Good morning. My name is Lori, and I will be your conference operator today. At this time, I would like to welcome everyone to the Mohawk Industries Fourth Quarter 2021 conference call. At this time, all lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer period. If you would like to ask a question during this time, simply press star then one on your telephone keypad. To withdraw your question, please press the pound key. Should anyone need assistance at any time during this conference, please press star then 0, and an operator will assist you. As a reminder, ladies and gentlemen, this conference is being recorded today, Friday, February 11, 2022. Thank you. I would now like to introduce Mr. James Brunk. Mr. Brunk, you may begin your conference. Thank you, Lori. Good morning, everyone, and welcome to Mohawk Industries quarterly investor conference call. Joining me on today's call are Jeffrey Lorberbaum, Chairman and Chief Executive Officer, and Chris Wellborn, President and Chief Operating Officer. Today, we'll update you on the company's fourth quarter and full year results. I'd like to remind everyone that our press release and statements that we make during this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, which are subject to various risks and uncertainties, including, but not limited to, those set forth in our press release and our periodic filings with the Securities and Exchange Commission. This call may include discussion of non-GAAP numbers. For a reconciliation of any non-GAAP to GAAP amounts, please refer to our form 8-K and press release in the investor section of our website. With that, I'll turn the call over to Jeff for his opening remarks. Jeff? Thank you, James. For the full year, Mohawk's business improved significantly. In 2021, net sales grew more than 17% as reported versus the prior year to $11.2 billion, and our operating margins rose dramatically to approximately 12%. Our 2021 adjusted operating income approached $1.4 billion with Adjusted EBITDA exceeding $1.9 billion. In addition, versus our 2019 pre-pandemic results, we also achieved 12% organic sales growth and improved our adjusted margins by 270 basis points. We ended the year with a historically strong balance sheet, and during the fourth quarter we purchased approximately 2.4 million additional shares of stock for a total of approximately 4.9 million shares purchased during the full year. In February, the board of directors approved an additional authorization for share repurchases of $500 million based on our confidence in the company's strength and to enhance shareholder return. All of our segments performed well and responded effectively to the complexities that occurred during the year. Throughout 2021, our regions benefited from strong housing markets supported by rising home prices, favorable interest rates, and accelerated home purchases by millennials. Changing lifestyles encouraged shifts from rental to owned property, movement to larger homes, and remodeling upgrades to adapt to work and school at home. Among home improvement projects, new flooring is one of the most frequent upgrades. All of our product categories have benefited from this trend, which is projected to continue throughout 2022. The commercial sector continued its improvement over the prior year but has not yet reached pre-pandemic levels. While we thought COVID would be behind us in 2021, the pandemic continued to impact our markets to varying degrees throughout the year. Surges in some countries kept people voluntarily at home, and government restrictions in other regions temporarily hindered our operations and customers. We continued to maintain precautions in our facilities to mitigate risks to our employees. Moving forward, we will benefit from bolt-on acquisitions we completed in 2021. These include an MDF manufacturer in France and an Irish insulation company, which will be accreted to earnings in 2022. When integrated, they will enhance our present operations, expand our markets, and reduce our costs. Our performance in 2021 illustrated the fundamental strength of our business as we maximize our results in strong market conditions as well as those where the pandemic impacted our industry. We delivered product innovation around the world, leveraged our logistics strength as a competitive advantage, and executed multiple price increases to pass through material, energy, and transportation inflation across all products and geographies. We managed labor shortages with enhanced training, process improvements, and strategic automation where possible. We creatively addressed material supply shortages through product reengineering, SKU rationalization, and improved production planning. The negative impact from inflation, supply chain disruptions, and labor shortages, along with a stronger U.S. dollar, increased as the year progressed. Sales in the fourth quarter remained strong, rising 4.5% as reported or approximately 12% on a constant currency and days basis to approximately $2.8 billion, with a return to more normal seasonality for the industry and 6% fewer days in the period compared to the prior year. Our adjusted EPS for the quarter was $2.95 per share, with benefits from price mix and productivity offset by increased inflation and lower volume from fewer days in the period. As raw material, energy, and other costs continued to rise, we implemented price increases in most products during the quarter. European natural gas prices have been the most volatile, substantially increasing our energy costs as well as material costs, and we have raised our selling prices significantly. We ran our operations at high levels through the end of the year in an effort to improve inventory, though staffing, material supply, and transportation challenges impacted our costs. Outside the U.S., government restrictions on business operations in some regions lowered retail sales during the quarter. Commercial sales improved in the quarter, even with some deferral of projects due to COVID and government actions. During the fourth quarter, we released our annual environmental sustainability and governance report. The report showcases how Mohawk is fostering innovative products that lay the foundation for healthier, more inspiring spaces where people live and work. We also highlight how we're maintaining a safe, respectful workplace, reducing and repurposing waste, and conserving natural resources. The entire document's available on our website. James will now review our fourth quarter and full year financials. Thank you, Jeff. Sales for the quarter were just shy of $2.8 billion. That's a 4.5% increase as reported, or 11.8% on a constant days and FX basis, setting a new fourth quarter record. Year-over-year growth was driven by price mix initiatives across the business to attack rising costs, partially offset by the fewer shipping days and a more normal seasonality. For the full year, Mohawk also set a sales record on a consolidated basis and in each segment, with total sales of $11.2 billion, 17% increase versus prior year as reported. Gross margin for the quarter was 26.7% as reported, or 26.8% excluding charges, decreasing from 28.8% in the prior year. The year-over-year decrease was primarily driven by inflation of $257 million, lower volume of $49 million with fewer shipping days and a more normal seasonality, partially offset by improved price mix of $242 million and productivity