Hello, welcome to the Axalta Coating Systems fourth quarter and full year 2022 earnings conference call. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to Christopher Evans, Vice President, Investor Relations. Please go ahead, Chris. Thank you and good morning. This is Chris Evans, VP of Investor Relations. We appreciate your continued interest in Axalta and welcome you to our fourth quarter and full year 2022 financial results conference call. Joining me today are Rakesh Sachdev, Non-Executive Board Chair, Chris Villavarayan, CEO and President, and Sean Lannon, CFO. Yesterday afternoon, we released our quarterly and full year financial results and posted a slide presentation along with commentary to the investor relations section of our website at axalta.com, which we will be referencing during this call. Our prepared remarks, the slide presentation, and our discussion today may contain forward-looking statements reflecting the company's current view of future events and their potential effect on Axalta's operating and financial performance. These statements involve uncertainties and risks, and actual results may differ materially from those forward-looking statements. Please note that the company is under no obligation to provide updates to these forward-looking statements. Our remarks, the slide presentation, and our discussion may also contain various non-GAAP financial measures. In the appendix of the slide presentation, we've included reconciliations of these non-GAAP financial measures to the most directly comparable GAAP financial measures. For additional information regarding forward-looking statements and non-GAAP financial measures, please refer to our filings with the SEC. I will now turn the call over to Rakesh. Thank you, Chris, and welcome everyone to our fourth quarter and full year 2022 earnings call. Let me begin by expressing my appreciation to the team for delivering another strong quarter. The company showed substantial improvement in profitability, most notably in our Mobility Coatings segment, and achieved earnings near the top of our fourth quarter guidance range, setting us on a positive trajectory into 2023. Before the management team outlines the details of our quarterly results, I want to introduce and welcome Axalta's new CEO and President, Chris Villavarayan. Chris joined us on January 1st, where he recently wrapped up his tenure at Meritor, a global industry leader of commercial vehicle drivetrains and engineered systems. Chris spent the past 22 years supporting and ultimately playing a leading role in the remarkable transformation of the company, which delivered above-market growth, margin expansion, and substantial shareholder value creation. Chris is a seasoned global executive who has distinguished himself as a strong leader. His decades of commercial and operational experiences align well with the skill sets that the board believes are necessary to achieve Axalta's long-term strategic ambitions. The board has a high degree of confidence that under Chris's direction, Axalta will be better positioned to unlock value for all stakeholders. As for myself, I've transitioned to the role of board chair with Chris's appointment as the CEO. It has been a fantastic few months serving as the interim CEO, getting deeper into our businesses, helping the team focus on the immediate value levers, and doing the initial planning for our 2023 objectives. The valuable insights I have gained over the past five months will clearly help as I lead the board and support Chris to unlock the full potential of this company. I will now pass the call over to Chris. Chris? Thank you, Rakesh, and good morning, everyone. I want to start by saying it is a true privilege, and I'm absolutely honored to become the CEO and President of Axalta. My first few weeks in the role have only strengthened my belief that Axalta is a true industry leader with immense opportunities ahead. In the coming weeks and months, I look forward to meeting many of you, our employees, customers, and investors as we accelerate our growth plans. This is an important moment for Axalta. I'm committed to delivering superior financial returns and ensuring we meet our customers' demands. Now on to our quarterly results with highlights on slide four. The fourth quarter was strong and the team has a lot to be proud of. We delivered Adjusted EBIT of $147 million and Adjusted Diluted EPS of $0.38, both at or slightly above the top end of our fourth quarter guidance range. This was driven by pricing momentum and volume growth with notable margin and profit recovery from Mobility Coatings. Constant currency net sales growth of 14% was very strong, driven by double-digit pricing growth across all our four end markets and modest volume contribution. Volume growth of 2% was led by market recovery in both light and commercial vehicle. Our slate of award-winning new products and customer-centric service models are driving new wins across the portfolio. Meanwhile, post-COVID normalization in our end markets create a unique opportunity for us to grow volumes and outpace broader industry trends. We again delivered strong year-over-year price/mix growth of approximately 12% in Q4. Price/mix improved 3% sequentially, the highest realized quarter-over-quarter improvement since 2020. This is a fantastic outcome that reflects strong execution of the new actions and highlights our prioritization of margin recovery. Pricing in the period offset substantial year-over-year variable cost inflation again this quarter. Raws remain well above historical levels. We continue to face pockets of cost pressure from inflation in labor, energy, and select specialty raws that require us to maintain our pricing momentum and prioritize better execution. I will cover this in more detail in the following slide and highlight where I intend to focus over the coming months. Axalta's strategic priorities remain unchanged for the foreseeable future. We will strengthen our core and drive growth while increasing our emphasis on improved near-term execution and margin recovery. This will continue along the trajectory which Rakesh was aggressively driving in the back half of 2022. By focusing on a few key areas, we can better control our destiny, strengthen our balance sheet, and add a tremendous amount of value regardless of the external environment. First, of utmost importance is margin recovery. The teams are doing a great job here, and this quarter's results reflect our heightened focus on pricing. This is especially important as we face areas of inflation in labor and energy costs, coupled with the carryover impacts of raws and freight costs that accelerated throughout 2022 before stabilizing in the fourth quarter. Next to cost productivity, we have over $1.5 billion in fixed