Good morning. My name is Keith, and I'll be your conference operator today. At this time, I'd like to welcome everyone to Goodyear's First Quarter 2019 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. [Operator Instructions] I will now hand the program over to Nick Mitchell, Senior Director of Investor Relations. Please go ahead.

Thank you, Keith, and thank you, everyone, for joining us for Goodyear's first quarter 2019 earnings call. I'm joined here today by Rich Kramer, Chairman and Chief Executive Officer; and Darren Wells, Executive Vice President and Chief Financial Officer. The supporting slide presentation for today's call can be found on our Web site 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 two, 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 the call are reconciled to the U.S. GAAP equivalent as part of our appendix to the slide presentation. And with that, I'll now turn the call over to Rich.

Great. Thank you, Nick, and good morning, everyone. Thanks for joining us today. During today's call, I'll share some highlights of our first quarter operating performance and discuss the steps we are taking to address our cost structure and improve our supply of premium tires. I'll also spotlight several new mobility partnerships as well as the upcoming launch of our commercial ecommerce pilot in the U.S. Darren will follow with a review of our financial performance as well as details on our recently announced European restructuring and the refinancing of our European credit facility. He will conclude with an update on how we are thinking about the business going forward. We entered the year with renewed focus on the elements of our business that we can control and influence including our operating execution, the efficiency of our manufacturing facilities, our cost structure, and product and business model innovation. We made progress increasing our premium supply for the U.S. market allowing us to gain momentum. Our U.S. consumer replacement tire shipments increased 6% outpacing the performance of the USTMA members. This was led by strong growth in the high margin 17-inch and greater category. Our U.S. commercial truck replacement tire volume turned positive, reflecting improved manufacturing performance at our commercial truck tire plants as well as the strength of our fleet solutions’ offering. Both businesses grew share while increasing the value we capture in the marketplace. Our U.S. and EMEA commercial OE businesses delivered another quarter of impressive volume growth reflecting healthy trends in the trucking industry, including increased ton miles and higher utilization. EMEA's commercial replacement business also posted solid growth aided by the strength of our proactive solutions offering. European consumer replacement industry demand waned throughout the quarter, reflecting weakness in the emerging markets and Germany. This negatively affected…

Thank you, Rich, and good morning, everyone. I'll begin my remarks with a couple of reflections on the quarter. First, I think you'll find that the factors that shaped our first quarter performance, which are largely consistent with the drivers we discussed as part of our year-end conference call. We did see a couple of slight shifts as the U.S. replacement industry was stronger than we had planned, and the replacement industry in Europe was weaker. Second, I'd say that overall, nothing we've seen during the first quarter has fundamentally changed the way we're thinking about full year 2019. Having said that, we continue to take action to build our long-term fundamentals, including the modernization and restructuring plans we've announced in Germany, which we expect to benefit our earnings next year. Turning to slide 12, our first quarter sales were $3.6 billion down 6% from last year, reflecting the impact of unfavorable foreign currency translation and lower volume, partially offset by improvements in price mix, unit volume contracted 3%, driven by an 8% decline in consumer Olli shipments. The global consumer Olli environment continued to be challenging during the quarter, particularly in our Asia Pacific region due to weak demand in China and India. Light vehicle production also declined in Europe and the Americas. Replacement shipments were relatively stable, with weakness in EMEA and Asia Pacific, largely offset by growth in the Americas. Asia Pacific performance was driven by weak consumer replacement shipments in China. European consumer replacement demand was also soft, driven by difficult winter tire comparisons and a slow start to the summer selling season. Robust growth in the U.S. consumer replacement market drove the increase in the Americas. Segment operating income for the quarter was $190 million, down about $90 million from a year ago and slightly…

[Operator Instructions] Today's first question will from Rod Lache with Wolfe Research. Please go ahead.

Good morning, Rod.

Good morning, everybody. Guess my main question is just hoping you could just characterize pricing conditions in North America and wanted to ask you whether you think it's time to re-examine pricing just given the recent raw material price increases plus the fact that you really haven't fully recovered everything that you lost in terms of the spread over the past two years?