gains of $40 million. SG&A as reported was 17.5%. On an absolute dollar basis, the increase versus prior year is the result of a return to a more normal selling and marketing activity compared to the prior year of $19 million, inflation of $7 million, unfavorable impact of price mix and volume of $5 million, partially offset by a net FX gain of $5 million. Operating income as reported was a margin of 9.2%, and excluding charges, 9.4% compared to 11.6% in the prior year. The year-over-year decrease was driven by inflation of $264 million, especially in raw material and energy, unfavorable volume of $51 million, primarily due to the fewer shipping days, partially offset by strong price mix actions of $240 million, productivity gains of $21 million, and a net FX gain of $8 million. On a full year basis, adjusted operating margin of 12.1% significantly increased, exceeding prior year by 370 basis points, and 2019 by 270 basis points, driven by strong volume, productivity, and price mix actions offsetting increased inflation. Interest expense for the quarter was $12 million, down slightly from prior year. Our non-GAAP tax rate for the quarter was 18.9% versus 14.8% in the prior year, which was favorably impacted by the CARES Act. We expect 2022's tax rate to be between 22%-23% with quarterly variations. Our EPS as reported was $2.80, and on an adjusted basis was $2.95, a decrease of 17%, primarily due to the volume effect of fewer shipping days and the pace of inflation, especially in Europe. On a full year basis, EPS of $14.86 was an all-time record, increasing 68% versus prior year and 48% versus 2019's pre-pandemic level. Now turning to the segments. Global Ceramic had sales of $950 million for the quarter, a 3.2% increase as reported, or 9.8% on a constant FX and days basis. The year-over-year sales growth is driven by pricing actions with Brazil, Europe, Mexico, and our U.S. countertop business showing the strongest growth. Operating margins excluding charges was 6.4% compared to 9.5% in the prior year. The segment has been impacted by the ongoing energy crisis in Europe, with total inflation increasing by $87 million versus prior year, as well as the fewer shipping days driving lower volume of $13 million, partially offset by strong price mix actions of $65 million, favorable productivity of $7 million, and net FX gain of $2 million. Flooring North America had sales at just over $1 billion. That's a 5.4% increase as reported, or 12.2% on a constant basis. With the resilient and laminate product categories having the strongest results, along with our commercial business, which continues to show improvement. Operating margin, excluding charges, was 9.1% as compared to 9.5% in the prior year. The year-over-year margin decrease was driven by inflation of $88 million, primarily due to raw materials, offset by continued price mix actions of $85 million, a decrease in volume, primarily due to the fewer shipping days of $20 million, offset by increased productivity initiatives of $22 million, and less temporary shutdowns of $4 million. Finally, Flooring Rest of the World had sales of $796 million. That's a 4.9% increase as reported, or 13.9% on a constant days and FX basis, with the strongest growth in our panels and insulation business as LVT and laminate were negatively impacted by supply and labor constraints. Operating margins, excluding charges, came in at 14.8% as compared to 18.2% in the prior year. The year-over-year margin decrease is due to unfavorable volume of $18 million, driven by fewer shipping days and labor and material constraints, which also negatively impacted productivity by $8 million. In addition, we have seen escalating inflation of $89 million in the fourth quarter, but we're able to offset with price mix actions of $90 million. Lastly, there was a slight increase in startup costs of $2 million, offset by net FX gains of $6 million. In the fourth quarter, our corporate eliminations were $12 million, in line with the prior year. Turning to the balance sheet. Cash and short-term investments were $592 million. Now, due to the increase in inventory and the timing of CapEx, we recorded a use of cash in the quarter of $89 million, but had a strong full-year free cash flow of $633 million. Receivables end of the year at just over $1.8 billion, and DSOs were very strong at 56 days as compared to 59 in the prior year. Inventories were just shy of $2.4 billion. That's an increase of approximately $479 million or 25% from the prior year, due primarily to increasing inflation. Inventory days finished at 112 days versus 103 in the prior year. Property plant and equipment was just over $4.6 billion. Based on the timing of our new projects, CapEx for the quarter was $301 million with D&A of $143 million. For the full year, CapEx came in at $676 million and D&A at $592 million. For 2022, we are forecasting CapEx to be approximately $800 million and D&A to be approximately $600 million. Overall, the balance sheet and ongoing cash flow remained very strong with gross debt of just over $2.3 billion and a leverage at 0.9x Adjusted EBITDA. With that, I will turn it over to Chris to review our operations. Thank you, James. For the quarter, our Flooring Rest of the World segment sales increased 5% as reported, or approximately 14% on a constant days and currency basis. Adjusted operating margin was 14.8% as a result of pricing and mix gains offset by inflation and lower volume due to fewer shipping days and supply chain interruptions during the quarter. Sales were strong in the quarter as demand for our residential products maintained its momentum, even with delays in shipments due to transportation constraints. Beginning in the third quarter, our material costs began escalating at an unpredictable pace as many suppliers utilized natural gas in their manufacturing process. Based on our cost estimates, we raised prices on our product lines in the fourth quarter and again in the beginning of this year. Despite multiple pricing actions, we are still lagging inflation because of these increases. We have announced further price increases based on current costs, and it will take time for our actions to offset these extraordinary circumstances. We will continue to monitor closely and will take further actions as required. During the quarter, our premium laminate collections continued to perform well in Europe and Russia due to our unique visuals and water-resistant technologies. Though we expected improved material availability for our LVT business, we continued to experience shortages which impacted our production and sales in the quarter. We are continuing to enhance our LVT processes, particularly in our higher value rigid collections. As we expand our customer base and product offering, we are growing our sheet vinyl sales in Russia and Europe. We installed a new production line for high-pressure laminate, which is sold as complementary product to our panels and is used on surfaces that require higher performance levels such as furniture, cabinetry, and wall treatments. We are enhancing our panel visuals with new technologies from our laminate flooring. Our mezzanine flooring business also grew significantly in the period as demand for e-commerce warehouses space expanded. Throughout 2022, we will integrate the bolt-on acquisitions we completed last year to expand our position and further differentiate Mohawk from our competition. Our new