Good morning, ladies and gentlemen. And welcome to the Titan International, Inc. Fourth Quarter 2021 Earnings Conference Call. At this time, all participants have been placed on a listen-only mode and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to Todd Shoot, Senior Vice President, Investor Relations and Treasurer for Titan. Mr. Shoot, the floor is yours.

Thank you, Victoria. Good morning. And welcome everyone to our fourth quarter 2021 earnings call. On the call today, we also have Titan’s President and CEO, Paul Reitz; and Titan’s Senior Vice President and CFO, David Martin. I will begin with a reminder that the results we are about to review were presented in the earnings release issued yesterday along with our Form 10-K, which has also been filed with the Securities and Exchange Commission this morning. As a reminder, during this call, we will be discussing certain forward-looking information, including the company’s plans and projections for the future that involve risks, uncertainties, and assumptions that could cause our actual results to differ materially from the forward-looking information. Additional information concerning factors that either individually or in the aggregate could cause actual results to differ materially from these forward-looking statements can be found within the Safe Harbor statement included in the earnings release attached to the company’s Form 8-K filed earlier today, as well as our latest Form 10-K and Forms 10-Q, all of which have been filed with the SEC. In addition, today’s remarks may refer to non-GAAP financial measures, which are intended to supplement, but not be a substitute for the most directly comparable GAAP measures. The earnings release, which accompanies today’s call contains financial and other quantitative information to be discussed today, as well as the reconciliation of the non-GAAP measures to the most comparable GAAP measures. The Q4 earnings release is available on the company’s website within the Investor Relations section under News and Events. Please note, today’s call is being recorded. A replay of this presentation will be available soon after the call within the Investor Relations section on the company’s website. A copy of today’s call transcript will also be made available on our Investor Relations website. In addition, our latest quarterly investor presentation is available on our website. I would now like to turn the call over to Paul.

