-to-date results
4
5
Q4 Transactions
• Dissolution of joint venture with SRI complete on October 1
– No impact to the company’s existing financial targets or capital allocation plan
as a result of this transaction
– Volume, revenue and SOI will be regionally impacted as disclosed on June 5
• US bond refinancing
– Net proceeds from $1 billion offering of 5.125% senior notes used to redeem
outstanding $1 billion in principal amount of 8.25% senior notes due 2020
– Reduction in annual interest expense of $31 million beginning in 2016
• Euro bond refinancing
– Net proceeds from €250 million offering of 3.75% senior notes will be used to
redeem outstanding €250 million in principal amount of 6.75% senior notes
due 2019
– Reduction in annual interest expense of $8 million beginning in 2016
2013201220112010
$1.0
$0.7
$0.2
$0.4
Strong Free Cash Flow(c)
$1.3
2014
$1.0
Goodyear Then…And Now
2013201220112010
$1.6
$1.2$1.4
$0.9
Segment Operating Income
(a) See Segment Operating Income reconciliation in Appendix on page 16.
(b) Trailing twelve months as of September 30, 2015.
(c) See Free Cash Flow from Operations reconciliation in Appendix on page 17.
(d) Primarily non-US plans, projected for December 31, 2015 as of September 30, 2015 using 2014 year end assumptions.
(a)
6
$ In billions
Past performance provides strong foundation for the future
201320122010
$0.7
$0.5
$0.3
~$0
North America Turnaround
2011
Segment Operating Income
2014
$1.1
$0.8$0.3B loss
in 2009
2014
$1.7
TTM (b)
$1.9
TTM (b)
TTM (b)2014201320122011
$0.7
$1.9
$3.5$3.1
Progress on Global Unfunded Pension
(d)
Fully funded,
froze, and de-
risked U.S.
plans
2015E
~$0.7(d)
Advantaged Value PropositionWhat does it take?
Goodyear delivering results through an integrated approach
Iconic brand
Industry leading products
Pervasive distribution
Strong customer relations
Consumer-centric focus
Right Tire
Right Time
Right Place
Right Cost
Market-Back Innovation Enabling Investments
AND
Sales & Marketing Excellence Operational Excellence
7
Industry migration to high-value-added tires advantages Goodyear given
manufacturing know-how, product innovation, and industry-leading products8
HVA Tire TechnologyA “Tire” Is Not a “Tire”
• There is no industry standard definition of “HVA”. For Goodyear …
• Consumer HVA tires incorporate one or more of the following features:
– Rim diameter 17” or greater
– Reduced sidewall height
– Speed-rated H or higher
• Commercial HVA tires have specific performance characteristics (e.g., Fuel Max, DuraSeal)
and are retreadable
• HVA tires are more complex to manufacture than LVA tires
• Converting LVA to HVA capacity may not be a one-for-one conversion in tire units
– Segmented mold
– Advanced tread compounds
– Extra load constructions
LVA Tire
(Low-Value-Added)
HVA Tire
(High-Value-Added)Silica
Tread
Additional
Components
For HandlingCarbon Fiber
Dual Reinforced
Sidewalls
Dual Tread
Zones with
TredLock
Technology
0
50
100
150
200
250
300
350
400
450
500
2012 2013 2014 2015 2016 2017 2018 2019
Americas Consumer Tire Industryterms: Millions of Tires - Replacment & OE - North and Latin America
New Americas Consumer Tire Plant
9
403421
434 434443 450
460 468
2014-2019 Growth
Total = +34M (~7M/year, ~2%/year)
HVA = +76M (~15M/year, ~5%/year)
(a) • Goodyear building previously announced
tire plant in San Luis Potosi, Mexico
• Central location effectively supports
strong and growing demand for HVA tires
across both North and Latin America
• Annual capacity at ~6 million tires;
first production planned for mid-2017
• Total Capex to be $500 to $550 million
during 2015-2018, and funded within
existing capital allocation plan
• High return project with IRR of 18%, and
generating $100 million of free cash flow
per year once fully operational
(a) Source: LMC International and Goodyear internal analysis, November 2015
53%
58%62%
65%68%
70%72%
74%
Low
Value
Added
(LVA)
High
Value
Added
(HVA)HVA as % of
entire industry
Goodyear building world-class factory to meet growing demand for
high-value-added Consumer tires across the Americas
10
2014-2016 Capital Allocation Plan
Executing on the 2014-2016 Capital Allocation Plan
Debt Repayment /
Pension Funding
Updated
(Feb. 2015)
Growth CapEx
Restructurings
Shareholder
Return Program
10* $0.65B approved by Board of Directors; increases dependent on Company performance including the achievement of financial targets
$0.6
$0.8
$3.6
~ $0.6B
~ $1.15B
$1.25B*
$0.9B
$3.8B
-
-
-
4.3x3.9x 4.1x
3.4x3.0x
~2.0 – 2.1x
2010 2011 2012 2013 2014 2016T
Balance Sheet Management –Leverage Targets
Leverage consistent with commitment to achieving investment grade metrics
Reduces cost of capital
Improves global access to credit
Committed to achieving investment grade
balance sheet by the end of 2016
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
Note: See reconciliations in Appendix on page 18.
