Citi 2016 Industrials Conference
June 14, 2016
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; foreign currency translation and transaction risks; 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; increases in the prices paid for raw materials and energy; 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
Company Overview
4
Goodyear tires are sold
in two distinct tire markets...
(% of 2015 Units of 164.8 million)
...and serve customers
around the world
(% of 2015 Revenue of ~$15.9 billion)
…available in a diverse
selection of products...
(% of 2015 Revenue of ~$15.9 billion)
OE ~20% of 2015 Revenue
Goodyear is a tire industry leader with powerful brands, a broad product
offering and global distribution
Consumer
20%
Retail
8%
Other
9%
Chemical
3%
Commercial
Includes:
OTR, Farm,
Race, &
Aviation
60%North
America
49%
Europe, Middle
East & Africa
32%
Latin
America
7%
Asia Pacific
12%
Replacement Market69%
OE Market
31%
Company Overview
Note: 2015 revenue and unit volume excludes revenue of $531 million and 1.4 million units related to our Venezuela subsidiary which was deconsolidated on December 31, 2015;
OE = Original Equipment, OTR = Off the Road 5
2013201220112010
$1.0
$0.7
$0.2
$0.4
Strong Free Cash Flow(b)
$1.0
2014
$1.0
2013201220112010
$1.6
$1.2$1.4
$0.9
Segment Operating Income
(a) See Segment Operating Income reconciliation for 2010 through 2015 in Appendix on page 36.
(b) See Reconciliation for Free Cash Flow from Operations in Appendix on page 40.
(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
2014
$1.7
2015
$2.0
2015
20152014201320122011
$0.7
$1.9
$3.5$3.1
Progress on Global Unfunded Pension
Fully funded,
froze, and
de-risked U.S.
plans
2015
$0.6
$0.3B loss
in 2009
Goodyear Then…And Now
7
Goodyear products
represented on 75% of
2015 Top 15 Selling
SUVs and Light Trucks
in the USA
Industry Leading Products
0
2
4
6
8
10
12
2010 2011 2012 2013 2014 2015
USA Light Truck & SUV Sales(in millions)
New Vehicle SalesSource: IHS
Industry migration to High-Value-Added tires advantages Goodyear given
manufacturing know-how, product innovation and value of our brand
8
• 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
HVA Tire TechnologyA “Tire” Is Not a “Tire”
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
9
Advantaged Value Proposition
10
Goodyear’s JourneySegment Operating Income (a)
$0.9B
$1.4B$1.2B
$1.6B$1.7B
$2.0B
$119M
$1.9B
------------------------------ Actual ------------------------ Without Venezuela
Venezuela
in 2015
Record!
Record!
Record!
Record!Record!
Achieved
2011-2013
$1.6B target
$2.1B to
$2.2B
Target of 10-15%
growth from core
business
Record!
Consistently meeting our financial targets despite challenging
economic environments globally
(a) See Segment Operating Income reconciliation for 2010 through 2015 in Appendix on page 36.(b) We are unable to present a quantitative reconciliation of our forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial
measures, because management cannot reliably predict the necessary components of those U.S. GAAP financial measures without unreasonable effort. These components could be significant to the calculation of those U.S. GAAP financial measures in the future.
$ In billions
2010 2011 2012 2013 2014 2015 2015 2016(b)
First Quarter 2016 Financial Performance
First Quarter Highlights
12(a) See First Quarter Segment Operating Income and Margin reconciliation in Appendix on page 37.
• Record first quarter Segment Operating Income of $419 million
with 11.4% SOI margin(a)
• Core Segment Operating Income (excludes Venezuela) grew
14%(a)
• Americas segment earnings of $260 million, SOI margin of 13%
• Asia Pacific segment earnings of $79 million, SOI margin of 16%
(a) See First Quarter Segment Operating Income and Margin reconciliation in Appendix on page 37.
(b) See Adjusted Diluted Earnings Per Share reconciliation in Appendix on pages 34 and 35.
