kvorak wrote: Finally... somebody agrees. The reason people can't answer this question objectively is because it's the WRONG QUESTION, lol. Well said.
Feb. 5, 2010 03:47 PM EST
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From the Wires
Goodyear Reports Third Quarter Results
Third Quarter highlights include:
By: PR Newswire
Nov. 3, 2008 07:59 AM
(Logo: http://www.newscom.com/cgi-bin/prnh/20050204/GTLOGO ) The company's third quarter sales of Revenue per tire, excluding the impact of foreign currency translation, increased 8 percent over the 2007 quarter, reflecting worldwide gains in pricing and product mix generated by the company's strategy to focus on high- value-added tires. "Goodyear's solid third quarter concludes a strong nine months of
performance, reflecting the successful execution of our business strategies
and continued strength in our international businesses," said "The tire industry is facing challenging business conditions as the global financial crisis and slowing economic conditions are impacting consumer demand in all regions. Our results reflect the economic reality of weakened industry demand and the associated cost impact of production cuts we initiated during the quarter," he added. "Our leadership team has the experience to operate effectively under these conditions and is taking decisive actions necessary to lessen the impact of falling industry demand. In this environment, you can expect Goodyear associates to drive business innovation, aggressively target costs and advance our business strategies," Keegan said. "The strength of our strategies and the proactive measures we are taking to address economic challenges position Goodyear well to maximize performance now and when industry demand recovers." Third quarter 2008 income from continuing operations was The 2008 quarter was impacted by net rationalization charges and
accelerated depreciation of The 2007 quarter was impacted by net rationalization charges and
accelerated depreciation of See the table at the end of this release for a list of significant items impacting continuing operations from the 2008 and 2007 third quarters. Goodyear made significant progress during the third quarter on its four-
point plan to achieve more than During the quarter, Goodyear sought redemption of Business Segments Total segment operating income was Improved pricing and product mix of Foreign currency translation positively impacted sales by Asia Pacific Tire and Asia Pacific Tire and Latin American Tire had third quarter record segment operating income. See the disclosure at the end of this release for further explanation and a segment operating income reconciliation table.
North American Tire Third Quarter Nine Months
(in millions) 2008 2007 2008 2007
Tire Units 18.1 20.7 54.2 60.7
Sales $2,185 $2,285 $6,312 $6,578Segment Operating (Loss) Income (19) 66 37 99
Segment Operating Margin (0.9)% 2.9% 0.6% 1.5%
North American Tire's third quarter sales were down
Third quarter segment operating income decreased $85 million compared to
the 2007 quarter due to lower sales and production levels, which resulted in
unabsorbed overhead. Lower SAG costs were a partial offset. Pricing and
product mix improvements of $109 million offset increased raw material costs
of $109 million.
Europe, Middle East
and Africa Tire Third Quarter Nine Months
(in millions) 2008 2007 2008 2007
Tire Units 19.7 20.7 58.5 60.6
Sales $1,936 $1,864 $5,910 $5,311
Segment Operating Income 134 176 457 441
Segment Operating Margin 6.9% 9.4% 7.7% 8.3%
Third quarter segment operating income decreased $42 million from 2007 due
to lower production levels, which resulted in unabsorbed overhead. Pricing
and product mix improvements of $71 million more than offset $59 million in
higher raw material costs.
