Q1 2026 Goodyear Tire & Rubber Co Earnings Call

May 7, 2026

Operator 2: 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 Q1 2026 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 1 on your telephone keypad. You may withdraw yourself from the queue by pressing star 2. Please note this call may be recorded. It is now my pleasure to turn the conference over to Ryan Reed, Vice President of Investor Relations. Please go ahead.

Operator: 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 Q1 2026 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 yourself from the queue by pressing star two. Please note this call may be recorded. It is now my pleasure to turn the conference over to Ryan Reed, Vice President of Investor Relations. Please go ahead.

Ryan Reed: Thank you. Good morning, everyone. Welcome to our Q1 2026 Earnings Call. With me today are Mark Stewart, CEO and President, and Christina Zamarro, Executive Vice President and CFO. A couple of notes before we get started. During this call, we'll make forward-looking statements and refer to non-GAAP measures. For more information on the most significant factors that could affect future results and for reconciliations of non-GAAP measures, please reference today's presentation and our SEC filings. Our earnings materials, including a replay of this call, can be found at investor.goodyear.com. With that, I'll hand the call over to Mark.

Mark Stewart: Thank you, Ryan Reed, and good morning, everyone. We appreciate you joining our call. As we look at the quarter, you'll hear Christina Zamarro and I walk through how we are staying disciplined as market dynamics continue to shift and how we're managing through the current environment. With that, let's start with our results. For the Q1 summary, Q1 operating results were largely in line with our expectations and reflected industry declines in both consumer OE and replacement demand in many of our markets. In that environment, both EMEA and Asia Pacific regions showed year-over-year segment operating income growth and SOI margin improvements. Conditions in the Americas were challenging. Weak consumer and commercial demand, retailer and distributor destocking, and increased manufacturer promotion weighed on the results. At the same time, Goodyear Forward savings continued to exceed plan. We generated $107 million of SOI benefits during the quarter.

Mark Stewart: While Goodyear Forward was launched as a 2-year program, the actions we took simplifying the business and improving productivity continued to deliver benefits for us today. The conflict in the Middle East has introduced more uncertainty, particularly around raw materials and potential end market demand. When you add that to already weak industry trends, it creates a challenging backdrop for the coming quarters, but one we're well-prepared to manage. In the Americas, consumer OE industry demand declined, reflecting lower OEM production. Even in that environment, we grew our OE market share by about 2 points in the quarter. That progress really reinforces our confidence in our OE strategy and continues to build a strong pipeline for future premium replacement demand over time in the replacement cycle. On the consumer replacement side, US industry demand declined, driven by harsh winter weather and a cautious consumer.

Mark Stewart: As I mentioned earlier, manufacturing promotions carried over from Q4, given a weak demand environment. Against that backdrop, we stayed disciplined on price mix. We did not chase near-term volumes. Americas Q1 volumes also reflect planned actions that rationalize low margin, non-core brands, non-core product lines as we continue to work to streamline our portfolio of product offerings in the marketplace. As we look to Q2, we expect consumer replacement volume to improve from Q1 levels, given the sharp destocking we experienced in Q1 and new assortment wins achieved by our sales team with key US customers. The Americas commercial truck tire business continued to be impacted by tough comps and a continued weak freight environment during the quarter, showing meaningful declines versus last year.

Mark Stewart: Volumes remained at very low levels, giving the multi-year downturn in US freight activities. Operating results in our Americas commercial business continued to be challenged. Our focus here is clear: improving the trajectory of earnings through price mix and a strong focus on cost. We believe our industry-leading cradle-to-grave fleet solutions business model will help us win with our customers. Turning to EMEA, where our consumer OE business continued to gain share, growing by roughly 2 points despite industry volume in both OE and replacement declining in the region. In fact, Q1 marked the ninth consecutive quarter of OE market share gains in the region. EMEA's consumer replacement volume was lower, driven primarily by two factors: increased competition in low rim size tires and, like the Americas, our strategic portfolio rationalization of low margin products.

The America's commercial truck tire business continued to be impacted by tough comps and a continued weak Freight environment. During the quarter showing meaningful, declines versus last year volumes remained at a very low levels and operating results. In our America's Commercial Business, continue to be challenged giving the multi-year downturn in US Freight activities. Our Focus. Here is clear.

Improving the trajectory of earnings through price mix and a strong focus on cost. We believe our industry-leading Cradle to grave Fleet Solutions, business model will help us win with our customers.

Turning to Amaya where our consumer OE business continued to gain. Share growing by roughly 2 points, despite industry volume in both OE and replacement declining in the region. In fact, q1 marked, the ninth consecutive quarter of OE market share gains in the region.

Mark Stewart: Importantly, the Middle East represents a very small portion of our EMEA sales. We did not see a material volume impact from the conflict during the quarter. In EMEA commercial truck, industry demand improved somewhat with replacement demand up slightly and OE increasing following gains in the H2 of last year. We continue to see opportunities to improve our commercial business this year through price mix and through increasing operational efficiencies in our solutions business. Finally, as we shared with you on our last call, we completed two major factory restructuring actions in Europe in 2025. Another is underway this year. EMEA's cost base has seen improvement. We expect high utilization across our consumer capacity in the region. We also expect a final decision on the EU tariffs on Chinese consumer tire imports this summer.

As consumer replacement volume was lower driven primarily by 2 factors increase competition, in low rim, size tires. And like the Americas, our strategic portfolio, rationalization of low margin products.

Importantly, the Middle East represents a very small portion of our Mas sales and we did not see a material volume impact from the conflict during the quarter. In a Maya commercial truck. Industry demand improved somewhat with replacement demand up slightly and OE increasing following gains in the second half of last year. We continue to see opportunities to improve our Commercial Business. This year through price, mix and through, increasing operational efficiencies in our Solutions business,

Mark Stewart: In Asia Pacific, SOI margin was very strong, with share remaining relatively flat in the quarter, our volume performance reflected underlying market conditions. Our strategy to expand in rim sizes 18 and above continues to gain traction. We're encouraged by our progress. Premium over 18-inch tire sizes now account for 55% of our consumer sales in the region, a 4-point increase over Q1 of last year. Across our SBUs, our teams have taken decisive actions to strengthen our portfolio. In EMEA, we've relaunched the Cooper brand with a refreshed product lineup with Q1 volumes exceeding expectations. Just this past weekend in the US, we introduced our new Fast Is In Us brand campaign in support of our Eagle Tire launch. Both reflect where we're choosing to invest in strong brands and products that meet our customers' needs.

Finally, as we shared with you, on our last call, we completed 2 major Factory restructuring actions in Europe in 25. Another is underway this year. Emmas cost base is seen Improvement and we expect High utilization across our consumer capacity in the region. We also expect a final decision on the EU tariffs on Chinese consumer Tire Imports this summer.

In asia-pacific SOI margin was very strong with Cher. Remaining relatively flat. In the quarter, our volume performance reflected underlying market conditions, our strategy to expand and rim sizes, 18 and above continues to gain traction.

We're encouraged by our progress in premium over 18-inch tire sizes. They now account for 55% of our consumer sales, an increase of 4 points over Q1 of last year.

Is in US brand campaign in support of our Eagle Tire launch.

Mark Stewart: It's encouraging to see these efforts translate into tangible improvements in two of our three regions despite the challenging market conditions. This highlights the strength of our execution and positions us to drive value creation with a more premium product portfolio. Taking a broader perspective on the market, we've been consistent in our conviction that execution on price mix and cost are critical components of long-term value creation. We remain committed to that strategy. That said, both the macro backdrop and industry dynamics have proved to be somewhat more turbulent than we anticipated at the start of the year. We're responding accordingly, remaining disciplined in our strategic priorities, taking a pragmatic approach to managing the business in the near term. As we think about the path forward, demand and inflation will largely depend on the duration and direction of the current geopolitical conflict and its impact on consumers.

Both reflect where we're choosing to invest in strong Brands and products that meet our customers needs.

Its to see these efforts. Translate into tangible improvements in 2 of our 3 regions, despite the challenging market conditions. This highlights the strength of our execution and positions us to drive value Creation with a more premium product portfolio.

Taking a broader perspective on the market, we've been consistent in our conviction that execution on price mix.

And cost are critical components of long-term value creation. We remain committed to that strategy, that said both, the macro backdrop and Industry Dynamics have proved to be somewhat more turbulent than we anticipated at the start of the Year. We're responding accordingly remaining disciplined in our strategic priorities. Taking a pragmatic approach to manage managing the business in the near term.

Mark Stewart: Historically, periods of elevated oil prices have had negative impact on vehicles mile travel, with even modest changes in VMT translating into meaningful shifts in the consumer replacement industry demand. In addition to raw material and other cost pressure, the current environment introduces the potential for supply chain disruption. We're actively monitoring this across our supply base, and we're well-positioned due to both our purchasing scale and long-term relationships with our supply partners, and we are planning for a range of outcomes to support continuity of supply. In response, we're going to focus the actions that we can directly influence to manage through uncertain environment. As we've shared with you before, it's about controlling the controllables. We have meaningful carryover SOI benefits in 2026 from Goodyear Forward actions. Additionally, we're accelerating the new cost actions that build on the transformation work we began 2 years ago.

As we think about the path forward demand and inflation will largely depend on the duration and direction of the current geopolitical conflict and its impact on consumers.

Historically periods of elevated oil prices have had negative impact on vehicles, mild travel and with even modest changes in VMT translating into meaningful, shifts in the consumer replacement industry. Demand in addition to raw material and other cost pressure the current environment introduces the potential for supply chain disruption. We're actively monitoring this across our supply base and we're well positioned due to both our purchasing scale and long-term relationships with our supply partners. And we are planning for a range of outcomes to support continuity of supply.

In response, we're going to focus on the actions that we can directly influence to manage through an uncertain environment.

As we've shared with you before, it's about controlling the controllables, we have meaningful carryover SOI benefits in 2026 from Goodyear, forward actions.

