The Goodyear Tire & Rubber Company

Good morning. My name is Margo, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Goodyear's fourth quarter 2024 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 a question anytime 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 Greg Schenck. Senior Director, Investor Relations. Please go ahead.

Thank you, Margo. Good morning and welcome to our fourth quarter 2024 earnings call. Today on the call, we have Mark Stewart, our CEO and President, and Christina Zamara, our Executive Vice President and CFO. During this call, we will refer to forward-looking statements and non-GAAP financial measures. Forward-looking statements involve risks, assumptions, and uncertainties that could cause actual results to differ materially from those forward-looking statements. For more information on the most significant factors that could affect future results, please refer to slide 21 of the supporting presentation for today's call and our filings with the SEC. These materials can be found on our website at investor.goodyear.com, where a replay of this call will also be available. A reconciliation of non-GAAP financial measures discussed on today's call to the comparable gap measures is also included in the appendix of the presentation. With that, I will now turn the call over to Mark.

Thank you, Greg, and good morning, everyone. Welcome to our fourth quarter earnings call. I'd like to begin today by thanking our associates, our customers, and all of our suppliers for helping us to deliver an outstanding year in 2024. As I'm sure you've seen in our release, we delivered fourth quarter segment operating income ahead of expectations, and alongside of it, some exceptionally strong free cash flow relative to our past few years. It was a fitting end to the year marked by transformation as we set out to strengthen Goodyear's financial foundation and position the company for long-term success. Looking back over my first year with the company, I'm really energized by all we've accomplished. Across our organization, we put the emphasis and the full force of our talented team on Goodyear Forward, and together we executed nearly 500 million of transformation benefits through relentless program execution and follow through. It's a truly remarkable outcome given the program kicked off in November of 23. To put this effort into perspective, we've now successfully delivered five consecutive quarters of margin expansion under our Goodyear Forward plan. We accomplished this growth by exceeding our Goodyear Forward targets each and every quarter this past year. The end result is together, we've generated a turnaround in our earnings with full year segment operating income growth of $350 million, over $200 million excluding the benefits from the insurance recoveries. 2024 was the first year that Goodyear has grown segment operating income and margins since 2015, excluding the recovery year immediately following COVID. Our commitment to continued progress is clear throughout the entire company. We will continue to drive execution to unlock Goodyear's full potential as we move forward. In addition to our progress on earnings, we have also completed the divestiture of our OTR, the off-the-road business, and announced an agreement as well to sell the Dunlop brand, both part of our strategic review process. It's a clear demonstration that we're focused on delivering the plan and positioning the company for future growth. As with all transformation, it hasn't come without some challenges. As we look at the top line this past year, we've seen growth in the low-end imports impacting the consumer replacement industry in the US, Europe, as well Brazil. The inflows at the low end of the market over the last two years are unprecedented. Looking to the US market, low-cost imported tires are largely sourced from Southeast Asia. including from a number of countries that are either not subject to anti-dumping or countervailing duty tariffs or whether the production has been shifted to avoid the level of tariffs that the U.S. has sought to impose in order to counteract unfair foreign subsidies in our industry. It remains to be seen how the tariffs and our markets will evolve this year in 2025. The Tier 1 tire manufacturers, including Goodyear, source our volumes from factories located in all three USMCA countries to support both the OE as well as the replacement customers in the US. As you would all expect, we have been quite active in our discussions with government officials, emphasizing the significance of Goodyear having the largest manufacturing footprint in the US, as well as the quality, the safety and the technology that we bring to consumers with our products and our services right here in the US marketplace. We look forward to continuing our collaborations with the leaders in Washington as we work to address these critical issues impacting our business. In the meantime, we're working across our operations to mitigate any potential near-term impacts of tariffs related to our Canadian and Mexican supply. As the tariff situation may be fluid and will be fluid, we'll remain agile and execute efficiency. We will also remain steadfast on our execution of the Goodyear Forward, which will bolster our top line and our cost performance with benefits of $750 million U.S. dollar planned in 2025. This is continuing on the foundation that we executed in 24 and will allow us to continue the push forward on several fronts this year. We're going to take advantage of the strategic moves we made in 24 to advance new products, modernize our manufacturing footprint, enhance our sales effectiveness, and evolve our regional operational models. In the U.S., we will accelerate the introduction of new products to more effectively compete in the premium tiers and capitalize on blank space opportunities. In our last conference call, I shared how we would refresh our U.S. portfolio of offerings and while also increasing our coverage to a much broader spectrum of high-end, high-margin SKUs. We will introduce five new product lines in the U.S. this year, each with significant improvements in the large rim SKU coverage than the predecessor lines. On the manufacturing side, we're increasing our capabilities in our Oklahoma facility with a modernization project that will add about 10 million units of new capacity for premium tires in 2025 and 2026. we will ensure we're running at the optimal level of output and efficiency, and we're running the products that will yield the highest opportunities for profitability this year. As we look to our new portfolio in the market, we're also investing in our sales capabilities, both in strengthening our customer service through global digital platforms, as well as strengthening our overall value proposition for our customers. all with the clear objective to grow with the products our customers and consumers demand across the Goodyear family of brands. On the cost side, we're lowering our SG&A, or SAG, and optimizing our manufacturing assets as we look at both footprint as well as plant optimization. In early January, we announced the addition of Don Metzler as our SVP of global manufacturing and supply chain, reporting directly to me. Don brings more than 30 years of experiencing, developing, transforming, and leading complex, multi-site, world-class manufacturing operations. He'll be instrumental in taking our global manufacturing capabilities to the next level. We have a significant opportunity as we look across our KPIs to drive both higher output and lower cost. In addition, Alon Conan has joined our organization from our European manufacturing operation Elan has many years with the company and a demonstrated strength in leading manufacturing. Elan is now leading our manufacturing in the Americas. Don Metzler is one of six leaders I've added to the leadership team over this last year. These leadership changes have been crucial to our business transformation and creating a culture of high performance in the company. In addition, with the right leadership in place, we will capitalize on opportunities to streamline our operating model and address duplication of effort and excess costs that are inherently incur under our current decentralized structure model. Today we operate from within three regions, meaning each region manages their own product portfolio, their product development, sourcing and manufacturing. By aligning our structure and process globally, we will be able to innovate and operate with speed around the world, leveraging the benefits of standardization, optimization, and our key assets, meaning our people around the world. This new structure will translate to better products, lower costs, better service, and quicker refreshing of our products across the world. The transition will take some time, but the model is one that many companies are already leveraging and will shape the future of Goodyear as well. Looking ahead, we will continue to prioritize Goodyear Forward and advance several strategic initiatives to ensure we're positioned for long-term growth for our shareholders. We successfully navigated a very challenging landscape in 24, and our focus on discipline and execution will continue to support us as we work to further strengthen our financial and our operational foundation in the coming year. Next, I'll turn it over to Christina and she'll take you through the financials and we'll move on to the Q&A. Thank you.