At this time, I would like to welcome everyone to the Goodyear fourth quarter and full year 2008 earnings release conference call. (Operator Instructions) At this time I will turn the conference over to Patrick Stobb.

Good morning everyone and welcome to Goodyear’s fourth quarter and full year conference call. Joining me on the call are Bob Keegan, Chairman and CEO; Darren Wells, Executive Vice President and CFO; and Damon J. Audia, Senior Vice President of Finance & Treasurer. Before we get started, there are a few items I’d like to cover. To begin, the webcast of this morning’s discussion and the supporting slide presentation are now available on our website at investor.goodyear.com. A replay of this call will be available later this afternoon. Replay instructions can be found in our earnings release issued this morning. The last item, we plan to file our 10-K later today. If I could now direct your attention to the Safe Harbor Statement on Slide 2 of the presentation. Our discussion this morning may contain forward-looking statements based on our current expectations and assumptions that are subject to risks and uncertainties that can cause actual results to differ materially. These risks and uncertainties are outlined in Goodyear’s filings with the SEC and in the news release we issued this morning. The company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise. Turning now to the agenda, on today’s call Bob will provide full year highlights followed by a strategy update. Darren will follow with a review of the financial results and discuss 2009 outlook before opening the call to your questions. That finishes my remarks. I will now turn the discussion over to Bob Keegan.

Good morning and thank you for joining us on the call this morning. Needless to say, we are in the midst of very interesting times. Today’s economic uncertainty, the new economic realities of the world, and the implications for our industry and for Goodyear are extremely challenging. We know that. Macro improvements may not come quickly and we understand that. These realities have certainly impacted overall consumer spending, tire industry demand and are reflected in our results, and will be reflected in the significant actions we are announcing today. The global economic slowdown has increased both in severity and geographic scope throughout the year. By year end it had a significant impact on volume in each of our major business units. The fourth quarter decline was the most dramatic, especially in our overseas operations. We want to ensure that the many positive actions that we took and the results that we achieved in 2008 are not overshadowed by the global economic decline. So let me briefly highlight some of the key achievements for the year. Global revenue for tire increased 8%, that’s excluding foreign exchange. Price mix offset full year raw material increases of approximately 13%, thanks to some strong early pricing actions and solid mix improvements. We reported record revenue in three of our regions, EMEA, Latin America, and Asia Pacific. Our share of market for Goodyear branded products continues to increase in all major markets. Our Latin America and Asia Pacific businesses reported record segment operating income. We made significant progress against our four-point cost savings plan, generating more than $700.0 million in savings in 2008 alone. That’s $700.0 million in 2008 alone. We completed major restructuring actions during the year, including shutdown of our Tyler, Texas, mix facility and our Summerton, Australia, tire plant and we are…

Before I get into the details of the quarter’s results, I will make a few summary comments and then address operating results, the balance sheet and our outlook for 2009. As you review the fourth quarter results think about two factors we have discussed with you over the last several months that negatively impacted Q4 and will impact Q1 2009 but should improve beginning in Q2. First, the double hit to earnings from production cuts, which reflect not only lower sales but also address our aggressive management of inventory levels. In the fourth quarter we reduced production by 17.0 million units versus a drop in sales of about 10.0 million units. Second, the peak of the raw materials cycle. As we have indicated previously, our raw materials cost increases, as they hit the P&L, spiked in Q4 and will peak in Q1 2009. The fourth quarter reflects an increase of about $350.0 million, or 28%, versus a year ago. On the positive side, pricing mix continued to provide significant benefits, reflecting performance of our new products and strong market programs. Liquidity remains solid but cash flow for the year was weaker than targeted, mainly due to the severe decline in fourth quarter industry volumes. While our business will remain challenging until volumes recover, as you heard Bob say, we continue to take aggressive actions to deal with the difficult market conditions, to lower our cost structure, protect cash flow, and deliver value to our customers. Given the impact of the quarter, I would like to spend some time on global industry volumes. In the fourth quarter a weak demand environment got even weaker and spread beyond North America and Europe to include Latin America and Asia. All of our businesses in North America and Europe saw double-digit declines for the…

(Operator Instructions) Your first question comes from Rod Lache - Deutsche Bank Securities.

On the $500.0 million inventory reduction that you spoke about, are you expecting that to be implemented in the first half or is that over the course of the year and how much of that is related to your expectations for commodity declines as opposed to production cuts?