Mark Stewart: That includes a continued emphasis on simplifying the organization, improving efficiency across our manufacturing footprint, and strengthening the structural cost profile of the business. We will continue to take action, proactively adapting our cost structure as conditions evolve, and we'll provide additional detail as those actions are finalized. In addition to the actions on cost, it's even more critical today that our product development efforts sustain the momentum we've achieved over the last 2 years. This will help ensure our product coverage aligns with the most differentiated and the most profitable segments of the tire market. In closing, we continue to align our portfolio towards the most attractive segments of the tire market, even in a highly dynamic environment. Our consumer OE share gains positions us very well for premium replacement demand in the years ahead. We believe much of the destocking is behind us.

Additionally, we're accelerating the new cost actions that build on the transformation work we began two years ago.

That includes a continued emphasis on simplifying the organization.

Improving efficiency across our manufacturing footprint.

And strengthening the structural cost profile of the business.

We will continue to take action, proactively adapting, our cost structure as conditions evolve and we'll provide additional detail as those actions are finalized.

In addition to the actions on cost, it's even more critical today that our product development efforts, sustain the momentum. We've achieved over the last 2 years.

This will help ensure our product coverage aligns with the most differentiated and the most profitable segments of the tire Market.

Mark Stewart: As that headwind eases, it should provide a more stable backdrop for volumes. In addition, we're accelerating the initiatives that build on the success of Goodyear Forward, further strengthening our cost structure. This will require us to make some difficult but very necessary decisions to ensure the business is aligned with the environment we're operating in. We have consistently demonstrated strong capabilities to drive those cost transformations. We are confident this approach will position us well over the long term. With that, I'll turn the call over to Christina. Thank you.

In closing, we continue to align our portfolio, towards the most attractive segments of the tire Market, even in a highly Dynamic environment. Our consumer, OE share gains positions us very well for premium replacement, demand in the years ahead. We Believe much of the docking is behind us as that headwind eases it should provide a more stable backdrop for volumes

In addition, we're accelerating the initiatives that build on the success of Goodyear, forward. Further strengthening our call structure. This will require us to make some difficult but very necessary decisions to ensure the business is aligned with the environment we're operating in.

We have consistently demonstrated strong capabilities to drive those cost Transformations, we are confident. This approach will position us well over the long term.

With that, I'll turn the call over to Christina. Thank you.

Christina Zamarro: Thank you, Mark. While our operating performance in the quarter was in line with our expectations, the conflict in the Middle East will materially impact our costs. With a high degree of uncertainty around the duration of the conflict, our approach is similar as to how we've navigated earlier macro pressures. We are proactively preparing for a wide range of scenarios. We're implementing further profit-enhancing actions and have already initiated prudent steps on cost management. As events continue to unfold, we'll maintain the flexibility to adjust our approach as needed. I'll come back to the outlook in just a few moments. Turning to the income statement on slide 6, Q1 sales were $3.9 billion, down about 9% from last year, given lower volume and last year's divestitures. Unit volume declined 12%, driven by lower consumer replacement volume in Americas and EMEA.

Thank you, Mark.

While our operating performance in the quarter was in line with our expectations, the conflict, in the Middle East will materially impact our costs with the high degree of uncertainty around the duration of the conflict. Our approach is similar as to how we've navigated earlier, macro pressures. We are proactively preparing for a wide range of scenarios where implementing further profit enhancing actions and have already initiated prudent steps on cost management.

As events continue to unfold, we'll maintain the flexibility to adjust our approach as needed. I'll come back to the Outlook in just a few moments.

Turning to the income statement on slide 6. First quarter sales were 3.9 billion down about 9%, from last year, given lower volume and last year's divestitures

Christina Zamarro: As Mark mentioned, consumer OE volume increased, driven by share gains in both of those regions. Gross margin improved by half a point, which includes a $46 million tariff adjustment related to the IEEPA Supreme Court decision in February. SG&A increased $18 million, which was more than all explained by the weaker US dollar, particularly against the euro. Excluding currency, SG&A decreased $10 million. Segment operating income was $95 million. I'll note that our effective tax rate was unusually high given our country mix of earnings. After adjusting for significant items, including new rationalizations and discrete tax items in the quarter, non-GAAP earnings per share was a loss of -$0.39. Turning to the segment operating income walk on Slide 7. Our 2025 earnings base was lower by $37 million due to last year's divestitures. After this change in scope, our 2025 SOI was $158 million.

Unit volume declined. 12% driven by lower consumer replacement volume in. America is anemia as Mark. Mentioned consumer, OE volume. Increased driven by share gains in both of those regions.

Margin improved by half a point, which includes a $46 million tariff adjustment related to the AA Supreme Court decision in February.

sgna increased 18 million which was more than all explained by the weaker US dollar particularly against the Euro, excluding currency sag, decreased 10 million,

Segments, operating income was 95 million. I'll note that our effective tax rate was unusually high, given our country mix of earnings, after adjusting for significant items, including new, rationalizations and discreet, tax items in the quarter.

Non-gaap earnings per share was a loss of 39 cents.

Turning to the segment operating income walk on slide 7.

Christina Zamarro: Lower tire unit volume and factory utilization were a headwind of $159 million. Price mix versus raw materials was a benefit of $103 million. Goodyear Forward contributed $107 million of benefits during the quarter. Inflation, tariffs, and other costs were a headwind of $117 million, which includes a $46 million IEEPA tariff adjustment. Foreign currency and other were a tailwind of $3 million. Turning to Slide 8, free cash flow was a use of $893 million in the quarter, consistent with our seasonality and largely in line with last year's levels after excluding operating cash received in Q1 2025 from the sale of OTR. Net debt declined almost $900 million versus a year ago, reflecting debt repayment at the end of last year.

Our 2025 earnings base was lowered by 37 million due to last year's domestic tours after this change in scope our 2025 SOI was 158 million.

Lower Tire unit volume and Factory. Utilization were a headwind of 159 million.

Price makes versus raw materials was a benefit of 103 million.

Good deer. Forward contributed 107 million of benefits during the quarter and inflation tariffs and other costs were a headwind of 117 million, which includes a 46 million, iea tariff adjustment.

Foreign currency and other were a tailwind of $3 million.

Turning to slide 8 free cash flow was a use of 893 million in the quarter. Consistent with our seasonality and largely in line with last year's levels. After excluding operating cash received in the first quarter 2025 from the sale of OTR.

Net debt declined almost 900 million versus a year ago, reflecting debt repayment at the end of last year.

Christina Zamarro: Moving to the SBU results on Slide 10. Americas unit volume decreased 17%, driven by lower US consumer replacement volume. Commercial volume was also significantly lower than last year, following trends in recent quarters. US consumer replacement volume reflected a couple of different factors. First, the external environment. We saw destocking at our retailers and distributors given weak industry sell out trends, as well as market share losses following aggressive competition for shelf space, particularly in the less than 18-inch rim size segments. The second factor was our own planned exits of low-margin product lines, which amplified our volume decline in light of the difficult industry environment. We will lap the majority of our product exits by the end of Q2, and it's important to note that our premium products continued to perform well as we look at our market share at retail sell out.

Moving to the sbu results of slide 10.

America's unit volume decreased 17% driven by lower us consumer replacement volume.

Commercial volume was also significantly lower than last year. Following Trends in recent quarters.

U.S. consumer replacement volume reflected a couple of different factors.

First the external environment we saw destocking and our retailers and Distributors. Given weak industry, sellout Trends, as well as market share losses, following aggressive competition for shelf space, particularly in the less than 18 inch rim size segments.

The second Factor was our own planned. Exits of low margin product lines, which Amplified our volume decline in light of the difficult industry environment.

Christina Zamarro: Having said that, competitive market share losses in structurally vulnerable lower tier segments requires that we accelerate actions to reduce footprint cost. Turning to the commercial truck business, replacement volume declined 22% and OE volume was down 5.5%, but relatively stable compared with Q4. Americas segment operating income was $37 million, reflecting the impact of lower volume, partly offset by price mix versus raw material benefits and Goodyear Forward savings ahead of cost inflation, net of the IEEPA tariff adjustment. Turning to Slide 11, EMEA's Q1 unit volume decreased 8.5%. Consumer replacement volume declined, reflecting a weak sell-in market, low-end portfolio rationalizations and increased competition, partly offset by the relaunch of the Cooper brand in the region. Consumer OE was a continued area of strength, commercial volume improved, driven by replacement.

We will lap the majority of our product exits by the end of the second quarter. And it's important to note that our premium products continue to perform well, as we look at our market share at retail sellout.

having said that competitive market share losses in structurally. Vulnerable lower tier segments requires that we accelerate actions to reduce footprint cost.

Turning to the commercial truck business replacement volume declined. 22% in OE volume was down 5.5% but relatively stable compared with the fourth quarter.

America segment. Operating income was 37. Million reflecting the impact of lower volume. Partly offset by Price. Mix versus raw material benefits and Goodyear forward. Savings ahead of cost inflation. Net of the ieepa, Tariff adjustment.

Turning to slide 11 EMA's, first quarter unit, volume decreased 8 and a half percent consumer replacement volume declined reflecting a weak cell in Market. Low-end portfolio, rationalizations and increased competition. Partly offset by the relaunch of the Cooper. Brand of the region.

Christina Zamarro: Segment operating income in EMEA was $1 million in the quarter, reflecting an increase of $13 million adjusted for the sale of the Dunlop brand. I'll also note that in March, we announced a rationalization plan to streamline our sales and distribution model and our business processes that should deliver $50 million in annual savings. The plan should be complete by 2028. Finally, as Mark noted, our direct volume exposure to customers located in the Middle East is relatively immaterial. In addition, before the beginning of the conflict, we had fixed about 75% of our energy rate exposure in EMEA for the current year. Finally, EMEA should see much less of an impact from rationalized product lines in Q2.

Consumer OE was a continued area of strength and Commercial volume, improved driven by replacement.

Segment operating income in EMEA was $1 million in the quarter, reflecting an increase of $13 million adjusted for the sale of the Dunlop brand.

