Goodyear Reports Record Second Quarter Results

• North America earnings of $321 million, up 54% and a record for any quarter

• Segment operating margin of 13%, with 3 of 4 business units above 10%

• Second quarter Goodyear net income of $192 million

• Completed $50 million in share repurchases in second quarter

• Company reaffirms 2015 financial targets

The Goodyear Tire & Rubber Company recently reported record results for the second quarter of 2015.

“We delivered outstanding segment operating income growth and achieved a segment operating margin of more than 13 percent, despite significant foreign currency and global economic headwinds,” said Richard J. Kramer, chairman and chief executive officer.

“North America continued to lead the way with a 54 percent increase in segment operating income and a 16 percent segment operating margin driven by strong demand for our products,” he said. “Additionally, three of our four businesses posted segment operating margins in excess of 10 percent.”

Kramer added, “Our strong second quarter results – even amid ongoing global challenges – reflect the strength of our strategy and of our value proposition.”

Goodyear’s second quarter 2015 sales were $4.2 billion, down from $4.7 billion a year ago, with the decrease largely attributable to unfavorable foreign currency translation of $401 million.

Tire unit volumes totaled 40.8 million for the second quarter of 2015, up 1 percent from last year. Original equipment unit volume was up 4 percent. Replacement tire shipments were down 1 percent.

The company reported second quarter segment operating income of $556 million in 2015, up 21 percent from a year ago and a record for any quarter. The increase in segment operating income was driven by favorable price/mix net of raw materials and cost reduction actions. These were partially offset by inflation and unfavorable foreign currency translation.

Year to Date

Goodyear’s sales for the first six months of 2015 were $8.2 billion, down 10 percent from the 2014 period, reflecting unfavorable foreign currency translation of $794 million. Tire unit volumes totaled 81.6 million for the first half of 2015, up 1 percent from 2014. Replacement tire shipments were up 1 percent. Original equipment unit volume was up 3 percent.

Outlook

The company reaffirmed its 2015-2016 financial targets, which include:

• Segment Operating Income growth of between 10 percent and 15 percent per year;
• Annual positive Free Cash Flow from Operations and,
• An Adjusted Debt to EBITDAP ratio of 2.0x to 2.1x.

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