Operator: Good morning. My name is Keith, and I will be your conference operator today. At this time, I would like to welcome everyone to The Goodyear Tire & Rubber Company First Quarter Earnings Conference Call. [Operator Instructions] I would now like to hand the program over to Christina Zamarro, Goodyear's Vice President, Investor Relations. Please go ahead.

Christina Zamarro: Thank you, Keith, and thank you, everyone, for joining us for Goodyear's First 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, a 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 will now turn the call over to Rich.

Richard Krawmer: Thank you, Christina, and good morning, everyone. I'll begin today's call by providing a summary of our first quarter highlights in each of our 3 regions. Then, with an eye on the next stage and our longer-term plan, I'll share an update to our strategy road map, which has been the cornerstone of how we operate our business. Laura will follow with the financial review and our 2016 outlook. We delivered strong first quarter performance highlighted by record segment operating income of $419 million. That's an increase of 14% in our core segment operating income, which excludes Venezuela from our 2015 base. On that same basis, our volumes grew 3% in the quarter. Demand for our premium-branded, high-value added products is robust, and our product mix continues to grow richer. Our results are not only consistent with our expectations for the quarter, but also with our long-term strategy and reflect the continued strong execution of our teams. As you know, this is our first quarter of results for our combined Americas business, and I'm extremely pleased with the team's performance. While we'll talk in some detail about how the U.S. and certain other countries are performing as part of our quarterly updates, I want to reinforce the long-term benefits we anticipate in managing the business internally as one consolidated unit. After adjusting for the loss of Venezuela's income, Americas segment operating income grew 15% in the quarter, driven by strong demand for our premium-branded HVA products. In the U.S., favorable demand has been created by lower fuel prices, higher miles driven and growing consumer OE needs, particularly in SUV and light truck. We are growing our OE profitability by winning fitments on many of the most popular vehicles and responding to the increasing complexity of OEM requirements. Our success in OE gives us a favorable position in the subsequent replacement market. Our consumer volumes in the U.S. were essentially flat in the first quarter. Customers want more premium Goodyear-branded products, and increasing our supply is both our biggest challenge and our greatest opportunity. We're just about 1 year away from when we expect our new factory in San Luis Potosí, Mexico to come online, and we're very excited about the opportunity to begin increasing our supply for our most complex tires with this incremental capacity. In the interim, we are working to maximize our footprint in the Americas to get the tires where they are needed most in the region. Conditions in Brazil remain challenging during the quarter. The ongoing recession and political uncertainty contributed to the overall economic stress in the country. Although, our replacement in OE segments both weakened in Brazil, it's profit contribution was positive in the first quarter. We feel very good about our ability to drive growth in mix in HVA segments in Brazil and about how we've managed our value proposition in this difficult recessionary environment. In summary, we had a very strong first quarter in the Americas, and we're looking forward to opportunities across our markets in 2016 and in the longer term as well. Our Europe, Middle East and Africa business delivered 10% growth in segment operating income. We had a good overall performance and a relatively solid industry environment, with strong demand for our HVA products for many of our OE and replacement customers. Early this month, I spent time with several of our customers in Europe. I came back encouraged by their confidence in Goodyear and their preference for our products. At the same time, they made it clear that they want even more of our HVA products, particularly in the performance and SUV categories. The growth in more complex HVA tires is as healthy in Europe as it is here in the U.S. The industry's evolution to high-value-added tires has been accelerated by many European car companies. Their preferences are driving mix up both in OE and replacement across the entire region. While our EMEA business delivered good results in the first quarter, we are continuing to look at our cost structure and working to strengthen and further differentiate our value proposition through our distribution and service network. We see opportunities to grow profitably and remain positive on EMEA's longer-term potential. Our Asia Pacific business delivered another strong quarter fueled by robust volume growth in China and India and because of the acquisition of Nippon Goodyear in Japan. Segment operating income grew 18% from last year's first quarter. I'd like to take a minute to touch on our business in China, where we had another strong quarter as volume increased more than 20% versus the prior year. Our growth was broad based, as OE was up nearly 30%, and replacement volume increased nearly 20%. OE continues to benefit from strong car sales growth, while replacement was driven by our team's strong execution of sell-through programs. We remain confident in the long-term market outlook, with continued expansion of the middle-class spring growth in Asia Pacific. We are well positioned to benefit from this market growth given our award-winning product lines and strong position in OE, again creating a replacement market pull. Overall, I'm very pleased with our strong first quarter performance. Even though we are running our business to create long-term shareholder value, a strong first quarter provides a good foundation for the remainder of the year. I'd like to spend the rest of my time this morning reviewing our updated strategy road map. As some of you may recall, we unveiled our original road map at the Investor Meeting in March 2011, and since then it has served as our guide to win in a rapidly changing and competitive tire industry. Though the