I'll also note that in March we announced a rationalization plan to streamline our sales and distribution model and our business processes. That should deliver 50 million in annual savings. The plan should be complete by 2028.

Finally, as Mark noted, our direct volume exposure to customers located in the Middle East is relatively immaterial. In addition, before the beginning of the conflict, we had fixed about 75% of our energy rate exposure and EMF for the current year.

And finally emia should see much less of an impact from rationalized product lines in Q2.

Christina Zamarro: Turning to Asia Pacific on Slide 12, segment operating income increased 27% to $57 million or 12.5% of sales, expanding 3 full points compared to the prior year. Growth in earnings was driven by strong execution in price mix versus raw materials, with our premium product lines up nearly 30% year-over-year. Asia's Q1 unit volume decreased 3.8%, driven by lower OE volume, particularly in China, given lower EV incentives versus last year. Turning to our 2026 outlook. The direct impacts of the conflict in Iran on the tire industry and our earnings largely depends on its duration, related impacts to customer and consumer demand, and tire commodity costs, all which make the outlook for the balance of the year unclear.

Turning to asia-pacific on slide 12.

Segments operating income increased 27% to 57 million or 12 and a half percent to sales expanding 3, full points compared to the prior year.

Execution in price, mix versus raw materials with our premium product lines up nearly 30% year-over-year.

As first quarter unit volume, decreased 3.8% driven by lower OE volume, particularly in China, given lower EV incentives versus last year.

Christina Zamarro: At current spot prices, raw materials will be a headwind of $200 million in H2, which represents a headwind of about $300 million from our prior forecast. We have a consistent track record of offsetting raw material inflation with price mix, and we are fully committed to new and meaningful operating and structural cost reduction. While there is very clear pressure on our near-term earnings, I am confident in our team's ability to manage through various scenarios that might unfold over the coming quarters with both price mix and cost actions over time. As we look at Q2 on slide 14, we would expect lower year-on-year volumes, but improving from Q1, all else equal.

Turning to our 2026 Outlook. The direct impacts of the conflict in Iran on the tire industry and our earnings largely depends on its duration related impacts to customer and consumer demand and tire commodity costs all which may be outlook for the balance of the Year unclear.

At current spot prices, raw materials will be a headwind of 200 million in the second half, which represents a headwind of about 300 million from our prior forecast.

We have a consistent track record of offsetting raw material inflation with price mix and we are fully committed to new and meaningful operating and structural cost reduction.

While there is very clear pressure on our near-term earnings. I am confident in our team's ability to manage through various scenarios that might unfold over the coming, quarters with both price, mix and cost actions over time.

Christina Zamarro: This expectation is rooted in new assortment wins with key customers, actions we implemented during Q1, and a more natural alignment of sell in relative to sell out. Having said that, it's not clear what demand volatility we may see due to the Middle East conflict. Our Q2 industry assumption for consumer replacement is down about 3% in North America and China, and down about 2% in EMEA. For commercial, we expect the industry in North America to be down 12% and down 3% to 4% in EMEA. Given production cuts in Q1 and Q2, including actions to manage our cash flow during this period of uncertainty, unabsorbed overhead will be a headwind of approximately $90 million and negative again in Q3.

As we look at the second quarter on slide 14, we would expect lower year-on-year volumes, but improving from the first quarter, all else, SQL, this expectation is rooted in new, assortment wins with key customers actions. We implemented during the first quarter and a more natural alignment of sell-in, relative to sell out.

Having said that it's not clear. What demand volatility, we may see due to the Middle East conflict,

Our second quarter industry assumption for consumer replacement is down about 3% in North America and China, and down about 2% in EMEA.

For commercial, we expect the industry in North America to be down 12% and down 3 to 4% in emia.

Christina Zamarro: Price mix should continue to be positive and step up meaningfully from the Q1 given stronger volume and our mix of new fitments, all else equal. Raw materials should be a benefit of roughly $100 million, Goodyear Forward will drive benefits of approximately $90 million in the quarter. Inflation, tariffs, and other costs will be a headwind of approximately $200 million. On a full year basis, these will be about $420 million higher, which is a reduction of about $80 million from our February call, driven by the IEEPA tariff adjustment of $60 million, 46 of which we recorded during the Q1. Finally, the sales of Dunlop and Goodyear Chemical lowers the base of earnings by $43 million in the Q2. Other financial assumptions are shown on slide 15.

Given production Cuts in the first and second quarters, including actions, to manage our cash flow during this period of uncertainty and absorbed overhead, will be a headwind of approximately 90 million and negative again in the third quarter.

Price mix should continue to be positive and step up meaningfully from the first quarter given stronger volume and our mix of new fitments. All SQL.

Raw materials should be a benefit of roughly, a 100 million. And Goodyear forward will drive benefits of approximately 90 million in the quarter.

Inflation tariffs and other costs will be a headwind of approximately 200 million.

On a full year basis. These will be about 420 million higher, which is a reduction of about 80 million from our February call driven by the aiba, Tariff, adjustment of 60 million, 46 of which we recorded during the first quarter.

Finally the sales of Dunlop and chemical lowers the base of earnings by 43 million in the second quarter.

Christina Zamarro: Given the uncertain environment, we have reduced planned capital expenditures to $725 million. Our global tax rate will continue to be unusually high and sensitive to changes in country mix. Finally, while our working capital for the year could be shaped by both timing and levels of volume and commodity rates, we will continue to target a working capital inflow at year-end. With that, we'll open the line for your questions.

Other Financial assumptions are shown on slide 15.

Given the uncertain environment. We have reduced planned, Capital expenditures to 725 million.

Our Global Tax Rate will continue to be unusually high and sensitive to changes in country, mix.

And finally, while our working capital for the year could be shaped by both timing and levels of volume and commodity rates, we will continue to target a working capital inflow at year-end.

Operator 2: Thank you. We will take our first question from James Mulholland with Deutsche Bank. Please go ahead. Your line is open.

Operator: Thank you. We will take our first question from James Mulholland with Deutsche Bank. Please go ahead. Your line is open.

With that, we'll open the line for your questions.

Thank you. If you would like to ask a question, please press star 1 on your keypad.

To leave the Queue. At any time. Press star 2

Once again, that is star and 1 to ask a question.

And we will take our first question from James moholland with Deutsche Bank. Please go ahead. Your line is open

James Mulholland: Good morning, and thank you for taking my questions. I just wanted to dig in a little bit on the raw materials headwind in the back half of the year. Given the volatility, I was wondering if you could share some thoughts on the sensitivity of SOI based on oil prices. I mean, we've seen a pretty material move yesterday and then again this morning. It'd be helpful if we could ballpark the impacts on the guide or, I guess put another way, I'm not sure what the oil price the current guide incorporates is, but if oil were to change $5 or $10, could you give us some sense of what that sort of benefit might look like?

Uh, good morning, and thank you for taking my questions. I just wanted to dig in a little bit on the raw materials headwind in the back half of the year. Um, given the volatility, I was wondering if you could share some thoughts on the sensitivity of -- so, based on oil prices. I mean, we've seen a pretty material move yesterday and, uh, then again this morning, so it would be helpful if we could ballpark the impacts on the guider. I guess, put another way, um, I'm not sure what the oil price of the current guide incorporates, but if it were to change $5 or $10, uh, could you give us some sense of what that sort of benefit might look like?

Christina Zamarro: Hi. Good morning. This is Christina. Thanks for the question. Our spot prices that are noted here in our Q1 conference call are pulled as of 29 April. That equates to a crude oil closing price of about $106 per barrel. Obviously with the volatility we've seen yesterday, it could be, you know, some impact on the forward outlook. Obviously, there's been a significant amount of volatility. We do provide, in our supplemental information on our website, sensitivities to changes in raw materials. With oil in particular, you're going to wanna pay attention to synthetic rubber inputs like butadiene and styrene, which are levered more toward oil than some of the other input costs.

Hi, good morning. This is Christina. Thanks for the question.

Christina Zamarro: We also see a strong correlation to pigments, chemicals, and oils, which are also a significant portion of our raw material buy.

Per barrel. And so obviously with the volatility we've seen yesterday um it could be um, you know, some impact on the forward Outlook obviously there's been a significant amount of volatility. We do provide in our supplemental information, on our website, sensitivities to changes in raw materials with oil. In particular, you're going to want to pay attention to um synthetic rubber inputs like beaded dine and styrene which are um levered more toward oil than some of the other input costs.

we also um, see a strong correlation to pigments chemicals and oils which are also a significant portion of our raw material by

James Mulholland: Got it. Thank you. I guess recognizing that you do have index pricing agreements in place for OE tires, that's on a lag, so you won't probably see any help there at least until Q4. Our sense is that some competitors have started to push through price increases on replacement to help offset any raw materials impacts for the year. Understanding there was a 4% to 6% price increase last year in North America, would you look to do something similar, and could we expect a benefit from that in the H2 to help offset some of those headwinds?

Thank you.

so, I guess

recognizing that you

Pricing agreements in place for OE tires that's that's on a lag so you won't probably see any help there. At least until fourth quarter, our sense is that some competitors have started to push through price increases on replacement to help offset any raw materials impacts for the year understanding. There was a 4-6 percent price increase last year in North America. Would you look to do something similar? And could we expect a benefit from that in the back, half of the year to help offset some of those headwinds?

Christina Zamarro: You're right. I would say about a third of our business is linked to indexed agreements for increases in raw materials. Those do reset on a lag. On average, that takes about six months or so. We do have this timing mismatch with a significant increase in raw materials that you're pointing out. That's the first point. Up until now, I can say we have announced price increases in EMEA for consumer, that's about a 4% increase, and in commercial, about a 7% to 8% increase earlier in April, May timeframe. We will obviously look to continue to increase a price mix to offset the headwinds that we're seeing in raw materials as well as, you know, take action on costs to manage through the current volatility.

With a significant increase in raw materials that you're pointing out. So that's the first point. Um, up until now, I can say we have announced price increases in emia for Consumer. That's about a 4% increase, and in commercial about a 7 to 8% increase earlier. In April, May time frame,

And we will obviously look to continue to increase a price mix to offset the um headwinds that we're seeing in raw materials as well as, you know, take action on costs to manage through the current volatility.

