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2013 Investor Day
September 20, 2013
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 realize anticipated savings and operational benefits from our cost reduction initiatives
or to implement successfully other strategic initiatives; increases in the prices paid for raw materials and
energy; pension plan funding obligations; actions and initiatives taken by both current and potential
competitors; 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; a labor strike, work stoppage or other similar event; 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
Agenda
Rich Kramer Chairman and CEO
Overview
Industry MegaTrends
Strategy
Steve McClellan President – North America
Operational Update
Darren Wells Executive Vice President and CFO
Financial Outlook
Capital Allocation Plan
Question/Answer Goodyear Management
3
Meeting Highlights
4
Based on our confidence in the business…
Reconfirming 2013 outlook
• SOI of about $1.5 billion
• Positive cash flow (excluding pension pre-funding)
Targets through 2016
• Annual 10-15% SOI growth per year through 2016
• Annual positive cash flow (excluding pension pre-funding)
• Targeting 2.5x Adjusted Debt / EBITDAP by 2016
Balanced Capital Allocation Plan
• Dividend and stock buy-back plan beginning Q4/2013
5
Shareholder Return Program
Shareholder return program demonstrates strong commitment
to shareholders and confidence in strategy
Reinstating regular dividend: $55 million per year
• $0.05 per share quarterly dividend beginning in fourth quarter
• Anticipate increases over time
Establishing share repurchase program: $100 million
Q2/2013 Highlights…they are worth repeating
Record segment operating income of $428 million(a)
• All business units achieved higher year-over-year SOI
• All-time records for North America and Asia Pacific
Three business units posted higher tire unit volumes versus last year
Strong cash flow
• Cash flow positive in Q2 and continued progress managing working capital
Pension underfunded status benefitting from higher interest rates
Increasing confidence in 2013 targets
• SOI expected of about $1.5 billion, at high end of original $1.4 - $1.5 billion range
• Cash flow positive (excluding pension pre-funding)
6 (a) See Segment Operating Income reconciliation in Appendix on page 66.
Strategy Roadmap
Where We Are
Key How To’s
Our Destination
Key Strategies
#4
Industry
MegaTrends
#1
#3
#5 #2
7
8
Where We Are #1
September 2013 March 2011
• ’11 Industry Growth = ~10%
• Natural Rubber = $2.38
• Euro = $1.42, Real = 1.67
• ’13 Industry growth = ~1%
• Natural Rubber = $1.11
• Euro = $1.35, Real = 2.21
Weaker demand
Lower raws
Stronger $
• Coming off of 2010 at $917 million
of SOI with margin of 4.9%(a)
• Expect to finish 2013 at ~$1.5 billion
SOI with margin of ~7.5%
• North America at essentially
breakeven SOI • N. America approaching $600 million
SOI and creating economic value
• Pension risk over-shadowing
the “tire company” • Clear path forward on pension –
performance based on underlying
tire business
• China consumer capacity still under
construction; truck not yet begun • China consumer and truck plant fully
operational, and Asia at record SOI
• Targeting cash flow positive • Cash flow positive and dividend
paying company
Great progress….in challenging environment (a) See Segment Operating Income and margin reconciliation in Appendix on page 66.
Key Strategy: NA Profitability
Strong business performance
Trailing 4 quarters approaching $600
million of SOI, far exceeding original
$450 million target
Despite weak-volume tire industry
Consistent business momentum
16 straight quarters of year-on-year SOI
improvement
Excellent execution of Goodyear strategy
Market-back innovation excellence
Target profitable market segments
Operational excellence & enabling
investments
USW contract recently extended into 2017
Sustainable business that is creating value
9
Record
Terms: Trailing 4 Quarters of SOI in $ millions
#2
Key Strategy: Win in China
High growth business (ex. ANZ) ... with excellent long term prospects
Winning in China
New passenger and truck plant fully
operational
Solid return on our CapEx investment
Gaining share
Record SOI in Asia
After working through natural disaster
(i.e., Thailand flood) and plant start-up
costs
Broad Asian business
Growing consumer & commercial
Solid off-the-road and farm (India)
Restructuring in Australia/New Zealand in
response to weak economic conditions
10
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
$0
$50
$100
$150
$200
$250