original road map served us well, we believe that an update was needed to more accurately reflect how we'll win, how we'll work and where we'll focus in an increasingly complex and competitive market. As I take you through it, there's one important thing to keep in mind. The updated road map does not represent a change in strategy. The road map is more specific about our goals and expectation and ties our overall strategy to driving performance for our customers and consumers. Starting right at the top, we begin with a clear and direct expression of our goal, to deliver sustainable revenue and profit growth over the long term while increasing the value of our brand. Our emphasis is on the "and." Our goal is sustainable revenue and profit growth. Top line growth and margin expansion remain our objective amidst global economic headwinds. When we do both, we increase the value Goodyear creates for all our stakeholders, associates, customers, consumers, suppliers and, of course, investors. The body of the road map comprises 3 clearly defined and interdependent elements: how we'll win, how we'll work and where we'll focus. I'll briefly touch on all 3, and as I go through them, you'll see how all the content is integrated no matter where it appears on the road map. First, the "how we'll win" section has been distilled to 3 key elements that you've heard us talk about on many of our quarterly calls. Innovation excellence is what we strive for when designing products from the market back. This ensures that we are creating products and services that respond to the demands of consumers, end-users and our customers. In sales and marketing excellence, we strive to create demand for our brand and for our innovative products, driving consumers and end-users to our customers. We help them grow their businesses by leveraging the power of our brands and providing industry-leading market and sales tools and training. Our insights and research build value proposition for our customers that goes beyond products alone. The result is that more consumers will ask for Goodyear tires and our customers will prefer to sell Goodyear tires. Sales and marketing excellence is about making it easier to do both. The final element in this section is operational excellence. This means efficiently making more of the tires the market demands, especially in the face of increasing complexity. As a result, we'll be a more reliable supplier by having the right tire at the right time to meet customer and consumer demand. Our operational excellence initiatives around the world are delivering both cost savings and improving efficiency. We certainly had success, but we know there's still much more work to be done here. Now as important as each of these areas are individually, the key concept on this part of the strategy road map is winning at the intersection of all 3. Our goal is to deliver a value proposition built on innovation, reliability and quality that wins over price alone, by putting our customer at the center of the intersection and by making this the clear purpose of all our initiatives, we see the opportunity to distinguish ourselves in the rapidly changing tire industry. Moving to the second section of the strategy road map, we identify 5 competencies that define how we'll work. As you read through the individual items, think of them as behaviors we expect from our associates in order to be successful at the intersection in the "how we'll win" section. For example, collaboration and agility are simple words but key competencies mastered only by top-tier companies to help deliver outsized results for customers and for shareholders. The final section of the road map is "where we'll focus." These are real world priorities, where we'll aim our excellence efforts. Some of these are givens. Quality, consumer experience and customer service have always been priorities and will remain so. Putting them in writing, reaffirms our commitment to them. Focusing on high-value segments is something else we've talked about frequently. The ability to supply high-value-added tires of increasing complexity, such as larger rim diameters and greater performance specifications, is where the growth and profitability are and will increasingly be in the tire industry; that's why they are important. The specific segments may differ from region to region, but the value proposition is the same. We want to win in the parts of the market, where we can capture the full value of our brand, our technology, our distribution and our products and services. We will not chase volume for volume's sake. Focusing on high-value segments is critical to creating sustainable value and profit growth. The final priority is mastering complexity. This is a major challenge for every tire company. There is complexity in manufacturing, in OE specs and supply chain; virtually every step in our end-to-end operations. Complexity in the tire industry is increasing at a pace not seen since the shift to radial tires. It's being driven by OEMs, by regulators seeking reduced CO2 emissions and by consumers who won't compromise on performance. It's affecting tire development, manufacturing, supply chain, consumer experience and customer service. The complexity of today's OE tires, let alone tomorrow's, is significantly greater than it was just 5 years ago. We will embrace this trend by managing the necessary complexity and by eliminating the unneeded complexity in everything we do. There is a lot of detail on the updated strategy road map, and as I said, this does not reflect a new strategy. Our objective, with the updated road map, was to clarify what's important to us and create a single-page document to reinforce alignment among all our associates throughout the organization. A team that is aligned from top to bottom around a common set of goals as defined in our strategy road map is the most important ingredient in our plan for long-term success. Now in closing, I'll add a final comment. We'll review with you how our strategy road map ties into the long-term trends in our industry, which we call the MegaTrends, at our Investor Conference in Boston on September 15. Also, we will use the conference to discuss our strategic business units and update our long-term performance targets. Further details on the conference will be forthcoming. Now I'll turn the call over to Laura.