James Mulholland: Great. Thank you very much.

Right, thank you very much.

Operator 2: Thank you. We will move next with James Picariello with BNP. Please go ahead. Your line is open.

Operator: Thank you. We will move next with James Picariello with BNP. Please go ahead. Your line is open.

Thank you.

We've almost next with James picarella with BNP. Please go ahead. Your line is open.

[Analyst] (BNP): Hey, guys, this is Jake on for James. Just at a baseline, how are you thinking about volumes in H2? I realize, you know, it's a tough question to answer just given some of the volatility. Just based on my math, if we assume, you know, 1% OE and replacement growth in H2, SOI for the year should be somewhere in the $600 million range. Are we thinking about that right? Thank you.

Jake Scholl: Hey, guys, this is Jake on for James. Just at a baseline, how are you thinking about volumes in H2? I realize, you know, it's a tough question to answer just given some of the volatility. Just based on my math, if we assume, you know, 1% OE and replacement growth in H2, SOI for the year should be somewhere in the $600 million range. Are we thinking about that right? Thank you.

Hey guys, this is Jake on for James. Uh, so just at a baseline, uh, how are you thinking about volumes in the second half? And I realize, you know, this—it's a tough question to answer just given some of the volatility.

Uh, but just based on my math, if we assume, you know, 1% OEM replacement growth, uh, in the second half, uh, SOI for the year, should be somewhere in the $600 million range. Um, are we think? Are we thinking that about that, right? Thank you.

Christina Zamarro: Maybe I'll start, and Mark can chime in. I would say the overall forecast hasn't changed materially when we think about the flow, in that we do expect volume to improve sequentially each quarter on an absolute basis, and we still should get to year-over-year improvements in H2. Obviously, still dependent on consumer demand and some volatility we may see in VMT just related to gas prices. Having said that, we are annualizing some of the Q1 share loss in Americas, which equates to about 2 to 2.5 million units lower volume in Q2 through Q4 versus our February outlook.

so maybe I'll start and and Mark can chime in, I would say,

the overall forecast hasn't changed materially. When we think about the flow in that, we do expect volume to improve sequentially. Each quarter on an absolute basis and we still should get to year-over-year improvements in the second half.

Obviously still dependent on.

Consumer demand. And some volatility, we may see in VMT just related to gas prices.

Having said that, we are annualizing some of the Q1 share loss in Americas.

Which equates to about 2 to 2 and a half million units, lower volume in the second through the fourth quarter versus our February Outlook.

Mark Stewart: Yeah, maybe just to tack on to that, right. As far as what did happen in Q1, right. When you think about the Americas volume specifically, and it is, you know, it's about a third, a third, a third. When you think about destocking is about a third of the volume delta in the Americas. Our optimizing the portfolio, as we've shared with you guys over the last two years, you know, moving out of the lower to no profit pool, lower rim size pieces is, you know, we had planned for that through the process. That's about 33% of it. Then we saw a definitely increased competition in Q4, particularly on the lower rim sizes with very aggressive pricing in that.

Yeah, maybe maybe just to, to tack on to that, right? As far as, uh, uh, what did happen in the in the first quarter, right? When you think about the America's volume specifically, and

Mark Stewart: As we've shared with you guys as well, we are not chasing profit into a non-profitable zone, right? I'm sorry, chasing volume into a non-profitable zone. We've continued our, you know, absolutely our roadmap of moving up and proof points to believe, as we shared. You know, we released 40% more new products in the higher rim size last year around the world. Proof points on AP, right? We were substantially up. We were up nearly 3, 4 percentage points. I think 4. We moved from 51% to 55%, 18 and above, with record SOI and AP for the quarter. In EMEA as well, great proof point there of moving up. As well, we've launched the Cooper to replace the Dunlop volumes.

Mark Stewart: We're marching ahead of our launch, ramp program, with great, really great, receipt from customers and end consumers. We, we feel very positive about EMEA and really securing that strong tier 2 marketplace for EMEA. In the Americas, again, we continue our mix up there. We have moved up from a 42% to 50% greater than 18 and above, year over year in our consumer replacement. We continue to launch the new products into the marketplace. Just last weekend, we had our big launch on our new Eagle tires globally, but starting here in the US to fill those white spaces we've shared with you guys before.

More new products in the higher rim size. Last year around the world. Uh, proof points on AP, right? We were substantially up. We were up nearly, uh, nearly 34, uh, uh, percentage points. I think 4, we moved from 51 to 55% 18 and above with uh, record SOI nap, uh, for the quarter, uh, in ama as well. Uh, great proof point there of moving up and as well, we've launched the Cooper to replace the Dunlop volumes, where marching ahead of our launch ramp program, uh with great, uh, really great uh, receipt from customers and in consumers. So we we feel very positive about uh, Amaya and really securing that strong tier 2 Marketplace for Amaya in in the Americas. Again, we continue our our mix up there. Uh, we have moved up from a 42 to 50%, greater than 18 and above, uh, year-over-year and our consumer replaced.

Mark Stewart: We feel very good that we've got the right products, and especially as we think about kind of a K-shaped economy, of the more resilient, pricing and, a little bit more Teflon-proof, shall we say, in terms of the pricing in those upper rim sizes.

Replacement and that we continue to launch the new products into the marketplace. And just last weekend, we had our big launch on our our new Eagle Tires globally, but starting here in the US to fill those white spaces, we've shared with you guys before. So we feel very good that we've got the right products, uh, and especially as we think about kind of a k economy uh, of the more resilient uh pricing and uh, a little bit more Teflon proof, shall we say in terms of the, the pricing and

Those upper Rim sizes.

[Analyst] (BNP): Thank you. Could you just provide an update on the trade environments? Based on our tracking, it looks like tire imports into the US are finally starting to fall off a little bit. In EMEA, it looks like the European Commission might be set to implement some duties on Chinese imports on the next couple of months. Can you talk about both what you're seeing and what the potential benefit could be there? Thank you.

Jake Scholl: Thank you. Could you just provide an update on the trade environments? Based on our tracking, it looks like tire imports into the US are finally starting to fall off a little bit. In EMEA, it looks like the European Commission might be set to implement some duties on Chinese imports on the next couple of months. Can you talk about both what you're seeing and what the potential benefit could be there? Thank you.

Thank you. And then, could you just provide an update on the trade environments? Uh, based on our tracking, it looks like higher imports into the US are finally starting to fall off a little bit. And then in EMEA, it looks like the European Commission might, um, be set to implement some duties on Chinese imports in the next couple of months. Uh, so you can talk about both what you're seeing and what the potential benefit could be there. Thank you.

Mark Stewart: Sure. Maybe just to start on the EMEA front. By mid-summer, we're anticipating that the EU will give their ruling in terms of the tariffs on Chinese tires coming into Europe. You know, we hope we'll have news for that as we do our Q2 announcement, but that's the latest info we have, is mid-summer. They'll be making the announcement on that. In terms of the US, with the lower imports, we did see some destocking. As you guys know, last year, there were the pre-buys around the tariff. There were lots of things with the tariffs moving a lot throughout the year and a big stocking of product. We do see that starting to destock. Christina?

Christina Zamarro: I don't have a lot to add. I can, maybe layer on some statistics. You know, the non-member imports in North America were down about 7% in Q1, which is a positive trend. Having said that, they do remain at a relatively high level compared to historical periods. I think when you couple that with the elevated raw material costs, we think that's constructive as we think about, you know, the layout for imports in the coming quarters.

Sure, maybe, maybe, maybe just to start on the AA front, uh, by Midsummer we're we're anticipating that. The, the EU will give their ruling in terms of the, uh, the tariffs on Chinese tires coming into into Europe. So, uh, you know, we hope we'll have news for that as we do our second quarter announcement, but that's the latest info we have is Midsummer, they'll be making the announcement on that, uh, in terms of the US, uh, with the lower Imports. We, we did see some D stocking as, as you guys know last year, there were the prebys around the Tariff. There were, there were lots of things with the tariffs moving uh moving a lot throughout the year and a big stocking of product. Uh so we do see that starting to do stock Christina. I don't have a lot to add, I can um maybe layer on some statistics, you know, the non-member Imports in North America.

So we're down about 7% in the first quarter, which is a positive trend. Having said that, they do remain at a relatively high level compared to historical periods. But I think when you couple that with the elevated raw material costs, we think that's constructive. As we think about, you know, the layout for, um, imports in the coming quarters,

[Analyst] (BNP): Thank you.

Jake Scholl: Thank you.

Thank you.

Operator 2: Thank you. We will move next with Ross MacDonald with Citi. Please go ahead. Your line is open.

Operator: Thank you. We will move next with Ross MacDonald with Citi. Please go ahead. Your line is open.

Ross MacDonald: Yes, thank you. Three questions from my side. The first one just on that destock that you're calling out in North America. How far through that process do you think you are? Maybe you could talk a little bit about whether there's further destock ahead of us in Q2, or if that process is largely done now. Within that, how you would assess the Goodyear inventories within the dealer network in the US and whether there's some opportunity to gain back some share in Q2 by topping up dealers. Second question on mix specifically. I know you don't guide on mix, but given the points you called out, Mark, around the K-shaped economy, the higher rim size share gains that you're making, how should we think about mix more structurally within Goodyear?

Thank you. We will move next with Ross MacDonald. With the city. Please go ahead. Your line is open.

Yes, thank you. Um, 3 questions, uh, from my side, the first 1 just on that dto that you're calling out in North America. Uh, how far through that process? Do you think you are? Maybe you could talk a little bit about

Whether there's further GTO ahead of us in in Q2, um, or if that process is largely done now and and then within that, how you would assess the Goodyear, inventories within the dealer Network in the us and whether there's some opportunity, uh, to to gain back some share in Q2, um, by topping up dealers. Um, the second question on mixed specifically, I know you don't guide

Ross MacDonald: Is there any steer you can give us for 2026 and beyond on sort of structural mix benefits from that work you're doing cutting the lower value add SKUs? Then just a final question on US trucks. You know, looks like on some of the freight data that the activity troughed around January. Just be curious what you're seeing maybe on April trading, if there is a little bit of momentum coming back to the freight activity. Linked to that, whether you're also giving up some share on the truck side, and trying to avoid sort of lower value add products or if that's specific to the consumer business. Thank you.