Latin American Tire Third Quarter Nine Months
(in millions) 2008 2007 2008 2007
Tire Units 5.3 5.5 15.9 16.3
Sales $581 $491 $1,683 $1,359
Segment Operating Income 101 99 318 267
Segment Operating Margin 17.4% 20.2% 18.9% 19.6%
Latin American Tire sales increased 18 percent from the third quarter of 2007 due to improved pricing and product mix and the favorable impact of currency translation. Lower volume was a partial offset. Third quarter 2008 segment operating income increased 2 percent from last
year due to improved pricing and product mix of
Asia Pacific Tire Third Quarter Nine Months
(in millions) 2008 2007 2008 2007
Tire Units 5.1 4.8 15.4 14.1
Sales $470 $424 $1,448 $1,236
Segment Operating Income 50 41 151 111
Segment Operating Margin 10.6% 9.7% 10.4% 9.0%
Asia Pacific Tire third quarter sales were 11 percent higher than the 2007
period primarily due to improved pricing and product mix. Sales in the 2008
quarter were positively impacted by strong volume growth for Goodyear-branded
high-value-added tires in the consumer replacement market, most notably in
Segment operating income increased 22 percent in the 2008 third quarter,
primarily due to improved pricing and product mix of Year-to-Date Results Goodyear's sales for the first nine months of 2008 were a record Segment operating income was Income from continuing operations for the first nine months of 2008 was
Improved pricing and product mix of Revenue per tire, excluding the impact of foreign currency translation, was up 8 percent over 2007's first nine months. "Our performance under challenging conditions this year demonstrates the capabilities of the business model we have put in place and the operating leverage we expect to harness once industry conditions improve," said Keegan. Conference Call Goodyear will hold an investor conference call at Participating in the conference call with Keegan will be Investors, members of the media and other interested persons may access
the conference call on the Web site or via telephone by calling (706) 634-5954
before Goodyear is one of the world's largest tire companies. Fortune magazine named Goodyear the World's Most Admired Motor Vehicle Parts Company in its 2008 list of the World's Most Admired Companies. The publication ranked Goodyear No. 1 in innovation, people management, use of assets and global orientation. The company is also listed on Forbes magazine's list of the Most Respected Companies in America and its list of the Most Trustworthy Companies in America and CRO magazine's ranking of the 100 Best Corporate Citizens. Goodyear employs about 70,000 people and manufactures its products in more than 60 facilities in 25 countries around the world. For more information about Goodyear, go to http://www.goodyear.com/corporate. Certain information contained in this press release may constitute 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, which 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: actions and initiatives taken by both current and potential competitors; increases in the prices paid for raw materials and energy; our ability to realize anticipated savings and operational benefits from our cost reduction initiatives or to implement successfully other strategic initiatives; work stoppages, financial difficulties or supply disruptions at our suppliers or customers; potential adverse consequences of litigation involving the company; pension plan funding obligations; deteriorating economic conditions or an inability to access capital markets; as well as the effects of more general factors such as changes in general market or economic 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.
The Goodyear Tire & Rubber Company and Subsidiaries
Consolidated Statements of Income
(unaudited)
Quarter Ended Nine Months Ended
(In millions, except per September 30, September 30,
share amounts) 2008 2007 2008 2007
NET SALES $5,172 $5,064 $15,353 $14,484
Cost of Goods Sold 4,316 4,051 12,473 11,759
Selling, Administrative and
General Expense 627 670 1,997 2,025
Rationalizations 34 2 134 24
Interest Expense 73 106 238 351
Other (Income) and Expense 4 (33) (24) (14)
Income from Continuing
Operations before Income Taxes
and Minority Interest 118 268 535 339
United States and Foreign Taxes 66 95 217 209
Minority Interest 21 14 65 52
Income from Continuing
Operations 31 159 253 78
Discontinued Operations -- 509 -- 472
NET INCOME $31 $668 $253 $550
Income Per Share - Basic
Income from Continuing
Operations $0.13 $0.76 $1.05 $0.40
Discontinued Operations - 2.41 - 2.41
Net Income Per Share - Basic $0.13 $3.17 $1.05 $2.81
Weighted Average Shares
Outstanding 241 211 241 196
Income Per Share - Diluted
Income from Continuing
Operations $0.13 $0.67 $1.04 $0.39
Discontinued Operations -- 2.08 -- 2.05
Net Income Per Share -
Diluted $0.13 $2.75 $1.04 $2.44
Weighted Average Shares