Laura Thompson: Thank you, Rich, and good morning, everyone. Today, I will cover our first quarter results and provide more detail on key income drivers in the quarter. I'll also provide an update regarding our full year outlook for 2016 before we open the call up for your questions. Turning to the income statement on Slide 5, you will see our results for the first quarter. Consistent with how we have provided our full year outlook at our call in February, we have provided callouts that remove the effect of deconsolidating Venezuela in order to provide better transparency to our underlying core business. On that basis, you see we had an outstanding quarter. Volume was up 3%, segment operating income of $419 million was up 14% and SOI margin of 11.4% increased 2.1 points. Looking at the income statement items as reported for the first quarter, the strengthening of the U.S. dollar against foreign currencies reduced sales by $141 million year-over-year. The sales comparison to prior year was also negatively impacted by the deconsolidation of Venezuela, which had $94 million of net sales in the first quarter of 2015. Gross margin improved 3 full points to 26.8%. Our earnings per share on a diluted basis was $0.68. Our results were influenced by certain significant items and after adjusting for these items, our earnings per share was $0.72, an impressive increase of 33% over first quarter 2015. In addition to our stronger overall segment operating income, interest expense and minority interest were lower by a combined $32 million versus last year, primarily driven by refinancing transactions we completed in 2015 and the dissolution of our global alliance with SRI late last year. As you will see on the step chart on Slide 6, which walks first quarter 2015 segment operating income to first quarter 2016, we have also isolated the effect of deconsolidating Venezuela to provide transparency on the drivers of our core SOI. The benefit of higher volume in the first quarter and higher production levels in the fourth quarter drove an overall improvement of $47 million. Lower raw material costs of $68 million more than offset reduced price/mix of $30 million for a net benefit of $38 million during the quarter. Cost-saving actions of $47 million, driven by our operational excellence initiatives, more than offset the $33 million negative impact of inflation. Foreign currency exchange was a headwind of $12 million, reflecting the continued strengthening of the U.S. dollar, particularly against the Canadian dollar. Other, a negative of $34 million, includes increased accruals in incentive compensation; higher advertising spend, particularly in Asia-Pacific; and a $6 million impact from the divesture of our North American motorcycle business in October of 2015. Turning to the balance sheet on Slide 7. Cash and cash equivalents at the end of the quarter were $1.1 billion. Net debt is up versus year-end, which reflects the normal working capital seasonality in our business. Versus the prior year period, the increase includes the impact of Venezuela's deconsolidation. Free cash flow from operations is shown on Slide 8. For the quarter, we used $585 million of cash, which is in line with the typical first quarter seasonality of our business. Over the last 12 months, our free cash flow performance has been strong at nearly $800 million. Moving now to the business units on Slide 9. I'll start with our new Americas business unit. The Americas delivered strong segment operating income of $260 million with year-over-year growth of $12 million. Excluding the $22 million impact related to the deconsolidation of Venezuela, SOI increased 15%. Americas margin expanded more than 200 basis points in the quarter, primarily driven by positive price/mix performance, coupled with a raw material benefit. We saw very strong mix in the U.S., especially from growth in ROE business. The Americas also benefited from improved factory utilization and our operational excellence initiatives. These benefits were partially offset by the impact of lower volume and unfavorable foreign currency exchange. Our volume in the Americas declined 6% year-over-year. When excluding the impact of both Venezuela and the sale of GDTNA from our 2015 base, our unit volume decreased 2%. This decline was primarily driven by lower unit volume in our consumer business in Brazil, where consumer tires sales were down 16% year-over-year in a continuing recessionary environment. We saw declines in Brazil OE as a result of decreased vehicle production versus last year and a decline in replacement in line with the overall industry. Even so, as Rich mentioned, our HVA product mix is growing and Brazil was profitable in the first quarter despite the very difficult economic environment. This is a testament to the strength of our brand and our team. As Rich mentioned, demand remains strong in the U.S. However, in our consumer business, unit volumes were essentially flat as we remain constrained in our ability to satisfy growing market demand for our premium high-value-added tires. Our capacity has been impacted by increasing complexity in HVA tires, including growth in OE, with SUV and light truck fitments that have longer cycle times in our plants. As you are aware, we are making strides to improve our supply within our U.S. and global manufacturing footprint to meet this demand. Separately, I'll note that first quarter sales in our U.S. commercial business declined almost 