On mix, but given the points you called out Mark around uh the k-shaped economy that the higher, uh, rim size, share, gains that you're making. How should we think about mixed more? Structurally within good years is there, is there any steer you can give us uh, for 26 and Beyond on sort of structural mixed benefits. Uh from that work, you're doing cutting the lower value. Add skus

To avoid that sort of lower value, add products, or if that's specific to the consumer business. Thank you.

Christina Zamarro: Maybe I'll start on the first question.

Ross MacDonald: Sure

Christina Zamarro: which is destocking. I think particularly in North America or the US, we did lay out, you know, our outlook for the consumer replacement industry in Q2, which is significantly better than Q1, but still negative. I think that indicates that maybe there's slightly more destocking yet to go because it's a little bit more than the weakness we're seeing currently in sell out. Dependent all still on the price mix environment. Sometimes we do see pre-buy if there is a significant move in overall pricing across the industry that can instigate some pre-buy. Having said that, with the uncertainty around the consumer, uncertainty around vehicle miles traveled, I'm not sure that I would say we're expecting that here over the course of the next 2 quarters.

So maybe I'll I'll start on the first question which is a docking. Uh I think particularly in North America or the us, we did lay out, you know, our outlook for the consumer replacement industry and the second quarter which is a significantly better than q1, but still negative, I think that indicates that maybe there's um, slightly more destocking yet to go because it's a little bit more than the weakness we're seeing currently in sell out.

Christina Zamarro: The second question was on structural mix over the course of the rest of the year. As we talked about this on our Q4 call, we did say we would expect mix to improve and stabilize in H2 2026, largely due to the fact that we're comping through the commercial truck weakness that began in Q2 and Q3 of last year. Structurally, we should see a much stronger mix for us coming out of Q2. The third question was on truck. Maybe I'll turn that one over to Mark.

Um dependent all still on the price mix environment. Sometimes we do see prebby, if there is um a significant move in overall pricing um across the industry that that can instigate some prebby. Having said that with the uncertainty around the consumer uncertainty around vehicle miles traveled. I'm not sure that I would say we're expecting that here over the course of the next couple quarters.

The second question was on structural mix over the course of the rest of the year. As, as we talked about this, on our fourth quarter call, we did say, we would expect mixed to improve and stabilize in the second half of 2026. Largely due to the fact that we're comping through. Um, the commercial truck weakness that began in the second.

Second quarter and third quarter of last year. So structurally, we should see a much, um,

Stronger, mix for us coming out of the second quarter.

Mark Stewart: Yeah. For truck as we look at the commercial trends, right, the fundamentals of the market are definitely looking better. We need to see that sustain in Q2 and on through the rest of the year. It obviously takes some time for that to flow through the market. We've seen the capacity of the trucking industry tightening up, the freight rates improving. We're starting to see the OEMs increasing their builds. You know, the PMI or the purchasing index has been above 50 now for quite a few months, which is a key towards that freight activity picking up.

Mark Stewart: In talking, you know, closely with our customers through our solution business and our fleet services, you know, we again, we see the OEM piece moving up substantially over a low number, granted, moving up substantially. We get a nice pull from our fleet customers. We know there's a lot of talk from them in terms of being more positive in their thinking and in terms of the buy. What we have To your last point, question was really around the lower end of the products. We have been just like the consumer side, right.

The third question was on truck, maybe I'll turn that 1. Um, over to Mark. Yeah. For uh, for truck on. As we look at the commercial Trends, right? It's the, the fundamentals of the market are, are definitely looking better. Uh, we need to see that sustained, uh, in in quarter 2 and, and on through the rest of the year and, uh, and it obviously takes some time for that to, to flow through the market. But we've seen the capacity of the of trucking industry tightening up. Uh, the freight rates improving, we're starting to see the oems, uh, increasing their builds. Uh, and you know, the PMI or the purchasing index has been above 50. Now, uh, for for quite a few months, which is, uh, it's a key towards that Freight activity, picking up, uh, and uh, and in talking, you know, closely with our customers, through our solution business, and our Fleet Services, you know, we again we we see the OEM piece moving up substantially over a low number granted but uh, moving up substantially, but we get a nice pull from our

Mark Stewart: We have specifically been rationalizing those low margin products and getting out of those to really focus on our premium business, particularly the tractor tire business, for the truck drive itself, the drive tires, as well as our retreading operations, and really working to robustly improve our efficiencies around the world from our solution and service business. We've got a big lift that we're working on. The team is super focused on our cost structure and the value proposition for our fleet customers around the world. So far, we're on track with those plans through the year, and it looks that we'll continue to improve that through the year.

Fleet customers and uh, and we know there's a lot of of of talk from them in terms of uh, of being more positive and they're in their thinking and in terms of the buy, uh, but what we have to your last Point, uh, question was really around the, the lower end of the products we have been just like the consumer side, right? We have have specifically been rationalizing. Those low margin products and getting out of those to really focus on our premium business. Particularly the, the tractor tire business, uh, you know, for the truck drive itself, the drive tires, uh, as well as our, our retreading operations and really working to robustly, uh, improve our efficiencies around the world from our solution and service business. So we uh, you know, we've got a big lift that we're working on the team is super focused on our cost structure and the value proposition for for our Fleet customers around the world. And uh, and so far, we're, we're on track with those plans, uh, through the year and it looks that uh,

we'll continue to improve that through the year.

Ross MacDonald: Thank you.

Thank you.

Operator 2: Thank you. Our next question comes from John Healy with Northcoast Research. Please go ahead.

Operator: Thank you. Our next question comes from John Healy with Northcoast Research. Please go ahead.

Thank you.

our next question comes from John hilly, with

go ahead.

Christina Zamarro: Morning, John.

Morning.

Operator 2: John, your line is open. Please check your mute.

Operator: John, your line is open. Please check your mute.

John your line is open, please check your mute.

John Healy: Sorry about that. You'd, you'd figure I'd figure that out by now. Just wanted to ask about the competitive position. I think when you look at the release, and I know you guys kind of expected a slower start on the US replacement market. In the categories in which maybe like for like tires are being kind of moved at certain dealers or with certain partners, is there a way to think about just like kind of what your organic SKUs were doing and maybe how those performed? Just so we could kind of, you know, put your performance kind of in more what I would say reasonable parameters to judge that.

Sorry about that dude. It's figure. I'd figure that out by now. Um, just, uh, wanted to ask about the, uh, competitive position. Um, I think when you look at the release, and I know you guys kind of expected a slower start on the US replacement Market, um, but in the categories in which, um, maybe like, for like tires, are being, um, kind of moved at certain dealers or with certain Partners. Is there a way to think about just the kind of what you're organic to use. We're doing, um, and maybe how those performed just so we could kind of, you know, put your performance um, kind of in more what I would say um, reasonable, um, parameters to judge that

Mark Stewart: Yeah. Maybe I would start, John, make sure I understand the question right. It's the you know, if we think about what Christina Zamarro said in terms of, you know, sell out was stronger than sell in, right? There was the destocking that happened from the buildup over Q3, Q4 of last year. That's a portion of it. You know, we were still as well in contract negotiations with some of our larger customers that have been settled out. From that standpoint, as we look through that, in terms of the volume profile going forward, we're very pleased with our mix-up, if I understand organic SKU, right, of our mix with our power lines in terms of products like MaxLife 2, right?

Mark Stewart: The Eagle that I just mentioned, that we've completely, you know, product development's done a super job to reinvigorate and bring new products into the marketplace for that, as well as our WeatherReady II, obviously performed very well in the marketplace.

Mark Stewart: On those power lines, those 18 and aboves that we have been launching over the course of the last 18 months, and we've got another 36 months of a very robust pipeline coming in, that's why we feel very strong. You know, in terms of the organic growth of our SKUs, if we will, that we are much more meaningfully participating in the higher profit pool, and that will continue to grow because we've got our marketing plans behind it, we've got our sales enablement teams out in the marketplace, and we've got the products to do it with.

Uh you know, sell out with stronger than sell in, right? So there was the dto that happened from from the build-up over a quarter to 3 quarter 4 of last year. So that's that's a portion of it. Um you know, we were still as well in contract negotiations with some of our, our larger customers that have been settled out. And uh, so from that standpoint, as we look through that in terms of the volume volume profile going forward. We're we're very pleased with our mixup. If I understand organic skew, right of of our mix with our power lines, in terms of soft products, like maxlife, 2, write, the eagle that I just mentioned that we've, uh, completely uh, you know, product developments in a super job to to, to reinvigorate and and bring new products into the marketplace for that uh as well as as our weather ready twos, uh obviously performed very well in the marketplace and so on those power lines, those 18 and above that uh that

We have been launching over the course of the last 18 months. And we've got another 36 months of a very robust pipeline coming in. Uh, that's why we feel very strong to the, you know, in terms of the organic growth of our skus, if we will, that we we are much more meaningfully participating in the higher profit pool and that will continue to grow up as we got our marketing plans behind it. We've got our sales enablement teams out in the marketplace, and we've got the products to do it with

John Healy: That's helpful. Just two quick follow-ups. I know Walmart's always been a big customer of yours, and was wondering if you could talk to the relationship there, if anything has changed there or you're working with them as kinda, you know, moved along in a certain direction, just if that's impacting the numbers in a meaningful way at all. Then secondly, are there any further, like, price increases baked into kinda some of the numbers that you guys have talked to us about the price mix headwinds? Thanks.