Thanks, Todd. Good morning, everyone. Titan had a great finish to the year with our fourth quarter adding to what has been a tremendous 2021 for us. The days really go by fast as we are already sitting here in March, and we see numerous positive aspects of our business lining up well for 2022 and beyond. I really want to comment though that I am very pleased with what our Titan team has accomplished over the past couple of years, and those efforts have put us in a good position as we head into 2022. Today I’d like to share some thoughts on markets and our expectations for this year. But before that, I do want to quickly go over a few financial highlights from 2021, and David will, of course, dive in deeper to the financials and cover that from all angles. So as we look at the year, we grew our sales over $520 million, with a solid $120 million or 23% of that flowing into operating income gains, which led to our 2021 adjusted EBITDA growing 2.5 times over 2020 to $135 million. It’s only happened one other time in Titan's history that we have had sequential sales growth each quarter throughout the year, but that is exactly what occurred this year. I also want to note that our fourth quarter gross margin percentage was 300 basis points higher than our Q4 average over the past 10 years. David will share more financial information later. But as I said, I am very pleased with what Titan has accomplished in 2021. But what’s more important is that we feel well positioned going into 2022 to keep riding that phenomenal tidal wave that’s out there. In the world of agriculture, which is our breadbasket comprising 53% of our sales, we believe the market forces are aligning well to create momentum driving a multiyear strong demand cycle. Some items to note include that farmer income and balance sheets around the world are looking good from higher commodity prices, prior crop yields have been strong, and government support programs have been very accommodating. These forces will continue to pull through strong demand along with the fact that dealer used and new equipment inventories are at or near all-time lows. Also, let me throw in there that there is continuing momentum from a replacement cycle that still has lagged, as North America's large Ag volume remains approximately 15% below historical averages even after the recent growth. If you start looking at future crop prices, the weather conditions in South America are helping to keep prices at higher levels. It’s pleasing to see increased demand for our U.S. grains, where reserves are light to start the year. The point being, of all this, there are clearly a good number of positive forces in the Ag sector. For example, at the National Farm Show just a couple of weeks ago, the comments I heard from the management teams, in particular from our small Ag customers, reflected really nothing but positivity regarding current demand and future forecasts. So sitting here today, Titan’s Ag order books are strong, and we are continuing to pursue increases to our headcount and our capacity to meet this demand. Looking further down the road, it doesn’t appear that 2022 OEM production levels are going to put much of a dent in the low dealer inventories. So if you are looking at 2023, you might see meaningful inventory replenishment starting to take place then. Plus, on top of that, I think you will see unmet 2022 retail demand that could carry forward into 2023 as well. It does appear that positive Ag weight is going to keep flowing in a multiyear cycle. Moving from farm to Earthmoving and Construction, where our undercarriage business is a major global player, we continue to see demand orders at really good levels. We stated last quarter that we still believe our EMC segment continues to look promising with the expected infrastructure investments kicking into gear in 2022. More likely than not, you are going to see more of that continue to flow into next year as well, and that will just add further support to the current strong demand levels that we see. On a global basis, Titan was able to be there for our customers in 2021. We see—we have increased our output with our global production footprint, which is the best and largest in the off-road yield tire and undercarriage industry. I believe that with our production capabilities, our quality products, and the innovation that we continue to drive in the marketplace, we are prepared to serve our global customer base well in 2022 and beyond. As companies look to further de-risk their supply chains, Titan is definitely better suited than our competition to meet our customers’ needs. We understand that in today’s world, there are questions surrounding global volatility. There is uncertainty for material prices, supply chain challenges, labor challenges, global logistics issues, and then the recent events in Ukraine. As we have noted before and as evidenced in our 2021 results, Titan is accustomed to solving problems and overcoming challenges, and we have proven that. We have a strong focus within our management team to meet our customer expectations, along with solid pricing, cost discipline, and innovative products that will drive further margin and profitability improvements. It’s been great to see how our company has taken strong actions and made significant improvements in recent years to strengthen our balance sheet, which is obviously crucial to protecting the heartbeat of Titan's future. As I have stated before, during that period, we have continued to invest our CapEx wisely to drive innovative products into the marketplace and increase our capacity where needed in our core businesses, which fits with our long-term strategy. That fact combined with our large global production footprint and the capacity we have put Titan in a position of strength within our industries, making us well-suited to meet our customers’ needs for the foreseeable future. I also want to add that in recent years we have improved and removed businesses and product lines that were a drag on our financial results. Along with increasing our portfolio of innovative products, we have streamlined our product portfolio to remove certain SKUs and improve our operational efficiencies. All of these facts illustrate our capabilities and our future potential, but really what speaks the loudest is our results from this quarter and for all of 2021 for that matter. That demonstrates that the Titan team has been successful in managing through a dynamic business environment and that we are well prepared for 2022 and beyond. Titan has built a good foundation for the future, and we have put an operating plan in place to deliver another strong financial performance in 2022, with sales over $2 billion, which is a 14% increase over 2021 and adjusted EBITDA around $175 million, up $40 million or 30% if you look at it that way. With that, I’d like to turn the call over to David.