French MDF facility will complement our existing operations, enhance our product offering, and strengthen our regional position. The purchase of an insulation manufacturer with plants in Ireland and the U.K. complements our existing operations in those countries and will increase our share in the polyurethane insulation category. The purchase of a wood veneer producer to be finalized in the first quarter will improve the cost and quality of our engineered wood floors and make our operations more sustainable. To enhance these operations, we will upgrade their assets and refine their processes. Our Rest of World segment has a proven foundation for growth based on delivering product innovation through value-added features that consumers prefer. The unique style and performance of our premium laminate has made us the market leader. Our waterproof laminate collections are popular across all sales channels, and we have seen growing demand as home renovation has increased during the pandemic. To maximize our premium laminate sales, we expanded our press capacity last year. We are executing our next laminate expansion in Belgium, which will support additional sales of approximately $150 million when the production is fully operational at the end of 2023. In the fourth quarter, our Global Ceramic segment sales increased 3% as reported and 10% on a constant days and currency basis. Adjusted operating margin was 6% as a result of productivity and pricing and mix improvements, offset by European energy crisis, inflation, and a return to more normal seasonality. Mexico, Brazil, and Russia outperformed in the period, even though sales in those regions were constrained by capacity limitations. Our U.S. ceramic products are gaining momentum as imported ceramic service levels have become less reliable and landed costs have increased. Residential remodeling and new construction drove sales growth in the quarter, with commercial improving, though still below pre-pandemic levels. We grew sales and improved mix with our innovative floor, wall, and mosaic offerings, as well as expanding our position in exterior products, such as our outdoor porcelain pavers. We have introduced a variety of new sizes and unique shapes and expanded our polished and rectified collections with enhanced performance features. Our quartz and porcelain slab sales continue to grow, improving our mix and margins. Inflation in material, labor, and energy continue to impact all of our markets, and we are taking additional pricing actions to recover. Last year in Europe, natural gas prices accelerated at an unprecedented pace due to supply shortages and are presently about five to six times higher than last year. Most European ceramic industry participants are implementing price increases to offset these extraordinarily high energy costs. We anticipate our prices aligning in the second half of the year. Due to uncertain availability this winter, we are forecasting continued energy volatility, which will impact our first quarter results. Future prices will depend on stability in the region and whether Russia increases supplies beyond its contractual obligations. Mohawk is the world's largest producer of ceramic tile, and we have many opportunities to leverage that position and grow our long-term sales and profits. We are well-positioned for significant growth in markets such as Russia, Brazil, and Mexico, where ceramic tile is the dominant residential and commercial flooring. In Russia, we are expanding our porcelain tile capacity with a new production line that should be operational later this year and an additional line that will be completed in 2023. In Brazil, we are constructing a new porcelain tile facility that should be operating fully by the end of next year. In Mexico, we are expanding our production of mosaics and specialty products while allocating more of our ceramic production to the local market. In Europe, we're adding capacity to expand our porcelain slab business and enhance our successful outdoor and specialty tile business. In the U.S., we are investing in our quartz countertop production to keep pace with rapidly increasing demand. Collectively, these expansions will support additional sales of approximately $300 million when all of the lines are fully operational. This year is the 20th anniversary of Mohawk's entry into ceramic tile manufacturing through the acquisition of Daltile. In the past two decades, we have grown our legacy sales and expanded into new markets through major acquisitions. Ceramic tile is the primary flooring in many large markets where industry consolidation has not yet taken place, providing significant opportunities for expansion. In the quarter, our Flooring North America segment sales increased 5% as reported or 12% on a constant basis, and operating margin was 9% as a result of productivity, pricing, and mix improvements, partially offset by inflation and a return to normal seasonality. The robust U.S. housing market supported sales growth with both remodeling and new construction remaining strong, particularly in the Sun Belt. The success of our differentiated products benefited our mix, though some consumers traded down to maintain their budgets. The commercial sector continued to slowly improve, with COVID concerns still deferring some projects. In the period, we increased prices due to higher energy and material inflation. We improved our service levels, though our production costs increased with greater energy expenses, absenteeism, and training of new hires. Some product manufacturing was constrained by raw material shortages, limiting operations and increasing costs. We are expanding our manufacturing capacity in LVT, laminate, commercial, carpet tile, and floor mats to increase our sales. We expect continued improvement in the residential markets for the foreseeable future. Commercial will continue to recover as business confidence grows and new projects are initiated. Mohawk is the leader in U.S. laminate market, and we have reinvigorated the product category with improved visuals and waterproof performance. All sales channels are expanding the use of our premium laminate, and we are increasing our capacity to support $300 million of additional sales. The first expansion phase is starting up this quarter, with the second phase following in 2023. The new production lines will have capabilities to produce the next generation of proprietary laminate to extend our leadership in the category. LVT remains the fastest-growing floor product in the market, and our LVT business delivered strong growth in the fourth quarter as we continue to improve production at our existing facility. We are starting up a new LVT operation to support sales of over $160 million. The plant's first equipment is being installed now, and the project will be completed in phases through the second half of 2023. Once all planned lines are fully operational, the site can be expanded further as needed. To provide more value to our customers, we are incorporating unique technical features utilizing proprietary technology developed for our laminate business. In addition to these capacity increases, we also have many cost-saving investments, including fiber manufacturing and transportation projects that will improve productivity and profitability within the segment. With that, I'll return the call to Jeff. Thanks, Chris. After a record-setting 2021, we're enthusiastic