That's helpful and, and just 2, quick follow-ups. Um, I know Walmart's always been a big customer of yours, um, and was wondering if you could talk to the relationships there. Um, if anything is changed there or you're working with them is, is kind of

Mark Stewart: Yeah. We, you know, we don't normally share on a particular customer on this call, right? We can provide some additional color. What I would say is as we look to across all of our portfolio, again, we are purposely mixing up the portfolio, refreshening specific SKUs in certain rim sizes where the profit pools are. What I can say, they're a great customer and have been for 40-plus years, right? We have a very strong relationship and continue to do so. As we look at that and the growth of e-com along with brick-and-mortar, we're being pretty successful in that arena with them as well.

Um, you know, moved along in a certain direction, just if that's impacting the numbers in a meaningful way at all. And then, secondly, are there any further, like price increases baked in to kind of sum of the numbers that you guys have talked to us about about the uh, the price mix headwinds? Thanks.

Yeah, we we you know we don't we don't normally share on a particular customer on on this call, right? We can provide some, some additional color. What I would say is is we look to across all of our portfolio. Again, we are purposely mixing up the portfolio, uh refreshing specific skus in certain Rim sizes, where the profit pools are, uh, what, what? I can say, they're they're a great customer and have been for 40 plus years. Right? So we, uh, we have a very strong relationship and uh, and continue to, to do so. Uh, and as as we look at that and and the growth of brick and mortar, sorry the growth of Ecom along with with brick and mortar. Uh, we're being pretty successful in that arena with them as well.

John Healy: Thanks.

Thanks.

Operator 2: Thank you. We will move next to Itay Michaeli with TD Cowen. Please go ahead.

Operator: Thank you. We will move next to Itay Michaeli with TD Cowen. Please go ahead.

Thank you, we will move next to ittai me with TD Cowen, please go ahead.

Itay Michaeli: Great. Thanks. Good morning, everyone.

Mark Stewart: Morning.

Christina Zamarro: Morning.

Mark Stewart: Morning. Wanted to ask a question on some of the, I guess, upcoming cost and maybe footprint actions you alluded to. Yeah, I'm curious if maybe you can roughly kinda size those relative to the original Goodyear Forward plan. Ultimately, I guess what I'd like to try to get at is sort of as you plan these next actions, what sort of timetable that you're trying to target in this sort of new environment to kinda get back to, like, a 10% SOI margin?

All right, great. Thanks. Uh, good morning everyone.

Itay Michaeli: Morning. Wanted to ask a question on some of the, I guess, upcoming cost and maybe footprint actions you alluded to. Yeah, I'm curious if maybe you can roughly kinda size those relative to the original Goodyear Forward plan. Ultimately, I guess what I'd like to try to get at is sort of as you plan these next actions, what sort of timetable that you're trying to target in this sort of new environment to kinda get back to, like, a 10% SOI margin?

Um wanted to ask uh morning want to ask a question on on some of the um I guess upcoming cost maybe footprint actions you will alluded to. Yeah I'm curious if maybe you can roughly kind of size those relative to the original Goodyear forward plan and ultimately I guess what, what what I'd like to try to get at is sort of as you plan these, next actions. What's the time table that you're trying to Target? Um, in a sort of new environment to kind of get back to like a 10%? Sy margin.

Christina Zamarro: Itay, I'll start. We talked a lot about footprint actions in this call specifically. Obviously, we're targeting restructuring actions that have a very near-term payback, and the restructurings that we've completed over the last several years have all been focused in other regions outside of the Americas. Just given where volume is, in particular in the Americas this quarter, you know, our restructuring is gonna be focused there, which will, just because of the nature of the high cost base, usually deliver a very fast payback. That would be point number 1. A lot of our other initiatives, nearer term that we're adding to the coffers as we think about cost outs over the next several quarters and on through 2027, we're looking at raw material consolidation to help bring meaningful cost out.

so it take, I'll I'll start we we talked a lot about footprint, actions in this call specifically obviously

We are targeting uh, restructuring actions that have a very near-term payback. And and the restructuring that we've completed over the last several years, we've all been focused in other regions outside of the Americas. But just given where volume is in particular in the Americas this quarter, you know, our restructuring is going to be focused there, which will just because of the nature of the high cost base, usually deliver a very fast payback. So that, that would be Point. Number 1.

Christina Zamarro: Also simplification within our factories, driving efficiencies, indirect spend, control cost towers on a lot of the different levels of spending across the organization, and then, of course, optimizing all other SG&A as well.

Mark Stewart: Maybe just to tack on, Itay, right? It's, you know, we're in execution mode of building on the, you know, the integrity and the credibility that we've built with you all, with our shareholder base, and our associates around the world of the Goodyear Forward program, right? As we've shared before, we really have it embedded in our DNA, in our governance, in our KPIs, in our actions, and we have a very robust roadmap of what we're doing.

Um, a lot of our other initiatives um, near a term that we're adding to the coffers, as we think about cost outs over the next several quarters and on through 2027, we're looking at raw material consolidation to help bring meaningful cost out. Also, simplification within our factories driving efficiencies indirect spend control control cost Towers on a lot of the different levels of spending across the organization. And then, of course, optimizing all other sgna as well.

Mark Stewart: While we don't have a formal announcement today of what the details of that are with you, obviously being very sensitive to that, you know, it is our intention to share with you guys coming up on the specific cost out value creation plans. It is absolutely in keeping with the principles that we've had in Goodyear Forward. It's, as we shared, right, we continue to top off the cost reduction value creation actions that we had in Goodyear Forward on a very disciplined way, function by function, as Christina mentioned, Direct material, indirect material, our product rationalization, making sure that our footprint and specifically our cost flexing is in line with volume demand.

Mode of of building on the, you know, the, the integrity and The credibility that that we've built with, uh, with you all with our shareholder base, uh, and our and our Associates around the world of, uh, of the Goodyear forward program, right? As as we've shared before, we really have an embedded in our DNA, and our governance, and our kpis, and our actions. Uh, and we have a very robust roadmap what we're doing. And while we're, we don't have a formal announcement today, uh, of of what the details of that are with you, uh, obviously being very sensitive to that. Uh, but, you know, it is, uh, it is Our intention to share with you guys coming up, uh, on the specific, uh, cost, uh, cost out value creation plans. Uh, but it is absolutely in keeping with the principles that we've had in Goodyear forward, but it's, it's been shared, right? We we continue to top off the, uh, the cost reduction value creation. Actions that, uh, we had in Goodyear forward on a very disciplined way function, by function as Christina mentioned on direct material.

Mark Stewart: It's the continued journey that we're on there, and we continue to be confident in our ability to execute that credibly as we've been doing here over the last two and a half years.

Indirect material, uh, our product rationalization, uh, making sure that that our footprint and specifically our costs flexing is in line with volume demand. So it's uh, it's the continued Journey that we're on there and uh, and we continue to to be confident in uh, in our ability to execute that, uh, credibly as we've been doing here over the last 2 and a half years.

Itay Michaeli: That's all very helpful. Thank you for that detail. Maybe just two quick follow-ups. First, on the CapEx cut up for the year, maybe talk a little bit about where that's coming from and how sustainable that is going forward. A second quick housekeeping is the IEEPA adjustment expected to be also a cash benefit this year?

That's all very helpful. Thank you for that detail. Uh, maybe just 2 quick follow-ups. Um first on the on the capex cut up for the year, maybe talk a little bit about where that's coming from and how sustainable that is going forward. And a second quick housekeeping. Um, is the AA adjustment, uh, expected to be, uh, also a cash benefit this this year.

Christina Zamarro: Sure, Itay. On CapEx in particular, you know, obviously we're reacting somewhat to the current demand environment, which brings down the need as we think about maintenance in the factories. Utilization rates are lower than we would have expected, and we are also applying a new best cost methodology across all major categories of capital spend to help control costs. More to come on that, but hopefully, as we even move into next year and years beyond, we're able to take capital spending to much lower levels than you've seen from us historically. On IEEPA in particular, you know, the cash inflow, yeah, very, very difficult for us to say if that comes later this year or early next.

Sure ETA. So our capex in particular, you know, obviously we're reacting somewhat to the current demand environment, which brings down the need. As we think about maintenance in the factories. Utilization rates are lower than we would have expected, and we are also applying a new best cost methodology across all major categories of capital spend to help control costs, so more to come on that. But hopefully, as we even move into next year and years Beyond, we're able to take Capital spending to much lower levels than you've seen from us, historically.

Christina Zamarro: You know, we have, you know, booked the receivable based on the Supreme Court ruling, and we'll continue to update you as we move through the rest of the year.

Mark Stewart: Maybe just to tack on to the CapEx piece as well. You know, again, as Christina mentioned, right, we've done a lot of work, you know, over the last, let’s say, year and a half, with our advanced global engineering team towards developing of those best cost solutions, but also best spec solutions. We have completely rethought how we go to market for CapEx in terms of bundle buying, in terms of looking at efficiency of where to have it made, but also looking at what we truly need in the operations as we modernize factories and work on our cost footprint. You know, we’re seeing significant reductions in our CapEx for the ability to produce same as, if more, same as or better quality.

Next, you know, we have, um, you know, booked the receivable based on the Supreme Court ruling and we'll continue to update you as we move through the rest of the year and maybe just to tack on to the the capex piece as well. You know, again, as Christina mentioned right, it we've done a lot of work, you know, over the last let's say year and a half uh with our Advanced Global Engineering team towards developing of those uh best cost Solutions but also best spec Solutions, right? So we have completely rethought, how we go to market for capex in terms of bundle buying in terms of looking at, yeah, efficiency of of where to have it made. But also looking at what we truly need in the operations and as we modernize factories and and work on our our cost footprint. But, you know, we're seeing, uh, significant reductions in in our capex for the ability to, uh, to produce, uh, same as if more.

Mark Stewart: We feel very good about that our CapEx dollars will go much further. I wouldn't think about it as much of a big reduction in the CapEx bill of starving the future. It really is about feeding the future on a much more efficient base.

Uh same as or better quality. And so we feel very good about that that our capex dollars will go much further. So I wouldn't think about it as much of of a big reduction in the capex Bill of starving, uh, starving the future. It really is about feeding the future on a much more efficient base

Itay Michaeli: That's very helpful. Thank you.