Thanks, Paul, and good morning to everybody on the call today. The fourth quarter concluded very strongly, capping off a year that we at Titan will all remember. In the midst of unprecedented volatility, we have set a course towards a bright future for the organization as a result of our collective decisions made in 2021 and even prior. There are many foundational pieces that we established that will bear fruit for the years to come, and our 2021 results are just the start. As usual, I will begin with the major highlights for the quarter and the year. For the fourth quarter, we had a six-quarter streak of sequential sales growth. This doesn’t happen by accident, as we put everything together to deliver increased production with our labor and our supply chain. Net sales grew 8% sequentially from Q3 and almost 50% from Q4 last year. This was led by the Ag segment, which grew 64% in the fourth quarter from last year, and our gross profit grew 68% from last year, maintaining strong margins. The adjusted EBITDA for the quarter was $36 million, representing the strongest fourth-quarter performance since 2013. Our fiscal year adjusted EBITDA was $135 million, which grew by an incredible $81 million. This implies incremental adjusted EBITDA margins of 15.6%. Regarding our cash flow and balance sheet, our fourth-quarter operating cash flow was $13 million, making the second quarter in a row where we generated positive operating cash flow despite the large increases in sales and the corresponding working capital requirements. Finally, our net debt leverage fell to 2.9 times at year-end. We expect an even stronger year in 2022, which Paul already discussed, and I will touch on that a bit more in a few minutes. Now let’s hit the important points relative to segment performance in the quarter, starting with Agriculture. Our Agricultural segment net sales were $265 million, an increase of over $103 million from Q4 last year, and it was up sequentially from Q3 by over $20 million, representing 8.3% sequential growth. We saw a balanced mix between OEM and aftermarket sales again this quarter. While OEMs continued to be the largest driver of increases year-over-year, there was also a very good balance between growth in volume and the impact of higher pricing related to the cost of raw materials and other inflationary costs. Each of our global regional businesses experienced significant growth in the segment year-over-year, and for the year, the Ag segment grew by over 50%, or $350 million in growth. The Agricultural segment gross profit for the fourth quarter was $37.5 million, up from only $20 million in the prior year, representing a 92% improvement. The gross margins were 14.2% for Ag in Q4, up from 13.6% in Q3 this year and 12.1% last year. This reflects the increased volume and the efficiency effects along with continued strong cost control actions we have taken over the last year. We are using our productive capacity in a strong way to support the demand in the market, reinforcing our value to customers, which will continue in 2022. Moving over to Earthmoving and Construction, the segment experienced another strong quarter as well. Overall, net sales for the EMC segment grew by $46 million or 33% from last year in Q4. This also compares favorably to the third quarter, with sequential growth of $15 million or 9%, very similar to the Ag growth. Again, all the major geographies experienced year-over-year growth during the quarter, with the largest dollar growth from ITM’s undercarriage business, which grew 35% from the fourth quarter last year and 11% sequentially from the third quarter. Like Ag, the growth was driven by a balance of volume and increased pricing relative to higher raw material costs and other costs related to inflation during the quarter, slightly offset by currency devaluation of about 2%. Gross profit within our Earthmoving and Construction segment for the fourth quarter was $20.4 million, which represented an improvement of $6.1 million or 42% from adjusted gross profit last year after eliminating one-time charges for asset impairments last year. The gross profit margin for the EMC segment was 11.1% versus an adjusted gross margin from the prior year of 10.4%. Again, the largest driver of increased profitability came from the increased sales, and ITM growth occurred across all of our businesses and geographies globally year-over-year. The Consumer segment’s Q4 net sales were up 41%, or $11.5 million compared to last year. Much like the rest of the year, volume was up nicely in the segment, although currency presented a slight drag in the quarter. Our growth was balanced across all of our global businesses, with the largest proportion coming in North America this quarter. This segment’s gross profit for the fourth quarter was $4.6 million, reflecting a $1.4 million increase from last