Thank you so much for joining us. Great to be with you this morning. We are delighted to have Goodyear Tire with us at the Future of the Consumer Conference to talk about many interesting and exciting trends for the company and for the industry itself. I'm Itay Michaeli, the auto analyst at TD Cowen. I'm very, very pleased to have Mark Stewart with us, Goodyear's CEO and President. We also have Christina Zamarro, the CFO, with us as well. We'll keep this to a fireside chat session. If you do have any questions throughout the session, feel free to raise your hands. We'll get you a mic. Yeah, looking forward to the conversation. Mark, great to see you. Thanks so much for being here. You too, Itai. Thanks for having us. Great. I thought we could start with some of your reflections on both the company and the industry since taking on the CEO role about one and a half years ago, I think, at this point. Yep. No, it is. It is a blink of an eye, literally, and a year and a half has passed, right? But when we take a step back for a minute and just kind of reflect on it, in joining the company, first and foremost, Goodyear is one of the most iconic brand names when you think about talking about a consumer conference, right? It is literally one of the most recognizable names around the world. What we have been working on is taking that iconic name and bringing it back to the forefront, right? We have really changed our mission, if you will, to be very simplistic, very focused, number one in tires, number one in service. They are like, well, that is basic. It is like, yeah, but that is what we are trying to do. We are trying to get back to the basics. Part of that is harnessing the power of our people. We've got unbelievable skill sets, great teams all around the world, and harnessing the power of those teams, of our performance, of our product, getting it back out into the marketplace in a meaningful way, right? Doing that and continuing to move up in what we call the upper tiers or the upper segments of the performance, whether it's the SUVs, the Luxe, the EVs, and the high-performance tires. Terrific. What would you say are Goodyear's key competitive advantages? And how does the brand kind of compare by your major regions? Yeah. It really, for sure, it is about our people, right? We've got some of the best chemists and compounders in the industry. I would say we have the best, right? It's one of our key IP features, our key areas of what makes us who we are. It is our tire intelligence, just the IP going into building those tires. We are winning awards at the top of the charts all around the world in each of the categories that we're in. We're really focusing on the fundamentals of the business, which is the Goodyear Forward Plan, again, what we're so proud of over this last year and a half, getting closer to two years now of just changing the trajectory of the business, getting the balance sheet healthy where it needs to be, getting us into the right competitive positions, filling in blank spaces in the marketplace. One of the things we're excited as well is we've had so much great success in the OE world and winning more fitments in the OE. As you know, right, importance as SARS come back and us winning on the right platforms, and it gives us a really strong ticket into 65%-70% of pull-through in that first and second replacement. Interesting. What would you say right now are some of the key innovations that you're working on at the company and for the industry? I do get this question often, particularly around EVs over time. As that mix starts to increase even more in the installed base, kind of what does that mean for the company as well? Yeah. We've got several different areas that we're working when it comes to innovations, whether it's our tire intelligence that goes not only into EVs, but also just into all of the car park, if you will, with our OE partnerships to where we can take our tire sensing that's built in, ties into the connected vehicle. Wet roads, dry roads, the snow, you name it, dynamics changing, tire wear changing, and we can make that vehicle perform at its very best. We can help to stop faster. We can help make sure of avoidance of accidents. That's a key part of it. On our commercial side or our trucking side of the world, it's really about tires as a service. It's taking a classic fleet subscription of helping them, but it's really about total cost of ownership for our fleet customers, of us really overarchingly owning that for them. We will do that, but auto inflation, deflation, telling when something's happening within the tire through that sensing. When we look at the EV space as well, and it's why we're having such great success, to your earlier question, in Asia Pacific on the EVs, we're winning with the right EV customers, the right OEMs, and the pull-through is following strongly. The same thing in Europe with the German OEs in particular, with other classics like former employer as well, Stellantis. We feel very good about the road handling, the wear, which is very important. Our compounding helps that immensely, and the noise and vibration aspects of it. Absolutely. Maybe double-clicking on the vehicle intelligence and, of course, the EV, over time, what does that do to OE tire margins? I think historically, it's always thought OE is low margin, aftermarket, of course, higher margin. Is there a long-term makeshift, particularly when you also layer in autonomy and presumably the need for if a vehicle is at level three, four, eyes off or driver out, presumably you would need a lot more vehicle intelligence on tires. Is that a long-term opportunity for the company? No, it absolutely is. I would say it is more of a midterm opportunity as well when you think about it because as we go through that, it is typically about a 30% faster wear on an EV. Just the battery packs are so heavy with the current technology of the battery packs based on the range that you are looking for in your vehicle, the SUVs, the trucks, everything is pretty heavy, right? From