AKRON, Ohio, Aug. 6, 2021 /PRNewswire/ -- The Goodyear
Tire & Rubber Company (NASDAQ: GT) today reported results for
the second quarter and first half of 2021.
"We delivered merger-adjusted segment operating income
significantly above last year and nearly 60 percent higher than
second quarter 2019. Our strong results reflect
continued recovery in demand, including above-market
growth across many of our businesses. In addition, the
execution of our strategies helped deliver the highest quarterly
contribution of price / mix in nine years," said Richard J. Kramer, chairman, chief executive
officer and president.
"Broad economic recovery remains robust, particularly in the
U.S. and China," continued Kramer.
"Our second quarter results demonstrate our ability to capture
value in the marketplace with innovative products and services
while overcoming inflationary cost pressure."
"The addition of Cooper Tire in early June also contributed to
our strong merger-adjusted earnings growth, and we welcome all of
our new colleagues to the Goodyear family. Our teams are now
focused on integrating our businesses and leveraging the
combination to provide enhanced service for our customers and
consumers."
Goodyear's second quarter 2021 sales were $4.0 billion, up 86% from a year ago. The
increase was driven by higher volume, the Cooper Tire merger,
increased sales from other tire-related businesses and favorable
foreign currency translation.
Tire unit volumes totaled 37.5 million, up 84% from the prior
year's period. The impact of the COVID-19 pandemic on industry
demand moderated significantly relative to the prior year.
Replacement tire volume increased 78%, reflecting both continuing
industry recovery and market share gains. Original equipment unit
volume increased 109%, driven by higher vehicle production and
increased market share. Volume growth also benefited from the
Cooper Tire merger, which closed on June 7,
2021.
Goodyear's second quarter 2021 net income was $67 million
(27 cents per share) compared to a
net loss of $696 million
($2.97 per share) a year ago. The
2021 period included several significant items, including, on a
pre-tax basis, a $117 million benefit
related to a Brazilian Supreme Court ruling with respect to
indirect taxes, transaction and other expenses of $48 million and amortization of Cooper Tire
inventory step-up adjustments of $38
million both in connection with the Cooper Tire merger, a
negative carryover impact of $27
million related to a winter storm in the U.S., and
rationalization charges of $18
million, primarily associated with the closure of a
manufacturing facility in Gadsden,
Alabama. Goodyear's second quarter 2020 net loss included,
on a pre-tax basis, a non-cash asset impairment charge of
$148 million to reduce the carrying
value of an equity interest in TireHub, and rationalization charges
of $99 million, primarily associated
with the closure of a manufacturing facility in Gadsden, Alabama. Second quarter 2021 adjusted
net income was $79 million
(32 cents per share) compared to an
adjusted net loss of $437 million
($1.87 per share) in the prior year's
quarter. Per share amounts are diluted.
The company reported segment operating income of $299 million in the second quarter of 2021, up
$730 million from a year ago. The
company also reported merger-adjusted segment operating income of
$349 million, which excludes certain
costs triggered by the Cooper Tire merger. The increase in segment
operating income primarily reflects the impacts of higher volume,
including increased factory utilization, improvements in price/mix,
higher earnings from other tire-related businesses and the benefits
of cost saving actions. These factors were partially offset by
higher selling, administrative and general expenses (SAG),
reflecting the impact of payroll and advertising expenses returning
to more normal levels after last year's COVID-19 response actions,
and higher raw material costs. Segment operating income also
benefitted from $69 million related
to a Brazilian Supreme Court ruling with respect to indirect taxes,
which was partly offset by the adverse carryover effects of a
winter storm in the U.S., which are estimated at $24 million. The reported results also
include Cooper Tire operating loss of $16
million, which includes $40
million of amortization of Cooper Tire inventory step-up,
$6 million of other
transaction-related items, and $4
million incremental amortization of Cooper Tire intangible
assets.
Year-to-Date Results
Goodyear's sales for the first six months of 2021 were
$7.5 billion, a 44% increase from the
2020 period, primarily due to higher volume, the Cooper Tire
merger, increased sales from other tire-related businesses and
favorable foreign currency translation.