$300
$350
$400
Q4/10
Q1/11
Q2/11
Q3/11
Q4/11
Q1/12
Q2/12
Q3/12
Q4/12
Q1/13
Q2/13
SO
I a
s %
of
Re
ve
nu
e
SO
I in
$
m
illio
ns
SOI: AsiaTerms: Trailing 4 Quarters of SOI in $ millions
Record
Factory
start-up
#2
Key Strategy: Continued Success in LA
High margin business on the road to recovery
Team responding to market transition
Closed open markets
- Primarily local manufacturing
local and significant imports
- Monobrand multibrand
distribution
Back to the “basics” of open market
Innovation via exciting new products
Increased HVA capability (Americana)
Solid marketing programs
Working through challenges of Venezuela
and Argentina
Evidence of recovery
Experiencing volume growth
3 straight qtrs of yr-on-yr SOI growth
Renewed
11
Recovery
underway
Terms: Trailing 4 Quarters of SOI in $ millions
#2
Key Strategy: Continued Success in EMEA
Developing recovery plan…full journey will take several years
Renewed
Struggling in weak economy
• Restructuring in response…
o Amiens North closure ($75 million)
o Profit Improvement Plan
1. Target Market Segments
2. Emerging Market Growth
3. Productivity ($75-$100 million
2013-2015)
Not backing off innovation
• Technology strength evidenced by
industry-leading Summer Tire labels
Our recovery plan is targeting a return
to historical margins by 2016
12
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
$0
$100
$200
$300
$400
$500
$600
$700
$800
Q4/10
Q1/11
Q2/11
Q3/11
Q4/11
Q1/12
Q2/12
Q3/12
Q4/12
Q1/13
Q2/13
SO
I a
s %
of
Re
ve
nu
e
SO
I in
$
m
illio
ns
SOI: EMEA
Recovery (early signs)
Terms: Trailing 4 Quarters of SOI in $ millions
Historical
Margin (6-7%)
#2
13
Our Destination
#3
Segment Operating Income(a)
$ in millions
Our performance provides confidence in achievability of Destination
(a) See Segment Operating Income reconciliation in Appendix on page 66.
Our Destination
Strategy leads to sustainable growth
Creating Sustainable Economic
Value by being….
• First with our customers
• Leader in our targeted segments
• The innovation leader
• Competitively advantaged
14
#3
As a result, we will be…
• Profitable though economic cycles
• Cash flow positive
• Investment grade
Strategy Roadmap
Where We Are
Key How To’s
Our Destination
Key Strategies
NA Adding Economic Value
Weak 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
#4 #5
15
1. North America: Profitability
2. Asia: Winning in China
3. EMEA/LA: Continued Success
Industry MegaTrends
Significant GDP growth in emerging markets will provide impressive tire market growth
Internet and information
technology will alter end-
user buying behaviors
Developed markets’ size, mix
and drive for innovation
provide profitable market
segments
High Value Added technology
will continue to migrate into
mid-tier cars/tires
“Green” (fuel efficiency) will
be a growing and permanent
global theme
Tire performance labeling will
become an industry standard
Unlikely to experience game-
changers…. evolutionary, not
revolutionary
Industry
MegaTrends
7
MegaTrends Define Industry Growth and Profit
Opportunities for Next Several Years
#4
16
Global Tire Industry is a growth business…led by Emerging Markets
MegaTrend #1: Significant GDP growth in emerging
markets will provide impressive tire market growth
17 (a) CAGR – Compound Annual Growth Rate
(b) Estimates based on LMC Automotive forecast and internal Goodyear analysis
Market Memo: 2012 Cumulative Industry 2018
Segment Avg. Price Industry Mix Growth 2018 vs 2012 Industry Mix
Premium ~$100 20% +19% 22%
Mid-Tier ~$80 55% +8% 54%
Economy ~$60 25% +7% 24%
Total ~$79 100% +10% 100%
18
MegaTrend #2: Developed markets’ size, mix and drive for innovation provide profitable market segments
~ 2x
Premium expected to grow at ~2X overall industry growth rate
Note: Price of Premium tire ~25% more than average tire
North America Total Consumer Industry Segmentation
Expected Cumulative Industry Growth: 2018 versus 2012
(a) Source: Internal Goodyear analysis and industry data sources
19
MegaTrend #3: High Value Added technology will
continue to migrate into mid-tier cars/tires
• Consumer HVA tires incorporating one or more of the following features:
– Rim diameter 17” or greater
– Reduced sidewall height
– Speed-rated H or higher
• Commercial tires with specific performance characteristics (e.g., Fuel Max, DuraSeal)
and retreadability
– Segmented mold
– Advanced tread compounds
– Extra load constructions
LVA Tire
(Low-Value-Added)
Incremental
$10 - $20
Margin Per Tire
HVA Tire
(High-Value-Added)
Silica
Tread
Additional
Components
For Handling Carbon Fiber
Dual Reinforced
