Good morning. My name is Tina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Goodyear Fourth Quarter and Full Year Sales and Earnings Results conference call. [Operator Instructions] I will now turn the call over to Greg Fritz, Vice President of Investor Relations for the Goodyear Tire & Rubber Company. Please go ahead, sir.

Good morning, everyone, and welcome to Goodyear's fourth quarter conference call. Joining me today are Rich Kramer, Chairman and CEO; and Darren Wells, Executive Vice President and CFO. Before we get started, there are a few items I would like to cover. To begin, the webcast of this morning's discussion and the supporting slide presentation can be found on our website at investor.goodyear.com. Additionally, a replay of the call will be accessible later today. Replay instructions were included in our earnings release issued earlier this morning. If I could now direct your attention to the Safe Harbor statement on Slide 2. Our discussion this morning may contain forward-looking statements based on current expectations and assumptions that are subject to risks and uncertainties. These risks and uncertainties, which can cause our actual results to differ materially, are outlined in Goodyear's filings with the SEC and in the 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. Turning now to the agenda on today's call. Rich will provide a business review, including perspective on our fourth quarter and full year results and how we are progressing toward our key strategic objectives. After Rich's remarks, Darren will discuss the financial results and outlook before opening the call to your questions. With that, I will now turn the call over to Rich.

Great. Thank you, Greg, and good morning, everyone. As we exit 2011 and head into 2012, I'm pleased with our progress, which has been consistent with the strategy we introduced in March of last year. Our progress in 2011, both financially and operationally, is frankly ahead of where we envisioned we would be as we started the year. However, as we look ahead to 2012, we already are experiencing more economic and internal headwinds than initially anticipated. Now that said, we remain on path toward 2013 target of $1.6 billion of segment operating income. As I said in our last quarter call, we're not running our company for one good quarter for one good year or for short-term performance. We understand our journey to our destination may not be in a straight line. Our strategy and our goals are based upon delivering results consistently over the long term and building the capabilities to do so. So again, I'm very pleased with our 2011 results, but I'm even more encouraged about the improvements made in executing our strategies, such as leading in innovation, winning in targeted market segments and in striving for operational excellence. I see these benefits in our business every day. More importantly, I see the opportunities relative to what remains to be accomplished. Now clearly, we must execute. But I believe in our team's ability to lead this industry in innovation, in marketing and in operational efficiency. In the fourth quarter, despite weak volumes, we saw branded share improvements and the continued trend of strong price/mix, despite more than 30% raw material cost increases. The price/mix improvements were offset by the results in our chemical business, the impact of the Thailand flood, startup costs related to our new factory in China and costs related to the transfer of…

Thanks, Rich, and good morning. I'm going to cover the fourth quarter results at a corporate level, give you some perspective on our year-end balance sheet and then spend some time on our business unit results and our outlook for 2012. While our results were not as strong as earlier in the year, given weaker industry volumes, our costs were also adversely impacted by previously discussed structural changes that we're making through our manufacturing footprint. These changes will support stronger earnings in 2013 and beyond. Turning to the income statement on Slide 7. Our fourth quarter revenue increased 12% to approximately $5.7 billion on a 4.6% reduction in volume. Revenue per tire increased 19% compared with the prior year. Lower replacement industry demand across mature markets was the main driver of our unit volume decline. Our OE demand remains solid across most regions, however, consumer OE demand in Asia was unfavorably impacted by Thailand flooding, which disrupted production during the fourth quarter. We generated gross margin of 15.3% in the quarter, representing a little over a 2-point decline compared to the prior year. Nearly the entire decline is the mathematical effect of increasing both cost of goods sold and sales by the higher raw material costs. Selling, administrative and general expense increased $9 million to $724 million during the quarter. As a percent of sales, SAG declined 140 basis points to 12.7% in the quarter. Excluding discrete items, our fourth quarter tax rate as a percentage of foreign segment operating income was about 26%. Our reported tax rate included a $60 million favorable impact, primarily from the release of a valuation allowance in Canada, which reflected our consistent improvement and profitability there. Fourth quarter after-tax results were impacted by certain significant items. A summary of these can be found in…

[Operator Instructions] Your first question comes from Rod Lache, Deutsche Bank.