year. Gross margins were 11.7%, improved from Q4 2020 margins, reflecting positive mix and pricing improvements in our products. Our selling, general, administrative and R&D expenses for the fourth quarter were $35.6 million, representing only 7.3% of net sales for the quarter. For the year, adjusted SG&A and R&D costs were 8% of net sales. This year’s expenses included some variable spending and compensation reflecting the significant increase in sales and profitability during the period. However, we controlled our spending very well, and as a percentage of sales, it dropped 220 basis points year-over-year after adjusting for one-time items last year. Our reported taxes on income in the fourth quarter reviewed some color as a result of recent efforts to restructure our intercompany loan structure and realign our legal entities, reflecting our operating model, along with improved profitability in certain tax jurisdictions. We reversed previously recorded valuation allowances against net operating loss carry-forwards in an amount of $16 million in the quarter, therefore, on a net basis recorded a tax benefit in the quarter of $8.8 million and a tax expense of only $1.1 million for the full year. Our cash taxes in the year were approximately $16 million, which was in line with what I had communicated last quarter. Let’s move over to cash flow. Our net debt level remained stable at $387 million from last quarter. Our cash balances increased to $98 million, an increase of about $3 million from the end of Q3. We generated $13 million in operating cash flow in the quarter, almost breakeven free cash flow as well. After tremendous sales growth this year, we actually invested in working capital, notably inventory, to meet demand. Despite these increases, we were able to generate positive operating cash flow of $28 million in the back half of the year. Another important metric for our management team relates to liquid working capital, meaning our accounts receivable plus inventory minus intercompany loans. At year-end, our liquid working capital as a percent of annualized net sales based on the most recent quarter was 19%. This compares favorably with the end of the third quarter when it was 21%, and last year’s figure was 24%. We are making measurable progress with discipline and focus across the business. Our debt leverage at the end of December was 2.9 times trailing 12 months adjusted EBITDA, down from 3.3 times last quarter. We are in a comfortable position with leverage in this range, with earnings growing in 2022 expected to gain on the leverage ratio throughout the year. We have flexibility in the business at these levels, including organic and inorganic growth initiatives. We are in March now, and it really feels like 2021 is far behind us, but it is important to look back and reflect on the progress we made during the year and how that sets the table for this year and beyond. As Paul talked about earlier, the markets are strong, and our position is as good as it’s ever been. We expect another great year at Titan, and we are off to a great start in the first quarter. It bears repeating that we expect sales to exceed $2 billion, with an EBITDA target of $175 million. This implies that gross margins will continue to expand, which comes with the discipline that we have around our controllable costs, our pricing to match inflation and raw material fluctuations that are inherent in our markets. We expect SG&A and R&D costs, not including royalties, to be controlled as well at about 7.5% of net sales for the year. We will also remain very disciplined and focused on working capital management, and as I have reviewed earlier, for our targeted capital investments for 2022, based on our operating plan approved by the Board, we expect to spend approximately $45 million to $50 million in capital investments, which is somewhat higher than last year. However, relative to sales, this remains in the range of spending that we believe is appropriate for the business. One of the most important takeaways from today’s conversation is that we expect to generate meaningful free cash flow in the business this year. Our current expectations are that we should generate between $35 million and $45 million in free cash flow in 2022 based on current expectations in profitability, working capital assumptions, and our capital investments. We should start to see positive momentum in free cash flow generation as we progress through the year, following our traditional seasonality with working capital requirements. Positive free cash flow is essential, as it affords us the optionality to balance growth initiatives with potential debt paydowns and even the potential for cash to shareholders. That’s our story for now, and I am happy to take Q&A in a minute. I will turn it back over to Victoria for any questions you have today.

