The Goodyear Tire & Rubber Company (GT) Q4 2016 Earnings Report, Transcript and Summary

Good morning. My name is Keith and I will be your conference operator today. At this time, I would like to welcome everyone to Goodyear's Fourth Quarter and Full Year 2016 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. Thank you. I would now like to hand the program over to Christina Zamarro, Goodyear's Vice President, Investor Relations. Please go ahead, ma'am. Christina Zamarro - Goodyear Tire & Rubber Co.: Thank you, everyone, for joining us for Goodyear's fourth quarter 2016 earnings call. Joining me today are Rich Kramer, Chairman and Chief Executive Officer; and Laura Thompson, Executive Vice President and Chief Financial Officer. Before we get started, there are a few items we need to cover. To begin, the supporting slide presentation for today's call can be found on our website at investor.goodyear.com, and a replay of this call will be available later today. Replay instructions were included in our earnings release issued earlier this morning. If I could now draw your attention to the Safe Harbor statement on slide 2, I would like to remind participants on today's call that our presentation includes some forward-looking statements about Goodyear's future performance. Actual results could differ materially from those suggested by our comments today. The most significant factors that could affect future results are outlined in Goodyear's filings with the SEC and in our earnings release. The company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Our financial results are presented on a GAAP basis and in some cases, on non-GAAP basis. The non-GAAP financial measures discussed on our call are reconciled to the U.S. GAAP equivalent as part of the appendix to the slide presentation. And with that, I'll now turn the call over to Rich. Richard J. Kramer - Goodyear Tire & Rubber Co.: Thank you, Christina, and good morning, everyone. This morning, I'll review our 2016 highlights and then ask Laura to walk us through the fourth quarter results, then I'll come back to discuss each of our business units and layout our 2017 plan in the context of our longer-term targets. Laura will finish with a detailed review of our 2017 segment operating income outlook before opening the call for your questions. Our fourth quarter and full-year results were highlighted by growth in core segment operating income. On a full-year basis, the Americas generated SOI of $1.2 billion and operating margin of 14.1%. Consumer tire margin in the Americas increased about 200 basis points in the fourth quarter and for the full year. Europe, Middle East, and Africa delivered $461 million of SOI for the year, and margin expanded to 9.4%. Asia Pacific generated SOI of $373 million, its highest ever, and margin increased to 17.7%. In total, our full-year core segment operating income grew to a record $2 billion, in line with our third quarter guidance. Slide 4 summarizes the progress we have made executing our strategy, resulting in steady segment operating income growth and positioning us well for that growth to continue. Our team has consistently delivered year-over-year growth while building our capabilities for the long term. This marks our fourth consecutive year and sixth of the past seven of delivering record core segment operating income. Since 2013, our SOI has grown 25%. This improvement each year is rooted in our strategy and reflects our industry-leading value proposition, which combines our innovation and technology leadership, our award-winning products, and the global strength of the Goodyear brand in an aligned and connected business model. Our earnings growth, combined with the actions we've taken to address our pension obligations and to reduce our interest expense, have translated to more than 40% annual compounded growth in our operating EPS. I'm pleased and proud of the Goodyear team for delivering this performance. As we discussed at our Investor Day last September, our strategy is designed to take advantage of the long-term trends shaping our industry. Global demand for high value-added large-rim diameter tires is increasing. In 2016, the percent of growth in the larger-than-17-inch tires was greater than that of the overall global growth in consumer tires. This trend will continue into the future and works in our favor as our portfolio of these products and our connected business model position us on a path to sustained growth and competitive advantage. Our performance to-date has enabled us to deliver on our 2014 to 2016 capital allocation plan, further validating our strategy. And with an eye on our 2020 plan, this morning, we announced the $1 billion increase to our share repurchase authorization. As we look at 2016, I'm very pleased with our fourth quarter and full-year results. Achieving these outcomes is perhaps the best indication of the strength of our strategy and the changes we have made to Goodyear's business over the past several years. Now, with that, I'd like to turn the call over to Laura to walk through the fourth quarter results. Laura K. Thompson - Goodyear Tire & Rubber Co.: Thank you, Rich, and good morning, everyone. Turning to the income statement on slide 5 and as in prior quarters, we have provided callouts that highlight the impact of deconsolidating Venezuela. Our unit volume was down 2% year-over-year as growth in Asia Pacific was offset by declines in Americas and EMEA. Our fourth quarter sales were $3.7 billion, down from $4.1 billion a year ago with the decrease driven by the deconsolidation of Venezuela. Our gross margin increased nearly 3 full points to 27.2%, and segment operating margin increased 1 full point to 12.8%. Segment operating income of $479 million was up 5% excluding the impact of Venezuela from our 2015 results. Our fourth quarter earnings per share on a diluted basis was $2.14. Our results were influenced by certain significant items. Adjusting for these items, our earnings per share was $0.95. The step chart on slide 6 walks fourth quarter 2015 segment operating income to fourth quarter 2016. The negative impact of lower volume was $19 million. Lower production, driven in part by our U.S. commercial truck business was $27 million in the quarter. Lower price/mix of $66 million more than offset reduced raw material costs of $18 million for a net $48 million negative impact. The year-over-year decline is reflective of the declining raw material environment over the past one year and weakness in our U.S. commercial truck business. Sequentially, price/mix was stable. The sequential decline in net price/mix versus raw materials was driven by the lower raw material benefit versus the third quarter. Our third quarter guidance for full-year net price/mix versus raw materials included an expectation of potential price increases during the fourth quarter. With volatility around raw material cost increasing dramatically throughout the fourth quarter, we elected to implement pricing actions at the start of the year, impacting the price/mix versus raw material outcome. Cost-saving actions of $120 million driven by our operational excellence initiatives and SAG actions more than offset the $37 million negative impact of inflation, delivering a net benefit of $83 million. On a full-year basis, our net cost savings was $190 million. Foreign currency exchange was a slight headwind of $3 million, and other was a net benefit of $35 million driven primarily by lower incentive compensation. Turning to the balance sheet on slide 7, cash and cash equivalents at the end of the quarter were about $1.1 billion. Net debt was down more than $700 million from the third quarter. Our global pension unfunded liability at the end of the year was $669 million, up slightly from the prior year. Free cash flow from operations is shown on slide 8. For the quarter, we generated $1 billion in free cash flow from operations driven by an $833 million working capital benefit. Additionally, cash flow from operating activities was $1.3 billion in the quarter and $1.5 billion for the full-year 2016. The strong cash generation during the quarter supported the repurchase of $300 million of our common stock during the fourth quarter or about 10 million shares. For the full year, we repurchased $500 million in common stock or 16.7 million shares. In addition, we repaid $200 million on our U.S. second lien term loan in December, taking the remaining balance to $400 million. Turning to slide 9, Americas generated record segment operating income of $295 million in the fourth quarter or 14.3% to sales. Excluding Venezuela, operating income grew by $33 million or 13%. The increase in income was driven by strong performance in our consumer tire business, which was partially offset by continuing weakness in commercial truck, which was down $32 million year-over-year. Unit sales in the fourth quarter were 18.7 million, down 5% versus 2015. The negative impact of Venezuela accounts for about 300,000 units with a much weaker U.S. commercial truck OE industry and consumer OE business driving much of the remaining difference. OE volume was impacted by the timing of new model