15%, driven by declines in OE. Overall, we're very pleased with the strong profit contribution of the Americas in the first quarter as a consolidated unit. We are focused on increasing our supply of high-value-added tires to drive profitable long-term volume growth, while maintaining our focus on operational excellence and delivering strong SOI across the region. Turning to Slide 10, Europe, Middle East and Africa delivered segment operating income of $80 million in the quarter, up 10%, driven by the benefit of higher production volumes during the fourth quarter. Volume was up almost 2% compared to last year and was primarily driven by an increase of 5% in consumer OE, with strong demand for Goodyear products throughout the region. Consumer replacement summer industry volumes were up 3% during the quarter, and in winter tires, channel inventories are more normalized following the first quarter sellout. Our commercial truck business also continues to deliver consistent results, growing market share based on the strength of our premium-branded products in a relatively stable industry environment. Our EMEA business delivered solid performance in the first quarter of 2016. We are very confident in our team, our product portfolio and in our ability to grow profitably throughout 2016. Turning to Slide 11, Asia-Pacific delivered first quarter segment operating income of $79 million, representing a $12 million increase versus the same period last year. The main driver in income was higher volume, which was partially offset by increased SAG and investments in advertising, both related to our recently acquired replacement business in Japan. SOI margin in the region increased to 16.2% from 14.9% a year ago. Asia-Pacific sold 7.3 million tires in the first quarter, representing 28% growth versus last year. Excluding the impact of our acquisition of the replacement tire business in Japan, our volume growth was 11%, which was driven by 2 of our largest and fastest-growing markets in China and India. The outstanding first quarter performance of our Asia-Pacific business confirms our confidence and our commitment to targeted growth investments in the region. Turning now to Slide 12. I'll cover our full year modeling assumptions for 2016. In summary, our full year outlook remains unchanged from our February call, and we continue to target $2.1 billion to $2.2 billion in SOI in 2016. Following increases in underlying raw material costs since February, we now expect raw material costs to be only 2% lower than last year before cost-saving actions. In our year-end earnings call in February, we were expecting a 5% decline during 2016. However, we continue to see our full year price/mix versus raw material benefit at around $75 million, unchanged from our February outlook. We expect second quarter raw materials to be down 3% and the remaining price/mix net of raw materials benefit to be spread evenly throughout the last 3 quarters. Our intent is to offset increases in raw materials with price and mix. We could see some volatility related to RMIs in the quarter, but as we look at 2016, we still feel very good about the year and the long-term sustainability of our margin. In cost savings versus inflation, we continue to expect a benefit of $135 million for the full year. However, I'll note that we do expect about $35 million in incremental cost in the Americas SOI in the second quarter. This temporary increase in our cost is primarily related to labor and engineering expenses that were incurred toward the end of 2015 and early this year, as we prioritized plant optimization activities and made shifts in production to enhance our capabilities to supply more HVA tires. While we do expect some offsets in the quarter across our SBUs, we wanted to highlight this expected increase in the Americas. As a result, we expect our total second quarter cost savings versus inflation to be similar to the first quarter actuals and improving later in the year for full year savings of $135 million. Regarding foreign currency translation, we are maintaining our full year impact to segment operating income of approximately $45 million. While current spot rates would imply a more favorable outcome, it's very early in the year and currencies remain volatile. And as a reminder for the Americas, the divested motorcycle business has its strongest comparable in the second quarter, which corresponds to the seasonality of that business. Additional financial assumptions for 2016 are listed on Slide 13. We've revised our full year expectation for financing fees to $45 million, which is $15 million lower than our prior forecast. This change is a result of our adoption of new guidance regarding the presentation of debt issuance costs on the income statement. While the offsetting amount is now recorded within interest expense, our interest expense guidance for the full year remains unchanged at $350 million to $375 million, as the increase has been offset by lower interest rates than expected. And finally, we repurchased $50 million in shares during the first quarter. We've repurchased $463 million so far under our existing $1.1 billion share repurchase authorization. Consistent with our previous communication, we remain committed to repurchasing additional shares through 2016 and early 2017, with the majority of our planned spend towards the end of the year and aligned with our cash flow generation. Now I'll open the line up for your questions.