In millions, except EPS
13
March 31, March 31,
2016 2015 Change
Units 41.5 40.8 2%
Net Sales 3,691$ 4,024$ (8)%
Gross Margin 26.8% 23.8% 3.0 pts
SAG 615$ 608$ 1%
Segment Operating Income(a) 419$ 388$ 8%
Segment Operating Margin(a) 11.4% 9.6% 1.8 pts
Goodyear Net Income 184$ 224$
Goodyear Net Income Per Share
Weighted Average Shares Outstanding 267 270
Basic 0.69$ 0.83$
Weighted Average Shares Outstanding - Diluted 271 274
Diluted 0.68$ 0.82$
Cash Dividends Declared Per Common Share 0.07$ 0.06$
Adjusted Diluted Earnings Per Share (b) 0.72$ 0.54$
Three Months Ended
Core SOI
growth
of 14%(a)
+33%
3%
excluding
Venezuela
2.1 pts
excluding
Venezuela(a)
First Quarter 2016 Income Statement
First Quarter 2016Segment Operating Results
14
(a) Core Segment Operating Income is Total Segment Operating Income excluding the operating income from our Venezuelan subsidiary which was deconsolidated on 12/31/15.
(b) Raw material variance of $68 million excludes raw material cost saving measures of $39 million, which are included in Cost Savings.
(c) Estimated impact of inflation (wages, utilities, energy, transportation and other).
(d) Includes the impact of other tire related businesses, including the sale of the North American motorcycle business.
$ In millions
$388 Cost
Savings
$39
$366
$419
Venezuela
Price/Mix
Raw
Materials(b)
Inflation(c)
Other(d)
$68($34)
($30)
$22
$53
($33)
Unabsorbed
Fixed Cost
Currency
($12)
$8
$47 $38
Q1
2016Q1
2015
Core
SOI(a)
Volume
$47
Q1
2015
Total
SOI $14
+14%
Net Cost
Savings
Net P/M vs
Raws
Total Volume
Impact
Strong Core SOI growth driven by balanced performance
(a) Working capital represents accounts receivable and inventories, less accounts payable – trade.
(b) See Total Debt and Net Debt reconciliation in Appendix on page 38. 15
First Quarter 2016 Balance Sheet
$ In millions
March 31, December 31, March 31,2016 2015 2015
Cash and cash equivalents 1,079$ 1,476$ 1,613$
Accounts receivable 2,482 2,033 2,523Inventories 2,636 2,464 2,538Accounts payable - trade (2,653) (2,769) (2,612)
Working capital(a)
2,465$ 1,728$ 2,449$
Total debt(b)
6,075$ 5,708$ 6,185$
Net debt(b)
4,996$ 4,232$ 4,572$
16
Free Cash Flow from Operations
$ In millions
(a) Gain on Recognition of Deferred Royalty Income is due to a one-time pre-tax gain of $155 million on the recognition of deferred income resulting
from the termination of a licensing agreement associated with the sale of our former Engineered Products business.
(b) Other includes amortization and write-off of debt issuance costs, net pension curtailments and settlements, net rationalization charges, net (gains)
losses on asset sales, compensation and benefits less pension expense, other current liabilities, and other assets and liabilities.
(c) See Free Cash Flow from Operations reconciliation in Appendix on page 40.
Trailing Twelve
Months Ended
2016 2015 March 31, 2016
Net Income 189$ 236$ 329$
Depreciation and Amortization 174 172 700
Change in Working Capital (611) (569) (84)
Pension Expense 18 36 117
Provision for Deferred Income Taxes 46 91 34
Gain on Recognition of Deferred Royalty Income(a)
- (155) -
Capital Expenditures (253) (204) (1,032)
Loss on Deconsolidation of Venezuelan Subsidiary - - 646
Other(b)
(148) (21) 70
Free Cash Flow from Operations (non-GAAP)(c) (585)$ (414)$ 780$
Three Months Ended
March 31,
Capital Allocation Plan
18
2014-2016 Capital Allocation Plan Delivering Shareholder Returns
Debt Repayment /
Pension Funding
Growth CapEx
Restructurings
Dividends/ Share
Repurchase
~ $0.7B
$1.1 - $1.3B(a)
~$0.9B
Executing on the 2014-2016 Capital Allocation Plan
~$0.9B
$3.6 - $3.8B
(a) $0.65B previously approved by the Board of Directors with $0.45B authorized for share repurchase on May 27, 2014; additional $0.65B authorized for share repurchase by the Board of Directors on February 4, 2016 with actual amount dependent on Company performance including the achievement of financial targets.