changeovers and lower overall production at OE in the quarter. Excluding Venezuela, replacement sales were about flat for the region. For the full year, Americas delivered segment operating income of $1.15 billion or 14.1% to sales. When excluding the impacts related to Venezuela and the sale of GDTNA, SOI continues to show solid growth. Turning to slide 10, Europe, Middle East and Africa generated segment operating income of $81 million in the quarter. The year-over-year decline in SOI was due to negative net price/mix versus raw material costs, which was primarily driven by timing associated with raw material index agreements in our OE contracts. Overall, EMEA's fourth quarter unit volumes declined 1% year-over-year. EMEA's OE unit volume was down 5%, primarily driven by choices we've made in our consumer business as we continue to focus on the more profitable 17-inch and larger-rim size fitments. Replacement tire shipments were up almost 1%, driven by growth in the 17-inch-and-above segment of the consumer market where our Europool volume increased 19% year-over-year. We continue to see declining industry demand and increased competition at the lower end of the consumer replacement business, particularly in the summer segment. For the full year, EMEA delivered $461 million in SOI and 6% growth for the year with margin expanding to 9.4%. Turning to slide 11, Asia Pacific delivered record fourth quarter segment operating income of $103 million, a $7 million improvement versus last year. The main drivers continue to be the benefits of volume growth and the positive impact from our operational excellence programs driving lower conversion cost. Our segment operating margin in the region increased to 18.8% from 17.2% a year ago. Asia Pacific's volume was 8.4 million tire units, representing about a 1% growth versus last year, primarily attributable to our key consumer markets in China and India. Given its proximity to natural rubber production and relatively lower levels of inventory, Asia Pacific began to feel the impact of higher raw material costs in the fourth quarter. While we anticipate higher raw material costs and currency headwinds for the region in the short-term, we continue to view China and the rest of the region as a key long-term growth opportunity. We're investing in our teams, our products, and our capabilities to drive that growth. On a full-year basis, Asia Pacific delivered record SOI of $373 million with margin increasing to 17.7%. I'll now turn the call back over to Rich. Richard J. Kramer - Goodyear Tire & Rubber Co.: Great. Thank you, Laura. We feel very positive about the progress in our business in 2016, and we remain confident in our ability to continue delivering on our long-term plan. Our strategy is clear and unwavering and, despite significant headwinds, including raw material costs, we believe we are positioned to generate significant increases in SOI and cash flow over the long term. While 2016 was strong for both Goodyear and the industry, we know there are trends that have your attention. They have ours as well. So, I'd like to continue my remarks by offering some perspective on two key topics affecting the global tire industry going forward. The first area relates to industry growth, which continues to be a great story in the premium segment. The industry saw robust growth in large-rim diameter tire sizes in 2016. In the U.S. market, the full-year growth in the 17-inch-and-larger segment was 9%, and in EMEA, it was 10%. As we discussed at our Investor Day, the 17-inch-and-above rim diameter tires are a good proxy for where the industry profit pool is going. With the increasing demand for these premium tires, we expect supply to remain tight. The segment is growing in multiples of the total industry. Our strategy and our strength focuses on the increasing profit pool in that part of the market that is simultaneously growing and mixing up. We're focused on the part of the market where Goodyear can add value with our technology, with our brand, with our distribution, and with all the capabilities that we bring to bear for the market. The trend towards larger, more complex tires has been driven by the auto manufacturers. In 2017, we will continue to implement our OE strategy where we target profitable fitments that have high loyalty rates and pull-through in the replacement market. While we continue to demonstrate a leading presence on successful vehicle fitments that were launched in previous years, we also have won a number of new fitments that will be rolled out over the coming year. As you would expect, these platforms depend on the performance characteristics of Goodyear's premium large-rim diameter tires. These are the type of platforms that we target with our OE strategy. They deliver strong return to the OE and lead to profitable growth in replacement. The second area of focus is raw material costs. Turning to slide 13, you'll see significant volatility in our key commodity costs, including natural rubber prices. Since our last earnings call, there's been a swing from a low of $0.67 per pound to a peak of $1.04 per pound as recently as last week, an increase of an astounding 55%. And the raw material cost story is about more than just natural rubber, with challenges coming in a broad cross-section of commodities. For example, prices of key commodities such as butadiene and carbon black have risen to 52-week highs in recent weeks. We expect raw material costs to remain at heightened levels in 2017. I'm pleased with how our team has been aggressively responding in this environment. We are confident that we will continue to offset raw material cost increases as we continue to focus on price/mix as a key component of our business. As shown on slide 14, over the past seven years, changes in raw materials have been largely offset by changes in price. This includes during 2011 when our commodity headwind was $2 billion and natural rubber reached a peak of around $2.60 per pound. With that as a backdrop, I'd like to turn the discussion to address the year ahead in each of our business units, starting with the Americas on slide 15. As I mentioned earlier, the U.S. market grew 9% in the larger rim sizes during 2016, outpacing growth in the overall market by more than four times. Our growth in these segments was on par with the market, which is a significant achievement given the supply constraints we've been managing through over the past several quarters. The investments we've made within the U.S., including growth CapEx to increase our supply of larger, more profitable tires, enabled us to sell 1.7 million more of the large rim size tires in the replacement market in 2016. In 2017, we're launching a number of new exciting products including the Goodyear Assurance WeatherReady in the commuter touring segment. The introduction of the WeatherReady at our recent Americas Customer Conference received an overwhelmingly positive response as did the new Endurance tire for trailers and RVs, and the Endurance LHD commercial tire for long haul applications. At the conference, we also reinforced the value of the Goodyear brand and emphasized that our customers' alignment to our strategy has both fueled their growth and positioned them to win in the future. Every year, our customers and associates leave this event energized and optimistic about Goodyear, and this year was certainly no exception. The investments we've made in our existing U.S. footprint and the start of production in our Americas plant later this year will drive our volume growth in the premium 17-inch-and-above segment. We continue to be focused on increasing our capability and managing our production costs to increase our supply of the right tires for this demand in 2017. This remains our top priority. The U.S. commercial truck industry continues to be affected by weak OE volumes and the impact of anticipated tariffs on Chinese imports in the replacement market. The current industry environment in heavy truck, especially new truck production, continues to be challenging. On the other hand, we began to see improvement in the replacement market in the fourth quarter where our volume was up 5% year-over-year. We will continue to drive value in our commercial business through our exclusive end-to-end total solutions business model for fleets, while leveraging our Goodyear and Kelly-branded products in the mid-tier. While we expect the first half of 2017 for our commercial business will be weaker year-over-year driven by OE, we are building on that positive replacement market momentum and expect that the business will grow again in the second half. Outside the U.S., we expect both the consumer OE and replacement industry in Latin America to grow in the low-single-digits in 2017, where we have successfully mixed up in a very, very tough environment. As an example, our team in Brazil has focused on expanding its aligned dealer and distribution network and building capabilities to drive value with these important customers. I am extremely pleased with our progress particularly in this very difficult environment. Our products are at the core of this improvement. Over the past four