Good morning, my name is Nikki, and I will be your conference operator today. At this time, I would like to welcome everyone to Goodyear's fourth quarter, 2023, earnings call. All lines have been placed on mute to prevent any background noise. After some opening remarks, there will be a question-and-answer session. You may register to ask questions at any time by pressing the star and one on your telephone keypad. You may withdraw your question from the queue by pressing star two. Today on the call, we have Mark Stewart, Goodyear's Chief Executive Officer, and Christina Zamarro, Chief Financial Officer. During this call, Goodyear will refer to forward-looking statements and non-GAAP financial measures. Forward-looking statements involve risks, assumptions, and uncertainties that could cause actual results to differ materially from those forward-looking statements. For more information on the most significant factors that could affect future results, please refer to the Important Disclosures section of Goodyear's fourth quarter, 2023, investor letter and their filings with the SEC, which can be found on the website at investor.goodyear.com, where a replay of this call will also be available. A reconciliation of the non-GAAP financial measures that may be discussed on today's call to the comparable GAAP measures is also included in the investor letter. I will now turn the call over to Mark Stewart, CEO. Thank you, Nikki. Good morning, everybody, and thank you for joining Christina and I this morning for what is my first conference call as the Goodyear CEO. I'm just now over two weeks in my new role. I could not be more excited to have joined this iconic company. As you guys can imagine, I'm working diligently, quickly, to understand a deep understanding of our business. I'm meeting with our people, visiting our factories, getting to know our customers, our products, our cost structures, and doing that through operational deep dives. I'm looking forward to engaging with the investment community as well over the course of the next several months to gain your perspective as well. As many of you have read, my most recent role was at Stellantis, where I ran the company's North America operations and a key leader on the global executive team. I will bring a perspective from an automotive OEM, automotive supplier background, and the understanding of needing to lead through industry cyclicality and a clear focus on manufacturing, purchasing, engineering, and logistics in order for us to achieve our financials. What this means is that in addition to spending time meeting our customers, understanding our products, and product placement, you can expect me to focus heavily on Goodyear's manufacturing operations and distribution, understanding it on every level, and working with the team to enhance capability and our cost-effectiveness. As well, I will focus on clean sheeting and should-cost activities, our SKU or product complexity, as well as our go-to-market strategies. Like all other aspects of our business, that focus will be centered purely around our Goodyear Forward in the coming months. I'm engaged in deep dives on each element of the program, the associated workstream, our amazing teams, and committed to delivering the outcomes of the forward plan. I've been a part of leading transformational efforts and driving results in my past roles and bringing them to the bottom line through clear KPIs, the definition, the tracking, and speed of execution. For Goodyear, for us, it's about maximizing our strength and our market position in North America. It's improving our cost structure, as well as de-risking our balance sheet. Ultimately, I'm confident Goodyear Forward will drive our company's next stage of profitable growth and success. It's clear, and I fully support the plan. With that, by now you read our investor letter from yesterday evening. Christina and I would like to get right to your questions. So with that, Nikki, let's open the line. At this time, if you would like to ask a question, please press the star and one on your telephone keypad. You may withdraw your question at any time by pressing star two. Once again, to ask a question, please press the star and one on your telephone keypad. I will take our first question from Rod Lache with Wolfe Research. Please go ahead. Good morning, everybody. Good to talk to you again, Mark. I understand, Mark, that you're just two weeks into working at Goodyear, but I wanted to give you a little bit more of an opportunity to talk about what you see as most important to create a durable industrial turnaround and what do you think the timeline will be for you to kind of put your stamp on the plan? Yeah. Thanks, Rod. I think what's clear is going back again to the very well-thought-out Goodyear Forward plan, which was rolled out November 15th, right? And that is my focus. It's about streamlining the portfolio. It's for us to get to sustainable operational margins of 10%, getting our net leverage to 2-2.5x by the end of 2025, and having that sustainable free cash flow that's going to increase our overall financial flexibility. So specifically, with a whopping 2 weeks and a day here, I'm right in the middle of this onboarding process. And again, I'm spending the majority of my time and plan to do so in the near term listening to our team here at Goodyear, both at headquarters, in the plants, our retailers, our customers, meaning in retail, OE, and distribution. And it really is looking forward to meeting you guys as well, Rod, in a different light