costs and another $2.5 billion in variable costs, including raw materials, freight, and energy. Given the large scale of spend and more than 46% of increases in variable costs over the past two years, we anticipate that we will drive cost enhancements to add considerable value to the bottom line. Another area of emphasis will be operational and supply chain excellence. I have spent most of my career in this area, ensuring safe and efficient operations for a global company. At Axalta, I see opportunity to increase capacity, deliver more reliable production, and ultimately drive near-term manufacturing efficiencies. Lastly, we're focused on driving better cash conversion and ultimately bringing down the net leverage in this high interest environment. This is important following a year like 2022, where working capital has been greater than a $200 million use of cash. Altogether, these near-term priorities reflect our intent to better control the controllable and yield maximum profitability in any economic environment. Let's go back to the results on slide six. I will now give you more color on our fourth quarter volume performance. Globally, volume improved 2% year-over-year, driven by market recovery in Mobility Coatings and share gains across the portfolio. This is a strong result and really speaks to Axalta's unique market positioning and resilient end markets. Volume was up in all regions except Europe, which declined by low single digit year-over-year and was mostly driven by the mid-teen% decline in Industrial. This was due to macroeconomic softening and the Russia-Ukraine conflict on the broader Performance Coatings segment. Macro conditions in China had mixed impacts on volumes. Auto production was again a bright spot, and Industrial benefited from significant sequential improvement as the economy reopened from lockdowns periods earlier in 2022. Reopening and the subsequent spike in COVID cases did have an impact on traffic congestion and Refinish activity. We see this as only a modest and temporary setback. Demand was very robust in Mobility Coatings, with volume improving 19% year-over-year with positive contributions from every region. Global light vehicle and commercial vehicle production recovered from heavily constrained levels in the prior year. Moving to slide seven, I will now cover the Refinish business. It was great to join many of you at our investor event in December, where we highlighted the long-term attractiveness of this resilient and growing business. At the event, we also focused on our unique value proposition built around the industry's most productive waterborne paint system and our customer-centric service model. This enables us to partner with the fastest-growing customers, yielding market outperformance for our business and a consistent track record of strong financial returns. 2022 was another record profit year for Refinish, with strong volumes outpacing industry growth and successful execution of pricing actions to offset inflation. There continues to be tremendous opportunity to continue our growth momentum that I will now highlight. Industry volumes remain below 2019 levels that we believe will normalize over time alongside return to work trends. Secular trends such as growing car park, increasing miles driven, and distracted driving altogether support increasing industry activity for the foreseeable future. Body shop consolidation is expected to continue and is still in the early stages, serving to expand the size of the premium market segment where we have a strong selling position. Lastly, our Refinish team is doing a great job identifying adjacencies, many leveraging our recent U-POL acquisition to grow our addressable market within the auto repair and related consumer DIY markets. Let's go to slide eight, where we'll now review the Industrial business. The Industrial end markets continue to soften from the combination of unprecedented inflation and more recently, lower demand. However, pricing remains a bright spot as Industrial achieved double-digit pricing gains every quarter this year and successfully offset year-over-year inflation beginning in Q2. On volumes, Industrial continues to face pressure from weakening economic activity in EMEA, as well as a slower than expected recovery in China. More recently, higher interest rates have a negative impact on our construction end markets, notably in North America. This has softened demand even further, specifically in our coil and architectural extrusion business. Our North American wood business remains strong with an order backlog extending into the first half of 2023. Our EV business continues to grow with new offerings in battery components. Recently announced infrastructure and energy investment is expected to drive upside in the future of our Industrial business. Moving to Mobility Coatings on slide nine. The team delivered encouraging progress towards margin recovery in the quarter. I want to recognize the efforts of the team to deliver our margin recovery goals in Q4. We still have a way to go here before achieving the levels of profitability we want, particularly given the substantial value we provide to our customers. Margin recovery continues to be our highest priority. We view current industry forecasts to be favorable following several years of constrained auto production and depleted channel inventory levels. We also expect to outpace industry growth rates into 2024 from a solid book of new business wins that we have built over the past 18 months. The new contracts are at an extractive contribution margin consistent with our historical levels. We expect to accelerate the earnings recovery in the segment as new business launches throughout the coming year. Altogether, we have an increasingly better line of sight to an expected margin recovery that should be driven by industry growth, new wins, and margin improvement. Let's move to slide 10, and I will discuss the drivers of our margin performance. Between 2021 and 2022, the inflationary impact from the variable costs was unprecedented, inflating by 46% and totaling an approximate $640 million impact to EBIT. In response, we have achieved historic pricing realization and successfully offset the inflation year-over-year impact as of year-end. As a cumulative two-year gap remains for Axalta with negative contributions from three of the four end markets, which continues to depress our profitability. We're fully committed to offsetting the cumulative impact of raw material, energy costs, and logistics inflation in all our businesses. We showed good momentum in the fourth quarter as pricing more than covered the year-over-year impact from higher raw materials and logistics costs across all our four end markets for the first time. The two-year cumulative price