years, 100% of the consumer replacement product portfolio in Brazil has been refreshed and revitalized. The consistent strength of our Americas business is the result of our unwavering commitment to a strategy built on the alignment and integration of our industry-leading products developed from the market back, our aligned distribution network, and the power of the Goodyear brand. Turning now to slide 16, our EMEA business saw strong fourth quarter growth in the greater-than-17-inch rim size segment of 19%, which nearly doubles the industry growth rate. This performance is attributable to our award-winning winter tire value proposition where we gained share in both the larger and the smaller rim size segments. In the summer replacement sector, however, we continue to see increased competition, including from low-cost imports, which led to year-over-year volume declines in the less-than-17-inch segment of the market. Last quarter, I outlined our plan to take the necessary steps to shift our resources and reduce our exposure to declining less profitable market segments in EMEA. This includes the previously announced footprint action in Philippsburg, Germany. In the current environment, we expect our volume declines in the less-than-17-inch summer segment to continue throughout the course of 2017. In addition, we're in the process of realigning our go-to market model across the region similar to the approach that we've successfully implemented in the U.S. Over the long term, this recalibration will strengthen and further differentiate our value proposition to our distribution and service network. These actions, when coupled with foreign currency headwinds, will make for a very challenging year for our EMEA business. We believe these actions, while difficult, are necessary to position the business for sustainable long-term growth. We'll continue to seek opportunities to accelerate our mix-up in the region. We're confident that our line-up of high value-added, large rim diameter tires will enable us to meet the increasing demand in the industry's most profitable, high growth segment. Turning to Asia Pacific, we're very pleased with our full-year results and are consistently building on our foundation to enable continued long-term growth in the region. In 2017, we see consumer replacement industry growth across the region in the mid single-digit range driven by our key markets in China and India. We also see growth in the OE industry in the low single-digits. We expect our momentum in 2016 will continue and lead the strong growth in China again in 2017. Our confidence is strengthened by multiple new OE platforms wins in 17-inch-and-above rim sizes and continued expansion opportunities for consumer replacement in Tier 3 and Tier 4 cities. As an example, we expect double-digit volume growth in large rim size SUV tires in our consumer business and continued strong demand across our product mix. In November, we broke ground on the latest expansion of our existing facility in Pulandian, China. This will enable us to produce an additional 3 million passenger and light truck tires annually, supporting our growth in the profitable segments of the market over the intermediate term. The ramp-up of this incremental capacity will be completed in 2019. We're very optimistic about the long-term value proposition of our business in Asia Pacific. Our new product introductions, OE pull-through and buildout of our distribution network will be supported by increased premium tire capacity and gives us confidence that we will continue to be successful in this growing region. Turning to slide 17, our next stage plan, as we discussed at our Investor Day, includes a target of $3 billion in SOI by 2020 and cumulative free cash flow of up to $5 billion over the next four years. The cadence of our earnings will certainly be affected by raw material input costs this year. With the recent increases in raw material costs, we are now expecting SOI in 2017 to be about flat compared to 2016. While we expected raw material costs to increase over the period, the rise we are currently experiencing has been both faster and steeper than we anticipated. However, we have both the confidence and the demonstrated capability to recover our input costs over time. We remain committed to our 2020 targets and our plan to deliver 20 million more premium tires over the next four years. We see 2017 as a foundational year leading to 2018 when we expect our earnings trajectory to accelerate. We believe there are four specific drivers of that growth. First, assuming raw material costs stabilize, we would expect a year-over-year tailwind from net price versus raw materials resulting from the approximate six-month timing lag related to our OE and fleet contracts. Second, we will realize cost savings in EMEA including the impact of the Philippsburg plant closure. Third, as I mentioned earlier, we expect our U.S. commercial truck business to be stronger. And finally, increased production in our new Americas plant in 2018 will help offset ongoing plant startup costs. Combination of these factors should accelerate earnings growth in 2018 as we continue to mix up and implement cost savings initiatives. As you think about our results over the next two years, it makes sense to think about 2017 and 2018 together. We remain focused on executing our strategy, and we are confident that we will continue to deliver strong earnings and economic value. I'm pleased with the state of the business as we look ahead. as I told our customers at our recent conference, the mix-up opportunity in our industry is as good as it has ever been. And for those who can also manage its complexity, this mix shift will be a tremendous opportunity. As I frequently say, we're not running our business for one quarter or one year but for the long term. We know that because a variety of factors, such as the unexpected steep increases in raw material costs, the tire business rarely grows in a straight line. That's okay. That's the tire business. That's why we have a 2020 plan and not a one-year plan. The Goodyear team has the experience and knows how to manage through it, and I have confidence we will. I'll now turn the call back over to Laura to finish up with our 2017 outlook. Laura K. Thompson - Goodyear Tire & Rubber Co.: Thank you, Rich. Turning to slide 18, with unabsorbed overhead and the impact of the timing lag related to our raw material indexed agreement occurring in the first several months of the year, the profile of our first half will be very different from our second half. We expect a softer first half with accelerating growth in the second half of 2017. So net-net, our full-year SOI is expected to be about flat based on our current planning assumption. As the current raw material environment remains extremely volatile, we will update you again as part of our first quarter earnings call. Turning to slide 19, we have updated our full-year 2017 SOI drivers. Overall, we expect volume growth of about 1% for the year and an unabsorbed overhead headwind of about $70 million, driven by lower production carryover and lower first quarter production. We expect raw material costs to be up 27% based on current spot prices and that equates to a $1.1 billion increase versus last year. Looking at the net of these raw material cost increases and positive price/mix performance, the outlook is about flat for 2017. The rapid increase in raw material costs will create a timing imbalance with our raw material indexed agreement that cover about 35% of our business. Strong mix over the course of the year will offset this temporary price versus raws imbalance. As a final note to the price/mix expectations for the year, we see global OTR industry demand in 2017 to be largely similar to 2016. As a result, we are expecting essentially a neutral impact to mix from our OTR business. We expect our cost savings actions to exceed inflation by about $140 million in 2017 as our operational excellence initiatives continue to deliver strong results. Looking at the impact of foreign currency translation at current spot rate, we estimate about a $50 million negative impact. The other line represents a combined headwind from plant startup costs, increased R&D, and higher depreciation in 2017, partially offset by the adjustment during the second quarter of 2016. The outlook for these combined is a $50 million headwind. The outlook in total for 2017 is for full-year SOI to be about $2.0 billion. On slide 20, we have listed the other financial assumptions for 2017. As part of those assumptions, we see working capital as a use of $200 million, as raw material cost increases along with startup inventory at our new plant drive an increase for the year. I'd like to cover the $1 billion increase to our share repurchase authorization briefly before we open the line for your questions. We remain committed to our capital allocation plan where our free cash flow is allocated both to debt repayment and returning capital to shareholders. In either case, we will execute on our capital allocation plan over time and as we generate the cash. Now, we'll open the line up for your questions.