from the past, right? But I am deep diving into the operations, going through the functions, the financials to really thoroughly understand the business right now. And so I'm asking lots of questions, taking lots of notes, continuously reviewing that, especially in this first 30, 60, 90 days, to challenge what I think in coming in, to gain the understanding from our team, also to get clarification of things that maybe we can put into some quick win categories and areas that learnings that I've had from the past as well. So again, it really is about trying to keep that fresh-eye look with a hard drive to execution, and it is about speed of execution. It's about us delivering that Goodyear Forward plan. A couple of the observations I've had in the first couple of weeks, again, there's incredible momentum in the Goodyear Forward plan. Meeting with the teams, just as you look to the plans, well-thought-out step-by-step timing, ownership, execution. And so that is what I'm here to do, is to help Christina and the rest of the team in terms of helping to lead and guide those initiatives across the finish line, Rod. Great. Thanks for that. And just on the business, maybe Christina, you can help us with this. Cost performance is obviously starting to look a lot better now, and I presume that that's not really with much benefit from the Goodyear Forward plan yet. But the question, just looking at the numbers, just continues to be market share. And I know there's factors that affect it in every region, but even in isolation, just Goodyear's year-over-year volume performance wasn't great. So I'm hoping you can maybe just talk to us a little bit about do you think that there's market stability for Goodyear, or is that kind of a work in progress? In other words, do you think that even beyond Goodyear Forward, more realignment is going to be needed to the portfolio? Yeah, sure, Rod. I'll take it by region, and I'll start with the U.S. Our fourth quarter replacement market share in the U.S. in 2022 was I'd have to characterize it, Rod, as just abnormally high, and it approached 28%. That was all driven by your reference to the volatility in imports that we saw over the course of 2022, even at the tail end of 2021. When I look at our consumer replacement share in the U.S. in the fourth quarter of 2023, I'd say it's in line with year-to-date results and reflects a more normalized level of sell-in share. Even with the significant change on a year-over-year basis, looking at the volume decline, what I'd also point out to you is that our sell-out share, so what's getting bolted onto vehicles at retail, was in line with the industry. That gets to your question around a level of stabilization. We would expect a much more normalized market share going forward in the U.S., certainly with margins in excess of 10%. We are in a good market position in terms of share. That doesn't mean that we won't make changes to the portfolio around the periphery. We've said that we will do that as part of Goodyear Forward through SKU consolidation, through our customer programs, as we look to continue to grow our margins. I don't think there's anything that significant there, Rod. I do feel that we've stabilized in the U.S. compared to last year. Having said all that, the forward outlook for our mature markets, say U.S. and Europe, is both slow growth for 2024, something like up 1%-2%. It feels tougher in the first half than in the second half, and we know we also have recent declines in raw materials. So there's that to put into the calculus as well. Now, when we think about EMEA, the past headwind has been our sales volume performance, really going back to 2019. We've been hurt by our position in OE, and that's where the industry has certainly fallen pretty dramatically off its peak. It's also hurt in replacement, where we do tend to be more profitable, as you know. I think going forward, we see little downside risk to OE. OE forecast globally for 2024 is something that feels a lot more forward or a lot more level. But when I think about the consumer replacement market share in Europe, what I'd say is we lost a lot of market share since 2019 to imported budget brands, and they have grown as a part of the industry about 15 million units since 2019. That's at the same time the industry shrunk 7 million units. So we've lost our fair share of that, and that's why we're directing the restructuring dollars as part of Goodyear Forward to the factories in EMEA. That was all announced in the fourth quarter. Just Christina, with that, once the restructuring is done in Europe, you would expect that business to be more defendable or more stable at that level? Yeah. I mean, I would say we're addressing the cost competitiveness with the couple of factories out. I think there will be more work for us to do beyond 2025. I think we can get Europe to a high single-digit SOI margin performance. I don't think we'll get there by the end of 2025, but we're beginning the work. We're laying the groundwork. We've announced the two factory closures. We've also announced a big SAG restructuring worth $100 million. And EMEA will also get their fair share of the purchasing and some of the corporate initiatives that we're running as part of Goodyear Forward. So we do have a good path to earnings growth in the future in Europe, but I think it's going to take a little bit longer than this two-year plan period that we're talking about as part of Goodyear Forward. Gotcha. Okay. Thank you. Thank you. Our next question comes from James Picariello with BNP