Sidewalls
Dual Tread
Zones with
TredLock
Technology
Goodyear Capturing Higher Margins Through Improved Value
Proposition for New Products
MegaTrend #3: High Value Added technology will continue to migrate into mid-tier cars/tires
Industry continues to evolve towards HVA tires 20
Latin America Example: OE Requirements for Mid-Tier Vehicle Platforms (a)
Mid-Tier Vehicle Examples
GM – Onix
Hyundai - HB20
Fiat - UNO Sporting
Ford - New Fiesta
VW - GOL/ UP
(a) Source: Internal Goodyear analysis and industry data sources
MegaTrend #4: “Green” (fuel efficiency) will be a
growing and permanent global theme
• Oil prices
• Sustainability
- Recycle/Reuse
- Climate Change
Global trends • CAFE Standards
• Advanced powertrains
• Total Cost of Ownership
• Increased electronic
content (constrained for
weight)
Vehicle OEMs
• Fuel Economy
Mandates
• Safety Standards
Governments
Demand for Fuel Efficiency Growing Rapidly Across all Regions and Accelerating HVA Growth
21
2010 2013
~6M
~14M
Goodyear Consumer
Fuel Efficient Tire Sales
In millions of
tires
Growth
Rate
~30%
CAGR
Includes FuelMax, EfficentGrip, TripleMax, BlueResponse
22
MegaTrend #5: Tire performance labeling will become
an industry standard
Already
implemented
Europe
(mandatory)
Japan
(voluntary)
Korea
(mandatory)
To be
implemented
Brazil
(2015)
US
(2016)
Under
consideration
Argentina
Australia
Chile
China
Mexico
Tire Labeling is a reality in several countries
Testing protocols and implementation continue to be defined
Global Tire Labeling Rollout European Label
Fuel
Efficiency
Wet
Grip
Noise
MegaTrend #5: Tire performance labeling will become
an industry standard
23
40% 60%
EU Summer Replacement Market(a)
% of Unit Volume
Summer HP Market Rest of Summer Replacement Market
(a) Passenger market based on Europool 2012 Total Europe (excl. Turkey and Ukraine). All grades based upon publicly available information on tires
available for sale as at August 2013. HP segment covers H and V speed indexes.
(b) B grade in Rolling Resistance Index / A grade in Wet Grip Index.
(c) Competitors include Premium brands and best available reported grades by size.
And when Tire Labeling comes…Goodyear has shown ability to lead
MegaTrend #6: Internet and information technology
will alter end-user buying behaviors
24
Consumer Behavior
Drive Sales & Mix
Marketing
% Consumers using internet
research prior to purchase(a)
2010 Now
• US 55% 70%
• Germany 20% 38%
• Brazil 51% 77%
• China 4% 10%
Drive consumers to our website
2012: 11.4M unique visits (+28% vs 2011)
Web Traffic
Goodyear.com in US (b)
#1 in the US
Customer Website
Taking advantage of the trend to drive higher sales and richer mix (a) Source: Industry data sources
(b) Source: Compete.com; Goodyear is #1 among North America tire manufacturer sites
1 2
3
MegaTrend #7: Unlikely to experience game-changers
….evolutionary, not revolutionary
1845 Robert Thomson
invents the pneumatic tire
1846 Tomas Hancock
produces the first
solid rubber tire
1904 Carbon black
discovered
as rubber
reinforcement
1909 First winter tire
1913 Radial ply tire
patented by
Christian Hamilton
1937 First low
profile tire
1947 Tubeless tires
1948 The steel belted tire
1966 First low profile for
high performance tires
1986 Goodyear introduces
the first HP All
season tire
1992 Goodyear
introduces
the Run-on-Flat
1979 Mini-spare
2007 Run-on-Flat
Standard
Equipment
at BMW
1839 Charles Goodyear
discovers vulcanization
1903 Bias-ply tires
1926 Drop-center, one
piece rim adopted
as standard equipment
for automobiles
Evolutionary Pace of Technology Change Makes Investment Returns More Predictable 25
Strategy Roadmap
Where We Are
Key How To’s
Our Destination
Key Strategies
NA Adding Economic Value
Weak 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
26
#5
Five Key How To’s
#5
27
1. Innovation Excellence -- Market Back Product Innovation • Aligning new product roadmap to our targeted market segments
• Driving performance evidenced by labeling scores
EMEA Asia Pacific North America
2013 Tire of the Year
- China
Tested by German magazine AUTOBILD June
2013 very recommended ranking; Tire
dimension: 205/55R16 91V Test track:
Goodyear Mireval, France
Tested by Motor Trend Magazine China
against other global brands
Tested at Bob Bondurant School of High
Performance Driving, Phoenix, Ariz., May
30, 2013, by independent journalists. Tire
dimension: 245/40R18
Dunlop Sport
BlueResponse
Goodyear Efficient Grip
Product launch test drive
high marks
Latin America
G686 MSS Plus &
G677 MSD Plus
Launched September 2013
G686 MSS Plus G677 MSD Plus