about Mohawk's future growth and profitability. This year, GDP is expected to grow 3%-5% in most of our markets, with residential sales remaining strong and commercial improvement. Interest rates will likely rise but should remain historically favorable and support continued home sales and remodeling. During the year, we anticipate inflation moderating and constraints in labor, material, and energy decline. We're selling all of our capacity in many product categories and are optimizing our mix and margins this year. We've initiated multiple expansion projects to increase our sales in these growing areas this year and beyond. Significant short-term material, energy, and transportation inflation is affecting all of our businesses, and we are re-engineering formulations, reducing spending, and improving efficiencies to offset. We are presently implementing price increases and have announced additional ones across products and geographies. We will continue to adjust our pricing as necessary to recover our margins over time. In Europe, energy costs have dramatically accelerated and have also affected the cost of our materials. Our European ceramic business has been the most impacted, which we anticipate will create a $40 million-$45 million headwind, net of price increases in the first quarter. Given these factors, we anticipate our first quarter adjusted EPS to be $2.90-$3.00, excluding any restructuring charges. In the second half, we expect our margins to improve as capacity expands, inflation moderates, and pricing aligns. Based on the strength of our company, our product and geographic diversity, investments in growing categories, and potential acquisitions, our long-range outlook is for higher sales growth and margin expansion. Flooring is an essential part of new construction remodeling, and as the world's largest flooring manufacturer, Mohawk has built leading positions in major flooring markets around the globe. We expect our business to benefit from strong demand through this economic cycle. Given today's low inventory of existing homes, new residential construction and remodeling should remain strong for many years. Mohawk sustainable products appeal to today's environmentally conscious end users, which gives us an added advantage in our markets and enhances our bottom line. In time, we expect the commercial sector to return to its historical growth, with pent-up demand representing a significant opportunity. In addition to expanding capacity, we continue to invest in our organization's talent and state-of-the-art technology to deliver exceptional design, value, and service to our customers. Over the next three years, we anticipate higher sales and margins as we implement our product, manufacturing, and marketing initiatives. We will continue to leverage our strong balance sheet to pursue acquisitions that further our geographic reach and product offering while growing our sales and profitability. We'll now be glad to take your questions. Ladies and gentlemen, at this time, if you would like to ask a question, please press star then the number 1 on your telephone keypad. Management requests that you limit your questions to one primary and one follow-up. Your first question comes from the line of Truman Patterson of Wolfe Research. Your line is open. Hey, good morning, everyone. Thanks for taking my questions. Good morning, sir. Morning. First, just wanted to look at this first quarter EPS guidance. Yeah, just trying to understand if a higher tax rate is embedded in it compared to the fourth quarter. Then also, when I look at the 1Q guide, historically, op margins, consolidated normally fall about 200 basis points quarter-over-quarter. Is it safe to assume that you're expecting kind of first quarter op margins to outperform that historical decline? Are there any segments maybe to call out when we look at it sequentially? Okay. Well, I'll take the first part of that. On the tax rate, Truman, as I said, for the full year, you know, looking at 22%-23%, I would expect it to be maybe a little bit lower than the bottom of that, in the first quarter. As I said, it's gonna vary as we go through the year. I think also the difference in days in the fourth quarter is also impacting the comparison between the two abnormally. Then we also have last year, as we were going out of last year, it was seasonally stronger than it is. This year, it's more normal and same thing in the first part of the year. The customers were behind in their purchases and inventory levels, and the channels were behind, so the demand was different. There's a lot of differences in the seasonality between the two. Okay. Well, in the press release, in the prepared comments, you all have discussed some cost-saving initiatives in North America, especially the fiber manufacturing and transportation projects. I'm hoping, can you give a little more detail on each of those initiatives? And is there any way you can help us quantify those over the long term? Some of it is in the asset purchases we've done with the investments. We upgraded various assets in the fiber and yarn manufacturing to put in lower cost assets based on how the business has changed over the years. Some of it is in the transportation we have put in new processes and systems to try to optimize the transportation systems, which we're getting higher weights on the trucks, and we are improving the way we charge for the business or charge for the transportation relative to the market rates as we go through. They're all benefiting the business. Some of it also, Truman, is the completion of the actions that we started back in 2020, where we have got out of older assets and optimized the plant flow, which is gonna eliminate, it's gonna help on the material side and the labor side on a productivity basis. All right. Thank you, guys. Yeah. Thank you. Your next question comes from the line of Eric Bosshard of Cleveland Research. Your line is open. Thanks. Yeah. Jeff, curious if you could talk about where you think we are in the life cycle of LVT. In thinking over the last five years that LVT was all of the industry growth for a period of time, and it felt like it was taking share from ceramic tile. It actually was, and laminate was doing okay. I'm just curious, as you think about over the next three or four years, how those three categories are behaving relative to each other, I guess, largely in the U.S., but also globally. In the U.S., LVT has now grown to approximately 20% of the flooring category. With that, as the size has gotten where it is, the rate of growth is gonna slow down. We think that the other categories are gonna still show volume growth, so we don't believe it's gonna take all of the growth going forward as you go through. There's been a change in the laminate business where it was perceived as a cheap alternative, and with all the advances we've made in it's now being seen as a equal opportunity to versus both LVT and wood. Because on one side, we've added the waterproof technology. On the other side, we've made it visually as pretty as real wood and can't tell the difference on the floor. It's in the midst of a changing piece, and we're investing to support it. When you go to Europe, laminate is a much larger part of the industry than it is in the U.S., and it's not growing at the same level. On the other hand, our premium LVT as a category is probably less than half the size it is in the United States, as