that, our prowess in compounding and the chemistry is absolutely a key enabler for our success in that space. Terrific. Maybe shifting gears to some near-term topics. You had, of course, some news recently with the announced sale of a part of the chemical business. Maybe just give us a couple of details on that, how we should think about the proformas and kind of what that does to the company's proforma leverage as well within the targets you've shared previously. As we go back to now, probably a year and three quarters, right, in November of 2023, it really has been a quick journey, but it's been a really fundamental change in our businesses as we look at launching through all the Goodyear Forward practices, the accountability, the ownership of really getting our day-by-day cost fundamentals, our SG&A, everything in place, the plant efficiencies, et cetera. You couple that with some of the strategic reviews that happened and ultimately the divestitures, whether it was our mining business with the OTR, the Dunlop sale that is now transacted, and now just in the last couple of weeks, the chem business. We are very pleased with the value. A huge shout out to Christina Zamarro and the BizDev team for getting the right value for those businesses. In total, we're about $2.3 billion of proceeds from that that we've used on the first two to pay down debts and to do all the right things with that money and getting our leverage to a healthy business. That's something that has been in the eyesight for a long time. We're very pleased to have the company in the right spot of health on a go-forward. Yeah. Congrats on all that progress. Of course, we're sitting here, I guess, in early June. Any thoughts about just how the quarter's going and any updated thoughts maybe on the year as well? Anything to kind of call out from some of the assumptions you laid out on the Q1 call? Yeah. Again, we're very pleased with six quarters of continued doing what we said we were going to do and actually doing better and better when it comes to the Goodyear Forward of that all getting embedded into the cost DNA and really our DNA profile for each one of us. Looking forward as well, the question around tariffs, I'm sure, right? That's probably coming on your page. My next one, my next question. It is, what does that mean for us? Ultimately, we see where it lands. We do believe, particularly in this marketplace, we're in a much healthier spot than the competitive set simply because we've got the largest U.S. footprint. It's another area for us that we're looking to leverage those opportunities as those come about as well. Maybe kind of deep dive the tariff impact and different scenarios that you're running. Are you seeing any impact already in the quarter or kind of how we think about the rest of the year? Maybe even just more broadly, some of the top maybe couple of scenarios that could play out and how that might affect Goodyear? Yeah. I mean, there was, we believe, I'd say there was a tremendous opportunity for folks to do pre-buys, right, particularly in the lower end of the tiers anticipating the tariffs coming. I think things are pretty cluttered when it comes to inventory and shelf space, if you will, of that. We really believe that probably late quarter two, start of quarter three is the most likely scenario of that getting cleared out and those opportunities really starting to come to fruition at that point. As well, from the raw material side of it for us, as we shared in the call, we feel very good about the fact that the raw material pressure coming off into the year-on-year comparisons, right, gives us some tailwind in that second half of the year as well. Absolutely. How could tariffs potentially impact the premium tire market in the U.S.? I think that it's a little bit more elastic in that space with just at that price point and that segmentation of the tiering of the tires. We've already, as we announced on the earnings call, we've already put price increases in the marketplace. We did different price increases based on the tiering and based on the location, obviously, where those tires are made. We led with that. We've seen others follow in that marketplace and in the marketplace. We feel very good about the future set for that. Terrific. Sticking with tariffs, any implications to EMEA from tariffs? I know there's been some developments there as well recently. Yeah, in the last couple of weeks, for sure. The investigation has started there as well into looking at the Asian imported tires into that marketplace, probably six- to seven-month type of period before that comes into an announcement. We believe that that's got some opportunities as well. Great. You mentioned this before, Mark. I think it's a really important topic. Just want to revisit is the first replacement sale. We've always felt that that was a really important transaction within the aftermarket for Goodyear, just given your very strong OEM share. What are you seeing there? Are you more optimistic that in the next couple of years that channel could improve, just given that we've now seen the SAR improve the last couple of years? Maybe just give us as much detail as you can on kind of your positioning there and what you see in terms of loyalty and kind of those types of things. No, absolutely. I think it's absolutely true in each of the regions we operate, right? Maybe if we start with Europe in that case, again, Europe has a lot more of the marked tires through the OEM. It's on the OE. It's got a marking. Going back to the car dealer on that first and second replacement cycle is a very high pull rate, roughly 70% on that first pull. We've had some really strong wins there with the German OEs, with Daimler, with BMW. We feel very good about that space. Same thing when it comes to Asia Pacific and the EV wins there. We've got a really healthy business with BYD that's winning all over the world, as well as with Tesla, with others. From that standpoint, again, feel very good about it. Right here in the home base, right, we again, winning