And we can take our first question from David Tamberrino with Goldman Sachs. Please go ahead. Richard J. Kramer - Goodyear Tire & Rubber Co.: Good morning, David. David Tamberrino - Goldman Sachs & Co.: Good morning, Rich. Good morning, Laura. Couple questions on my end. First on really price/mix cadence as we're thinking about this. It sounds as if first half of the year clearly going to be down and maybe having that made up in the second half of the year. Can you help us think about the magnitude of the first quarter? Are we talking down triple digits for price/mix less raws in the first quarter in aggregate? Maybe (34:09) I'll stop right there before the next one. Laura K. Thompson - Goodyear Tire & Rubber Co.: Okay. So you're exactly right, David. We do expect for the first half of the year, our price/mix versus raws to be negative and turning positive in the second half of the year. Our raws, specifically, in the first quarter, we're thinking it's going to be down and just more like 7% – 7% to 9% or so with that increasing more as we get into the second quarter. So more heavy weighted to the second quarter as you think about the first half. No, I don't see it as triple digits, I think, as you mentioned it in your question. David Tamberrino - Goldman Sachs & Co.: Okay. And then from a pricing perspective, you've announced up to 8% in the U.S. You've seen a lot of fast followers, you've seen the other global Big Three follow you there with Michelin and Bridgestone announcing similar price increases. Are you expecting that amount to stick in its entirety? Do you think maybe that gets cut in half is realistic? And really, what have you been seeing so far? Because we're, what, eight days into your price increase. Richard J. Kramer - Goodyear Tire & Rubber Co.: So David, I think it's a lot to cover there and if I could, I'm just going to maybe take one step back again, because I think it's really important to look back at what we're trying to do in the marketplace, even in view of the significant raw material headwinds we have. And I just want to go back and say, as you think about our business and what we built over the last, call it, 10-plus years and the like, the essence of our strategy has really been around trying to create value for our consumers, for our customers and for ourselves. And if I could, because it's so meaningful to us, even go back to our strategy road map where we say our goal to deliver sustainable revenue and profit growth while increasing the value of our brands. And that's what we're ultimately trying to do. I told our customers recently, there's lots of alternatives to go out there and buy a tire – just to go buy a tire from. You can find a lot of companies to do that, but we try to deliver more than that. And that's what we built our business on as we've move ahead. Our customers are getting, right, our entire value proposition, getting technology, they're getting product innovation. They're getting our brand, our brand promotions. They're getting service. They're getting supply. They're getting quality that we bring, and they're getting the partnership of our people. And that's the competitive advantage we're doing. And why it's so important is as we think about a headwind like we have on our raw material costs right now, it's not simply just about looking at one input cost then trying to manage that. It's ultimately about selling and getting compensated for that value proposition. So, that's what we're ultimately doing. Now back to your question, in terms of what we have, we've gone out in the U.S. and we've done that at 8%. We've done that in other regions of the world as well, including Europe, where we've done up to 8% for consumer and commercial to be effective as of the 1st of March. So, we've put -and we've done this in other regions or other countries as well. So, our intention on that value proposition is to go capture that value, not simply as a function of only our input costs but as a function of the value that we're bringing to the table. Now, if I could, maybe one more thing, and I think Laura touched on it, remember, we have two things that are going on that are worth commenting on. One is simply the lag of which these raw materials ultimately hit our P&L. And for those that may be familiar, those who may not, there can be a six-month lag to when we actually purchase, let's say, natural rubber in Southeast Asia when it's on a ship, when it ultimately gets to a dock, when it comes into our inventory, when it gets produced into a tire, to finally when it hits cost of sale. So we have this lag of the cost that comes into our P&L. Europe and North America being the longest, Asia it hits a lot quicker. So that goes into how we think about this. And the second element is the raw material indexation agreements we have that essentially reset every six months or so, on average. And remember, we really liked that when that came in, when we dealt with big raw material headwinds in the past where we were able to be compensated or essentially acknowledge the raw material increases we have. As they go up, we get a lag and the price goes up. As those raw materials go down, there's a lag and the prices come down. So as we see this inflection point where raw material goes up, it'll take longer to recover those raw material indexation customers around OEMs and fleets as well. So those are some of the things that will come into play as we think about how the raw materials hit us. Our intent, to be very clear, is to offset those raw materials over time. And if you look back, our track record, I think, speaks for itself in our ability to do that, and we approach this with the same confidence at this point. So, David, hopefully, that adds a little color to the question as well. David Tamberrino - Goldman Sachs & Co.: I think it does. Just – is there anything in the near term that you've been seeing that would lead you to believe that those price increases that you've passed on would not stick, or you're seeing a volume response as a result? Richard J. Kramer - Goodyear Tire & Rubber Co.: I think, David, I'll go back and say, with the value proposition we have forward, this is just another element of it, and we feel confident that that value proposition is worth it in the marketplace and that we can pass that on. Laura K. Thompson - Goodyear Tire & Rubber Co.: Yeah. And if you look back, we have different time periods in our recent history where we've been able to do that. This is a lot of the same management team that's been able to accomplish that. It is, over time, just like slide 14 shows you, and that's all reflective in our outlook for the year. David Tamberrino - Goldman Sachs & Co.: Okay. Richard J. Kramer - Goodyear Tire & Rubber Co.: And, David, just maybe to go back and just build on Laura's point, if you go back in time, we had increases of in 2006, $800 million of increased raw material; in 2008, we had $700 million; in 2010, we had $700 million; in 2011, we had $2 billion; and this year, we're looking at about $1 billion. And if you look back over time, we were able to offset that with price and mix. And I think that's the best way to answer that question. David Tamberrino - Goldman Sachs & Co.: Okay. And then lastly, on the overhead absorption, you're looking for $70 million for the full year. It seems like the majority of that's the first half, you get a benefit from the San Luis Potosí plant ramping up in the second half of the year. How much of that is really driven by commercial vehicle? How much of it is something else that maybe I haven't considered because that was a very large variance, at least, what we are thinking about for the full year? Richard J. Kramer - Goodyear Tire & Rubber Co.: No, I think it's – I think you hit it on the head. As we carry over, that's what we're bringing into the first half essentially, is the bulk of that is – we had certainly some consumer production cuts in that number as well, but commercial, particularly on a dollar basis, is a driver of that number. Laura K. Thompson - Goodyear Tire & Rubber Co.: Yes. Richard J. Kramer - Goodyear Tire & Rubber Co.: You got it, right? Laura K. Thompson - Goodyear Tire & Rubber Co.: Yeah. And the cadence is, just like you said, it's primarily all going to hit (41:40) in the first half. David Tamberrino - Goldman Sachs & Co.: Okay. Thank you. Richard J. Kramer - Goodyear Tire & Rubber Co.: Thanks, David. Laura K. Thompson - Goodyear Tire & Rubber Co.: Okay, thanks.