Tire unit volumes totaled 72.5 million, up 40% from 2020.
Replacement tire shipments increased 41%, reflecting stronger
industry demand and market share gains. Original equipment volume
increased 39%, driven by higher global vehicle production and
increased market share.
Goodyear's net income was $79
million for the first six months of 2021 (32 cents per share) compared to a net loss of
$1.3 billion ($5.62 per share) in the prior year's period. The
first half of 2021 included several significant items, including,
on a pre-tax basis, rationalization charges of $68 million, primarily associated with the
modernization of two manufacturing facilities in Germany and a plan to reduce SAG in EMEA,
transaction and other expenses of $55
million and amortization of Cooper Tire inventory step-up
adjustments of $38 million both in
connection with the Cooper Tire merger, a negative impact of
$50 million related to a severe
winter storm in the U.S. and a $117
million benefit related to a Brazilian Supreme Court ruling
with respect to indirect taxes. Goodyear's net income for the
comparable period in 2020 included, on a pre-tax basis, a non-cash
charge of $295 million related to a
valuation allowance on certain deferred tax assets for foreign tax
credits, a non-cash impairment charge of $182 million to reduce the carrying value of
goodwill in the EMEA business, a non-cash asset impairment charge
of $148 million to reduce the
carrying value of an equity interest in TireHub, and
rationalization charges of $108
million, primarily associated with the closure of a
manufacturing facility in Gadsden,
Alabama. Goodyear's adjusted net income for the first six
months of 2021 was $184 million
(76 cents per share), compared to a
net loss of $575 million
($2.46 per share) in the prior year's
period. Per share amounts are diluted.
The company reported segment operating income of $525 million for the first six months of 2021, up
$1.0 billion from a year ago. The
company also reported merger-adjusted segment operating income of
$575 million, which excludes certain
costs triggered by the Cooper Tire merger. The increase in segment
operating income primarily reflects the impacts of higher volume,
including increased factory utilization, improvements in price/mix,
higher earnings from other tire-related businesses, and the
benefits of cost saving actions. These factors were partially
offset by higher SAG, reflecting the impact of payroll and
advertising expenses returning to more normal levels after last
year's COVID-19 response actions, and higher raw material costs.
Segment operating income also benefitted from $69 million related to a Brazilian Supreme Court
ruling with respect to indirect taxes, which was partly offset by
the adverse effects of a severe winter storm in the U.S., which are
estimated at $50 million. The
reported results also include Cooper Tire operating loss of
$16 million, which includes
$40 million of amortization of Cooper
Tire inventory step-up, $6 million of
other transaction-related items, and $4
million incremental amortization of Cooper Tire intangible
assets.
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 (Loss)
and Margin; Merger-Adjusted Segment Operating Income (Loss) and
Margin; Adjusted Net Income (Loss); and Adjusted Diluted Earnings
(Loss) per Share, reflecting the impact of certain significant
items on the 2021 and 2020 periods.
Business Segment Results
Americas
|
Second
Quarter
|
|
Six
Months
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
|
2020
|
Tire Units
|
19.0
|
|
8.5
|
|
34.5
|
|
23.0
|
Net Sales
|
$2,256
|
|
$1,134
|
|
$4,043
|
|
$2,807
|
Segment Operating
Income (Loss)
|
233
|
|
(287)
|
|
347
|
|
(287)
|
Segment Operating
Margin
|
10.3%
|
|
(25.3)%
|
|
8.6%
|
|
(10.2)%
|
Americas' second quarter 2021 sales of $2.3 billion were 99% higher than in 2020, driven
by higher volume, the Cooper Tire merger, and increased sales from
other tire-related businesses. Tire unit volume increased 125%.
Replacement tire volume increased 120%, reflecting stronger
industry demand, U.S. consumer replacement market share gains and
the addition of Cooper Tire. Original equipment unit volume
increased 155%, reflecting higher industry demand and market share
gains in Latin America.
Second quarter 2021 segment operating income of $233 million was up $520
million from the prior year's quarter. The increase was
driven by the impacts of higher volume, including increased factory
utilization, improvements in price/mix, higher earnings from other
tire-related businesses, and the benefits of cost saving actions.
