NEW YORK (Sept. 20, 2013) — Goodyear is planning to buy back up to $100 million worth of its common stock and will reinstate its quarterly dividend after an 11-year interruption, company executives disclosed today during an investor conference in New York.
The share repurchases are intended to offset new shares issued under equity compensation programs, Goodyear said,
"Driven forward by the disciplined execution of our strategy and building on the growing momentum in our business, the plans we are announcing today put us on a path to achieve consistent earnings growth and value creation," Chairman and CEO Richard Kramer said.
"Our capital allocation plan demonstrates Goodyear's commitment to creating value for shareholders while maintaining financial flexibility to execute our strategic plan, continuing to strengthen our balance sheet and investing for future growth," Mr. Kramer said.
Goodyear's directors have declared a quarterly dividend of 5 cents per share of common stock, payable Dec. 1 to shareholders of record Nov. 1. The payout represents an annual rate of 20 cents per share, Goodyear said. Future dividends will be subject to board approval.
Goodyear last paid a common stock dividend in December 2002.
Goodyear also reconfirmed its outlook for 2013 segment operating income of about $1.5 billion and is targeting annual segment operating income growth of 10 to 15 percent through 2016 as well as targeting positive cash flow, excluding pension pre-funding, through 2016.