We'll take the next question from Itay Michaeli with Citi. Please go ahead.

Great. Thanks. Good morning, everyone. Richard J. Kramer - Goodyear Tire & Rubber Co.: Morning, Itay. Laura K. Thompson - Goodyear Tire & Rubber Co.: Morning.

Just on page 17, I appreciate the color on some of the potential 2018 drivers, wondering if there are any other buckets we should be thinking about at this point for 2018, particularly in some of the other elements like R&D and depreciation, just kind of want to understand if you think these are the main buckets for SOI growth, if there's any other factors – potentially offsetting factors to think about as well for 2018. Richard J. Kramer - Goodyear Tire & Rubber Co.: Well, Itay, I'll start and Laura can jump in as well. I mean I think as we look at this, we have managed through a lot of headwinds, differing headwinds over time, and I think one of the elements on here is that the cost bucket. I mean you see a line on there for costs, but at the end of the day, we will continue to manage our investments and our – not on this page. Obviously, this is an SOI page – but we'll be prudent allocators of our capital. We will certainly look at all our costs and expenses whether it's advertising, it's R&D, and manage those in the context of – prioritize those in the context of the environment that we're dealing with. So, this isn't an all-inclusive bucket, but these are some of the things, as we think about 2017, 2018 sort of together as we look at what we need to offset over time here, these are the things to say, they're going to be benefiting us as we look out into the future, particularly into 2018. Laura K. Thompson - Goodyear Tire & Rubber Co.: And I think if you look at our SOI walk chart for our 2020 target, some of your questions on some of the investments, so we did provide for investments as part of that target. To Rich's point, we also have the net cost savings, right, of $500 million over that time period as well and continued mix-up, and again these 20 million tires as they come into play. But investments as we think about 2018, again as Rich said, we'll time those as we need them. Certainly things like depreciation will increase as we go into 2018 as well. Richard J. Kramer - Goodyear Tire & Rubber Co.: And, Itay, one of the things that we've not built into the 2020 plan and we've not built it on that page – and I say this with a little bit of humor – but it's got to snow again in Europe. And remember, our winter business is really an industry leading business in Europe. And to the extent that we ever get that coming back again, which I hope we do, that's an upside as well. But to be clear, we've not built any of that in because we've been dealing with such warm winters now for sort of like five in a row or four in a row. So that's in there as well. Laura K. Thompson - Goodyear Tire & Rubber Co.: Yeah. And I think the OTR business falls in the same bucket. We're not assuming a big recovery in there but, at some point, that will come back.

That's very helpful. And just a follow-up question just on slide 7, I think your leverage ratio of 2.39 times is a little bit higher than I think what you thought you'd come in at 2 to 2.1 times for the end of 2016. Could you just update us on how you're thinking about debt reduction versus buybacks, and that glide path to, I believe, your 1.5 times leverage ratio by 2020? Laura K. Thompson - Goodyear Tire & Rubber Co.: Okay, sure. So, I think – let's go through it maybe this way. As we think about our share repurchase – maybe I'll hit that one – certainly, the authorization increase of $1 billion is meant to go beyond 2017, that our share repurchase historically, you've seen us kind of time those with when we generate the cash, which is normally concentrated towards the fourth quarter. So I think – now, as you think about the 2016 impact that you pointed out, that certainly was impacted by the earnings decline related to the U.S. commercial truck market, frankly. As we think about our capital allocation plan, everything still holds. Nothing we saw in 2016 changes that. Our free cash flow is balanced between debt repayment as well as our shareholder return programs.

Great. That's very helpful. Thanks so much. Richard J. Kramer - Goodyear Tire & Rubber Co.: Thank you, Itay. Laura K. Thompson - Goodyear Tire & Rubber Co.: Thank you.

And we'll go next to Ryan Brinkman with JPMorgan. Please go ahead.

Great. Thanks for taking my question. Richard J. Kramer - Goodyear Tire & Rubber Co.: Hi, Ryan.

Hi. We've seen you and your competitors announce price increases in the U.S. I've not seen as many price actions being announced in Europe. Is that consistent with what you're seeing, or maybe it's just a case that the increases there are made more stealthily or harder to track from the U.S. Do you think one region or another may have more or less difficulty in passing along price increases in 2017? Richard J. Kramer - Goodyear Tire & Rubber Co.: Ryan, as you would imagine, we manage our business market by market, and you rightly pointed out that we had announced price increases in North America of up to 8% in consumer and commercial effective 1 February. And as I mentioned just a bit ago as well, we announced as of 1st of February in Europe, again, up to 8% on consumer and commercial effective 1st of March as well. And, again, we have, market by market, made announcements, I certainly won't go through them on this call, but we only can speak to our situation. And our situation, again, I would point back to, our goal is to recapture or capture the value for the entire value proposition we put out there. Input costs are one of them, and obviously very significant at this moment as it has been in the past. But our philosophy around the world is to put a value proposition out there that creates competitive advantage and that's what we're ultimately trying to accomplish.