the market hasn't accepted it at the same rate as the U.S. has. Okay. That's helpful. One follow-up, if I could. The competitive position of your U.S. business, you referenced it in the prepared remarks, but as you look at your cost position, I guess this is a hard surface-focused question, but your cost position relative to imports, and the incremental transportation costs they're dealing with, I'm just curious how you think that influences the performance of the business over the next couple of years and what that means for you. If I can comment on the ceramic side, as the ceramic industry strengthen, the import prices have increased. The ocean freight constraints are causing delays and increasing costs. I think we're well-positioned on the ceramic side in the United States to take additional share. The other pieces, I think we're in good position. The LVT, we're still in the original plant. We're still improving the costs. In the fourth quarter of last year, the costs were actually impacted by a lack of supply, and we had to slow down the machines in order just to keep the plant running. We expect the productivity and the cost to continue to improve. We're investing in a new plant, which we think will be cost-advantaged versus imports, and we think we're in a good position to grow with the market. We're also importing a lot of products, so it's not in lieu of the other. Great. Thank you. Your next question comes from the line of Adam Baumgarten of Zelman. Your line is open. Hey, good morning, everyone. I guess maybe sticking with Flooring North America. When you talk about trade down in the segment, is that primarily, you know, related to carpet or are you seeing it also in some of the other areas like LVT? Every time you go through significant inflation in the industry, some of the consumers start looking to hold the value of what they're gonna spend or the prices. It's a normal course of events that as you see significant inflation, there's some trading down in all the categories. Got it. Maybe switching gears to ceramic. You talk about the net headwind from the European natural gas cost increases. Is that net of all price in the segment, or is that just net of European ceramic pricing? That's net of European ceramic pricing. Okay. Got it. Thank you. Your next question comes from the line of Susan Maklari of Goldman Sachs. Your line is open. Thank you. Good morning, everyone. Sticking, I guess again with Flooring North America, you know, I wanna focus a little bit more on the margin side. You obviously are coming off a year where you've gotten that margin back to the low double-digit range. As you think about the initiatives that are going on in that segment, can you talk about where you think that can go over time, what the trajectory of it is, and how does that maybe compare to where we've been in the past in that segment from a profitability perspective? The margins in the business have come back. They're still below where they were at the peak a few years ago. In the carpet industry, there's been a trading down to polyester at lower prices and different pieces, so that those margins will probably not get back to the peaks they were at. On the other hand, we have investments in LVT and laminate that those margins we think have room to grow as we improve the mix and put more investments in as we go through. Impacting the whole thing in all the categories you have also, the commercial sales are still behind the pre-pandemic levels. Our estimates depends on which product category and which channel. They could be 10%-20% below the pre-pandemic levels, and those are higher margin products and sales. As those come back, those are gonna improve the margins also. Okay. That's helpful color. When you think about all the initiatives that you have going on globally across the business, can you talk about how we should think of growth going forward over time, the ability to sort of capture what is going on out there, and where do you think growth will really be led from within this business in terms of products or even geographies? What are some of the areas that you're really thinking about and looking to incrementally further capture? What's happened to us is that as the business went through COVID, we pulled back on all the investments in the various categories, and then when we came out of it, we found that many of the categories had grown in one year what we had expected in multiple years. You see us trying to catch up with the investments that we're putting in. We're investing about $800 million this year, which will add roughly about $800 million worth of sales, which is all going in this year and next year in the high growth categories. The other categories of the business still have additional capacities to support increased sales going into the next year or two. We think we're taking the right steps to optimize the business. You know, one is we don't get enough credit for is the portfolio of the products that we have. We manufacture in five different continents. In the different markets, we have the leading brands and market positions. We sell them into over 170 different countries. With this, with a strong balance sheet you have, you see us investing heavily to reduce our costs and broaden our product offering. We believe there are gonna be more acquisition opportunities. We're talking to several at the moment. We'll have to see how they evolve. We think there's more gonna come into the marketplace over the next year or two. We're well-positioned with our balance sheet to take advantage of those. You hear us continuing to invest in leading technologies to give us differentiation to improve the margins. With all that, we think we're probably in the mid-cycle part of it. Usually the economy and the industry keep growing as we start raising rates at this point. The residential markets are running at high rates, and what normally you have when you get toward the cycle, we've overbuilt the residential housing. This time we're still chasing it. It seems like there's plenty of room to grow. We've talked about the commercial improving, so we think we're in the right position for higher growth and margin expansion over the next few years. That's great color. Thank you, Jeff, and good luck with everything. Thank you. Thank you. Our next question comes from the line of Mike Dahl of RBC Capital Markets. Your line is open. Morning. Thanks for taking my questions. Good morning. I wanted to follow up on a couple areas. The first is on kind of the European ceramic and the nat gas environment. In the opening remarks, in addition to the headwinds that you outlined in terms of the $40 million-$45 million, I think you did say that at this point, most competitors are raising prices to adjust. Can you elaborate a little more? 