These factors were partially offset by higher SAG, reflecting the
impact of payroll and advertising expenses returning to more normal
levels after last year's COVID-19 response actions, and higher raw
material costs. Segment operating income also benefitted from a
$69 million favorable indirect tax
ruling in Brazil, partly offset by
the adverse carryover effects of a severe winter storm in the U.S.,
which are estimated at $24
million. The reported results also include Cooper Tire
operating loss of $14 million, which
includes $45 million of costs
triggered by the combination, including amortization of Cooper Tire
inventory step-up of $35 million,
other transaction-related items of $6
million, and incremental amortization of Cooper Tire
intangible assets of $4 million.
Europe, Middle East and Africa
|
Second
Quarter
|
|
Six
Months
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
2020
|
Tire Units
|
12.0
|
|
7.3
|
|
24.7
|
18.9
|
Net Sales
|
$1,230
|
|
$676
|
|
$2,461
|
$1,671
|
Segment Operating
Income (Loss)
|
43
|
|
(110)
|
|
117
|
(163)
|
Segment Operating
Margin
|
3.5%
|
|
(16.3)%
|
|
4.8%
|
(9.8)%
|
Europe, Middle East and Africa's second quarter 2021 sales increased
82% from last year to $1.2 billion
due to higher volume, favorable foreign currency translation and
increased sales from other tire-related businesses. Tire unit
volume increased 63%. Replacement tire volume rose 52%, reflecting
stronger industry demand and consumer and commercial replacement
market share gains. Original equipment unit volume increased 112%,
reflecting higher industry demand and significant share gains
driven by new consumer fitments and the addition of new fleet
customers.
Second quarter 2021 segment operating income of $43 million was up $153
million from the prior year's quarter, driven by the impacts
of higher volume, including increased factory utilization, and
improvements in price/mix. These factors were partially offset by
higher SAG, reflecting the impact of payroll and advertising
expenses returning to more normal levels after last year's COVID-19
response actions, and higher raw material costs.
Asia Pacific
|
Second
Quarter
|
|
Six
Months
|
(in
millions)
|
2021
|
|
2020
|
|
2021
|
2020
|
Tire Units
|
6.5
|
|
4.6
|
|
13.3
|
9.8
|
Net Sales
|
$493
|
|
$334
|
|
$986
|
$722
|
Segment Operating
Income (Loss)
|
23
|
|
(34)
|
|
61
|
(28)
|
Segment Operating
Margin
|
4.7%
|
|
(10.2)%
|
|
6.2%
|
(3.9)%
|
Asia Pacific's second quarter
2021 sales increased 48% to $493
million, driven by higher volume, favorable foreign currency
translation, and the Cooper Tire merger. Tire unit volume increased
43%. Replacement tire volume increased 35%, reflecting stronger
industry demand and expanded distribution. Original equipment
unit volume increased 63%, driven by market share gains and a
recovery in vehicle production.
Second quarter 2021 segment operating income of $23 million was up $57
million from the prior year's quarter. The increase was
driven by the impacts of higher volume, including improved factory
utilization, and improvements in price/mix. These factors were
partially offset by higher SAG, reflecting the impact of payroll
and advertising expenses returning to more normal levels after last
year's COVID-19 response actions.
Cooper Tire
On June 7, Goodyear completed its
announced Cooper Tire transaction. Second quarter results
incorporate the operating results of Cooper from June 7 through June 30. Cooper sales during
this period totaled $256
million. Inventory and other assets of Cooper were
recorded based on their fair market value on June 7 and the cost of goods sold of tires sold
after that date reflect the "step-up" to fair market value.
Merger-adjusted segment operating income excludes the impact of
this "step-up" and certain other costs triggered by the
combination, which totaled $50
million in the second quarter, including $40 million of amortization of Cooper Tire
inventory step-up, $6 million of
other transaction-related items, and $4
million incremental amortization of Cooper Tire intangible
assets.
