Net sales growth of 40% compared with the
first quarter of 2021, 20% growth excluding the Cooper
Tire transaction and foreign currency
First quarter Goodyear net income of
$96 million; adjusted net income of
$105 million
Merger-adjusted segment operating income of
$311 million, up 38% compared to the
first quarter of 2021
Continued global market share growth during
the quarter, driven by consumer replacement
Price/mix exceeded raw materials by more
than $130 million
Revenue per tire (excluding currency impact)
up 17% versus first quarter of 2021
AKRON,
Ohio, May 6, 2022 /PRNewswire/ -- The Goodyear
Tire & Rubber Company (NASDAQ: GT) today reported results for
the first quarter of 2022.
"We delivered our highest first quarter revenue in 10
years despite ongoing supply chain disruptions, impacts from
geopolitical issues in Europe and
increasing COVID-19 restrictions in China," said Richard
J. Kramer, chairman, chief executive officer and
president.
"Moreover, with the addition of Cooper Tire and the benefit of
strong pricing actions across our key markets, our merger-adjusted
segment operating income grew nearly 40%. I am extremely proud of
our teams who continue to deliver excellent results in the face of
new challenges."
Goodyear's first quarter 2022 sales were $4.9 billion, up 40% from a year ago. The
increase was driven by the Cooper Tire merger, improvements in
price/mix, higher volume, and increased sales from other
tire-related businesses.
Tire unit volumes totaled 45.0 million, up 29% from the prior
year's period. Replacement and original equipment tire unit volume
increased 35% and 9%, respectively, reflecting the addition of
Cooper Tire unit volume and market share gains.
Goodyear's first quarter 2022 net income was $96 million (33
cents per share) compared to net income of $12 million (5
cents per share) a year ago. There were several significant
items in the period, including, on a pre-tax basis, rationalization
charges of $11 million. First quarter
2022 adjusted net income was $105
million compared to adjusted net income of $102 million in the prior year's quarter.
Adjusted earnings per share were $0.37, compared to $0.43 in the prior year's quarter, driven by
increased taxes and interest expense. Per share amounts are
diluted.
The company reported segment operating income of $303 million in the first quarter of 2022, up
$77 million from a year ago. The
company also reported merger-adjusted segment operating income of
$311 million, which excludes
incremental amortization of Cooper Tire intangible assets. The
increase in segment operating income primarily reflects
improvements in price/mix, the Cooper Tire merger and impacts of
higher volume, including increased factory utilization. These
factors were partially offset by higher raw material costs and
inflationary cost pressures in transportation, wages, benefits and
energy.
Reconciliation of Non-GAAP Financial Measures
See the note at the end of this release for further explanation
and reconciliation tables for Total Segment Operating Income and
Margin; Merger-Adjusted Segment Operating Income and Margin;
Adjusted Net Income; and Adjusted Diluted Earnings per Share,
reflecting the impact of certain significant items on the 2022 and
2021 periods.
Business Segment Results
Americas
|
First Quarter
|
|
|
(in millions)
|
2022
|
|
2021
|
|
|
|
|
Tire Units
|
22.2
|
|
15.5
|
|
|
|
|
Net Sales
|
$2,915
|
|
$1,787
|
|
|
|
|
Segment Operating
Income
|
216
|
|
114
|
|
|
|
|
Segment Operating
Margin
|
7.4%
|
|
6.4%
|
|
|
|
|
Americas' first quarter 2022 sales of $2.9 billion were 63% higher than in 2021, driven
by the Cooper Tire merger, improvements in price/mix, and increased
sales from other tire-related businesses. Tire unit volume
increased 44%. Replacement tire unit volume increased 55%. Original
equipment unit volume increased almost 5% despite ongoing customer
supply chain challenges, driven by the addition of Cooper Tire's
units.
First quarter 2022 segment operating income of $216 million was up $102
million from the prior year's quarter. The increase was
driven by improvements in price/mix and the Cooper Tire merger.
These factors were partially offset by higher raw material costs
and inflationary cost pressures in wages, benefits and
transportation.
