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Operator: Good afternoon, ladies and gentlemen, and welcome to the Gold Fields' Q4 Results Presentation. [Operator Instructions] Please note that this event is being recorded. I will now hand the conference over to Chief Executive Officer, Mike Fraser. Please go ahead, sir. Michael Fraser: Thank you very much. Good afternoon, good morning and good evening for those that have joined the presentation of our financial year 2025 results. And on behalf of the team at Gold Fields, I'm really pleased to deliver a very strong set of results for the group. Going into the presentation, I have with me our Chief Financial Officer, Alex Dall. Also joining in the room is Jongisa Magagula, our Executive Vice President of Corporate Affairs; as well as Chris Gratias, our EVP of Strategy and Business Development. As going into the presentation, we will run through a short presentation that will be shared between myself and Alex, and then we will spend some time at the back end addressing questions. I would like to first draw your attention to the disclaimer on the forward-looking statements. Just going into some of the highlights. I think, first and foremost, as I said, we are very proud to deliver a strong operating and financial performance for 2025. I think firstly and most pleasingly, we delivered a safe delivery during the year. And it's quite clear that our safety improvement plan is starting to deliver positive outcomes for the group. In terms of production, attributable production was up 18% year-on-year to 2.44 million ounces, and that was at the upper end of our guidance of 2.25 million to 2.45 million ounces. That was assisted by a strong performance across many of our assets, but most importantly, through the strong contribution and ramp-up of our Salares Norte mine in Chile. Our all-in costs and all-in sustaining costs were within guidance and were marginally higher than 2024. Most of the impact was due to higher sustaining capital, but also due to royalties and stronger producing currencies. If we look at the work that we've done on improving our portfolio, as I said, calling out Salares Norte achieved commercial production in quarter 3 2025 and steady-state production during quarter 4. And certainly, Salares' ramp-up has been a very pleasing part of the delivery during 2025. In addition, during the year, we completed the acquisition of Gold Road Resources that was completed in quarter 3 that allowed us to consolidate 100% of Gruyere and the surrounding tenements and I will touch on the outlook for Gruyere in a short while. We also continued the progressing of Windfall towards FID. We worked on updating the execution plan as well as advancing conversations with our host community on advancing the impact and benefit agreement as well as progressing the final environmental approvals. In addition, in terms of our portfolio and as communicated at our Capital Markets Day in November, we've identified a number of asset optimization opportunities across our assets, and we have started embedding those into our plans for 2026. Also to -- finally to talk to the fact that we have significantly increased returns to shareholders, and that has been communicated in our results today. This follows our decision to revamp our capital allocation policy in November, which we communicated as part of Capital Markets Day, where we now are delivering 35% of free cash flow before discretionary investments. In addition, we announced a special dividend of ZAR 4.50 per share as well as a share buyback of $100 million to be delivered during the course of the next 12 months. And that delivers a total shareholder return of ZAR 31.85 per share, which, in our view, delivers an upper quartile yield of over 6%. We also have decided to allocate an additional $250 million to our top-up program over the next 2 years, which increases that total program to around $750 million, of which $353 million is delivered now in this result. So overall, I think the key message is that we've had a safe, reliable operating delivery during 2025, and that has delivered a strong cash flow generation, which has allowed us to continue to reinvest in our business and return additional cash to our shareholders. Just again, to remind everyone of our portfolio, Gold Fields today is a global gold miner with assets in high-quality jurisdictions. We have 9 mines and 1 project across 6 countries, and these are all in attractive mining jurisdictions. We have delivered adjusted cash -- free cash flow of just under $3 billion during 2025 with around 44% of our production from Australia and key growth in Chile and Canada through Salares Norte and our Windfall Project. If we move on to the operational performance for 2025. Again, just most importantly, we're proud of the fact that we've been able to get everyone home safe and well at the end of every day. We have had, however, 7 serious injuries across the year, which again just galvanizes us to focus even more on delivering safer outcomes across our business. Pleasingly, we have also completed all 23 of the Elizabeth Broderick & Co recommendations. These have now been implemented. And now we are working on continuous improvement of our culture. As I mentioned, attributable production at 2.44 million ounces above 18% improvement year-on-year. And that meant that we were able to deliver within our original production and cost guidance that we set at the beginning of 2025. Our costs -- all-in costs were up 3% and all-in sustaining costs up 1%, largely due to increases in royalty paid as well as strengthening producer currencies, offset by dilution of higher ounces produced as well as higher quality ounces coming out of Salares Norte. I think the highlight is, again, we call out is despite the challenges we had in 2024, the safe ramp-up at Salares Norte meant that we were able to deliver well above the market guidance during 2025. That enabled us to deliver a 175% increase in cash flow from operations. As Alex will show a little later, some of that is just allocation differences from Salares Norte between operational cash flow and group cash flow. So when you look at our net group cash flow, that is up nearly 4x from 2024. Just going on to our ESG performance briefly. We've spoken about the impact of our -- positive impact of our safety improvement plan that we're implementing. We also had 0 serious environmental incidents and that's been consistent for the last 7 years. We have also made good progress on our gender diversity with now 27% of our employees being women with 28% in leadership. And of that, 20% of our women are in core operating roles. Due to the strong cash generation, we were able to share significantly to our stakeholders and ZAR 1.4 billion of the total ZAR 5.7 billion that has been created was delivered to host communities. We have also delivered significant work in building out our group legacy programs in Peru, Ghana, Chile and in South Africa with the Australian legacy program currently being scoped. In terms of decarbonization, we've delivered 15% absolute emission reduction against our '26 baseline and a 5% net increase against the '26 baseline. We've also been able to achieve full conformance against the global GISTM on tailings management. And under water stewardship, we've had 74% water recycling against our target of 73%. We've also completed our midterm review in -- of our 2030 targets. I think 2 key changes that we are considering is changing our decarbonization target to an intensity reduction target which will allow us to more actively move in line with the portfolio changes and also setting context-based water targets, given that some of our water -- our operating areas, we certainly have saline and hypersaline operating environments. Just calling out our production very briefly. We have a couple of things to call out. Gruyere, you see an increase of 42,000 ounces, mainly due to the inclusion of 100% in quarter 4 as well as an increase in tonnes milled. Granny Smith was down in line with our business plan, but what we are seeing is increasing grades as we're mining deeper. St Ives, we saw the benefit of higher tonnes milled and an increase in the yield because of more fresh material going through the mill than stockpiles. South Deep, pleasingly, we're up 16%, largely driven by improved mining grades as well as improved stope turnover, which allowed us to get greater consistency and feed through the system. Damang was down largely due to the fact we were mining -- processing stockpiles through the year, and that was due to lower yield. And Tarkwa were down largely due to the fact that we had prioritized stockpile feed through the mill rather than fresh material. And then the other big kicker for us is obviously Salares Norte giving us a 16% increase. I'll now hand over to Alex to give us a rundown on the cost changes year-on-year. Alex Dall: Thanks, Mike. We've seen a 3% year-on-year increase in all-in costs. This is higher volumes offsetting inflation as well as investing in our future at Windfall. The higher operating costs are driven by the inclusion of Salares Norte as it reached commercial levels of production, the accounting for Gruyere at 100% for the fourth quarter of the year as well as higher mining costs driven by both volumes and contractor rate increases. The higher sustaining capital is primarily due to the investment in the winterization project at Salares Norte to ensure that we got through the winter. And the higher growth expenditure at Windfall is due to a full year of consolidated costs after the acquisition of Osisko Mining in Q4 2024. And then we see the significant impact of the higher gold volumes on decreasing our cost base. Thank you, Mike. Michael Fraser: Thanks very much, Alex. So just moving on very briefly then to the -- some of the individual assets before I hand over to Alex for a more detailed financial overview. I think just starting with Gruyere, we're very pleased to have consolidated Gruyere. I think it gives us an unconstrained opportunity to unlock the potential of the asset. I mean, clearly, during 2025, we didn't entirely deliver all of the ounces that we would have liked to, but we made significant progress. We were able to deliver record material movements. So we're up 37% year-on-year on tonnes mined, largely due to a focused attention to accelerating the Stage 5 waste strip. And that really translated into where we're seeing the higher cost due to larger development capital at the site. But the other thing that was pleasing is that our mill achieved record throughput rates at 9.6 million tonnes. That was a significant achievement in getting the mill running close to its potential. Moving on to Granny Smith. Again, Granny Smith continues to be an important asset in our portfolio and delivers consistent results. The reduction in production was in line with our plan as we prioritized development and in particular, significant effort going into catching up on some of the infrastructure spend, particularly ventilation and energy reticulation capital. St Ives had a very pleasing year, where we were able to lift production by 12% and that meant that we were able to really see those higher grades coming through the mill. All-in cost was up 14%, but that was largely due to the higher capital spend, in particular, as we bore the brunt of the capital spend on the renewable energy micro grid during the year. On an all-in sustaining cost basis, they were down 5% year-on-year. Moving on to Agnew. Agnew was -- saw a 7% increase in attributable production. And that was largely due to an increase in improvement in mine grades and processes grades. But we did see a 21% increase in capital spend, which translated into a 14% increase in costs. And that, again, was largely due to the development of the Barren Lands underground mine and related brownfield exploration. South Deep, we've touched on this, production up nearly 16%, which had the effect of diluting the cost increase by only 3%. And this shows us the leverage at South Deep because of the fact that it's a highly fixed cost operation. And that translated into a significant growth in free cash flow, which is really pleasing to see. The improvement at South Deep was really driven by an improving stope turnaround. And that really is the key focus for us to improve rock on ground. And once we have rock on ground, we're able to get that through the system and deliver higher yields through the plant. So from our point of view, South Deep has really had a good 2025 and has positioned itself for a good start into 2026. Damang, we had production down 28%. That's largely due to the fact that we stopped mining in the beginning of 2025 and have really been processing stockpiles with the associated yield loss through the mill. Despite that, they did continue to deliver reasonably good cash flow on much lower volume. Moving on to Tarkwa. Tarkwa had a 12% reduction in production ounces against 2024. That was largely again due to the fact that we had prioritized a lot of waste stripping activities during the year and prioritized waste movement over ore mining. That meant that our grades were down over the year as we use low-grade stockpiles to supplement feed into the mine. That had a direct translation into higher costs as we capitalized a lot of the mining activities as well as the fact that we had lower production ounces during the year. Despite that, we saw free cash flow up over 100%, largely due to the benefits of the tailwind of gold prices. Salares Norte, without adding a lot more to that, really pleased with the performance at Seladas Norte. The mill is running really well. We're also seeing recoveries above what we had anticipated. And everything at Salares largely going on track. We did have some slightly higher capital, which Alex can talk to during the additional winterization during 2025, but that certainly has paid us back well. Cerro Corona has performed well. And although we see the all attributable production down 3%. That's largely due to the copper gold price factor. And on a specific commodity basis, we saw copper and gold being delivered above our plan, largely due to better-than-expected grade yields. All-in costs were slightly higher on an all-in equivalent basis due to some of that lower production. With that, I hand over to Alex to take us through the detailed financial performance. Alex Dall: Thank you, Mike. On the back of the higher production as unpacked earlier by Mike, and an average gold price for the period of about $3,500 per ounce, headline earnings are up 117% year-on-year to $2.6 billion. Adjusted free cash flow is just shy of $3 billion for the year or up 391% year-on-year and $3.32 per share. This has enabled us to declare a record base dividend the full year of ZAR 25.50 per share, comprising the interim dividend of ZAR 7 per share and a final dividend payable in quarter 1, 2026 of ZAR 18.50 per share. In addition, we are also in a position to announce additional returns to shareholders of $353 million, comprising a special dividend of ZAR 4.50 per share, taking the total dividends for the year to ZAR 30 per share, and a share buyback program of $100 million, which will be executed over the next 12 months. I'm also pleased that our balance sheet is in a strong position after funding both the Osisko and Gold Road transactions, and we are sitting in a net debt-to-EBITDA ratio of 0.26x. This slide unpacks our cash generated over the period. The operations before tax generated cash of $5.5 billion. After tax and royalties as well as interest and certain working capital adjustments, we generated cash flows from operations before investing activities of $4.5 billion. After capital of $1.4 billion, lease payments of $100 million and certain rehab outflows, we have generated free cash flow of $3 billion or approximately 5x the free cash flow of $600 million in 2024. This slide is the capital allocation framework that we communicated with the market as part of our Capital Markets Day in November 2025, which is all about ensuring we continue to invest in our assets to ensure safe, reliable and cost-effective operations, maintain our investment-grade credit rating and pay a sector-leading base dividend. After this, it is all about getting that competitive tension right in allocating our free cash flow generated between investing in our future, building balance sheet flexibility and delivering industry-leading returns to shareholders. Unpacking the allocation of our cash that we generated in 2025, our free cash flow before capital and dividends generated is $4.4 billion, This enabled us to deliver on our capital allocation priorities in a disciplined manner, ensuring that we got the tension right between the 3 core pillars. We reinvested in the business through spending over $1 billion on sustaining capital. And we also delivered on our growth objectives by spending growth capital and exploration expenditure of $665 million. This was to bring Salares Norte to commercial levels of production, advance the Windfall Project and to increase life and lower costs at our existing operations, in particular, at St Ives. We delivered strong shareholder returns through $1.4 billion through our base dividend, which is aligned to our revised policy and additional returns of up to $353 million. After this, we had $944 million of cash, which was used to delever and build balance sheet flexibility on the back of the debt raise to fund both the Osisko and the Gold Road transactions. We ended the year with net debt of $1.4 billion, which includes leases of around $500 million. As communicated at the CMD through the change to our base dividend policy, we are declaring a full year dividend of $1.4 billion, special dividends of USD 253 million and a buyback of $100 million. This enables us to deliver total shareholder returns of $1.7 billion over the period, which is 44% of free cash flow before growth and 54% of total free cash flow. This is in excess of half of all our cash being returned to shareholders. On the back of the additional returns, we are also -- on the back of the stronger gold price, we are also in a position to top up our program that we announced at the CMD from $500 million to $750 million over the next 2 years. After both the special and the share buyback, this leaves $400 million under the program. This graph shows our dividend history over the last 5 years. In 2025, we are able to deliver record shareholder returns of ZAR 31.90 per share, a 220% increase from 2024. And this, we believe, equates to an industry-leading yield of 6.3%. Thanks, Mike, and back to you. Michael Fraser: Thanks very much, Alex. And look, I think just what the work that was done on revisiting our capital allocation framework has certainly given us a lot of clarity on how we position the business going forward. And what I can honestly say is that, that does not limit our ability to continue to improve the quality of our portfolio. So now we will move on to what we are doing and the 3 levers of growth that we consider around improving our portfolio. So I think during the year, despite the significant cash generation and what we have returned to shareholders, we continue to make disciplined investments across the 3 growth levers during 2025. In terms of our bolt-on M&A, we did complete the Gold Road acquisition, which allowed us to consolidate 100% of Gruyere and the surrounding land package. We also significantly advanced our Windfall Project in preparation for FID, which we are still planning for mid-2026. In addition, we have been hugely successful in extending life our assets through our brownfields exploration program. And in a short while, a few slides, we'll touch on the success we've had in reserve replacement at our assets, but we spent USD 129 million in our brownfields program in '25, which allowed us to deliver a 9% increase in reserves across the year. In addition, we have really revitalized our greenfields exploration program. We have spent $101 million during 2025. This is inclusive of a USD 35 million investment -- equity investment in Founders Metals to gain a significant exposure to Antino Gold project in Suriname. In addition, we spent $21 million on our broader land package at Windfall, which is beyond the brownfield spin. And also what we did in quarter 4, we integrated the Gold Fields exploration portfolio, which gave us a significant additional exposure for our Gruyere mine. I think one of the other things to call out is, again, not speaking it up, but Salares is going to continue to be an important part of our value accretion over the coming years. we were able to have uninterrupted operations during 2025 despite the same weather conditions that we experienced in 2024, which again spoke to the effectiveness of the work that we did to prepare it for winter. We achieved commercial level of production in quarter 3 with steady-state production achieved during quarter 4. We were also able to continue to progress the Chinchilla capture and relocation program to derisk the development of the Agua Amarga extension. In 2026, our focus is to continue to maintain the steady-state throughput and stability through the plant. We still have around 2 years of mine material sitting in front of the plant. So we're certainly not mine constrained or at risk in the mining in any way. We will continue to advance the Chinchilla capture and relocation program. and starting to prepare the second half of the year, the Agua Amarga pioneering and pre-strip activities. We will also continue to undertake near-mine exploration to identify potential additional ore bodies and ore sources for the mill. Our 2026 guidance remains intact against our CMD disclosures of 525,000 to 550,000 ounces of gold equivalent with an all-in sustaining cost of between $450 and $600 per ounce. The next big growth lever for us is really progressing Windfall to final investment decision. Our key deliverables really for 2026 is finalizing the execution plan, getting the main environmental completed and awarded during the end of H1, continuing the secondary permitting approvals, which we also require by the end of June, getting the impact benefit agreement signed and really ensuring that these are all in place to take the most advantage of the weather windows ahead of the next weather -- the winter season at the end of 2026. So our plan at this stage is to really advance those key deliverables during the first half of this year. That will ensure that we have all of the site cleared and core infrastructure in place for the start of 2027, which allows us to start plant construction during the first half of 2027, with commissioning to start commencing the back end of 2028 with first gold due in 2029. So the critical path for us over the next few months is really around the key permitting and approvals, and we are confident that we remain on track at this point in time, but we'll provide a good update at the Q1 operating update in early May. Just moving on to the Gold Road acquisition very briefly. Again, we think that this was a very well-executed transaction. We got the timing right. This was always something we wanted to do, and we feel very pleased with the outcome of what this has delivered. So for a net $1.4 billion, we were able to consolidate 100% of this asset. And that allows us to really deliver on the full potential of this asset and optimize the full life of mine. It also allows us to bring in 100% of Golden Highway and that entire Yamana land package, which we have already identified a number of targets to build into our longer-term plan. So the key focus for us in 2026 is advancing the studies to optimize the deposit, obviously, looking at ways of accelerating access to some of those high-grade material to supplement the lower-grade Gruyere deposit as well as investing in further drilling across the Yamana package. Just going on to reserve replacement. This is ultimately how we measure the health of our -- the life of our portfolio. Pleasingly, we were able to deliver additional 4 million ounces in reserves over the year, which gave us a 9% improvement in our overall reserve position. So with the 2.5 million ounce reserve depletion, we saw an increase on the Gruyere addition from the other 50%. Granny Smith, we've included the Z150 discovery. We've also added additional ounces for Santa Ana and Invincible at St Ives. Agnew replaced depletion, and this is the nature of that ore body where they just continue to replace depletion on an incremental basis, and Tarkwa, we were able to convert resources to reserves through that additional price assumption adjustment as well as removing some of the key operational constraints. And this is going to be a key focus for us to continue to replace reserves. Just moving on then to the outlook and conclusion. For 2026, our guidance really is completely in line with our guidance that we provided at Capital Markets Day for 2026 with production targeted between 2.4 million and 2.6 million ounces. Total capital is between $1.9 billion and $2.1 billion. All-in sustaining costs between $1.8 (sic) [ 1,800 ] and $2,000 and all-in cost $2,075 million to $2,300. We've included the capital markets guidance next to those numbers and the only deltas that we've adjusted for in 2026 guidance is really foreign exchange and royalties, and that we've just run through on the cost numbers. I think for our focus this year is really about continuing to improve safety performance, ensuring the predictable delivery of our plan and continue to improve the portfolio quality by advancing our greenfields program and advancing Windfall to FID. Key priorities we've set out for each of our assets are really in line with the Capital Markets Day plan for each of our assets. We have a number of studies and activities and capital investment going into each of these assets. to improve the quality of these individual assets and also clearly progressing 2 key permitting and lease renewal processes. Firstly, the Tarkwa renewal and secondly, the permitting around Windfall. So we have a very clear plan, and we are progressing against our strategic plan that we set out in our Capital Markets Day in November. So with that, we've come to the end of the presentation. Thank you for listening. And now we hand over to Jongisa to facilitate the questions. Jongisa Magagula: Thank you so much, Mike. We've got participants that are joining on the webcast as well as on the Chorus Call. So to keep it balanced. I'll take 2 questions from the webcast and then switch over to the voice-only Chorus Call questions. The first one comes from [ E Adeleke ] from [ Marotodi ] Capital Markets. He says, congratulations on your stellar set of results. The first question, what is the most troublesome KPI on your radar at the moment? And how are you anticipating moving the needle on it? His second one says, could you outline the current exploration road map and clarify if excess liquidity is being prioritized to these operations? Okay. So those are the first 2. Michael Fraser: Thank you very much for those questions. Look, I think just on the key issues undoubtedly, and I'm sure many words are going to be written about it. But across the industry, we are facing cost inflation, not just the impacts of producers, strengthening producer currencies, increasing royalty rates, but there is some pressure on costs. Pleasingly, we have a number of opportunities to really arrest that. And that was really what we were trying to unpack at our Capital Markets Day and what we try to present in here. So many of those costs are an outcome of the things that we do to improve the structure of our business, and we're very focused on that. But that's a very important focus. And I think the second one, undoubtedly is with the changes that are going on in Ghana is to really progress that the Tarkwa lease renewal and the safe and reliable transition of the Damang mine. So those would be, I think, in the top of our mind, the things that are really important for us to progress. I think in terms of exploration, I absolutely think if you think about the levers of growth and the opportunities in front of us, M&A is always really expensive, but you have to be opportunistic to really grab things that present themselves to improve the quality for future generations. Obviously, our brownfield exploration continues to be the lowest cost per ounce replaced of discovery, and we'll continue to prioritize our brownfields program, in particular, at Windfall, where we