Through March 31, 2016
Dividends paid: $147 million
Repurchases of $463 million
19
New Americas Consumer Tire Plant
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 - Replacement & OE - North and Latin America
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 the Americas
• 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
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
(a) Source: LMC International and Goodyear internal analysis, November 2015
Shareholder Return Program
20
Increased to $0.07 per share as of
December 1, 2015 payment
Anticipate increases over time as
cash flow and leverage improves
Regular Dividend
~$70 million annually
Total share repurchases of $463
million through March 31, 2016
Remain committed to repurchasing
additional shares
More than offsetting new shares issued
under equity compensation programs
Share Repurchase
Up to $1.1 billion
Shareholder return program demonstrates strong commitment to
shareholders and confidence in strategy
Balance Sheet ManagementLeverage Ratios
4.1x
3.4x
2.9x
2.5x
~2.0x - 2.1x
Leverage consistent with commitment to achieving investment grade metrics
Reduces cost of capital
Improves global access to credit
Targeting investment grade balance sheet by the end of 2016
Adjusted Debt / EBITDAP(a)(b)
Greater ability to extend maturities
Ability to reduce cash balances
21
2012 2014 2016T(c)2013
(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, other (income) and expense, and the loss on the deconsolidation of our Venezuelan subsidiary.
(b) See the EBITDAP, Adjusted Debt & Leverage Ratio reconciliation in Appendix on page 39.
(c) We are unable to present a quantitative reconciliation of our forward-looking non-GAAP financial measures to the most directly comparable U.S. GAAP financial measures, because management cannot reliably predict the necessary components of those U.S. GAAP financial measures without unreasonable effort. These components could be significant to the calculation of those U.S. GAAP financial measures in the future.
2015
22
Key Takeaways
• Goodyear is a different company following the turnaround of
our North American business and funding/freezing of US
pension plans
• Goodyear is advantaged in a competitive industry; our results
give us confidence
• Targeting continued earnings growth in 2016 with strong free
cash flow generation
• Balanced capital allocation plan demonstrates commitment to
reaching investment grade, continuing to grow the business,
and returning capital to shareholders
Q&A
Appendix
2016 Key Segment Operating Income Drivers (As presented April 27, 2016)
Driver
2015 Results
excluding
Venezuela
Outlook
2016 vs 2015Comments
Global Volume +3% ~3%• Core business unit volume of
164.8 million in 2015; no change
Net Price/Mix vs.
Raw Materials$77 million ~$75 million
• Raw material costs down ~2%; prior
outlook was down ~5%; no net change
Overhead
Absorption($3) million ~$50 million • No change
Cost Savings vs.
Inflation$227 million ~$135 million • No change
Foreign Exchange ($142) million ~($45) million • No change
Motorcycle ($7) million ~($30) million• Sale of the North American motorcycle
business; weighted to Q2; no change
Other $8 million ~($35) million• Plant start up costs and advertising; no
change
25
2016 Outlook - Other Financial Assumptions(As presented April 27, 2016)
2016 FY Assumption
Interest Expense $350 - $375 million
Financing Fees ~$45 million
Income TaxExpense: ~30% of global pre-tax operating income
Cash: 10-15% of global pre-tax operating income
Depreciation & Amortization ~$700 million
Global Pension Expense $65 - $85 million
Global Pension Cash
Contributions$50 - $75 million
Working Capital Use of ~$50 million
Capital Expenditures $1.0 - $1.1 billion
Corporate Other ~$165 million
26
27
$689
$2,356
$1,017
($321) ($376)
($10) ($30)
$549
$1,822
$327
($985)
($553) ($594)
($107)
2010 2011 2012 2013 2014 2015 2016 Q1
Price/Mix Raw Materials
(b)
(e)
Price/Mix vs. Raw Materials(a)
(a) Reflects impact on Segment Operating Income. Includes Venezuela through 2015. Raw materials include the impact of raw material cost savings measures.(b) Raw material variance of $549 million includes raw material cost savings measures of $136 million. (c) Raw material variance of $1,822 million includes raw material cost savings measures of $177 million.(d) Raw material variance of $327 million includes raw material cost savings measures of $249 million.(e) Raw material variance of ($985) million includes raw material cost savings measures of $228 million.(f) Raw material variance of ($553) million includes raw material cost savings measures of $269 million.(g) Raw material variance of ($594) million includes raw material cost savings measures of $228 million.(h) Raw material variance of ($107) million includes raw material cost savings measures of $39 million.