That's uh, that's very helpful. Thank you.

Operator 2: Thank you. Once again, that is star and one on your touchtone phone if you would like to join the queue. We will move next with Ryan Brinkman with JPMorgan. Please go ahead.

Operator: Thank you. Once again, that is star and one on your touchtone phone if you would like to join the queue. We will move next with Ryan Brinkman with JPMorgan. Please go ahead.

Thank you.

And once again, that is star N1 on your touchdown phone.

Ryan Brinkman: Hi. Thanks for taking my questions. I wanted to continue, you know, with these questions asking around the impact of raw materials, commodity prices, offsets, et cetera. Firstly, maybe starting with the indirect impact of higher commodities, because I recall during the pandemic, you actually met quite well with the challenge of passing along the higher raw material input prices, but obviously found it more challenging to contend with all of the unusual indirect impacts of the higher costs of higher diesel, freight, ocean shipping, logistics, electricity, natural gas, et cetera. I think there were some unique aspects of that particular environment. I just wanted to check in with regard to how these other costs might be tracking, which in some ways do find their way back to the same Middle East conflict impacting, you know, raws more directly.

We will move next with Ryan Brinkman with JP Morgan. Please go ahead.

Ryan Brinkman: You know, I think you account for this mostly, in the, when it exceeds the general inflation rate in the other costs and tariffs bucket, I suppose, of the FY bridge. How should we think about that driver trending going forward?

Hi. Thanks for taking my questions. I wanted to continue, you know, with these questions, asking around the impact of raw materials. Commodity prices offsets, Etc. Firstly, maybe starting with the indirect impact of higher Commodities because I recall during the pandemic, you actually let quite well with the challenge of passing along the higher raw material input prices but obviously found it more challenging to contend with all of the unusual indirect impacts of the higher costs. It's higher diesel afraid, ocean shipping Logistics, electricity and natural gas Etc. And I think there were, you know, unique aspects of that particular environment. But I just wanted to check in with regard to how these these other costs uh, might be tracking which in some ways do find their way back to the same Middle East conflict impacting, uh, you know, raw's more directly. You know, I think you account for this mostly, uh, in in the uh, when it exceeds the general population rate in in the other costs in tariffs bucket, I suppose of the slide bridge and how how should we think about that uh driver uh trending going forward?

Word.

Christina Zamarro: Thanks, Ryan Brinkman, for the question. We have headwinds of about $40 million, mostly in increased transportation, a little bit of energy in that other cost bucket, just as you pointed out. That is more than offset by the IEEPA tariff refund adjustment, as well as some other cost reductions as we've been discussing so far on this call. You know, largely when we also think about energy in EMEA, I mentioned in the prepared remarks that we have hedged out or fixed a lot of the contractual agreements for our energy costs in EMEA pre-war. That's 75% to 80% of those rates were fixed before the war. We feel really good about the position, and we'll monitor, you know, the environment for volatility and continue to update you as we move through the year.

So thanks for the question. We have um, headwinds of about 40 million dollars mostly, an increased Transportation, a little bit of energy in that other cost bucket just as you pointed out. And that is more than offset by the type, the IPA tariff. Uh refund adjustment, as well as some other cost reductions as as we've been discussing so far on this call.

Ryan Brinkman: Okay, thanks. Then, with regard to the offsets of restructuring and price mix against all this headwind, maybe starting with restructuring, obviously, I see you've increased your Goodyear Forward impact here from $300 to $325. It's only $25 billion versus the raw net degradation for the full year looks, $300 million-ish, $312 million or something. You dug deeper with Itay just now on the allusions in the prepared remarks, right, with regard to the restructuring actions. The payback activity, timing I thought was interesting. Sounds like maybe workforce reductions in Americas that you're looking to maybe not pull the trigger on if the environment quickly resolves, is that how we should think about it?

I think, you know, largely when we also think about energy and emia I mentioned in the prepared remarks that we have um, hedged out or fixed, a lot of the um contractual agreements for our energy costs in emia pre-war. So that's 75 to 80% of those rates were fixed before the war. So we feel really good about the position and we'll monitor, you know, the environment for volatility and continue to update you as we move through the year,

Okay. Thanks and then with regard to the offsets uh of restructuring and price. Next again, all this headwind um um maybe starting with restructuring. Uh obviously. See you you've increased the go to your uh the forward. In fact here from 300325, um this is only 25 billion dollars versus the the the raw Matt degradation for the full year looks you know, 300 million is 30012 million or something. Um,

Ryan Brinkman: Also, what about magnitude? Because, yeah, it seems like really price mix, and that'll be my next question, is the only thing that can really offset this headwind. What's the outlook for company-specific restructuring actions kind of under your control to be able to offset, like, how much of this incremental raw material headwind, say, when we annualize it to next year, for example?

You dug deeper with eay just now on on the Illusions and the prepared remarks, right with the regard to the restructuring, uh, actions that the payback activity, uh, payback timing. I, I thought was interesting, it sounds like maybe Workforce reductions in America's um, that you're looking to, maybe not pull the trigger on if the environment quickly resolved, how how we should think about it but also what about magnitude because uh, yeah, it's it seems like um, really price mix and I'll do my next question, but is, is the only thing that can can really offset this this headwind. So what, what what's the, uh, the outlook for company specific restructured actions kind of under your control uh to be able to offset like how much of this incremental raw Mass headwind say when we annualize it to next year, for example,

Mark Stewart: Yeah, maybe Ryan, I can start and have Christina Zamarro chime in. You know, as we think about we really work very hard on our cost flex, our firm versus flexible cost within each of our factories around the world, right? We have intense governance around that, again, utilizing the principles of the Goodyear Forward in terms of the best cost practice, best quality practices across the plant and implementing those around the plant. Some of that involves flexing of manpower. Some of it involves waste reduction. You know, it's every element of manufacturing 101. It really is about flexing our cost to match the volume and demand and also the mix of our products.

Mark Stewart: You know, we have meaningfully moved products that are important for the portfolio into cost locations where we can make the proper returns on those. We've rationalized products. We've rationalized footprint, as you know, on the EMEA side. We continue to look at that all over the world to make sure, you know, as we move to global function and global manufacturing, part of that intention was, again, best landed costs for our customers and for our shareholders to make sure that we can hit the right returns and have a competitively priced product in the market. The other part of that price mix, again, is robustly changing our portfolio as we've shared, right?

I meant, you know, with with we think about we we really work very hard on our our cost, Flex our firm versus flexible cost within within each of our factories around the world, right? So we have uh, in intense, uh, uh, governance around that, uh, again utilizing the the principles of of the Goodyear forward in terms of the the, uh, best best cost practice, best quality practices across the plant, and implementing those around the plant, some of that involves, uh, flexing of Manpower, uh, some of it involves waste reduction, you know? It's it's every element of of manufacturing 101. So it really is about flexing our cost to match, uh, to match the, uh, the volume and demand, and also the mix of our products. So, uh, you know, we have meaningfully moved products, uh, that are important for the portfolio into into cost locations where we can make the, uh, the proper Returns on those. Uh, We've rationalized footprint,

Uh, sorry rationalized products. Uh We've rationalized Footprints as, you know, on the, on the Emmas side and we continue to look at that all over the world to make sure, you know, as we move to Global function and Global manufacturing. Part of that that intention was again, best landed costs for our customers and for our shareholders, to make sure that we can, we can hit the right returns and and have a competitively priced product in the market, the the other part of that price makes again is, is robustly. Changing our

Mark Stewart: With filling out all of those blank spaces that Goodyear has not been participating in or where the products were, the vitality or the freshness of those products were not appropriate. That's why we continue to march in each of those. It will lead to some additional restructuring, obviously, but part of it is just normal day by day, you know, good cost management. Christina?

Ryan Brinkman: Okay.

Portfolio as we've shared right, with with, uh, with filling out, all of those blank spaces that Goodyear has not been participating in, or where we were, the products were the Vitality or the freshness of those products were, were not appropriate. So that's why we continue continue to march in each of those. Uh, it will lead to some additional restructuring, obviously, but we, uh, part of it is just normal day by day, uh, you know, good cost management.

Christina Zamarro: Yeah, I'll chime in. I think about these two buckets a little bit differently, Ryan, in the sense that, you know, we have a really strong track record of offsetting raw material inflation with price mix. We talked about, you know, it's sometimes seeing a structural lag because of OE RMI indexed agreements. Having said that, looking back through the history, you know, the inflation that we've seen in raw materials has been covered by actions all in and around price mix. When it comes to volume, and Mark Stewart just made these comments, you know, where we're seeing volume pressure, especially at the lower end of the market, just sort of dictates that we address that unabsorbed overhead with cost out actions in restructuring dollars.

Christina. Okay.

Yeah, I I, I'll chime in, I think about these, these 2 buckets, a little bit, um, differently. Ryan in the sense that

Christina Zamarro: Those paybacks, you know, are generally 1 to 2 years, and they're gonna be, you know, right now focused in our highest cost footprint. We can't share more details with you today, but we hope to be able to do that over the coming quarter.

You know, we have a really strong track record of offsetting raw material inflation with placements. And we talked about, you know, it's sometimes seeing a structural lag because of OE RMI index agreements, but having said that, looking back through the history, you know, the, you know, the inflation that we've seen in raw materials has been covered by actions all in and around price mix then when it comes to volume and Mark just made these comments, you know, where we're seeing volume pressure, especially at the lower end of the market, just sort of dictates that we address that unabsorbed. Overhead with cost out actions, in restructuring dollars and those paybacks. Um, you know, our generally 1 to 2 years and they're going to be, you know, right now focused in our highest cost footprint. We can't share more.

Ryan Brinkman: Okay. That's very helpful. Thanks. Just lastly here, get your thoughts on how things might play out and the impact on Goodyear in a couple different scenarios here. It's so hard to predict what's happening in the Middle East and, you know, most of the time I'm thinking, Oh my gosh, Brent Crude's going to stay at $120, $100. This is awful. It's going to continue like this. Other days, a tweet comes up from the White House, and it's down 20% on the day, right? I mean, on the one hand, you sort of just addressed, I think you've got a good track record of passing along these higher costs.