have a very, very significant land package that we're trying to identify the next Windfall opportunity. But then in terms of our greenfields program, really ramping that up because we've seen what success looks like. Salares Norte was a product of our greenfields exploration strategy. And you can just see the multiplier of that. So we are very much focused on finding ways of really building our longer-term pipeline through our greenfields program, and you've seen that through the investment in the Antino project through Founders Metals, where we've been able to put our foot on what we think is a highly prospective next horizon opportunity for us. So as you rightly identify, I think more value is going to be created through the drill bit for the next generation than it is necessarily by buying assets, although we're always going to have to be mindful of being able to be agile when those opportunities present themselves. Jongisa Magagula: Good. I'm going to pause and hand over to the operator on the Chorus call to see if there's any questions. I'm not hearing that there are any questions on the Chorus call, so we'll just carry on. The next one, sir, is from Luca Grassadonia, from VSME report. He says, good afternoon, could you please explain the rationale for a $100 million buyback on a market cap of $47 billion? Michael Fraser: Thanks for that Luca. And I think I'm going to probably hand that question to Alex to take. Alex Dall: Certainly. Thanks, Mike, and thanks, Luca, for that question. I think what we need to bear in mind is that we have competing shareholder priorities depending on the jurisdiction that they are in. We have North American shareholders who prefer buybacks and have been looking for them. So I think what we've done here with the buyback program is it is small relative to the total returns to shareholders. It approximates about 6% of the total shareholder returns. So we think it is just finding the right balance of mixing our returns between both dividends -- special dividends and buybacks, top-up returns. Michael Fraser: Alex, and I would just say that the views amongst shareholders about buybacks are quite polarized at times. This would be the first time that we've really been in the market buying back shares. And it really is an opportunity for us to just see how it goes with a very low-risk entry. Jongisa Magagula: Okay. Just the second question, also on the webcast is, do you plan on doing any joint ventures with Zijin Mining? Michael Fraser: Yes. Look, I think firstly, I would want to say that Zijin has been shown really remarkable growth. And we engage them in all of our industry bodies in the countries that we operate. And we see them as a very credible miner who've really developed their business very, very well. So we have a very productive relationship with them. And certainly, we are not closed to working with any of our peer groups around the world. Our point is always clear. We're here to exist to create value as long as we can find partners who share our values and are willing to work in line with our standards and what our expectations are of ourselves and the priorities for our shareholders. Then, frankly, it would be incumbent on us to be constructive about any potential working relationship. Jongisa Magagula: I'm going to pause again and just see if there are any questions on the Chorus Call, operator. So I'm hearing that there are, please go ahead. Operator: We have a few questions. The first question we have comes from Chris Nicholson of RMB Morgan Stanley. Christopher Nicholson: I've just got 2 questions, please. So I know we touched on it on our call this morning. So can you just go back to the current situation in Ghana. My understanding that royalty bill is now before the parliament. So is it your base case that royalties will be lifted on Tarkwa in particular? And then in relation to the ongoing lease renewal negotiations you're having with the government there. I know that there's a couple of things at stake. Could you talk to the fact whether the 10% government ownership is one of the issues that are at stake in relation to lease renewal? And then just the final one, just -- I mean, obviously, we're looking at roughly about $2 billion of CapEx this year. I mean I've been going through my model today. And the one region I'm specifically interested in is in the Australian region. It looks like you spent somewhere close to about $600 million in 2025. Could you give us what the CapEx number would be for 2026 in the Australian region? It looks to me like it's going to be north of $1 billion? Michael Fraser: Thank you, Chris. I'll come back. Alex can take the CapEx question, but let me just start with Ghana. You're quite right. The royalty bill is in front of parliament. Under that, the parliamentary procedure unless it's withdrawn, it will be passed into law within weeks. So you would expect it during the course of March, I expect to be announced as law. Under our current lease agreement at Tarkwa though, we won't be immediately impacted because our lease agreement does include some stability provisions, which means that it won't apply to us at least until the end of our lease, which expires in April of 2027, which, as we know, is not that far away, but it does provide some protection during the course of 2026. But I think the issue around the royalty rates and will it apply going forward, I think is something that is still not yet entirely clear because as you rightly call out, there's also a debate about, well, is the 10% ownership appropriate? And it's not just for -- for Tarkwa, there's many other assets don't have any local participation or any state ownership in the asset. And I think the way that we're having the conversation with government, and it's very early days. So there's nothing is hard on the table from proposals either from our side or their side, just to be clear, we're really talking about the process at the moment is it's really about how we share value here. And today, there's already a significant sharing of value with the government of Ghana. And the conversation we're having is to say, look, you can pull many levers here. But just bear in mind that you can't put all the levers because otherwise, you end up in a world where there's -- it makes very little sense for companies like ours to continue to invest. So I think the conversation is really to try and be quite broad and pragmatic. And I do think the government is aware of the fact that now that you've pulled -- you shot 1 of the arrows in terms of royalties that you've got to be quite pragmatic about how you think about the rest of the package. And I also don't think it's off the table to think that there could be potentially some other movements. The ministers and the Minister of Finance have already been talking about reducing the stability levy from the current 3% to 1%, for example, to mitigate some of those impacts to the higher royalties. So there's a degree of pragmatism. But I think as the bill stands today, we will see that new royalty rate coming through. But we certainly think that the door is now not closed to continue to talk about what a fair sharing of value looks like going forward. Alex? Alex Dall: And thanks, Chris. To just go to your capital, you are right, there are going to be significant increases in Australia. The first one is at Gruyere, an increase of about $150 million. That is just purely due to consolidating at 100% versus 50%. Then at Granny Smith, we've seen close to $100 million increase, and that's as we invest in ventilation, cooling and power upgrades to access the Zone 150 ore body that you saw Mike talk about the additional reserve of 0.5 million ounces there. And then at Agnew, we're also seeing a $50 million as we invest in tailings, paste plant construction as well as ventilation and cooling upgrades. And then also St Ives about a $50 million increase at the Invincible complex development and on the materials as we advance the materials handling system. So you're right. If you also add the strong Australian dollar that moves your $600 million closer to the sort of $1 billion mark. Jongisa Magagula: There are quite a few questions still on the Chorus Call. And I understand that there was an issue with connectivity. I'm going to take another one on the Chorus Call. Operator: [Operator Instructions] The next question we have comes from Rene Hochreiter of NOAH Capital. Ren Hochreiter: Very nice cost control, especially. Mike, you have a dividend policy, and I get that one. But would you consider having a special dividend policy? Like it looks like at the moment, a special dividend is declared depending on what your capital allocation is. But would you like have a more rigid policy going into the future some time? Michael Fraser: Look, Rene, thanks for that question, and I'll ask Alex to contribute it to as well. I think from our point of view, we look at whatever we provide in top-ups is really a function of probably 3 things. Firstly, are we maintaining a good balance sheet? So are we maintaining an investment-grade balance sheet. Secondly, are we limiting the opportunities to reinvest in our business for the future generation? And thirdly, what does the total dividend look like in relationship to our peers? And that's why we always talk about targeting upper quartile total returns to shareholders -- total dividends to shareholders. So that special dividend in my mind will always be something that is a function of those other 3 elements. And so being very precise about it, in terms of formula, I don't think really serves us well. And that's why in the way that we've described capital allocation it really is about sharing the cash flow that we generate between those 3 elements of maintaining a strong balance sheet and keeping a strong balance sheet to give us flexibility for the future, making sure that we are in the upper quartile of total dividends payable to shareholders. And then thirdly, making sure that we've got cash to reinvest in the future. So that's how we thought about it. But I don't know, Alex, if you got any other thoughts. Alex Dall: Well, I think that's right, Mike. And we also obviously benchmarked our base dividend policy, and we do believe that it is one of the top ones in the sector. And we were very strategic in how we thought about, do we allocate it purely on free cash flow, but we actually decided to go with free cash flow before growth investments that we don't penalize shareholders returns on us investing in the future. So we honestly believe giving back 1/3 of all free cash flow before growth investments will deliver strong returns to shareholders at sort of consensus gold prices. If we see gold prices above those consensus prices, I think there will be room to deliver special dividends. Ren Hochreiter: Okay. Just a couple of other questions. Under underground drilling results at Gruyere. Is there any update on that? Michael Fraser: No, early days yet, Rene. So we'll probably only be in a position to provide more detail maybe in 12 months. We've got a pretty good program during the course of this year. We know that the ore body is there. It's really just trying to size it up. And in parallel, we'll be doing the trade-offs of the additional cutback versus moving into the underground. The underground will happen at some point. But pretty early days. We know what the grade is largely. It's pretty consistent, but it's really now sizing up the size of the ore body. Ren Hochreiter: Okay. And just 1 more question, if I may. St Ives grades, mine grades were down 29% and the yield was up 3%, and Gruyere's mine rates were down 18% and the yield was down 6%. The yield was down or quite a lot different from what the mine grades were. Can you sort of explain that a little bit? I'm a mining engineer, but I still don't understand that. Michael Fraser: I think what always happens is that it's a function of how much of the stockpile material that we're processing. At St Ives, we also had an impact where we were actually processing the Swift Shore and Invincible Footwall South, which were 2 open pit operations, which come in at a slightly lower average grade than our underground material. So it really becomes a mix. And that really meant that our mining grades were slightly lower year-on-year, but we had more mined material going through the plant and therefore, you saw yields being slightly higher as it replaced -- as it replaced stockpile material. And then I think on Gruyere, it's also a function of higher stockpile processing because even though we moved massively more material in the year, we weren't able to get all of that through the mill because the mill was also stepping up in terms of its volume of process. They moved up nearly 1 million tonnes year-on-year. So that's kind of what you're dealing with. Jongisa Magagula: I'm going to come back into the webcast questions, and we're going to have to pick up pace because I'm just mindful of the time. The next one is, can you discuss any outstanding permits that might be needed for Agua Amarga? The incoming Chilean administration has hinted at easing some regulatory burdens. Do you see any potential that such executive actions could ease issues at Salares? I'm going to cluster a few of Ghana-related questions just so that we can speak to it in one go. The next 1 is from Cornelius from Robeco. He says, do you expect the proposed royalty increase in Ghana will lead to higher royalty payments for us in the next 5 years? And then the other one that is related to Ghana is for Tarkwa, how are you treating the lease renegotiation for your reserve calculation? What outcome on the lease renewal do you assume in the reserve calculation? And that's from Reinhardt van der Walt from Bank of America. Shall we do those 2? Michael Fraser: Thank you. So just on Agua Amarga, I think we feel quite confident. There's nothing additional that we require. So we are now -- it really is -- the progress is largely aligned to our Chinchilla capture and relocation program. So that's the only thing. But it's not permit related. I think in Ghana, yes, if the royalty payments -- the royalty regime would apply to us, currently, we pay what the industry pays, which is around 5% royalty. Under the new sliding scale that's 6% to 12% even if you offset 2% of the stability levy at worst -- sorry, it's likely at these kind of gold prices to still mean an additional 5% royalty payment, if that's what gets applied under our new lease conditions. So whilst in the next 12 months, it doesn't impact us. It could impact us beyond 2027. And in terms of, Reinhardt, the question that you've asked on reserves, we have applied the full life of mine reserves into our declaration, and that's what the application is for. So anything that would limit our horizon on our lease could potentially impact that. But we're certainly confident that we'll find the right path on the term of lease. Jongisa Magagula: If I can tag one on, Mike, from Shaib, which is along the same lines. Could you quantify the increase once it starts affecting Tarkwa the impact to unit costs of increased royalty? Michael Fraser: Alex, do you want to take that? Alex Dall: Yes. So at current spot prices, that would be $350 an ounce increase -- $5,000 an ounce. Jongisa Magagula: Great. I'm going to go back to the Chorus call to take an additional question or 2. Operator: The next question we have comes from Adrian Hammond of SBG. Adrian Hammond: Just to follow up a bit on Windfall. The project as it stands, you've given us a CapEx number at Capital Markets Day, although there is still due in EIA and IBA as well. And obviously, the most importantly, the feasibility study. So I guess the question is, what's your confidence in the CapEx number given the feasibility has yet to be done? And I'm assuming that your reserve gold price increase to 2,000 will have a large influence on the project and the reserves, et cetera. So I guess, should we be looking forward to a -- I'd like to call it a Tier 1 asset for Windfall, but I don't see it as a Tier 1 yet, not because of it's jurisdiction, but because of its size and cost profile, but perhaps you can enlighten us? Michael Fraser: Adrian, maybe just a couple of things. So this investment in Windfall is what we look at as almost the first phase of the development of this entire property. So the first phase of this was always designed to be -- to fit in with provincial approvals, which was always going to be the fastest process, fastest pathway to get this project started. That is going to really deliver us at 300,000 ounces for the next 10 years and banks it in. But we're already starting the next second phase of studies, which will help us to further optimize the asset. That's about looking at potential additional material handlings, potentially a shaft for the long term. We know this is a 20-year plus asset. In addition, we're looking at ways of improving the yield of that asset. But today, we have a fairly tight footprint that is within the current approval that we -- that is being developed. And so just to be very clear, the feasibility study for this asset that supports the environmental approval was actually done 2 to 3 years ago. So the only thing that we're really working on is optimizing our underground mining. So even with a change in reserve price assumptions because of the nature of our footprint, in this first phase of the project delivery, it's not going to have a material impact on the reserves in the near term. But the bigger opportunity really is to go into that second phase of permitting, which hopefully will allow us to widen the footprint and create further opportunities to mine this ore body. And then we've got the opportunities of all the nearby resource that we haven't even started including in this. So we absolutely do believe that in the long term, it's Tier 1. Yes, you may look at it today and it might be too small. But the potential of this asset is -- and the footprint is really huge, and it's up to us to now migrate to that. But the first approval is really this. In terms of the capital cost, we felt that when we got to November, we put a lot of work into understanding the underground mining. We've put a lot of work in updating our cost estimates and the execution plan. And certainly, that presented the best view of it. In terms of the IBA, that's largely going to be translated into some form of royalty equivalent-type participation, I suspect. But I do think that that's not going to necessarily hit our capital number. I think the biggest risk on capital is possibly likely to be any significant changes in exchange rates, U.S. dollar Canada, but also just an underlying contractor and project productivity. I mean we've seen and we've been engaging with some of the peers who are delivering big projects in Canada. And the biggest concern is just like as years passed, productivity rates are dropping off. So that's probably one of our bigger concerns. But Chris is on the line. I don't know if, Chris, you want to add anything to that? Chris Gratias: No, Mike, I think you covered it extremely well. Maybe I just -- the one point I would add as to the prospectivity that we see. This gets to a related question before about additional investments in exploration. Well, obviously, are prioritizing increased spend at Windfall. And as we think about future pipeline management and people always ask us, what's next after Windfall, we kind of say, we highly are excited about the next Windfall Project will be found at Windfall. Jongisa Magagula: I'm just mindful of time. I'm going to take 2 questions from... Adrian Hammond: Thanks for the color there, Mike and Chris. That's very useful. And then to follow-up, if I may, for Alex on inflation rates, which follows on about the CapEx. We've seen some incredible increases with some of your peers as well. And it sort of reminds me of the price cycle where competition for labor has become a thing. Are you able to put some color to us on what the labor landscape is like for you out there right now, given where record prices are at? Just so that we can get a sense of when we're looking at these companies, on a cost basis, what is actually a real cost increase versus a real -- an inflationary increase. It's quite nuanced. Alex Dall: Thanks, Adrian. And we're not quite seeing -- we're not seeing the inflation we saw during COVID, but I mean we are probably seeing CPI plus a couple of percentage point inflation across the board. We are continuing to see labor pressure in Australia. I think luckily with the Windfall construction, we've actually modeled sort of all the labor and other construction projects in -- that are going on in Quebec, and we think we actually fall in quite a good window from labor availability from some projects ramping off before others ramp up in that construction phase. But I think the real labor pressure we're experiencing in Australia at our mining contractors in particular. Jongisa Magagula: Thanks for that, Adrian. I'm going to take questions from Josh Wolfson, and we are on time. So I do note that there's still quite a few from the webcast. We'll take note of them and then reach out to answer them directly. The first one from Josh says, can you provide more details on turnover at Gruyere? How would the operating trends there differ from GFI's other operations in Australia? I'm assuming he's talking labor turnover. And then can you speak to high-level indications of quarterly expectations for 2026 production, thinking about sequencing and seasonality? Michael Fraser: Yes. Thanks very much, Josh. Good to chat. Look, I think Gruyere absolutely has been a challenge with our contractor. They've seen in the fourth quarter, turnover rates of up to nearly 50% amongst their workforce. That's been a combination of certainly some of the iron ore producers really being quite aggressive in hiring. But it also demonstrated that when we looked at it, that probably our contractor wasn't really being market competitive. And so we have rectified that and tried to address that trend. And we're certainly hopeful with that intervention, we'll start seeing a recovery on that number. In terms of seasonality, I think we should see, given the portfolio effect, while some of the assets have a little bit of a second half weighting that probably would be within 5% of the kind of variation by quarter. So I don't think we're going to see a huge variation across the year. And 1 of the things we're working really hard to do is to eliminate that hockey stick effect that we've had in years gone by, where we've had a lot of production weighted to the second half, which is really a function of the fact that we weren't having high degrees of mine plan compliance, which we're really working back into our system to deliver more predictable outcomes. Jongisa Magagula: Thanks, Mike. I'll hand back to you for closing comments because we are over time. Michael Fraser: Great. Yes. Thanks very much, Jongisa, and thanks so much for all the great questions that have come up. Thank you very much for the interest in Gold Fields I think we've made very good progress on our strategy last year, and we'll continue to deliver more of the same. That's our objective for this year. So thanks all for listening and look forward to engaging you in the coming weeks.
Operator: Good morning, everyone. Thank you for standing by, and welcome to Cenovus Energy's Fourth Quarter and Full Year 2025 Results Conference Call. [Operator Instructions] As a reminder, this call is being recorded. I would now like to turn the meeting over to Mr. Patrick Read, Vice President, Investor Relations and Internal Audit. Please go ahead, Mr. Read. Patrick Read: Thank you, operator. Good morning, everyone, and welcome to Cenovus' 2025 Year-End and Fourth Quarter Results Conference Call. On the call this morning, our CEO, Jon McKenzie; and CFO, Kam Sandhar, will take you through our results. Then we'll open the line for Jon, Kam, and other members of the Cenovus management team to take your questions. Before getting started, I'll refer you to our advisories located at the end of today's news release. These describe the forward-looking information, non-GAAP measures, and oil and gas terms referred to today. They also outline the risk factors and assumptions relevant to this discussion. Additional information is available in Cenovus' annual MD&A and our most recent AIF and Form 40-F. And as a reminder, all figures we reference on the call today will be in Canadian dollars, unless otherwise noted. You can view our results at cenovus.com. For the question-and-answer portion of the call, please keep to one question with a maximum of one follow-up. You're welcome to rejoin the queue for any other follow-up questions you may have. We also ask that you hold off on any detailed modeling questions. You can follow up on these directly with our Investor Relations team after the call. I will now turn the call over to Jon. Jon, please go ahead. Jonathan McKenzie: Great. And thank you, Patrick, and good morning, everyone. I want to begin by recognizing our safety performance. Safety remains the cornerstone of everything we do at this company and every decision we make. At our Sunrise Oil Sands asset, our teams have now gone through 2 full calendar years and more than 1.8 million hours worked without a reportable incident. Now this is particularly notable because 2025 represented the highest activity level at Sunrise in the past 6 years with close to 950,000 hours worked as they completed 2 turnarounds and advanced the asset's growth program. This outcome reflects our deep commitment to safety even during periods of elevated activity. Personal safety for each of our employees and contractors remains a critical priority, which must underpin everything we do. We are working to build on our strong performance and continuously improve to ensure that our people come home safely each and every day. So now to our results. 