Conference Call
Goodyear will hold an investor conference call at 9:30 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 (800) 895-3361 or (785) 424-1062 before 9:25 a.m. EDT and providing the Conference ID
"Goodyear." A taped replay will be available by calling (800)
839-4568 or (402) 220-2681. 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 55
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: the impact on us of the
COVID-19 pandemic; our ability to achieve the expected benefits of
the Cooper Tire & Rubber Company acquisition; delays or
disruptions in our supply chain; 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;
increases in the prices paid for raw materials and energy; a labor
strike, work stoppage or other similar event; foreign currency
translation and transaction risks; work stoppages, financial
difficulties or supply disruptions at our suppliers or customers;
the adequacy of our capital expenditures; 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)
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
(In millions,
except per share amounts)
|
2021
|
2020
|
|
2021
|
2020
|
|
|
|
|
|
|
NET
SALES
|
$
3,979
|
$
2,144
|
|
$
7,490
|
$
5,200
|
|
|
|
|
|
|
Cost of Goods
Sold
|
3,078
|
2,216
|
|
5,829
|
4,768
|
Selling,
Administrative and General Expense
|
658
|
451
|
|
1,222
|
1,032
|
Goodwill and Other
Asset Impairments
|
--
|
148
|
|
--
|
330
|
Rationalizations
|
18
|
99
|
|
68
|
108
|
Interest
Expense
|
97
|
85
|
|
176
|
158
|
Other (Income)
Expense
|
30
|
34
|
|
64
|
61
|
|
|
|
|
|
|
Income (Loss) before
Income Taxes
|
98
|
(889)
|
|
131
|
(1,257)
|
United States and
Foreign Tax Expense (Benefit)
|
27
|
(186)
|
|
42
|
63
|
|
|
|
|
|
|
Net Income
(Loss)
|
71
|
(703)
|
|
89
|
(1,320)
|
Less: Minority
Shareholders' Net Income (Loss)
|
4
|
(7)
|
|
10
|
(5)
|
|
|
|
|
|
|
Goodyear Net
Income (Loss)
|
$
67
|
$
(696)
|
|
$
79
|
$
(1,315)
|
|
|
|
|
|
|
Goodyear Net
Income (Loss)
- Per Share of Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
0.27
|
$
(2.97)
|
|
$
0.33
|
$
(5.62)
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding
|
244
|
234
|
|
239
|
234
|
|
|
|
|
|
|
Diluted
|
$
0.27
|
$
(2.97)
|
|
$
0.32
|
$
(5.62)
|
|
|
|
|
|
|
Weighted
Average Shares Outstanding
|
247
|
234
|
|
242
|
234
|
|
|
|
|
|
|
Cash Dividends
Declared Per Common Share
|
$
--
|
$
--
|
|
$
--
|
$
0.16
|
|
|
|
|
|
|
The Goodyear Tire
& Rubber Company and Subsidiaries
|
Consolidated
Balance Sheets (unaudited)
|
|
(In millions,
except share data)
|
June
30,
|
December
31,
|
|
2021
|
2020
|
Assets:
|
|
|
Current
Assets:
|
|
|
Cash and Cash
Equivalents
|
$
1,030
|
$
1,539
|
Accounts
Receivable, less Allowance - $141 ($150 in 2020)
|
2,819
|
1,691
|
Inventories:
|
|
|
Raw Materials
|
782
|
517
|
Work in Process
|
174
|
143
|
Finished Products
|
2,358
|
1,493
|
|
3,314
|
2,153
|
Prepaid
Expenses and Other Current Assets
|
356
|
237
|
Total Current
Assets
|
7,519
|
5,620
|
Goodwill
|
874
|
408
|
Intangible
Assets
|
1,216
|
135
|
Deferred Income
Taxes
|
1,170
|
1,467
|
Other
Assets
|
1,079
|
952
|
Operating Lease
Right-of-Use Assets
|
1,025
|
851
|
Property, Plant and
Equipment, less Accumulated Depreciation – $11,192 ($10,991 in