Thank you. And our first question comes from Steve Ferazani from Sidoti & Company. Please go ahead. Your line is open.

Good morning, everyone. Paul, David, appreciate all the detail on the call. I want to get a sense of the much stronger sales in Q4 versus even Q3. Typically, you have got some holidays there, can you help me understand how much you have caught up on the labor front in the production capacity as you go into what could be a stronger 2022? How are you prepared to manage the stronger sales, and how did you do in Q4?

Well, we continue to execute on increasing our labor force, most importantly, and along with that is our labor force continues to get stronger as the training continues to sync in, and their output levels increase. The other element I would throw in there, Steve, is that we did secure some new union contracts that have incentive clauses in North America, so we look to continue driving further improvements in output as we move into 2022. I think it’s a combination of truly executing on what we already have in place. We have a good team that knows how to continue recruiting and retaining people. We work hard at it, and then you throw in the union contracts on top with incentive clauses to help drive further output for this year.

Okay. When I think about David, the guidance you gave for free cash flow, I am trying to sort of look at my model, and clearly there’s going to be a build in working capital, which won’t be as steep, even though you are going to have sales growth. I am just trying to figure out how you get there? What are you going to do on the working capital side unless my other margin assumptions on margins are way off?

As you look through how you model, we can certainly talk about that later. But we do have some impact from working capital. We have some working capital growth built in. However, we don’t believe that our inventory levels require significantly more investment than where we have been. We have been really working hard to determine that balance to manage inventory, and we are in pretty good shape. We will see some growth in the first part of the year just because of the natural climate we will have, but we will be able to start to see the benefits of that and generate some good operating cash flow as we progress through the year.

Great. Thanks. And then I have been getting a lot of questions—I am sure you have as well—in terms of, if you can just walk me through the AIF stock transaction, where your Russian venture stands now, and just your general perspective thoughts on the Russian venture given the current Russia-Ukraine conflict?

Yes, Steve. It’s David. I will take the first part. We did execute the stock repurchase earlier in the month without AIF as it was all according to everything that we needed to do from a regulatory standpoint, and that occurred well before the conflict started. We are in compliance with any regulatory matters, and we were able to complete that in early February.

And then, Steve, regarding our business there, as we have stated on prior calls, we have a really strong management team. They have always been good at handling challenges, including the one they face now. We have a business that holds a strong market share within the CIS region. We do not export a lot outside that region, and I think that’s an important point to note. We have talked about the long-term vision of exporting more, but our business has a high market share within that region. The critical point to remember is that the products we produce are vital—not just to the customers we serve, but to the overall societies and food supply of the territories where we operate, and certainly that applies here as well. At this moment, we are in compliance with all current ramifications relating to the Ukrainian situation. There is no material impact to our Russian operation or really our other Titan facilities at this time, and we will continue to move forward from there.

Great. Thanks for that. I will turn it over and get back in queue if I have additional questions. Thanks very much, guys.

Thank you.

Thank you, Steve, for your question. Our next question comes from Komal Patel from Goldman Sachs. Please go ahead. Your line is open.

Hi. Thanks so much, and nice show this quarter and in 2021. Thinking about 2022 and the visibility that you have, after the consecutive quarters of strength that you have experienced, are you seeing any deceleration in your order books at this stage? I know the backlog is still pretty strong, but if you could comment on the visibility and the rate of orders that are still coming in?

The visibility is strong. The order book is strong. We are going to continue to work hard to produce as much as we can.

That works. Maybe the second question is, in light of some of the continuing challenges on raw material, supply chain, labor, etcetera, if you could touch on pricing. Is there any need to take on additional pricing? Do you think you have additional room versus peers to pull that lever further if needed? Thanks.

Yeah. Obviously, as we progressed through 2021, there were required adjustments that we needed to make to pricing relative to not just raw material cost but logistics costs, energy costs, labor, and all the different inflationary components. I would tell you that we worked really well with our customers, providing them transparency around our pricing relative to those costs, and we worked efficiently in 2021. We fully expect that we will be able to do the same in 2022.

As far as our footprint goes, it is extremely strong in relation to meeting the needs of our customers and further de-risking their supply chains. We will continue to add volumes, which clearly benefits our efficiencies, and we see that we need to keep adding capacity, particularly in key core strategic areas. We are not trying to veer off into anything new or different or take volumes that we haven’t been focused on in the past. We just remain disciplined. As David mentioned earlier, with our costs in relation to our pricing, we will continue to work hard to, as I said in my previous response, increase output to meet the needs of our customers. We see good order books for 2022, but really when you look at all the positive forces available, especially in the Ag sector, we think the tidal wave has got a multiyear aspect to it, and we see this continuing into 2023 and beyond.

Great. If I could squeeze one more in, leverage has come down a lot, from 3 to 4 times to now 2.9. Again, it sounds like your comments are pretty positive on the outlook there. I know in the capital allocation comments you had mentioned potential share repurchases. If you could just elaborate on that, could that potentially be debt-funded? If you could shed some light there, that would be great.

We still need to have conversations and make decisions around that as the cash flow warrants. We haven’t made any decisions one way or another at this point in time.

The point is that we have the optionality to work around a variety of components, obviously investing in the business, paying down debt where we feel it’s warranted or opportunistic, and then the potential for shareholder returns.