cost gap was cut in half from Q3 to Q4. We were very pleased to see the positive shift in Mobility Coatings price cost during Q4. This supported a noteworthy improvement in segment margins. In the quarter, we also benefited from modest sequential cost relief in some upstream commodity categories driven by slowdowns in adjacent markets and better overall supply availability. Looking ahead, we see an opportunity for modest lower sequential unit rates to continue into 2023. However, we are cautious on the actual impacts in the first quarter given that our inventory levels remain historically high. Inflation remains persistent in specialties like non-TiO2 pigments, energy, and labor, where we do not see yet a path to relief. It is necessary for us to remain focused on price and cost actions to offset ongoing inflation and to fully recover the remaining cumulative price cost gaps. Now I will turn the call over to Sean to discuss our financial results beginning on slide 11. Thanks, Chris, and good morning, everyone. Net sales were $1.2 billion, an increase of 9% year-over-year for the fourth quarter, while constant currency net sales increased 14%, driven by pricing actions and strong market recovery in Mobility. Constant currency net sales growth included an 8% increase in Performance Coatings and an impressive 30% increase in Mobility Coatings, as both light vehicle and commercial vehicle showed strong year-over-year performance. Fourth quarter volume improved 2% year-over-year as market recovery in Mobility more than offset the softer industrial environment and slower than expected recovery in China from COVID-19 lockdowns within Performance Coatings. Demand remains robust in Mobility Coatings, where volumes grew 19% year-over-year due to pent-up demands and new business wins. Price/mix increased 12% year-over-year and 3% sequentially, which is reflective of this being our key priority across every end market. FX translation was a headwind of 5% on net sales for the fourth quarter, driven by a weaker euro and Chinese renminbi. During the quarter, we recorded a $15 million charge as part of a new cost-saving initiative being implemented in early 2023. We also incurred $15 million of costs associated with the term loan refinancing executed in December. The $30 million combined impact of these two items are excluded from adjusted earnings. Fourth quarter Adjusted EBIT was $147 million, 22% higher versus the $121 million reported in the prior year. Axalta's Adjusted EBIT margins increased by approximately 130 basis points year-over-year to 12%. This is the first increase since the current inflationary period began in early 2021, with improvement in profitability in Mobility Coatings and Performance Coatings. This is an important milestone towards our margin recovery goal. Q4 performance also included an approximate $17 million EBIT headwind associated with the impacts from the Russia-Ukraine conflict, China COVID-19 challenges, and FX translation. Turning to slide 12. Performance Coatings Q4 net sales increased 2% year-over-year and 8% ex FX, driven by a 12% price mix benefit. Volumes for the segment were slightly lower as Refinish share gains were offset by Russia-Ukraine impacts and headwinds from a slower than expected recovery in China. Industrial volumes were lower, mostly driven by a softer EMEA and North America. Performance Coatings reported Q4 Adjusted EBIT of $107 million versus $100 million in Q4 of 2021 as a favorable year-over-year Refinish contribution was partly offset by lower Industrial profitability. Industrial made progress towards offsetting its cumulative price cost deficit this quarter, this was more than offset by softer volumes. Segment Adjusted EBIT margins improved by 60 basis points year-over-year to 13% in the quarter. Moving to slide 13. Mobility Coatings constant currency net sales increased 30% in the fourth quarter as volumes increased by 19%, which outpaced market build rates across light vehicle and commercial vehicle. A highlight of the quarter for Mobility was price/mix growth of 12%. The team executed extremely well and remains focused on pricing discipline into 2023. Approximately $5 million of our price growth was driven by the recognition of retroactive price adjustments with several customers where the team had been in active negotiations since earlier this year. The two-year cumulative price cost gap remains a priority for Mobility, We are encouraged by the progress to end the year. Mobility Coatings reported Q4 Adjusted EBIT of $18 million versus -$4 million in the prior year quarter as volume and price/mix growth were partially offset by raw material inflation, higher fixed costs, and the negative impacts of foreign currency translation. The sequential increase to Adjusted EBIT was also noteworthy, increasing from $4 million in the third quarter to $18 million in the fourth quarter, driven mostly by an inflection in the price cost environment as pricing increased by mid-single digit% and variable costs were largely stable throughout the quarter. Segment Adjusted EBIT margins improved by 530 basis points year-over-year to 4.2% in the quarter. Moving to slide 14 for a few comments on the full year 2022 results. 2022 proved to be a challenging year as a series of exogenous headwinds impacted the business, such as unprecedented variable costs, energy and labor inflation, constrained auto production, Russia-Ukraine dynamics, and COVID lockdowns in China. These headwinds together drove Adjusted EBIT 9% below 2021 levels, though we're ending 2022 on a positive trajectory. Adjusted EBIT improved by 11% in the second half year-over-year and 22% year-over-year in the fourth quarter. Price/mix increased 10% year-over-year in 2022 with a low single-digit percent sequential improvement every quarter that peaked in Q4 at 3%. Despite the macro and geopolitical headwinds from Russia and China, full year volumes increased 4%, led by a strong recovery in light and commercial vehicle production and was supported by new customer wins in every end market, including notable MSO wins and Refinish and a record number of new light vehicle customer wins. We also ended the year having improved our balance sheet, which I'll review in more detail in the following slide. Axalta's fourth quarter balance sheet and liquidity profile remain solid. We ended the year with nearly $1.2 billion in total liquidity. Our net leverage ratio is now at 3.8 x, reflecting a significant improvement for 4.1 x at September 30th. This reflects our commitment to focusing on free cash flow in the fourth quarter to address leverage. With that said, net leverage remains elevated in part due to higher working capital balances associated with pricing and volume growth impacting accounts receivable as well as higher levels of