2020)
|
8,297
|
7,073
|
Total Assets
|
$
21,180
|
$
16,506
|
|
|
|
Liabilities:
|
|
|
Current
Liabilities:
|
|
|
Accounts
Payable – Trade
|
$
3,858
|
$
2,945
|
Compensation
and Benefits
|
687
|
540
|
Other Current
Liabilities
|
849
|
865
|
Notes Payable
and Overdrafts
|
459
|
406
|
Operating
Lease Liabilities due Within One Year
|
215
|
198
|
Long Term Debt
and Finance Leases due Within One Year
|
535
|
152
|
Total Current Liabilities
|
6,603
|
5,106
|
Operating Lease
Liabilities
|
843
|
684
|
Long Term Debt and
Finance Leases
|
6,978
|
5,432
|
Compensation and
Benefits
|
1,677
|
1,470
|
Deferred Income
Taxes
|
97
|
84
|
Other Long Term
Liabilities
|
571
|
471
|
Total Liabilities
|
16,769
|
13,247
|
|
|
|
Commitments and
Contingent Liabilities
|
|
|
Shareholders'
Equity:
|
|
|
Common Stock, no par
value:
|
|
|
Authorized, 450 million
shares, Outstanding shares – 281 million in 2021 and 233 million in
2020
|
281
|
233
|
Capital
Surplus
|
3,086
|
2,171
|
Retained
Earnings
|
4,888
|
4,809
|
Accumulated Other
Comprehensive Loss
|
(4,043)
|
(4,135)
|
Goodyear
Shareholders' Equity
|
4,212
|
3,078
|
Minority
Shareholders' Equity – Nonredeemable
|
199
|
181
|
Total
Shareholders' Equity
|
4,411
|
3,259
|
Total
Liabilities and Shareholders' Equity
|
$
21,180
|
$
16,506
|
The Goodyear Tire
& Rubber Company and Subsidiaries
|
Consolidated
Statements of Cash Flows (unaudited)
|
|
(In
millions)
|
Six Months
Ended
|
|
June
30,
|
|
2021
|
|
2020
|
Cash Flows from
Operating Activities:
|
|
|
|
Net Income
(Loss)
|
$
89
|
|
$
(1,320)
|
Adjustments to
Reconcile Net Income (Loss) to Cash Flows from Operating
Activities:
|
|
|
|
Depreciation and
Amortization
|
405
|
|
472
|
Amortization and Write-Off
of Debt Issuance Costs
|
9
|
|
6
|
Amortization of Inventory
Fair Value Adjustment Related to the Cooper Tire
Acquisition
|
38
|
|
--
|
Transaction and Other Costs
Related to the Cooper Tire Acquisition
|
55
|
|
--
|
Cash Payments for
Transaction and Other Costs Related to the Cooper Tire
Acquisition
|
(33)
|
|
--
|
Goodwill and Other Asset
Impairment
|
--
|
|
330
|
Provision for Deferred
Income Taxes
|
(66)
|
|
58
|
Net Pension Curtailments and
Settlements
|
19
|
|
3
|
Net Rationalization
Charges
|
68
|
|
108
|
Rationalization
Payments
|
(123)
|
|
(101)
|
Net (Gains) Losses on Asset
Sales
|
--
|
|
2
|
Operating Lease
Expense
|
143
|
|
142
|
Operating Lease
Payments
|
(133)
|
|
(130)
|
Pension Contributions and
Direct Payments
|
(22)
|
|
(33)
|
Changes in
Operating Assets and Liabilities, Net of Asset Acquisitions and
Dispositions:
|
|
|
|
Accounts
Receivable
|
(545)
|
|
36
|
Inventories
|
(542)
|
|
304
|
Accounts Payable –
Trade
|
547
|
|
(860)
|
Compensation and
Benefits
|
90
|
|
(11)
|
Other Current
Liabilities
|
(42)
|
|
29
|
Other Assets and
Liabilities
|
(28)
|
|
145
|
Total Cash Flows from
Operating Activities
|
(71)
|
|
(820)
|
Cash Flows from
Investing Activities:
|
|
|
|
Acquisition of
Cooper Tire, net of cash and restricted cash acquired
|
(1,856)
|
|
--
|
Capital
Expenditures
|
(385)
|
|
(363)
|
Short Term
Securities Acquired
|
(57)
|
|
(30)
|
Short Term
Securities Redeemed
|
58
|
|
46
|
Notes
Receivable
|
(7)