2025 was a very important year for Cenovus in which we executed a long list of priorities across the company. Our performance in 2025 is a testament to the great people and assets we have at Cenovus. When I look at all the things that we accomplished this year, I couldn't be more impressed by the way our people met the challenges we faced. We had a very ambitious agenda, and we collectively delivered against it. Operationally, our teams delivered exceptional performance, including setting multiple upstream production records across our assets and executing consecutive quarters of top quartile downstream reliability and profitability. Our upstream production of 834,000 BOE per day in 2025 was the highest ever for Cenovus and up 3% from 2024, excluding the impact of the MEG Energy acquisition. We also reduced total upstream nonfuel operating costs by approximately 4% from the year before. In the Downstream, our refineries ran well through the year with a combined utilization rate of 95% across the Canadian and U.S. segments. This included the impact of a major 59-day turnaround at Toledo, which was completed 11 days ahead of schedule. Now at the same time, we lowered costs, delivering a reduction in operating costs of around $4 per barrel in the Canadian Refining segment and $2 per barrel in our U.S. operated refineries. We recognize there's more work to do as we continue to drive down costs and leverage our commercial capabilities to enhance our market capture. We also achieved major milestones across our growth projects in 2025. This included completing the Narrows Lake tieback to Christina Lake, a first of its kind extended steam reach pipeline. Completing the facilities work on the Foster Creek optimization project, which delivered production growth well ahead of schedule and completing the construction and installation of the tie-ins on the West White Rose platform. These projects reflect an enormous amount of effort, determination, and ingenuity from all parts of our organization that I couldn't be -- and I couldn't be more proud of what we've delivered. Now 2025 also saw us complete 2 significant transactions. Starting with MEG Energy. We have long recognized the quality of the resource and the synergy opportunity available if we consolidated the Christina Lake area. When MEG became available, we responded accordingly. The acquisition was successfully closed on November 13, adding over 100,000 barrels a day of top-tier resource located directly within our largest producing SAGD asset. The addition of MEG's assets and people have strengthened our industry-leading heavy oil portfolio and solidified our position as the preeminent heavy oil producer, not just in the Western Canadian Sedimentary Basin but globally. We also sold our interest in the WRB refining joint venture at the end of the third quarter. As a result, we now have full operational, commercial, and strategic control of our Downstream business, which remains critical -- which remains a critical component to our heavy oil value chain. Together, these transactions position the company for continued material value growth over the long term. So now turning to our fourth quarter results. Upstream production in the fourth quarter was 918,000 BOE per day, headlined by oil sands production of 727,000 BOE per day, both records for the company. Including the full benefit of the MEG acquisition, which closed in mid-November, we exited the year with production over 970,000 BOE per day in December, including nearly 786,000 BOE per day from the oil sands. We are encouraged by the recent performance and expect our operating momentum to continue into 2026 and beyond. At Christina Lake, production averaged 309,000 barrels a day in the fourth quarter. That includes roughly 6 weeks of production from the newly acquired Christina Lake North asset, which achieved its highest ever production rates of over 110,000 barrels a day in the quarter. The combined Christina Lake is the largest and highest quality thermal asset in the industry with a reserve life measured in decades. The integrations of systems and people is largely complete, and we have delivered a majority of the expected corporate synergies already. Work is now progressing at pace to capture operational synergies. We have begun a delineation and seismic program at the Christina Lake North asset, which will allow us to optimize our go-forward development plans for this resource. Our technical groups have begun leveraging our scale and operating practices to deliver near-term production and cost savings. We have also begun drilling a 42-well redevelopment program, which will support additional production volumes in 2026 and 2027. We are very comfortable in our ability to deliver the $150 million of annual synergies in 2026 and '27, and over $400 million of annual synergies by the end of 2028. We are delineating additional synergy opportunities as we fully integrate our future development plans for the broader Christina Lake region. Now at Foster Creek, we achieved a production record of 220,000 barrels per day in the quarter, reflecting the impact of the Foster Creek optimization project. Incremental steam capacity of approximately 80,000 barrels a day was brought online in mid-2025. And in the fourth quarter, the water treatment and deoiling facilities were commissioned and put into service. With these milestones behind us and production largely ramped up, we have successfully delivered around 30,000 barrels a day of growth at Foster Creek well ahead of schedule. Looking forward, new well pads associated with the optimization project will be brought online at Foster Creek this year, which will support increased production levels or support the increased production levels we have seen. We also continue to progress our enhanced sulfur recovery project that will reduce operating costs by about $0.50 to $0.75 per barrel when it comes online midyear. At Sunrise, following the turnarounds executed in Q2 and Q3, production rose to over 60,000 barrels a day in the fourth quarter. The first of the new well pads from the East development area, incorporating Cenovus well pad design for the first time at Sunrise is currently steaming and expected to start up in early 2026. We will bring on a total of 3 well pads in this high-quality reservoir in 2026 and at least one more in 2027. This development will deliver the next phase of growth as we progress our plans to increase production to over 70,000 barrels a day by 2028. Now with the work we completed earlier this year, we have also extended the turnaround cycle from 4 to 5 years at Sunrise. That means there is no major cycle ending turnarounds at Sunrise until 2030, providing an extended runway while we grow volumes and optimize the asset. The Lloydminster thermals had an exceptional fourth quarter, partly as a result of the highly successful redevelopment well program that significantly exceeded our expectations. In tandem with strong base well optimization, production averaged over 107,000 barrels per day in the quarter, more than 10,000 barrels higher than the previous quarter. This includes the impact of the sale of Vawn at the beginning of December. And building off the success we had in 2025, we'll be deploying an even larger redevelopment program in Lloydminster in 2026. Now turning to the Atlantic. At West White Rose, we're currently conducting systems integration testing, and we're in the final phase of commissioning. Our teams have done a fantastic job of safely progressing the scope in spite of particularly challenging weather in the North Atlantic. We've seen an abnormally severe winter storm season with waves as high as 17 meters and winds up to 170 kilometers per hour. Through this, our people have continued to make steady progress. We have completed the welding and coating of the platform legs and the main power generators are fully commissioned. We also opened the living quarters on the top side prior to year-end, transitioning staff from using a flotel vessel to fully manning the platform. Now we've guided you to expect first oil in the second quarter. With the weather disruptions we've seen, that timeline will be tight but our people are determined and do incredible work as we push this forward at pace. Also in the offshore, in conjunction with our partners in Asia, we successfully extended the gas sales agreements in China for both Liwan 34-2 and Liwan 29-1 subsequent to the quarter. The extensions will enable sales through the end of the field's production periods in 2034 and '40, respectively. This increases sales volumes within our 5-year plan and add nearly $2 billion of incremental free cash flow to these assets over the life of the fields. Now moving to the Downstream. Fourth quarter results underpin the profitability and competitiveness of our assets in a relatively weak crack environment. In the quarter, the Canadian Refining business ran at its highest rates of production through the year with crude throughput of 113,000 barrels per day or utilization rate of about 105%. in U.S. Refining, our results in the fourth quarter reflect not only our operated -- sorry, reflect only our operated assets as our interest in the WRB refining was divested effective September 30. Our U.S. refining business delivered crude throughput of 353,000 barrels per day or approximately 97% utilization. While the market crack spreads in Chicago area deteriorated significantly in early December, which is typical for this time of year, we're able to capture a larger share of the margin available. Excluding the receipt of onetime pipeline settlement, our adjusted market capture was around 95% in the quarter. This reflects both seasonal product mix impacts related to our configuration as well as our ability to capitalize on commercial opportunities we saw in the market during the quarter. Now I'm going to pause for a minute, and I will turn this over to Kam to walk through our financial results. Kam Sandhar: Thanks, Jon. Good morning, everyone. In the fourth quarter, we generated approximately $2.8 billion of operating margin and $2.7 billion of adjusted funds flow. Operating margin in the Upstream was over $2.6 billion, in line with the prior quarter with record production in the oil sands more than offsetting declining benchmark oil prices. Oil sands nonfuel operating costs decreased to $8.39 a barrel in the fourth quarter, over $1.25 lower than the prior quarter due to higher production volumes and reduced maintenance activity. As Jon mentioned, our Downstream business continued to demonstrate strong performance in the quarter. Downstream operating margin was $149 million despite deteriorating regional crack spreads in the U.S. towards the end of the year. This included $138 million of inventory holding losses and $15 million of turnaround expenses, partially offset by a onetime pipeline settlement receipt. Excluding these impacts, downstream operating margin would have been approximately $235 million in the quarter. In the U.S. Refining, operating costs, excluding turnaround expenses, were $11.57 a barrel, reflecting higher fuel and electricity prices, planned maintenance activity and modestly lower throughput quarter-over-quarter. The fourth quarter environment was particularly favorable to our configuration with heavy crude differentials widening, diesel and jet fuel advantage relative to gasoline and lower benchmark crude prices benefiting asphalt and other product margins. Our marketing teams were able to capitalize on market opportunities in the quarter, while at our Lima and Toledo refineries, we continue to leverage and enhance the interconnectivity of the sites. On a sustained basis, we continue to guide to adjusted market capture of around 70% at a $14 WCS heavy oil differential with opportunities to improve this over time. Capital investment in the fourth quarter was nearly $1.4 billion, resulting in full year capital spending of $4.9 billion. This spend supported sustaining activity across the business, along with investment in growth and optimization, including capital directed to our 3 of our major capital projects at Narrows Lake, Foster Creek and West White Rose. As we look forward, growth spend in 2026 -- in the 2026 plan is approximately $300 million lower at the midpoint year-over-year. This growth spend includes commencing the drilling at West White Rose, advancing the Christina North expansion project, which will support growth at Christina Lake to around 400,000 barrels a day. Net debt was approximately $8.3 billion at the end of the fourth quarter, an increase of approximately $3 billion due to the MEG transaction, partly offset by the receipt of $1.9 billion of cash proceeds from the sale of WRB. Shareholder returns in the fourth quarter were $1.1 billion, including $714 million through share buybacks and $380 million through dividends. After closing the MEG transaction, we've adjusted our framework to balance deleveraging and shareholder returns while we move towards our long-term net debt target of $4 billion. When net debt reaches $6 billion, we will aim to increase shareholder returns to around 75% of excess free funds flow. Also in the fourth quarter, we recognized a current tax recovery of $189 million, primarily driven by the integration of MEG's business with Cenovus. Full year 2025 current taxes were approximately $780 million, well below our original guidance of $1.2 billion to $1.3 billion. Our cash tax guidance for 2026 remains unchanged at $1 billion to $1.3 billion at around a USD 60 WTI price. With the strong operational performance, meaningful progress towards capturing MEG synergies and a robust balance sheet, we are well positioned to continue to deliver value from our opportunity-rich portfolio. I'll now turn it back to Jon with some closing remarks. Jonathan McKenzie: Great. And thank you, Kam. 2025 was a great year for this company by any measure and a testament to the dedication and determination of the people that we have in this organization, including those who most recently joined us from MEG. Our disciplined execution and focus on operational excellence enabled us to deliver significant milestones across the major projects this year while setting numerous production records at all our oil sands assets. In our Downstream business, we've continued to demonstrate the potential of the assets as evidenced by consecutive quarters of top-tier reliability and meaningful cash flow contribution. Completing the strategic acquisition of MEG has materially extended our industry-leading low-cost, long-life resource base. Through the integration of our highly complementary assets and the focus on the ingenuity of our combined teams, we expect to create significant value from this business for years and decades to come. Anchored by our strong financial framework and balance sheet, and the many opportunities ahead of us, Cenovus is more resilient, competitive and durable than ever before. And with that, we're happy to answer any questions you might have. Operator: [Operator Instructions] Our first question will come from the line of Dennis Fong from CIBC World Markets. Dennis Fong: First and foremost, congrats on a really strong quarter and year. My first one here focuses really on the MEG assets that you've now taken over. I was hoping to find out what some of the next steps happen to be in terms of obviously turning the asset over to your teams? And then how are you looking at applying, we'll call it, Cenovus' best practices and technical understanding on the asset to really drive stronger performance and realize the synergies that you outlined or more with the initial presentation. Jonathan McKenzie: Sure. So maybe I'll take a crack at it, and then I'll turn it over to Andrew Dahlin to give you some of the details on the production side. But I think we've had this asset now for, I guess, it's about 3 months now. And I'd say that particularly during the first 6 weeks since we acquired this, we moved really, really quickly on getting after all the corporate synergies that we had outlined in our investment case. So everything from the HR synergies through the commercial synergies, the finance synergies, getting the amalgamation done to realize some of the tax synergies. That was all done before year-end. And so we kind of look at that run rate of [ $150 million ], and we're very, very comfortable that the [ $120 million ] that is sort of the corporate component of that is very realizable and has largely been captured now. So as we kind of move into 2026, we're really focused on the operations proper. We have started a lot of work on delineating the reservoir in advance of doing our redevelopment program, which will kick off next month and really looking at the well pad development and seeing where we can insert ourselves to impose some of our operating practices and well design on that. And Andrew will give you a bit more detail. But we haven't lost sight, Dennis, of the bigger picture and the view of how do we bring more synergy forward and how do we go beyond the $400 million that we had articulated in the business case. And we're comfortable there's a lot more there, and that's what we're working on now. But Andrew, maybe you can talk a little bit about some of the things you're doing in the field to get additional production synergy out of those operations. That's right. Andrew Dahlin: Yes, it's Andrew Dahlin speaking. Yes, maybe just focusing on production itself. So the first thing we're going after here in the first half of this year is the start of the redevelopment campaign. So the plan is to drill 40 redevelopment wells that ultimately get after heated bitumen zone that sits below our current production wells. We will get production from our first redevs here in Q2 of this year. And I think as Jon has spoken to, that would benefit and see a production uplift both here in 2026 and into 2027. So that's the kind of the first production lever we're pulling. Second one would be our development methodology. So those of you that came to our teach-in, you'll know that our focus or our sort of way of developing it is the field is with wider well spacing and longer wells. So we are moving to implement that already here latter part of 2026. We'll be steaming the first pad in 2027 and seeing a production ramp-up and actually much lower development costs starting in '26 into '27. And then the team is working really hard on facility debottlenecking and expansion. So there's a debottlenecking program, actually 3 MOCs taking place right as we speak to be able to push more volume through the plant. And then, of course, we have a facility expansion project that will see the facility expanded and production taken to an excess of 150,000 barrels a day by 2027, 2028. So that was kind of the immediate production focus. And then on top of that, of course, if I look further out, we have things like boundary land, so the boundary land that existed between ourselves and MEG. As Jon alluded to, we're delineating that opportunity and then putting that into an optimized long-term development plan for the asset. So I'll stop there. Jonathan McKenzie: If I were to sum it up, Dennis, I'd say there's really no surprises in what we put out as our investment case on this. And I think we'll be bringing forward additional upside as we go through the coming quarters and months. Andrew Dahlin: Fantastic. No, I really appreciate that -- the depth of that context there, both Jon and Andrew. Shifting my focus towards Lloyd for my second question. In your slide deck, you showcased development, both from the thermal as well as the, we'll call it, conventional assets towards over 145,000 barrels a day over the next couple of years. But I did draw a little bit of notice to the use of solvent enhanced oil recovery techniques. Can you elaborate a little bit more on that opportunity and what that could mean for the field? Jonathan McKenzie: Yes. So we've got a solvent project going on at what we call Spruce Lake North, which we think is an ideal reservoir for the application of solvent. And I think you know that we've been kind of leaders in this and kind of developing that technology. So it's not a, I'd say, a step change from our strategy but it is something that we think is an opportunity for us, and this is kind of an ideal place to do this. I think, Andrew, maybe you can talk a little bit about the development of that and when we can expect to see that project come online. Andrew Dahlin: Yes. No, happy to. So indeed, Spruce Lake project, we've taken FID on the project. Its spend is in the order of $250 million. We'll spend that here in 2026 and through into 2027 when the project will come on stream, I know. Essentially, what we do is we inject condensate along with the steam but less steam. And what it does is it lowers our SOR, it drives higher production and it drives higher ultimate recovery. So we see an immediate benefit to Spruce Lake. And frankly, we see the future application of this in the rest of our oil sands assets. and potentially also in some of our lower quality reservoirs. So we very much have a view of how could we deploy this technology into the next 2 to 3 decades. So that's where we are on that. Operator: Our next question will come from the line of Menno Hoshoff from TD Cowen. Menno Hulshof: I'll start with maybe just on the Downstream side of things. One big thing that jumped out for a lot of people in the quarter was the big uptick on a quarter-on-quarter basis for U.S. market capture. Yes, just a big increase. And you did touch on this to some degree in your opening remarks, but can you just elaborate on what drove that because nobody was even close to that in their models, I don't think. And maybe your expectation for market capture through the middle of the year, especially given limited planned turnaround activity. Jonathan McKenzie: Well, I'll tell you what I'm going to turn it over to Eric to give you a view on that. Eric rarely smiles but he is smiling this morning. So I think we're really pleased and happy with the work that he and his team have done. But Eric, why don't you talk a little bit about how you got the market capture you did? Eric Zimpfer: Yes. Thanks, Jon, and thanks, Menno, for the question. Yes, really pleased with the performance. I would say it's a combination of a number of things. I think certainly, fundamentally, just having the reliability in place that gives you the ability to capture the market when it presents itself. And so what we saw in the fourth quarter was some market opportunities where there were some supply disruptions in the region and our reliability allowed us to capture that. I think you put on top of that some of the real commercial optimization work that we've been doing between finding the synergies between Lima and Toledo, using dock access to find new markets for our products, just really helped underpin the improvement that we've been driving, and you got to see that in the fourth quarter. The other nuance to market capture that I would highlight is there is seasonality to it. So what happens in the fourth quarter when you see the gasoline cracks start to fall off as you expect in PADD 2, there is some benefit to our portfolio where we have some GDD flexibility. It also helps relative to some of the other secondary products that we make, so asphalt and some of those products are able to kind of price better relative to the crack, which shows a higher market capture. What I would say going forward is we'll continue to guide to that 70%, but we do see seasonality in it but I would continue to steer towards that 70% at the $14 dip that we've talked about. Menno Hulshof: So we are starting to see a bit of an impact from the PADD 2 egress initiatives, that you've talked about in the past? Eric Zimpfer: Yes, absolutely. We've seen some real good improvements around our ability to utilize the Toledo dock. We set an annual record in the volumes we've been able to move. And that just really helps us find new markets and be able to really get after some better opportunities for us, and we'll continue to explore all sorts of options to continue to take advantage of that. Menno Hulshof: Okay. That's helpful. And I'm going to assume that's part of the first question, cutting off if it's not. But just on West White Rose, really good to see that the Q2 timeline is still intact. But can you just give us an update on the status of drilling? And what should we be modeling for an exit rate for 2026 if everything goes according to plan? Jonathan McKenzie: Yes. No, you're quite right, Menno, we're still guiding to Q2. I did mention in my notes that it's tight. So we had hoped to be drilling by this time. We are in the final stages right now of commissioning, and that will make the time frame, again, tight for the end of Q2. But Andrew, maybe you can talk a little bit about exactly where you are and how you're seeing production through the end of the year. Andrew Dahlin: Menno, it's Andrew speaking. Yes, indeed, maybe I'll just sort of make sure that we all sort of level on where we are in terms of status of the project. So major construction is complete. The platform is commissioned and inhabitable. All the subsurface work connecting the platform to the SeaRose is completed. And as Jon talked about, we're in the final throes of commissioning and sit testing. So that's where we are today, and then we move into drilling. I think in terms of how do I look at it from a production and the CapEx for the year, we absolutely to guidance, both for production. Our production guidance was 20,000 to 25,000 barrels a day and actually don't have CapEx handy but we're also within that CapEx guidance. And so what you'll naturally see is as the first and the second well come on stream, you'll see a -- sorry, I'll start again. You'll have a base production from SeaRose and from Terra Nova, and that will continue through the year. I tell you that we're seeing good uptime and availability on production from both of those facilities here in Q1. And then obviously, in the second half of the year, you'll get a production ramp-up as each new well comes on. Jonathan McKenzie: So the final push is on, Menno, and we've increased the number of people on the platform, and we look to be drilling very, very shortly. Operator: Our next question will come from the line of Neil Mehta from Goldman Sachs. Neil Mehta: And Jon, you addressed this in a couple of different ways, but maybe you can dig a little deeper, which is you're getting to be a 1 million barrel a day producer, and you've got a lot of growth here coming in the next couple of years. I think there's a lot more questions about egress coming out of Canada and apportionment is a factor and you have a little bit less WRB as a hedge. And so just maybe you can address this concern head on. Is Cenovus a lot more exposed to potential volatility in WCS? Or do you feel confident about your ability to navigate that potential risk? Jonathan McKenzie: Yes. No, it's something we obviously think about Menno or Menno -- Neil. Since I came to this company, the 2 things that we obviously highlighted were egress and having a strong balance sheet. And when you kind of think about this company growing from a standing start to 1 million barrels a day over 20 years, those 2 things have really been front and center for us. So Geoff Murray , who's our EVP of Commercial, he deals with this every day. But Geoff, maybe talk about some of the egress options that we have and where we sit as a company in terms of our balances. Menno Hulshof: No, it sounds great, Jon. Neil, great question. If we wind the clock way back when to 2018, we sold 80% of what we made in Alberta. Where we stand now is maybe 40% of the crude oil we make is sold in Alberta and exposed to that diff. So we've moved a very long way, as you point also the growth on that front. So that's a really big shift over the past 7, 8 years. Probably more importantly is looking forward in the near term. We've been saying for a while, Trans Mountain is here. It's working. It's performing as expected, and you will see that through the stability of the Alberta diff as compared to global points, and that's proven to be true. We've also said we're not going to rest on our laurels. And we and the industry at large haven't. I think we've disclosed entering into opportunities for 150,000 barrels a day of export over the next 2 years under contract. And even more importantly than that, I would say Cenovus has been pressing hard across the industry for what's next, although the diff is in the right place and stable, we know that we need to take action to continue that. And I think you can probably scour the market and find a number of publicly discussed projects, and we're really quite supportive of all of them, both in philosophy but also through contracting mechanisms, and we'll continue to do that. Jonathan McKenzie: Yes. I'd say just adding to that, Neil, I would say that we probably see more proposed projects today than I've seen in the last 10 years. and more projects that are doable in a shorter time frame than we've had in a long period of time. So as Geoff mentioned, heavy oil egress is a really important part of our strategy, and we are actively evaluating and looking at all of those options that are available to us. And you shouldn't be surprised if we take action on some of those. Neil Mehta: And the follow-up is around return of capital versus growth. We're probably in a firmer commodity price environment, Jon, than you and I would have thought a couple of months ago. Certainly, geopolitics is part of that. But if we are -- if we do go into a period of time where we're above, let's say, a mid-cycle price that you outlined, does that dollar go back to deleveraging/return of capital? Or could you accelerate the growth lever? How do you think about that? Jonathan McKenzie: We really don't think about the commodity price of the day, Neil. We are kind of more value orientated in terms of how we allocate capital over the long term. And I think we've been pretty clear that in the short term, until we get down to $6 billion of net debt, 50% of the free cash flow is going to be used for deleveraging, and then we'll return 50% to the shareholders in the form of buybacks. But Kam, maybe you have some more thoughts on that. Kam Sandhar: Yes, Neil, I would just add, I think when you look at our philosophy around just capital allocation, the growth projects we've got in the portfolio, and I mentioned this in my remarks, our growth spend actually has come down year-over-year when you look at the projects we've got. We've obviously finished or close to being done things like Narrows, the Foster optimization, West White Rose. We obviously added the FEP expansion. But when you look at the portfolio as a whole, our growth spend is down year-over-year. So -- and one of the things we do try to do is we try to ensure that capital spend doesn't really change with commodity prices to Jon's point, in that we can fully fund that growth plan with our dividend and probably in a low $50 world. And so don't