I guess, a couple of things. First, you're guiding to somewhat weak North American replacement volumes going into 2012. A lot of -- some of the incoming macro data has been somewhat more positive and people are looking for, obviously, positive GDP growth. I was hoping you can maybe give us a little bit more color on what you see happening, what's behind it and whether it's -- there are some factors that you're looking at, such as inventory wholesale and that kind of thing?

Okay, Rod. I thought you were going to ask another question. Relative to North America, I think you're right. I mean, I think as we've look at it, we've guided the way we have because it's, frankly, pretty reflective of what we're seeing. One of the things that we've done pretty well over the past 6 months and now already into January and going out is really get better insight into channel inventories and sellout data. And it really confirms the forecast that we have that we still see sellout okay, not really picking up relative to some of the macro ups that you're referring to. And we still see dealers, I think, certainly being cautious, particularly relative to the raw material environment and the like. So I think what we see is still a cautious environment out there. I would tell you, there is possibility for upside if the economy goes up. The way we think about that is particularly relative to taking Union City out last year. Rod, I have to say we're probably very -- we're as well-positioned since I've been with the company in North America from a footprint perspective to deal with both the outlook that we've put in our forecast as well as to deal with an uptick that might come should those macroeconomic elements really show themselves in the marketplace.

Okay. And just relative to your price/mix versus raw material outlook for this year, you're talking about raw materials being up 5%. I'm just wondering if pricing and mix stays where it is right now, would you agree that it would likely exceed the raw material cost headwind that you're anticipating for this year, or is there some contractual giveback that you're anticipating for later in the year?

Yes. So Rob, what we see right now, I think, from the comments is that with -- as we start into the year, we've got the price increases we've taken and our outlook for mix. And I think even with $500 million of raw material cost increases in Q1, I think we feel comfortable that we're going to be able to more than offset the raw material costs in Q1. I think in Q2, the way it looks right now and including the fact that we do have price downs under raw material indexing agreements with some of our contractual customers, and that works up and down, so we do get some reductions related to those raw material formulas, given that we expect second quarter to be about neutral. And second half of the year, I think that we know what we expect, given raw materials staying where they are today. And that would -- the map would say that effectively means raw materials would be down a bit in the second half. But I think we'll hold out and understand what the environment is going to bring there before we give any further guidance. But what I would say is that at some point here we do expect raw material cost to go back up. Raw materials have started back up here in the first quarter, so we've seen some increase in rubbers, an increase in butadiene as well. And to the extent that trend continues, we know there's actions we're going to have to take to address that going forward.

Okay. And just lastly, any comments on when the Union City inefficiencies end? And are you planning on updating the plan for EMEA anytime soon?

Yes. So Rob, I think the Union City impact is primarily a Q4 2011 and Q1 2012 effect. So you should continue to see some impact of Union City transition going into the Q1 results. And then after that, it should get better. We, I guess, purposefully have not given any specifics around the Amiens situation. It is still one that -- we're committed to addressing that situation and eliminating that high-cost consumer production capacity. And we continue to work toward that goal. If we aren't able to get an agreement to shut down the consumer capacity, then we'll have to look at other alternatives, including potentially closing the entire facility. So one way or the other, we'll work through that. It's kind of tough to call the timing with any precision right now, but we're working toward getting it done s quickly as we can.

Your next question comes from Saul Ludwig, Northcoast Research.

Hey, one question about Europe. I was just thinking about Europe overall in 2012. You mentioned you that got euro headwind, your outlook for volume is pretty cautious particularly on truck tires. You've got the situation where your snow tire business was fabulous in 2011, but the sellout maybe wasn't so good. And the situation in France, I mean it's going to linger for a while and hopefully you get absolved eventually. But these are all a sort of the big headwinds that you have looking at Europe. Are there any sort of positives or is does it just look like 2012 is going to be a tough year for Europe compared to a great year that you had in 2011?