inventory. Inventory build has been a use of more than $300 million over the last two years. Working capital balances at year-end were 11% of 2022's full year sales, which is roughly 300 basis points above our historical levels, which will now provide a nice opportunity into 2023. On capital allocation, we paid down $47 million of gross debt in Q4 and made no additional share repurchases in the quarter. Thus, the annual total share repurchases remained unchanged at $200 million. In December, we also successfully refinanced our $2 billion term loan, which resulted in the extension of the June 2024 maturity date to December 2029. On slide 16, we will review our Q1 guidance framework and 2023 outlook commentary. For Q1, we expect net sales growth between approximately 5% and 9% year-over-year, inclusive of a 2%-3% FX headwinds. We expect to generate Adjusted EBIT of $126 million-$146 million, which we expect to correlate to Adjusted EBITDA of $185 million-$205 million, representing 8% year-over-year growth at the Adjusted EBITDA midpoint. We expect this growth inclusive of headwinds associated with FX and the Russia-Ukraine conflict of approximately $10 million of EBITDA compared to Q1 of 2022. For Adjusted Diluted Earnings Pre Share, we anticipate a range of $0.26-$0.33 per share. This framework assumes sequential Mobility Coatings EBIT improvement from the fourth quarter, given continued outpacing of global auto builds and margin recovery. Typical seasonal Refinish volume decline that is expected to result in lower sequential Performance Coatings EBIT despite a better Industrial EBIT contribution from the fourth quarter and a stabilizing raw material environment. Though pressure is anticipated to continue in specialty raws like non-TiO2 pigments, labor, and energy costs. Altogether, we expect a first quarter low single-digit% quarter-over-quarter variable cost benefit, which translates into a high single-digit% year-over-year headwind. I will end with a few additional comments on our 2023 outlook. The macroeconomic situation remains difficult to forecast. However, we're cautiously optimistic given our specific end market mix and the progress towards post-COVID normalization that we're expecting across most of our business portfolio. We believe that the risk of further macro headwinds to Axalta is mostly contained within pockets of our industrial end markets, with industrial already managing through a weaker global environment. Elsewhere, we have a resilient core centered around our Refinish business, which had record profit once again in 2022. We expect that trend to continue into 2023. Plus, we expect substantial Mobility Coatings upside from industry and margin recovery. In regards to cash flow, we will be focused on returning working capital towards our historical levels as a percentage in net sales. This represents a meaningful opportunity of cash into 2023. Our capital allocation framework will continue to be guided by our focus on de-leveraging and balance sheet strength. I expect the pace of share buybacks to remain somewhat muted beyond offsetting dilution from share-based compensation as the new interest rate environment has increased the relative attractiveness of gross debt reduction. Net leverage is expected to improve meaningfully from the current levels as we grow earnings and deliver cash. We strongly believe in the earnings power of Axalta and the value creation opportunity that lies ahead. Thank you, Sean. I'd like to close out by thanking our global team. I had the opportunity to spend time with our team members in some of our manufacturing facilities. We have a talented group of operators who diligently help us serve our customers every day. I'm also grateful to our business and functional teams who are driving execution and accelerating Axalta's growth plans. With that, we will be pleased to answer your questions. Operator, please open the lines for Q&A. Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star one at this time. One moment, please, while we poll for questions. You may press star two if you'd like to remove yourself from the queue. Our first question today is coming from Christopher Parkinson from Mizuho. Your line is now live. Great. Good morning. Chris, understanding it's incredibly early, but just given your background and, you know, your experiences, is there a preliminary thought process on what you can do to assist Axalta in better streamlining results in the Mobility segment, especially now that, you know, volumes and market share seem to be comfortably on the right track? Thank you. Hey, good morning, Chris. Yeah, absolutely. I think, you know, if you look at my background, a lot of it on the operations side, as I think about Axalta in the short term, it's purely about execution. You know, this is where Rakesh started, as you could see, in the last two quarters, and you can see the inflection from Q3 to Q4. We certainly are gonna continue to drive execution. As I think about, you know, operations, supply chain, procurement, what are we doing to drive continued cost improvements here, as well as the drive for continued pricing to ensure we continue to drive that price cost grab. That's certainly the focus here, and that's certainly from my background also at Meritor. Understood. Just a quick follow-up on the Refinish side, it seems you've been also winning a decent amount of share in terms of body shop and consolidation among some of your largest customers, and acquisition activities should also be a tailwind. You know, when should we expect to see a lot of that through results in the Performance segment? Thank you. Well, good question. I think as you know, Q1 Refinish is somewhat seasonal. You know, as we see that continuing through the year, certainly in Q2, you should see the benefit from that. Again, if you think about the Refinish business, whether it's 2021- 2022, they've seen record growth. As we think about 2023, certainly with the wins, again, what we announced at, also at the Investor Day, what you can see is they've gained about 3,000 in shops. The MSOs, as you pointed out, continue to consolidate. Certainly significant opportunity there going forward. Thank you so much. You're welcome. Thank you. Next question today is coming from John McNulty from BMO Capital Markets. Your line is now live. Yeah, thanks for taking my question. With regard to pricing, I guess, Can you help us to think about how 2023 looks if you didn't raise price any further in any of the channels, just what would we be seeing kind of for a full year price increase in 2023? What channels? It does sound like there are certainly pockets where you feel you still are behind or have some inflationary pressures where you need further pricing. Can you fill in the blanks on that a little bit more