expect us to make any sort of knee-jerk reactions to capital spending if commodity prices flex down $5 to $10. And similarly, you're not going to see us move it in the other direction if oil prices go up. When you look at the priorities we have today in terms of our excess free cash flow, I don't think anything has changed. Neil, we -- obviously, our philosophy has been that we're going to continue to be balanced on deleveraging and share repurchases with our excess cash, and that's something we'll continue to do. I think I would say that obviously, the share price has continued to perform very well but we're nowhere near a price level that I would suggest is a level where we would move away from things like buybacks. We've made a lot of improvements to the business, both on costs, on growth and free cash flow improvements. And our business continues to get more and more resilient. And I think that affords us the opportunity to continue to buy back stock. Operator: Our next question will come from the line of Travis Wood from NBCCM. Travis Wood: I wanted to -- Menno kind of stole my question there but I wanted to dig into that a little bit more because I think it's quite interesting in terms of the rate of change. So could you talk about some of those anomalies that you saw through Q4 in order to capture that adjusted 95%? And does the marketing and trading team have that ability to capture those go forward? And I guess, in the same breath, how much does other refinery downtime have to do with that market capture? So if we see in the future, Whiting go down again, can we ramp up that market capture in those one-off quarters with other refineries going into turnaround? Eric Zimpfer: Yes. Again, great question, Travis. I appreciate the question. Yes, I think maybe just working backwards, I think certainly, with the reliability improvements we've been able to deliver in our portfolio, it positions us to be able to capture market opportunities when they present itself. And so any time there's a disruption in the market, that reliability lets you take advantage of it. And that's what we saw in the fourth quarter. And so you saw some strength in the crack really into early December before it started to fall off as you would expect it to in the winter season. And so I fully expect that is something we will continue to stay laser-focused on that when the market presents opportunities for us, we want to be able to take advantage of that. So that is absolutely core to what we want to be able to do. In terms of the market, I think every refinery and every downstream has its own unique configuration. And I think when the market fundamentals favor that configuration, you see the opportunity to have a higher market capture. So for us, where we have a high -- heavy differential -- sorry, where we have a higher heavy crude consumption where we see that heavy diff, that favors our portfolio. Where you see the gas crack come off, we have some diesel -- some distillate length, some diesel and jet length, we're able to take advantage of that by optimizing our cut points inside the refinery and really maximizing that distillate production. Superior has significant asphalt production, right? When you see the asphalt market have some strength and carry that forward, that favors that portfolio. And so that really is that seasonality I spoke to earlier that depending on what the market is favoring and how it's priced in, that can favor or that can work against you. And what we saw in the fourth quarter was really the opportunity, both from the market opportunities with some of the disruptions as well as our configuration fitting better into what the crack available was for us. Travis Wood: Okay. That's fantastic color. Switching gears for my second, just in terms of Liwan contracting on the gas sales, does that include any kind of contracted pricing as well? Is there any material change to the pricing as we look out through '26 and beyond? Jonathan McKenzie: Yes. No, that's a good question, Travis. So what we've done on 34- it's taken the last couple of years to really work on delineating those reservoirs. And what we're finding is those reservoirs are getting bigger than what we had originally booked for reserves, not smaller. And that's given us the opportunity to increase the gas sales right to the end of life of the PSCs. And that's a big deal for us. And so the gas contracts themselves are roughly the same as what they are today, although slightly higher as well. So we're very pleased with the pricing, very pleased with the volumes. And as I mentioned in my notes, it gives us about $2 billion of incremental free cash flow over the life of those fields. So it's a very significant piece of work and something that the team there has been working on for the last couple of years. So it's good to see it come to fruition at year-end. Operator: Our next question will come from the line of Chris Hebert from RBC Capital Markets. Greg Pardy: Jon, it's Greg. So I think we may have got our wires crossed on our end. Jonathan McKenzie: Apologize. You came up because Chris Hebert [ we're wondering ] really well. Greg Pardy: I did indeed. And yes, so listen, a couple of things. I want to come back to Neil's question. So you finished the 3-year plan, the 3-year growth plan and so forth. Is there another growth plan, albeit perhaps more modest than the offering right now? And then kind of related to that, I wanted to go back to what Kam was talking about in terms of not really throttling your spending too much. But like how generally should we -- I hate to ask it this way but how should we think about sort of your capital spend maybe over the next 2, 3 years? And that obviously ties into the degree of balance sheet deleveraging, other things being equal. Jonathan McKenzie: Yes. So what I would say, Greg, is one of the things we don't want to get into is big major projects again. So West White Rose is the last of the big major projects. But we have fairly low sustaining capital in and around sort of the 3.6, 3.7 level. And so we have plenty of capital available to us at growth projects that chin the bar at $45. But the growth that you're going to see from us over the next couple of years outside of the work that we've already delineated at the Mega asset is really around brownfield development, debottlenecking and those kind of things. So we mentioned the [indiscernible] SAGD project that we've got going on at Spruce Lake, which is kind of another example of something that kind of adds 5,000 to 10,000 barrels a day, but isn't -- probably doesn't chin the bar in terms of major project status. But you're going to continue to see those kind of things. So where we have opportunities to add production for $45 or sort of add production that has a return of and return on capital of $45, and we can kind of do in $10,000, $15,000, $20,000 a flowing barrel range, you're going to continue to see those things come out of us. And so I would kind of -- if I were you, I would kind of model us being close to that $5 billion that we've talked about in the past as kind of being the ceiling for our capital spending and then incorporate from that kind of 3% to 5% growth. Greg Pardy: Okay. Okay. That's helpful. And then that [ $5 billion ], let's just assume another $350 million, like I like the fact you guys are capitalizing your turnarounds, gives good transparency. So another -- I'm splitting hairs here, Jon, but that would include turnarounds or wouldn't include turnarounds? Jonathan McKenzie: That will include turnarounds. Greg Pardy: Okay. Okay. Terrific. And Travis's question was good. I mean, kind of interested in -- like I love your Asian business. I mean it doesn't get a whole lot of airtime. But what does that business look like over 2, 3, 4, 5 years? How much time are you spending there? Do you want to grow it? Do you want to harvest it? Are you going to sell it? Jonathan McKenzie: I don't think -- the way I think about that business, Greg, you're quite right. It's a really good business, and it spits out a lot of free cash flow. I think it's averaged about $1 billion a year for the last 5 years that we've owned it on a free cash flow basis. And what we really like about it is it's fixed price gas plus we get the value of the liquids on a Brent basis. Your operating costs are about $1 an M. The fiscal take is relatively modest, and there's really not much of a requirement for sustaining capital. So the way we kind of think about it is not harvesting the asset but definitely sweating the asset and staying true to the Block 29/26, where we think we have a competitive advantage. But we kind of look at it under those terms. We evaluate the opportunities within the block. We work well with the partner there that we have in CNOOC, and we're really grateful for that relationship. And it's just an asset that we just continue to take free cash flow from and invest appropriately in. Operator: Our next question comes from the line of Manav Gupta from UBS. Manav Gupta: I just wanted to quickly focus a little bit on egress. We know Enbridge has announced MLO 1 on their call, they are very close to announcing MLO 2 could happen before year-end. And then they also threw out the prospect of an MLO 3. And then there are a bunch of projects that ET and Enbridge are looking where they could even reverse the Bakken pipeline, get more Canadian crude onto DAPL. So I'm just trying to understand, as all these Egress projects are taking shape place, does this give Cenovus a little more confidence that we are not going back to the days where WTI, WCS could be $25 or so. Those days are behind the Alberta oil sands. Can you talk a little bit about that? Geoff Murray: Manav, it's Geoff Murray. It sounds like between my last comment and this one you scoured the world and found a number of the pipelines. There's -- there are more out there as well under development. And I'd point to a few other developments and other companies that are working away on things in the same sort of time frame. The projects you referenced, I think, are all intended to be in service late '27, '28, '29. There's projects that push '29, '30, '31 as well. And I think, as Jon pointed out, there's a number of these opportunities out there. Very few of them look like the big challenging mega projects we saw of a decade ago, and there was a certain level of probability around those things. These things are smaller. They're more easily permitted. There is less development to be done. And I would say we're well connected with all of them, broadly supportive of egress. The key will be industry and Cenovus being prepared to stand by and stand behind and take long-term contracts around these assets. And as Jon pointed out, don't be surprised to see us do that. That is a way of saying we have impact and influence to drive the outcome you referenced, which is to continue to bring egress to market to keep the differential in Alberta where we see it now. And it does feel fairly comforting that, that is something we can take action to drive for at least the next 5 to 10 years. Jonathan McKenzie: Yes. I think, Manav, we don't take any of this for granted. So we would never be of the view that we're never going back to where we are. But our challenge as a company is to make sure that we take advantage of these opportunities as they arise. We're kind of in a world right now where we're opportunity-rich in terms of egress. And so we're looking at everything. But we also understand that egress is something that's very important to this company on a long-term basis. But with everything that's out there today, it's very positive for this company and this industry. And as I said before, you should look for us to lead this and take advantage of it. Operator: [Operator Instructions] And there are no further questions registered at this time. I would now like to turn the meeting over to Mr. Jon McKenzie. Jonathan McKenzie: Great. Thank you, operator. So this concludes our conference call. I'd just like to thank everybody for joining us. We definitely appreciate your interest in the company. So thank you very much, and have a great day. Operator: This concludes today's program. You may all disconnect. Thank you for participating in today's conference, and have a great day.
Salvador Villasenor Barragan: Good morning, everyone. I'm Salvador Villasenor, Head of Investor Relations at Walmex, and I want to thank you once again for joining our live Q&A session following our fourth quarter and full year 2025 earnings release, which was published yesterday. As always, we will make an effort to answer as many questions as we can in the 45 minutes we have scheduled for this call. [Operator Instructions] Joining me today is Cristian Barrientos Pozo, President and CEO; Paul Lewellen, our Chief Omnichannel Operating Officer; and Paulo Garcia, our Chief Financial Officer. We'll now go right straight away to the first question. Operator: [Operator Instructions] The first question is from Mr. Ben Theurer from Barclays. Benjamin Theurer: Can you guys hear me, see me? Salvador Villasenor Barragan: Yes. Benjamin Theurer: So I wanted to get a little bit your sense as you look at the market in Mexico. And in the presentation yesterday, it was very clear there's a lot of differences between regions, but also within formats. So I wanted to understand what are your targets for 2026, how to potentially address these issues, be it on the regional side and/or on a format side? What are the things that you can do that are under your control to tackle what seems to be still a somewhat challenging environment? Paulo Garcia: So first of all, Ben, on the targets and guidance for the year, we are still elaborating on that and probably you'll hear more about that in terms of the Walmarts there. I think when you think about the environment, it's still relatively soft. We still expect the environment to be still probably relatively soft in the first half of the year. The good thing, as you know, we all know the data is the GDP growth expectation for the year is better than actually what we had in 2025. That's roughly 1.5%. I think 2 things that I'll say before I pass the button, whether Cristian or Paul want to add up on that. One is -- so what we're seeing in a banner like Bodega in these moments tends to shine further. We talked about the fact that Bodega increasing the penetration in the households of the lower income, and that is helping us. But at the end of the day, you know the strength of our portfolio, it's the overall portfolio that we have. And you've seen that -- across all the last quarters, not very dissimilar performance if you think about Bodega, Sam's and Walmart. Maybe Walmart Express at times a little bit more volatile, but a very tiny part of our portfolio, as you know, roughly 2%. But maybe Paul or Cristian can elaborate a little bit more what we are doing with the banners in particular. Cristian Barrientos: Ben, from my perspective, I think we are expecting a different year 2026 compared with 2025, as Paulo mentioned. We have seen in other markets how relevant is as you mentioned, what is in our control today to be prepared when the numbers came, let me say, in growth in the market, we will be very benefit. We have seen in other markets, as I told you, that we can accelerate 3, 4x above the market if we are very well prepared. So that is why the focus will continue in EDLP availability and, of course, the acceleration of e-commerce that's going to be prepared in the future, maybe near future because it will happen this year. So that's the focus of the total company. Operator: Our next question is from Mr. Alejandro Fuchs from Itau BBA. Paulo Garcia: Let's go to the next question, and we come back to Alejandro. Operator: Our next question is from Mr. Froy Mendez from JPMorgan. Fernando Froylan Mendez Solther: I was -- I wanted to ask about private label within your EDLP strategy. What role does it play? What level of penetration should this reach in the midterm under this new enhanced EDLP strategy? And what could the impact on margins be from pushing further into the private label? Cristian Barrientos: Thank you, Froy. And maybe you saw in the report that we are focused as a company in deliver EDLP, improve availability and accelerate e-commerce. And in EDLP, EDLP is not only about a price gap. It's a business strategy that differentiates us from the rest of the market. And included in EDLP, private brands play a very important role, the same as the assortment, supply chain, modulars, all this stuff. So for us, private brands is really important, and we have seen in Q4 good evolution of the penetration inside of Walmart. And so particularly in Bodega, as you saw also in the numbers, Bodega was the highest accelerator in sales during Q4. And in Bodega, private brand plays a super important role. So we are seeing a room to improve, a room to grow. So we are leveraging in all the markets with a different brand that we have today in Mexico. But it's a clear differentiator for us today. So that's the information that we have today to share with you in terms of penetration, acceleration, all this stuff. So -- and also, as I mentioned before, EDLP, there is a lot of metrics, but at the end, we are looking for increase our price perception and private brand plays a super important role there. And we have a very good quarter in terms of how we accelerate price perception and private brand was one of the key elements there. So I don't know if you... Paulo Garcia: Just maybe on numbers because there were 2 questions directly on numbers and margin of private brands, building on what Cristian said. I think on where we need to go, we said that a couple of times probably in the past, we want to be in the mid-20s penetration minimum, and that mostly focused in the Bodega. So there's a lot of room to improve, which things Cristian was saying that we need to do, but adding more products in categories, and we have lots of white spaces, entry price points. To the second question, private brands margins, our margins today of private brands is higher than what we have in innate brands but tends to be also the portfolio. One of the things I want to let it clear because once there was adopt, we don't manage private brands for margin. We do manage private brands for the EDLP to help the customers save money and live better with the entry price points. Of course, there will be categories that we will be having better margins. So as you can imagine, in foods and consumables is roughly similar to what we have in innate branded. We do have higher margins, in particular, in the areas of seasonal entertainment in the commodities, as you can expect, because it's a commodity, we will have lower margins than a branded. So -- but of course, we will play with it, but we manage for what's relevant for the customer. Operator: Our next question is from Mr. Ulises Argote from Santander. Ulises Argote Bolio: So the question that I had was trying to get a bit more sense and a bit more detail on those 15 basis points gross margin improvement that we saw in Mexico coming from the other businesses. So just wanted to get your thoughts on how should we think about this kind of trending forward? Are this the initial levels and how much more runway is there left for this? And maybe if you can comment a little bit on which of the businesses actually are becoming more relevant and are contributing more here at the gross margin level. Paulo Garcia: On that one. So as you can see, our new business has been contributing steadily over quarter-on-quarter, roughly around 20 basis points, sometimes a little bit more than that. In this case, a little bit less as you've seen it Ulises. The big one, which is actually becoming more and more relevant is Walmart Connect, immediately followed, of course, by Byte. In this particular quarter, Ulises, as you've seen it from what we said it in the webcast, Walmart Connect was not the one that drove the most of this improvement, actually tended to be around in the space of the financial solutions as well as Byte. These were the ones that contributed. You've seen the size of Byte these days. So contributing both in terms of the revenues as well to the P&L on a stand-alone basis. We always said 2 things about the business, right, Ulises. I will refresh that. One, of course, we do look at them on a stand-alone basis because it's good practice. We need to make sure that they did deliver. But of course, the sole reason why they are here is twofold: one, to deliver a pain point of the customer and how they actually helped overall the core of the business, either more frequency or more average ticket being higher. And that's what we are seeing with some of these businesses. For instance, a customer that is in Byte, the average ticket is more than 2x what we see in a customer that's non-Byte. So that we are pushing. The other thing that we're doing at the same time, we're using these funds to continue progressing and investing in margins in more EDLP in order to fuel the growth. In this particular one, our margin was higher as you've seen it. It will always be volatile as we said it, but that's how we actually approach this area. Operator: Our next question is from Mr. Felipe Rached from Goldman Sachs. Felipe Rached: Can you hear me well? Salvador Villasenor Barragan: Yes, Felipe. Now we don't. Let's move on to the next one. Operator: Our next question is from Ms. Melissa Byun from Bank of America. Cristian Barrientos: Melissa can you hear us? Operator: Our next question is from Mr. Álvaro García from BTG Pactual. Alvaro Garcia: Can you hear me? Cristian Barrientos: Yes, sure. Alvaro Garcia: Great. Awesome. I have a few questions. The first one on reducing the number of SKUs at Bodega Aurrera Express by 30%. I was wondering if you can give some more comments on that. And the second one for Paul. Paul, nice to meet you. I was wondering as part of your sort of onboarding on to Walmex into what Mexico and Central America look like as retail markets, if you could maybe share your sort of first take or your first impressions on how different Mexico is relative to the U.S. market and what that means from a playbook standpoint for Walmex. Paul Lewellen: Sure. Thank you for the question, Alvaro. I've been with Walmart for over 35 years, and I would say that we have more in common than we do different. And I would say the biggest similarity is around culture and our people are definitely an enabler of our success. And from a global leverage standpoint, I think the way that I would describe it is that Walmart has no boundaries. So when we're looking at either technology, AI, global leverage, we're able to take best practices from around the world and apply them globally. And that's exactly what we're doing this year in Walmart, Mexico. Just a few examples of that, that I would give, is when you think about how there are no boundaries and we can enable the stores from an AI and technology standpoint, you could start at the front end with Coastal, which is a global platform, which allows our registers to run the same around the world. You can go to the sales floor where we have the same tools and same technology to speed up the way that we process freight from the back room to the sales floor, the accuracy of our on hands, the availability of our products, the availability of what we can pick and what is available inside of our catalogs for our customers to purchase regardless of where, when and how they want to shop. And then I would lastly say from an inventory standpoint, whether it's our logistics system and the exciting technology that we're implementing there in Mexico and how that's going to enable us in the stores to be more efficient. I would say we're more like than we are different. Speed is critically important to us this year in Mexico, and I think you're going to see that, and it's going to come through loud and clear. Paulo Garcia: On the SKUs... Paul Lewellen: Yes. On the SKUs in BAE, I can tell you not only in BAE, but in Mi Bodega, the 30% reduction or SKU rationalization is a process that we are undergoing right now. Space is critically important and devoting the majority of our space to those items that drive the most sales and the most traffic inside of our stores, it's nothing new about that. We're constantly reevaluating our assortment across all of our banners. But these 2 are very, very important as it comes or relates to our purpose, which is saving people money so that they can live better, and that also drives our price and our price perception. Operator: Our next question is from Mr. Antonio Hernandez from Actinver. Antonio Hernandez: Just wanted to get a sense on Byte from a P&L perspective. I mean we all know that it's part of the ecosystem and it's not per se a P&L driver. But wanted to get a sense, I mean, you've already gained so much of a very large scale in a very short period of time. So if you can provide more light on that and maybe if there's any specific target, that would be very helpful. Paulo Garcia: Yes, Antonio, thanks. So I'll say what the things that we have mentioned this about in the past. So Byte, I said to you, it's in the past, guys, it's already a profitable business. We always said that was not sole driver at the beginning as we were building it because we wanted, of course, helping people getting access to affordable phones, so to speak in affordable prices and also help the overall business. But we also see as the business is evolving, it can also get better, it can also contribute more overall even on a stand-alone basis. We have the view that this business can easily go and actually have an operating margins in line to what we have in the rest of the business in the near term. So that's actually where we actually are heading to. At the same time, as I said, and Cristian always talks about that, the role of this business is to help the core, right? That's why actually I mentioned that the frequency -- the ticket of the Byte customer is more than 2x the one that actually you see that's a non-Byte. That's actually what we're also trying to push as we fulfill our purpose. Antonio Hernandez: Okay. And do you have any idea of the scope that maybe you could achieve in terms of the amount of users? Paulo Garcia: No, I'm not going to throw that number, but you can expect us to continue growing. I'm not going to put a number in the market that holds me accountable on that. Operator: Our next question is from Mr. Alex Wright from Jefferies. Our next question is from Ms. Melissa Byun from Bank of America. Melissa Byun: Can you hear me this time? Paulo Garcia: Yes, Melissa. Melissa Byun: Sorry about that. I had some technological difficulties, so I do apologize if this question has already been asked. But can you please provide some more context around the decision to reduce the Bodega Express assortment by more than 30%? How are consumers responding to cuts given the differentiation that's historically been provided by the broad assortment? And should we think about this maybe as a broader shift in your strategy moving toward a narrower and more private label-oriented mix in the concept? Paulo Garcia: Just say, Melissa, we actually answered this question just before. I'm not sure if you listen... Melissa Byun: I did not but I can -- sorry. Paulo Garcia: Let's do one thing, Melissa, we'll try to elaborate a bit more on the question. So Paul, will add a few things to your benefit. Paul Lewellen: Yes. I would tell you, our strength comes from a very diversified format portfolio, especially with Bodega. And when I think about Bodega, I think about value and I think about how critically important price is to value. I think about the experience that our customers have inside of our store. The assortment, to your point, is critically important. In our 2 smaller formats, though, space is a premium, and we want to make sure that we are dedicating space to the items that are producing the greatest amount of sales and sales results for our customers. Also, they're tailored to our customers' needs. And these are things that our customers have actually told us that they want more space dedicated. We don't have a ton of backroom space in Bodegas as you know. Most of it is stored on the sales floor on our top steel. So space is a premium. And I think the merchants and our commercial team have done a fantastic job in making sure that we have tailored the assortment and diversified the assortment to the customers that we serve. And the last thing