Goodyear Reports First Quarter Financial Results; Makes Significant Progress on Actions...

Goodyear Reports First Quarter Financial Results; Makes Significant Progress
on Actions to Address Market, Economic Challenges

AKRON, Ohio, April 29 /PRNewswire-FirstCall/ --

-- Continued weak global industry demand, peak raw material costs impact
results
-- First quarter sales of $3.5 billion on 20% lower tire volumes
-- Revenue per tire up 3.4% as Goodyear brand continues market share
gains

-- Goodyear net loss is $333 million ($1.38 per share)

First Quarter 2009 Actions
-- 23 new products launched
-- $145 million in cost savings achieved
-- Global work force reduced by 3,800

-- Inventories reduced by more than $300 million from year-end

The Goodyear Tire & Rubber Company (NYSE: GT) today reported first quarter
2009 financial results and updated its progress on actions taken to address
market and economic challenges around the world.

(Logo: http://www.newscom.com/cgi-bin/prnh/20050204/GTLOGO)

"Our markets presented us with the challenges we expected in the first
quarter, and in some cases more," said Robert J. Keegan, chairman and chief
executive officer. "While we aren't satisfied with our results, they generally
reflect the difficult market conditions. Our ongoing innovation played a
significant role in driving our first quarter top line as we continued to take
the right cost and cash actions to weather the economic downturn and position
our company to rapidly take advantage of opportunities as the markets
recover."

2009 Actions Update

Top Line: Goodyear's 23 new product launches in the first quarter, of the more
than 50 planned globally during 2009, are finding early success in the
marketplace. In North America, Goodyear-brand market share increased during
the first quarter in the consumer and commercial replacement markets.

"Based on the consumers' purchases and the resultant market share gains we
have enjoyed with the Goodyear brand, it is evident that the markets are
rewarding innovation - and innovation is the key cornerstone of our overall
strategy," Keegan said.

Cost Actions: Goodyear made additional progress during the first quarter on
its Four-Point Cost Savings Plan to achieve $2.5 billion in gross cost savings
by the end of 2009. The company achieved $145 million in new savings during
the quarter.

During the quarter, the company reduced its global work force by 3,800
associates, which will provide further cost savings in subsequent 2009
quarters.

Cash Initiatives: Goodyear made significant progress toward its goal of
reducing inventory by more than $500 million during 2009. The company's total
inventory is more than $300 million below the year-end 2008 level.

"Our actions are fully aligned with the strategy that has served us well over
the past several years, a strategy guided by our intense focus on the Seven
Strategic Drivers of our business," Keegan said. "Our future direction is not
a new one. We firmly believe we are taking a proven strategic path to the
next level of business performance."

First Quarter Results

The company's first quarter 2009 sales were $3.5 billion, down from record
sales of $4.9 billion in the 2008 quarter. Goodyear's first quarter 2009 net
loss was $333 million ($1.38 per share), compared with Goodyear net income of
$147 million (60 cents per share) in the 2008 quarter. All per share amounts
are diluted.

The quarter's sales reflect the $766 million impact of a 20 percent decline in
tire unit volume due to significantly lower global industry demand. In
addition, unfavorable currency translation reduced sales by $484 million.
Sales benefited from price/mix improvements that drove revenue per tire,
excluding the impact of foreign currency translation, up 3.4 percent over the
2008 quarter despite a significant drop in commercial truck tire unit volume.

Goodyear's segment operating loss of $176 million in the quarter reflects weak
industry demand across all of its businesses resulting in a negative volume
impact of $138 million, under-absorbed fixed costs of approximately $200
million and declines in its other tire related businesses. Higher raw
material costs, which increased 31 percent, or approximately $332 million,
more than offset improved price/mix of $161 million.

Selling, administrative and general expenses improved by $102 million compared
to the 2008 quarter benefiting primarily from foreign currency translation and
cost efficiencies.

The 2009 quarter was also impacted by after-tax charges of $57 million (23
cents per share) due to rationalizations, asset write-offs and accelerated
depreciation, and a gain of $9 million (4 cents per share) after minority
interest primarily due to tax law changes.

See the table at the end of this release for a list of significant items
impacting the 2009 and 2008 quarters.

Business Segment Results

The company had a segment operating loss of $176 million in the first quarter
of 2009, compared to segment operating income of $367 million in the year-ago
quarter.

See the note at the end of this release for further explanation and a segment
operating income reconciliation table.