Okay. Thanks. And then, I was just hoping – and maybe to revisit a topic from last quarter's call on the impact to Goodyear of the China TBR tariff. So, looking at some of the RMA import data, it shows that the imports of commercial truck tires, they've already started to decline maybe even sizably in the back half of 2016. Is it the case that you're seeing this too, but that there's still a volume headwind for you because of the distributors maybe being in a still overstocked position after a pre-buy? And then, at some point I imagine this should turn into a nice volume tailwind for you on market share gain. When do you think that that will occur? Richard J. Kramer - Goodyear Tire & Rubber Co.: So, Ryan, it's a good question. I think to the first question just on the tariff itself, I think the issue that we still see, and we did speak to it last quarter as well, is essentially there's a lot of inventory in the channels reflective of the big pre-buys that came as was the case with consumer as well. So, the channels have a lot of inventories still in them and our view is that it's still going to take the first half to work its way through the channels. So that something is there. Just like with the consumer side, our view is we sort of have to look at the business, and we do, in a steady state trying to adjust for some of the aberrations of the pre-buys and then the significant stop (48:54) buyings of imported tires because of tariffs and look at it – look at sell-out over time because that's a more true picture of the market that we have to deal with. Now having said that, we're looking at about 1% to 2% growth in replacement in the U.S. and still about a 6% decrease in OE, which is sort of a carryover from what we've seen in 2016. So, we expect – to your point, we expect the volumes even for OE to turn positive later in the year, and we would expect the commercial industry to improve. And from our perspective, look, we've got great products, we've got the best end-to-end fleet solutions in the business, we got a great brand, we supplement it with some Kelly product in the mid-tier. So, we're confident that we're going to – that the industry's going to rebound, and that we're going to benefit from that as we look ahead. And that is an upside for us. But I'll tell you, one of the things I learned early on of our business is truck is probably one of the most cyclical businesses that we have. When it's great, it's really great and it booms; and when it's not, you get, like I said, two years in a row of OE downs and what have you. But that's okay. I mean, we know how to manage it, and that's exactly what we're doing. And to your point, there's no doubt that there's better days ahead in truck.

That's a very helpful color. Thank you.

And we'll go next to Brett Hoselton with KeyBanc. Please go ahead. Richard J. Kramer - Goodyear Tire & Rubber Co.: Hi, Brett. Laura K. Thompson - Goodyear Tire & Rubber Co.: Good morning, Brett.

Just a couple of quick questions here. First of all, if I take your raw material impact of $1.1 billion divide it by about $15 billion in sales, I get about a 7% increase necessary on the pricing side. Is that kind of how you're thinking about it, which would seem to imply that you don't need another price increase, or is it possible that you might need another price increase given current raw material levels? Richard J. Kramer - Goodyear Tire & Rubber Co.: Ryan (sic) [Brett], we can only speak to the situation that we see at hand. So, I... Laura K. Thompson - Goodyear Tire & Rubber Co.: Right. Richard J. Kramer - Goodyear Tire & Rubber Co.: ...I can't comment on what's ahead. What I can say is that we have a demonstrated track record to deal with what's.... Laura K. Thompson - Goodyear Tire & Rubber Co.: Whatever. Richard J. Kramer - Goodyear Tire & Rubber Co.: ...thrown in front of us. And that's what you can expect from us going forward. What we're in, what I can say is that clearly the raw material inputs that we've got have been very volatile and I would even say unpredictable. I mean, we saw steep, steep increases in our raw material costs, not only natural rubber which you saw. I'm sure many of you have seen or will look at an article even in The Journal this morning that talks about one of the reasons being speculation in China and the like. We know we've had floods in Thailand relative to natural rubber. On butadiene, we've had some unplanned factory shutdowns and the like. So, there's some causes for this. But our view is raw materials are going to stay at a heightened level, as I said in my script, and we have a philosophy here, play it as it lies, and that's what we're going to go do. Laura K. Thompson - Goodyear Tire & Rubber Co.: I mean, Brett, just since – even since to the Detroit Auto Show, right, we've gone up over $300 million in raw material cost increases just in the last three weeks. So, it is quite volatile, just to reiterate that point.

And then switching gears, how do we think about the pace of share repurchase. If I take a look at your $3.5 billion to $4 billion over a four-year period of time, that seems to suggest that you might be buying back in the range of about 10% per year on a constant basis. But is there some reason to believe that that's going to be substantially lower in 2017 versus, let's say, 2018, 2019 or 2020? Laura K. Thompson - Goodyear Tire & Rubber Co.: So, I think I talked about it earlier and we'll keep you updated as we go throughout the year, Brett. But I think we all – if you go back in history, as we generate the cash, we spend it, whether it's debt repayment or things like share repurchases. So, I think as we – we still, I mean, look at the outlook charts that we have. We certainly expect strong free cash flows in 2017, of course. And given that, I think based on our history, we'll time that as we generate the cash, which is really, for us, concentrated in the fourth quarter. Now, just overall as a 2020 comment, the share repurchases are directly correlated to the growth in the earnings through that 2020 plan. Absolutely.

Fair enough. Thank you very much. Laura K. Thompson - Goodyear Tire & Rubber Co.: Okay. Thank you, Brett. Richard J. Kramer - Goodyear Tire & Rubber Co.: Thank you, Brett.