Operator: [Operator Instructions] And we'll go first to Itay Michaeli with Citi.

Justin Barell: This is actually Justin on for Itay. So a quick question with regards to the $6 million that you took for the motorcycle business this quarter. How should we think about the remaining $24 million throughout the year given the Q2 waiting? Is there a specific cadence that you can help us kind of drill down for the remainder of the year?

Laura Thompson: Yes, Justin, there is. And just -- it's actually similar to what we said in February when we gave the guidance, and for the full year, it is $30 million. Yes, we have the $6 million in the first quarter and the second quarter is going to get hit pretty hard as well, with really very little then in the third and fourth quarter. I would think of maybe close even to $20 million in the second quarter.

Justin Barell: Perfect, excellent. And then I guess, can you briefly talk a little bit about pricing trends that you're noticing in North America and Europe, and maybe the subsequent migration to HVA as a percent of the unit volume in these regions? And how that's impacting the pricing environment that you're seeing?

Richard Krawmer: Jason, I'll jump into that. I would say the trends that we're seeing, broadly speaking, differ from region to region. You almost have to do sort of a tour around the world to really see what's going on. I will say to your comment on HVA pricing, clearly, the part of the market that's growing, where the demand is -- still outstrips supply as we've reviewed many times in the past, I would say a very good demand-supply equation, and we are able to certainly capture the value of those products going forward. So as we've always said, our high-value segments, those targeted marketed segments, I would say still a very, very robust environment, and we're very pleased with how that's moving. I think if you look at pricing around the world, again, we don't really comment on pricing specifically, so I won't do that. But certainly in EMEA, it remains a very competitive market there. We've seen that in the past, and I think we expect that to continue. The industry clearly is showing some signs of strengthening, particularly in the OE part of the market, as we said. And we have many places we do business in Europe, so we manage that value proposition market-by-market, but we see it as still a very good place for us. The biggest impact that we continue to see is that of -- sort of Chinese or Asian tires coming into Eastern Europe and putting pricing pressure on there. In Latin America, we could probably use Brazil as a marker. Again, what we've seen there is the impact of the devaluation of the currency against tire raw material prices, so a lot of pressure there. We've had already a price increase announced in Q4 2015. And our way to do business there has always been to get the value of our products by recovering the cost of raw materials and dealing with the devaluation impacts there. That's exactly what we'll continue to do in that very difficult environment. I will tell you our volumes there, as we've talked down in the past, are increasingly mixing up the HVA tires to sort of 17-inch and above rim diameter tires, and that is a part of the market that is still very favorable for us there. And in North America, I would say really pretty stable environment that we've seen there. Not really a whole lot else to talk about there. The higher end of the market is doing very well for us. And in Asia-Pacific, what you're seeing there and will continue to see as raw material rises, remember that gets through our footprint -- our raw material cost quicker because of the cycle times. So again, we've been very active in the market there recovering those raw material prices as well.

Laura Thompson: And I guess I'd add maybe another data point, especially for the Americas. If you look at revenue per tire in the first quarter, and you -- excluding Venezuela, right, which we deconsolidated at the end of 2015, and excluding -- I guess, as you go, if you look at Americas and, granted, it isn't total for Americas, revenue per tire is flat year-over-year, really demonstrating that value proposition in the marketplace.

Operator: And we'll take our next question from David Tamberrino with Goldman Sachs.

David Tamberrino: The North America environment remains pretty robust from a demand perspective and the quarter was pretty good, albeit some of that's going to be from import tires coming in and easy comps year-over-year from some of the shipment disruptions, but your consumer replacement OE, I think, together the business was flat in the U.S. against this pretty strong backdrop. You mentioned that you're still capacity constraint, which is probably why we're still positive price/mix of the top line in the U.S. despite lower raw materials. I guess our question is, as you progress through the year, do you see this easing up at all or even against a pretty nice backdrop for volumes in North America given increasing VMTs and a growing vehicle carpark, whether your consumer business is going to grow or not?

Richard Krawmer: And, David, to be clear, easing up meaning the supply? Is that what you're referring to?

David Tamberrino: Yes, if you're less supply constraint in the back half of the season.