That $500.0 million is over a year and it’s the result of what we’ve been talking about for the past two years, significant improvement in our supply chain capabilities, frankly, in the company. And most of that is not due to commodities, although that’s a piece of it as commodity prices are expected to come down. Most of that is driven by significant unit reductions, particularly in North American tire and [inaudible].

The only thing I would say is what you will see in the balance sheet is that the inventory for raw materials was up over $100.0 million during 2008 so that probably would help to mention the fact that it will come down but it won’t be the largest piece of the pie.

And do you have any thoughts on what the associated overhead absorption impact would be of that and how that compares to the impact that you had in 2008?

Just to mention that, on a tire-for-tire basis, it will look, I think, very similar to what we experienced in the results of the actions we took in 2008.

The only thing I would say is that as we take personnel out of our manufacturing organization, there is an element of the unabsorbed fixed cost that does relate to people and so as we take those cost reduction actions, and certainly as we start to take actions against the 15.0 million to 25.0 million units of capacity reductions, that will start to lead us down a path of reducing that unabsorbed overhead.

And on cash flow, can you talk about with the capex reduction, this inventory reduction, is it your expectation that you can manage the business for positive free cash this year and you mentioned also the debt maturities. What is the status of the Sumitomo put? Is that exercisable later this year?

Let’s start with the Sumitomo put because you can take that as a separate consideration here. You probably recall that in 2003 we extended the initial agreement, partnership agreement, that we had with Sumitomo and we extended for five years, essentially, at that point, to September 2009. And at this point in time, our feeling is that the partnership is working well, it’s working well from a technology standpoint, a purchasing standpoint, and we would anticipate that there would not be a put in 2009. Because I think both parties are getting significant benefits, driving significant benefits from the relationship. But remember, we did extend this in 2003 for five years.

Just to the point, on running the business from cash and what expectations we might have for cash flow in 2009, the environment clearly makes it more difficult to generate cash. There is no question about that. I think what you see from us is actions in inventory, reductions in capex, looking at opportunities for asset sales, so that we put ourselves in the best position that we can, in terms of cash flow, but in the end the environment is going to have an influence and partly it will be the operating environment throughout the year and I think partly there will be questions around when the recovery comes, does that bring with it some working capital increases. And those are all things that we are going to look to minimize the amount of cash that we use on those factors, we’re going to take the right actions to manage for cash. But in the end the environment is going to be an influencing factor.

Inflation obviously had been swamping cost savings for most of this past year and it looks like you’re starting to catch up now. Any thoughts on inflation versus savings for 2009?

I think your comment to that is take raw materials out of the equation and just look at what we’ve called general inflation which hit us to the tune, I think in 2008, of about $690.0 million. And even a somewhat significant rate in the fourth quarter. We are expecting clearly that general inflation will, given this economic situation, will be mitigated and decline a bit and so we will be able to carry more of the gross savings that we talk about through 2009 and into 2010.

Your next question comes from John Murphy - BAS-ML.

Just wanted to touch on the capacity reduction. It’s a pretty big incremental step here, greater than 10% of your unit shipment. I was just wondering if you could parse out what regions it’s in, if it’s mostly focused in North America, really where it is, and if it really represents any change in direction. Are you getting out of any further segments at the lower end? Is there anything going on there strategically?

We won’t make any specific comments here about regions. Obviously we have negotiations around the world that take place this year and next year so we have got to work our way through those, so I would simply say, I won’t specify regions, but you can assume that if you look back at what we did in taking the 25.0 million out these past few years—and by the way, we took Huntsville in the U.S. out before that, which was an incremental 7.0 million—so we kind of look at it internally as we’ve taken out 32.0 million in the past 6 years. 32.0 million units of capacity. We have generally addressed high-cost capacity. Remember our manufacturing cost goals are centered on take out high-cost capacity, replace that with low-cost capacity, as I mentioned in my remarks. And by the way, also built capacity to be able to deliver high-value-added products. So I think you can assume that’s the case. But we are working on 15.0 million to 25.0 million over this time frame and I think we’ve got a track record over these past few years that says, a) we know how to do it, we’ve done it in the right areas, and we’ve done it for the right strategic reasons.

And on inventory, how do you see inventory in the channel? Is there a lot of excess that you think needs to be worked on in the channel in addition to what you’re trying to cut on your balance sheet? And as you and a lot of other industry players are working down inventory, do you expect any incremental pressure potentially on price as we work through this process?