Yes. So, Rod, it is an ongoing matter for us to look at what we need to do in order to recover the lost margins that we have experienced from the increased raw material costs over the last couple of years, and it is something we are confident we will be able to do over time. I think if we look at where we were in the first quarter, we were able to -- we achieved price mix of $42 million which compares to $35 million in Q4, and negative numbers for several quarters before that. So, I think we feel like we are making progress. In particular, it was good for us to see price mix in the Americas turn positive after having slightly negative in Q4. So, in the Americas, we've got good momentum on price, and we've got mix improving as we enter Q2. And this is at the same time when raw material -- year-over-year raw material cost increases are getting a little more moderate. So, that's a good combination. I mean that's how we feel about the Americas. And just to hit on Europe and Asia-Pacific, I think where we have good momentum on pricing in the America, not as clear in EMEA and Asia-Pacific as price mix in Q1 for both of them was a little lower than Q4. So, there is some seasonality in it for the EMEA business. But I think it's fair to say the momentum there is not as good as it in the Americas. But overall, I think I mean we feel like we are making progress. We are still working towards that crossover point where we can start to recover the loss margins that we have experienced from rising raw materials. I didn't include the cyclical price versus raw materials chart in today's deck. It hasn't really changed very much as you can -- as you might imagine. But we will come back to that later in the year to do a progress check and to talk some more about that. But, that's obviously an ongoing point of focus for us.

Well, maybe I could just ask this a little bit differently. What would be the key metrics or indicators that you would analyze to determine that the time is right to implement additional pricing?

Rod, I don't think -- I will jump in, I don't think they are a lot different than what we've done in the past. It's a combination of where our input -- the change in our input cost and we go as well as other market conditions that are relevant to each of the particular areas that we deal with. So, I don't think the things that we look at are going to -- going to be any different. It's going to be the environment, and it's also going to be – we’ve said this consistently in the past and we believe this, and Darren just said it again that we believe we can recover over time not just on market conditions and input costs but also the value we are putting out in the marketplace, whether it's in new products that we put out and we highlighted again where our product portfolio is. That's an opportunity for us to continue to go back and look at what we can offer in the marketplace and the price at which we're offering it, so we look at our portfolio, we look at the services we're providing, and we look at the value we're bringing around all the programs, whether it be advertising, whether it be some of the distribution programs we have, whether it be some of the new products, all those type of things that we bring to market are all things that go into the mix of what we do.

Okay. And just lastly, could you just remind us in North America, how big is your truck and bus radial tire business, and has there been any benefit to you since the U.S. obviously implemented some pretty significant tariffs starting February 15?

And so, Rod, when you're asking about the commercial truck tire business, you're just asking for the relative size of the business?

Right, the size to you within the North America business and obviously it's a lot of tires imported from China in that segment, maybe it's more lower end, but I think the tariffs are like 40% or something like that on those imports. Is that something that you're seeing as a positive as a domestic manufacturer?

Yes, you’re really just trying to get -- you're trying to get the tariff impact more than anything else Rod that's kind of where you're going with it.

Well, presumably not much direct tariff impact for you but may be indirect.

Right, yes, so, Rod, I think the size of the business just use the overall size we use in North America for the total businesses relative to North America, as well as we look at it, so and I think you're right, I mean I'll kind of I'll jump to the end and maybe add a little bit more color, but our focus is typically on the OEs and the fleets, and that's between our product and product performance as well as our fleet solutions and proactive solutions, our brand technology and those type of things is what drives our business as opposed to the low end. But as we look at it, there is now, as you know a 4% standard tariff in place as we look at it, then there is a 10% section if I get a little technical, section 301 tariff that went into effect in the middle of 2018 and the increase to 25%, as you may remember was supposed to occur at the start of the year that's been delayed. And then also, there was the ITC announcing anti-dumping and countervailing duties that went into effect in mid-February. And those amounts can differ by company, as you probably know, but the combined sort of effective rate for most manufacturers, call it, between 42% to 45% and those rates that are applied to the import price of those tires coming in. So as an example, a standard sort of commercial truck tire coming in from China on average is about import value by 120 bucks, so the importer of record would need to pay approximately an incremental call 70 bucks to cover all the duties. So that's sort of how to think about the tariffs coming into remember for us, nearly all our commercial truck tires that we sell in the U.S. are made in the U.S. and they're made to support that business model that we spoke of, so clearly has an impact there and made reference to that in his formal remarks about what it does to the industry, but our focus is going to continue to remain on where we add value to our customers in the OEs in the fleets.

Okay, great. So, it sounds like you're seeing some benefit, I guess, in a nutshell, just given what's happening competitively there.