and help us to understand, you know, the magnitude of and where you might need to see those price increases? Yeah. Hey, John it's Sean. Good morning. I mean, the last two quarters, you've seen essentially 3% sequentially from Q2 to Q3 to Q4. We're signaling, you know, low single digits next year, call it $150 million of just pure Pricing carryover. I think the dynamics just in the deflationary environment is how quickly we deflate and how it ultimately impacts some of our raw material indexing. With that said, even with Chris's prepared remarks, you know, the margin recovery is still not fully there. We expect to fully recover from a total Axalta perspective, you know, in the first half of next year, but Mobility is still behind, as well as Industrial. You know, Refinish has quickly caught up, but that's really the focal areas, you know, that being, you know, the two components within Mobility and Industrial. Got it. Got it. Fair enough. Chris, look, won't ask you too much on the operational side, obviously you have a lot to dig into, but I guess high level, like when you think about, the area of leverage for Axalta and also returning of cash to shareholders, I guess, can you give us kind of how you think about those topics in general? What you think might be the right leverage levels for Axalta kind of going forward? Also, you know, is it something where you would consider, you know, pushing the board to maybe think about dividends versus buybacks? Do you have a preference there? Just if you can give us some of your early thoughts on how you think about that'd be great. Sure. I think initially, as Sean pointed out in his prepared remarks, our focus is on debt repayment. I think, you know, we're gonna continue to drive that. You know, we're at 3.8x. Again, as you folks know, we were around 4x. Our objective is to get that down around that 3x mark as we were before. That is going to be the primary focus for us going forward, especially with the current interest rate environment, that's certainly, you know, driving the focus towards debt repayment. In terms of, let's call it return to shareholders, that's probably something we'll look at later in the year, but right now our absolute focus is on execution and debt repayment. Got it. Fair enough. Maybe if I could just squeeze in one last one just around auto OEM. The volumes have been huge, and we, you know, we were well aware of some of the big account wins that you had. Is there any initial fills? It's not gonna be like a big box type thing, but are there any initial fills, like, where we should be kind of thinking about that as we model out kind of your performance relative to, you know, the broader global OEM markets? You know, look, you put out some huge numbers in the last couple of quarters. Is that an okay run rate at least until that anniversaries? Or again, was there maybe a little bit of a fill in there that we need to consider? I wouldn't call it necessarily a fill. I would expect that we're gonna continue to outpace the market in 2023, maybe not exactly by the levels you saw in Q3 and Q4. Q4 in particular, you know, we beat in every region, and it's really a twofold reason, John. It's the market wins, but more importantly, some of the OEMs and the platforms that we're actually serving product to are actually outpacing the market. China is probably a really big bright spot. You know, the market was down roughly 6% in the fourth quarter. We were well over 30%, and a big part of that is just the platforms that we're actually serving are, quite frankly, just outpacing the market altogether. Got it. Thanks very much for the color. Appreciate it. Thank you. Next question is coming from Ghansham Panjabi from Baird. Your line is now live. Thank you. Good morning, everyone. Good morning. Given the real-time sequence in in China as it relates to the reopening, can you just give us a sense as to where volumes are by sub-segment relative to perhaps, you know, the pre-COVID levels? Yeah, I mean, the first quarter is typically, you know, fairly soft for us, Ghansham, you know, with Chinese New Year and even the infection rates in the first two weeks in January. I mean, we're cautiously optimistic for 23. I think the first quarter is gonna be pretty soft. Mobility has actually run pretty strong other than the COVID lockdowns in the second quarter. You know, they've propped it up that market and it's run pretty well in Q3 and Q4. Refinish with all the lockdowns has just impacted miles driven, that's probably the one region that's just sort of further behind, just given the COVID lockdowns. Industrial, same thing, just given general slowdown in some of the European economic markets, the export market in China has impacted Industrial and again, just the COVID impacts. You know, again, we're cautiously optimistic. We'll see slow recovery here, but, we're pretty cautious on the first quarter guide as it relates to China. Where did auto Refinish in China finish 2022 relative to 2019 levels? Oh, that's a good question, Ghansham. We're certainly down a few points, probably high single digits opposite 2019. Okay. Okay. Fair enough. Then on slide nine, you have the historical, you know, and projected bills in global light vehicles. Nice little chart there. Assuming we get to 2019 levels by, let's say, 2024, is there any reason why it would not be above the 2019 EBIT margin levels for that segment? You know, assuming that commercial kind of hangs in and raw material cost inflation is relatively muted relative to prices. Well, maybe I'll start off. Again, you know, as you can see from our year-year guide, we're certainly going up, and we're also a little bit lower than where the external forecasters are because we're being somewhat conservative. Again, Ghansham, I think, you know, what you have to take into consideration is the inflation that we've faced in the marketplace, right? Offsetting that margin gap on the top end between, you know, where we were at the full look with cost inflation built in. However, you know, if you look quarter by quarter, even if you go into Q1, we're driving increased margins in the mobility business. That's the objective going forward. As you know, if you went back to, let's call it Q1 levels, we were running at about $35 million, and this quarter we were at $22 million. The Q1 we're building into $22 million, so certainly we're progressing in the right direction, but still a ways to go there. Okay, perfect, Chris. Look forward to meeting you at some point. Absolutely. Thank you. Next question today is coming from Vincent Andrews from Morgan Stanley. Your line is now live. Thanks, and good morning, everyone. Could I ask on the Mobility pricing in the quarter, how much of that was sort of new bespoke pricing versus the flow-through of the