Five Key How To’s
#5
28
2. Target Profitable Segments • Focus on segments/geographies that offer highest long-term profit potential
• Make smart choices that best utilize our advantages in brands, technology, etc
…while being cognizant of the capability of our existing footprint
Examples of Success
Focus in Target Market Segments drives profitable growth
China SUV
Completed market-back
analysis to understand
consumer needs
Developed technology to
deliver features and benefits
relevant to consumers
Launched marketing
programs to create “word of
mouth” endorsements from
key opinion leaders
Won numerous product
awards from print media
Russia Truck
Identified segment as large
volume and profitability driver
Redefined Go-to-Market
strategy and strengthened
commercial capabilities
Significantly increased dealer
network to expand
distribution
Doubled sales force and
introduced dedicated training
program
Improved planning processes
to ensure consistent supply
Large Mining
Business model definition based
on market-back analysis
Defined and targeted strategic
customers
Developing integrated solutions
to become leader in Customer
Value
Made to Order, Customized
Product driven by customer’s
needs
Investment in R&D and CapEx to
support growth
Five Key How To’s
#5
29
Source Deliver Make Customers Serve Suppliers
3. Operational Excellence • Utilizing best-in-class approaches to deliver continuous and sustainable
results across end-to-end supply chain
• Total productive
maintenance
• Equipment reliability
• Lean run strategies
• Globally leverage asset
base
• Customer service levels
• Reduce working capital
(ours and customers’)
• Reduce cost to serve
• Contingency planning
• Increased level of supplier
collaboration
• Leverage full scale of our
global operations
• Continue creating
flexibility to substitute with
lower cost materials
• Continue innovation of
new materials
• Total productive
maintenance
• Equipment reliability
• Lean run strategies
• Globally leverage asset
base
• Customer service levels
• Reduce working capital
(ours and customers’)
• Reduce cost to serve
• Contingency planning
• Increased level of supplier
collaboration
• Leverage full scale of our
global operations
• Continue creating
flexibility to substitute with
lower cost materials
• Continue innovation of
new materials
30
Five Key How To’s
#5
4. Enabling Investments
Segment Operating Income trajectory enabled by Growth Capex (a) See Segment Operating Income reconciliation in Appendix on page 66.
5. Top Talent / Top Teams • Leadership traits: Builders, problem solvers, courageous, deliver results (right way!)
Five Key How To’s
#5
31
27%
19%
54%
A balanced team of...
…home grown talent
and external hires
>10
years
0-5
years
6-10
years
We attract talent from…
…many world class companies
Goodyear’s Leadership Team Experience Profile – Top 130 Executives
People make the difference … and we have strong leadership …
that continues to get stronger
Terms: years of
Goodyear
service
Key How To’s
Lead in innovation
Target highly profitable market segments
Supply reliability and leverage global scale
High ROI to support targeted product market segments
Best team
32
WINNING FORMULA
Value of the Goodyear Brand
Integrity
Innovation
Reliability
“Supplier of the Year”
Trust
The Goodyear brand is a differentiator in a competitive market 33
Summary
34
Our view of industry MegaTrends is unchanged and offers
significant profit opportunities for Goodyear and the Industry
Our strategy works…and is delivering record results
We are staying the course on our strategy and focusing our
attention on execution
We remain vigilant in a competitive, cyclical industry, but
confidence in our brand, our strategy and our team allows us
to…
• Announce significant SOI growth targets
• Announce a balanced capital allocation plan that includes dividends and
stock buy back
Goodyear has a tremendous legacy…but the best is yet to come
North America
Operational Update
Steve McClellan President – North America
-$305
$18
$276
$514 $577
Takeaway Message
2009 2011 2010 2012
North America
Path to Profitability
Exceeded $450M SOI goal one year early, despite weak industry volumes
Q2 2013 TTM
Margin
6.4% Margin
5.3%
Margin
2.8%
240M Units 239M Units Flat Consumer Replacement Industry
March 2011
Investor Day Target
$450M in 2013
36
$ In millions
Takeaway Message
North America
Path to Profitability
Fundamental change drove North America turn around
$514
-$305
Capture
Brand Value
Lower
Cost 2009 2012
Market Back Innovation
Award Winning Products
Transition to HVA