Yes, I think we're at point where the -- it's an industry that is in good shape and we've got a very competitive offering. So I think commercial structure -- truck business a strength for us right now.

Okay, thank you.

Thanks, Rod.

We'll take our next question from John Healy with Northcoast Research. Please go ahead.

Hi, thank you.

Good morning, John.

Good morning, guys, wanted to ask a big picture question, when I think about everything that's going on. Operationally, I feel like there's 2 sides of the coin, you've got the U.S. business where you've made some pretty significant moves in terms of changing distribution and exciting launch in June with the e-commerce . On the commercial truck side and then if you go over to Europe and it seems like you guys are really digging in, on the operations in terms of being effective with your production -- and production capabilities. As you look at those two things, do you see things in Europe that you can bring to the U.S., maybe in 2020 on the production side and then do you see things in the U.S. on the distribution side, so that you can take the year up in 2020. And I guess the way I'm asking is, at some point over the next few years do you see yourself pivoting where you take the lessons learned and trying to implement those across back and forth and in the business look like in the U.S., what you're building that be the model in Europe and then vice versa on the production side.

Yes. So, John, I think it's reasonable to look at what we've done in terms of distribution in the U.S. and think that is going to be instructive for the way we want to improve approach aligned distribution in other parts of the world. And we - we are - and we are thinking about what it takes to establish that level of alignment in other markets where we operate. So I think it's fair. Those are changes that take place - tend to take place over extended periods of time. So your specific question was about 2020, the work that we've done in distribution in North America has taken place over many years. So there was no -- TireHub was a significant event, but there was a lot of work done over a long period of time that led up to that. So I think directionally we are looking to develop that level of alignment in other markets, but those changes take some time to accomplish. In terms of production, certainly our European factories have had a longer have -- had a lot of experience with high levels of product complexity and skew proliferation. So I think inevitably, there are some lessons that can be shared. And I think we look at our manufacturing programs on a global basis. So our plant optimization program, including the efforts that we're undergoing to address any sort of constraints that we have on producing the type and variety of skews that we're now being asked to produce. Those are the learnings that we share globally. And to the extent we have factories that have greater levels of experience then we're going to leverage those learnings over share those around as well. So I think both the points you make a relevant points.

Okay, fair enough. And then wanted to ask on about one of the comments in the slides I jumped out of me as you guys kind of building a strong OE pipeline for 2020 and beyond. Can you maybe talk to that's U.S., that's Europe, is it new partners maybe potentially how meaningful that can be relative to the performance we've seen in '18 and then the start '19.

Yes, I think John, how I would look at it is really on the continuum, and you've heard us talk about this in the past is having a selectivity strategy where we've been very thoughtful about the portfolio and where it was and where we wanted to take it. And I would tell you to think of what we're doing now is very much in line with that we have been -- we've been on that journey and will be, will continue to be on it to make sure we're getting on the right fitments and have the right people with the right partners going forward. And what you've seen is certainly a lot of decisions to move away from products and replacement pull that wasn't there to improve our business and to be able to get our cost structure in line to do that. As we look ahead, I would say that this is not region specific, I think it's company-specific. I'm very pleased with the OE fitments in the win rates that we're having in the Americas, including Latin America in Europe as well as in Asia, and Asian particularly both China and India where we're having a very successful win rates and getting on the segments we want and that means not only a particular country platforms but global platforms. And it means AV's and it means a lot of unique tires and characteristics that those manufacturers want not for the vehicles that we're seeing on the road today but as they're thinking about where those platforms are going forward. So we are having -- I'm very pleased with the success, we're having on win rates and I'm even more pleased with the partnerships that we're having with those individual OEMs to work together on bringing those vehicles to market.

So if -- John, if I could just add one thing because again you you're focused on the year that the benefits might begin. I do -- we did -- we had a question on the year-end conference call when we were talking about the 2 to 3 million units of OE volume that we expected to reduce this year, because of solar selections that we had made in our portfolio. And there have been a question about whether or not that we lost OE volume was going to be something that would go on for several years. And I think we want to keep making the point that while we're our OE volume is expected to decline this year and now probably closer to 2 million and 3 million units. We've won fitments that's going to start to bring that volume back and in a significant way beginning in 2020. So we don't see that OE decline in terms of our fitments as a long-term thing. It really is -- it's principally a 2019 thing will recover thereafter.