I would say is that it's all about trust and our customers trust us, especially in Bodega to deliver price, that value, that experience and the assortment in a lot of cases for a one-stop shop. So SKU rationalization and the way that we rationalize SKUs by category, it honestly is nothing different or anything that we don't do on an annual basis across our commercial teams. So it is the right thing to do for these 2 formats. But again, the strength comes from the diversification of all 3. Cristian Barrientos: If I may add, Melissa, in this point, maybe you know that I run this business a long time ago. And in a small format is so important availability. So the way to reach right numbers in availability came from our right assortment. So today, we're taking advantage of the program that we have here in Mexico shop. So it's an asset that we have today to run faster and have the right assortment for the customer. So we will improve availability. So immediately, sales came. So you can see numbers in the past in Bodega Aurrera Express what happened, and that's the idea to evolve every year. Operator: Our next question is from Mr. Felipe Rached from Goldman Sachs. Felipe Rached: Sorry for the tech issue before. I hope you can hear me well now? Paulo Garcia: Yes, perfect, Felipe. Felipe Rached: Great. So I was wondering if you guys could share more details on what you expect to be the main drivers for the e-commerce acceleration going forward and whether you think any further investments will be necessary in that front. And still in this context, it would be very interesting to hear more on how the maturation process of the One Hallway initiative in Mexico so far compared to the one that you guys observed in the U.S. So anything you can share on that would be very interesting. Paulo Garcia: Okay. Maybe we'll try to answer the question and to... Cristian Barrientos: So first of all, thank you, Felipe, for the question. As you saw in the report, we define -- really important element to focus on the fundamental and the acceleration of e-commerce is critical here in Mexico and all over the world, and we have a huge opportunity. We -- you saw the numbers. We are still depending in 1P in a few categories in the quarter that didn't perform so well. We are evolving on demand. And as you mentioned, we are in the learning curve in One Hallway. But for us, I think the huge opportunity that we have today is to take advantage of the footprint that we have in Mexico to accelerate and accelerate speed to the customer and also reach more customer because today, we are serving not all the households here in Mexico because of -- because we need to evolve our operational model to reach homes. And we're right now evolving that last quarter. We extend our reach and we added in our fleet, let me say, Valle de Bravo, San Miguel de Allende, some cities that we didn't get because of the restriction that we had. And today, we are adding more cities. Next quarter, we're adding more than 20 cities to reach that. So in summary, speed, reach and assortment will be critical for us, and we have the footprint, we have the team looking forward to accelerate more both business, both that Paul shared in the idea that we have today. We're in a journey to unify our platform. So we will be ready to adapt or connect, let me say, as a global platform. So that allow us to receive the assortment from the U.S., the assortment from all over the world, in the Walmart world and in both sides. But the most important part is we will receive, but we can deliver or we will deliver to the customer with the speed. And that's the idea to increase assortment, reach and also accelerate the deliveries. Paul Lewellen: Cristian, can we also talk about total availability. I think I would say the journey that we're on from a store mapping, store location, modular integrity, on-hand accuracy and being able to fulfill the items on the shelf, the moment of truth in a very timely manner with precision and accuracy like we've never done before. This availability journey that we are on allows us to have real-time data down to an item level and where it is located across all stores, increasing our availability, improving our availability and our pickability of items for on-demand. Cristian Barrientos: And helping customer, shoppers, pickers to be faster. Paul Lewellen: That's right. Operator: Our next question is from Mr. Miguel Ulloa from BBVA. Miguel Ulloa Suárez: Can you hear me? Paulo Garcia: Yes. Miguel Ulloa Suárez: Perfect. A couple on my side would be regarding the slowdown in e-commerce. Could you provide a little more color on categories or what happened in the whole market and how you are reading going forward? Paulo Garcia: And Cristian to build on that well. We are still -- when you think about the extended assortment, particularly 1P, but also marketplace, we still very [Technical Difficulty] categories like TVs, particularly during the season, when Buen Fin and Fin Irresistible didn't perform so well. So therefore, that tends to impact us. And that's when you see the e-commerce numbers, you see that our on-demand business pretty much grew almost 20%, but our extended assortment grew much less mid-single digit, and that was impacted by 1P. So that's what an impact in the short term. As you know as well, we're also going through the transition on One Hallway. And the goal of the One Hallway, of course, is to increase and broaden our assortment so that we can diversify the assortment. And today, we have roughly 20 million SKUs. In the future, we can go up to more than 1 million SKUs in the next couple of years. So that's the journey we are in. It's a gradual implementation. It's a gradual progress. We don't expect to happen from one quarter to the other. But gradually, we'll see improvements over and above the things that Cristian already talked about that we are 100% focused, which is speed and reach. So it's about speed, reach and assortment. Operator: [Operator Instructions] Our next question is from Mr. Alejandro Fuchs from Itau BBA. Alejandro Fuchs: First of all, welcome, Paul, to Mexico and to Walmex, best of luck. I want to make 2 brief questions. The first one on same-store sales in Mexico. We saw a slight decrease in traffic and most of the growth coming from ticket. I wanted to see if you can maybe explain to us a little bit more color on how much of this is mix? How much of this is price? That will be the first one. And the second one, maybe for Paulo on gross margins. The improvement on the commercial front from lower shrinkage and general merchandise, how sustainable is this improvement on commercial margin going forward? And if you could give us maybe a little bit more color on those 2 general merchandise and on the food side, that will be very helpful. Cristian Barrientos: Thank you, Alejandro. And first of all, I will begin with the traffic, as you mentioned, was negative almost flat, but we always see the trend. So we began the year with a more negative traffic in the first quarter, and we're seeing a very good, let me say, response of the customer with the program that we're putting in place. Q3, Q4 was almost 0. And as you know, and as you saw in the reports, we have seen an evolution of the focus and that we're looking today in the fundamentals on the EDLP availability and e-com that those 3 are helping us to accelerate. And the idea in the coming months is to be very well prepared because we are waiting for the country to improve growth. You know very well that we ended 2025 with 0% growth in the market in -- as a total Mexico. We are expecting 1.5%. And we have a lot of data in other markets when you are very well prepared and the economy turn, you receive all these benefits in the future. So that is why we will be continue to focus on these 3 pillars that is crucial for the business, crucial for brick and also crucial for e-com. Recently, Paul mentioned that we are working very hard to mapping all our stores, all our items in the sales floors, also in backroom, trying to connect with e-com business and create more speed, more reach and take advantage of the assortment that we have. So that's the idea to combine all together, and we will continue to focus on it, and we know we will be very well prepared when the economy turn a little bit. Okay? And the second one was? Paulo Garcia: It was around margin. Thanks, Alejandro. Yes. So let me talk about -- as you said, you've seen the improvement in the omnichannel margin was mostly from GM mix and shrink. Let me start from the second and then talk about the first. So the second one, yes, it's an area that we are attacking. It's an area because at the end of the day, it's waste. And it's ways that we better can elsewhere invested to invest in pricing for our customers. We're putting a lot of energy there across all the teams. It's an end-to-end process. It's merchants, it's operators, but everyone that is involved. And we are topping that up with AI tools and machine learning, whether that's in terms of to optimize the replenishment, but it's also improve the demand forecasting because we still have a little bit of manual process in the way we actually look at the perishables. So that is something that we are really attacking left and center. On the general merchandise, Alejandro, goes a little bit what I also said to what on the e-commerce response or the extended assortment. So the categories that actually didn't perform so well tend to be, as you know, categories that don't enjoy the best margins as well. And as a result of that, of course, we tend to have a benefit on that. I think what you can expect from us going forward is the new business continue helping our margins, and we continue to invest behind the EDLP for our customers. And you, of course, might see volatility quarter-on-quarter as we always said it every single year. Operator: That was the last question. I will now hand over to Mr. Salvador Villasenor for final comments. Salvador Villasenor Barragan: Well, thank you very much for joining, and thank you for all your questions, and we hope to see you all at Walmex Day on March 25. Thanks again. Cristian Barrientos: Thank you very much. Paul Lewellen: Thank you. Operator: Walmex would like to thank you for participating in today's video conference. You may now disconnect.
Olaf Scholz: Good afternoon, and a warm welcome from my side. My name is Olaf Scholz, Head of Investor Relations here at Krones. We have presented, this morning, our preliminary figures for the fiscal year '25. So Krones continued profitable growth in '25, and we forecast also a further revenue and profitable growth for '26. Next to me is Christoph Klenk and Uta Anders, they will give you more details about these figures and also additional information. And we will also talk about the '26 targets. After the presentation, you will have the opportunity to ask questions. I think you also know how the Q&A session works. Please use the function raise your hand in Teams or send me a short e-mail, and then I will hand over to you. Additionally, please be reminded that this meeting will not be recorded and that is also not allowed to record the meeting. Please also deactivate any functions of recording at Teams. So I think we can start with the presentation, and I will hand over to Christoph Klenk, CEO of Krones. Christoph Klenk: Yes, Olaf, thank you. Warm welcome, ladies and gentlemen, on behalf of Uta and myself to our preliminary figures for 2025 and of course, to how we see 2026 and looking forward then in, of course, answering your questions. I will skip, as always, I would say, the beginning of the slides because this has been actually working as a summary for you that you can see all in a condensed way. And here even over the numbers, I will skip because we go in detail anyway. I can say if we see here the numbers at the end of 2025 and seeing the results we are extremely happy. Before I continue, I want to extend a big thank you to the Krones team globally. So 21,000 people having made this success possible because we're dealing with 160 countries around the globe and quite complex lines and businesses. And once somebody is failing, some projects are failing totally. So everybody is important in our team, and that's why we are so thankful that we have achieved those numbers with the team together. Before I go ahead, we had various challenges in 2025. I just want to name them, not all of them because then we would stand here an hour, but at least 3 of them. First of all, is Middle East because we all forgot that in the beginning of the year, Middle East was pretty much under pressure with the strike of Israel and the United States in Iran, which actually affected the whole region. Then of course, we had the tariff issues during the year and should not forget that FX issues will affect and has affected our businesses as well. On the other side, we had a highlight with Drinktec. You have been all being invited to that, seeing the Ingenic line and what we are doing with that into the services we are delivering. And of course, with Prefero, the Netstal acquisition and the, let me say, combination of the Netstal Maschinen and the Krones Maschinen. So that's the highlights. And again, thanks to our team that all those things have been working out. Yes, numbers you see here, and these are the green tick marks that we have actually achieved what we have promised, and that's the most important thing for us, for Uta and myself that we once again have been robust in the statements we have made and that we have been achieving our targets. From this on, jumping into more details, order intake. I mean, we have said all the time that order intake will be around 1 with the book-to-bill ratio, and this is actually what we have achieved. Yes, we have been -- and this is very obvious, we have been short EUR 100 million with order intake in comparison with the sales we have done. But nevertheless, I would like to put that into context what we have seen in 2025. As said in the beginning, I mean, the beginning of the year, Middle East was a bit shaky because of what I have said earlier. Then, of course, we had a tariff issue, which I'm reflecting later on when we go to the split into the regions, how this affected North America, but this has been 2 challenges. And number three, and this is on the positive note, this is very important for us that we have maintained price stability. I mean, for those of you knowing us for a longer period of time, in particular those times before COVID, pricing was all the time an issue. And since I would say the -- let me say, the markets are a bit more under pressure than before. For us, it was very important that we kept a very close eye on pricing and we kept price stability. Some of those let me say, actions have been that we have been losing some of the orders just to make sure that the signal into the market is crystal clear. That's the remark I wanted to do here. If we look to 2026 because Uta and myself, we have agreed on that once we go through the presentation here, we give you all the time, let me say, the view in 2026, of course, you will see a summary at the end. But as you have seen, book-to-bill ratio in 2025, around 1, which is actually 0.98, if you put it exactly on it, the EUR 100 million short, I'm just saying, we are looking about a book-to-bill ratio slightly above 1 for 2026. So that means we will be higher than sales, and we will have in order intake a higher growth than we will have in sales. So that's the statement we are doing. And this is based, of course, always on, let me say, our interviews we have done with our customers by late 2025. And I would say what we see right now in the market looks good for Q1 to confirm what I have just said. So that's for order intake, and I assume you will have later on certainly more questions to it. Order backlog, yes, that has decreased slightly, but only slightly, and this has been on purpose because our point was our delivery times have been too long. Fortunately, we have been able to decrease that to around 40 weeks right now. And in particular, let me say, orders, we are even going further down. So we have shortened that. And we can say that as of today, we don't lose orders because of delivery times. So we have been arrived into the competitive landscape again on where we should be, and that's important for us that this is not a reason that we are going to lose orders. On the other side, it actually provides a very nice and stable fundament for the, let me say, economical development of Krones in 2026. So we are well booked into the third quarter. So very important for us because that gives us the visibility on our statements. But more to say again, by purpose, we are happy to decrease that because we need short delivery times. Now from the market perspective, how do we see things? Number one, we see customers behaving slightly different than what we have seen in the past. I would assume that might be something for Q&A later on once you want to know more details about that. But basically, if you look to the split of the regions, and this is actually sales, it's not order intake. You might see that on the left-hand side that North and Central America in terms of percentage is going significantly down. However, if you look to the absolute numbers, we maintain a quite stable level on sales in North America and roughly -- I mean it's easy to calculate, it's EUR 1.2 billion. So all 3 numbers are reflecting EUR 1.2 billion, and that has to do with the growth of the other regions. And of course, I named it earlier at the beginning based on FX reasons we have in that. So that's one thing. If you look to pure order intake in North America 2025, that was decreasing, in fact, by 10%. Of course, in the second half of the year, influenced by the tariffs. But important for you to know, we plan on, let me say, the levels we had seen the year before last in terms of order intake for 2026 because what we see from our customers since the shock of the tariffs have been going away, the business cases are still even including the tariffs intact. I think we can talk certainly more about that in the future or in the Q&A. Second, what is to remark here, even as South America looks pretty good in sales, we have missed the targets there. We had higher expectation into South America. So this was not going too well, to be honest with you. So this is one critical aspect for 2025. And if you look to Asia Pacific, that has been going down into sales and in order intake. So that as well a critical development in 2025. But now the good news comes for all of the 3 markets, North America and Central America, South America and Asia Pacific, we do assume that 2026 will perform better, and we are looking into achieving our targets for 2026. And this, again, because many projects has been postponed are still active, not lost. And that's the reason why we have hope into those markets. And we will see, from our point of view, a good development in 2026. Remarkable, Europe and Middle East, Africa, both of them in sales and in order intake have been growing significantly. And in particular, Middle East and Africa have helped to overcome the shortage in order intake in North America. And even China from the order intake numbers is an increase in 2026. Sales is declining a bit in the sense of generating revenue, but we are on a good path in terms of order intake. And last but not least, you see Central Asia and Eastern Europe is doing quite well as well. So even good on track here. So that's from, let me say, the markets, the order intake and where we are with that. And with that, I'm going to hand over to Uta. Uta Anders: Thank you, Christoph. Yes. Good afternoon to all of you also from my side. I mean, as always, I will start with revenue development. I mean you have seen it already in our press release, but let me just give you some additional comments also from my side. I mean we said 7% growth. So we are within our guidance of 7% to 9%. And we have mentioned or Christoph has mentioned it earlier already in that 7% is a EUR 99 million effect just coming from currency translation. That was mainly in Q3 and Q4. We didn't see it so much at the beginning of the fiscal year. That's why also we didn't put too much emphasis at the beginning of the fiscal year on it. But if you look now at the whole fiscal year, EUR 99 million is quite an effect. And if we took that out, we would have been -- or we would have recorded a growth rate of 8.9%. Yes, Q4, I mean, we had always said for both order intake and revenue, Q4 will be strong with EUR 1.556 billion. It was strong 9.7% growth compared to 2024. So also there within our expectations. I mean, as Christoph has mentioned, we will highlight already on those slides, on the individual slides, our expectation, our guidance for 2026. Our expectation for 2026 is a growth -- a revenue growth of 3% to 5%, and this is important adjusted for currency translation effects. I mean it's the first time that we are guiding this way. Not only I know that I mean, we also saw, as I said earlier, EUR 99 million is quite a high number for '25, and we expect a similar number for '26. So that's why we believe it's only fair to take that out in our guidance or guide this way. Moving on with EBITDA, EUR 602.3 million. I mean we are not so much into superlatives, but let's say, it's the highest number we have ever recognized. So we are proud on behalf of our team that we have achieved that. And you can see 12.2% growth. So absolute numbers growth compared to '24. And I mean speaking about margin, you can see the 10.6%, so 0.5 percentage point compared to 2024. And we are with that within our guidance of 10.2% to 10.8%. And yes, I'm sure you all have calculated Q4 which was an 11% margin. So versus a 10.3% Q4 2024. And for 2026, I mean, the headline of our press release has stated it already. We continue growth both in top line but also in margin. So that's why our expectation, our guidance is 10.7% to 11.1% for 2026. Moving on with EBT, very similar development to what I had said already for EBITDA. I mean, if we look at the absolute number, EUR 424.1 million,7.5% margin. And I already want to say it at this point, I'm sure a lot of you have calculated the difference between EBITDA and EBT, which is a little bit in terms of growth, lower. So I mean, we had higher depreciation in '25 and also the interest result was a little bit lower because we had special effects in '24. But I'm sure we'll come to that also later in the Q&A. Personnel and material expense, yes. Starting with personnel cost, I mean, you can see that we have increased it by EUR 125 million, which is, I mean, that's logical because of the additional FTE, which we will see in one of the next slides, but also the overall cost increase in payroll per person in general. Important for us, and you know that we have highlighted that also throughout the calls in the fiscal year, 30.1%, so very close to our 30%, which is an orientation for us as payroll, personnel cost as a result of total performance. Material costs, yes, very positive development, as we can see. I mean, overall, we only increased material cost by EUR 110 million. So -- and that brought us then also down to 47.8% material cost ratio, so well below all other years, which is just the result also of the good work of our purchasing team. I already spoke about employees very shortly. I mean you can calculate it yourself. We have an increase by 962 coming to 21,339 employees. So what makes up the difference of the 962? 1/4 of it is service technicians. Then we have some, but that's not 3 digit. So mid-2-digit increase because of M&A. You remember, we have bought CSW. And the rest of the increase is across the globe, as I always say, and also across the functions, also with emphasis, of course, focus on digitalization and IT. Important for us also is, I mean, looking at the ratio of the German workforce in total that is 55.0% compared to 55.5% last year. And also to mention, you can read it in the headline, 1,600 employees in the United States. Now coming to the segments, yes, I mean, for Filling and Packaging Technology, the story is always very similar to Krones in total because it is the largest segment. So I mean, with our EUR 4.774 billion revenue, we had a growth of 7.2%, also here effected or impacted by FX. We have met the guidance 7% to 9%, which is important for us. And we also here had a very strong fourth quarter, EUR 1.294 billion revenue. Looking at absolute EBITDA and margin, you can see EUR 517.8 million and a margin of 10.8%. So also here well within our guidance, which we had given of 10.5% to 11.0% and Q4 was 11.2%. Speaking about guidance, yes, for 2026, we expect revenue growth by 2% to 4% adjusted for currency translation effects and an EBITDA margin of 11% to 11.5%. Moving on to Process Technology. I mean, EUR 514 million revenue, it's a growth by 1.2%. Our guidance was 0% to 5%. So we have met our guidance here as well. Very slight currency translation effects, but as I said, not major. Speaking or coming to EBITDA, you can see at EUR 52.9 million. So another positive development here. And also if we look at the margin, 10.3%. Our guidance was 9% to 10%. So a very positive development also because you know that on the growth side, we are lacking turnkey projects, but that on the other side is beneficial also for the margin. Speaking about guidance, same guidance as we had it for '25, 0% to 5%, a 9% to 10% EBITDA margin. Intralogistics, EUR 376 million revenue, you can see EUR 44 million more than 2024, which is a growth by 13.2%. Adjusted for currency translation effects, it was 14.9%. So very, very close to our 15% to 20% guidance, which we had given. Looking at EBITDA and margin, yes, also if we look longer term, a very positive development here. Overall, 31.6% as an absolute figure, but also 8.4% as the number, which is also a result. You remember that we had said on the CMD that we are having smaller projects, but also new products, which we brought into the market also then with higher margins. And for 2026, growth of 5% to 10% and EBITDA margin of 7.5% to 8.5%. So far for our P&L. Now let's look into our balance sheet and everything which is related to that. I want to start with cash and liquidity. I mean you have seen it already on the first slide. We had a very good cash flow in the fourth quarter again and overall a very good cash flow of EUR 283 million, which brought us then to a cash of EUR 549 million, which was above our expectations. And with free credit lines and used ones, you can see the number, EUR 1.437 billion liquidity. So very solid to manage global economic volatility as also the headline states. Now coming to the right side of the picture, I mean, you see that we have increased equity by EUR 206 million to EUR 2.128 billion. And the EUR 206 million, of course, is the result of EUR 299 million net income, paying out the dividends of EUR 82 million and then a small miscellaneous change brings us to the EUR 2.128 billion, and it's an increase by 11% compared to December '24. And because the total of assets liability only increased by 6%, we increased our ratio to 42.2%. Yes. And of course, I mean, good cash flow, very good cash flow is reflected in stable working capital development, 17.3%. So very much in line with what we had last year, so '24 below our 20% or also 18%, which we have as a hallmark also for the future. And then looking where it comes from, I mean, received prepayments, you see that with 15.6%, this is 2 percentage points lower than we had at end of '24. But if we look at the overall number, it is still about EUR 900 million as we had it also '24. Now looking at inventory, also stable here as an absolute number. And that's why also the ratio decreased slightly to 12.5%, EUR 700 million approximately is the absolute number. And now accounts payable, yes, 15.5%. So on the level as we had at '24. And here, we had an increase in the absolute number, which, of course, then leads to a stable ratio. Receivables, contract assets as last number, a slight decrease, 1 percentage point. If I look at the overall number, also slight decrease -- a slight increase, close to EUR 2 billion we are here now. And if I look at the total working capital, you don't see that number on the slide, EUR 80 million increase. But we see that number on the next slide as change in working capital. But let's start, first of all, with free cash flow in general. We have mentioned that already a few times throughout