Targeted Market Segments
Close Union City
Reduce Supply Chain cost
Addressed Legacy costs
USW Contract
Today’s
Focus
37
$ In millions
North America
Sustainable Profitability
Our business is fundamentally different:
Consumer Replacement business
Consumer OE business
Commercial Truck business
Shift from LVA to HVA driving sustained profitability
38
Volume driven to fill the
factories, primarily LVA
Multiple brands including
private label
Reliant on industry volume
All things to all customers and
consumers
Where We Were
Market back strategy, majority
HVA and Goodyear brand
Approaching 100% Branded
portfolio
Profitable through all economic
cycles
Strategically focused in
targeted market segments
Where We Are
Fundamental changes have created a sustainable business
North America
Consumer Replacement
39
Significant HVA growth in targeted segments
Industry 2013 – 2018*
Commuter
Touring
Perfor-
mance
All-
Terrain Winter
-
Premium
Mid-Tier
Economy
+14%
Overall industry flat 2009-2012
Targeted segments growing faster than
industry, and those segments are HVA
Goodyear brand is well positioned in
these targeted segments
Invested in increased HVA capacity
North America
Consumer Replacement
The Driving Force in the Industry
* Source: Internal Modeling 40
Retailer’s Needs Response
Attract more customers
Grow volumes in fastest growing HVA
segments
Increased sales, margins and
profitability
Innovative branded products to meet HVA
market demand
Goodyear brand generates demand for
retailer
Value of Goodyear brand realized through
improved margins for both customer and
Goodyear
Historically focused primarily on the sales of private label tires
“Large Regional Retailer”
Capturing value through HVA branded products
North America
Consumer Replacement
41
Business not profitable
Focused on driving volume to
fill factories
Long term fixed price contracts
OE managed as “standalone”
business
Where We Were
Profitable business
Market back strategy, focused
on HVA targeted market
segments
Contracts reflect HVA products
and raw material indexes
Integrated approach; aligned
with the replacement business
Where We Are
Fundamental changes have created a sustainable business
North America
Consumer OE
42
Automotive Trends
Fuel Efficiency
Integrated Technology (navigation,
Bluetooth, satellite radio, etc.)
Larger Rim Diameter/Low Profile
Improved Handling & Styling
HVA impacting all classes of vehicles
Takeaway Message
Essentially all new vehicles will be equipped with HVA tires
North America
Consumer OE business
2013 2018
263M +97M -86M 252M
Retired New
Vehicles
Registered vehicles(a)
(a) Source: Global Insight May 2013
The Driving Force in the Industry
HVA
43
OEM’s Needs Response
Reduced tire weight
Aggressive wet and dry grip
Lower rolling resistance, less noise
Extended mobility – no spare tire
Meet government regulations
Next generation HVA tire with…
Fuel economy
Enhanced traction
New tread compound
Run on Flat technology
Seeking to respond to consumers’ needs for high-performance vehicle
“Original Equipment Manufacturer”
Takeaway Message
Capturing value through HVA branded products
North America
Consumer OE business
44
Where We Were
Where We Are
Fundamental changes have created a sustainable business
LVA products
Incomplete service network
Focused on volume to fill
factories
Not realizing value for our
products and services
Industry leading HVA products
Complete service network –
largest in the U.S.
Market back product portfolio
aimed at targeted market
segments
Realizing value for our
products and solutions
North America
Commercial Truck business
45
We’ve created value, and customers are benefiting from it
North America
Commercial Truck business
Takeaway Message Need for HVA products and solutions to improve fleet profitability
Slow growth industry
Fragmented service and product
providers
Government regulations impacting
emissions, fuel efficiency, and drivers
Economic uncertainty impacting
investments
Truck Industry Class 4-8 Ton Miles(a)
The Driving Force in the Industry
2008 2018
720M 665M
Retired
2012
(a) Source: FTR & Associates and internal models
660M
CAGR
~ +1%
CAGR
~ 0%
Quarterly Average
46
Fleet Needs Response
Premium fuel efficient tires
Product durability
Consistent billing & pricing
Nationwide product & service availability
Tire performance tracking
Seeking to improve profitability through lower cost/mile and increased uptime
“Large Fleet”
Takeaway Message Capturing value through HVA branded products and solutions
North America
Commercial Truck business
Integrated solution with tires &
services…..