That's good point there. And our pipeline to get those tires out as full right now. So we're feeling good.

Great, thank you, guys.

Yes.

We'll take our next question from Ryan Brinkman with JPMorgan. Please go ahead.

Thanks for taking my question. Hi.

Sure.

Regarding the German plant modernization and restructuring program, should we think about this more as an LVAD to HVAC type conversion that is aimed at density mix or is it more of a cost reduction action? And what are your latest thoughts generally on cost saves versus general inflation. I think there has been some anticipation you might be set to pull additional levers to try to ramp cost savings back up to the level of recent years, where are you in that process is Germany part of it and when might we expect to learn more.

Okay. So, Ryan, let me -- I'm going to ask, answer your last question first. And regarding cost savings versus inflation and the -- I think we were pleased to see that in the first quarter, we were -- we had cost savings that exceeded inflation by 10 million and that was after a 4th quarter where if we exclude the one-time settlement we had on Brazil VAT, which was a benefit in call -- in terms of cost savings in the fourth quarter if we exclude that fourth quarter inflation and savings were about equal. Now in the first quarter, we've gotten some net savings, which I think we pleased about it was part of what our delivered earnings a little bit better than we might have been expecting in Q1. The cost inflation issue though is still very much in front of us. So our cost savings programs are going to have to ramp up. We've kept a lot of attention in that area, but inflation is continuing to build. I think particularly in EMEA, particularly in emerging markets, we're feeling that. And it's going to be a struggle for us this year to deliver net savings, I mean that's kind of -- that's where we've been, hasn't really changed. We're one quarter end and we delivered a little bit more than we had originally expected. I think that's good. We're going to stay focused, there is no question, but not - not at the level of net savings where we, that we really like to see if I come back to the German restructuring. I think the way you phrased your question is right on the mark, because you are separating the two different aspects of this project. And there are two aspects because first we are…

I see, thanks for all that great color. And then just lastly from me, I think it's encouraging that you are gaining share in the U.S. consumer replacement market including after the price increases in the back half of 2018. Maybe you can talk about the role that TireHub if any may have played in improving share. I'm curious to know also though if you think that you took as much price in the back half of 2018 as did your average competitor or if maybe you elected to invest in a little bit more competitive price point to try to recover some of that share that was lost when maybe you were in retrospect being to the third of in raising price in 2017?

Yes, I mean I'll jump in. I would say our value proposition in the fourth quarter was what I thought, what we thought was appropriate for the markets at the time. So I think I would, I leave it at that in terms of how we went to market. We were very pleased in the fourth quarter coming out of the fourth quarter in terms of how we were set up in the market. And I think you saw that come into Q1. I think you rightly pointed out, we were I think as Darren mentioned in his remarks, we were 6% up in the quarter in the U.S. market. I think that's reflective of that value proposition, I talked about great products in the marketplace, new products in the marketplace and a strong demand out there. And as we look at it from a overall, we saw market prices sort of trending higher in the quarter, year-over-year and sequentially and again as you said our revenue for Tire was up, our volume was up, our market share was up and that comes off of the situations that we had in 2017 as well as 2018 with TireHub. So I'm very pleased with the way that we've worked through that. And I might add that we don't see any sort of a broad evidence that any inventory is really building up in the channel remember sell outs been good, vehicle miles traveled is good, consumer confidence is good. So the industry is pretty good and from our perspective, our inventories are certainly in relatively good shape at both the wholesale and retail level. So we feel pretty good about that. And in terms of TireHub, TireHub is doing what we intended to do right. This is we started at last year, we did that as part of our initiative overall to drive our line distribution with our line partners to support our delivery of tires in the marketplace to support the initiatives that we're putting out there. It's doing just that. We exceeded our transition plans last year. Yes we've had some bumps in the road but we continue to build momentum. We haven't lost the customer and we're executing against those customer deliveries. So, and as I mentioned, inventories are in good shape and we're actually operating with less inventory than our previous national distributor had. And we're doing that getting better visibility into the demand trends and consumer preferences that are out there. So I think I wouldn't attribute everything to certainly the TireHub based on our first quarter volume, I think that's a lot of things but TireHub certainly is doing what we intended it to do.