on the right platforms. We've really changed our process as a company and coming in as well, though, just looking at what are our OEM-by-OEM strategies, who's winning in the marketplace, looking at the, we call it the IHS. It's a little bit dated, right? They change names irregularly. Yes. Yes. As Yes. As we look into the SAR predictions, what is coming out and us making sure we're timing OE and then the moles we've got set up for replacement cycle as well into that marketplace. We feel really good about those wins that we've had, winning with the right players, winning in the right spaces. We're very strong in all-terrain. We're very strong in the light truck, in the SUV, and in the EV space, which are really the moneymakers in this market. Terrific. Mark, I'm hoping you could talk a little bit more about the actions you took recently to increase premium tire capacity. I think about 10 million units this year and next year. What drove that decision and how should we think about kind of Goodyear's share in the premium replacement tire market in the next couple of years? It's been on the list for Goodyear for a long time. When we talk about actually the governance and the cadence of making sure we're doing what we said we were going to do, it's one of the things in coming into the company is we've really got a robust governance process around making sure we are participating in the higher rim segment, which is the higher profit pools. A clear need for that. This started pre-me, right, of our lot in Oklahoma facility. I guess it's just one to highlight of a conversion for $10 million of incremental capacity in those higher rim sizes in the higher profit pools to make sure that our equipment, our capacities are lined up with the profit pools in the marketplace. It's not only there, right? We're doing the same activities across Texarkana, Tupelo, and many of our other facilities, not only here in the U.S., but around the world. It's about changing the way we're applying CapEx. We're being very regimented in our CapEx plans. We're making sure we got the right CapEx at the right kind of a CapEx or asset light approach to make sure we've got best cost, best performance capital that's going to convert those assets where we can generate the most returns. We're simplifying. We're streamlining and reducing the complexity of some of the older SKUs that we've relied on for many, many years, right, for volume. This is number one in tires doesn't mean a volume play. It really is about us standing on the podium in terms of overall value for a customer and value for shareholders in terms of profitability. Absolutely. Sticking with MIX, the over 18 kind of rim diameters, obviously very important for you. Where do you see that market going in the next couple of years? Maybe talk about the competitive set in that kind of category. Yeah. No, definitely. The OEMs are, it is very rare to see, other than occasionally you'll see a Japanese or Korean OEM with something in less than that space, which we do participate on a very focused way with the right OEMs. By far and large, it's definitively 18 above. In a lot of cases, it's 19 and 20 above for this space. Our engineering teams are set up in centers of excellence to be able to develop those. We've also changed our development process. It's ongoing at the moment to move into global product development so that we're going with common platforming and then tweaking those tires in terms of tread and development for that and compounding for the OEs for the performance that they need. I think one of the things that the team's done a great job of is the number of cycles or iterations required to bring a tire into the marketplace. It used to be eight or 10 different cycles, right? We can do that in three or less now. A lot of that is virtual. Not a lot of this prototyping that is taking so many people, resources, money to do. The OEs are very appreciative of that because we can bring things to market for them much faster at a much better cost structure. Terrific. Maybe related to that and maybe kind of back to EVs, what has been your EV win rate of the OEMs in the next two, three, four years? Kind of where do you see your market position there? It seems like you are winning pretty significant business the last couple of years with a lot of different OEMs. I am just curious. Maybe to that point, Mark, what has been the driver of that success for Goodyear? Yeah. So we absolutely are. If you think about Asia Pacific, it's approaching nearly 80% win rate because that is the market, right? We need it to be at that number. We're very pleased with that. Also with the customers we've targeted or the OEs we've targeted, we're winning with those folks. We're looking at it in terms of not only a local, but on a global play as well. Same thing in EMEA. It's about a 50/50 or 60/40 mix. That's the same in terms of the sell-in into the marketplace and sell-out in the marketplace of the OEs of Europe. Here, it's about 25-30%, which is the same thing. It's based on what's happening in the market. We're a little bit stronger than the market in that space because people are really finding the value in our tire technology for that, the sensing, the quietness in terms of, as I mentioned before, right, for quiet road handling. We really think it's a definite competitive advantage for us on the go-forward. What is nice is, though, we've got purpose tires for each consumer based on what they're looking for on an end consumer. Terrific. Asia, very competitive market. A lot of different other auto suppliers, not in tires necessarily, have struggled with competition there. It seems like you're actually winning quite a bit of business. What's the success driver there in sort of what is just a very competitive market? I think we've got a very focused business model there, Nat Madarang, that runs the business for us there, does an excellent job with the team. They're in the field. They're in very close with the customers, not only the transplanted OEMs, if you will. That's kind of