BOSTON, Sept. 15, 2016 /PRNewswire/ -- The Goodyear Tire
& Rubber Company (NASDAQ: GT) at an investor meeting here today
will discuss, among other topics, industry trends, its financial
performance targets and its capital allocation plan.
"The tire industry is healthy, growing and offers attractive
opportunities to grow profitably," said Chairman, Chief Executive
Officer and President Richard J.
Kramer. "Our strategy is built to take advantage of key
industry drivers including the transition to increasingly complex,
large-rim diameter tires and the growing influence of empowered
consumers in all aspects of the tire buying process."
Kramer added, "We believe the combination of Goodyear's
innovation and technology leadership, industry-leading products and
strong global brand provide us with a competitive advantage to
execute our strategy and deliver on our performance targets."
Goodyear's financial performance targets include:
- $3 billion in annual segment
operating income in 2020 and
- Cumulative free cash flow of $4.3-$4.9
billion from 2017 to 2020.
Goodyear also updated its capital allocation plan that includes
growth capital expenditures, restructuring, debt repayment and a
shareholder return program of up to $4
billion. As part of that program, Goodyear's Board of
Directors has declared a quarterly dividend of 10 cents per share of common stock, a 43 percent
increase. The dividend is payable December
1, 2016, to shareholders of record on November 1, 2016. The payout represents an annual
rate of 40 cents per share. Future
dividends will be subject to Board approval.
"Our capital allocation plan demonstrates Goodyear's commitment
to creating value by maintaining financial flexibility to execute
our strategic plan, continuing to strengthen our balance sheet and
investing for future growth while also providing significant direct
returns to shareholders," said Kramer.
Goodyear also reaffirmed its previously communicated 2016
financial targets.
The company will host a live video webcast of the investor
meeting today. The meeting is scheduled to begin at 9 a.m. and is expected to conclude at
12 p.m. Prior to the commencement of
the webcast, the company will post the financial and other related
information that will be presented on its investor relations
website: http://investor.goodyear.com.
Also participating in the meeting will be Executive Vice
President and Chief Financial Officer Laura
K. Thompson, along with the presidents of the company's
strategic business units: Stephen
McClellan, Americas; Jean-Claude
Kihn, Europe, Middle East and Africa; and Christopher Delaney, Asia Pacific.
Investors, members of the media and other interested persons can
access the video webcast on the website or the audio via telephone
by calling either (800) 895-0198 or (785) 424-1053 before
8:55 a.m. and providing the
Conference ID "Goodyear." An audio replay will be available by
calling (800) 723-8184 or (402) 220-2668. A video replay will
remain available on the website.
Goodyear is one of the world's largest tire companies. It
employs approximately 66,000 people and manufactures its products
in 49 facilities in 22 countries around the world. Its two
Innovation Centers in Akron, Ohio
and Colmar-Berg, Luxembourg strive
to develop state-of-the-art products and services that set the
technology and performance standard for the industry. For more
information about Goodyear or its products, go to
www.goodyear.com/corporate. GT-FN
Use of Forward-Looking Non-GAAP Financial Measures
This news release contains forward-looking non-GAAP financial
measures, Total Segment Operating Income and Free Cash Flow, which
are important financial measures for the company but are not
financial measures defined by U.S. GAAP, and should not be
construed as alternatives to corresponding financial measures
presented in accordance with U.S. GAAP.
Total Segment Operating Income is the sum of the individual
strategic business units' (SBU's) Segment Operating Income as
determined in accordance with U.S. GAAP. 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. The most directly comparable U.S. GAAP
financial measure to Total Segment Operating Income is Net
Income.
Free Cash Flow is the company's Cash Flows from Operating
Activities as determined in accordance with U.S. GAAP, less capital
expenditures. Management believes that Free Cash Flow is useful
because it represents the cash generating capability of the
company's ongoing operations, after taking into consideration
capital expenditures necessary to maintain its business and pursue
growth opportunities. The most directly comparable U.S. GAAP
financial measure to Free Cash Flow is Cash Flows from Operating
Activities.
It should be noted that other companies may calculate
similarly-titled non-GAAP financial measures differently and, as a
result, the measures presented herein may not be comparable to such
similarly-titled measures reported by other companies.
We are unable to present a quantitative reconciliation of our
forward-looking non-GAAP financial measure, Total Segment Operating
Income, to the most directly comparable U.S. GAAP financial
measure, Net Income, because management cannot reliably predict all
of the necessary components of Net Income without unreasonable
effort. Net Income includes several significant items that are not
included in Total Segment Operating Income, such as rationalization
charges, other (income) and expense, pension curtailments and
settlements and income taxes. The decisions and events that
typically lead to the recognition of these and other similar
non-GAAP adjustments, such as a decision to exit part of our
business, acquisitions and dispositions, foreign currency exchange
gains and losses, financing fees, actions taken to manage our
pension liabilities and the recording or release of tax valuation
allowances, are inherently unpredictable as to if or when they may
occur. The inability to provide a reconciliation is due to that
unpredictability and the related difficulty in assessing the
potential financial impact of the non-GAAP adjustments. For the
same reasons, we are unable to address the probable significance of
the unavailable information, which could be material to our future
financial results.
See the table below for a reconciliation of forward-looking
cumulative Free Cash Flow to the most directly comparable U.S. GAAP
financial measure, Cash Flows from Operating Activities.
Reconciliation
for Free Cash
Flow
|
|
(in
billions)
|
2017 -
2020
|
Cash Flows from
Operating Activities
|
$8.9 -
$9.5
|
Capital
Expenditures
|
($4.6)
|
Free Cash
Flow
|
$4.3 -
$4.9
|
Forward-Looking Statements
Certain information contained in this press release
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 implement
successfully our strategic initiatives; actions and initiatives
taken by both current and potential competitors; foreign currency
translation and transaction risks; a labor strike, work stoppage or
other similar event; 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; increases in the prices
paid for raw materials and energy; 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.
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SOURCE The Goodyear Tire & Rubber Company