Europe, Middle East and Africa
|
First Quarter
|
|
|
(in millions)
|
2022
|
|
2021
|
|
|
|
Tire Units
|
14.5
|
|
12.7
|
|
|
|
Net Sales
|
$1,426
|
|
$1,231
|
|
|
|
Segment Operating
Income
|
59
|
|
74
|
|
|
|
Segment Operating
Margin
|
4.1%
|
|
6.0%
|
|
|
|
Europe, Middle East and Africa's first quarter 2022 sales increased
16% from last year to $1.4 billion,
primarily due to improvements in price/mix, higher volume and the
Cooper Tire merger. Tire unit volume increased 14%. Replacement
tire unit volume rose 22%. Original equipment unit volume decreased
9%, reflecting lower vehicle production.
First quarter 2022 segment operating income of $59 million was down $15
million from the prior year's quarter, driven by higher raw
material costs, inflationary cost pressures in energy, wages,
benefits and transportation, and adverse foreign exchange. These
factors were partially offset by improvements in price/mix and the
impact of higher volume.
Asia Pacific
|
First Quarter
|
|
|
(in millions)
|
2022
|
|
2021
|
|
|
|
Tire Units
|
8.3
|
|
6.8
|
|
|
|
Net Sales
|
$567
|
|
$493
|
|
|
|
Segment Operating
Income
|
28
|
|
38
|
|
|
|
Segment Operating
Margin
|
4.9%
|
|
7.7%
|
|
|
|
Asia Pacific's first quarter
2022 sales increased 15% to $567
million, driven by the Cooper Tire merger, higher volume and
improvements in price/mix. Tire unit volume increased 21%, driven
by the addition of Cooper Tire's units. Replacement tire unit
volume increased 11%. Original equipment unit volume increased
42%.
First quarter 2022 segment operating income of $28 million was down $10
million from the prior year's quarter, driven by higher raw
material costs, partly offset by improvements in price/mix, the
Cooper Tire merger and higher volume.
Conference Call
Goodyear will hold an investor conference call at 9 a.m. EDT today. Prior to the commencement of
the call, the company will post the financial and other related
information that will be presented on its investor relations
website: http://investor.goodyear.com.
Participating in the conference call will be Richard J. Kramer, chairman, chief executive
officer and president; Darren R.
Wells, executive vice president and chief financial officer;
and Christina L. Zamarro, vice
president, finance and treasurer.
Investors, members of the media and other interested persons can
access the conference call on the website or via telephone by
calling either (877) 830-2597 or (785) 424-1881 before 8:55 a.m. EDT and providing the Conference ID
"Goodyear." A taped replay will be available by calling (888)
274-8337 or (402) 220-2329. The replay will also remain available
on the website.
About Goodyear
Goodyear is one of the world's largest tire companies. It
employs about 72,000 people and manufactures its products in 57
facilities in 23 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 and its products, go to
www.goodyear.com/corporate. GT-FN
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 achieve the
expected benefits of the Cooper Tire & Rubber Company
acquisition; the impact on us of the COVID-19 pandemic; increases
in the prices paid for raw materials and energy; inflationary cost
pressures; delays or disruptions in our supply chain or the
provision of services to us; changes in tariffs, trade agreements
or trade restrictions; our ability to implement successfully our
strategic initiatives; actions and initiatives taken by both
current and potential competitors; deteriorating economic
conditions or an inability to access capital markets; a labor
strike, work stoppage, labor shortage or other similar event; work
stoppages, financial difficulties, labor shortages or supply
disruptions at our suppliers or customers; the adequacy of our
capital expenditures; foreign currency translation and transaction
risks; 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.