(f)(g)
(d)
(c)
(h)
$ In millions
2015 Venezuela Key Metrics
28
Venezuela
Q1 Q2 Q3 Q4 2015
Full Year
Units (000s) 377 318 385 312 1,392
Revenue $94 $115 $155 $167 $531
Operating
Income$22 $36 $39 $22 $119
Foreign
Currency
Exchange(a)
($1) ($12) ($8) ($5) ($26)
NOTE: The Venezuela subsidiary was deconsolidated effective December 31, 2015
(a) In addition to the foreign currency exchange impact in Venezuela, 2015 included $8 million of foreign currency exchange losses on bolivar denominated assets held by other Goodyear entities.
$ In millions
Global Raw Material Usage(a)
29
*Petrochemical-based
(a) Based on Goodyear internal analysis
Natural Rubber
20%
Synthetic Rubber
25%
Carbon Black22%
Pigments / Chemicals /
Oils17%
Fabrics3%
Wire / Other13%
Breakout by Weight
Natural Rubber
20%
Synthetic Rubber
28%
Carbon Black12%
Pigments / Chemicals /
Oils18%
Fabrics10%
Wire / Other12%
Breakout by Cost
*
*
*
*
*
*
*
*
First Quarter 2016
Maturity Schedule
$ In millions
30
Note: Based on March 31, 2016 balance sheet values and excludes notes payable, capital leases and other domestic and foreign debt.
(a) At March 31, 2016, our borrowing base, and therefore our availability, under the US revolving credit facility was $618 million below the facility’s stated amount
of $2.0 billion. Also, the total amount outstanding was $270 million and $284 million of letters of credit were issued under the revolving credit facility.
(b) At March 31, 2016, the amounts available and utilized under the €340 million Pan-European securitization program totaled $247 million (€217 million).
(c) At March 31, 2016, the total amount outstanding under the €550 million European revolving credit facility was $268 million (€235 million) and no letters of
credit were issued.
U.S. revolving credit
facility refinanced on
April 7, 2016; maturity
extended to 2021
$900 million 6.5% senior
notes redeemed on
June 13, 2016 utilizing
proceeds from the
May 13, 2016 offering of
$900 million 5.0% senior
notes due in 2026
$1.1
$2.0
March 31, 2016
First Quarter 2016
Liquidity Profile
(a) Total liquidity comprised of $1,079 million of cash and cash equivalents, as well as $1,988 million of unused availability under various credit agreements. 31
Cash &
Equivalents
Available
Credit Lines
Liquidity Profile
$3.1(a)
$ In billions
In millions
32
• Strong SOI performance with income growth of 15% excluding Venezuela
• Volume decline explained by Venezuela deconsolidation (0.4 million), sale of
GDTNA (0.3 million) and continued recessionary environment in Brazil
• U.S. total consumer flat
• SOI growth driven by positive price / mix and benefit from lower raw material costs
2016 2015 Change
Units 18.0 19.2 (6.0%)
Net Sales $1,951 $2,243 (13.0%)
Operating Income $260 $248 4.8%
Margin 13.3% 11.1%
Americas
First Quarter
15%
excluding
Venezuela
First Quarter 2016Segment Results
In millions
33
2016 2015 Change
Units 16.2 15.9 1.7%
Net Sales $1,251 $1,331 (6.0%)
Operating Income $80 $73 9.6%
Margin 6.4% 5.5%
Europe, Middle East and Africa
First Quarter
• Consumer volume up 2%, with strong OE up 5% and Replacement up slightly
• Winter channel inventory levels normalized post Q1 sell-out
• Commercial volume up 3%, with strong OE up 9% and Replacement up 1%
• SOI improvement driven by impact of higher volume
First Quarter 2016Segment Results
In millions
34
• Volume growth of 28% driven by growth in key markets
• 11% when excluding new Japanese replacement business
• Double digit growth in China in both OE and replacement
• Continued strong performance in India
• SOI gains from volume partially offset by increased SAG / advertising
2016 2015 Change
Units 7.3 5.7 28.1%
Net Sales $489 $450 8.7%
Operating Income $79 $67 17.9%
Margin 16.2% 14.9%
First Quarter
Asia Pacific
First Quarter 2016Segment Results
$ and shares in millions (except EPS)
35
First Quarter 2016 Significant Items(After Tax and Minority Interest)
As
Reported
Rationalizations,
Asset Write-offs,
and Accelerated
Depreciation
Debt
Repayments
Insurance
Recovery -
Discontinued
Products
Discrete Tax
Items As Adjusted
Net Sales 3,691$ -$ -$ -$ -$ 3,691$