|
|
(35)
|
Other
Transactions
|
14
|
|
(8)
|
Total Cash Flows from
Investing Activities
|
(2,233)
|
|
(390)
|
Cash Flows from
Financing Activities:
|
|
|
|
Short Term
Debt and Overdrafts Incurred
|
522
|
|
928
|
Short Term
Debt and Overdrafts Paid
|
(446)
|
|
(521)
|
Long Term Debt
Incurred
|
4,855
|
|
4,886
|
Long Term Debt
Paid
|
(3,042)
|
|
(3,879)
|
Common Stock
Issued
|
9
|
|
--
|
Common Stock
Dividends Paid
|
--
|
|
(37)
|
Transactions
with Minority Interests in Subsidiaries
|
(5)
|
|
--
|
Debt Related
Costs and Other Transactions
|
(73)
|
|
(53)
|
Total Cash Flows from
Financing Activities
|
1,820
|
|
1,324
|
Effect of Exchange
Rate Changes on Cash, Cash Equivalents and Restricted
Cash
|
(6)
|
|
(50)
|
Net Change in
Cash, Cash Equivalents and Restricted Cash
|
(490)
|
|
64
|
Cash, Cash
Equivalents and Restricted Cash at Beginning of the
Period
|
1,624
|
|
974
|
Cash, Cash
Equivalents and Restricted Cash at End of the Period
|
$
1,134
|
|
$
1,038
|
Non-GAAP Financial Measures (unaudited)
This earnings release presents Total Segment Operating Income
(Loss) and Margin, Merger-Adjusted Segment Operating Income (Loss)
and Margin, Adjusted Net Income (Loss) and Adjusted Diluted
Earnings (Loss) 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 (Loss) is the sum of the
individual strategic business units' (SBUs') Segment Operating
Income (Loss) as determined in accordance with U.S. GAAP. Total
Segment Operating Margin is Total Segment Operating Income (Loss)
divided by Net Sales as determined in accordance with U.S. GAAP.
Management believes that Total Segment Operating Income (Loss) 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 (Loss) is Goodyear Net Income (Loss) and to Total
Segment Operating Margin is Return on Sales (which is calculated by
dividing Goodyear Net Income (Loss) by Net Sales).
Merger-Adjusted Segment Operating Income (Loss) is Total Segment
Operating Income (Loss) less the impact of the amortization of
inventory step-up, other transaction-related items and the
incremental amortization of intangible assets related to the Cooper
Tire merger. Merger-Adjusted Segment Operating Margin is
Merger-Adjusted Segment Operating Income (Loss) divided by Net
Sales as determined in accordance with U.S. GAAP. Management
believes that Merger-Adjusted Segment Operating Income (Loss) 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, incremental amortization of
Cooper Tire intangible assets, and other transaction-related
items.
Adjusted Net Income (Loss) is Goodyear Net Income (Loss) as
determined in accordance with U.S. GAAP adjusted for certain
significant items. Adjusted Diluted Earnings (Loss) Per Share is
the company's Adjusted Net Income (Loss) divided by Weighted
Average Shares Outstanding-Diluted as determined in accordance with
U.S. GAAP. Management believes that Adjusted Net Income (Loss) and
Adjusted Diluted Earnings (Loss) 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 (Loss) and Margin, Merger-Adjusted Segment
Operating Income (Loss) and Margin, Adjusted Net Income (Loss) and
Adjusted Diluted Earnings (Loss) Per Share to the most directly
comparable U.S. GAAP financial measures.