HVA fuel efficient tires
Complete product & service
network
Nationwide coverage with more
than 2,000 Locations
24/7 service including roadside
47
North America Summary
• North America aligned to the Goodyear Strategy
Roadmap
• Path to profitability driven by execution against key
strategies
• North America creating economic value
• Fundamental changes enabling sustainability
48
Financial Summary
Darren Wells Executive VP and CFO
2010-2013
Record
Results
2013 SOI Outlook
~$1.5B
• Price/mix
• Selective
approach on
volume
• Cost savings
• Invest for
growth
Our Financial Journey
50
Our Journey
2004-2007
Turnaround
2008-2009
Great
Recession
Avg SOI(a)
$960M
• Asset sales
• 4-point cost
savings plan
• New product
engine
• Exit wholesale
private label
Avg SOI
$590M
• New products
• Increase cost
savings
• Constrain
CapEx
• Reduce
inventory
2001-2003
Survival
Avg SOI(a)
$350M
• Financial
restructuring
• Leadership
changes
Multi-stage Journey Positions the Business for Value Creation
2014-2016
Consistent
SOI Growth
SOI
Grow 10-15%/yr
• Growth & cost
• Investment
grade Balance
Sheet
• Balanced
Capital
Allocation
(a) Segment Operating Income for 2001 – 2006 utilized in the averages represents the sum of the individual tire business unit SOI amounts.
51
~$1,500
2013 2016
Balanced plan to grow SOI at 10% to 15% per year based on growth and cost
Segment Operating Income Target
Part Growth
• Sales margin and
overhead absorption on
sales growth (3-5 million
units / year)
Part Cost
• Structural cost savings
(focus in EMEA)
• Cost savings > inflation
o Offset by added
investments in R&D and
advertising / marketing
$ In millions
2014 - 2016 SOI Target $5.5 - $5.8
Corporate Other ~ (400)
EBIT ~ 5.1 - 5.4
Depreciation ~ 2.1
EBITDA ~ 7.2 - 7.5
Pension Expense ~ 0.6 - 0.7
2014 - 2016 EBITDAP ~ $7.8 - $8.2
52
• Interest Expense ~$1.2 - $1.4
• Taxes Paid ~ $0.8 - $1.0
• Sustaining CapEx ~ $2.0 - $2.2
• Working Capital ~ $0.0
• ~$4.0 - $4.6
Capital Allocation Plan - Cumulative 2014-2016
Sources / Uses of Cash Flow
Note: All estimates based on current assumptions and available data
Cash Available for
Deployment
• Dividends / Share
Repurchase
• Growth CapEx
• Debt Reductions
(incl. Pension)
• Restructurings
~$3.6 - $3.8
Significant cash available for deployment to further enhance shareholder value
Maintaining the Business Driving Value
~ (0.4)
$ In billions
53
Cumulative Cash Available for Deployment $3.6 - $3.8B
Capital Allocation Plan – Driving Value 2014 - 2016
Capital allocation plan provides immediate returns to investors while
strengthening the balance sheet and continuing investment for future growth
Growth Capex
Debt Repayment /
Pensions
Restructurings
$1.1 - $1.3B
$1.4 - $1.7B
$0.5 - $0.7B
Shareholder
Return Program $0.3 - $0.4B
$ In billions
Capital Expenditures
• Continue to get strong returns from past “growth capex” investments
• Ongoing projects discussed at 2011 investor day on track – helping drive
2014-2016 earnings growth
• 2013 capex for “sustaining” (excluding growth projects) consistent with /
slightly below assumption of ~$700 million
• Several large projects complete / nearly complete in 2013
– Growth capex likely down in 2014
• Continued growth capex required (especially 2015 & beyond) as added
capacity is required for growth in HVA (excluding Western Europe)
54
Continued growth capex required albeit at lower levels for 2014
55
Enabling Investments • Investments focused on supporting, driving and sustaining profitable growth
North America Asia
EMEA Latin America
Lawton Modernization
CapEx (2010-2013): ~$150 million
Benefit: Convert 5 mil LVA consumer tires to HVA
Fayetteville Modernization
CapEx (2008-2013): ~$175 million
Benefit: Convert 4 mil LVA consumer tires to HVA
Pulandian (China) Plant
CapEx (2008-2014): ~$775 million (net of incentives)
Benefit: 5 mil tires/year consumer HVA & 0.6 mil truck
Japan OTR Plant Expansion
CapEx (2011-2014): ~$250 million (funded by customers)
Benefit: Add large Earthmover tire capacity
Equipment Upgrades (multi-plant)
CapEx (2011-2016): ~$400 million
Benefit: Lead performance in tire labeling
Furstenwalde (Germany) Expansion
CapEx (2011-2016): ~$150 million
Benefit: Add 1 mil tires/year consumer HVA
Chile Expansion
CapEx (2008-2013): ~$475 million
Benefit: Add 7 mil tires/year consumer HVA
Brazil Expansion/Modernization
CapEx (2011-2014): ~$250 million
Benefit: Add 2 mil tires/year consumer HVA
Driving successful completion of growth projects we announced at 2011 Investor Day
Ongoing Growth Capex Projects
Capital Expenditures
56
Investing consistent with our business plans
$ In millions
2013E 2014 2015-2016Current Growth Projects
Lawton Modernization 5
Fayetteville Modernization 15