The only thing I'd add to that Rich is the hold. There was certainly an effort early in 2018 to go back and get the volume and the market share that we had lost in 2017 when our pricing got out of phase with the rest of the industry. So I think that happened. But if I look at the fourth quarter and the first quarter, I would say that our pricing momentum there was strong and I think and we talked about this at the fourth quarter call, we had good pricing momentum in the Americas but we had negative mix, some of that related to the supply situation. There is still a bit of a bit of that in the first quarter. Right, so we're still looking to get to the point where we start to get some benefit from mix because the last couple of quarters mix in fact has been a bit of a drag and is hiding some of the benefits of the pricing that we've got.

And Darren, that's a great point and maybe I'd add one final comment is just to say we put TireHub, we started TireHub sort of the middle of 2018, a big decision for us to do particularly coming off of 2017 as we described and you're seeing that momentum now come back into 2019. I'd say it's just a view that we do that strategy, we have long-term is something we're committed to and we're executing against.

Very helpful, thank you.

We'll take the next question from Armintas Sinkevicius with Morgan Stanley. Please go ahead.

Good morning. Thank you for taking the question. Question on raw materials, last quarter, you said that, the guidance was for $300 million of a headwind in '19 versus '18 based on forecasted rates, but it would be $150 million of a headwind based on spot rates. It looks like raw materials have been holding in fairly well, since then, but the raw materials guidance is still at minus $300 million. So just wondering about the puts and takes anything we might be missing there.

Sure

As to why we're not seeing a tailwind to raw materials versus prior commentary?

Good question. And as you point out, our forecast has not changed. And when we did our call in February, spot prices at that point would have implied if they stay where it was would have implied $150 million less cost than we were forecasting. As we expected, these feedstock costs have actually risen over the last 60 days. And that is true in natural rubber. Certainly, it's true in carbon black. Obviously, a little bit of the effect of oil prices rising over that period of time. At today's commodity and prices and also taking into account some further strengthening of the U.S. dollar. What today's spot prices would imply is about $50 million below the $300 million forecasts that we have. So the picture at spot price has gotten $100 billion worse than it was 60 days ago. So I guess we're still at the point where we believe the $300 million cost increase is the right assumption for the year because we're still expecting that, yes, still expecting a little bit further increase, it's embedded in our forecast. If it doesn't happen, obviously that $50 million of good news would still be there. But, I think we're feeling like we've done the right thing, given that we've seen what we were expecting to see.

Okay, I appreciate it. Thank you for the clarification.

Sure. Thank you.

We will take our next question from David Tamberrino with Goldman Sachs. Please go ahead.

Great.

Good morning, David.

Good morning, guys. Two questions for you. Just the back and forth a couple of questions, does it sound like or what I'm hearing, there's potentially less pricing action on the horizon, or are we in a wait and see mode, given how the market shaping up from a OE consumer replacement demand and supply in the market?

Yes, so I think that what we're seeing right now is, in terms of price mix is good -- is really good momentum in the Americas. So I think has the right direction there. A little bit more of a mix picture in Europe, so in Europe we've seen for the summer season, we've seen some manufacturers raise price, we've seen other manufacturers' lower price, so kind of a mixed situation there. And obviously the situation in China is, as that improves, it may change, but right now very weak markets there. And that's having an impact. So I do think there are some regional differences there with the North American market probably being in the best position. So but I don't know, I think our intentions are to recover the cost of raws over time. And we've got ways to go before we achieve that. So it's a constant area focus for us.

Okay. And then my second one, which I feel like is probably the key question for you for this year, because, if I'm not mistaken, your guide or your directional commentary was for SOI to be down slightly, somewhat from 18 to 19 and I look at the free cash flow TTM, look at where you're at, for 2018 just trying to get a sense of if you think, staring that 2019, you're going to be able to achieve a positive free cash flow. And if not, just let me just assume you'll continue to fund the dividend from the bounce.

Okay. I know it's up. So, David, I think that I continue to be comfortable that the level of earnings that we're running today, that we're in a position to fund, the investments we're making in the business, which are principally some restructuring in our CapEx plan and cover the dividend without increasing our leverage. And that's the balance that we are focused on. We are clearly focused on protecting the balance sheet. And we so we've taken actions to make sure that we're doing that, our leverage ratios are up and that is to some degree cyclical and related to where our earnings are. But we're very focused on making sure that we're not increasing our debt levels. So, we've taken some discrete actions there, including discontinuing the share repurchases but we're also taking operational actions, including a lot of focus on working capital to look at opportunities to improve our balance sheet and then obviously is the cycle turns in earnings and cash flow improve. We'll be looking to take advantage of that to further improve the balance sheet.