Richard Krawmer: No, no. I just wanted to be sure. But listen, I think you've actually capsulized it very well. If you look at the market and you look at our overall volume as a company, excluding Venezuela, we grew the 3%, which is really pretty much in line with what we said; strong volumes in Asia and EMEA. When you come back and look at the Americas, and you adjust, again, for Venezuela and then the GDTNA piece, what you see is Brazil was the weak spot in the Americas. And then you come down to kind of the U.S., if you like, if you want to call it that, you hit it on the head, we're about flat. And the way I would frame that up -- again, David, you kind of laid it out properly. If you look at consumer placement, just look at our EMEA numbers, it was up about 6%, but as you've said, very distorted by over 30% increase and sort of nonmember Asian imports coming in, and that is the long tail whipsaw of tariff buying. So you have all the industry being impacted by tariff buying really in the first half. The second half of 2014, if you think about this, there was a lot of prebuy, which meant Q1 2015, there wasn't really any buying going on. That buying sort of went back to trend line in Q1 '16 this past quarter, so you saw that big increase of over 30%. But if you follow it over the period, it's about on the normal sort of import purchases that the industry has always had. So distorted by quarter not really over the long term. If you look at members, members are up about 0.6%, call it, 1%. And I think in that environment, what you said, we've got vehicle miles traveled, being up about 2%; you've got sellout up round about 1% to 2%, which, for us, has always been a good marker of what's happening in the industry. So good environment. Our main members are up 0.6% and, to your point, Goodyear flat. And as you look at us, I would say what we've seen is increased demand from our OEM sort of strategy that we've laid out over the years, with the strong SAR with the OEM demands, we're dedicating more capacity to that. In fact, demand is up higher than we expected there as well. As we do that, as you know, those tires are really high specifications, yields are a little bit lower, so that's having a little bit of an impact on us as well. I would say I'm pleased with that, because essentially it says we're on strategy. We said we wanted to get on the right fitments and bring those fitments through to our dealers as a replacement; first and second replacements is coming through. So the strategy is working exactly as intended. The demand is higher, therefore, we are having trouble keeping up with those tires, and you're seeing some of that in the replacement market. But to frame it in the quarter, sort of use it as a proxy just for the moment, our main members are up 0.6%, Goodyear up -- flat in replacement, so driven by those things. As we look forward, I think to the question of can we catch up, it's exactly the intent. We've got focused improvement, as Laura mentioned, getting more tires out of the factories we have. We have the San Luis Potosí factory coming on in 2016 and we have imported -- excuse me, 2017. I'm sorry, getting ahead of myself. And then we have some of the import tires coming in from some of our factories overseas to try to use that capacity in a period of low demand. So our intent is certainly to get ahead of it. But I would say this notion of being a tire short versus a tire long is helpful to us. I would say, we're executing on plan. We've got an excellent environment. We've got an excellent demand for our Goodyear tires. We're executing on our plan. Hey, the fact of the matter is it's what we talk about every day. We need more of tires that customers want right now and that's why you hear us talking about it. And the last thing, David, I would just say is we always have to keep in mind the tire industry is cyclical. We won't always be talking about this, but our focus will always be on getting those HVA tires to our customers, because even in weaker markets that eventually will come, those tires will still outperform the rest of the market. So hopefully that gives you a little bit of perspective.

David Tamberrino: No, that's helpful. I mean, it sounds as if may be towards the back half of the year you should be seeing some ease of that, but really the release valve is going to be San Luis Potosí coming on line next year.

Richard Krawmer: Well, we're going to keep working from today onward, trust me, to get more tires out. So that's our objective and that's where we're working towards.

David Tamberrino: That's fair. And then, just lastly from me. The Americas segment margin combined looked pretty good year-over-year. I think it was up 120 basis points. I think you commented that you were positive in, I guess it would be Latin America ex Venezuela, but that margin was still pretty strong in the first quarter of last year. When you say profitable, how profitable were you in Latin America? Just because -- what I'm trying to get to is what is the trajectory of your margin for the legacy North America business looked like. Because the biggest pushback we get here is that the North America segment is, at least relative to the rest of its peers, at peak margins given the environment that we're in? And maybe just if you could give us some of your thoughts on why there is maybe a little bit more margin expansion in the region going forward from here?

Laura Thompson: Okay, let me start -- maybe I'll start with the earlier part of your question on Brazil. So we were profitable in the first quarter. As we've said, we worked hard on cost, good volumes, good product mix, align distributions down there, but year-over-year for the first quarter, we're still down in Brazil, and we're really not expecting that. So better than the fourth quarter and the first quarter, but, again, year-over-year Q1-to-Q1, we're still down. And we, frankly, as we look at Brazil, we'll continue to take these actions and set ourselves up well for when things do recover, but we're really not seeing that in 2016. And then, if you think about, okay, that's Brazil within Americas, and you think about the U.S. market for example, as you look then at our guidance, the net price/mix versus raws, the cost savings versus inflation, volume, so on and so forth, all of that tells you that as we look at the Americas, and especially our U.S. business, we see continued improvement as we move through the year. We do not believe we are at peak margins.

Richard Krawmer: Yes. And I'm just going to jump in. I think if I take a step back and give a view on how we think about the future, it's part of the reason that we redid internally our strategy road map and, frankly, shared it with you. As we look to the future, the focus on what's being demanded from us from the tire industry relative to the OEM requirements, relative to consumer requirements, is, frankly, only getting more and more difficult and more demanding, and we've always said, we welcome that complexity. It's actually a good thing for us. That part of the market that's growing both in demand -- both in volume and in profitability, is the toughest part of the market. That's where we're headed, that's where our focus is. And that's why I think as we look at where our margins will be, we're not giving a forecast next quarter or 3 quarters down the road. But as we look down -- out into the future, I think the opportunities are actually more exciting today than they were, let's say, 5 years ago. I think that's true about the auto industry in general in terms of what's coming. And maybe even a simple example, you saw some of our domestic OE customers investing in more SUV production. SUV tires and mixing up to SUV tires is really a good business mix for us. And so as we look at where the industry is going, I think the mix opportunities still get us very excited and we'll say that I don't think we look at it and say, "We are at peek margins and, boy, we're never going to go from here." I think the opportunities are actually pretty exciting.