Well, Saul, I think you probably summed up Europe as well as we can in terms of the headwinds that we see there and I think most of those are very real. In terms of positives, you have to remember the product portfolio that we have there, the mix of business that we have is really still very, very good. In terms of what we were able to accomplish in price/mix, in terms of -- in 2011, I should say, and in terms of how we've actually driven our mix strategy in Europe over the past, I would say, at least 5 years is really what you saw 2011 being the beneficiary of. When you look at what particularly the German OEMs are continuing to do, you look at the product lineups that we have, I would tell you that the core business in Europe is still very strong. In addition to that, while certainly there is an economic overhang over in Europe in general, there are still good growth businesses in East Europe that continue to drive our profitability there as well. So clearly headwinds, but a strong foundation and still a lot of growth areas and a lot of opportunities to mix that will be in 2012 and beyond.

Would you think the net positives are greater than the headwinds? Or I mean just directionally, given Europe, from an EBIT standpoint, looks like a tough comp.

Yes. I think, Saul, what I'll say is 2012 will be a tougher year than 2011 for the reasons you said. But trying to give you a net position on that is like trying to forecast whether the Greeks will accept the austerity package. It's very hard to make prognostications like that. Very difficult in fluid situation that we have there, so I'm going to refrain from sort of calling that one.

Your next question comes from Himanshu Patel, JPMorgan. Himanshu Patel - JP Morgan Chase & Co, Research Division: Three questions. Just the production cuts that you alluded to in Q1 and Q2, can you talk to a little bit just where are the inventory issues by segment and what sort of magnitude are these issues?

Yes. So, Himanshu, I guess just to be clear, what we've done is we adjusted our production in the fourth quarter and we'll take some production cuts again in the first quarter, just to get our inventories back in alignment with where we've seen sales levels. And I think, as you know, we are very careful about what we do with inventories and protecting our cash position. So we tend to do that when we need to. We've done that, That'll have an impact on our first quarter earnings. The impact of the production cuts in Q4, flowing into Q1 and then from Q1 into Q2. So expect some impact there. I think, overall, where we ended the year, I think certainly we had consumer sales at the end of last year were very soft. And in Europe, the warm winter there wasn’t a lot of retail sellout activity and therefore, not a lot of reordering from dealers. So our consumer inventory in Europe above where we'd originally thought it would be, I think, similar in the U.S. We had soft sales in December and net-net there, our inventory was high at year end. I think a little bit of that in Commercial as well for us. So I think we're taking those adjustments, we're going to do what we need to do there. But overall, I think our inventory position, it's not significantly out of line, it's just some actions that we needed to take there to address, the softness at the end of Q4 and what looks to be a relatively soft start to Q1.

Himanshu, I might just add. I think what you're also seeing there is sort of actions consistent with what we said around Cash is King and taking decisions to sort of look in to see what we see coming from an industry perspective and adjusting as best we can to not build inventory and to not be in a position to be on the wrong side of that. So that's a consistent behavior that you'll continue to see. Himanshu Patel - JP Morgan Chase & Co, Research Division: Okay. And just a couple more here. Just the October 1 up to 5% price hike announcement from North America, can you just give a little bit of context or color around what the kind of net realization level was on that? It seems like the whole industry has been pretty geared up to implement price increases. So historically, we've thought about sort of a 50% net realization on kind of the up to announced amount. I'm just trying to understand is are we in an environment where you're actually seeing kind of a better net realization than that?

Himanshu, I think it's hard for me to say anything that can be much stronger than the fact that we've got the kind of increases in revenue for tire that we got in the fourth quarter. So the fact that North America had revenue per tire of 19% gives us a pretty good indication that we're getting the price and mix that we're targeting. And the price/mix performance there are very strong. And we are starting to anniversary some of the price increases that we've taken over the last year. So you've got to build that into your thinking. But overall, I think the team has done a good job in driving towards the revenue per tire that we've gotten. So I think we’re feeling good about our performance there. And that's something we've had to do in order to address the raw material cost increases. Himanshu Patel - JP Morgan Chase & Co, Research Division: Okay. And then, Darren, on Slide 13, you guys did a nice job of just laying out kind of the incremental headwinds on 2012. I'm wondering if you could just go back and think about -- help us think about 2011 on a full year basis and help us think about the headwinds that you faced in 2011 that you would pretty much say are not repeating in 2012? And I think you touched on some of them. It sounded like there was a $40 million hit on Union City in the fourth quarter. Maybe some of that continues in Q1, but maybe on a full year basis, that's a tailwind year-over-year. It sounds like the chemical business had a $20 million hit in Q4 because of butadiene prices. There's also, I think, a profit sharing hit in the fourth quarter. Does that repeat itself in the fourth quarter of next year? Can you just kind of walk us through those items from 2011 to 2012?