Cost of Goods Sold 2,701 (2) - - - 2,699
Gross Margin 990 2 - - - 992
SAG 615 - - - - 615
Rationalizations 11 (11) - - - -
Interest Expense 91 - (2) - - 89
Other (Income) Expense 6 - (10) 3 - (1)
Pre-tax Income 267 13 12 (3) - 289
Taxes 78 1 - (1) 12 90
Minority Interest 5 - - - (1) 4
Goodyear Net Income 184$ 12$ 12$ (2)$ (11)$ 195$
EPS 0.68$ 0.05$ 0.04$ (0.01)$ (0.04)$ 0.72$
$ and shares in millions (except EPS)
36
First Quarter 2015 Significant Items(After Tax and Minority Interest)
As
Reported
Rationalizations,
Asset Write-offs,
and Accelerated
Depreciation
Discrete Tax
Items
Charges for
Labor Claims
Related to a
Closed Facility
in Greece
Gain on
Recognition of
Deferred
Royalty
Income As Adjusted
Net Sales 4,024$ -$ -$ -$ -$ 4,024$
Cost of Goods Sold 3,066 (3) (3) - - 3,060
Gross Margin 958 3 3 - - 964
SAG 608 - - - - 608
Rationalizations 16 (16) - - - -
Interest Expense 107 - - - - 107
Other (Income) Expense (132) - - (4) 155 19
Pre-tax Income 359 19 3 4 (155) 230
Taxes 123 1 (4) - (56) 64
Minority Interest 12 4 2 - - 18
Goodyear Net Income 224$ 14$ 5$ 4$ (99)$ 148$
EPS 0.82$ 0.05$ 0.02$ 0.01$ (0.36)$ 0.54$
Reconciliation for Segment Operating Income / Margin for 2010 - 2015
$ In millions
37
(a) Interest expense and Other income (expense) have been adjusted to reflect the impact of the accounting standards update on the
presentation of debt issuance costs which requires the amortization of debt issuance costs to be included in interest expense rather
than Other income (expense). This standard was adopted January 1, 2016.
2010 2011 2012 2013 2014 2015
Total Segment Operating Income 917$ 1,368$ 1,248$ 1,580$ 1,712$ 2,022$
Rationalizations (240) (103) (175) (58) (95) (114)
Interest expense(a) (335) (350) (385) (407) (444) (438)
Other income (expense)(a) (167) (53) (111) (82) (286) 141
Asset write-offs and accelerated depreciation (15) (50) (20) (23) (7) (8)
Corporate incentive compensation plans (71) (70) (69) (108) (97) (103)
Pension curtailments/settlements - (15) 1 - (33) (137)
Intercompany profit elimination (14) (5) (1) 4 4 (3)
Loss on deconsolidation of Venezuelan subsidiary - - - - - (646)
Retained expenses of divested operations (20) (29) (14) (24) (16) (14)
Other (47) (75) (34) (69) (51) (92)
Income before Income Taxes 8$ 618$ 440$ 813$ 687$ 608$
United States and Foreign Tax Expense (Benefit) 172 201 203 138 (1,834) 232
Less: Minority Shareholders Net Income 52 74 25 46 69 69
Goodyear Net Income (Loss) (216)$ 343$ 212$ 629$ 2,452$ 307$
Sales $18,832 $22,767 $20,992 $19,540 $18,138 $16,443
Return on Sales (1.1)% 1.5% 1.0% 3.2% 13.5% 1.9%
Total Segment Operating Margin 4.9% 6.0% 5.9% 8.1% 9.4% 12.3%
December 31,
Twelve Months Ended
Reconciliation for First Quarter Segment Operating Income / Margin
$ In millions
38
2016 2015
Core Segment Operating Income 419$ 366$
Venezuela subsidiary operating income - 22
Total Segment Operating Income 419$ 388$
Rationalizations (11) (16)
Interest expense (91) (107)
Other income (expense) (6) 132
Asset write-offs and accelerated depreciation (2) (3)
Corporate incentive compensation plans (26) (13)
Intercompany profit elimination (2) (4)
Retained expenses of divested operations (5) (2)
Other (9) (16)
Income before Income Taxes 267$ 359$
United States and Foreign Tax Expense 78 123
Less: Minority Shareholders Net Income 5 12
Goodyear Net Income 184$ 224$
Sales (as reported) $3,691 $4,024
Sales (excluding Venezuela) $3,691 $3,930
Return on Sales 5.0% 5.6%
Total Segment Operating Margin 11.4% 9.6%
Core Segment Operating Margin 11.4% 9.3%
Three Months Ended
March 31,
39
Reconciliation for Total Debtand Net Debt
$ In millions
March 31, December 31, March 31,
2016 2015 2015
Long-Term Debt and Capital Leases 5,685$ 5,074$ 5,924$
Notes Payable and Overdrafts 76 49 23
Long-Term Debt and Capital Leases Due Within One Year 314 585 238
Total Debt 6,075$ 5,708$ 6,185$
Less: Cash and Cash Equivalents 1,079 1,476 1,613
Net Debt 4,996$ 4,232$ 4,572$
40
Reconciliation for EBITDAP, Adjusted Debt & Leverage Ratio
$ In millions
(a) Net periodic pension cost excludes curtailments/settlements and termination benefits.