Merger-Adjusted
Segment Operating Income (Loss) and Margin, Segment Operating
Income (Loss) and Margin
|
|
Reconciliation
Table
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
June 30,
|
|
June 30,
|
(In
millions)
|
2021
|
2020
|
2019
|
|
2021
|
2020
|
2019
|
Merger-Adjusted
Segment Operating Income (Loss)
|
$
349
|
$
(431)
|
$
219
|
|
$
575
|
$
(478)
|
$
409
|
Amortization
of Cooper Tire Inventory Step-up
|
(40)
|
--
|
--
|
|
(40)
|
--
|
--
|
Other
Transaction-related Items
|
(6)
|
--
|
--
|
|
(6)
|
--
|
--
|
Incremental
Amortization of Cooper Tire Intangible Assets
|
(4)
|
--
|
--
|
|
(4)
|
--
|
--
|
Total Segment
Operating Income (Loss)
|
$
299
|
$
(431)
|
$
219
|
|
$
525
|
$
(478)
|
$
409
|
Goodwill and
Other Asset Impairments
|
--
|
(148)
|
--
|
|
--
|
(330)
|
--
|
Rationalizations
|
(18)
|
(99)
|
(4)
|
|
(68)
|
(108)
|
(107)
|
Interest
Expense
|
(97)
|
(85)
|
(88)
|
|
(176)
|
(158)
|
(173)
|
Other Income
(Expense)
|
(30)
|
(34)
|
(17)
|
|
(64)
|
(61)
|
(39)
|
Asset
Write-offs and Accelerated Depreciation
|
--
|
(86)
|
(1)
|
|
--
|
(90)
|
(1)
|
Corporate
Incentive Compensation Plans
|
(24)
|
(7)
|
(14)
|
|
(33)
|
(10)
|
(15)
|
Retained
Expenses of Divested Operations
|
(4)
|
(1)
|
(3)
|
|
(7)
|
(3)
|
(6)
|
Other
|
(28)
|
2
|
(10)
|
|
(46)
|
(19)
|
(24)
|
Income (Loss)
before Income Taxes
|
$
98
|
$
(889)
|
$
82
|
|
$
131
|
$
(1,257)
|
$
44
|
United States and
Foreign Taxes
|
27
|
(186)
|
26
|
|
42
|
63
|
32
|
Less: Minority
Shareholders' Net Income (Loss)
|
4
|
(7)
|
2
|
|
10
|
(5)
|
19
|
Goodyear Net
Income (Loss)
|
$
67
|
$
(696)
|
$
54
|
|
$
79
|
$
(1,315)
|
$
(7)
|
|
|
|
|
|
|
|
|
Net Sales
|
$3,979
|
$2,144
|
$3,632
|
|
$7,490
|
$5,200
|
$7,230
|
Return on Net
Sales
|
1.7%
|
(32.5)%
|
1.5%
|
|
1.1%
|
(25.3)%
|
(0.1)%
|
Total Segment
Operating Margin
|
7.5%
|
(20.1)%
|
6.0%
|
|
7.0%
|
(9.2)%
|
5.7%
|
Merger-Adjusted
Segment Operating Margin
|
8.8%
|
(20.1)%
|
6.0%
|
|
7.7%
|
(9.2)%
|
5.7%
|
Adjusted Net
Income (Loss) and Adjusted Diluted Earnings (Loss) per
Share
|
|
Reconciliation
Tables
|
|
Second 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
|
$
98
|
$
27
|
$
4
|
$
67
|
247
|
$
0.27
|
Significant
Items:
|
|
|
|
|
|
|
Acquisition Related Transaction
and Other
Costs
|
48
|
9
|
|
39
|
|
0.16
|
Amortization of Acquisition Related
Inventory
Fair Value Adjustment
|
38
|
9
|
|
29
|
|
0.12
|
Americas Winter Storm Impact
|
27
|
5
|
|
22
|
|
0.09
|
Pension Settlement Charges
|
19
|
5
|
|
14
|
|
0.06
|
Rationalizations
|
18
|
2
|
|
16
|
|
0.06
|
Colombia National Strike
|
4
|
|
|
4
|
|
0.02
|
Debt Redemption Charges
|
5
|
1
|
|
4
|
|
0.01
|
Americas Accrued Freight Adjustment
|
(8)
|
(2)
|
|
(6)
|
|
(0.02)
|
Indirect Tax Settlements and