No, I think, it's -- I can absolutely do that. So I think, Himanshu, that first of all, a number of the things that affected Q4 I think are going to continue to affect Q1. And so from one year to the next, you get some of the similar factors, in one year it was in Q4, the next year it's in Q1. And that, I think you would include the Union City transition costs, which were in Q4, they'll be in Q1. The Thailand flood impact, which is going to continue and affect probably a little bit higher in Q1, given it's a full quarter versus a couple of months in Q4. Continue to have China startup expenses, in fact, the increases there. And we'll have some impact of production cuts coming as well. But in terms of the things that we saw in 2011, I think you probably hit a number of them. We've got some of these things in Q4 that bled over. I think the raw materials is the big difference between the 2 periods. I mean, a lot less raw material costs increased this year than last year, provided raw materials stay where they are. I think to the extent we see rising butadiene prices, then that'll help the chemical business, where at the end of last year, the drop in butadiene prices was a headwind for us. So I think you can probably hit on some of the big ones there. Yes, obviously, we expect as we get through 2012 and into 2013, there's some of these things, including, in particular, the footprint actions that will start to have less impact as we get past 2012. Because there are a lot on the -- really a lot going on in the footprint side right now. I mean, you've got the shutdown and the transfer of products for Union City. We've got the construction of the China facility, and the fact that we're going to be going through shutting down the old facility in 2012. So you're going to have a construction and a shutdown going on over there simultaneously, which is why you see the impact that we showed there. You continue to see the ramp up of the factory in Chile, although that was a big challenge for us in '11. We'll start to get some momentum there in 2012. And then we've got, obviously, the situation in Amiens, which is an issue for us in 2011. And until we get that resolved, it will continue to be an issue for us. Himanshu Patel - JP Morgan Chase & Co, Research Division: And is the profit sharing every fourth quarter we should think about that?

Well, I think, the profit sharing, Himanshu, I think, we've said in the past is the agreement with the United Steel Workers was for 12% of EBITDA, effectively with a cap of $175 million over the 4-year length of the contract. And the EBITDA metric has some adjustments, so it's not perfect. But I think what you'd see is that once we go through, we had a lot of profit sharing that hit 2011. I think you'll see that'll continue through 2012, provided we continue to drive earnings in North America. Once you get past 2012 though, we would start to approach the cap and there'd be less of an impact for 2013.

Your next question comes from Patrick Archambault, Goldman Sachs.

I guess one question on just the cash flow, I mean, going way back now to sort of your Analyst Day. I think the original plan consistent with the 1.6 SOI target, was that, I think, cash flow including pension contributions should be about breakeven. Now it does seem like there's a few items that have come in a bit worse, pension is one of them. Maybe some of the startup costs and footprint actions have been maybe a little bit more costly in terms of disruption as well. Is that breakeven level still something that we should be thinking about? Or should we -- might there be a little bit more caution in that estimate today?

Yes, so, Pat, I think it's a fair question. And certainly what you've heard us say today, and then you just need to step back to March for a second. In March, we said we get about -- we were targeting $1.6 billion of segment operating income. Clearly, we, even with some of the headwinds, we're still saying $1.6 billion is our target for 2013. In terms of the key cash flow items, you have seen pension contributions which -- or we've got a slide in the appendix of our deck today that gives some revised estimates of pension contributions. We now see instead of $525 million in pension contributions, which is what we had estimated back in March, we see $575 million. So about $50 million delta based on what happened in 2011. But beyond that, the other items, CapEx remains the same, interest and taxes, no big change in outlook there. So I think we're still focused on getting ourselves to that breakeven cash flow for 2013 and our $1.6 billion. I mean, we remain committed to those targets.

Okay. And that I think it hinted in one slide that you may do a little bit more restructuring as well. So that could be sort of a risk factor, but where you stand now, you'd be pretty close to that breakeven.