Greater ability to move debt overseas
Ability to reduce cash balances
11
12
Regular Dividend
$75 million per year
Shareholder Return Program
$0.07 per share quarterly dividend
effective December 1, 2015
Quarterly dividend increased 40% since
reinstatement in 2013
Anticipate increases over time as cash
flow and leverage improves
Shareholder return program demonstrates strong commitment
to shareholders and confidence in strategy
Share Repurchase
$450 million
Through Q3, we repurchased $313
million of our current board
authorization of $450 million or 11.5
million shares
Program designed to offset new
shares issued under equity
compensation programs and offer
incremental shareholder returns
13
Key Takeaways
• Goodyear is a different company today after the turnaround of our
North American business and funding/freezing of US pension plans
• Goodyear is advantaged in a competitive industry and is positioned
to capitalize on growth in HVA tires
• Balanced capital allocation plan demonstrates commitment to
reaching investment grade, continuing to grow the business, and
returning capital to shareholders
Q&A
Appendix
Reconciliation for Segment Operating Income / Margin
$ In millions
16
September 30,
2015 2014 2013 2012 2011 2010
Total Segment Operating Income 1,905$ 1,712$ 1,580$ 1,248$ 1,368$ 917$
Rationalizations (97) (95) (58) (175) (103) (240)
Interest expense (424) (428) (392) (357) (330) (316)
Other income (expense) 53 (302) (97) (139) (73) (186)
Asset write-offs and accelerated depreciation (9) (7) (23) (20) (50) (15)
Corporate incentive compensation plans (89) (97) (108) (69) (70) (71)
Pension curtailments/settlements - (33) - 1 (15) -
Intercompany profit elimination (2) 4 4 (1) (5) (14)
Retained expenses of divested operations (11) (16) (24) (14) (29) (20)
Other (82) (51) (69) (34) (75) (47)
Income before Income Taxes 1,244$ 687$ 813$ 440$ 618$ 8$
United States and Foreign Tax Expense (1,633) (1,834) 138 203 201 172
Less: Minority Shareholders Net Income 61 69 46 25 74 52
Goodyear Net Income 2,816$ 2,452$ 629$ 212$ 343$ (216)$
Sales $16,736 $18,138 $19,540 $20,992 $22,767 $18,832
Return on Sales 16.8% 13.5% 3.2% 1.0% 1.5% (1.1)%
Total Segment Operating Margin 11.4% 9.4% 8.1% 5.9% 6.0% 4.9%
Twelve Months Ended
December 31,
Reconciliation for Free Cash Flow from Operations
a) Working capital represents total changes in accounts receivable, inventories and accounts payable – trade.
b) Pension expense is the net periodic pension cost before curtailments, settlements and termination benefits as reported in the pension-related note in
the Notes to Consolidated Financial Statements.
c) Other includes amortization and write-off of debt issuance costs, net pension curtailments and settlements, net rationalization charges, net (gains)
losses on asset sales, net Venezuela currency loss, compensation and benefits less pension expense, other current liabilities, and other assets and
liabilities.17
The amounts below are calculated from the Consolidated Statements of Cash Flows except for pension expense, which is as reported in the pension-
related note in the Notes to Consolidated Financial Statements.
Sept. 30,
2015
Dec. 31,
2014
Dec. 31,
2013
Dec. 31,
2012
Dec. 31,
2011
Dec. 31,
2010
Net Income 2,877$ 2,521$ 675$ 237$ 417$ (164)$
Depreciation and Amortization 701 732 722 687 715 652
Change in Working Capital (a)261 (1) 415 457 (650) 52
Pension Expense (b)142 158 285 307 266 300
Provision for Deferred Income Taxes (1,766) (1,970) (34) 16 (55) 6
Gain on Recognition of Deferred Royalty Income (155) - - - - -
Capital Expenditures (945) (923) (1,168) (1,127) (1,043) (944)
Other (c)139 464 109 124 516 540
Free Cash Flow from Operations (non-GAAP) 1,254$ 981$ 1,004$ 701$ 166$ 442$
Capital Expenditures 945 923 1,168 1,127 1,043 944
Pension Contributions and Direct Payments (123) (1,338) (1,162) (684) (294) (405)
Rationalization Payments (162) (226) (72) (106) (142) (57)
Cash Flow from Operating Activities (GAAP) 1,914$ 340$ 938$ 1,038$ 773$ 924$
Trailing Twelve Months Ended
EBITDAP, Adjusted Debt & Leverage Ratio Reconciliations
18
$ in millions
(a) Pension expense is the net periodic pension cost before curtailments, settlements and termination benefits as reported in the pension-related note in the Notes to
Consolidated Financial Statements.
(b) Other includes rationalization charges and other (income) expense.
2014 2013 2012 2011 2010
Net Income (Loss) $2,521 $675 $237 $417 ($164)
Interest Expense 428 392 357 330 316
Income Tax (Benefit) Expense (1,834) 138 203 201 172
Depreciation and Amortization 732 722 687 715 652
Pension Expense(a) 158 285 307 266 300
Other(b) 397 155 314 176 426
EBITDAP, as adjusted $2,402 $2,367 $2,105 $2,105 $1,702
2014 2013 2012 2011 2010
Notes Payable and Overdrafts 30 14 102 256 238
Long-Term Debt and Capital Leases Due Within One Year 148 73 96 156 188
Long-Term Debt and Capital Leases 6,216 6,162 4,888 4,789 4,319
Total Debt $6,394 $6,249 $5,086 $5,201 $4,745
Global Unfunded Pension Obligations $714 $1,855 $3,522 $3,097 $2,549
Adjusted Debt $7,108 $8,104 $8,608 $8,298 $7,294
Adjusted Debt/EBITDAP 2.96x 3.42x 4.09x 3.94x 4.29x
Year Ended December 31,
December 31,
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