The Goodyear Tire & Rubber Company · NASDAQ:GT
The Goodyear Tire & Rubber — Q2 2021 Earnings Presentation
31 slides from The Goodyear Tire & Rubber's earnings presentation, Aug 6, 2021
Slide 1: Second Quarter 2021 Conference Call
SECOND QUARTER 2021 CONFERENCE CALL AUGUST 6, 2021 GOODZYEAR
Slide 2: Forward-Looking Statements
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 o
Slide 3: Second Quarter Highlights
SECOND QUARTER HIGHLIGHTS * Second quarter Goodyear net income of $67 million; adjusted net income of $79 million ¢ Second quarter merger-adjusted segment operating income of $349 million‘) ¢ Global consumer replacement volume continued to exceed industry, driven by large-rim diameter volume * Globa
Slide 4: Reflecting on Second Quarter 2021
REFLECTING ON SECOND QUARTER 2021 mee Positives * Continued recovery of pre-pandemic price versus * Disruptions in OE production schedules raw material deficit continued * Continued recovering consumer replacement share * Demand and production in emerging markets in U.S. and EU impacted by COVID-19
Slide 5: Consumer Replacement Industry
CONSUMER REPLACEMENT INDUSTRY U.S. Replacement Industry!) Europool & Turkey Replacement Industry (>) Q2 21 1H 21 Q2 21 1H 21 USTMA Members (217") ETRMA Members (217") USTMA Members (<17") ETRMA Members (<17") Total Total Non-Members Non-Members Total U.S. Total EU & Turkey Goodyear (217") ©) Goodyea
Slide 6: Goodyear SightLine
GOODZYEAR. Sig ht Li ne Suite of tire intelligence technologies First intelligent tire solution designed for cargo vans enabling optimal tire performance and reduced fleet downtime Collaborating with OEs and tier 1 automotive suppliers to unlock vehicle performance Paves the way to provide feedback
Slide 7: Financial Review
FINANCIAL REVIEW GOODSYEAR
Slide 8: Income Statement Second Quarter 2021
Terms: US§ millions (except EPS) Three Months Ended June 30, June 30, 2021 2020 Change IN COM E Units 37.5 20.4 84% STATEMENT Net Sales $ 3,979 $ 2,144 86% Gross Margin 22.6% 5.4% 26.0 pts SAG $s 658 $ 451 46% SECOND QUARTER Merger-Adjusted Segment Operating Income(Loss)* $ zug S (431) 2021 Merger-A
Slide 9: Segment Operating Results Second Quarter 2021 versus 2020
SEGMENT OPERATING RESULTS SECOND QUARTER 2021 VERSUS 2020 Terms: US$ millions 1 i $86 (san) $37 $159 ($30) | Cooper Costs | = = Inflation'©) Currency Other'® Operations / Triggered | Raw Cost by Cooper | Materials'®) Savings Merger ! $263 Price/Mix () direct taxes in Brai $268 Unabsorbed Fixed Cost
Slide 10: Segment Operating Results Second Quarter 2021 versus 2019
SEGMENT OPERATING RESULTS SECOND QUARTER 2021 VERSUS 2019 Terms: USS millions $164 ($76) SB 32 EE Inflation ‘°) Currency Other'@) Ly | | | — | Cooper | $299 | | | | | | | | | Operations/_ Costs | Triggered $219 70 by Cooper ($70) Cost | Merger fi ee () Savings \--£--------- on 19 sol E a Includes $6
Slide 11: Balance Sheet Second Quarter 2021
Terms: USS millions BALANCE — SHEET June 30, March31, December 31, June 30, 2021 2021 2020 2020 SECOND QUARTER Cash and cash equivalents $ 1030 $ 1,223 $ 1,539 $ 1,006 2021 Accounts receivable Ss 2,819 S$ 2,159 S$ 1691 S$ 1,727 Inventories 3,314 2,359 2,153 2,474 Accounts payable - trade (3,858) (3,
Slide 12: Cash Flow
Three Months Ended Trailing Twelve ——_———— June 30, Months Ended Includes $93M inventory fair value adj. and other non-cash 2021 2020 June 30, 2021 items and ($33M) cash costs Net Income(Loss) \__‘elstedtethemerger $ n ¢ (703) § 159 Depreciation and Amortization 208 276 792 Change in Working Capital
Slide 13: Segment Results - Americas
SEGMENT RESULTS - AMERICAS ff « Terms: USS millions Units in millions [ Second Quarter \ / \ 2021) 2020 Change + U.S. consumer replacement share recovering r & + U.S. commercial replacement business benefited Units 19.0 8.5 125.1% from strong fleet volume (+14% vs 0219 ex. Cooper) Net Sales $2,256 $
Slide 14: Segment Results - EMEA
SEGMENT RESULTS - EMEA Terms: US$ millions Units in millions / Second Quarter \ 2021@) 2020 Change Units 12.0 7.3 62.7% Net Sales $1,230 $676 82.0% Operating Income (Loss) $43 (Sm10) Margin 3.5% (16.3)% ee, [+ Volume reflects partial recovery from \ COVID-19 related shutdowns « EU consumer replaceme
Slide 15: Segment Results - Asia Pacific
SEGMENT RESULTS - ASIA PACIFIC ft Terms: US$ millions Units in millions Second Quarter + Volume reflects partial recovery from 2021") 2020 Change COVID-19 related shutdowns Units 6.5 4.6 43.1% - Recent COVID disruptions in ASEAN markets and India Net Sales $493 $334 47.6% + China consumer replacemen
Slide 16: Business Outlook