(financial statements follow)
The Goodyear Tire
& Rubber Company and Subsidiaries
Consolidated
Statements of Operations (unaudited)
|
|
|
|
|
|
(In millions, except per share
amounts)
|
Three Months Ended
|
|
|
|
March 31,
|
|
|
|
2022
|
2021
|
|
|
|
|
|
|
|
|
|
NET SALES
|
$
4,908
|
$
3,511
|
|
|
|
|
|
|
|
|
|
Cost of Goods
Sold
|
3,966
|
2,751
|
|
|
|
Selling,
Administrative and General Expense
|
688
|
564
|
|
|
|
Rationalizations
|
11
|
50
|
|
|
|
Interest
Expense
|
104
|
79
|
|
|
|
Other (Income)
Expense
|
5
|
34
|
|
|
|
|
|
|
|
|
|
Income before Income
Taxes
|
134
|
33
|
|
|
|
United States and
Foreign Tax Expense
|
38
|
15
|
|
|
|
|
|
|
|
|
|
Net Income
|
96
|
18
|
|
|
|
Less: Minority Shareholders' Net Income
|
--
|
6
|
|
|
|
|
|
|
|
|
|
Goodyear Net Income
|
$
96
|
$
12
|
|
|
|
|
|
|
|
|
|
Goodyear Net Income
- Per Share of Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.34
|
$
0.05
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding
|
284
|
235
|
|
|
|
|
|
|
|
|
|
Diluted
|
$
0.33
|
$
0.05
|
|
|
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding
|
287
|
238
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Goodyear Tire
& Rubber Company and Subsidiaries
Consolidated Balance
Sheets (unaudited)
|
|
(In millions, except share
data)
|
March 31,
|
December 31,
|
|
2022
|
2021
|
Assets:
|
|
|
Current Assets:
|
|
|
Cash and Cash
Equivalents
|
$
1,053
|
$
1,088
|
Accounts
Receivable, less Allowance - $113 ($123 in 2021)
|
3,220
|
2,387
|
Inventories:
|
|
|
Raw Materials
|
1,032
|
958
|
Work in Process
|
211
|
191
|
Finished Products
|
2,783
|
2,445
|
|
4,026
|
3,594
|
Prepaid
Expenses and Other Current Assets
|
264
|
262
|
Total Current
Assets
|
8,563
|
7,331
|
Goodwill
|
1,006
|
1,004
|
Intangible
Assets
|
1,034
|
1,039
|
Deferred Income
Taxes
|
1,581
|
1,596
|
Other
Assets
|
1,159
|
1,106
|
Operating Lease
Right-of-Use Assets
|
988
|
981
|
Property, Plant and
Equipment, less Accumulated Depreciation – $11,233 ($11,130 in
2021)
|
8,291
|
8,345
|
Total Assets
|
$ 22,622
|
$ 21,402
|
|
|
|
Liabilities:
|
|
|
Current Liabilities:
|
|
|
Accounts
Payable – Trade
|
$ 4,339
|
$
4,148
|
Compensation
and Benefits
|
644
|
689
|
Other Current
Liabilities
|
836
|
822
|
Notes Payable
and Overdrafts
|
570
|
406
|
Operating
Lease Liabilities due Within One Year
|
206
|
204
|
Long Term Debt
and Finance Leases due Within One Year
|
350
|
343
|
Total Current Liabilities
|
6,945
|
6,612
|
Operating Lease
Liabilities
|
825
|
819
|
Long Term Debt and
Finance Leases
|
7,450
|
6,648
|
Compensation and
Benefits
|
1,375
|
1,445
|
Deferred Income
Taxes
|
137
|
135
|
Other Long Term
Liabilities
|
568
|
559
|
Total Liabilities
|
17,300
|
16,218
|
|
|
|
Commitments and
Contingent Liabilities
|
|
|
Shareholders' Equity:
|
|
|
Goodyear Shareholders' Equity:
|
|
|
Common Stock,
no par value:
|
|
|
Authorized,
450 million shares, Outstanding shares – 282 million in 2022 and
2021
|
282
|
282
|
Capital
Surplus
|
3,109
|
3,107
|
Retained
Earnings
|
5,669
|
5,573
|
Accumulated
Other Comprehensive Loss
|
(3,915)
|
(3,963)
|
Goodyear Shareholders'
Equity
|
5,145
|
4,999
|
Minority
Shareholders' Equity – Nonredeemable
|
177
|
185
|
Total Shareholders'
Equity
|
5,322
|
5,184
|
Total Liabilities and Shareholders'
Equity
|
$ 22,622
|
$ 21,402
|
The Goodyear Tire
& Rubber Company and Subsidiaries
Consolidated
Statements of Cash Flows (unaudited)
|
|
(In millions)
|
Three Months Ended
|
|
March 31,
|
|
2022
|
|
2021
|
Cash Flows from Operating
Activities:
|
|
|
|
Net Income
|
$
96
|
|
$
18
|
Adjustments to
Reconcile Net Income to Cash Flows from Operating
Activities:
|
|
|
|
Depreciation and
Amortization
|
244
|
|
197
|
Amortization and Write-Off
of Debt Issuance Costs
|
3
|
|
3
|
Provision for Deferred
Income Taxes
|
3
|
|
(18)
|
Net Rationalization
Charges
|
11
|
|
50
|
Rationalization
Payments
|
(36)
|
|
(83)
|
Net (Gains) Losses on Asset
Sales
|
(4)
|
|
--
|
Operating Lease
Expense
|
74
|
|
70
|
Operating Lease
Payments
|
(72)
|
|
(67)
|
Pension Contributions and
Direct Payments