North American Tire First Quarter
(in millions) 2009 2008

Tire Units 13.9 17.8
Sales $1,544 $1,997
Segment Operating (Loss) Income $(189) $32
Segment Operating Margin (12.2)% 1.6%

North American Tire's first quarter 2009 sales declined from last year,
reflecting significantly reduced industry demand. Original equipment unit
volume declined 49 percent, resulting from lower vehicle production.
Replacement tire shipments were down 10 percent.

First quarter sales benefited from improved price/mix as well as market share
gains for Goodyear-brand tires in the consumer and commercial replacement
markets.

The first quarter 2009 segment operating loss was significantly impacted by
lower sales and production levels, which drove a negative volume impact of $37
million, under-absorbed fixed costs of $120 million and declines in its other
tire related businesses. Increased raw material costs of $137 million more
than offset price/mix improvements of $60 million.

The 2009 quarter benefited from savings resulting from the implementation of
the Voluntary Employees' Beneficiary Association (VEBA) and other actions to
reduce costs.

Europe, Middle East First Quarter
and Africa Tire
(in millions) 2009 2008

Tire Units 16.2 20.0
Sales $1,268 $1,950
Segment Operating (Loss) Income $(50) $172
Segment Operating Margin (3.9)% 8.8%

Europe, Middle East and Africa Tire's first quarter sales declined from last
year primarily due to lower tire unit volume, reflecting significantly reduced
industry demand and foreign currency translation. Original equipment unit
volume declined 47 percent, resulting from lower vehicle production in Europe.
Replacement tire shipments were down 9 percent.

The first quarter 2009 segment operating loss was significantly impacted by
lower sales and production levels, which drove a negative volume impact of $67
million and under-absorbed fixed costs of $55 million. Increased raw material
costs of $111 million more than offset price/mix improvements of $23 million.
Price/mix was lower than prior periods due to a significant drop in commercial
truck tire volume. Losses were reduced by favorable currency translation and
actions to reduce selling, administrative and general expenses.

Latin American Tire First Quarter
(in millions) 2009 2008

Tire Units 4.2 5.2
Sales $383 $530
Segment Operating Income $48 $114
Segment Operating Margin 12.5% 21.5%

Latin American Tire's first quarter sales declined from last year primarily
due to lower tire unit volume, reflecting reduced industry demand and
unfavorable foreign currency translation. Original equipment unit volume
declined 16 percent, resulting from lower vehicle production. Replacement
tire shipments were down 20 percent.

Segment operating income reflected lower sales and production levels, which
drove a negative volume impact of $22 million and under-absorbed fixed costs
of approximately $15 million. Increased raw material costs of $63 million
more than offset price/mix improvements of $57 million.

The 2008 quarter included a $12 million gain from the settlement of an excise
tax case.

Asia Pacific Tire First Quarter
(in millions) 2009 2008
Tire Units 4.1 4.9
Sales $341 $465
Segment Operating Income $15 $49
Segment Operating Margin 4.4% 10.5%

Asia Pacific Tire's first quarter sales declined from last year due to
unfavorable foreign currency translation and lower tire unit volume,
reflecting reduced industry demand. Original equipment unit volume declined
17 percent, resulting from lower vehicle production. Replacement tire
shipments were down 17 percent.

Segment operating income reflected lower sales and production levels, which
drove a negative volume impact of $12 million and under-absorbed fixed costs
of $10 million. Price/mix improvements of $21 million offset increased raw
material costs of $21 million.

Conference Call

Goodyear will hold an investor conference call at 10 a.m. 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 Web site:
www.goodyear.com/investor.

Participating in the conference call will be Robert J. Keegan, chairman and
chief executive officer; Darren R. Wells, executive vice president and chief
financial officer, and Damon J. Audia, senior vice president, finance and
treasurer.

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 9:50 a.m. A taped replay will be available later by calling (706)
645-9291. The replay will also remain available on the Web site.

Goodyear is one of the world's largest tire companies. It employs
approximately 71,000 people and manufactures its products in more than 60
facilities in 25 countries around the world. For more information about
Goodyear, go to 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: deteriorating economic conditions or an inability to
access capital markets; our ability to realize anticipated savings and
operational benefits from our cost reduction initiatives or to implement
successfully other strategic initiatives; actions and initiatives taken by
both current and potential competitors; pension plan funding obligations;
increases in the prices paid for raw materials and energy; work stoppages,
financial difficulties or supply disruptions at our suppliers or customers; a
labor strike, work stoppage or other similar event; our failure to comply with
a material covenant in our debt obligations; the adequacy of our capital
expenditures; 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 Statement of Operations (unaudited)