03 BUSINESS OUTLOOK ¢ Volume continues to trend back toward 2019 levels (expect smaller decline than in 02°) ¢ Tire production at 2019 levels, rebuilding inventories ¢ Positive price/mix vs. raw material costs ¢ Net cost savings reflecting non-recurrence of one-time COVID savings ($57M), higher tran
Slide 17: 2021 Outlook: Other Financial Assumptions
2021 OUTLOOK: OTHER FINANCIAL ASSUMPTIONS Includes impact of Cooper transaction except as noted Current Assumpt Raw Materials $425 to $475 million higher than prior year based on current spot rates, net of raw material cost savings *) Interest Expense $400 to $425 million Other (Income) Expense Fina
Slide 18: Appendix
APPENDIX GOODSYEAR
Slide 19: Legacy Goodyear Modeling Assumptions
LEGACY GOODYEAR MODELING ASSUMPTIONS Volume Sensitivities Pricing Translational Foreign Currency (impact on Goodyear 's Annual Unitsin 00's) (Annual Impact of Effective Pricing Yield) (Annual Impact on FX portion of SOL Walk) + 1% Ain US. Consumer OE Industry ~90 + 1%A inUS. Consumer Replacement ‘~S
Slide 20: Legacy Goodyear Raw Materials
LEGACY GOODYEAR RAW MATERIALS & Raw materials are ~36%') of tire COGS ~67% of raw materials are influenced by oil prices « P&Limpact lags spot rates by 1-2 quarters depending on commodity ~61% of raw materials are purchased in USD Customer agreements indexed to raw materials + OE customers * Certain
Slide 21: Legacy Goodyear Raw Material Overview
LEGACY GOODYEAR RAW MATERIAL OVERVIEW 2021 Outlook ‘») Raw Material Costs‘) $268 Raw material costs expected to increase $425 to $475 million based on current spot rates, net of raw material cost savings ¢ Includes adverse transactional foreign currency impact of Q1 02 03 04 O1 02 O3 04 O1 02 OS 04
Slide 22: Feedstock Prices
FEEDSTOCK PRICES 475 Price Movements of Key Feedstocks 468 * Recovery in global tire production and supply chain constraints 150 impacting feedstock prices 125 j ioe ¢ Synthetic rubber costs significantly 3 impacted by rising butadiene prices ~ a - Q1winter storm impacted supply of butadiene g ¢ Nat
Slide 23: U.S. Industry Fundamentals
U.S. INDUSTRY FUNDAMENTALS Recovery underway 360 Total Shipments!) forecast raised +6% (+20M units) (>) 300 COVID-19 250 200 2006 2007 2008 #2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 = 2021E jon (USTMA) includ! 2021 of 315.7 million shipment ly 2021 of 336. million shipment
Slide 24: Maturity Schedule
Terms: USS millions I- i } Undrawn Credit Lines $2,750) BB Funded debt MATURITY SCHEDULE SECOND QUARTER 2021 $951 (0) 2023 2024 2025 2026 2027 2028 2029 22030
Slide 25: Liquidity Profile
Terms: USS billions $5.1') LIQUIDITY PROFILE SECOND QUARTER 2021 June 30, 2021 {s) Total liquidity is comprised of $1,030 million of cash and cash equivalents, as well as $4,112 million of unused availability under various credit agreements
Slide 26: Use of Non-GAAP Financial Measures
USE OF NON-GAAP FINANCIAL MEASURES This presentation contains historical non-GAAP financial measures, including Total Segment Operating Income (Loss) and Margin, Merger-Adjusted Segment Operating Income (Loss) and Margin, Free Cash Flow, Adjusted Net Income (Loss) and Adjusted Diluted Earnings (Loss
Slide 27: Reconciliation for Merger-Adjusted Segment Operating Income
RECONCILIATION Terms: USS lions Three Months Ended FOR MERGER- 2021 ss 2019 A D J U S T E D Merger-Adjusted Segment OperatingIncome(Loss) $ 349 $ oa $ = Amortization of Cooper Tire Inventory Step-up (40) SEGMENT Other Transaction-related Items (6) OPERATING Tota Segment Opertnghneame(ises) aR)“ INCO
Slide 28: Second Quarter 2021 Significant Items
SECOND QUARTER 2021 SIGNIFICANT ITEMS Terms: US$ millions ‘Acquisition ‘Amortization of Americas Indirect Tax (except EPS) As Related AcquisitionRelated Americas _ Colombia wae ‘Accrued Settlements As Winter Storm Settlement _Rationalizations Redemption Reported Transactionand —_Inventory Fair impac
Slide 29: Second Quarter 2020 Significant Items
SECOND QUARTER 2020 SIGNIFICANT ITEMS Terms: USS millions Rationalizations, lexoerkErs) Asset Write- Impairment of . As Discrete Tax As offs, and TireHub Asset Sales 2 Reported Items Adjusted Accelerated Investment Depreciati Net Sales $ 244 § & $ = $ = $ > $ 2,144 Cost of Goods Sold 2,216 (86) = =
Slide 30: Reconciliation for Total Debt and Net Debt
Terms: USS millions RECONCILIATION FOR TOTAL DEBT AND NET June 30, March 31, December 31, June 30, D E B T 2021 2021 2020 2020 Long-Term Debt and Finance Leases $ 6.978 =$ 5,326 $ 5432 $ 5,688 Notes Payable and Overdrafts 459 390 408 712 Long-Term Debt and Finance Leases Due Within One Year 535 386
Slide 31: Goodyear
GOODFSYEAR
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