Discrete Tax
Items
|
(117)
|
(7)
|
|
(110)
|
|
(0.45)
|
|
34
|
22
|
--
|
12
|
|
0.05
|
As
Adjusted
|
$
132
|
$
49
|
$
4
|
$
79
|
247
|
$
0.32
|
Second Quarter
2020
|
Income
(Loss)
Before
Income
Taxes
|
Taxes
|
Minority
Interest
|
Goodyear
Net Income
(Loss)
|
Weighted
Average Shares
Outstanding-
Diluted
|
Diluted EPS
|
(In millions,
except EPS)
|
|
|
|
|
|
|
As
Reported
|
$
(889)
|
$
(186)
|
$
(7)
|
$
(696)
|
234
|
$
(2.97)
|
Significant
Items:
|
|
|
|
|
|
|
Rationalizations, Asset Write-offs, and
Accelerated Depreciation Charges
|
185
|
44
|
|
141
|
|
0.60
|
Impairment of TireHub Investment
|
148
|
35
|
|
113
|
|
0.48
|
Asset
Sales
|
3
|
|
|
3
|
|
0.01
|
Discrete
Tax Items
|
|
(2)
|
|
2
|
|
0.01
|
|
336
|
77
|
--
|
259
|
|
1.10
|
As
Adjusted
|
$
(553)
|
$
(109)
|
$
(7)
|
$
(437)
|
234
|
$
(1.87)
|
First Six Months
2021
|
Income
Before
Income
Taxes
|
Taxes
|
Minority
Interest
|
Goodyear
Net
Income
|
Weighted
Average Shares
Outstanding
-Diluted
|
Diluted EPS
|
(In millions,
except EPS)
|
|
|
|
|
|
|
As
Reported
|
$
131
|
$
42
|
$
10
|
$
79
|
242
|
$
0.32
|
Significant
Items:
|
|
|
|
|
|
|
Rationalizations
|
68
|
7
|
|
61
|
|
0.25
|
Acquisition Related Transaction
and Other
Costs
|
55
|
10
|
|
45
|
|
0.19
|
Americas Winter Storm Impact
|
50
|
10
|
|
40
|
|
0.16
|
Amortization of Acquisition Related
Inventory
Fair Value Adjustment
|
38
|
9
|
|
29
|
|
0.12
|
Inventory, Accrued Freight
& Other
Adjustments
|
13
|
|
|
13
|
|
0.06
|
Pension Settlement Charges
|
19
|
5
|
|
14
|
|
0.06
|
Colombia National Strike
|
4
|
|
|
4
|
|
0.02
|
Debt Redemption Charges
|
5
|
1
|
|
4
|
|
0.01
|
Indirect Tax Settlements and
Discrete Tax
Items
|
(114)
|
(9)
|
|
(105)
|
|
(0.43)
|
|
138
|
33
|
--
|
105
|
|
0.44
|
As
Adjusted
|
$
269
|
$
75
|
$
10
|
$
184
|
242
|
$
0.76
|
First Six Months
2020
|
Income
(Loss)
Before
Income
Taxes
|
Taxes
|
Minority
Interest
|
Goodyear
Net Income
(Loss)
|
Weighted
Average Shares
Outstanding-
Diluted
|
Diluted
EPS
|
(In millions,
except EPS)
|
|
|
|
|
|
|
As
Reported
|
$
(1,257)
|
$
63
|
$
(5)
|
$
(1,315)
|
234
|
$
(5.62)
|
Significant
Items:
|
|
|
|
|
|
|
Discrete
Tax Items
|
|
(293)
|
|
293
|
|
1.25
|
Goodwill
and Other Asset Impairments
|
330
|
39
|
|
291
|
|
1.24
|
Rationalizations, Asset Write-offs, and
Accelerated
Depreciation Charges
|
198
|
46
|
|
152
|
|
0.65
|
Asset
Sales
|
2
|
|
|
2
|
|
0.01
|
Pension
Settlement Charges
|
3
|
1
|
|
2
|
|
0.01
|
|
533
|
(207)
|
--
|
740
|
|
3.16
|
As
Adjusted
|
$
(724)
|
$
(144)
|
$
(5)
|
$
(575)
|
234
|
$
(2.46)
|
View original
content:https://www.prnewswire.com/news-releases/goodyear-reports-second-quarter-first-half-2021-results-301349946.html
SOURCE The Goodyear Tire & Rubber Company