|
(16)
|
|
(9)
|
Changes in
Operating Assets and Liabilities, Net of Asset Acquisitions and
Dispositions:
|
|
|
|
Accounts
Receivable
|
(842)
|
|
(526)
|
Inventories
|
(436)
|
|
(258)
|
Accounts Payable –
Trade
|
276
|
|
221
|
Compensation and
Benefits
|
(82)
|
|
19
|
Other Current
Liabilities
|
19
|
|
(4)
|
Other Assets and
Liabilities
|
51
|
|
105
|
Total Cash Flows from
Operating Activities
|
(711)
|
|
(282)
|
Cash Flows from Investing
Activities:
|
|
|
|
Capital
Expenditures
|
(276)
|
|
(185)
|
Asset
Dispositions
|
8
|
|
--
|
Short Term
Securities Acquired
|
(9)
|
|
(29)
|
Short Term
Securities Redeemed
|
16
|
|
41
|
Notes
Receivable
|
(34)
|
|
(10)
|
Other
Transactions
|
(5)
|
|
3
|
Total Cash Flows from
Investing Activities
|
(300)
|
|
(180)
|
Cash Flows from Financing
Activities:
|
|
|
|
Short Term
Debt and Overdrafts Incurred
|
418
|
|
280
|
Short Term
Debt and Overdrafts Paid
|
(246)
|
|
(285)
|
Long Term Debt
Incurred
|
2,914
|
|
694
|
Long Term Debt
Paid
|
(2,114)
|
|
(514)
|
Common Stock
Issued
|
(5)
|
|
9
|
Debt Related
Costs and Other Transactions
|
15
|
|
(40)
|
Total Cash Flows from
Financing Activities
|
982
|
|
144
|
Effect of Exchange
Rate Changes on Cash, Cash Equivalents and Restricted
Cash
|
2
|
|
(34)
|
Net Change in Cash, Cash Equivalents and Restricted
Cash
|
(27)
|
|
(352)
|
Cash, Cash
Equivalents and Restricted Cash at Beginning of the
Period
|
1,164
|
|
1,624
|
Cash, Cash Equivalents and Restricted Cash at End of
the Period
|
$
1,137
|
|
$
1,272
|
Non-GAAP Financial Measures (unaudited)
This earnings release presents Total Segment Operating Income
and Margin, Merger-Adjusted Segment Operating Income and Margin,
Adjusted Net Income and Adjusted Diluted Earnings Per Share (EPS),
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' (SBUs') Segment Operating Income as
determined in accordance with U.S. GAAP. Total Segment Operating
Margin is Total Segment Operating Income divided by Net Sales as
determined in accordance with U.S. GAAP. Management believes that
Total Segment Operating Income and Margin are useful because they
represent the aggregate value of income created by the company's
SBUs and exclude 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
Goodyear Net Income and to Total Segment Operating Margin is Return
on Sales (which is calculated by dividing Goodyear Net Income by
Net Sales).
Merger-Adjusted Segment Operating Income is Total Segment
Operating Income less the impact of the amortization of inventory
step-up adjustments, the incremental amortization of intangible
assets and other transaction-related items related to the Cooper
Tire merger. Merger-Adjusted Segment Operating Margin is
Merger-Adjusted Segment Operating Income divided by Net Sales as
determined in accordance with U.S. GAAP. Management believes that
Merger-Adjusted Segment Operating Income and Margin are useful
because they allow investors to understand and evaluate the
aggregate value of income created by the company's SBUs in a manner
that is more comparable to the performance of The Goodyear Tire
& Rubber Company and Cooper Tire & Rubber Company in the
periods before the merger by adjusting for certain expenses related
to the Cooper Tire merger, including amortization of the Cooper
Tire inventory step-up adjustments, incremental amortization of
Cooper Tire intangible assets and other transaction-related
items.
Adjusted Net Income is Goodyear Net Income as determined in
accordance with U.S. GAAP adjusted for certain significant items.
Adjusted Diluted Earnings Per Share is the company's Adjusted Net
Income divided by Weighted Average Shares Outstanding-Diluted as
determined in accordance with U.S. GAAP. Management believes that
Adjusted Net Income and Adjusted Diluted Earnings Per Share are
useful because they represent how management reviews the operating
results of the company excluding the impacts of non-cash impairment
charges, rationalizations, asset write-offs, accelerated
depreciation, asset sales and certain other significant items.