this call, EUR 282.9 million. So above our expectations because we had a very strong fourth quarter again as we have it usually. And if we look where does it come from or where does the free cash flow before M&A come from, of course, first of all, earnings development, other noncash changes, which is mainly depreciation and then change in working capital, I already mentioned. Other assets and liabilities, the major or the bulk in that is tax payments, EUR 111 million, so income tax payments. And some of you may wonder why that is so much higher than it was in '24. '24, we had some consolidation effects from Netstal included. So that's why it's not 100% comparable. So cash flow from operating activities, very solid, very good with EUR 446 million. And CapEx, EUR 185 million, so 3.3% so slightly below our 4% and then other, which is smaller things, bringing us to our free cash flow without M&A. M&A activities in 2025, you remember Q3 CSW acquisition, that was the largest in here. And then financing activities, other, that is mainly the payout of the dividend of EUR 82 million and then some lease payments. And then you can read it yourself, change in cash, bringing us to our cash of EUR 550 million. Free cash flow as an overview over many years and also then slightly shown what our expectation for '26, yes, we're always a little bit more cautious. Yes, Christoph is smiling because it's always a kind of discussion on how high is the bar. I'm sure that some of you will also measure the bar and have a number there. But what is our message here? Our message is here, we also expect for '26 a solid and a good free cash flow. That's our message. And last but not least, for 2026 -- 2025, of course, ROCE 19.1%, yes, it's logical. EBT increased by 13%. Average capital employed increased only by 8%. So that's why our ROCE increased by 0.9 percentage points to 19.1%. And also to give you the absolute numbers, EBT EUR [ 470 ] million and average capital employed close to EUR 2.2 billion. Yes. So far for the actuals. And now let's just summarize one more time the outlook for 2026. I mean I have mentioned all those numbers already throughout the call, but already -- one more time here as a summary, 3% to 5% revenue growth. Important is the asterisk, adjusted for currency translation effects, EBITDA margin, 10.7% to 11.1% and ROCE, 19% to 20%. And of course, we have the usual disclaimers. And actually, we have added here also reliability of forecasting revenue is impacted because of the volatility of exchange rate. But that's why we have adjusted it in the revenue growth guidance. And for the segments, also here, the summary one more time. I have mentioned all of them already throughout my presentation. So that's why I will not read them out one more time. And that is everything from my side for the presentation. Christoph Klenk: Yes. All right. So let's have -- so let's have a look on the midterm targets. And since we have this morning several interviews with newspapers and journalists, I thought I should give a bit more of a taste on it because if you look to the planned revenue in 2026, you might ask the question, is that target still valid? And I can say it's still valid. And I just want to give some highlights on that. First of all, as we say that always here, we are not talking only with our customers about their 1-year investments. We are even talking about their 3 years investments and how markets might develop into the future. No security on that, but at least we have a pretty good understanding about possible investments in the different regions. So that's one thing. And the investment cases are pretty robust. I mean that you see when you see what, let me say, hurdles we had in the world economy, in the geopolitics in 2025 and still the order intake was good. Then we have our basic growth drivers intact. I don't want to repeat them in detail, is growth of world population, particularly in Asia and Africa and Middle East. It's definitely escaping from poverty in many areas of the world of the people. Then it's in the mature economics. It's definitely product varieties and differentiation. So that helps us a lot for new lines and it's cost pressure of our customers because new lines will simply have a better cost structure than old lines. Then there is, of course, our new factories coming up in China and in India. That has -- if we say new factories, that has to do we can actually better compete with local competition. We are still, for example, in China, the #1 in terms of revenue, but we have, let me say, growing competition, and we need to get on the price levels of our Chinese competitors where we can get really close to and have a bigger scale of, let me say, equipment being built in China. Same is true for India. So on those 2 factories, we have hope and they have to deliver contribution of it. And then the most important one is innovation. And if you look to what you have seen on Drinktec, there is this new line type, but it's not, let me say, a machine or a line because of it's a new line. It's about getting more share of the life cycle revenue of our customers. Of course, we are going to take more responsibility. But if you look to the utilization of our installed base, that is a significant proportion on the growth we have. So if you look to all of that, that's quite a big proportion, which is coming along. I have to add, we all the time had some acquisitions being built in. They are, let me say, on reasonable scale, EUR 30 million to EUR 70 million. That's the ideal sweet spot for us in the sense we do acquisitions, so that might be not overweighted into what we are going to see until 2028. But nevertheless, it's part of it. And then there is one other big thing Uta referred to that already. That's the FX because if we look to that, and if we would see the FX effects in 2025 and 2026, we are close to EUR 6 billion with the guidance in sales with the guidance we have given for 2026. So if you look to all of those factors, I think this is a reasonable number. And if we see then around EUR 7 billion being possible in terms of revenue, that will be a, let me say, a reasonable number from our point of view. Certainly, for the time being, with the FX effects more difficult to achieve. But nevertheless, I would say, for the time being, we have no reason to see that our fundamental underlying, let me say, factors out of the markets would not work. That's the statement I wanted to do here and to express that very clearly. So I would say with that, we are through our presentation. I mean, key takeaways that's a summary of the presentation. I wouldn't say that we are going to refer that once again. I would move directly on to Q&A. Thanks for listening. Olaf Scholz: So thanks to Uta. Thanks to Christoph for these information about the actual figures and the outlook. Olaf Scholz: I already got on my list Adrian Pehl from ODDO with some questions. Adrian Pehl: So actually, first of all, a question on what you mentioned in terms of the dynamics in China. I just want to make sure to get that right. So basically, the development that we saw throughout 2025, is that rather a function of the investment cycle of Chinese customers? Or would you say that you have been losing share? I mean I hear you that the situation on the order book side is improving. But how do you see your market position going forward in China? And the second question is linked to a little bit the slide, obviously, that you showed on the free cash flow development. I just want to make sure on the CapEx side of things, what should we expect for 2026? And how is the phasing of the CapEx given that you are ramping up your capacity throughout the years? I'll start with these 2 and then I jump back into the queue. Christoph Klenk: First to where we are in China and how -- if we look closer to the market, how do we have to see the market there? I mean, first of all, to give general questions of the Chinese market is very difficult because you need to see it different in the different, let me say, beverage categories. And we have to see it, of course, different in the, let me say, various products we have in the Chinese market. So it's a different route. But if I look into channel, I would say China has had over the last 5 years, a bit up and down. So we have been on a higher investment level than it has been a bit going down. It has been a bit going up. But if we look to a long run, it's pretty stable. And I would say the investment patterns of our customers is on a very comparable level. Now if you look to the future, I mean, China is right now in terms of investments dominated by aseptic bottling lines. The Chinese market has some specialties. And if I look back the last, Krones had a bit of a shortcoming because we didn't have aseptic lines localized. What we deliver out of China is PT lines for water and CSD, which was working well and everything included. So from, let me say, the end -- from the beginning to the end. And now the next step, and this is becoming true in 2026 are aseptic lines out of China because the market is significantly growing. Historically, we have been the biggest supplier of aseptic lines over the last 20 years in the Chinese market. We have around 250 systems installed in the market. Then it has been going down a bit and then it has been going up. And we have a disadvantage of what I just said, no local production, but this is coming up right now. So I would say, if I look to the future, there's a better fundamental on which we sit in terms of the local supply, we can supply out of the market. And we have strengthened our technical, let me say, ability in China in addition. So I would say there is a good potential for the future. And second, we have been working on the other side of the product portfolio that we get a bit of, let me say, more simple products out of the Chinese operation to serve -- to begin -- I mean really to say to beginning to serve the market better. Now if you look to the order, let me say, behavior of our customers, this is a quite competitive market. And then I would say this is changing because we have seen customers being good 5 years ago, they have lost really market shares and others have taken them. Fortunately, because of the long term, we are already serving the Chinese market and a good customer relationship, we don't care too much which customer is at the moment investing or not because we have access to all of them. And we have a specific program in place to get customers on board, which we didn't know yet because they are new customers. And we are having a team observing the local competition in detail just to understand what we need to do in order to get with certain customers an order, which is not all the time only the product. It has a lot to do with the services we supply around the product. I hope that gives you a taste where we are in China. Uta Anders: I take the CapEx question? Christoph Klenk: Yes. Uta Anders: Adrian, it is what we have communicated also throughout the conferences. We stick to our 4%. That's also the bottom-up plan we have. And I mean, we have mentioned all the investment cases, but projects we are currently undergoing. Christoph talked about the strategic importance of India, but also of China. We spoke about the U.S. that's where money goes into when it comes to CapEx, but also here in Germany, I mean, investing into a new warehouse here at our headquarters, but also investing more automation into our machining facility close by. So those are the big tickets, and they end up at 4% as we had planned it all the time. Olaf Scholz: So thanks to Adrian. The next question, I just see a phone number starting with 44. I don't know. Christoph Klenk: Somebody from the U.K. that's obvious. Olaf Scholz: That must be U.K. number, yes. It's a U.K. number and then next is 7407. But let me skip to the next one, which is [ Vitor Shen from Iberbell ]. Unknown Analyst: So just regarding the outlook provided, I was just wondering of the composition of it. I mean, is it possible to split it a bit? I understand that it's communicated in local currency. And thereby, can you elaborate a bit more on how much, I would say, it could come from pricing and how much from volumes? And also if M&A is [ loosely ] part of the strategy for 2026 as well, if you could get some color on that? And the next question will be on the EBITDA margin. So you're enhancing them. And is it possible to elaborate a bit more regarding the drivers implying the improvements, notably the cost optimization measures? I have seen in the presentation that personnel expenses were increasing relative to total performance, while material expenses were decreasing. So can you please shed some light on this as well? I mean is this trend going to be the same for the coming year or not? Christoph Klenk: So if you look to the, let me say, a more detailed split of the 2026 perspective we give. I mean, number one, we do not see significant changes on, let me say, the markets we are going to serve, okay? So I would say the composition will be pretty much the same. And that's the reason why we see -- once we see currency on the same levels as of today and the changes that currency impact, and that's what we're actually stating might then be very comparable. If you look to the composition of, let me say, our segments, even this composition will be pretty much the same. I mean, with the growth of what we have said, this will be pretty easy to calculate. If you look now to our main segment in terms of machines and services, which we do not separate there, even there, the composition will be the same. There might be small gainings in terms of the life cycle because that's important for us, but that's the beginning, it will be pretty small. So I would say even this composition will be pretty much the same. And if you look to pricing, there is very little in terms of pricing included. We keep prices stable. And even in those areas where we had historically, I would say, better and fast price adjustments, which is the spare part and life cycle business, even there, prices are pretty stable because customers do not accept that we are raising pricing for the time being. I mean we are fighting -- and I said it in the beginning, we pay a strong attention that pricing is not eroding. That's our target. But if you look to sales in total, there's no pricing effects being included. So I hope that gives you for, let me say, this category a point. And if you look to the strategy to 2026, I mean, if you look to the overall situation, we have been, let me say, driving the company significantly by growth in a pretty large scale over the last 4 years. Yes, that's a bit less than in the past. But if you look to 2026, we have big initiatives in the markets that we go more in specific cases of the market that we strengthen, for example, namely processing that we say we have -- we are going to attack certain markets stronger. We have for categories of processing, different sales forces being in place, which are coming just to make sure that we maintain the growth. Same is true for Intralogistics. And if we look to our core business, it's about what I said that in 2026, the factories in China and in India are going to be started up. That's an important factor to serve the markets closer. And of course, as always, we are building stronger footprint into life cycle around the globe just to make sure that we are going to harvest on the installed machine base and getting more share in the service section. I would say that's my summary. Okay. Thanks. Uta? Uta Anders: I wouldn't have said it as such. Christoph Klenk: Good. M&A is something which we certainly look into, which might be as well part of it. Did I read it right, what you said? Yes. Good. Then we go to the... Uta Anders: Then let's go -- let's look at margin expansion. I mean, 10.7% to 11.1%. Actually, it's compounded by various developments. First of all, let's look at payroll. I mean I mentioned earlier staying around 30% is important for us. I mean, despite of staying at around 30%, we expect as an absolute number, an increase in payroll just because of, for instance, collective bargaining agreements, which is around, but it's just an approximate number, 3%. Then on the other hand, and I have communicated that also throughout our conferences, we expect decrease in material cost. And why are we certain that we can achieve that? Because already last year, so 2025 in summer, we have actually closed quite some deals in terms of securing steel, for instance. And we are not only securing that for us, Krones, but we have also secured it for some of our suppliers, which then gives us a leverage also on some of the supplies we get. So that is important, and we have also hedged copper. So that's the 2 major components of our cost base. Then I mean, we will not have a Drinktec in 2026, which also has a certain effect. I mean you know it was around, but it's just an approximate number, EUR 10 million last year to EUR 25 million. So we will not have that high amount in 2026. And as a fourth lever, we will have only a moderate increase in FTE in 2026 compared to 2025, so very moderate. And then last but not least, we have always talked about the strategic measures we are executing to secure our margin, to secure our performance. And we have spoken earlier about CapEx. I mean, I have spoken about our machining plant. And there, we are increasing the level of automation, which helps us also then to increase operational efficiency, just to name 5 reasons why we -- or 5 portions why we believe that the EBITDA can increase as a margin. Does that answer your... Olaf Scholz: The next question is coming from Lars Vom-Cleff from Deutsche Bank. Lars Vom Cleff: Two quick ones, but I guess the first one you already answered. I mean, looking at your organic growth guidance for this year, 3% to 5%, if I understood you correctly, you said pricing is stable, so that it will be fully and solely driven by volume effects, correct? Christoph Klenk: Yes, correct. Lars Vom Cleff: Perfect. And then, I mean, more and more of my companies are worried or starting to get worried about chip prices rocketing, potential supply chain bottlenecks. Would you see that as a risk for your company as well? And if chip prices stay on this extremely or far elevated levels they are currently or some of them are currently trading on, would you be able to pass on the additional costs to your customers? Christoph Klenk: First of all, I would say we, as a management, and this is maybe one of the learnings out of the last 5 years that you worry all the time about your supply chain. But nevertheless, I would say we see no hurdles at the time being that we are not capable of, let me say, getting those components on board, which we need for our production. And out of this learning from the last 5 years, we have a totally different view on supply chains because we -- our arrangements would have said it earlier that we are going to hedge material and making these on a much longer period than we have been doing that in the past. We have included our suppliers, and this is even to the chip question, even for all the suppliers because we don't buy any chip direct. So if we buy chips, they are either in the PLCs, which we get delivered from Siemens and others or in other electrical components, which we get supplied again from Siemens, from B&R and so on. But what we have is, we are sitting with them and to look deeper into their supply chain. And I would say the fact that we have been all the time concerned that the Taiwan and Chinese issue might come up that we have secured supply chains in, let me say, different quantities and different time periods than we have been doing that in the past. And this will help us over a pretty long period if things go south that we can: a, maintain pricing and; b, can maintain supply. I don't want to go more in detail into what we have done there, but it's at least beyond one business year. That's the important message we sent here. Second, this is another learning once pricing of certain components goes out of the frame, like chip pricing would go up. And we can explain that to our customers. We have gained significant experience in translating material cost increases once they are reasonable and can be not compensated by other sectors of material costs that we can translate that into pricing. This is still, let me say, a procedure. We do every 6 weeks, controlling procurement and sales. Is there anything which we need to translate because that was one of the learnings out of the, let me say, supply chain crisis. Once we look early into that and address it early, we can manage even, let me say, significant price changes in the supply chain reasonably. So I hope this gives you a taste on how we are going to manage that. And I wouldn't say that we are fully protected to all of this because we all know that the prices might come up. But at least we have prepared in a reasonable manner for such kind of incidents which might happen. Olaf Scholz: Christoph Blieffert from BNP. Christoph Blieffert: Can you give us some idea about the revenue contribution for the new Chinese and Indian factory, please in '26? Christoph Klenk: Very simple, India will be very low because these are actually most probably for the time being, what we see today, 2 lines, which are built in India and being then shipped to customers. So if you look to the overall revenue, it's small. It's more for, let me say, if we look to order intake in India and the agreements we are going to do with our customers, and this will actually pay off 2027 and 2028. For China, I mean, today, we are doing a low 3-digit number revenue in China locally. And I would say this is going to be [ extended ] by 10% to 20% in 2026. Why is that? Because the factory goes into operation by July. And I would say, until we have it in really full speed, it will be October. But nevertheless, we are doubling the capabilities in China for 2027. And this is what I said earlier that we are even going to localize our aseptic business there, which is a significant proportion, which can even add then another, let me say, 50% to what we are going to do in China. So it will be quite a significant proportion. I think there will be a chance in one of the next meetings to show you some slides how this looks like. This is a factory, which is really big. And at the end, we are talking about increasing our headcount in China until mid-2027 from today, roughly 1,000 to 1,500. Uta Anders: But small in 2026. Christoph Klenk: Small in 2026. Yes. Christoph Blieffert: You have been highlighting the negative FX impact of again, some EUR 99 million in '26. This is based on the current exchange rate levels? Uta Anders: So the EUR 99 million is '25. That's what we have highlighted. And this was just the difference between the average exchange rates '24 to '25. So translated them with the same exchange rates. And actually, most of it comes from the U.S. dollar, about half of a significant portion. And '26, yes, we expect a similar level. Does that answer your question? Christoph Blieffert: Similar level means again [indiscernible] close to EUR 100 million? Yes? Uta Anders: Like we had it in '25, yes, around EUR 100 million. Christoph Blieffert: And if the exchange rate remain on the current level, would you have to adjust your 2028 targets? Christoph Klenk: That's a good question because we can answer that when we know how the exchange rate will remain, let me say, later than 2026. But I told you earlier, I mean, we are keeping this target of around EUR 7 million in place, okay? And how much we might be short because of FX effects, I can't tell you today. We always the statement, we believe in the growth of our market. There are potentials which we can actually lift ourselves. It's not only market related. And since I have been explaining that, we would not make the statement at all that we are, for the time being, skip any of those targets. I mean there are many unpredictable things in front of us, but we have seen that world economy is for us, in our market is quite stable. And we believe we have talked that up and down. We still believe in that target, and we stay with that even with the FX effects in place for the time being. And please allow me that do not take the notions in for the time being. I have to be really careful because there any word is interpretated. So we stay with the targets of around EUR 7 billion in 2028. That's important. Olaf Scholz: Now we identified the number from U.K., Constantin Hesse from Jefferies. Constantin Hesse: Yes. Sorry, I had some issues with Teams. All right. So I have 3 questions. I would love to start with the medium-term guidance, one. So I already heard that on the call, you talked about order intake in Q1 looking good. So what I want to understand for '26 because clearly, there has to be some kind of growth cadence into that about EUR 7 billion figure in '28, meaning that order intake clearly has to be above 1x book-to-bill this year. So what I want to understand is what visibility? And are you actually seeing a pick up in order intake where you could today already give confidence that '27, we could see an accelerated growth relative to what we're seeing currently, obviously, assuming no further FX headwinds? Christoph Klenk: Well, visibility is certainly not up to 2027. I mean visibility, if I might explain that, how we -- what kind of visibility we have and how we deal with that. We have 3 measures: number one, discussion with our customers to understand those our own analytics. That's one package, why we actually look into the markets and how we think that we see investments coming. Then second, we have the more short-term view, which might go, let me say, until end Q2, beginning of Q3. And this is how many quotes we have out and how the pipeline looks like. And saying that this includes as well that we look into how much is the lost order rate we have because it's important, is there enough volume in the market and we are losing because of other reasons? Or is the market, let me say, as such not intact? But what I can say as of today, and this was true even for 2025, volume is not an issue. If my sales colleague would stay here, would say, Christoph volume is no issue at all, just pricing is a problem. But this is my second statement. We want to maintain pricing. So this is all the time a bit of a, let me say, a different balance we need to keep. And number three, short term, why I say Q1 is okay, we are mid of February. We know the orders we have already on hand. We know what is out there, and we know what we usually gain or lose. So I think this is something where we are usually pretty good in predicting that. But 2027 is staying significantly on the measures we have in our own hand. What I said earlier, the factories we are going to build, the innovations we see, the life cycle we want to extend, the processing where we see big potentials in the market that we can grow further and even Intralogistics, which has been doing great for us, where we can grow on. And we have then, let me say, Netstal, what we call advanced molding technology, where we see options and some smaller, let me say, growth areas where we are going to grow. So if we put it only on what we know from the market, this would be not enough for us to see really the case. And yes, order intake, of course, has significantly increased in 2027. That's no doubt about. And this is something we have in mind once we look into the statements we have just given. Constantin Hesse: Fair enough on '27. But then just rephrasing the question, keep it simple, Q1, Q2, Q3, which is what you have visibility on, you're confident that book-to-bill is above 1? Christoph Klenk: As confident as you can be with all the history and, let me say, the know-how we have. We have not yet the orders for Q2 and Q3 in our hand. But again, pipeline is good. We have been, I would say, any week in discussion, is that sound what we have planned to? Do we -- can we stick to it? Is there other reasons why it should not work? But from all what we know, things are looking pretty good for the time being. I promise I wouldn't give too long being in the business because we all know that Iraq, Iran -- sorry, Iran and the Middle East is, let me say, under pressure for the time being for us, an important market. I would predict that there is a reasonable reason -- or let me say, it's reasonable that there will be a strike, which would be then serious for