EMEA Modernization (multi-plant) 65
Furstenwalde Expansion 45
Chile Expansion 45
Brazil Modernization 105
Pulandian (China) Plant 25
OTR (Japan) Expansion 150
Total Current Projects 455
Future Growth Projects n/a
Total Growth CapEx 455 200 to 300/yr 400 to 500/yr
Sustaining CapEx 645 ~700/yr ~700/yr
memo: Depreciation ~700 ~700 ~700
Total CapEx ~$1,100 $900 to $1,000/yr $1,100 to $1,200/yr
Complete or Nearly Completed in 2013
Replace worn outequipment, support of
owned Retail stores, IT, environmental, safety,
molds, etc
Balance Sheet Management
3 Focus Areas:
1. Target leverage of 2.5x Adjusted Debt / EBITDAP by 2016
2. Continue to pursue long-term pension strategy
– Will consider pre-funding beginning in 2014
3. Continue to reduce need for balance sheet cash
57
Addressing balance sheet to get to investment grade is a key priority
58
• Leverage target of ~2.5x Adjusted Debt / EBITDAP consistent with commitment to
achieving investment grade metrics
o Reduces cost of capital
o Improves global access to credit
Pension / debt drives improvements to earnings and cash flow
while strengthening the balance sheet
Adjusted Debt (a) / EBITDAP (b) Adjusted Debt (a)
a) Adjusted Debt is Total Debt plus Global Pension Liability.
b) EBITDAP is EBITDA plus Global Pension Expense.
Note: See reconciliations in Appendix on page 67.
Balance Sheet Management – Leverage Targets
$ In millions
4.3x 3.9x
4.1x
3.6x
2010 2011 2012 2013E 2016T
2.3x – 2.5x
$7,294
$8,298 $8,608 $8,300
2010 2011 2012 2013E 2016T
$6,600 - $6,900
o Greater ability to move debt overseas
o Ability to reduce cash balances
• In February announced intention to freeze / fund / de-risk our remaining
U.S. defined benefit pension plans
• In Q1 – Q2, completed funding / de-risking of previously frozen U.S. plans
• In Q3, announced agreement with USW that gives us ability to freeze the
remaining plans within the life of the contract
– Requires plans to be fully funded
• Will evaluate appropriate timing to pre-fund / freeze USW plans beginning
in 2014
– Interest rate increase has reduced unfunded obligation during 2013
– Additional interest rate increases have modest impact on required
contributions over next 5 years
– Asset returns versus plan assumptions remain a risk
59
Balance Sheet Management – U.S. Pension Strategy
Goodyear U.S. Hourly Pension Plans: Discount Rate Scenarios
60
Pre-funding provides stability / avoids discount rate and asset return risk;
rising rates provide limited benefit to required contributions (a) Assumes 8.5% asset returns, decreasing over time as assets shift toward a greater mix of fixed income as the U.S. hourly plans become more fully funded
(b) Discount rate as of June 30, 2013
$ in millions
Current Discount Rate Scenario:
4.5% Discount Rate (b) $1,030 ~$1,100
Increasing Discount Rate Scenario:
6.0% Discount Rate $815
Impact of Rising Rates ($215)
Estimated
5-Year Cash
Contributions
Estimated
Pre-Funding
Amount (a) Assumes target asset
return achieved
61
Regular Dividend
$55 million per year
Shareholder Return Program
$0.05 per share quarterly dividend
beginning in the fourth quarter
• First dividend has been declared for
shareholders of record on November 1
to be paid December 1
Anticipate increases over time as cash
flow and leverage improves
Shareholder return program demonstrates strong commitment
to shareholders and confidence in strategy
Share Repurchase
$100 million
Repurchases to offset new shares
issued under equity compensation
programs
Meeting Recap
62
Based on our confidence in the business…
Reconfirming 2013 outlook
• SOI of about ~$1.5 billion
• Positive cash flow (excluding pension pre-funding)
New Targets through 2016
• Annual 10-15% SOI growth per year through 2016
• Annual positive cash flow (excluding pension pre-funding)
• Targeting 2.5x Adjusted Debt / EBITDAP
Balanced Capital Allocation Plan
• Dividend and stock buy-back plan beginning Q4/2013
Goodyear committed to creating sustainable value for shareholders
Question and Answer
Session
APPENDIX
64
Use of Historical and Forward-Looking Non-GAAP Financial Measures
This presentation contains our historical total segment operating income for certain periods, our total
segment operating income outlook for 2013, our targeted total segment operating income growth rate for 2014-
16, our historical ratio of Adjusted Debt to EBITDAP for certain periods, and our targeted ratio of Adjusted
Debt to EBITDAP for 2016. Total segment operating income and the ratio of Adjusted Debt to EBITDAP are
important financial measures for the company but are not financial measures defined by U.S. GAAP, and
should not be construed as an alternative to corresponding financial measures presented in accordance with
U.S. GAAP.