And we'll go next to Paresh Jain with Morgan Stanley. Please go ahead. Paresh B. Jain - Morgan Stanley & Co. LLC: Good morning, everyone. Richard J. Kramer - Goodyear Tire & Rubber Co.: Good morning, Paresh. Paresh B. Jain - Morgan Stanley & Co. LLC: Good morning. Laura K. Thompson - Goodyear Tire & Rubber Co.: Good morning. Paresh B. Jain - Morgan Stanley & Co. LLC: Just a couple of questions on the OE exposure actually and slightly longer term. In a situation where the 17-inch supply basically falls short of demand, which is what you're forecasting, I'm guessing it would be fair to assume that your capacity would first address your OE customer demand before meeting replacement. Can you provide any color on how you're splitting that incremental demand between OE and replacement through 2020? And in the event U.S. South continues to grow over the next two years for some reason, should I consider that as a headwind to your 2020 outlook? Richard J. Kramer - Goodyear Tire & Rubber Co.: So, to the first question, Paresh, I would say what we have to do is manage the volatility or the changes in demand between replacement and OE, and we do that being able to toggle that product back and forth between the two markets. Clearly, our strategy, as we've indicated, starts with getting on those high-loyalty fitments that succeed in first and second to maybe even third replacement as they get into the market. So, OE is something that clearly is a priority for us, and it's really prioritize in the sense of obligations, contractual obligations as well as we work with each of the OEs. But OEs change their production schedules. And as they do, we need to go back and then figure out how to utilize our capacity the best we can. And there's a big demand in the replacement market as well. So, I would say there's no magic formula. It's really a strategic path that we follow. And then we have to manage demand requirements as we go. Laura K. Thompson - Goodyear Tire & Rubber Co.: And then I'd just say – I mean, I think it's maybe what you're getting at, Paresh, is OE is very profitable for us. So it's not a headwind per se, if that's your point, in our 2020 plan if the SAAR goes up. Paresh B. Jain - Morgan Stanley & Co. LLC: I mean, relatively because replacement is expected to be $32 in profits per tire versus OE at $20. Laura K. Thompson - Goodyear Tire & Rubber Co.: Yeah. That's an industry... Paresh B. Jain - Morgan Stanley & Co. LLC: Yeah. Laura K. Thompson - Goodyear Tire & Rubber Co.: The first number is an industry number on that chart. Richard J. Kramer - Goodyear Tire & Rubber Co.: Paresh, I would say our OE business, we don't look at that as a headwind at all. We actually look at that as the seeds (56:12) to drive our business into the future. And again, if I could take it back, I mean, it really is about managing our OE business with our customers, our OE customers to the point where we're adding value for them and being able then to get the benefit of those tires in the replacement market. In the past, our focus was too much on just getting fitments and volume for volume's sake. And in that model, I might suggest your thought process may have more relevance. But we're really very focused on making the right decisions for us, and therefore, I think OE growth of large-rim diameter tires is actually a good thing for us. Paresh B. Jain - Morgan Stanley & Co. LLC: Understood. Thanks for the color.

And we'll take the next question from Emmanuel Rosner with CLSA.

Hi. Good morning, everybody. Richard J. Kramer - Goodyear Tire & Rubber Co.: Good morning, Emmanuel.

So, first, just a quick housekeeping question on the quarter. The fourth quarter SOI, I think, I mean is a little bit below the low end of the guidance you had given in October. But I think the EPS was a bit above expectations. And as far as I could say, it was basically the contribution from other income. Anything specific in that other income bucket and whether that's something that we could expect to be recurring? Laura K. Thompson - Goodyear Tire & Rubber Co.: Okay. So, first, maybe just to make sure we have the numbers clear, our outlook for the fourth quarter was to be between $2 billion and $2.025 billion, and we came in for the year at $2.009 billion, okay, so right where we think we should be, okay, overall. Now, on the guide, I think, Christina can walk you through that, those pieces part, if you'd like. Richard J. Kramer - Goodyear Tire & Rubber Co.: Yeah. And, Emmanuel, I would say there's really – Christina can walk you through the other items. There is nothing unusual in there to highlight for you. What I would say, though, is we focus our guidance a lot on segment operating income because that's sort of the number that we manage. But I can tell you we put a tremendous amount of effort as well on managing net income and EPS, whether it's tax planning, whether it's... Laura K. Thompson - Goodyear Tire & Rubber Co.: Interest expense. Richard J. Kramer - Goodyear Tire & Rubber Co.: ...managing our financings, and things like these. So, that is obviously, to state the obvious, a priority for us. But as you look at that forecast, again, Christina can take you through all the elements, but I don't think there's anything in there that you're going to – there's nothing in there that you would highlight to say, oh, that's a surprise we didn't tell you about. It's more of business as usual, normal course.

Okay. And I guess, more fundamentally then, so I was hoping if you could go into a little bit more detail or quantification of the mechanism to recover some of these raw materials especially the contractual part, like if I look at your expectation for $1.1 billion in raw material increase in 2017 at spot prices, how much roughly of that would it just be automatically you will get back based on contracts? And how much would be things where you would have to basically pass on a price increase on the market in order to be able to get it back? Richard J. Kramer - Goodyear Tire & Rubber Co.: Yeah. So, Emmanuel, I'll maybe try to answer that from a couple of different ways. We estimate about 35% of our business is covered by RMI agreements and the like. And that again is primarily OEM or new car manufacturers as well as certain commercial fleets and mining fleets out there. By and large, that's what ultimately covers it. And those agreements are in there, so that mechanism normally resets round about every six months or so. Laura K. Thompson - Goodyear Tire & Rubber Co.: On average. Richard J. Kramer - Goodyear Tire & Rubber Co.: (01:00:06) on average. Some are quicker. Some are a little bit longer. But on average, I think it's a reasonably good proxy. And for us, as I mentioned, and I think for our customers as well, it gives us good transparency and visibility into our costs and their costs as they move ahead. So, I think it's a mutually beneficial type agreement that we put in there. And again, in a period of rising raw material costs, we're going to lag in terms of recovering those raw material costs because of that. And that situation will continue until such time that those raw materials stabilize and we can catch up. Of course, that reverses itself as well as raw material goes down with that lag. So, right now, as we see raw materials increase as they come into our P&L, I think as David asked earlier, Q2 is going to be really a bigger hit of incremental year-over-year raw material cost increases as well then in (01:01:08) Q3 and Q4 as we look at the forecast here. So, those RMI contracts have to catch up. That's why we have a lag between being able to offset everything in a really sort of finite period of time, if you will, of 12 months calendar year. So, that's how the RMI contracts work. But I think they're very effective. They're a good answer for us, and we believe that that's ultimately will happen over the period of time. The others, those aren't (01:01:38) negotiated agreements with our customers that are out there, so.