indexation contracts? Yeah. fourth quarter, actually, the vast majority was new pricing, you know, contract negotiations as opposed to raw material indexing. When you think about the whole year, it's probably a 50/50 split as far as the contribution between raw material indexing and just pricing negotiations. Okay. That's helpful. Chris, maybe just preliminarily, you know, you talked in that slide about the sort of strategic goals. When you think about sort of operations and supply chain, is the stuff that you're envisioning, is this sort of more tactical and nimble stuff, or is it more, sizable restructuring kind of stuff that would have significant cash costs associated with it? Well, you know, three weeks in, probably a little early to call, Vincent, but, you know, what I'm absolutely focused on right now is more the tactical and nimble stuff because we have to react absolutely quickly here, continuing the path that Rakesh and the team have built up, and obviously the monumental step up they did in Q4. We got to continue that through Q1, Q2, Q3. The first step is just purely focused on driving those execution aspects, whether it's, you know, utilization of our plants better, whether it's procurement, and whether it's our supply chain improvements. Those are the drivers we're driving initially. Okay. Fair enough. Thanks for the question. Sure. Thank you. Next question is coming from Aleksey Yefremov from KeyBanc Capital Markets. Your line is now live. Thanks. Good morning, everyone. In fourth quarter, sequentially, your sales were about flat, your EBIT was about flat, and yet, you know, your price cost gap sprung by $56 million sequentially. I guess the question is, why didn't, you know, more of that price cost benefit show up in EBIT and would it show up sometime later? Hey, Aleksey. Good morning. The big thing is Refinish volumes. Q4 and Q1 are typically the soft quarters from a Refinish perspective. Coming off Q3, that's really where you see sort of some margin compression. Obviously nothing structural, just the seasonality of how Refinish works, Aleksey. Okay. That's helpful. Thanks a lot. Then you also talk about E-coat on EV battery components. Could you talk about that product? You know, what's your content? What is the gross opportunity there? I mean, you're probably referencing a press release that came out a few weeks ago where we won an award. It's really the entire infrastructure of an EV vehicle where the E-coat is going onto. As far as our EV exposure within Energy Solutions, you know, on that roughly $130 million business, it's still sitting around 30%. It's still pretty small, but obviously a bigger opportunity for us longer term. Thanks a lot. Thank you. Next question is coming from Jeffrey Zekauskas from J.P. Morgan. Your line is now live. Thanks very much. During your preliminary remarks, I think you said that working capital could be improved by 300 basis points. You have about $5 billion in sales, so 300 basis points is $150 million. Your working capital change this year was negative $265. Why isn't the working capital opportunity larger? In general, over the past 10 years, I think working capital has only been positive once for Axalta. Why, why is it that you tend to normally run with negative working capital year on year? Jeff, we signaled, you know, roughly 8% is our historical levels on an LTM basis at the end of any fiscal year. We're calling out, you know, the target is to get back to those historical levels. That's not necessarily gonna entirely happen in 2023, but it's certainly a bigger opportunity for free cash flow generation. You know, within the overall working capital balance, you know, what we're signaling is AR, inventory, accounts payable, and accruals. I think you may be picking up prepaids, which I think you're aware we have these business incentive payments within Refinish that are a typical outflow. And they range from $60 million-$70 million annually, just for perspective there, Jeff. Thank you. Your CapEx was $151 million. Can you remind me what's maintenance CapEx, and what did you spend on that was the difference between maintenance and the $151 million? We don't call out specific years for maintenance CapEx, but, you know, over time. Roughly It's $30 million-$50 million, Jeff. On average in a given year, I'd say, you know, 2020, 2021, we certainly underspent from a CapEx perspective. We're expecting a little bit more of an uptick, you know, closer to that $50 million-$60 million in 2023 within maintenance. We'll get back to the more normal run rate in 2024. Okay, great. Thank you so much. Thank you. Next question today is coming from Mike Leithead from Barclays. Your line is now live. Great. Thanks. Morning. First question, just on the input side of the equation, can you just remind us how big energy and labor costs are relative to, say, raw materials in your overall cost basket? Sure. energy is right around $75 million. You know, that's up from $33 million two years ago. You know, we've essentially doubled. labor pools run about $900 million annually. Got it. Okay. Second, just on the outlook, I think historically, the first quarter's been something like 22% or 23% of where you end up normally delivering for the full year. I appreciate the visibility is quite low, but just is that still a rough estimate as we start this year, or should we expect a steeper ramp just as you start to catch up on some of those margin and cost initiatives? Yeah. Directionally, that's a good number. You know, what I called out earlier in the Q&A, you know, refinish, you know, historically range roughly 20%-21% of the profitability in the first quarter, opposite the full year for refinish. That's really what's driving the overall EBITDA contribution being down in that 22% range. Great. Thank you. Thank you. Next question today is coming from Steve Byrne from Bank of America. Your line is now live. Yes, you guided the first quarter raws to be up high single digits. For raw materials purchased today, what would you say they would be on a year-over-year basis, and what would you estimate the monthly lag before it would flow through COGS? Yeah. Steve, probably the best way to look at this is versus fourth quarter. I mean, we're seeing across almost every basket, you know, down low to mid-single digits that we're actually procuring right now, with the exception of pigments. I bifurcate pigments. You know, TiO2 and carbon blacks are relatively flat opposite fourth quarter, but some of the specialty pigments are actually still inflating a bit. Energy costs are expected to be up slightly opposite fourth quarter. When do you see the year-over-year deflation flowing through COGS? Yeah. Could you see it in second quarter? We're expecting some marginal benefits in the first quarter. Again, we're