(b) Other includes (i) rationalization charges, (ii) other (income) expense and (iii) the loss on the deconsolidation of our Venezuelan subsidiary effective December 31, 2015.
2012 2013 2014 2015
Net Income $237 $675 $2,521 $376
Interest Expense 385 407 444 438
Income Tax (Benefit) Expense 203 138 (1,834) 232
Depreciation and Amortization 687 722 732 698
Pension Expense(a) 307 285 158 135
Other(b) 286 140 381 619
EBITDAP, as adjusted $2,105 $2,367 $2,402 $2,498
2012 2013 2014 2015
Notes Payable and Overdrafts 102 14 30 49
Long-Term Debt and Capital Leases Due Within One Year 96 73 148 585
Long-Term Debt and Capital Leases 4,845 6,110 6,172 5,074
Total Debt $5,043 $6,197 $6,350 $5,708
Global Unfunded Pension Obligations $3,522 $1,855 $714 $642
Adjusted Debt $8,565 $8,052 $7,064 $6,350
Adjusted Debt/EBITDAP 4.1x 3.4x 2.9x 2.5x
Year 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, compensation and benefits less pension expense, other current liabilities, and other assets and liabilities. 41
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.
$ In millions
Trailing Twelve
Months Ended
Dec. 31,
2010
Dec. 31,
2011
Dec. 31,
2012
Dec. 31,
2013
Dec. 31,
2014
Dec. 31,
2015
March 31,
2016
March 31,
2015
March 31,
2016
Net Income (164)$ 417$ 237$ 675$ 2,521$ 376$ 189$ 236$ 329$
Depreciation and Amortization 652 715 687 722 732 698 174 172 700
Change in Working Capital(a)52 (650) 457 415 (1) (42) (611) (569) (84)
Pension Expense(b)300 266 307 285 158 135 18 36 117
Provision for Deferred Income Taxes 6 (55) 16 (34) (1,970) 79 46 91 34
Gain on Recognition of Deferred Royalty Income - - - - - (155) - (155) -
Capital Expenditures (944) (1,043) (1,127) (1,168) (923) (983) (253) (204) (1,032)
Loss on Deconsolidation of Venezuelan Subsidiary - - - - - 646 - - 646
Other(c)540 516 124 109 464 197 (148) (21) 70
Free Cash Flow from Operations (non-GAAP) 442$ 166$ 701$ 1,004$ 981$ 951$ (585)$ (414)$ 780$
Capital Expenditures 944 1,043 1,127 1,168 923 983 253 204 1,032
Pension Contributions and Direct Payments (405) (294) (684) (1,162) (1,338) (103) (25) (26) (102)
Rationalization Payments (57) (142) (106) (72) (226) (144) (24) (26) (142)
Cash Flow from Operating Activities (GAAP) 924$ 773$ 1,038$ 938$ 340$ 1,687$ (381)$ (262)$ 1,568$
Cash Flow from Investing Activities (GAAP) (859) (902) (1,123) (1,136) (851) (1,262) (257) (180) (1,339)
Cash Flow from Financing Activities (GAAP) 179 994 (426) 1,082 (11) (985) 213 (34) (738)
Three Months EndedYear Ended
.
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