Operator: And our next question comes from Ryan Brinkman with JPMorgan.

Ryan Brinkman: I think investors are increasingly trying to gauge the potential impact of any U.S. tariff on Chinese made TBR tires. I think there is a broad consensus this would negatively impact Cooper tires, because many of the TBR tires are made in China, but there's more uncertainty out there what it would mean for Goodyear. So where do you primarily source the TBR tires that you sell in U.S.? Do you bring them in from China? If could -- in the future, could you instead bring them easily from, I don't know, Brazil or something? How should we generally think about any possible TBR tire tariff impacting you?

Richard Krawmer: So we certainly can't comment what the impact could be to any competitors. I would say just from a behavior perspective, we see prebuy ahead, when we've had the tariffs on passenger tires and you have already seeing some of that prebuy particularly in the replacement markets for truck tires. So that behavior, I think, is repeating itself and that's why you saw the OE side of -- the OE industry, actually, have some headwinds in the quarter where the replacement side was impacted less. That again is some of the prebuy coming in in anticipation of what happens. For us, most of our truck tires are made right here in the United States. We do import some tires, but essentially the bulk of our products are made right here in the U.S. And remember, we have very strong products, very strong linkages to the OEMs. I mean, you saw some of that slowdown in the quarter, but long term, our technology is valued by the OEMs and it's valued by the fleets, not only because of the products, but because of our entire solution -- fleet solution model to them as well. So again, can't say how it's ultimately going to play out, but, for us, we've got a very good, I would say, an envy of the industry truck business model here, and -- but we're going to continue to execute no matter what happens.

Ryan Brinkman: Okay. That's great to hear. And then last question regarding the price/mix to raw spread. I'm curious what you're seeing that allows the full year outlook to remain plus $75 million year-over-year on Slide 12, despite, you say, road map is tracking down maybe 2% versus 5% prior. Is it that price is stronger? Is mix stronger? Or are those like spot prices in dollars and the euro was rebounded some versus the dollar? No sure. Just what was the initial outlook may be conservative at the then prevailing spot prices? Or what's the offset that you are seeing?

Richard Krawmer: Yes. So you saw our raw material forecast go from 5% down to 2%, so a difference in the benefit that we would get. And I would say as we look at that and we see less of a benefit, our value proposition, as we've talked about often, really is about getting value for our products in the marketplace through going out and getting rewarded, if you will, for our innovation, for our technology, for our products, for our brand, for our distribution, for our supply chain. And it's something that we've done very well over time. And even periods of, let's say, rising raw material cost, we have a very strong track record of being able to recover our cost in the marketplace because of that value proposition. So as we see raw material prices going up, which we do. I think today natural rubber as a proxy was like $0.71 a pound. That's up from $0.59 or $0.60 a pound not too long ago. Our philosophy has always been to recover our costs and get paid for the value proposition in the marketplace. It's our philosophy, and we execute tactically to go do that. And that's no different when we look at the environment that we're in right now. And again, I would say, rather than just saying we're going to do this, if you look at our track record of offsetting increased raw material costs, it is quite substantial. We've been quite successful at it, and we intend to really do it no different at this time. I would tell you, though, as we've spoken in the past in these environments, there can be a lag when we ultimately recover that because of the way the materials flow through our P&Ls. Goes faster through Asia, let's say, than it does in the U.S. But again, philosophically, our view is that we will recover the value of -- the value we bring to our customers in the marketplace and it's no different here, as we look at a change in our cost of raw materials.

Operator: And we'll take our next question from Rod Lache with Deutsche Bank.

Patrick Nolan: It's actually Pat Nolan on for Rod. Just wanted to -- just one quick clarification on the price/mix versus raws discussion. So when we think about the change of going from -- to 2% benefit from the 5% benefit, and you've said pretty clearly that you hope to offset that with improving price/mix versus raws -- price/mix benefit from that. Can you just -- you need to see a sequential improvement in pricing and mix, right? It's not just a matter of there is less give back on the OEM business? You actually do need to see an upward movement in pricing and mix from current levels, correct?

Richard Krawmer: I think, Pat, it's going to vary region-by-region, country-by-country. As I mentioned, places in Brazil, we've announced price increases already that are in place, so that would be an increase year-over-year. In other markets, it could be simply different how we go about achieving recovering the raw material prices. I don't think I can give you -- I don't think I can give you one answer for that. What I can say is just to reiterate what I said before, is that we have got a very strong track record of managing price/mix versus raw material. That's through a variety of things getting it back in the marketplace for value proposition, getting efficiencies through us, through our own internal processes as well. As we've done it in the past, our intention is to do that again.