Understood.

Thank you.

Thank you for your question. Our next question comes from Kirk Ludtke from Imperial Capital. Please go ahead.

Good morning, guys.

Hi. Good morning.

Thanks for the call and the updated presentation. Very helpful. And just a quick follow-up on the capital allocation topic, is 3 times to 4 still your target range?

I would just say that we are in a very healthy range, and we have the opportunities to do the right things for all of our constituents. We do feel more comfortable with 3 times to 4 times, and we are going to be in the low 3 times range for a bit of time as well. We are looking at the right things to try to drive returns in a better way at that comfortable level.

Great. Thank you. There was a time when you were hoping to get to 3 times to 4 times. Now you are below it. If I am doing the math right, without any distributions to shareholders, you will be closer to 2 times at the end of 2022. So does that 3 times to 4 times move down? Would you prefer to run the business as a BB rather than a B type growth?

Well, obviously, a lot better credit is preferred, and as a CFO, I always want to be in a comfortable range. But again, I want to ensure that we and our Board are fully aligned on what we are doing to drive returns for the long term. This may require some investments in the business to try to drive that, but again I feel if we stay in this 3 times range, we have the options to do that.

Right. Do you think of leverage as a cyclical environment? How do you think about your leverage? It is still a cyclical environment, even though you are in an upswing, and you think it’s a multiyear run. I mean, you are in a business where earnings have been historically volatile. I am curious about your thoughts on that.

I want to maintain their levels of leverage through the cycle. We haven’t had an extended cycle over the last few years; it’s been more challenging. Therefore, I do view it over the cycle versus just a moment in time.

Okay. Got it. Thank you. There is a lot of concern about a potential recession in Europe. Slide four is very helpful; it shows where your facilities are located, and none of them, other than the Russian tire plant, are in a conflict zone. Do you have a sense for, at this point? You may not have this visibility, but do you know where your equipment is actually used? Do you have any visibility into that?

We know where our products are shipped to. You would have to look at the follow-through from our main customers to see exactly where it’s used. We are going to follow those trends as to where the equipment actually gets utilized within our main customers. But to specifically answer your question, we ship directly to their point of manufacturing and assembly.

Got it. Any comments on what you see or expect to see in Ukraine this planting season? Is it too early to say what’s happening there?

Yeah, it really is too early to tell. I think what we are looking at is obviously the commodity prices. The current inventories in the U.S. are light, and the South American situation, where their yields might put some pressure on other areas. Therefore, in a broader scope, we are observing farmer incomes and commodity prices, and all that is quite strong. How that all gets sorted with production and where the production ends up getting exported is still too early to tell.

Got it. Then lastly—thank you—does the agreement with Kubota improve utilization rates, or how does that affect your financials? I appreciate it. Thank you.

It’s a win-win for both sides. We are very excited about the new product that we will be partnering with Kubota; it will be a private label with Kubota. This would benefit both their end users and their dealers. This win-win will enhance our plants and improve efficiencies while helping them connect with their customers. Overall, it’s a great deal we are excited about; it’s a fantastic way for us to position new products into the market with a leading customer in that space as well.

Great. Thank you very much.

Thank you, Kirk, for your question. Our next question comes from DeForest Hitman from Walthausen & Co. Please go ahead.

Hey. Thank you for taking questions from shareholders. Can you talk about this from 10,000 feet? Ten years ago, we had over $2 billion in sales and a different EBITDA profile. Those sales were different, and obviously, 10 years have passed. But can you just help people understand what the difference is now versus 10 years ago and how that aligns with your thinking around the $175 million in EBITDA you've projected?