sitting with essentially record high inventory levels. We expect more of that to flow through actually in the second quarter. That's why we're a little bit more cautious on the margins in the first quarter. Can you address what led to the customer win in mobility? You know, I doubt that's easy to achieve with such large customers. I guess I'm raising it as an issue with how do you get price in that business without threatening to walk away from contracts? I mean, we price for value, Steve. You saw that in the fourth quarter. Some of these discussions, you know, went over two quarters for us ultimately to get to retroactive improvements. Hadi Awada and the team that he's built over the last two years, we really started to see the progress 18 months ago. Some of these conquest wins, you know, they take 18 months to two years to ramp up and actually for us to get the sales. This has been a continuation of his team continuing to drive service, you know, bringing good products and bringing the right team to the market. Equally important, I think we should mention that all that new business is coming in at margins that we're very proud of. Okay. Thank you. You're welcome. Thank you. Next question today is coming from Kevin McCarthy from Vertical Research Partners. Your line is now live. Yes. Good morning. In the first quarter of 2023, would you expect to run your assets at a similar rate to the first quarter of 2022 or higher or lower? How might that answer, you know, vary by your major businesses? I would expect them to run pretty similar. You know, volumes are relatively stable. Mobility is gonna be slightly up versus the first quarter of 2022. Industrial volumes will be slightly down. Overall, it's gonna be a very similar volume picture. Okay. As a follow-up, Sean, in your prepared remarks, I think you referenced $5 million of retroactive price adjustment. Can you speak to, you know, what that is, why it occurred, and whether we should expect any additional so-called retroactive adjustments in the first quarter and beyond? Yeah. We're not expecting any big retrospective. You can imagine, Kevin, some of these discussions, you know, last a multitude of months and sometimes two quarters, you know, ultimately to get this to the finish line. That's really what you're seeing the dynamic in the fourth quarter. Some of these discussions have been going on for two quarters, and you're seeing the realization once we actually reached a final verdict, you know, with the customers and actually able to invoice them. We're not expecting big retros in the 1st quarter in our current guide. Understood. Thank you very much. Thank you. Next question is coming from John Roberts from Credit Suisse. Your line is now live. Welcome, Chris. Thank you. Maybe I could lean on you a little bit for your auto experience. The auto dealer inventories are still relatively low. Do the auto producers still have constraints keeping them from fully further restocking, or are they unconstrained and you think they're just cautious about rebuilding their inventory? No, I believe there's still constraints and, you know, a lot of my experience was on the commercial vehicle side. As I think about, you know, where commercial vehicle trucks and truck production sits, you know, there's historic backlogs on that side. You know, if you look at some of the recent customer announcements or earnings calls, you can see there's continued pent-up demand as we look into moving into next year. It grows across both baskets, whether it's the light vehicle side or the commercial vehicle side. You can see even with our numbers, right? We're going from $82 million up to $83 million to $84 million in 2023. You know, if you look at the external forecasters, they're at $85 million. We do have some upside here, but again, you know, we're being cautious primarily. You know, if you think about China, if you think about Europe, you know, we wanna make sure we have a fixed cost model that is slightly lower, and then we're prepared for the upside here. If you look overall, I think the key message is that we have, let's call it a market that we believe is going up primarily because inventories are still tight on both sides. On top of that, though, as Sean mentioned on the last point, we're outpacing end market activity, whether we're driving growth in, as you heard on the mobility side, on the light vehicle side, with, you know, Hadi and the team have driven significant growth in China. On top of that, on the heavy side, they've also closed with Navistar here. Anyway, great story across the board. Just a quick one, Sean, not that it's big, but what's driving color pigment prices up? Very few things are actually going up right now. Yeah. It's just a supply and demand imbalance that continues to inflate those. Okay. Thank you. Thank you. Next question today is coming from David Begleiter from Deutsche Bank. Your line is now live. Thank you. Good morning. Sean, first, given your new contract structures in Mobility, can you minus what happens when raws actually come down, how much do prices, you know, decline here, or how much do they hold? David, we're still behind on mobility, which you'll see in the price cost slide. Outside of the indexing contracts, you know, we're still gonna be pushing price even if we do see a deflationary environment. To your point, maybe on the indexing, you know, in general, we're on a six-month lag. Again, depends on the pace of deflation, but we would expect to give back, you know, potentially something on roughly 40% of those contracts. Very good. Chris, again, welcome aboard. As you put a fresh eyes on Mobility, what do you think the biggest issue was the last, you know, 18 months? Are there any structural reasons why this business can't return to prior levels of earnings? Forgetting about margins because they will go up and down based on other factors, but earnings dollars, any re-reason you can't get back to prior levels? Thank you. Well, I think it's focus and execution as I think about the business, and I know that might sound pretty simplistic, but, you know, if you look at the last quarter, two quarters and what was done, that was primarily the focus. It was focus around driving pricing. Again, I think as Sean mentioned, it's about, you know, making sure we're getting the value from our that we're providing for our service. Essentially in this space, I, you know, I look at it as, you know, if you look at where our customer margins are, where our margins were for the last year, you know, we certainly can't invest. If we're providing the value that's driving the growth, we certainly need to be pushing pricing here, whether, you know, as we've discussed, above and beyond where we are. We believe we're providing that level of price, sorry, value, because