Details with you today, but we hope to be able to do that over the coming quarter.

Ryan Brinkman: I think there was one time where you didn't, right? That was kind of when they spiked up, right at the end of 2016, early 2017, maybe, then spiked right back down. I remember when oil fell the most in, you know, 30 years or whatnot the other week, I mean, hopefully, that is the case. Everything resolved very quickly, right, for the world. How do you anticipate and are you prepared for, do we have to consider that scenario also and maybe making it more complicated to pass along those costs? Of course, the price mix opportunity is, you know, not in a vacuum with the softer demand and higher inventory backdrop.

Okay, that's very helpful. Thanks and just, lastly, here. Um, I want to test, get your thoughts on, um, how how things might play out and, and uh, the impact on Goodyear in a couple different scenarios here. It's so hard to predict what's happening in the, the Middle East. And you know, most of the time, I'm thinking, oh my gosh. Brittany cruises going to stay at 120 dollars. $100 is awful. It's going to continue like this and and then other days a tweet comes up in the white house and it's down 20% on on the day, right? So I mean, on on the 1st, I think you've got a good draft record of passed along these these higher costs. I think there was 1 time where you did it, right? And, and that was kind of when they they spiked up, right? At the end of 16 early 17, maybe, uh, and, and then spiked right back down. And, and I remember when when, uh, uh, oil fell the most and, you know, 30 years or whatnot, the other week. Um, I mean, that is the case I think it resolves very quickly, right? For the world. But, um, uh, how do you anticipate and are you prepared for, uh, do we have to consider, um, that scenario also and, and

Ryan Brinkman: I guess even in the event that they were to stay elevated, you know, how much could you this time around maybe hope to be able to offset relative to prior scenarios? I know you do have a good track record for it, except for maybe the one time.

And that maybe making it more complicated to, to pass along those costs. And, and, of course, the the price mix opportunity is, you know, not in a vacuum with, with the, the software demand and and hiring inventory backdrop. So, um, I guess, even in the, the event that they were to stay elevated. Um, you know, how much, how much could you this time around? Maybe hope to, to be able to offset relative to to

To Prior scenarios but I know you do have a good track record for it, except for maybe the 1 time.

Mark Stewart: Maybe I can start on it, right. You know, as mentioned, I think as we think about the K-shaped economy, right? We're seeing the greater than 18 pricing more resilient in the market. We see a lot of competitive price pressures in the below 18 rim size as we shared earlier, as we, you know, do the competitive scrapings in the market, looking at sellout data from the published sources. As we look to that, right, that again, it goes back and really reinforces our strategy, which is to position Goodyear as the strong premium number one brand again, right? That's been our journey.

Mark Stewart: It's why we continue on that because, you know, being in a, being in a dog fight in the, in the lower tiers of the marketplace, at a very different cost structural base, to Christina's point, is not the winning proposition, right? The winning proposition is the journey that we're on, which is to successfully gain. Again, proof points for us, again in AP, you know, Up 4 percentage points to greater than 55%. Same thing of the on the in the US marketplace. And we've been filling that out in EMEA as well. We feel good at that. That helps that resiliency and also the ability to pass those pricing needs forward into the marketplace.

Rim size as we shared earlier. Uh, as we, you know, do the competitive, uh, the the the scrapings in the market looking at sellout data from the published sources. And and as we look to that, right that again it goes back and really reinforces our strategy which is to position Goodyear as the strong premium number 1 brand, again, right? That's, that's been our journey. It's why we continue on that because, uh, you know, being in a being in a dog fight in the, in the lower tiers of the marketplace, uh, at a very different cost structural base to Christina's Point, uh, is uh, is not the winning proposition, right? The winning proposition is the, is the journey that we're on, which is to, uh, to successfully gain and again, proof points for us. Uh, again in AP, you know, up up, uh, 4 percentage points to greater than 55% same thing of the, uh, on the uh, in the US Marketplace. And and we've been filling that that out inma as well. So we feel, uh,

Feel good. That—that helps that resiliency and also the ability to pass those, uh, those pricing needs forward into the marketplace.

Ryan Brinkman: Thank you.

Thank you.

Operator 2: Thank you. We will take our last question from Emmanuel Rosner with Wolfe Research. Please go ahead.

Operator: Thank you. We will take our last question from Emmanuel Rosner with Wolfe Research. Please go ahead.

Thank you.

We will take our last question from Emmanuel, Rosner. With wolf research. Please go ahead.

Emmanuel Rosner: Oh, great. Thank you so much. Christina, how should we think about free cash flow outlook for this year based on some of the puts and takes that you gave, obviously, on the SOI, but also some actions to preserve cash? Within that, when we're thinking about some of these potential restructuring actions, you know, should we, in a sort of like budget within that also some, you know, extra cash for restructuring within, you know, this year's outlook?

Oh great. Thank you so much. Um,

So, uh, Christina, how should we think about, um, free cash flow outlook for this year based on some of the, uh, the puts and takes that you gave, obviously on the SOI, but also some actions to preserve cash? Uh, and then within that, when we're thinking about some of these potential restructuring actions, you know, should we—

you know, sort of like budget within that also some, you know, extra cash or restructuring within, you know, this year's Outlook

Christina Zamarro: Yes. Thanks, Emmanuel, for the question. I think you're right. We're definitely focused on free cash flow. I do think it's a little too early for us to settle on where we're going to land. I think we're going to need to get through Q2, see where raw material prices will fall out in our P&L over the course of Q3 and Q4. We have given you the drivers that we know today. Free cash flow is still though going to also be dependent on some of those variables. You noted we've reduced CapEx, and we're committed to managing the business for cash, and we feel really good about the balance sheet position. I would say our free cash flow doesn't contemplate any additional restructuring related to any upcoming announcement that we may make over the course of the next couple of quarters.

Yeah, so no, thanks manual for the question. I think you're right. We're we're definitely focused on free cash flow. I do think it's a little too early for us to settle on where we're going to land. I think we're going to need to get through the second quarter.

See where raw material prices will fall out in our pnl over the course of Q3 and Q4, but we have given you the drivers that we know today.

Free cash flows are still going to also be dependent on some of those variables you noted. We’ve reduced CapEx, and we’re committed to managing the business for cash. We feel really good about the balance sheet position.

Um, I would say.

Christina Zamarro: I wouldn't expect that anything upcoming to impact our cash flow until next year.

Our free cash flow doesn't contemplate, any additional restructuring related to any upcoming announcement that that we may make over the course of the next couple of quarters. But I wouldn't expect um that anything upcoming to impact our cash flow until next year.

Emmanuel Rosner: Okay. No, that's, this is extremely helpful. In terms of, in the Q2 volume, I think that you're, you know, you give the various pieces. I'm not sure if I caught them all in terms of, you know, how you're thinking about it. I know historically you have sort of like an overall number in the slide. I think here it's might be a little bit more, more complicated. Is there also more? Can you just go back over the pieces of how choosing about Q2 volume, but also is it a little bit more, you know, volatile? I guess what, why no, like, point estimate, I guess, this time in the slide?

No. That's uh

This is extremely helpful. Um and then in terms of um, in the second quarter of volume, I think that you're

Um, you know you you give the very species. I'm not sure if I caught them all in terms of, you know, how you're thinking about it. But um, I know if historically you have sort of like an overall number in, in the slightest thing here is might be a little bit more. More complicated is there. Also, more can you just go back over the pieces of? How do you think about second quarter of volume? But also is, there is it a little bit more, you know, volatile or I guess what? What, I know, like Point estimate, I guess this time in this line,

Christina Zamarro: Yeah. I mean, the consumer demand environment is still subject to gasoline prices. I mean, we're pulling up the average gasoline prices last night and this morning, and it's above $5 per gallon. Historically, we have seen a commensurate impact on VMT when we see gas prices spike. I think what we've given you is our best view and still an improvement for volume in Q2 relative to Q1 and sequential improvement as we move through the rest of the year. We're going to have to stay agile and continue to update you as to impacts on the consumer over the coming quarters.

Yeah, so I mean they they consumer demand. Environment is still subject to gasoline prices. I mean we're pulling up. Um, the average gasoline prices last night and this morning and it's above 5 dollars per gallon. In historically we have seen um, a commensurate impact on vehicle miles traveled, when we see gas prices um, Spike. So I think what we've given

Giving you is our our best view and still an improvement, for volume and Q2 relative to q1 and sequential Improvement as we move through the rest of the year. But we're going to have to stay agile and continue to update. You as the impacts on the consumer, over the coming quarters.

Emmanuel Rosner: Got it. Thank you.

Thank you.

Operator 2: Thank you. At this time, I will turn the call back to Mark Stewart for closing comments.

Operator: Thank you. At this time, I will turn the call back to Mark Stewart for closing comments.

Mark Stewart: Okay. Thank you guys for joining in today, thank you for the questions. Really appreciate that. As you heard, right, we are absolutely taking and continue to take decisive actions to navigate through the current environment. We got a clear focus on cost, a clear focus of matching our cost structure with the demand structure of the market, also keeping to a very strict portfolio discipline of moving up into the more premium product mix. We're confident these actions are positioning us well and supporting our long-term strategy. As Christina mentioned, we are absolutely focused on our cash flow as well. With that, guys, we really appreciate you joining today. Again, thank you for the questions.

Thank you. And at this time, I will turn the call back to Mark Stewart for closing comments.

Into the more premium product mix. So we, uh, we're confident, these actions are positioned, as well, and supporting our long-term strategy as Christina mentioned. We are absolutely focused on our cash flow as well. And uh, with that guys, we really appreciate you joining today. Again, thank you for the questions.

Operator 2: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Operator: Thank you. This brings us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.

Thank you.

These Springs out to the end of today's meeting.

We appreciate your time and participation. You may now disconnect

Hmm.