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.
See the tables below for reconciliations of historical Total
Segment Operating Income and Margin, Merger-Adjusted Segment
Operating Income and Margin, Adjusted Net Income and Adjusted
Diluted Earnings Per Share to the most directly comparable U.S.
GAAP financial measures.
Merger-Adjusted
Segment Operating Income and Margin, Segment Operating Income and
Margin
Reconciliation
Table
|
|
|
|
|
|
(In millions)
|
Three Months
Ended
|
|
|
March
31,
|
|
|
|
2022
|
2021
|
|
|
|
Merger-Adjusted Segment Operating
Income
|
$
311
|
$
226
|
|
|
|
Incremental
Amortization of Cooper Tire Intangible Assets
|
(8)
|
--
|
|
|
|
Total Segment Operating Income
|
$
303
|
$
226
|
|
|
|
Rationalizations
|
(11)
|
(50)
|
|
|
|
Interest
Expense
|
(104)
|
(79)
|
|
|
|
Other Income
(Expense)
|
(5)
|
(34)
|
|
|
|
Corporate
Incentive Compensation Plans
|
(19)
|
(9)
|
|
|
|
Retained
Expenses of Divested Operations
|
(3)
|
(3)
|
|
|
|
Other
|
(27)
|
(18)
|
|
|
|
Income before Income Taxes
|
$
134
|
$
33
|
|
|
|
United States and
Foreign Tax Expense
|
38
|
15
|
|
|
|
Less: Minority
Shareholders' Net Income
|
--
|
6
|
|
|
|
Goodyear Net Income
|
$
96
|
$
12
|
|
|
|
|
|
|
|
|
|
Net Sales
|
$4,908
|
$3,511
|
|
|
|
Return on Net
Sales
|
2.0%
|
0.3%
|
|
|
|
Total Segment
Operating Margin
|
6.2%
|
6.4%
|
|
|
|
Merger-Adjusted
Segment Operating Margin
|
6.3%
|
6.4%
|
|
|
|
Adjusted Net Income
and Adjusted Diluted Earnings per Share
Reconciliation
Tables
|
|
First Quarter 2022
|
Income
Before
Income
Taxes
|
Taxes
|
Minority
Interest
|
Goodyear
Net Income
|
Weighted
Average
Shares
Outstanding-
Diluted
|
Diluted EPS
|
(In millions, except EPS)
|
|
|
|
|
|
|
As Reported
|
$ 134
|
$
38
|
$
--
|
$
96
|
287
|
$
0.33
|
Significant
Items:
|
|
|
|
|
|
|
Rationalizations, Asset Write-offs and
Accelerated
Depreciation Charges
|
11
|
2
|
|
9
|
|
0.03
|
Discrete Tax Items
|
|
(4)
|
|
4
|
|
0.02
|
Asset Sales
|
(4)
|
|
|
(4)
|
|
(0.01)
|
|
7
|
(2)
|
--
|
9
|
|
0.04
|
As Adjusted
|
$ 141
|
$
36
|
$
--
|
$
105
|
287
|
$
0.37
|
First Quarter 2021
|
Income
Before
Income
Taxes
|
Taxes
|
Minority
Interest
|
Goodyear
Net Income
|
Weighted
Average
Shares
Outstanding-
Diluted
|
Diluted EPS
|
(In millions, except EPS)
|
|
|
|
|
|
|
As Reported
|
$
33
|
$
15
|
$
6
|
$
12
|
238
|
$
0.05
|
Significant
Items:
|
|
|
|
|
|
|
Rationalizations, Asset Write-offs and
Accelerated
Depreciation Charges
|
50
|
5
|
|
45
|
|
0.19
|
Americas
Inventory Valuation & Other
Adjustments
|
20
|
1
|
|
19
|
|
0.08
|
Americas
Winter Storm Impact
|
23
|
6
|
|
17
|
|
0.07
|
Acquisition Related Transaction Costs
|
8
|
2
|
|
6
|
|
0.03
|
Discrete
Tax Items
|
|
(3)
|
|
3
|
|
0.01
|
|
101
|
11
|
--
|
90
|
|
0.38
|
As Adjusted
|
$ 134
|
$
26
|
$
6
|
$
102
|
238
|
$
0.43
|
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SOURCE The Goodyear Tire & Rubber Company