The Goodyear Tire & Rubber Company (GT)

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The Goodyear Tire & Rubber (GT)

Q3 2013 Earnings Call

October 29, 2013 9:00 am ET

Executives

Thomas Kaczynski - Vice President of Investor Relations

Richard J. Kramer - Chairman of the Board, Chief Executive Officer and President

Darren R. Wells - Chief Financial Officer and Executive Vice President

Analysts

Itay Michaeli - Citigroup Inc, Research Division

Patrick Archambault - Goldman Sachs Group Inc., Research Division

Brett D. Hoselton - KeyBanc Capital Markets Inc., Research Division

Rod Lache - Deutsche Bank AG, Research Division

Presentation

Operator

Good morning, my name is Tony, and I'll be your conference operator today. At this time, I'd like to welcome everyone to The Goodyear Tire & Rubber Company Third Quarter Earnings Conference Call. [Operator Instructions]

I would now like to hand the program over to Tom Kaczynski, Goodyear's Vice President of Investor Relations.

Thomas Kaczynski

Thank you, Tony, and good morning, everyone. Welcome to Goodyear's third quarter 2013 conference call. Joining me today are Rich Kramer, Chairman and Chief Executive Officer; and Darren Wells, Executive Vice President and Chief Financial Officer. Also with us today is Laura Thompson, who, on December 1, will take over responsibility as Executive Vice President and Chief Financial Officer.

On today's call, Rich and Darren will discuss our results for the quarter, along with the outlook for the remainder of the year. There are also a few items I need to cover before we get started.

To begin, the supporting slide presentation for today's call can be found on our website at investor.goodyear.com, and a replay of this call will be available later today. Replay instructions were included in our earnings release issued early this morning.

If I could now draw your attention to the Safe Harbor statement on Slide 2. I'd like to remind you that today's presentation includes some forward-looking statements about Goodyear's future performance. Actual results could differ materially from those suggested by our comments today. The most significant factors that could affect future results are outlined in Goodyear's filings with the SEC and in an earnings release. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, or future events or otherwise.

The financial results presented are on a GAAP basis and in some cases, a non-GAAP basis. The non-GAAP financial measures discussed on the call are reconciled to U.S. GAAP equivalent as part of the appendix to the slide presentation.

And with that, I'll now turn the call over to Rich.

Richard J. Kramer

Great. Thanks, Tom, and good morning, everyone. We've had an extremely active few months following our second quarter call in July. Since then, our new 4-year labor agreement with the United Steelworkers was ratified, setting us on a path to address our unfunded pension obligation. We held an Investor Day in New York, where we announced the reinstatement of a dividend and set new 3-year earnings targets, and we delivered a strong third quarter on the heels of a record results or a record second quarter.

But before discussing our third quarter performance, I'd like to review some of the recently announced changes that will be taking effect over the next few weeks. As you know, Darren Wells will soon be leading our Europe Middle East and Africa business. So after something like more than 40 consecutive quarterly investor calls, first as Treasurer and then as CFO, Darren will be moving on to a new challenge. Replacing Darren as CFO will be Laura Thompson, who is joining us on the call today. Laura has been a key leader on the finance team for many years, and most recently, with the head of finance of our North American business unit, where she helped drive its dramatic turnaround. I'm looking forward to Laura and Darren working together on a seamless transition. Laura is certainly excited about helping implement the strategies and capital allocation plan we shared in our September Investor Meeting. You'll have an opportunity to get to know Laura better over the coming weeks.

I'm also looking forward to having Darren leading the team in EMEA. Darren has spent significant time working in the region this year, helping set priorities and developing the playbook for delivering the profit improvement plan for that business. While there's been some improvement in the EMEA results over the past few quarters, our goal remains to return to historical levels of profitability and deliver the consistent value creation we know this business is capable of. While economic headwinds in the region remain, I'm confident in Darren's leadership to drive our strategies there.

As Arthur de Bok transitions to his new role, I would like to recognize his many accomplishments during his 12 years in EMEA, including several years of record earnings and numerous industry-leading product innovations. We thank him for his leadership with associates, customers and in the business.

Turning now to our third quarter results. I'm pleased that following our successful Investor Day in September, the team has delivered another strong quarter. This morning, I'll provide some highlights of the quarter, and then come back and further discuss a few areas of the Investor Meeting that I believe deserve more attention. Then, I'll turn the call over to Darren to go through the financials in detail and review our outlook for the remainder of the year.

As you saw in our release this morning, our third quarter segment operating income of $431 million reflected another period of strong year-over-year improvement. In our Investor Meeting, we talked about our focus on consistent growth in segment operating income, and Q3 certainly delivered this with 24% growth in segment operating income overall and year-over-year growth in every business unit.

Read the rest of this transcript for free on seekingalpha.com