we certainly are continuing to grow. That's certainly going to be our focus as we go forward. One is pricing. The second part is execution. What does that mean? We've obviously had supply chain constraints in our plants, and it's not associated with the capacities of our plants or the utilization of our plants. It's really about how we drive the supply chain from our, from a procurement standpoint right through the facilities, to get the volume out. Then we've made choices there that's obviously, you know, limited our ability to drive that gap. Certainly those two are the focuses we're going to continue. Simply put, focus and execution. Yeah. Just to layer on, I mean, the clear objective is, you know, first step is to get back to historical profitability levels. The other thing to keep in mind, you know, global auto builds was $82 million this year. Historical levels, you know, normal for us is 89 million, 90 million. The markets are still down 10%. Again, kudos to the team. We saw a nice step up in profitability in the fourth quarter, and we're gonna continue executing. You know, sequentially, you should see improvement going forward through 2023. Thank you very much. Thank you. Next question today is coming from Michael Sison from Wells Fargo. Your line is now live. Hey, guys. Nice quarter. Just one question. In terms of refinish volumes, you talked about it being seasonally weak or, you know, typical seasonality first quarter versus fourth quarter. What do you think about the second quarter? Are there odds that the seasonality could be similar improvement? Maybe talk about the regions. Maybe China is not as strong sequentially, but any thoughts about what you're seeing for a typical improvement in 2Q versus 1Q in refinish? Yeah. Mike, we're only guiding to the first quarter. You know, we fully expect there'll be a nice uptick in the second quarter of 2023. We also think, you know, the cautiousness that we're seeing in China, you know, hopefully that'll fade away here pretty quickly. We'll see the benefits in the second quarter as well. Great. Thank you. Thank you. Next question is coming from P.J. Juvekar from Citi. Your line is now live. Yes, good morning. Chris, welcome to Axalta. Thanks, P.J. As China reopens, how do you think about that benefiting your industrial demand versus auto OEM? In auto OEM, you mentioned China was a big growth driver for you. Talk about sort of what kind of pace of improvement do you expect. On the flip side, if China does rebound, then oil demand and prices could go up. Could that create some potential headwind? Thank you. Well, let me start off, again, you know, three weeks in the role, and then I'll probably hand it over to Sean. Again, obviously we're being conservative and being cautious as our approach for China. To your point, there is upside as you think, especially since we have significant new business wins that are ramping up there. That is a bright spot for us. On the Industrial side, though, I would say globally, you know, we are seeing softening and, you know, even in China, we've, you know, forecasted that we're being somewhat muted. I think the bright spot for us, you know, just answering your question on the regional side, if I think about where is the opportunity for Industrial, it's really North America. We look at our building products business where we see, you know, some great growth in the siding business. As Sean pointed out on the EV side, we are also seeing growth there. Coming back to China, as we look at the overall basket, I would say we're being somewhat conservative as we go through it. Obviously, it's got fits and starts. We went through an experience as we started out from, let's call it the COVID lockdowns early in the month of January. We certainly see a lot of our facilities opening up, and it seems like the same story for the rest of China. Short term, we're being somewhat conservative. I'll now turn it over to Sean. Yeah. I mean, on the Mobility side, you know, that market's actually been operating really well, we're still pretty optimistic, even in our first quarter guide on how that business continues to run, outside of obviously the Chinese New Year impacts. Industrial and Refinish, both of those are roughly $120 million businesses. You know, there's certainly incremental improvement, but, you know, relative to total Axalta, those businesses are still pretty small. Certainly some upside there, as we think about full recovery. It's just as far as China economy coming back and the impacts on sort of inflation, deflation, I guess we're somewhat neutral. We see a potential argument on both sides. You know, for our business, the regional arbitrage from a supply chain perspective, we expect, you know, that to be a net benefit as we think about the raw material environment. Thank you. My second question is, you're getting some significant volume growth in light vehicles, but you're also talking about the need to get pricing. I'm just putting those two comments together. Was Axalta trying to loading price or acting tough on price to gain share? Is that what we are seeing? Now you're saying that we need to get pricing back up. Is that the right way to interpret those two points? No, absolutely not. The variable margins that are coming through for the new business wins are coming through at historical levels. Where we're really focused on getting price is on the legacy contracts, and continuing to push from a margin perspective. Thank you. Thank you. Our final question today is coming from Joshua Spector from UBS. Your line is now live. Yeah. Hey, thanks for squeezing me in. Just two quick follow-ups. I guess one on the new win side of it, you know, the Refinish, the MSOs, the new stocking centers in Europe and the Mobility side, if markets broadly were flat, what do you think Axalta does at a volume level? Just on the Mobility side from an earnings perspective, you historically talked about it, the recovery being 50/50 price-cost market recovery. Has that calculus changed given some of the pricing you got in fourth quarter and some of the dynamics you talked about? Thanks. Yeah. I mean, I would expect us, assuming a flat market across the board, that we're gonna be up, you know, low single digits, really across all of our end markets. As far as the mobility volume, I think we said in the third quarter that it probably had shifted more to 60/40 as far as, you know, the pricing, and it's probably now back to the 50/50 between volume and price, given what we were able to do in the fourth quarter from a pricing perspective. Okay. Thank you. You're welcome. Thank you. We've reached the end of our question and answer session. Ladies and gentlemen, that does conclude today's teleconference webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.