In terms of dealer inventories, it’s interesting that in both North America and in Europe, and this is information as of yesterday, we think dealer inventories are in pretty good shape. This is for the replacement consumer business. I cannot say the same in either North America or in Europe for commercial truck tires. Their inventories are high because of the magnitude of decline that we’ve seen in those areas over the past quarter to two quarters in Europe and a longer period of time in the U.S. We’ve seen some pretty significant declines. You can see those in the sales figures, from us and from the rest of the industry. So dealers have been working the consumer product down and doing so pretty effectively, that’s our view. And remember, we’ve got pretty good insight because of our scale, into that. But in the commercial truck area, dealers still have inventories to work off, which is going to affect all the manufacturers, including us, as we go into 2009. In terms of pressure on price, which was your second question, I think we’re not going to speculate here. We will simply say that we have a situation today of dropping demand. We’ve got some inventory issues in truck. And those would point to concern. On the other hand, we’re going to keep moving with the strategy that we have used over these past few years and our new products will substantiate that. Over the past five years I think we have achieved over $900.0 million, or $3.5 billion of positive price mix, with about $940.0 million in 2008. Where one could have argued the economies have started to soften. So we will keep on that track and we now have the competitive position of the products and the dealer relationships to make that successful. Even with some downward pressure and concerns to the overall economic situation.

On capex, what we’re looking at is really a near-term thrifting as opposed to something, a structural efficiency that you’ve found. Is that a correct characterization as we step through 2010 and 2011?

I think the way we look at that is frankly we say, “The market has changed. A fair amount of our capex was pointed towards increases in annual unit sales and high value added.” And we may still see some increases over time, in the short term in some particular market segments. But overall, we don’t need to spend the capex today. We can defer it and we’re not giving up very much market opportunity because that opportunity isn’t there today. It will be there in subsequent years. So it’s not a huge kind of capital allocation efficiency that we found in the capex area.

Your next question comes from Himanshu Patel - J.P. Morgan.

On Slide 18, I’m just looking at the general cost inflation figure for the quarter at $192.0 million. Can you speak to when that figure should turn positive? Could it be as early as Q1 on a year-over-year basis or should we just think of Q1 as being negative but maybe to a less severe extent than what we saw in Q4?

The inflation that we see in the fourth quarter results, as you might imagine, it does represent some lag from the time when the production costs were incurred. So you can think of that as being more of a reflection of where inflation rates were in the second quarter or third quarter. And that will work its way through the system. I think for some areas of cost, and particularly in directs and energy, we should see lower inflation rates in the first quarter results. But there will still be some inflation pressure flowing through. And that, as you might expect, we would expect that that would ease up as we go through the year.

I’m just looking at price mix gains in the fourth quarter for North America it was about $79.0 million versus about $100.0 million year-over-year in Q3 and Q2. I know this number is a little bit volatile so I don’t want to read too much into it, but can you give a little color on what’s going on there? Was there a comp issue? Was it more mix-driven? And I am specifically referring to the moderation in the gains in price mix, and if it’s not mix, does that imply it was pricing?

I think there are going to be multiple factors involved there but certainly a piece of it is the fact that volumes are so much lower so less opportunity to gain on price mix, we’re selling that many fewer tires. What we saw was price increases continuing to flow through. You know, our last announced price increase was September 1 in North America so we got the benefit of that, the benefit of the two other price increases we announced during the year. So we continued to see that benefit but just on a lower volume base.

I would also mention here, just to make sure we’re as open with all of you as we always are, because I know you’re thinking about what are consumers doing, are they trading down from premium product a bit. What we’re seeing is a fair amount of strength in the mid-tier in North America. The mid-tier still encompasses a significant amount of high-value-added, or HVA product, and our new products, including the Assuarance Fuel Max, are directed right at that mid-tier. Frankly, the mid-tier is where the high volumes are. And we are seeing strength in that area and obviously we are expecting, over time, that there’s going to be some pressure on the premium product. Frankly, it’s just driven by the overall economy but premium products are holding up pretty well. And the mid-tier here is growing and we feel we’ve got the product lines now. I wouldn’t have said that a year or two ago. To go after that, but those are HVA products, as I mentioned.

If the current level of end demand were just to be straight-lined, can the inventory correction that needs to be done pretty much be done by the first half or even the first quarter? I’m trying to get more granularity behind the earlier comment that the inventory reduction figure is sort of for a full-year number.

