Fi First rst Qu Quart arter er 2020 0 Co Conference nference Ca Call ll April 30, 2020
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: the impact on us of the COVID-19 pandemic; 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; foreign currency translation and transaction risks; 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
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Responding to the Needs During COVID-19 Discount counted ed an and free ee ti tire mmunities CTSC TSC & Ra Raben ben Tire e offerin ering r Communitie service vices s to to essential sential wo worke kers ‘Zero Contact’ service to Fleets Work rk Dona nations tions of PP PPE E an and finan ancial cial Free ee DOT OT inspections pections w We Wo supp pport ort to to lo local cal heal alth th systems stems to U.S. to S. Fleets leets How We Our Co GY Luxem xembour bourg g uti tili lized zed GY Auto to Service vice an and Just st Tires es 3-D D printers ters to to produce oduce offering ‘Zero Contact’ apting Ho ting Ou fac ace e shield eld par arts ts service vice to to co consumer nsumers Adapting porting Glo lobal bal as associates ciates wo working king Interactive teractive le lear arning ning/ac /activities tivities Suppor rem emotel otely y an and ma maintaini taining ng through th ough social cial me media a for th those se Ad cont co ntinuity inuity of bu busine ness ss shelte eltering ing in pla lace ce Su Supporting essential workers on and off the road 4
Mitigating the Impact of COVID-19 Operational Financial Opera Op eratio tional nal Financial Fi nancial • Tempor • Ref emporarily arily suspended uspended production oduction at t th the e efinanced inanced $2.0 0 bil illion lion U. U.S. S. rev evolv olving ing cr cred edit it majority ma jority of our ur ma manufac nufacturin turing g facilities cilities facility, cility, ex exten tending ding ma maturity turity to to 2025 • Al • Tempor Altered tered opera erating ting hours urs at t our ur ret etail ail emporarily arily suspended uspended our ur qu quarterly rterly stores tores & wa & warehouses rehouses di divi vidend dend • Flexed • Le exed payroll yroll co costs sts th thro rough ugh a co combin mbination ation Levera eraging ging payroll yroll ta tax x de deferral ferral option tion of furl urloughs oughs & s & salary lary de deferrals errals / r / red eductions uctions affor fforded ded un unde der r th the e CA CARES RES Ac Act • Red educed uced di discretionary scretionary spendin ending, g, in incl cluding uding marketi ma keting ng and nd adv dvertising ertising ex expenditures penditures • Lo Lowe wered red ca capital ital spending pending plans ans Taking decisive actions to improve our liquidity and financial flexibility 5
China Business Conditions Impr Im proving oving En Environment vironment Expe pected cted Vo Volu lume e Re Reco covery very Curv rve (a) (a) • Good Go odye year ar-Pulan Pulandi dian an is is o oper erati ating ng wi with th 100% 10 0% of of it its w s wor orkfor force ce an and a d able e to to me meet et Fu Full Rec ecover overy custo cu stome mer dem deman and • Maj ajor or OE OEMs s hav ave e resu esume med pr d prod oducti uction on Impr provin oving g • Dem emand Al All key ey di distr strib ibuto utors s ar are e up up an and r d run unni ning ng • >95% >9 5% of of reta etail il ch chan annel nel reo eopene ened • OE no OE nomi mina nati tion on proc ocess ess retu eturni ning ng to to pre-COVID pre OVID-19 19 lev evel els Containment inment Q4 2019 19 Q4 2020 20 Volume recovery is underway 6 (a) Source: LMC forecast; includes OE and replacement demand
Tire Production: Status Update as of April 30th Americas ≥ 70% Capacity 0 plants EMEA < 70% Cap apacity acity 1 pla lants nts ≥ 70% Capacity 0 plants Idle le 12 pla lants nts Asia Pacific < 70% Cap apacity acity 10 0 pla lants nts Idle le 3 pla lants nts ≥ 70% Capacity 2 plants < 70% Cap apacity acity 0 pla lants nts Idle le 5 pl plants ants Majority of manufacturing facilities currently idle, but nearly all expected to be operating by end of May 7 7
Financ Financial Re ial Review view
Financial Review Summary Q2 Q2 Cos Cost t Redu eductions ctions − Sal alaried aried pa payr yroll oll ($6 $65 5 mil illion) lion) − Ma Marketing ting an and d other ther SAG G ($7 $75 5 mil illion) lion) Cas ash & Liq h & Liquidity uidity Ac Action ions s (2 (202 020 0 Im Impact act) − Cape apex x ($1 $100 00 mil illion) lion) − Di Divi vidend dend su suspens spension ion ($1 $110 0 mi million) llion) − Tax ax def eferra errals ls ($6 $60 0 mil illion lion U.S., ., Int ntern ernationa ational l TB TBD) D) − Ex Expanded panded U.S. . ABL ABL “borrowing base” (~$350 million) Str Struct uctur ural al Cos ost t Sa Savi vings ngs (v (ver ersu sus s 20 2019 bas 9 basel eline) ine) − Ge Germ rman an re restruct structuring uring re remain mains on n tr track ack (20 2022 22 sa savings vings of f $6 $60-70 70 mil illion) lion) − Tentativ entative e ag agreement reement to o cl close ose Ga Gadsden, dsden, AL (2 L (202 021 1 sa savi vings ngs of of $1 $130 30 mi million) llion) 9
Price vs Raw Materials During the Great Recession Net Net Pr Pric ice e vs vs Ra Raw w Ma Materials erials (a) Pric Pr ice e an and Ra Raw w Ma Materials erials (a (a) (a) $400 $400 $400 $400 $354 $354 $280 $280 $258 $258 lions) s) lions) s) $200 $200 $200 $200 act ($ Million act ($ Million $24 gin Impact gin Impact $- $- $0 $0 ($20) Margin Margin ($162) 2) $(2 $(200) 00) ($2 ($200) 00) Raw R aw Mate Material rials Price Pri ce Q1 $(400) $(4 00) ($400) ($4 00) Q1 Q2 Q2 2009 2009 2009 2009 2010 2010 2010 2010 Pricing relative to raws resilient in economic downturn 10 (a) Price changes are versus prior year; excludes the benefits of mix. Raw materials changes are versus prior year and exclude raw material cost savings
First Quarter 2020 Income Statement Terms: rms: US$ millions llions Three Months Ended (exc xcept ept EPS) PS) March 31, March 31, 2020 2019 Change Units 31.3 38.0 (18)% Net Sales $ 3,056 $ 3,598 (15)% Gross Margin 16.5% 20.0% (3.5) pts SAG $ 581 $ 547 6% Segment Operating Income (Loss) (a) $ (47) $ 190 (125)% Segment Operating Margin (a) -1.5% 5.3% (6.8) pts Goodyear Net Income (Loss) $ (619) $ (61) Goodyear Net Income (Loss) Per Share Weighted Average Shares Outstanding 234 232 Basic $ (2.65) $ (0.26) Weighted Average Shares Outstanding - Diluted 234 232 Diluted $ (2.65) $ (0.26) Cash Dividends Declared Per Common Share $ 0.16 $ 0.16 Adjusted Diluted Earnings (Loss) Per Share (b) $ (0.60) $ 0.19 (a) See Segment Operating Income (Loss) and Margin reconciliation in Appendix on page 29 11 (b) See Adjusted Diluted Earnings (Loss) Per Share reconciliation in Appendix on pages 30 and 31
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