Total segment operating income is the sum of the individual strategic business units’ segment operating
income as determined in accordance with U.S. GAAP. The most directly comparable GAAP financial measure
is Income before Income Taxes. Management believes that total segment operating income is useful because it
represents the aggregate value of income created by the company’s SBUs and excludes items not directly
related to the SBUs for performance evaluation purposes.
Adjusted Debt is the sum of our total debt and our global pension liability, each as determined in accordance
with U.S. GAAP, and EBITDAP, as adjusted, represents net income (the most directly comparable GAAP
financial measure) before interest expense, income tax expense, depreciation and amortization expense, net
periodic pension cost, rationalization charges and other (income) and expense. We present the ratio of
Adjusted Debt to EBITDAP because we believe it is widely used by investors as a means of evaluating a
company’s leverage. It should be noted that companies may calculate the components of this ratio differently;
as a result, the ratio of Adjusted Debt to EBITDAP as presented herein may not be comparable to similarly-
titled measures reported by other companies.
We are unable to present a quantitative reconciliation of our forward-looking non-GAAP financial measures to
the most directly comparable GAAP financial measures, because management cannot reliably predict all of the
necessary components of those GAAP financial measures without unreasonable effort. These components
could be significant to the calculation of those GAAP financial measures in the future.
65
Reconciliation for Segment Operating Income / Margin
$ In millions
66
2013 2012 2012 2011 2010 2009 2008 2007
Total Segment Operating Income 428$ 336$ 1,248$ 1,368$ 917$ 372$ 804$ 1,230$
Rationalizations (13) (26) (175) (103) (240) (227) (184) (49)
Interest expense (102) (83) (357) (330) (316) (311) (320) (468)
Other income / (expense) 14 (37) (139) (73) (186) (40) (59) (9)
Asset write-offs & accelerated depreciation (5) (4) (20) (50) (15) (43) (28) (37)
Corporate incentive compensation plans (35) (15) (69) (70) (71) (41) 4 (77)
Corporate pension curtailments/settlements - - (1) (15) - - (9) (64)
Intercompany profit elimination 3 9 1 (5) (14) (13) 23 (11)
Retained expenses of divested operations (6) (5) (14) (29) (20) (17) - (17)
Other (28) (9) (34) (75) (47) (37) (45) (53)
Income before Income Taxes 256$ 166$ 440$ 618$ 8$ (357)$ 186$ 445$
United States and Foreign Taxes 63 63 203 201 172 7 209 255
Less: Minority Shareholders Net Income 5 11 25 74 52 11 54 70
Goodyear Net Income (Loss) 188$ 92$ 212$ 343$ (216)$ (375)$ (77)$ 120$
Sales $4,894 $5,150 $20,992 $22,767 $18,832 $16,301 $19,488 $19,644
Return on Sales 3.8% 1.8% 1.0% 1.5% (1.1)% (2.3)% (0.4)% 0.6%
Total Segment Operating Margin 8.7% 6.5% 5.9% 6.0% 4.9% 2.3% 4.1% 6.3%
June 30,
Twelve Months Ended
December 31,
Three Months Ended
EBITDAP, Adjusted Debt & Leverage Ratio Reconciliations
67
$ In millions
2012 2011 2010
Net Income (Loss) $237 $417 ($164)
Interest Expense 357 330 316
Income Tax Expense 203 201 172
Depreciation and Amortization 687 715 652
Net Periodic Pension Cost(a)
307 266 300
Other(b)
314 176 426
EBITDAP, as adjusted $2,105 $2,105 $1,702
2012 2011 2010
Notes Payable and Overdrafts 102 256 238
Long Term Debt / Capital Leases due Within a Year 96 156 188
Long Term Debt and Capital Leases 4,888 4,789 4,319
Total Debt $5,086 $5,201 $4,745
Unfunded Pension Liability $3,522 $3,097 $2,549
Adjusted Debt $8,608 $8,298 $7,294
Adjusted Debt/EBITDAP 4.09x 3.94x 4.29x
(a) Net periodic pension cost excludes curtailments/settlements and termination benefits.
(b) Other includes rationalization charges and other (income) and expense.
Year Ended December 31,
December 31,
68
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