I would say the way we would talk about it today is to say that that’s over the full year. Don’t expect that the vast majority of that is going to be out in the first half. As Darren mentioned in his outlook, we are going to take further production cuts in the first quarter but those production cuts will contribute to the 500.0 million, they won’t realize the 500.0 million.

On Slide 7 you have some useful data there and just long-term U.S. consumer replacement demand. If you look at the late 70s it looks like peak-to-trough was negative 20%. Where are you thinking this cycle plays out? Is your starting assumption that maybe we are going to see something similar to that?

I would say this, that as I mentioned in my comments, frankly, flexibility right now is an imperative. And in terms of our view of the future, we are looking very hard at the next quarter, the next half, and the next year, and what we see is a weak economy over that time frame. My point was simply to say that people need tires, people are going to drive, people want mobility, people are going to come back at some point, but I’m not going to speculate as to the point in time. But we know from the history that when there is a bounce-back it’s likely to be a significant bounce-back because there is pent-up demand being created. Behaviors we’re seeing include the fall of buying new tires, in some segments. So in and of itself, that creates pent-up demand. But it’s a challenging economy and we’re just going to play this with very flexible planning on our part. I mentioned contingency plans and I’m very grateful that we started those just over a year ago for 2008.

Your final question comes from Patrick Archambault - Goldman Sachs.

On the revenue per unit growth rates in both Asia and Latin America, obviously those were still up pretty strongly for the quarter. Can you give us a little color on what the trends are there? Is that pricing, is that kind of a trading up trend in terms of mix that maybe has some legs to it versus the mixed trends that seem to be moderating in both Europe and North America?

You clearly saw a strong impact here on our price and mix in the quarter and I think there’s evidence in the trends there of strong improvement in both areas. What I would point out is from a pricing perspective, this revenue per tire is measured excluding foreign exchange, so this is a local currency move. So to the extent that some of these markets have experienced devaluation, there is an element of pricing to offset devaluation that will boost the revenue per tire, so you do see an element of that. But you also see a good product position, a lot of new product launches, and continued improvements in mix. So all of those are factors but when you see the fact that the revenue per tire was up in the fourth quarter more than it’s been in prior quarters, I think there was an element of exchange in that.

Maybe if we could dig into the pricing issue a little more. Can you give us a sense of how pricing traditionally has trended with capacity utilization in the industry and I know you are doing your best to take out excess capacity but I assume that for the entire market it’s down quite a bit. What levels are associated with a deterioration of price discipline historically and if things are different this time around it would be interesting to hear why pricing might hold up as well.

I would say that your comment is right relative to the history. We do a lot of data collection and data analysis and I wish I could say that we could just extrapolate from that data to conclusions about 2009 and 2010 with regard to price. We can’t. So the history is some guide but not a perfect guide because think of the products, the innovation that we and others have brought to the market. The products are totally different. I think the other thing that we should look at are just the fundamentals. A fair amount of capacity has come out of North America these past few years and we’ve highlighted that on other calls. That’s a fact of the way the industry has dealt with a demand and capacity here in the U.S. and we have contributed to that decline in capacity. What we have seen recently, and this is public information of course, we have taken some capacity out but around the world and even in North America, so have other manufacturers. So I think as I look at it I see us all trying to deal with the demand stress that the markets are under today. So I think those are key factors. The third factor is that innovation has played a role here and people pay premiums for innovation. And that continues to be as core to our strategy as anything we ever talk about. So I think those are the points I would ask you to think about, but it would be about as specific as I would get on the subject. That’s how we think about it.

Your other income was significantly negative. I believe it was a loss of $83.0 million for the quarter. And while your segment income came in close to a lot of people’s expectations I think one of the divergences in EPS was from this other income line. Can you tell us what that was? I assume there was some non-recurring stuff in it. Can you just break that out a little more for us?

The two primary drivers in that account are the foreign currency exchange and then remember at the course through last year we had much higher interest income in 2007 versus 2008 as we put money in to pay off the high cost debt and also the funding of the VEBA in the middle of the year.

So interest expense is not a net number then, so interest income actually rolls through the other bucket.

Correct.

There are no further questions in the queue.

Thanks for joining us today. That concludes today’s call. As always, if you have any follow up questions, please don’t hesitate to give me a call.

This concludes today’s conference call.