Outstanding 243 244 243 229
The Goodyear Tire & Rubber Company and Subsidiaries
Consolidated Balance Sheets
(unaudited)
Sept. 30 Dec. 31
(In millions) 2008 2007
Assets:
Current Assets:
Cash and Cash Equivalents $1,606 $3,463
Restricted Cash 178 191
Accounts Receivable, less Allowance - $90
($88 in 2007) 3,681 3,103
Inventories:
Raw Materials 715 591
Work in Process 147 147
Finished Products 2,998 2,426
3,860 3,164
Prepaid Expenses and Other Current Assets 632 251
Total Current Assets 9,957 10,172
Goodwill 715 713
Intangible Assets 162 167
Deferred Income Tax 68 83
Other Assets 421 458
Property, Plant and Equipment less Accumulated
Depreciation - $8,506 ($8,329 in 2007) 5,720 5,598
Total Assets $17,043 $17,191
Liabilities:
Current Liabilities:
Accounts Payable-Trade $2,602 $2,422
Compensation and Benefits 770 897
Other Current Liabilities 816 753
United States and Foreign Taxes 259 196
Notes Payable and Overdrafts 276 225
Long Term Debt and Capital Leases due within
one year 80 171
Total Current Liabilities 4,803 4,664
Long Term Debt and Capital Leases 5,035 4,329
Compensation and Benefits 2,026 3,404
Deferred and Other Noncurrent Income Taxes 266 274
Other Long Term Liabilities 713 667
Minority Equity in Subsidiaries 986 1,003
Total Liabilities 13,829 14,341
Commitments and Contingent Liabilities
Shareholders' Equity:
Preferred Stock, no par value:
Authorized, 50 shares, unissued - -
Common Stock, no par value:
Authorized, 450 shares, Outstanding shares -
241 (240 in 2007) after deducting 10
treasury shares (10 in 2007) 241 240
Capital Surplus 2,699 2,660
Retained Earnings 1,855 1,602
Accumulated Other Comprehensive Loss (1,581) (1,652)
Total Shareholders' Equity 3,214 2,850
Total Liabilities and Shareholders' Equity $17,043 $17,191
Non-GAAP Financial Measures This earnings release presents total segment operating income and net debt, each of which are important financial measures for the company but are not financial measures defined by GAAP. Total segment operating income is the sum of the individual strategic business units' segment operating income as determined in accordance with Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information." 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. See the table below for the reconciliation of total segment operating income. Net debt is total debt (the sum of long term debt and capital leases, notes payable and overdrafts, and long-term debt and capital leases due within one year) minus cash and cash equivalents. Management believes net debt is an important measure of liquidity, which it uses as a tool to assess the company's capital structure and measure its ability to meet its future debt obligations. Cash and cash equivalents are subtracted from the GAAP measure because they could be used to reduce our debt obligations. See the table below for the reconciliation of net debt.
Total Segment Operating Income Reconciliation Table
(In millions) Quarter Ended
Sept. 30,
(unaudited)
2008 2007
Total Segment Operating Income $266 $382
Rationalizations (34) (2)
Accelerated depreciation (13) (6)
Interest expense (73) (106)
Interest income 13 36
Corporate incentive and stock based
compensation plans 7 (22)
Intercompany profit elimination 7 --
Curtailments/Settlements (11) --
Financing fees and financial instruments (10) (11)
Asset sales 4 10
Hurricane losses -- insurance deductible (7) --
Retained net expenses of discontinued
operations -- (1)
Other (31) (12)
Income from continuing operations
before income taxes and minority interest 118 268
U.S. and foreign taxes (66) (95)
Minority interest (21) (14)
Income from continuing operations 31 159
Discontinued operations -- 509
Net Income $31 $668
Net Debt Reconciliation Table
(In millions)
Sept. 30, Dec. 31,
2008 2007
Long Term Debt and Capital Leases $ 5,035 $4,329
Notes Payable and Overdrafts 276 225
Long Term Debt and Capital Leases
Due Within One Year 80 171
Total Debt 5,391 4,725
Less: Cash and Cash Equivalents 1,606 3,463
Net Debt $3,785 $1,262
Change in Net Debt $2,523
Third Quarter Significant Items (after taxes and minority interest) Impacting Continuing Operations 2008 -- Net rationalization charges and accelerated depreciation, -- Loss on settlement of postretirement healthcare obligations in
connection with the establishment of a Voluntary Employees' Beneficiary
Association (VEBA), -- Expenses related to Hurricanes Gustav and Ike, -- Discrete net tax charges related primarily to German operations, -- Charges related to the exit of Moroccan business, -- Gain on asset sales, $2 million (1 cent per share). 2007 -- Net rationalization charges and accelerated depreciation, -- Reduced value of deferred tax assets primarily due to tax rate
reduction in -- Gain on asset sales, SOURCE The Goodyear Tire & Rubber Company
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