Paribas. Please go ahead. Hi. Good morning, everyone, and welcome aboard, Mark. Good. Just on the restructuring actions, the Goodyear Forward savings plan. So you're calling for $350 million for the full year, $50 million in the first quarter. Just curious how we should be thinking about the remainder of the year in terms of the cadence. And then more broadly, as we think about divestitures and the need for the execution there to fund the heavy lift on the Goodyear Forward plan in 2025, right, to achieve that billion-dollar-plus exit rate, just does all that need to take place this year for the timing to be maintained here in terms of the timeline? Thanks. Hi, James. So on the Goodyear Forward program, $350 million on a full-year basis, $50 million in the first quarter. You can think about that as a big step up in Q2 and then a little bit of a leveling the rest of the year. But then what I would say is still ramping on through the fourth quarter. As you can imagine, we're building into a run rate through the end of 2025 with all of these programs. When I look at the asset sales, I'd say the processes related to the sales of the three respective assets that we talked about on November 15th is underway and progressing as planned. So we'll be back to you when we have significant developments. I'll note that the outlook items within the investor letter don't contemplate an asset sale, so we'll have to come back to you and adjust our box once we close on any sale. But I would say for the 2024 plan, no requirement for additional funding this year from an asset sale in order to achieve our plan. Right. And maybe this is a question we could answer offline, but just for context, if no divestiture takes place this year, right, just for context, what would be the additional restructuring Goodyear Forward savings that would be in store for next year, just on an incremental year-over-year? Yeah. So when we laid out the plan in November, James, we had said $350 million in year one and $750 million in year two. Right. But what about under the hypothetical that the divestitures don't take place this year? Again, purely hypothetical. Just what would be the incremental push to next year without that additional funding source for the additional actions? Does that make sense? As of today, we've announced restructurings of about $750 million as compared to that guidance of $1.1 billion that was in our November announcement. We've said $300 million of that sits in 2024, $350 million sits in 2025, and that leaves the remaining stub in 2026. Got it. Much appreciated. And then if I could just ask one more, just on the full year, kind of a follow-up to Rod's question. Just on a full-year basis, would you be surprised if Goodyear's unit volumes were down for the full year, right? You've got the -2% for the first quarter. Just wondering if we could kind of establish that barometer in terms of just expectations flat or up or down for the full year in terms of units. Thanks. Yeah. I mean, maybe I'll take the opportunity, James, to just talk through a year-over-year SOI view, and that'll get you at least sort of how I'm thinking about volume, but I'll go through all the drivers at once, if that makes sense. On a year-over-year basis, if you start with our 2023 SOI of $968 million, Goodyear Forward obviously adds that $350 million against base inflation of $215 million. Other costs, so these are costs in transportation and energy, on a full-year basis should be about flat. I do see right now a tailwind of $75 million in the first half that's driven by transportation rates, but we'll flip to headwinds in the back half of the year driven by increased insurance premiums as well as some transitional manufacturing inefficiencies related to our announced footprint actions in EMEA. Then separately, with Tupelo now at full production, we should get a $50 million benefit in the second quarter on a year-over-year basis. And then raw materials, we've set our $375 million in the first half, first quarter price mix down $130 million. And then we'll lap that about $60 million drag that we've been carrying with us as part of the commercial truck decline since the second quarter of last year. We'll lap that in Q2. So our price mix in Q2 should be better than Q1. We're also looking to build a couple million units of inventory in the Americas as levels are lower than what we need for optimal service levels. As a result of the tornado and our managing the business for cash last year, that should benefit second half unabsorbed by about $40 million. I know we've said working capital will be neither a source nor a use for 2024, but we do have some Goodyear Forward work streams that will help us offset that, particularly around procurement. Then it comes down to, and this was your question, James. What it comes down to is what you want to assume on volume, price, and mix for the rest of the year. I think if you look at Asia-Pacific, we have been seeing steady growth of mid-single- to high-single-digit in our consumer replacement business. If you wanted to model that Q2 through Q4, I think that would give you another $35 million or so on volume and unabsorbed. And then you get to the mature markets where you have to balance this lower volume growth environment, call it up 1% or so, against the declining raw material environment and what you think that means for our price mix. Super helpful. Thank you. Thank you. As a reminder, it is star and one on your telephone keypad if you would like to join the queue. We will move next with Emmanuel