Understood. And then finally, just on your – some of the tax plans that are being considered for the U.S., obviously, you're currently sitting in an incredibly good position with your manufacturing being done basically in the U.S., but you're also working on that Mexico plant. Any initial thoughts in terms of the parameters of what would affect – would you change to reflect (01:02:08) the way or the place your future tires will be produced in case some of these border adjustment taxes go through? Laura K. Thompson - Goodyear Tire & Rubber Co.: So, Emmanuel, you're correct to state that it's clear around the world including in the U.S., our strategy generally is that we make the tires where we sell the tires. And certainly, like I said, that's the case for the U.S. So, in that sense, you're correct in your assessment, but, right, and certainly my actually (01:02:40) caveat all of this with there's just a tremendous amount of unknowns and no details around a lot of the statements that are being made. But remember, we do import natural rubber from Asia into the U.S., and you can't get that in the U.S., so it's all imported. So, there would be a tax consequence opposite on that side. Bottom line is, though, because of that and, like I said, especially if you look at 2016, we import very few tires into the U.S., but we are a net importer, when you think of it, to the tune maybe of a couple hundred million dollars driven by that natural rubber piece of the business. Now, there's a lot of other things going on in these Ryan plans and taxes and so on, so again, hard to figure out, not a lot of details. So, kind of on the tax front for Goodyear, at this time, we probably have to say somewhat of a neutral, lots of pluses and minuses within there. But the tire industry imports into the U.S. about 170 million tires. And like I said, we're a very small part of that piece there, so could be an impact as the industry looks at it. But, again, from Goodyear, from a tax perspective, hard to say, fairly neutral, though, especially because of that importing of the raw material natural rubber. Richard J. Kramer - Goodyear Tire & Rubber Co.: And I'll just add to Laura's comments just to emphasize what she made the point of, there are so many moving parts. I mean, we don't know. Our philosophy is we will – as I mentioned earlier, we'll do the appropriate tax planning and other planning that we have to do. But we do it every day, right? There's rules around the world. We have to react to the rules and regulations and laws and manage our business accordingly, and that's what we'll do. When and if or when we see whatever comes out here – it's just too early to tell what the specifics are. So, we'll stay tuned and obviously, let you know as we move ahead. But we're prepared to manage through that, just like we do at other places.

Great. Thanks for the color. Richard J. Kramer - Goodyear Tire & Rubber Co.: Thank you.

We'll go next to Ashik Kurian with Jefferies. Please go ahead.

Hi. Thanks for taking my... Laura K. Thompson - Goodyear Tire & Rubber Co.: Hello, Ashik.

Hi. Thanks for taking my question. I just have one left. And how to think about your volume and market share development factored into your 2020 plan. Because if you look back, you have strong track record of driving mix and net neutral price have come during a period of very limited volume growth. Even in 2016, you flagged declining sales in less-than-17-inch segment. And given that it's still around 60% of your portfolio, I've struggled to think of volume growth and continued price/mix that you have in your 2020 plan as mutually exclusive, so interested to get your thoughts on how we see your volumes developing from here. Richard J. Kramer - Goodyear Tire & Rubber Co.: Ashik, I think it's actually a very good question and I'll say first time, second time, third time, our focus is on those 20 million HVA 17-inch and larger-rim diameter tires because that's where the profit pool of the industry is. That's where our growth is ultimately going to be. Just as we have in the past, we will also manage those parts of the market where we're not able to get paid for the value we put into those products, whether that's competitive environments, whether it's demand decreasing. Whatever that might be, we will take the decisions accordingly. But our goal is not – to simply not focus on, as you said, that part of the market as well. We have a lot of profitable and attractive fitments in that part of the market, let's say, 16-inch-and-below. And remember, while we don't put it in that number, I just came back, as an example, from one of the capital investments we're making in India, and the 16-inch market there is a fantastic market for us. Certain countries in Latin America, it's still a fantastic market for us. In fact, we're growing our volumes in that in certain markets in Latin America. So, I think it is something that we will manage, but we will manage it relative to hitting our profit goals, and we will certainly preference those tires that are being sold where the profit pool is growing. So, it's something we will manage, but I would say we don't really – there's no difference from what we said in September to that question.

Just to follow up, if I can, is it fair to summarize that in your 2020 bridge, maybe volume is probably the least fixed of the buckets? Richard J. Kramer - Goodyear Tire & Rubber Co.: That's a difficult one to say because there can be volatility in a number of those buckets, raw material being one of them as we're going through here. Laura K. Thompson - Goodyear Tire & Rubber Co.: Yeah. Richard J. Kramer - Goodyear Tire & Rubber Co.: But I understand your question. I think what I can say about that bucket is we will stick to our philosophy of not pursuing volume for volume's sake, but to drive, as I candidly, not to be repetitive – as our strategy roadmap says, our goal is sustainable revenue and profit growth. That's what we have to do, and that's the context in which we'll make those decisions. Laura K. Thompson - Goodyear Tire & Rubber Co.: And as we look at that, we know the market needs the greater-than-17-inch tires especially in the mature markets. A lot of that volume is about us also making those 20 million more tires, a lot in our control in that sense and timing. And our overall philosophy, as Rich always says, is just it's not volume for volume's sake; it is about profitable growth. And that's what we see that greater-than-17-inch market primarily giving us in that bucket for that 2020 walk.

Thank you. Richard J. Kramer - Goodyear Tire & Rubber Co.: Thanks, Ashik. Laura K. Thompson - Goodyear Tire & Rubber Co.: Welcome. Richard J. Kramer - Goodyear Tire & Rubber Co.: Appreciate it.

And we'll take today's final question from Paul Kratz with Berenberg. Please go ahead. Laura K. Thompson - Goodyear Tire & Rubber Co.: Hello, Paul. Paul Kratz - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Hi. Good morning. I just had a quick question. I think on what you said in the OTR markets that you kind of see the development this year being a bit flattish, maybe a bit in the weak end. And I think it's interesting because this is in contrast with a lot of the competitors who have been pushing I think a relatively bullish view of the market. I mean, could you maybe give us an idea directionally where you see the OTR market and maybe if you could confirm, is this primarily mining that's driving this weakness in the OTR business for you guys or is it something else that maybe I'm not picking up on? Laura K. Thompson - Goodyear Tire & Rubber Co.: Right. So, I'll answer your last question first. Mining is driving that weakness, certainly. We would love for the OTR business to rebound. But we do see inventories out there. They're not any higher than they were. They're a little lower, but people are also buying a few tires here and there, just smaller tires. So, I think to your point, if mining picks up, that is about the larger tires, the mix comes back, and so on. Now, for us, we certainly are about $100 million off our peak earnings in that OTR business but again, not building in a big rebound certainly for 2017 in that market at all. Now, again, we do – likely between now and 2020, there should be a rebound at some point or better than what it's been performing, but it's not the way we see it certainly for 2017. Paul Kratz - Joh. Berenberg, Gossler & Co. KG (United Kingdom): Perfect. It's very clear. Thank you. Laura K. Thompson - Goodyear Tire & Rubber Co.: Okay. Thank you, Paul. Richard J. Kramer - Goodyear Tire & Rubber Co.: Thank you, Paul. Richard J. Kramer - Goodyear Tire & Rubber Co.: And I think that was our last question. So, I just appreciate everyone's attention today, and we thank you for that. Laura K. Thompson - Goodyear Tire & Rubber Co.: Thank you.

And this will conclude today's program. Thank you for your participation. You may now disconnect, and have a [Abrupt End].