Absolutely. When you look at our company today, our primary concentration is agriculture. Currently, as we stated, agriculture comprises 53% of our sales. Back 10 years ago, you would have seen more coming from the EMC segment, which was our profitability driver. Therefore, now, our EMC segment is largely driven by ITM, our undercarriage business. ITM and undercarriage are strong global leaders, with tremendous OEM brands and products, representing good aftermarket presence. We also have gained a strong foundry in Spain. So overall, we have a better-diversified business structure picking up the bulk of our EMC sales and earnings. When you look at our Ag sales and earnings, you see healthy, strong businesses featuring solid market-leading products and significant market share; therefore, we are primarily based upon wheels and tires. There is definitely a different mix of operations that you see today versus what you encountered 10 years ago. Our earnings are derived from robust core businesses. We are focused on growing our business around core competencies and that’s what we see today, as elaborated with our guidance for 2022.

Okay. That’s helpful. Separate topic: I think many industrial companies that have reported have highlighted ongoing issues regarding supply chains, raw material availability, and labor challenges. I don’t think we discussed that in-depth. Can you help us understand what gives Titan a competitive advantage in executing well in 2022? You spoke about union labor in the past regarding labor availability. Can you elaborate on your security from a labor perspective? Dynamic challenges include simplifying your business, making tires and wheels, etc. It seems like we have steel, we have rubber, and steel dies are readily available. So can you update us in terms of your view regarding logistics, supply chain, and labor as it relates to 2022 and how that will allow you to execute efficiently going forward?

It starts with the team that we have. We possess a really strong unified global team. We have been highlighting that for years now, even during down periods, referencing that we were building a solid foundation. As noted on both today’s call and previous calls, I could not be more pleased with how our team has operated amid a dynamic business environment, as you illustrated, with many moving pieces. Here at Titan, our secret sauce begins with our people. We have effectively handled the challenges presented to us over the last couple of years. We continue to see challenges on a weekly basis, just like every other company. Nonetheless, as a team, we excel at resolving those issues. We manage our customer requirements effectively and we serve them with our strong production capacity and our top-notch quality innovative products all wrapped under our solid global, one Titan team. The evidence is clearly highlighted in our 2021 results showcasing how we have performed amid these challenges, and we firmly believe that our one Titan team will continue to operate effectively.

Okay. That’s helpful. As it relates to your guidance, I understand things may be changing in real time. Historically, you have disclosed revenue contributions from Russian operations. However, relating to the $175 million EBITDA guidance, are you willing to disclose your expectations through the EBITDA mix within that $175 million if that pertains to Russian operations?

We only report based on the segment, as you see in our results, in our 10-K we disclose that the Russian business constitutes roughly 5% of our overall total sales. The general practice—completely apart from what is currently happening—has been not to disclose by business units any information beyond what you see in the 10-K related to sales. Thus, we look at our business based on segments: Agriculture, Earthmoving and Construction, and Consumer segments. Therefore, we can refer you to the 10-K, which indicates that 5% of our sales come from Russia.

One comment I will make is that those aspects are factored into our 2022 guidance as well, so we are taking everything into account.

Okay. Thank you for taking my questions.

Thank you for your questions. Our next question comes from Alex Blanton from Clear Harbor Asset Management. Please go ahead.

Hi, good morning. Congrats on the quarter. I just wanted to clarify the tax benefit. What would your taxes have been without the benefit?

For the quarter, it would have been roughly $4 million to $5 million, I believe.

Did you say $4.5 million?

No. I said I just got clarification from our Chief Accounting Officer, and I was told it would have been $8 million for the quarter.

$8. million even?

$8 million roughly.

When is your expected tax rate this year?

Here’s what I would say, as there is always variation in book taxes due to valuation allowances and similar factors, I expect cash taxes, which is the most crucial aspect, to be around $16 million.

I wonder what taxes will be. What are your expected taxes as to what's going to be included in the income statement?

Yeah. That’s roughly it before any special allowances we may take. So…

Okay, that’s good.

...That's our expectation for now, Alex: $16 million.

Okay. That's not tax; that's sort of a rate, that's not a tax rate.

That's right. You can perform the calculations in your modeling, okay?

I will need to know your taxes to get that rate.

Yeah, that’s not part of our guidance.

Okay, let’s go on. The tax benefit is included in the adjusted earnings?

Yes.