Yes. No, Patrick, we said those are the targets. That's what we're shooting for. I think Darren highlight the most significant headwind that we've really identified since we met back in March.

Okay, great. One last one if I may. Can you just go over again, I know you referred to mix as being something that's sort of a structural tailwind here. Clearly, it was in a pretty big way in 2011. How much of that is like Commercial Truck, I suppose, on the OE side more than anything else? And then how much of that is HVA? And can you just remind us of what the main drivers of this rotation upwards to HVA are as well?

I think, Patrick, when we talked about mix, particularly in 2011, most of that mix was in the Consumer business as we looked ahead. And if you think about mix, what our goal is and what our goal has been is to drive our innovation through new products and branded business where we can differentiate our products going forward. That's something I mentioned, we started initially in Europe in a meaningful way. Certainly, we've made very significant progress in driving our mix in North America, thus the improvement that you saw year-over-year, both in the ability to offset a significant raw material headwind. But, really, in the mix of our business where we shifted the portfolio from a high percentage of private label and a lot of more unprofitable OE business to more Goodyear-branded business in the mid tier and the upper tier of the performance tier in the market. And that's what driving our mix. You see the same trends that we're doing in Asia right now, particularly in China, where our business is directed at the higher ends of the markets with Goodyear-branded product. And certainly, as both Darren and I alluded to in our remarks, we've got some work to do in Latin America, but certainly that's where we're headed there as well.

So Pat, just to hit the other point which is what are the drivers of the mix. I think Rich laid out what the drivers are in terms of our strategy. I think from an industry perspective, you look at the proliferation of sizes and types of tires, particularly over the last few years, you'd look at the push for improved rolling resistance, which tends to require more technology, it tends to push toward more high-end tires. And then ultimately, I guess the MegaTrend of the industry is going to be the trends towards higher labeling, which is just going to demand higher levels of technology and it's going to push more consumers toward tires that we would characterize as high value-added, which are places where we can differentiate with technology.

Your final question comes from Chris Reenock, Citi.

I'm calling in for Itay, and just had a couple. I apologize if any of this has been said, but I got logged off for a second. Can you just quickly comment on the challenges now of building on 2011 strong price/mix, and how and where do we go in 2012?

Well, I think as we look back to 2011, number one, I think what you saw is that we really built our confidence and our ability to address record high raw material costs. I think we had 3 consecutive quarters in a row where we offset anywhere from 28% to 35% of raw material cost increases. So clearly, we made progress, and again, reinforced our belief that the importance to that is around innovation brands and products to do so. I think that Darren mentioned earlier that as we look to 2012, we do have some items that are going to impact us. One, again, is the OE contracts that we have that have raw material price indexes in them, which actually will adjust the downward in this case because of lower raw material costs. And certainly, we have a tougher comp in the third quarter reflective of the strong winter business and the winter mix we had in 2011. So as you think about 2012, those are some of the things to work through. But again, over the long term, our belief is that raw material prices again will increase. We've got a proven track record to be able to address them. And as they go up, we'll certainly be ready to take the actions to go and do that.

Okay, great. And one on China, do you expect the start-up costs to start to taper off in 2013? Or is this something that's going to continue to be a headwind?

I think as we look at the outlook for China, we had the start-up costs in 2012. Darren made reference to the fact that, just to put in perspective, the China factory is a significant factor in that it both is a consumer factory and a truck factory. As we work through 2012, we're seeing the startup on the consumer side, we would expect that to evade as we get into 2013. But certainly, we'll start up our truck business as we get into 2013 as well. So that's something, I think, we'll certainly give more view into as we get into the future. But really, we've got a lot going on there. Again, it's a good way to frame it for you, starting up a consumer factory closing, our Dalian, our existing factory and then starting up the truck factory in Pulandian as well. So those are the things that are going to be with us a few more years.

So I think '12 and '13, we continue to have some impact there. But I mean, these are projects that ultimately have very strong returns and a market that's going to continue to see a lot of growth, particularly at the high end. So I think we're comfortable with the investments. We've got a couple of years of startup to work through.

And I think that was the last call. So everyone, we appreciate your attention this morning. Thanks very much.

This concludes today's Goodyear Fourth Quarter and Full Year Results and Earnings Results Conference Call. You may now disconnect.