'Cause last quarter it was that some of your competitors were hedged, so they weren't acting as quickly. Can you talk more about what you're seeing in terms of the competitive dynamics and the pricing environment and whether competition is raising price enough at this point? Well, everybody in the market is raising prices, including us. You're right, some are hedged, and that's probably causing them to raise prices a little less fast than they need to be, but everybody is raising prices. We expect the energy volatility through the winter due to lower European reserves and uncertain availability. In the short term, the headwind should peak in Q1, and then progressively get better after that for a couple of reasons. One is you're getting into the summer months where gas is naturally cheaper, and you're also, as we look at the forward contracts, they are lower than what we're experiencing now. Got it. Okay. Thanks. My second question, it's around market share and going back to North America. You know, you've made some comments around how you've positioned your product, and I think you're in a position to take share in a variety of categories. You know, if I look at the fourth quarter data and I adjust for your days headwind, you know, it still seems like from a total value and a volume standpoint, and correct me if I'm wrong, but it seems like volume was kind of flattish on a days adjusted basis, maybe up slightly to down slightly. But the market industry data would still seem to suggest that industry growth in volumes has been called high single digits and in value, maybe closer to 20%. That data would seem to suggest maybe still some share slippage. Can you just speak to that and talk about how you think your share performance evolved kind of through the quarter and what your expectations are for this year? Well, let me unbundle a little bit of what you said there, Mike. So first of all, in the fourth quarter, you're right. As we look across the segments, I would say the volume piece, you know, adjusting for days and everything else, the business volume was relatively flat to slightly down. If you think about that makes sense compared to fourth quarter of 2020 when you had unusual demand levels and really abnormal seasonality. That kind of straightened itself out in the fourth quarter. Also, in the fourth quarter of this year, we had the material and labor constraints, which impacted not only our production but our sales in various product categories. That definitely impacted that volume. Yeah. The other thing I would add, when you look at the data on the ceramic market, it's really hard to read because you've got the imports coming in and the volume, the way they're measuring that is the imports coming into the country, which we think most of the competitors were building inventory during that time. But when we go out and look at the customers we're getting and the progress we're making in the marketplace, we think we're doing really well. The industry data on the carpet shows that the carpet industry was down in units. Again, we think it's because of the seasonality differences between the two. On the other side, we are probably indexed higher on the commercial business, which is still 10%-20% below where it was before the pre-pandemic levels. We also have a lower percentage of the LVT, but we're growing our business there. Okay. All of that makes sense. Thank you for that color. Your next question comes from the line of Michael Rehaut of JPMorgan. Your line is open. Thanks, good morning, everyone. A few clarification questions, you know, before I get into, I guess, a bigger picture question. If you could just kinda be more explicit just to make sure we understand. Number one, the second half margin improvement that you're talking about in 2022, we're talking about year-over-year expansion when you say improvement. Also the net of price impact in the European ceramic of $40-$45, that $40-$45 is kind of the same number that you were referring to last quarter when you were saying, you know, off of the $25 million headwind in Q4 that, you know, that could approach doubling. We're not changing the definition of that $40-$45 relative to last quarter. Just wanna make sure that's clear. Let me start with the ceramic piece. The ceramic piece, the number's still the same. However, we're getting there a little different. We've actually gonna get more price than we thought. On the other hand, the gas prices were actually higher, so they net back down to about the same thing. Both are different. The definition. Yeah, they said. The definition is the same, Mike. The 25 compared to the 40-45, the definition is the same. Mike, what happened in the? Okay as we produced in the fourth quarter, you may have seen the gas prices, but in some cases, they spiked to EUR 170-EUR 200, which is very high. Of course, that as that inventory rolls off in the first quarter, you see that impact. Yeah. As we think about the year, we're starting from the premise that the present trends for the economy, housing, and business investments continue as we all expect, and all the projections from everybody. What we see is our margins after the first quarter should improve as the price and costs get aligned better and continue throughout the rest of the year. Don't forget, when you get into the fourth quarter, we shouldn't have the same energy headwinds that we had last year. Just to be clear again, when you talk about second half margins improving, again, we're talking about on a, maybe on a consolidated basis, second half margins higher than, you know, second half 2021? Is that fair to say? Yes. When we're looking at that sentence that we're saying is that year over year. Now I would say, you know, really, you know, it depends upon how inflation plays out in the first half as well, and then the economic trends continuing as most expect into the second half. That is what we're addressing. Right. Okay, good. You know, secondly, you know, you talked about also in the press release this outlook for 3%-5% GDP growth across most of your markets. You know, usually companies have a goal of at least meeting that GDP growth. When you think about, you know, your full year sales growth, for 2022, you know, particularly given, you know, the pricing, the price increases that you've put into place in the back half of 2021 and in early 2022, should we be expecting a revenue growth kind of in the mid-single digit range, you know, mostly driven by price? Is that the right way to think about it? You know, also, sorry, one more granular question. If there's any variation in shipping days by quarter for 2022 versus 2021, that would also be helpful for modeling. Let's see. Let's start out with you're correct that you have the increase in the inflation is going to increase the price, and the volume assumptions you have seem reasonable. Just to put it in, the comparisons will be more difficult in the first half as the customers last year were replenishing inventories, and will see the same thing. We'll be back at a more normal seasonality this year. Also in the first half, you'll see a bigger impact from price increases in the first half than you will in the second. As we go into the second half, we think we'll see some stronger volume growth due to better inventories on our part, so we can service the business better, as well as a lower impact from pricing. One more thing, just to not forget, at least the estimates by everybody show that this year the dollar is expected to be stronger than last year, and a stronger dollar would have a reduction in our translated results. In terms of days, Mike, there's one less day in the first quarter, and the other three are the same. Great. Thanks a lot. Thank you. Our next question comes from the line of Philip Ng from Jefferies. Your line is open. Hey, guys. You mentioned that supply chain labor impacted your results in the fourth quarter, and certainly that was very pronounced in your rest of the world business. Curious, how is that kind of shaping up in 1Q? Should you expect