our business. So that might be some of the downside. But if things could go normal, yes, I'm quite confident that we are going to get our order intake. Constantin Hesse: So second question, just on cash levels. We're reaching close to EUR 550 million in net cash. So I'm wondering, is there -- in terms of M&A pipeline, is there anything potential coming up that could be larger? And if not, at what level of cash would you start considering returning cash to shareholders? Christoph Klenk: First of all, I mean, we have proven over the period that we have been using the cash for possible M&As. And I would say, on the other side, we are very careful in terms of our cash positions because we all know that this is something very comfortable once you have it in particular on times get a bit more shaky. But I can say we are -- how to say, we are working on M&A projects. However, we do speak only in case they are just before becoming true. So these are things which might come up. And we have -- sorry, when I say that not yet considered to pay extra dividend to our shareholders because we believe the reinvestment in the company is going to happen. We see things which could be done in the market in terms of M&A, and let's see how this continues through 2026 and 2027. So I don't think we come into the question whether we have to use our -- or we have to give our cash to pay it out to the shareholders. Uta Anders: Yes. And also with the profitable growth, we believe our forecast shows that the payout ratio or payout per dividend is going to increase. So that is the lever where we believe that this is beneficial for our shareholders as well. Constantin Hesse: And then just curious around the free cash flow development. I mean, you said that you're being conservative for 2025 -- 2026, sorry. But just to understand the dynamics of it because from today's perspective, I mean, because you basically confirm the '28 guidance, I would assume that orders start accelerating in '26 in order to have the book to grow in '27. So looking at the free cash flow development, what is holding you back from generating a free cash flow that is similar or even above 2025? Uta Anders: I mean, yes, we're going to invest further 4% of revenue. That's also what we plan for 2026 and also the years beyond. I mean for working capital, I mentioned earlier, a level of about 18%, which is an absolute increase also for 2026. Of course, we're going to generate good levels of cash flow from operating activities. And so we expect a good level. And why is it in our expectation lower than it is for 2025? I mean, you may remember that for 2025, our expectation actually was a bit lower as well. So that means we have generated more cash flow. And I mean you can cash flow only generate once. So there's maybe also some effect -- some small effect from '26. But overall, we expect a very good cash flow development for '26 as well. Some, as my colleague may say, also conservatism in here, but we believe it's going to be a good one as well. And we don't guide it. I mean it's, of course, indirect part of our ROCE guidance, but the free cash flow, we don't guide. We just give an indication on the expected development. Constantin Hesse: Christoph, can I quickly just -- Christoph, can I just ask very quickly? You said Iran, obviously, is an important part of the business. If there is potentially a strike there, is there any -- what's -- I mean, any idea that you could give us in terms of what the potential impact could be? Christoph Klenk: First of all, when I look to Iran, I mean, I'm looking more to the countries, let me say, aside from Iran, like Saudi Arabia and Israel. So I do not talk about Iran. That's from a business perspective, not important. So I was more looking to the uncertainty which brings that to the region because if you look to our Israelian and Saudi Arabian friends and customers, I mean, if such a strike would go to happen, they are concerned whether their countries would be attacked. That's the reason behind it. And I would say our customers are in this region quite robust to whatever weaponized conflict they are going to see. Nevertheless, a bit of an uncertainty might be if, let me say, such a counter-attack of Iran might jeopardize those areas. And I would say it's limited to those being around Iran. And -- but if I really can figure out what the impact would be, I can't tell you. I would take it around. I mean, if you look too, we have digested a 10% decrease in order intake in North America because of the tariffs. And we have been able to compensate that in other areas. And I would see that other, let me say, areas of the world, and I would name Asia in particular, have a big potential for 2026. And again, I wouldn't promise it, but I would see potentials to compensate in other areas as well. And that's the reason why we still stay pretty sound on our statement, book-to-bill ratio will be slightly above 1. Olaf Scholz: And the next questions come from Sven Weier from UBS. Sven Weier: I'm sorry, I have to follow up on the revenue guidance, and I'm probably the only person on the call who hasn't understood it yet. But the 3% to 5% guidance that you give, is that already after the EUR 99 million? Or do we have to deduct it so the real guidance is 1% to 3%? Uta Anders: So first of all, the EUR 99 million is '25, but I said it's a similar number for '26 and the 3.5% is not after the EUR 100 million, the similar number, you have to deduct it. Sven Weier: Okay. Good. That's what I thought, but I just wanted to confirm that. And then the other question also on currency because you said U.S. is down 10%. I mean, is that an organic figure? Or is that including the negative currency effect? Because otherwise, I guess, you would be kind of... Christoph Klenk: Yes, yes, including. Including. Including. Sven Weier: So organically, you've been actually quite flat in the U.S. despite all the trouble? Christoph Klenk: No, it's half-half. It's half-half. It's half-half. If you look to the numbers on order intake, what I just said, I would say a bigger proportion is tariffs, but it's certainly a proportion is currency. Yes. But nevertheless, this is not -- you have to look into -- currency is an order intake, not so big issue. It's just a translation effect, which we usually have once we translate P&Ls from the U.S. into Germany. Because on the orders, we are dealing with the numbers we have in the quotes, very simple. And we don't translate them because if we quote bottling lines to the U.S., we have here a euro quote, so if we count. We have not the U.S. count. Once we quote out of the U.S., of course, it's U.S., and we do not translate that at all. It's just a number we see. So order intake has not so a big effect of FX than actually the sales because we don't have the, let me say, exact translation. Sven Weier: And final question for me is just if you could share what kind of beer exposures do you still have left? I mean we all can obviously see... Christoph Klenk: That's a good question. Sven Weier: The issues that the beer makers have and it doesn't seem to keep getting better, the generational issue, I guess. So has it become quite small already? Or what's left in beer? Christoph Klenk: First of all, I have to say, complement how you phrased the question in the sense of what beer percentage we have left and beer exposure. This is really good. 2025 was really bad on it. If you look to it, I think it would have been around 20%, maybe beyond -- below that. But interestingly, we have received this year quite good orders from the beverage -- from the beer industry. So I would -- if you look to purely Q1, this would be on old levels, maybe between 25% and 30%. But all in all, we do expect that beer is, I would say, on a 22% to 25% level in our portfolio. And it's still decreasing since Intralogistics is growing, and we have been actually in processing, not growing at all in the beer that has become a pretty small business in the processing. I would say -- and I can say the number that's pretty easy. We have around EUR 120 million in the processing business being exposed to beer, not more anymore. Where we are coming from, I would say, EUR 300 million. So that has been compensated all by other, let me say, activities outside of beer. And in the core, I would say it's pretty stable because bottling lines are more replaced than brewhouses. Sven Weier: And what is the nature of the order that you got? I'm just curious, I mean, if these guys invest, what are they still investing? Is this an emerging markets order or developed markets? Christoph Klenk: To be honest, it's all over the place. So we have orders from Europe where we have very old equipment being replaced from well-known breweries, but it's as well in Asia, where we have received orders, and there is still some orders out there in Southeast -- in South America, where we believe those orders are going to materialize in the next 3 months as well. So it's all over the place. And I have to say maybe that's interesting for you in the audience that in particular, the German brewers have been quite active in ordering equipment and getting on better cost levels. So I would say they have been -- had a lot of courage into what they are going to do. So in particular, in Germany, investments in breweries have been pretty good in 2025. And the same looks like for 2026, even if you look to the market development, which is not so good all over the globe, it's, I would say, a lot of hesitation for investments into breweries. Sven Weier: And is that around also a lot of energy efficiency and those environmental topics, let's say? Christoph Klenk: I would say it's more economical reasons that they, in many cases, bring 2 lines down to 1 with higher speeds, higher efficiency, getting better, let me say, economics because they have less people in. That's more the investment scheme we see right now. And there is still some very old equipment out there in case you look to bottle washers, which have, in their case, they are 25 years old. They have a significant amount of energy consumption where they just because of energy reasons, go to reduce that energy consumption of pasteurizers; if they are old, they are horrible in terms of what they consume in water and heating. Olaf Scholz: And a little question, I think I see from Adrian, Adrian Pehl. Adrian Pehl: Actually, a very quick one on Intralogistics. Obviously, I mean, you want to grow the business still quite substantially. So you achieved 8.4% margin in this segment last year. So I was wondering why should we assume that the margin is not going to see more momentum on this one? Is that due to mix? Or how should we see this? Christoph Klenk: Yes. I mean Intralogistics from a, let me say, profitability standpoint, let me say, and I would call it commodities, which I call hybrid warehouses has been over the years under pressure. And what we did and this we stated as well on our Capital Market is that we looking into, let me say, more advanced order picking systems and that we have moved, let me say, the portfolio significantly. Then we have, let me say, a momentum that we are exploring new markets in Asia, while we have on the other side, the mature markets in the U.S. But I would say, if we look in comparison with, let me say, comparable product portfolio structures, we are doing pretty well in terms of the profitability. And we wouldn't see Intralogistics necessarily being in the short run on the same profit levels than we see the core. That's a fact. And I wouldn't say anything wrong in case I would make the statement that's going immediately in the right direction. So I would say the profitability we see we are quite happy with. It was quite an effort to be there. And I would say we can grow certainly further because and this adds on the margin because even our service business is growing, and this is not parts in this particular point. This is more software upgrades and helping people -- customers out with crews running their installation. So there's a different business model. Again, if we grow an installed base, I think we have a better chance in grabbing the aftermarket business, which is highly profitable in that section. And in the long run, I see a good development in terms of profitability as well, but it will be not in the short term. Adrian Pehl: All right. And very last follow-up, actually on the service share in general for the group. I take it that actually the service share increase is probably more pronounced as of 2027 as well and more or less like -- I think the line of communication so far has been 2025, 2026 rather not a significant increase on the service side. Is that correct? Christoph Klenk: Yes. I mean if we talk about significant, it's a question of what is significant, but we are growing our service business. So it's still growing. It has a very solid fundament. And if we look to the first 2 months, things are in line. Is it, let me say, that you see a huge momentum in sales? No, it's a kind of a very constant development. And we would see that even over the period of 2027, 2028. In life cycle, there is no, let me say, big jump. It's more an evolution rather than really an explosion what you might see. Even with the new lines we bring up, I mean, we are going to ship 8 of those by the end of the year, beginning of next year, which we are harvesting on. But if it's really completely having scale, and we stated that all the time, it will be 2027 to 2028. Olaf Scholz: So let me check the channels or ask a [ community side ]. I don't see no hand raising, also no mails from my mail server, so Christoph [indiscernible]. Christoph Klenk: Again, thank you very much. We are beginning of the year. As always, there is, let me say, a realistic optimism. We see and you have heard from the statements we have made. We are, I would say, as we have been always quite committed to the numbers we have given. A lot can happen, of course. But nevertheless, we managed that and compensated that with the markets we have. So we are looking with realistic optimism forward and even looking to listen to our 2028 numbers. Thanks a lot for staying with us and having your questions. It was a pleasure, as always. Thank you. Uta Anders: Thank you very much. Olaf Scholz: Thank you.
Operator: Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to Fourth Quarter 2025 CVR Energy, Inc. Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Richard Roberts, Vice President, FP&A and Investor Relations. You may begin. Richard Roberts: Thank you. Good afternoon, everyone. We very much appreciate you joining us this afternoon for our CVR Energy Fourth Quarter 2025 Earnings Call. With me today are Mark Pytosh, our Chief Executive Officer; Dane Neumann, our Chief Financial Officer; Mike Wright, our Chief Operating Officer; and other members of management. Prior to discussing our 2025 fourth quarter and full year results, let me remind you that this conference call may contain forward-looking statements as estimate a defined under federal securities laws. For this purpose, any statements made during this call that are not statements of historical facts may be deemed to be forward-looking statements. You are cautioned that these statements may be affected by important factors set forth in our filings with the Securities and Exchange Commission and in our latest earnings release. As a result, actual operations or results may differ materially from the results discussed in the forward-looking statements. We undertake no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by law. This call also includes various non-GAAP financial measures. The disclosures related to such non-GAAP measures, including reconciliation to the most directly comparable GAAP financial measures are included in our 2025 fourth quarter earnings release that we filed with the SEC and Form 10-K for the period and will be discussed during the call. With that said, I'll turn the call over to Mark. Mark Pytosh: Thank you, Richard. Good afternoon, everyone, and thank you for joining our earnings call. For the full year 2025, we reported consolidated net income of $90 million and EBITDA of $591 million. At the segment level, we generated EBITDA of $411 million in the Petroleum segment, $211 million in the Fertilizer segment and a loss of $22 million in the Renewable segment. For the fourth quarter, consolidated net loss was $116 million and EBITDA was $51 million. Our fourth quarter results were impacted by the accelerated depreciation associated with the reversion of the renewable deal unit at Wynnewood back to hydrocarbon processing along with extended downtime at the Coffeyville fertilizer facility due to 3 weeks of start-up issues at the third-party air separation plant. We continue to believe the refining and fertilizer market fundamentals look constructive for the next several years, which I will discuss further in my closing remarks. Now let me turn the call over to Dane to discuss our financial highlights. Dane Neumann: Thank you, Mark, and good afternoon, everyone. For the fourth quarter of 2025, our net loss attributable to CVR shareholders was $110 million losses per share were $1.10, and EBITDA was $51 million. Our fourth quarter results included unfavorable inventory valuation impact of $39 million, a $9 million unfavorable change in our RFS liability and unrealized rate of gains of $10 million. Excluding the above-mentioned items, adjusted EBITDA for the quarter was $91 million and adjusted losses per share were $0.80. Adjusted EBITDA in the Petroleum segment was $73 million for the fourth quarter of 2025 compared to $9 million for the fourth quarter of 2024. Higher crack spreads and increased throughput volumes drove the majority of the increase from the prior year period. Combined total throughput for the fourth quarter of 2025 was approximately 218,000 barrels per day. Crude utilization for the quarter was approximately 97% of nameplate capacity and life product yield was 92% on total throughput volumes. Benchmark cracks for the fourth quarter softened from the third quarter levels as they typically do in the winter with the Group 311 averaging $22.70 per barrel. Cracks were unseasonably strong in October and November, which we believe led to higher than average U.S. refining utilization levels that partly drove the decline in crafts in December. Our fourth quarter realized margin adjusted for the change in RFS liability inventory valuation and unrealized derivative gains was $9.92 per barrel, representing a 44% capture rate on the Group 3 2-1-1 benchmark. RIN prices declined approximately $0.18 per barrel from the third quarter 2025 levels, averaging $6.05 per barrel for the fourth quarter. Net RINs expense for the quarter, excluding the change in RFS liability, was $90 million or $4.49 per barrel, which negatively impacted our tax rate for the quarter by approximately 20%. The estimated accrued RFS obligation on the balance sheet was $72 million at December 31, representing 59 million RINs mark-to-market at an average price of $1.21. As a reminder, we will continue to recognize 100% of Wynnewood Refining Company's RIN obligation in our financials as EPA has not yet ruled on our pending petition, which for the fourth quarter of 2025 was approximately $34 million. Direct operating expenses in the Petroleum segment were $5.40 per barrel for the fourth quarter compared to $5.13 per barrel in the fourth quarter of 2024. The increase in direct operating expenses per barrel was primarily due to increased personnel and utilities costs. Adjusted EBITDA in the Renewable segment was breakeven for the fourth quarter, a decline from fourth quarter of 2024 adjusted EBITDA of $9 million. The decline in adjusted EBITDA was driven by a combination of the loss of the blenders tax credit, a decline in the HOBO spread and reduced throughput volumes. We ceased operations of the renewable diesel unit at the end of November and the reversion of the unit to hydrocarbon processing was completed in December. Adjusted EBITDA in the Fertilizer segment was $20 million for the fourth quarter of 2025 compared to $50 million for the prior year period. ammonia utilization rate was 64% for the quarter, which was impacted by the planned turnaround and subsequent delayed start-up at the Coffeyville facility. While the turnaround was completed in early November as scheduled, we experienced additional downtime following approximately 3 weeks of start-up issues at the third-party air separation plant. The Board of Directors of CVR Partners' general partner declared a distribution of $0.37 per common unit for the fourth quarter of 2025. As CVR Energy owns approximately 37% of CVR Partners common units we will receive a proportionate cash distribution of approximately $1 million. Cash flow from operations for the fourth quarter of 2025 was breakeven and free cash flow was a use of $55 million. Significant uses of cash in the quarter included a $75 million payment on the term loan, $68 million of RIN purchases related to Wynnewood Refining Company's 2024 and 2025 obligations, $55 million of capital spending for the noncontrolling interest portion of the CVR Partners third quarter distribution and $26 million of cash interest. Total consolidated capital spending for the full year 2025 was $197 million, which included $135 million in the Petroleum segment, $57 million in the Fertilizer segment and $4 million in the Renewable segment. Turnaround spending in the petroleum segment was approximately $190 million in 2025. For the full year 2026, we estimate total consolidated capital spending to be approximately $200 million to $240 million and turnaround spending in the petroleum segment to be approximately $15 million to $20 million. Growth capital spending of $75 million to $90 million in 2026 is expected to be slightly elevated relative to the past few years as we hit the peak spending year for the alkylation project at Wynnewood along with a host of reliability and debottlenecking projects in the Fertilizer segment. As a reminder, the growth capital spending in the Fertilizer segment will be funded from cash reserves taken at CVR Partners over the past few years. Turning to the balance sheet. We ended the quarter with a consolidated cash balance of $511 million, which includes $69 million of cash in the fertilizer segment. Subsequent to year-end, we completed a $1 billion senior notes offering with maturities in 2031 and 2034. The proceeds of the offering were used to repay the remaining balance of the term loan redeem all of the outstanding 8.5 senior notes due in 2029 and redeemed $217 million of the 5.75% senior notes due in 2028. With these transactions, we are able to significantly extend our debt maturity profile while retaining the ability to pay down the remainder of the outstanding 2028 notes as we work to get back to our current target of $1 billion of gross leverage. Total liquidity as of December 31, excluding CVR Partners, was approximately $690 million, which was comprised primarily of $442 million of cash and availability under the ABL facility of $248 million. Subsequent to year-end, we also completed an upsize and extension of our asset-based lending facility, increasing the commitments from $345 million to $550 million and extending the maturity to 2031. While we have not historically drawn on the ABL, we believe the increased liquidity is a benefit and provides additional financial flexibility if needed. Looking ahead to the first quarter of 2026 for our Petroleum segment, we estimate total throughput to be approximately 200,000 to 215,000 barrels per day. We estimate direct operating expenses to range between $110 million and $120 million and total capital spending to be between $30 million and $35 million. For the Fertilizer segment, we estimate our first quarter 2026 ammonia utilization rate to be between 95% and 100%. We estimate direct operating expenses to be approximately $57 million to $62 million, excluding inventory impacts, and total capital spending to be between $25 million and $30 million. With that, Mark, I will turn it back over to you. Mark Pytosh: Thank you, Dane. As this is my first earnings call as the CEO of CVR Energy, I wanted to take a few minutes to highlight some of the strategic priorities that we will be focused on over the next few years. First and foremost, our primary focus will continue to be the safe and reliable operations of our facilities. Reliability is key in this industry as we need to make sure the facilities are running well to be able to capture whenever margin opportunities present themselves. Second, we are reevaluating our commercial optimization opportunities to drive margin capture improvement in the petroleum segment. While we are still at the beginning phases of this analysis, we believe there are opportunities in our existing asset base to capture more of the crack than we have been over the past few years. These include the reversion of the RDU back to hydrocarbon processing, which should expand the crude slate flexibility at Wynnewood and allow us to repurpose rail assets for additional feedstock security and product shipment optionality. At Coffeyville, we have started ramping up our WCS processing and believe we may be able to get throughput up to 20,000 barrels per day compared to less than 1,000 barrels per day in 2025. I would also like to take this opportunity to introduce our new Chief Commercial Officer, Travis Capps. Travis brings over 30 years of leadership experience in the refining and petrochemical industries. Most recently having served as Chief Commercial Officer at Motiva. We're excited to have Travis leading our commercial team as we look to better optimize our refining portfolio. Third, we plan to take a more proactive approach in pursuing opportunities to expand our asset footprint. Our portfolio would benefit greatly from additional geographic diversity and increased scale, and we plan to be more active in the marketplace and trying to identify these opportunities. And finally, we will maintain a disciplined approach to capital allocation. We've made significant progress on our deleveraging efforts, reducing debt on the balance sheet by over $165 million in 2025. Making progress on deleveraging, along with maintaining a cash balance of $400 million to $500 million excluding CVR Partners and generating free cash flow in the current environment are some of the key metrics the Board evaluates each quarter regarding a potential return of the dividend. Looking ahead, we believe fundamentals in the refining sector continue to look constructive over the next few years. Global refining capacity additions are set to slow down in 2026 and 2027 and compared to the past few years, while refined product demand growth is expected to remain steady, particularly for diesel. Within the Mid-Con where we operate several new refined product pipelines are under construction or development that should offer additional outlets from the Mid-Con and the Gulf Coast to the Denver area, the Southwest and potentially on to California. On the crude oil side of the equation, recent developments in Venezuela could lead to additional heavy barrels coming to the Gulf Coast, which in turn may pressure Canadian crude oil differentials. Wider Canadian crude debts would be a benefit to our system as we increase our WCS processing at Coffeyville, which was part of the facility's upgrades over a plus turnaround cycle. Although RINs continue to weigh on our margin capture in refining, we remain cautiously optimistic after the actions taken by EPA last year to clear the backlog of outstanding SRE petitions. We believe Wynnewood refining company should continue to receive full or partial SRE grants as it has for the 2017 through 2024 period. And we will continue to fight for the right 21 refining companies entitled to. Far from being the windfall that large integrated refiners and the RFA claim, there is no doubt that Wynnewood Refining company suffers disproportionate economic harm as a result of complying with the RFS. Any attempt to force the shutdown of small refineries is nothing more than a maneuver to increase the market share of large integrated refiners to align their own pockets at the expense of the American driving public. In Fertilizer segment, despite a record crop year for corn in 2025 and preliminary estimates are calling for up to 95 million acres of corn to be planted in 2026, which should drive continued strong demand for nitrogen fertilizers through the spring. In addition, global