an antiquated phrase, but with the Chinese OEMs. We're listening. We develop products that they want. We're listening to the consumer base. That's great. Mark, Goodyear Forward's been successful. You've been executing very well since you joined. What do you see beyond Goodyear Forward as you begin to think about the next two or three years for the company? What do you see the biggest opportunity? Is it on more cost efficiency? Is it to drive more growth? Kind of how do you prioritize the next kind of two or three years for the company? Yeah. It's making sure the discipline and the fundamentals we put in place that we continue that, that it really and truly is embedded into our DNA, right? As I mentioned, we've changed our governance and our cadence of meetings to make sure that we have the right checks and balances in place. We're updating our business processes accordingly to try to streamline less bureaucracy, less hands in the pie, if you will, in terms of making decisions so we can be speedier. It really is about us focusing on this higher rim size, the higher profit pool markets that we're bringing things to market faster through our virtual engineering and really being able to harness our engineering resources all around the world and not developing products three times over, one for each region, but one that can be developed all around the world. In principle, it gives us 2x plus times the engineering resources, right? We've set up another tech center as well in Asia to help us with speed to market there. We're going to be able to refresh our products faster. We're going to have newer products in, and we'll be able to take on more OE wins. The biggest thing is as well, it is about complexity and not overcluttering the plant. We've got to have the discipline. We've got the governance for it. New things come in. Old products must come out. That's the way it goes. Interesting. Is that another kind of incremental cost opportunity that also accrues to better, faster products? No, absolutely. It is, right? As we continue to modernize the factory, we're going to be very disciplined. We're protecting for about $1 billion of CapEx at the right negotiated price points, obviously, but $1 billion around the world for that and a regular cadence of restructuring money so that we can keep up and not get behind, right? We can modernize where we need to modernize and do the activities we need to do. Interesting. On that point, Mark, to what extent are automation and AI kind of being used as tools to drive that incremental R&D and product efficiency? No, it's huge for us. Right now, we're in a partnership with Salesforce where we're actually doing digital-enabled customer help, if you will, from customer agents and helping our frontline Salesforce to be able to go to the market with the right portfolio of products or the right screen, we call it, to help our retailers, help our customers to go to the end consumer with the right products and always having the right things in stock. With tires, you've got it or you don't, right? It's a sale or it's not. We feel very good. We've got drops scheduled basically every 90 days with the work that we're doing with Salesforce. We're starting here in the U.S., but the teams around the world are part of that so that we're able to expand that around the globe. That's a key part of it, of bolting the AI on into our, it's not just the classic CRM or CDP of the customer data platforms, but it really is about a customer cloud and a consumer cloud so that we've got that data so that we can help and make sure that we know what's happening in the market real time. Excellent. I just love to touch on distribution in the aftermarket. Obviously, it's been a topic for the industry and for Goodyear for a number of years. I do get the question about what are the preferred distribution channels, how are you feeling about overall distribution? Maybe talk a little bit about that and kind of what you're seeing and whether that is any kind of opportunity there over the next couple of years as well. Yeah. You know, we've got different ways of going to market around the world, so in terms of our line distribution. Here in the U.S. market, it's more of a two-step distribution process to a distributor, then to a retailer or to our own retail stores. In Asia, it's more of a direct-to-retail through an app where the retail centers can get on or the sub-distributor, if you will, and it's real time. That's really a benchmarking model that we strive for, right, so that folks have ease of access on their phone at all times. Boom, I just put a set of tires on. Boom, I'm bored of another one, right? When we look at it, it's important that we have the right relationships with distribution and with the retailers. Sometimes we go direct to a retail if it's a large retailer, or we do a middle step so that we've got the right amount of deliveries per day to our customers. Absolutely. Hopefully, we can touch on EMEA, obviously, in terms of the lowest margin region. You've been making progress. How are you thinking about that region long-term, the strategy? Yeah. You know, it's been a very tough region operationally for the tire industry just with so much of the low end of the marketplace having the Asian imports coming into the market. Country by country, we still do very well in the upper tiers. We're doing very well, as I mentioned, of winning with the right fitments in the OE, which we feel very good about that and the car dealer channel. Christina has been there running that for some months now. That's been absolutely invaluable to have Christina's expertise there and working with the team. As we look to it, we've gone through a big restructuring activity there really over the last year and a half. We've got another year and a half of in flight, if you will. We're restructuring two plants that needed to be closed, unfortunately, in the Western European marketplace. We're fundamentally changing our footprint of the landscape there as opposed to Western Europe versus Eastern Europe. It's