Laura Thompson: Yes.

Patrick Nolan: And on the European business. So replacement on the consumer side was up slightly. Is that a matter -- the end parts versus the industry, is that a matter of just being more disciplined on price, because it still remains competitive there? Or would you expect to be performing in line with the industry going forward?

Richard Krawmer: Well, I think it's a combination of a lot of things. Again, I would go back and say that the European market remains a very, very good market. We do have sort of the industry headwinds of these low-cost Chinese tires that, remember, used to come to the U.S. than they went to Latin America, now they're going to Eastern Europe, that's having an impact on the industry there. But really when we look at sort of the mix-up that's going on over there, I'm really very optimistic on where the market is right now and where it's going and our opportunities in that market. I would tell you as well as we look at Q1, just to frame it, we do have a seasonal business over there and what we also saw in Q1 as an industry is that winter stuck around longer, which meant the summer changeover season didn't happen until later in the quarter, which also had an industry impact in terms of how tires float and tires changed over. So I think as you look at Q1, you've got a little bit of signal impact in there as well. But long term and 2016, very good market. Our focus is going to remain on driving our mix in both replacement and OE. We are focusing on sort of getting more disciplined in our line distribution, improving the alignment between ourselves and the dealers. We continue to introduce industry-leading new products there, which will help us. Our focus is growing in those higher parts of the market and really leveraging our Goodyear and Dunlop brands over there, and we're going to continue to drive that. And as we've mentioned, we've taken some cost actions on closing some facilities in the U.K. and Germany. We announced that a while ago. We're in process of doing that. We'll see the benefit of that going forward. And we will continue to focus on getting our costs in line as Europe, by definition, is a bit of a high cost region.

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

Emmanuel Rosner: So first question on the volume outlook. So maintaining that at 3% for the full year, obviously, you did that in the first quarter. However, it feels like in the first quarter you essentially did it through Asian volume growth, right? North America was essentially flat-ish as was Europe. Is that the way you see it achieving it for the full year as well? Or is there any room in the developed markets to get a little more growth? And I guess as part of that question, I know, you started to import some of your own tires into the U.S. to sort of address these, I guess, strong demand, lack of capacity. Are you able to import more? Can we see throughout the year some improvement in the -- in sort of like your volume here, I guess, in the Americas?

Richard Krawmer: I would say in terms of volume growth for the year, we didn't break it down by region, but I would say, clearly, we had growth in Asia by definition and by plan. It is a growth region for us and we'll continue to be more important to us. But we also had growth in certain mature markets as well. EMEA had growth and, by definition, that is a mature market, where we see opportunity. And while we don't break it down for you, I can say that by certain segments of our market within North America, we had year-over-year growth as well in terms of those high-value segments of the market that we targeted. So we are seeing growth in the places that are very important to us as well. In terms of the impact of imports going forward, I would expect that the amount of imports that we get increases over time and it will help to alleviate some of the supply problem that we have. I mean, that's kind of what we said in the past, and I think that will continue to happen.

Laura Thompson: And then to add on just, Emmanuel, our normal seasonality, right, Q2 and Q3 are going to be stronger than Q4.

Emmanuel Rosner: Okay. That's helpful. And then just wanted to turn quickly to your comments around taking cost actions or I guess further cost focus in Europe. Clearly, when looking at your margins, you've had a dramatic improvement, but there's still a pretty decent gap, I guess, versus some of the other tire makers that operate in Europe. What sort of actions are you sort of contemplating and, more importantly, what sort of timing should we expect to see further benefits to the margin profile from these cost and restructuring?

Richard Krawmer: Well, again, I'd go back to say some things that we have done already. You may remember that we closed our Wolverhampton, U.K. mixing and retread facility. We had a reduction of about 400 associates there. And I think starting in 2017, we'll see about an annual benefit of $30 million for that. So I tell you that just as an indication of that we continue to look at our footprint, our efficiencies and how we can make sure that we're getting our cost in line. We're doing the same thing around our SAG costs. And I think it's something that you'll see us continuing to do going forward. We don't have any other particular announcements to make at this time, but, Emmanuel, what I would say is I agree with you, and I think our team agrees with you, and one of the focus items of Jean-Claude Kihn, who just took over our European business at the beginning of the year, is making sure that we have the diligence on cost again on a tactical basis, but then also strategically as we look out to the future to make sure that we're getting our breakeven point lower in all the things that would entail both from an operations perspective, from a daily management perspective and from a structural perspective, and that's what we're going to continue to focus on.

Operator: And, ladies and gentlemen, we are at the top of the hour, and this will conclude the conference for today. We thank you for your participation. You may now disconnect, and have a great day.

Laura Thompson: Thank you.