(In millions, except per share amounts) Three Months Ended
March 31,
2009 2008
---- ----

NET SALES $3,536 $4,942

Cost of Goods Sold 3,219 3,961
Selling, Administrative and General Expense 533 635
Rationalizations 55 13
Interest Expense 64 89
Other (Income) and Expense 30 (6)
-- ---

(Loss) Income before Income Taxes (365) 250
United States and Foreign Taxes (17) 77
---- --

Net (Loss) Income (348) 173
Less: Minority Shareholders Net (Loss) Income (15) 26
---- --

Goodyear Net (Loss) Income $(333) $147
====== ====

Goodyear Net (Loss) Income - Per Share

Basic $(1.38) $0.61
======= =====

Weighted Average Shares Outstanding 241 240

Diluted $(1.38) $0.60
======= =====

Weighted Average Shares Outstanding 241 244

The Goodyear Tire & Rubber Company and Subsidiaries
Consolidated Balance Sheets (unaudited)

(In millions) March 31, December 31,
2009 2008
Assets:
Current Assets:
Cash and Cash Equivalents $1,896 $1,894
Accounts Receivable, less Allowance - $92
($93 in 2008) 2,489 2,547
Inventories:
Raw Materials 519 714
Work in Process 144 119
Finished Products 2,599 2,759
----- -----
3,262 3,592

Prepaid Expenses and Other Current Assets 321 307
--- ---
Total Current Assets 7,968 8,340
Goodwill 650 683
Intangible Assets 158 160
Deferred Income Tax 52 54
Other Assets 341 355
Property, Plant and Equipment 5,476 5,634
less Accumulated Depreciation - $8,222
($8,310 in 2008) ----- -----
Total Assets $14,645 $15,226
======= =======

Liabilities:
Current Liabilities:
Accounts Payable-Trade $1,989 $2,509
Compensation and Benefits 633 624
Other Current Liabilities 561 643
United States and Foreign Taxes 192 156
Notes Payable and Overdrafts 317 265
Long Term Debt and Capital Leases due
within one year 564 582
--- ---
Total Current Liabilities 4,256 4,779
Long Term Debt and Capital Leases 4,645 4,132
Compensation and Benefits 3,392 3,487
Deferred and Other Noncurrent Income Taxes 194 193
Other Long Term Liabilities 766 763
--- ---
Total Liabilities 13,253 13,354

Commitments and Contingent Liabilities
Minority Shareholders' Equity 576 619

Shareholders' Equity:
Goodyear Shareholders' Equity:
Preferred Stock, no par value:
Authorized, 50 shares, unissued - -
Common Stock, no par value:
Authorized, 450 shares, Outstanding shares
- 242 (241 in 2008) after deducting
9 treasury shares (10 in 2008) 242 241
Capital Surplus 2,767 2,764
Retained Earnings 1,130 1,463
Accumulated Other Comprehensive Loss (3,538) (3,446)
------- -------
Goodyear Shareholders' Equity 601 1,022
Minority Shareholders' Equity - Nonredeemable 215 231
--- ---
Total Shareholders' Equity 816 1,253
--- -----
Total Liabilities and Shareholders' Equity $14,645 $15,226
======= =======

Non-GAAP Financial Measures

This earnings release presents total segment operating income, which is an
important financial measure for the company but is not a financial measure
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.

Total Segment Operating Income Reconciliation Table (unaudited)

(in millions) Three Months
Ended March 31,
2009 2008
---- ----
Segment Operating (Loss) Income $(176) $367
Rationalizations (55) (13)
Interest expense (64) (89)
Other income and (expense) (30) 6
Asset write-offs and accelerated
depreciation (10) --
Corporate incentive compensation plans 6 (4)
Intercompany profit elimination (26) (9)
Other (10) (8)
---- ---
(Loss) Income before Income Taxes $(365) $250

First Quarter Significant Items (after tax and minority interest)

2009
-- Rationalizations, asset write-offs and accelerated depreciation, $57
million (23 cents per share)

-- Gain primarily due to tax law changes, $9 million (4 cents per share)

2008
-- Financing fees related to debt repayment, $43 million (18 cents per
share)
-- Rationalization charges, $13 million (5 cents per share)
-- Gain on asset sales, $33 million (13 cents per share)

-- Gain on excise tax settlement in Latin America, $8 million (3 cents
per
share)

SOURCE The Goodyear Tire & Rubber Company

MEDIA: Keith Price, +1-330-796-1863, ANALYSTS: Pat Stobb, +1-330-796-6704,
both of The Goodyear Tire & Rubber Company