that to kind of improve, or it's gonna take a little more time, call it a 2Q event? We're still having problems with supply. We're still having problems with labor, and it's still impacting our business. Probably the bigger part of it's in our LVT business, both in the U.S. and Europe. For instance, you know, we're running lines at lower speeds to keep them running instead of stopping and starting them. We have other suppliers and pieces that have, we've had to stop the plants. Then with COVID, we've had people not showing up for work and, you know, just having to shut the places down and/or having to run places different. In most areas we're seeing some improvements, but we'll have to see how it works. Got it. Okay. That's helpful. Marginally better. It's gonna take a little time. From a capital project standpoint, you got a lot of exciting new stuff coming on, whether it's LVT, ceramics, and your laminate product as well. Can you kind of remind us how that kind of ramps up through the year? In appreciating their startup costs, and there's a learning curve component to that, is there a good way to think about the EBITDA contribution this year? I know a few years back when you had a big ramp up, you had some headwinds to kind of come out of the gates. I think if you go back to the introductory remarks, we tried to put what points in time they would come in, because some of them are in the middle of next year and some of them are this year. They're all through it. If you go through that, I think you get a sense of the timing of it. Our current expansion projects, different than the earlier time we did it, are in markets and products that we already have in the marketplace with increasing sales. The last time we went into new products and new markets that we had to start at zero, and there were significant marketing costs up front. This time the investments are focused on our existing laminate business in the U.S. and Europe, ceramic outside the U.S. where the markets are sold out or where we're sold out. We're expanding our countertop business in the U.S. and Europe and our LVT business. The markets are there for where they are, which should reduce the impact of scaling up the assets as we start them up. The same thing, we're using technologies that are proven, which we have operating in all the places, which also would limit the startup costs as we get through. In addition, there are other projects on both productivity and efficiencies, which should immediately enhance our business. Got it. Timing-wise, you Sorry, go ahead, Jeff. I was just gonna say, timing-wise, if you look, so we launched the first laminate, the new laminate line in the fourth quarter, so you'll see some benefit in 2022 of that. A limited benefit on LVT, the LVT launch, but most of the others, echoing what Jeff said, will impact into 2023, more so than 2022. Okay. You're expecting to be additive rather than any big headwinds, right? It's more of a good guide than anything. Yes. Okay, great. Thank you. Our next question comes from the line of Keith Hughes of Truist. Your line is open. Thank you. Question on Flooring North America. If you look at the revenue growth, excluding the days, was up a good bit. Compare that to some of the numbers coming out of the carpet industry. Even adjusting for days, you seem well ahead, and I know that's about laminates and LVT. I guess my question is, could you put a little bit more of a magnitude on how much those products grew in the fourth quarter versus the average in the segment, and also for the year as well? Get that. We normally don't get to that level of granularity, Keith. You're right that, certainly in the segment, laminate and the resilient business grew more than carpet, and so they really drove the growth, along with, I would say, the pricing actions that we put in place, really kind of dwarfed anything around volume. Okay, second question on Global within Global Ceramic, the North American business. If you could talk about what its growth looked like versus the segment average, and what the puts and takes on that are. Well, first on U.S. ceramic, our products are gaining momentum as imported products are less reliable and landed costs have increased. Our pricing actions have offset inflation, keeping margins in line with prior year. We introduced several products, floor, wall, and mosaic offerings that were offered this year. To improve mix, we've introduced new sizes and shapes. As you look into 2022, we believe the U.S. will grow in both volume and price as residential remains strong and commercial strengthens. Brazil, Russia, and Mexico will have to optimize mix given their capacity limitations, and we think the EU volume will be under pressure just given natural price increases from natural gas. Okay. Thank you. Thank you. Your next question comes from the line of Stephen Kim of Evercore ISI. Your line is open. Yeah. Thanks very much, guys. Just wanted to clarify, to start off some of the capacity that you talked about bringing on in Flooring North America. The $300 million in laminate capacity, you talked about two phases. I just wanna make sure that the $300 million encompasses both phases. The LVT plan of $160 million, which I think is gonna be done over the next 18-24 months, I guess my question is, it seems like that line is quite a bit smaller, maybe as much as half the size, maybe half as small or half as large as your first line. When you talk about the site being expanded, able to be expanded as needed, I was curious, how quickly could you bring on additional capacity within that site? Where is that site located? Well, first of all, just in terms of the production, the original lines were designed for high volume, long runs, and our new production lines are designed for more differentiated products and smaller runs. You talked about the location. To optimize our U.S. LVT manufacturing, we'll now have both an East Coast and a West Coast operation. This should provide us service, logistics, and cost advantage. This plant will be in Mexico, and it's adjacent to one of our other factories. I think the other questions were around laminate. The laminate, each line does about $150 million each. The first one is in a startup right now and should be operating, you know, in the middle of the second quarter, close to its potential. The next line will come in in the middle of next year sometime. Just to clarify, Steve, you know, what we've said is up to this point, we have, you know, globally, we have about $1 billion of sales capacity and- LVT, that's across five lines. The $160 million on the new line is not really totally different versus, you know, the other lines. Yeah. Yeah. I know you have a couple of smaller lines in Europe and so forth. Okay, that's helpful. Second question relates specifically to productivity. I mean, as we look at your EBIT walk on the year-over-year growth in EBIT from productivity specifically, you had a couple of really good years now. I mean, it was strong in 2020. It was strong in 2021. I'm curious with all the moving pieces and particularly like labor inefficiency and absenteeism and whatnot, I would think that productivity could start to become a benefit to your EBIT, you know, from other pieces like maybe labor. I'm curious, would you expect another strong year of productivity in 2022, and how might that flow in from a timing or a segment perspective? Listen, one, we have to find