inverted as we go forward into 2027 so that we can compete in that market space. Again, we are focused very much on the upper tier products, not in the lower tier zones. Absolutely. Continuing to kind of think ahead beyond Goodyear Forward, at a high level, how should investors contextualize and what do you see kind of Goodyear's long-term earnings power, whether it's SOI margin? Kind of how do you think about at least the opportunity for growth margin expansion directionally over the next few years? It sounds like there's still a lot of initiatives you're working on internally to improve efficiency. There's, of course, volume considerations, share consideration, first replacement tariffs. How do you kind of think, of course, a lot in there, but overall, the last two or three, next two or three years of what that means for Goodyear's earnings and margin power? Yeah. We've really restructured ourselves as such to be able to harness that and make sure we are leveraging it. Also making sure that we stay very focused and we do not have 250 things you are working on a day, right? Because you know how that goes. Really making sure that by global functions, we have aligned as opposed to a regional function. All of manufacturing is under one umbrella. We have process owners around the world. A best practice, a best process is being able to be rolled out instantly around the world as, oh, hey, here is a great cost opportunity. Here is a great OEE or efficiency opportunity. Or here is a best-in-class asset light CapEx program, right? We can do that. We are already seeing the benefit to that in terms of just it is a cost base. It is efficiency base. It is making sure that we're really harnessing the power of one, one global team is what we're really shooting for. As we look to that as well, same thing on the engineering base of having one global team working global products so that we can bring things to market faster. It is going to be more efficient, cheaper to bring it to the marketplace. We can refresh things faster so that we can be number one in terms of performance on an ongoing basis. We feel very good about that. Again, we've got our debt leverage where it needs to be. We'll continue to work that on down. As we've shared in the market, just shedding a lot of that debt gives us upside of $130 million-$140 million a year of less interest expense, of money that can go to fuel more profits, fuel the right investments, and just keep us in a healthy shape. It really is, though, about the business fundamentals. Absolutely. Maybe on debt leverage, Mark, as you kind of reach your goals and get the asset sales done, what's next? Would you like to get leverage a little bit lower over time? Is your preference or maybe allocate elsewhere? Yeah. You know, for the Goodyear Forward, we set that in the twos kind of range, and we're well within that. We would likely continue to look at it, but we'd probably come down a little bit more as we look at the competitive peer set, if you will, to make sure that on a peer benchmarking basis, that's what's next after Goodyear Forward, right? It's taking the other elements of peer benchmarking to, again, put our sights on being number one. That would include taking a look at that debt leveraging as well. Absolutely. We've got a minute left. One other kind of question on reflecting that I wanted to ask you is a year and a half or so in, what do you see, if any, of the dislocations and the perception of Goodyear as sort of the investment story and the industry as a whole, having kind of been out in the industry executing and meeting with investors? Are there any kind of dislocations in perception that you're seeing out there? You know, coming in from the OE side, right? It's like, okay, here's all the tire vendors, right? It's a tire. There's a heck of a lot going on in that tire, you know, that you're like, you take it for granted, right? That's what is truly keeping you safe every time you get behind a wheel, right? It's at the very fundamental level of it. As we look at the industry in total, there is so much opportunity. When we look at what we have been able to harness in the Goodyear Forward plan to get the company to health in such a short amount of time, to improve our retail operations in a short amount of time, and really have our best years in more than 20 years in terms of our retail performance and focusing on service, not just on pushing tires, but on service, it is something from an investment standpoint. It is actually a very interesting space because there are opportunities there when we think about the OE to the replacement cycle and the interplays between that, making sure as well that the right investments are being put into the chemistry upfront so that we can do leaps. You think about white spaces. It is not only the larger rim sizes or blank spaces for Goodyear. It definitely is for the coming year because, again, an iconic brand, iconic name, but we've not been out there in the marketplace in a marketing way, in a meaningful way in a number of years. I encourage everybody, if you've not seen our new marketing advertising space of still, it's pretty powerful. It can be emotional. I'm an emotional guy, so I love to laugh and tear up. For me, it just really brings back when you look through the decades of the advancements in tech that Goodyear has brought to the table, to the country, to the industry, and that we're still doing that. It goes back into as well what we're doing on the go- Forward in the EV space, in the last mile development space, and the work we're doing with last mile fleets that we all know and get from on a daily basis that we've been able to partner with those folks to service their vehicles on a daily basis, right? To the tune of six, seven hundred appointments a day just in this marketplace is pretty powerful when you think about the upside opportunities. Absolutely. I think we'll have to leave it there. Mark, thank you so much. Great conversation. Learned a lot as always. Thanks for being with us. Thank you.