Understood, but for this year, I mean, are you expecting positive free cash flow, OCF less CapEx?

Yes, so I think we're uncomfortable that we're being able to cover our dividend payment, if that's the question.

With respect to Part A of the question, just wanted to get your sense, but okay. Thank you very much.

Sure.

We'll take our final question today from Anthony Deem with Longbow. Please go ahead.

Hi, Anthony.

Thanks for taking my questions. First one, fixed costs absorption, so $18 million positive in the quarter. You know, you've had lower volumes the past couple of quarters. So I'm just wondering is TireHub product original mix, maybe the Americas plant is having a meaningfully positive impact on your overhead absorption. And certainly, next quarter it looks like you're guiding to a positive outcome in the Americas segment. But you seem flattered down going the past couple of quarters. So just wonder if you could share anything potentially abnormal going on this line?

And that's specific to overhead absorption?

Yes. Yes.

Okay. So I think we -- it's a good question, because we do have in an environment where our volume has been down. We've got favorable overhead absorption, which I think is it makes it a very natural question or I think those we look at a lot of the volume decline has been Asia Pacific, and our production, the reduced production has principally been in Asia Pacific. And that's our overhead for tire is the lowest there. So we've had our hot, our production has been actually up in the Americas in EMEA notwithstanding the volume, and part of that's been trying to catch up with our supply situation in the Americas. And it's been up and it's been up the most in commercial truck. So it's been up in some areas that have the highest overhead absorption. So there's a bit of a mix among geographies, that's benefiting us there. The -- so I think that is, that's really what you're seeing. And I think we'll continue to see a bit of that. So that is, if that's the question, you asked the question also about the increased production in our new America's factory, and obviously, we're getting some benefit as that ramps up as well.

Okay, that's helpful. Thanks for the color, and so on the supply constraints update. So, it looks like you did 12% HVA growth in the U.S. this past quarter. And you took some share. So, I guess the question we're wondering is what could those numbers be without some of the supply constraints? Are you able to put a value or unit number towards that?

Yes. So I think two benefits that we would get, if we were able to supply better. Certainly, we would have opportunity for those numbers to be higher, because we're not supplying all the high value tires that we would be able to supply. And to be clear, that's true in the consumer business. also true in the commercial truck business. And the 12%, you're referring to that's only consumer business point. But the same effect is true in the commercial truck business. So you would see that the other thing that it would help us with is it would help us supply all of our customers, where we do have some customers who have first claim on supply. And obviously, the OEs are the clearest example of that, but we have replacement customers who also have sort of a first call on our supply, and they're not always our highest margin customers. And that's been one of the challenges we have in achieving mix, is that we are selling more tires to some of our lower margin customers. And we've been able to supply some of our higher margin customers better if we can get supply situations a better spot.

I can fit in one more question here. So advertising R&D, sort of the other category and so I walk net benefit in the quarter, it looked like so, is it fair to assume I know you're not giving exclusive guidance, but I'm wondering if it's fair to assume, if these were main tailwinds from end of the year, perhaps this is just a savings lever that Goodyear is pulling? Thank you very much.

Yes. So, I think -- you know, the fact that we're very cost-focused I think shouldn't be a surprise. I will say that there are -- you know, when it comes to advertising there are some differences quarter-to-quarter. So I don't know that I would look at first quarter as a clear indicator for where we are going to be in the full-year. The timing of product launches and some of our marketing pushes can change, and if I in fact we start to see some recovery in some of our markets in the second-half, that would have an impact on the investment we'll be making in marketing, advertising, and SAG. So, I guess I don't read too much into one quarter, but I think it is fair to say that we are going to stay very, very focused on cost for the foreseeable future. Yes.

And all I would add is you know, over time I think we've demonstrated a very good sort of decision-making and timing of CapEx and R&D as we go through the cycle. So, you would expect to do the same. We'll make good decisions, but we are no less committed to -- particularly you mentioned our R&D expense, that remains a priority for us, but I would say we manage it very well in terms of prioritizing and executing our projects, so…

And I believe that was the last call. So, I just want to thank everyone for your attention today. Thanks very much.

And this will conclude today's program. Thank you for your participation. You may now disconnect.