Yeah, so if I apply a 25% tax rate to the income, earnings come out to about $0.18, correct?

I believe that’s the math, yeah.

Yeah, so why didn't you adjust the earnings for the tax benefit?

We could have.

Why didn't you?

Standard practice has been not to adjust it, so I’ll just leave it at that. It’s clearly outlined in the numbers we revealed and in our remarks and the press release.

Okay, let’s go on. The incremental 22% for the year in upper earnings—do you think that’s sustainable going forward or is there potential for it to increase?

Sure. Inherently, our guidance for 2022 indicates that this would be the case. However, it might vary around that figure. We have good expectations for continued efficiencies across the business as a result of all the efforts we've employed last year, and yes, that’s implied in our guidance that margins will continue expanding.

Yeah, that is a pretty good incremental, so you think you can sustain that at least for a while?

Clearly, when you get closer to peak capacity, that tends to wane, but...

Just what your capacity is?

I think that’s the point we are trying to illustrate with some of our comments, and certainly, I know our customers appreciate this. We have the production capacity and the ability to continue to grow and improve as a company with our efficiencies. As I mentioned earlier as well, we put out a press release highlighting that we are looking forward to our North American union contracts with some new incentive clauses that will help enhance output from our plants on a more effective basis.

Yeah. On the commodity front, commodity prices are benefiting from the fact that Russia and Ukraine are major producers of grain, wheat, and other agricultural products, passing the idea there'll be a shorter supply than they would have been. Do you see that—are you taking those developments into account in your guidance that commodity prices are going to be higher as a result of what’s happening in Russia, at least for now?

What’s implied in our guidance is not merely one specific factor, but rather the entirety of the ecosystem surrounding it. The continued strong demand for agricultural products drives this sentiment, indicating that demand will remain robust, irrespective of potentially fluctuating commodity prices. Hence, there are numerous positive aspects contributing to this demand cycle.

I get it, you are not commenting on the specifics of what might happen.

We have a strong leadership team over there that has worked cohesively for several years. Our business maintains a high market share, and as we have observed throughout the pandemic, our products are critical to not only our customers but also the overall infrastructure for food supplies in the territories where we operate. We remain compliant with current regulations pertaining to the Ukraine situation, and at this time, there isn’t any material impact to our Russian or other Titan facilities.

Sounds good. Thank you very much.

Thank you.

Thank you, Alex, for your question. Our final question comes from Jack Voigt from Balyasny Asset Management. Please go ahead.

Hey, guys. Thanks for taking the question. You dived into this a little bit, but 5% of sales came from Russia in 2021, is that all rubber? Also, you disclosed that 22% of sales come from Europe. Does that include any Russia or Ukraine exposure?

Going back to your first question, Jack, yes, Russia accounts for about 5% of our sales, specifically in rubber—the tires. With respect to Europe, there is very little, if any, exposure to Ukraine in our 2021 results; it's simply not a major part of our business. Our sales are predominantly within Western Europe and then the CIS region for tires.

Got it. So you mentioned you don’t export much outside of Russia, which I presume means finished products. Are you exporting rubber out of Russia to other continents to produce finished products? If so, what percentage of your rubber production is sourced from Russia?

We do not export rubber to other parts of the world, simply put.

Got it. As you discussed capital allocation, your 2022 guidance implies a substantial amount of additional leverage; you're also anticipating... potential returns to shareholders. What are your thoughts about implementing dividends versus buybacks?

There are options available to us for consideration. However, we haven't made any definite decisions as of this time. We will discuss this further in consultation with our Board, and we will arrive at the right course of action at the appropriate time.

Sounds good. Helpful. Thanks for your time, and congratulations.

Thank you.

Thank you, Jack, for your question. This concludes our question-and-answer session. I’d like to turn the conference back over to Mr. Reitz for any closing remarks.

I just wanted to thank everybody for their participation in our Q4 earnings call, and I look forward to touching base with you soon. Thank you.

Thank you for attending today’s presentation. The conference call has now concluded.