out what happens to supply and to labor around the world in different places. Presently, we're still struggling with the pieces. Our assumptions are that it gets better through the year, but to tell you the truth, we haven't seen it yet, is it. At the same time, all of these new facilities and things we're gonna start bringing up show up as some negative productivity offsetting some of the other positive productivity we have during the year. Okay. That's helpful. All right, great. Thanks very much, guys. Your next question comes from the line of Laura Champine of Loop Capital. Your line is open. Thanks for taking my question. It's a follow-on to your comments about inflation being lower in the back half. I heard the answer about gas prices in Europe, but are there any other elements in your thoughts where you can see provides a basis for inflation to be lower back half versus first half this year? There is significant shortages that have been causing the raw materials to be at historically high prices. We're assuming that some of that lines up this year and some of the pressure from capacity versus demand offsets, and then it depends on what happens with the oil and gas prices around the world. Does that imply that your expectations are that units for the industry will be down year-over-year, thus freeing up more capacity? Or do you think there's more capacity coming to market broadly this year? We think that there's more capacity to support some of the product categories that we're in. For instance, you know, in Europe with the high gas prices, our wood prices are up because they're starting to burn wood as an energy source, is it. It's at unusually high levels. We're assuming that some of that starts to balance out next year as the energy prices come down, for instance. There are other places where we're seeing more supply come into the marketplace, and we're assuming there's gonna be a better balance to it than there was the last six months. Got it. Thank you. Your next question comes from the line of Matthew Bouley of Barclays. Your line is open. Hey, good afternoon, everyone. Thanks for taking the questions here. Just on natural gas in the European ceramic market, I think I heard, Chris, you mentioned earlier that you expect some volume pressure in European ceramic as a result of these level of price increases that you and competitors are implementing. Any more color on the elasticity that, you know, you expect there as you lift prices materially and, you know, is there an impact to the mix side of it as well? I mean, so far we haven't seen it. Our volumes in Europe have still been strong, so we haven't seen it. We just anticipate with the pricing that's being taken there, that it would make sense that it could put pressure on the market. So far we haven't seen it. Right. Okay. That's helpful. Then I guess same topic just on the overall European ceramic market. Have you seen any, I guess, changes competitively within the market? You know, that was a great comment you just gave, Jeff, on you know, people burning wood. Are ceramic manufacturers limiting production at all? Or is this impacting, you know, exports from Italy or Spain to the U.S.? Are there any other way the market is adapting to this severity, you know, beyond just the pricing side? Well, on one end, you have some of the smaller producers that have cut way back or shut down. On the other end of the market, you have some of the bigger players that were hedged. I would say in general, the competitors who are in the market are trying to cover the cost as much as they can not to let it impact the market too much. It's a balance, as you could expect, of covering inflation and not killing your demand. It's got to, though, put pressure between the increased gas prices, the increased freight cost. It's got to put pressure on those exports. That's why we think in the United States, we're gonna be in a good position. Got it. Well, thanks for the color and good luck. Thank you. Thank you. Your next question comes from the line of Deepa Raghavan of Wells Fargo Securities. Your line is open. Hi, good afternoon. Thanks for taking my question. I'll switch gears and ask about commercial business trends. Are you able to share how much this business grew in 2021? Looks like you're expecting an acceleration in 2022, but it also appears the hospitality industry recovery has been further pushed out. Essentially, the drivers to your commercial business growth is offices and maybe some institutions like schools, et cetera. Are these the primary drivers that would actually accelerate your growth in 2022? Am I thinking about the moving pieces within the component commercial verticals correctly? Well, I think it also depends on the category. Like in ceramic, hospitality is doing well, hospitals, schools. It's still not back to pre-pandemic levels, but it's certainly been strengthening. Yeah, it's been really led by the healthcare government area, and then some of the other channels have been slower to respond. Again, we had good, strong growth in 2021 versus 2020. As Chris said, it's not back to the 2019 levels. Just curious on, you know, just the interest rate concerns out there with the backdrop. You're still calling for R&Rs. You know, how are you thinking about the R&R spend in the U.S.? We were, you know, up at the IBS, and obviously we're looking at, you know, some of the ceramic manufacturers, the larger format stones are in. So, you know, obviously, the industry is continuing to invest in product innovation, bringing out new products. With that, you know, it doesn't seem like the interest rate concerns are impacting the industry as such. Any comparisons? What are your thoughts, first of all, on that? Should we be concerned? Any comparisons to 2018 you could help us draw and say, this time it's different because of certain items. Where we are with it presently, we're assuming we're in the midpoint of the cycle, that you're gonna still see unemployment decreasing, you're gonna still see incomes rising. We expect the economy to keep growing like it does in the mid part of the cycle. The mortgage rates are still historically relatively low. Unlike the end of cycles, there's still demand for housing exceeding the supply, and it's supporting new construction. You have increased home values that should support continued remodeling as you go through. Typically, on existing home sales, when someone buys a home, they don't do all of the remodeling in the first year. It takes multiple years to do it. You have all of these homes that were sold over the last two years that should continue to get remodeled. You still have commercial that's still below the pre-pandemic levels, and there should be pent-up demand to help it increase. You know, unless they move the rates up, you know, way higher than we expect, we're expecting to continue improving the category. That's great. Thanks for the color and good luck. Thank you. Thank you. There are no further questions in the queue. I will turn the call back over to Mr. Lorberbaum for closing comments. Yes, we appreciate you joining us today. We are really optimistic about our long-term performance. We're investing to support growth and margin expansion, and we believe that we're in the right spot to optimize our business over the long term. Thank you for joining us. This concludes today's conference call. Thank you for participating. You may now disconnect.