Rosner with Deutsche Bank. Please go ahead. Congratulations, Mark. Thank you. Good morning. Good morning. So Christina, I appreciate all the good color around the call. I, frankly, didn't have a chance to put it all into my little calculator. It It came back in real time. So just trying to understand maybe in terms of bottom line versus your view in November. I think when you presented the plan to all of us, I think your high-level view at that point was, "Look, we're exiting 2023 with a fourth-quarter margin of 7%," which you clearly overdelivered on. So let's call it like a at the time, you said $1.4 billion sort of annualized SOI. And then on top of that, we can have net cost savings of about $100 million, so the gross savings minus the inflation. And so you were sort of, I think, suggesting that $1.5 billion is sort of something that is potentially a reasonable target. What does this year look like now that you have all the other puts and takes in place versus what you were describing a few months back? Sure, Emmanuel. So tracking back to our November 15th announcement, you're right. We said that the run rate of the business exiting the back half of the year felt like about 1.4. If I look at it today and adjusting for the first quarter seasonality, we do have a big step down in Q1 always because of we generally sell about 4 million units less in Q1 than we do in Q4. We also drag in some inefficiencies from the holiday shutdowns into Q1. But what I would say on top of all that, we do have to absorb about $60 million in OTR, mines that aren't in the run rate. So on a run rate basis, I would start knowing where we closed at the end of the fourth quarter, I would start a run rate at 1,350. Then we know that we have the positive of Goodyear Forward of $350 million. We have a negative inflation of $135 million. And then outside of inflation, I articulated on the year-over-year walk just a $75 million headwind in the second half driven by higher insurance premiums and then some of these manufacturing inefficiencies related to our recently announced factory shutdowns in EMEA. So that's new news. And then against all of that, again, that $60 million in OTR and mines that we're going to absorb, that's weighted to the first half. It's even more weighted to Q1. And then that leaves your assumptions on how you want to build volume on top of that, Emmanuel. So hopefully, that gives you some clarity around the run rate. So sorry, just to clarify, the changes versus sort of the new news, I guess, versus the November framework is a little bit of a lower run rate. Call it like $50 million as an exit rate, and then sort of like this $75 million headwind in the second half, and then any assumption on price mix volume. Is that it, or did I leave something out? Well, yeah. I mean, I would say OTR and mines, we knew back in November. And when I answered the question, Emmanuel, in November, we said we have to come back in February and lay out our guidance for the full year. And so OTR and mines are certainly a piece of it. Insurance premiums are a headwind against the run rate. And then we have these transitional manufacturing costs as part of the recently announced closures in Europe. Okay. Thank you. And then on the cash side, so the CapEx was guided to, I guess, quite a bit higher than it's been recently, I think $1.2 billion-$1.3 billion. I don't remember it being sort of like a piece of the plan. I think you may be just elaborating on what this is sort of related to. And then conversely, I think the restructuring cash, the initial plan was going to be $600 million outlay in 2024. Now it's $300 million. What does this relate to? Are there incremental efficiency or timing of spend? And does that impact the timing of savings? Yeah, sure. So I'll start on the CapEx question. Our guidance implies a $200 million increase at the midpoint to support new programs. We've given a range here. What I would say is if you assume a weaker environment over the course of 2024, we'll find ourselves at the lower end of that range. At the higher end is in a more constructive volume environment. That's typically how we've managed our CapEx spend historically. The step-up is really driven by two different new programs in the Americas to drive mix-up. One's a factory modernization. One is a factory expansion. The modernization's going to convert about 9 million units from LVA to HVA, and that will be at its annualized run rate by the end of 2025. Then another, I mentioned an expansion that's going to add, call it $2.5 million of HVA capacity for us in annualized run rate by the end of 2026. So getting the full-year benefit of that in 2027. The second question on restructuring, the guidance as part of the November 15th announcement was $1.1 billion. We didn't phase it for you. What we've announced up until now is $750 million. And just based on the timing of the factory closures that we've outlined, $300 million of that falls in 2024, $350 million of that falls in 2025, and the remainder in 2026. So it does feel like timing, Emmanuel, versus maybe what you had written down to start. Okay. And you're talking about the spending here, the cadence you just gave? I'm sorry, Emmanuel. I didn't quite hear you. The 300, 350, and then the remainder, this is the timing of the spending? That's the timing of the $750 million of announced restructuring. Understood. Thank you. Sure. Thank you. This will conclude our Q&A session as well as our conference call. Thank you all for your participation, and you may disconnect at any time.