inventories of nitrogen fertilizers appear to still be tight and pricing has been robust so far to start the year. We are continuing to invest in plant infrastructure for reliability in addition to increasing our DEF production and load-out capacity. We are also progressing the feedstock diversification and ammonia expansion project at the Coffeyville facility and the brownfield expansion at East Dubuque. Although we experienced some unplanned downtime in the fourth quarter due to the third-party owned air separation plant at Coffeyville. Both facilities are running well today. And as Dane noted in our guidance, we are currently expecting a long utilization rates back above 95% for the first quarter. Looking at quarter-to-date pricing metrics for the first quarter, [ Group 3 2-1-1 ] cracks have averaged $17.09 per barrel with the Brent WTI spread at $4.57 per barrel. And the WCS differential at $14.84 per barrel under WTI. Prompt fertilizer prices are $700 per tonne for ammonia and $350 a tonne for UAN. With that, operator, we are ready for questions. Operator: [Operator Instructions] Your first question comes from the line of Manav Gupta with UBS. Manav Gupta: I wanted to first start on a little bit on what you mentioned in the opening comments, looks like more pragmatic M&A, but more persuasive approach to M&A than the prior management team. Can you talk a little bit about that, your expansion plan? What kind of assets are you looking? Which fats would you be interested in? Is it only refining? Anything on those lines would really be helpful. Dane Neumann: Thanks for the question, Manav. So our focus is when we say proactive means that try to engage with other players to discuss kind of where things are headed strategically and looking for places where people are thinking of doing something different going forward looking at a portfolio evaluation and really just trying to engage in discussions and see what may be out there and trying to see if there are opportunities to do bilateral acquisitions as opposed to participating in the auction process. So we're really just more trying to engage in being in the dialogue. We're looking at both sides of the business, so both our refining business and our fertilizer business. So we are looking at opportunities to grow in both areas. And what I want to say is while we're going to be more proactive, we're not going to lose our discipline. So it's not that we feel pressure that we have to do something, but we think there's going to be opportunities. We think the industry is sort of at an inflection point where there's going to be changes in portfolios out there, and we would like to see if there's opportunities to participate in that and -- but we're going to be disciplined. And I would give you kind of two thoughts on metrics or guideposts. One is we won't stretch the balance sheet. So we're not going to try to leverage up to do anything in either business. And the other is that any deal that we would consider has to be accretive to our shareholders or our unitholders. So we are going to try to see if opportunities present themselves, but we are going to be disciplined in our approach. Mark Pytosh: Perfect. That's very reasonable. My quick follow-up, sir, is, you said you were going to pay down term loan and you have paid a portion of it, should we expect that you will first pay down the full amount of it? Or can we expect that as you are paying it down, you could institute like a small, modest dividend, refining shareholders always appreciate some kind of cash returns. I'll turn it over. Dane Neumann: Yes. Thanks, Manav. This is Dane. As we've said in our prepared remarks, cash -- free cash flow, minimum cash balances and progress deleveraging have been our priorities. We don't believe that we have to be back to our base $1 billion target before a dividend can return, and we've obviously made a lot of progress on the deleveraging. So again, we don't think we have to be at 0. We want to see a clear path to paying it down further before we consider returning to a modest level of dividend. Mark Pytosh: Yes. And just to add to that, Manav, because we do get that question quite a bit as when we return with the dividend, we want a dividend that's going to be sustainable in any part of the cycle. So we want to be -- have -- be able to do that and not yoyo the dividend. And so we -- one of our major goals is to bring the dividend back. We understand that the shareholders would like us to be paying a dividend. But we want also something that's sustainable. So we'll pick that spot. The sweet spot Dane's described where we can be sustainable in paying it again, in good crack markets and bad. Operator: Your next question comes from the line of Matthew Blair with TPH. Matthew Blair: Great. you talk a little bit more about ramping up the WCS runs at your Coffeyville refinery. I think previously, you were shipping those WCS barrels and then reselling them in Cushing. So you're still getting some economic benefit. But I think on -- earlier, you mentioned that you're looking to ramp up rents at 20,000 barrels a day versus just the one that you did in 2025. So -- can you talk about like why -- like what's spurring this change? Is there anything different going forward in your kit? Why are you doing this? Dane Neumann: So Matt, we were -- we had sort of gotten prepared for this day. The last two turnarounds, we had upgraded our metallurgy there and so we were prepared for this day. And quite frankly, when Maduro was removed in Venezuela, that started changing the dynamics in the Western Canadian market. And we saw dips widen out. And the biggest bang for our buck in the portfolio was to run those barrels as opposed to there were some -- the sales price was the most attractive. So the most attractive option was to be able to run the barrels, and we moved very quickly. So I was very happy with quickly our team acted on that, and we've been ramping up in January and into February. So we're taking advantage of that market opportunity. And -- but the best economic value of the barrel was to run it at Coffeyville rather than shipping it all down to the Gulf Coast. Matthew Blair: Okay. It sounds good. And then could you talk about the steep rise in RIN prices since the start of the year and basically, how are you dealing with it? Are you looking to blend more of your own barrels? Or are you in the market purchasing those RINs? And as part of the M&A effort, would you think about acquiring more blending capacity or potentially retail to offset some of your RIN exposure? Dane Neumann: Sure. There's a few questions in there, so I'll try to parse that. But rent prices have increased quite a bit in the first 6 weeks of the year. I think we believe that the -- it's not finalized, of course, we're in already in '26, so we don't even have to finalize '26 RVO. So apart from the course there. But there has been a proposal made. It's supposed to be finalized any day now, back in September, and we think that it's a much higher RVO than we've had historically, and we think that, that's lifted the rent market. Just to give you a fact there, the RIN obligation at Wynnewood is our financial obligation is 2 to 3x what we pay everybody who works at the facility. So just to level set how what a steep cost it is to us it is 2 to 3x when we pay all the employees at the facility today. And yes, we are trying to blend more, we're trying to take steps to reduce our overall exposure. And in the acquisition world or develop world, we're going to be looking for ways to either get more blending capacity or moving fuel around or all of the above and try to minimize the impact on us. But there's no doubt that we can't hide from the full effect of the RVO. We're going to have some exposure there, but we're going to try to do everything we can to minimize the cost to the company. Operator: Your last question comes from the line of [ Alexa Petrick ] with Goldman Sachs. Unknown Analyst: I wanted to start maybe back on Coffeyville. Would love your perspective, there's been more initiatives there on improving capture rates, and you've also talked about increasing jet fuel production. Any thoughts on how we can think about kind of the capture rate uplift and some of the moving pieces there going forward? Mark Pytosh: Sure. And we have a similar number of initiatives going on in winning wood. So I don't -- we did talk about Coffeyville a lot today, but we're pursuing it on -- at both facilities. And we're not -- we're pretty early and not ready to get targets. We're going to continue to be talking about all of our capture opportunities that we've either done or pursuing over the coming quarters. So we'll be communicating the way we are thinking about it is rather than putting a fixed number out there and saying that's what our -- it's really, from my perspective, a cultural shift where we are constantly looking for those margin capture opportunities. Because they come in different forms in January, the two forms that were -- that appeared that were not on the radar screen or the winter storm and the Venezuelan situation. And we're working together to being able to respond to changes in the market and take advantage. And the issue is the window is open and close, and they're generally open for short periods of time. And so you have to be fast and you have to respond. And we are working to speed it up and respond to opportunities across the whole platform to be able to take advantage of it. So we're not putting a target out there at this point, but we will be communicating with you as to our progress on improving our margin capture, and we wanted to show up in the results. Obviously. Unknown Analyst: Okay. That's helpful. And then maybe one follow-up. It's been a few months in some of these product pipeline projects were announced, bringing products from the Mid-Con to the West Coast. Any updated thoughts on how this could change the operating environment dynamic in the Mid-Con and how you guys are thinking about the next few years there? Dane Neumann: Yes. Sure. We're -- I would just say I'm very optimistic about the Mid-Continent for the next several years because I think with the pipelines that are being developed to go to the West and then the Denver I feel like our -- the Group 3, the Southern and the Southern Plains, well, it's going to begin to look more like the other parts of the geographies and refining in other parts of the country where you have other outlets. The biggest issue in the Mid-Con is seasonally, we have a wide basis. And if we had more outlets for what we're producing, I think that basis would not be as wide. And so I look out as the infrastructure is being developed as the Mid-Con being a pretty attractive place to be and give us opportunities to be moving fuel to other regions. And especially in times of the year where seasonally it's softer in the Mid-Con. So I'm very optimistic about it. It's going to take some time for all the infrastructure to be put in place. But I think the upside for our company in the Mid-Con is very good. And I think the Mid-Con as a market is going to be a lot more attractive in the coming years. So very optimistic about what's ahead there. Operator: There are no questions at this time. I will now turn the call back over to Mark Pytosh for closing remarks. Mark Pytosh: Again, I'd like to thank all of you for your interest in CVR Energy. Additionally, I wanted to thank our employees for their hard work and commitment delivering safe, reliable and environmentally responsible operations, and we look forward to reviewing our first quarter results in a couple of months. Thank you. Operator: Ladies and gentlemen, that does conclude our conference call for today. Thank you all for joining, and you may now disconnect. Everyone, have a great day.
Operator: Good afternoon, ladies and gentlemen, and welcome to the Gold Fields' Q4 Results Presentation. [Operator Instructions] Please note that this event is being recorded. I will now hand the conference over to Chief Executive Officer, Mike Fraser. Please go ahead, sir. Michael Fraser: Thank you very much. Good afternoon, good morning and good evening for those that have joined the presentation of our financial year 2025 results. And on behalf of the team at Gold Fields, I'm really pleased to deliver a very strong set of results for the group. Going into the presentation, I have with me our Chief Financial Officer, Alex Dall. Also joining in the room is Jongisa Magagula, our Executive Vice President of Corporate Affairs; as well as Chris Gratias, our EVP of Strategy and Business Development. As going into the presentation, we will run through a short presentation that will be shared between myself and Alex, and then we will spend some time at the back end addressing questions. I would like to first draw your attention to the disclaimer on the forward-looking statements. Just going into some of the highlights. I think, first and foremost, as I said, we are very proud to deliver a strong operating and financial performance for 2025. I think firstly and most pleasingly, we delivered a safe delivery during the year. And it's quite clear that our safety improvement plan is starting to deliver positive outcomes for the group. In terms of production, attributable production was up 18% year-on-year to 2.44 million ounces, and that was at the upper end of our guidance of 2.25 million to 2.45 million ounces. That was assisted by a strong performance across many of our assets, but most importantly, through the strong contribution and ramp-up of our Salares Norte mine in Chile. Our all-in costs and all-in sustaining costs were within guidance and were marginally higher than 2024. Most of the impact was due to higher sustaining capital, but also due to royalties and stronger producing currencies. If we look at the work that we've done on improving our portfolio, as I said, calling out Salares Norte achieved commercial production in quarter 3 2025 and steady-state production during quarter 4. And certainly, Salares' ramp-up has been a very pleasing part of the delivery during 2025. In addition, during the year, we completed the acquisition of Gold Road Resources that was completed in quarter 3 that allowed us to consolidate 100% of Gruyere and the surrounding tenements and I will touch on the outlook for Gruyere in a short while. We also continued the progressing of Windfall towards FID. We worked on updating the execution plan as well as advancing conversations with our host community on advancing the impact and benefit agreement as well as progressing the final environmental approvals. In addition, in terms of our portfolio and as communicated at our Capital Markets Day in November, we've identified a number of asset optimization opportunities across our assets, and we have started embedding those into our plans for 2026. Also to -- finally to talk to the fact that we have significantly increased returns to shareholders, and that has been communicated in our results today. This follows our decision to revamp our capital allocation policy in November, which we communicated as part of Capital Markets Day, where we now are delivering 35% of free cash flow before discretionary investments. In addition, we announced a special dividend of ZAR 4.50 per share as well as a share buyback of $100 million to be delivered during the course of the next 12 months. And that delivers a total shareholder return of ZAR 31.85 per share, which, in our view, delivers an upper quartile yield of over 6%. We also have decided to allocate an additional $250 million to our top-up program over the next 2 years, which increases that total program to around $750 million, of which $353 million is delivered now in this result. So overall, I think the key message is that we've had a safe, reliable operating delivery during 2025, and that has delivered a strong cash flow generation, which has allowed us to continue to reinvest in our business and return additional cash to our shareholders. Just again, to remind everyone of our portfolio, Gold Fields today is a global gold miner with assets in high-quality jurisdictions. We have 9 mines and 1 project across 6 countries, and these are all in attractive mining jurisdictions. We have delivered adjusted cash -- free cash flow of just under $3 billion during 2025 with around 44% of our production from Australia and key growth in Chile and Canada through Salares Norte and our Windfall Project. If we move on to the operational performance for 2025. Again, just most importantly, we're proud of the fact that we've been able to get everyone home safe and well at the end of every day. We have had, however, 7 serious injuries across the year, which again just galvanizes us to focus even more on delivering safer outcomes across our business. Pleasingly, we have also completed all 23 of the Elizabeth Broderick & Co recommendations. These have now been implemented. And now we are working on continuous improvement of our culture. As I mentioned, attributable production at 2.44 million ounces above 18% improvement year-on-year. And that meant that we were able to deliver within our original production and cost guidance that we set at the beginning of 2025. Our costs -- all-in costs were up 3% and all-in sustaining costs up 1%, largely due to increases in royalty paid as well as strengthening producer currencies, offset by dilution of higher ounces produced as well as higher quality ounces coming out of Salares Norte. I think the highlight is, again, we call out is despite the challenges we had in 2024, the safe ramp-up at Salares Norte meant that we were able to deliver well above the market guidance during 2025. That enabled us to deliver a 175% increase in cash flow from operations. As Alex will show a little later, some of that is just allocation differences from Salares Norte between operational cash flow and group cash flow. So when you look at our net group cash flow, that is up nearly 4x from 2024. Just going on to our ESG performance briefly. We've spoken about the impact of our -- positive impact of our safety improvement plan that we're implementing. We also had 0 serious environmental incidents and that's been consistent for the last 7 years. We have also made good progress on our gender diversity with now 27% of our employees being women with 28% in leadership. And of that, 20% of our women are in core operating roles. Due to the strong cash generation, we were able to share significantly to our stakeholders and ZAR 1.4 billion of the total ZAR 5.7 billion that has been created was delivered to host communities. We have also delivered significant work in building out our group legacy programs in Peru, Ghana, Chile and in South Africa with the Australian legacy program currently being scoped. In terms of decarbonization, we've delivered 15% absolute emission reduction against our '26 baseline and a 5% net increase against the '26 baseline. We've also been able to achieve full conformance against the global GISTM on tailings management. And under water stewardship, we've had 74% water recycling against our target of 73%. We've also completed our midterm review in -- of our 2030 targets. I think 2 key changes that we are considering is changing our decarbonization target to an intensity reduction target which will allow us to more actively move in line with the portfolio changes and also setting context-based water targets, given that some of our water -- our operating areas, we certainly have saline and hypersaline operating environments. Just calling out our production very briefly. We have a couple of things to call out. Gruyere, you see an increase of 42,000 ounces, mainly due to the inclusion of 100% in quarter 4 as well as an increase in tonnes milled. Granny Smith was down in line with our business plan, but what we are seeing is increasing grades as we're mining deeper. St Ives, we saw the benefit of higher tonnes milled and an increase in the yield because of more fresh material going through the mill than stockpiles. South Deep, pleasingly, we're up 16%, largely driven by improved mining grades as well as improved stope turnover, which allowed us to get greater consistency and feed through the system. Damang was down largely due to the fact we were mining -- processing stockpiles through the year, and that was due to lower yield. And Tarkwa were down largely due to the fact that we had prioritized stockpile feed through the mill rather than fresh material. And then the other big kicker for us is obviously Salares Norte giving us a 16% increase. I'll now hand over to Alex to give us a rundown on the cost changes year-on-year. Alex Dall: Thanks, Mike. We've seen a 3% year-on-year increase in all-in costs. This is higher volumes offsetting inflation as well as investing in our future at Windfall. The higher operating costs are driven by the inclusion of Salares Norte as it reached commercial levels of production, the accounting for Gruyere at 100% for the fourth quarter of the year as well as higher mining costs driven by both volumes and contractor rate increases. The higher sustaining capital is primarily due to the investment in the winterization project at Salares Norte to ensure that we got through the winter. And the higher growth expenditure at Windfall is due to a full year of consolidated costs after the acquisition of Osisko Mining in Q4 2024. And then we see the significant impact of the higher gold volumes on decreasing our cost base. Thank you, Mike. Michael Fraser: Thanks very much, Alex. So just moving on very briefly then to the -- some of the individual assets before I hand over to Alex for a more detailed financial overview. I think just starting with Gruyere, we're very pleased to have consolidated Gruyere. I think it gives us an unconstrained opportunity to unlock the potential of the asset. I mean, clearly, during 2025, we didn't entirely deliver all of the ounces that we would have liked to, but we made significant progress. We were able to deliver record material movements. So we're up 37% year-on-year on tonnes mined, largely due to a focused attention to accelerating the Stage 5 waste strip. And that really translated into where we're seeing the higher cost due to larger development capital at the site. But the other thing that was pleasing is that our mill achieved record throughput rates at 9.6 million tonnes. That was a significant achievement in getting the mill running close to its potential. Moving on to Granny Smith. Again, Granny Smith continues to be an important asset in our portfolio and delivers consistent results. The reduction in production was in line with our plan as we prioritized development and in particular, significant effort going into catching up on some of the infrastructure spend, particularly ventilation and energy reticulation capital. St Ives had a very pleasing year, where we were able to lift production by 12% and that meant that we were able to really see those higher grades coming through the mill. All-in cost was up 14%, but that was largely due to the higher capital spend, in particular, as we bore the brunt of the capital spend on the renewable energy micro grid during the year. On an all-in sustaining cost basis, they were down 5% year-on-year. Moving on to Agnew. Agnew was -- saw a 7% increase in attributable production. And that was largely due to an increase in improvement in mine grades and processes grades. But we did see a 21% increase in capital spend, which translated into a 14% increase in costs. And that, again, was largely due to the development of the Barren Lands underground mine and related brownfield exploration. South Deep, we've touched on this, production up nearly 16%, which had the effect of diluting the cost increase by only 3%. And this shows us the leverage at South Deep because of the fact that it's a highly fixed cost operation. And that translated into a significant growth in free cash flow, which is really pleasing to see. The improvement at South Deep was really driven by an improving stope turnaround. And that really is the key focus for us to improve rock on ground. And once we have rock on ground, we're able to get that through the system and deliver higher yields through the plant. So from our point of view, South Deep has really had a good 2025 and has positioned itself for a good start into 2026. Damang, we had production down 28%. That's largely due to the fact that we stopped mining in the beginning of 2025 and have really been processing stockpiles with the associated yield loss through the mill. Despite that, they did continue to deliver reasonably good cash flow on much lower volume. Moving on to Tarkwa. Tarkwa had a 12% reduction in production ounces against 2024. That was largely again due to the fact that we had prioritized a lot of waste stripping activities during the year and prioritized waste movement over ore mining. That meant that our grades were down over the year as we use low-grade stockpiles to supplement feed into the mine. That had a direct translation into higher costs as we capitalized a lot of the mining activities as well as the fact that we had lower production ounces during the year. Despite that, we saw free cash flow up over 100%, largely due to the benefits of the tailwind of gold prices. Salares Norte, without adding a lot more to that, really pleased with the performance at Seladas Norte. The mill is running really well. We're also seeing recoveries above what we had anticipated. And everything at Salares largely going on track. We did have some slightly higher capital, which Alex can talk to during the additional winterization during 2025, but that certainly has paid us back well. Cerro Corona has performed well. And although we see the all attributable production down 3%. That's largely due to the copper gold price factor. And on a specific commodity basis, we saw copper and gold being delivered above our plan, largely due to better-than-expected grade yields. All-in costs were slightly higher on an all-in equivalent basis due to some of that lower production. With that, I hand over to Alex to take us through the detailed financial performance. Alex Dall: Thank you, Mike. On the back of the higher production as unpacked earlier by Mike, and an average gold price for the period of about $3,500 per ounce, headline earnings are up 117% year-on-year to $2.6 billion. Adjusted free cash flow is just shy of $3 billion for the year or up 391% year-on-year and $3.32 per share. This has enabled us to declare a record base dividend the full year of ZAR 25.50 per share, comprising the interim dividend of ZAR 7 per share and a final dividend payable in quarter 1, 2026 of ZAR 18.50 per share. In addition, we are also in a position to announce additional returns to shareholders of $353 million, comprising a special dividend of ZAR 4.50 per share, taking the total dividends for the year to ZAR 30 per share, and a share buyback program of $100 million, which will be executed over the next 12 months. I'm also pleased that our balance sheet is in a strong position after funding both the Osisko and Gold Road transactions, and we are sitting in a net debt-to-EBITDA ratio of 0.26x. This slide unpacks our cash generated over the period. The operations before tax generated cash of $5.5 billion. After tax and royalties as well as interest and certain working capital adjustments, we generated cash flows from operations before investing activities of $4.5 billion. After capital of $1.4 billion, lease payments of $100 million and certain rehab outflows, we have generated free cash flow of $3 billion or approximately 5x the free cash flow of $600 million in 2024. This slide is the capital allocation framework that we communicated with the market as part of our Capital Markets Day in November 2025, which is all about ensuring we continue to invest in our assets to ensure safe, reliable and cost-effective operations, maintain our investment-grade credit rating and pay a sector-leading base dividend. After this, it is all about getting that competitive tension right in allocating our free cash flow generated between investing in our future, building balance sheet flexibility and delivering industry-leading returns to shareholders. Unpacking the allocation of our cash that we generated in 2025, our free cash flow before capital and dividends generated is $4.4 billion, This enabled us to deliver on our capital allocation priorities in a disciplined manner, ensuring that we got the tension right between the 3 core pillars. We reinvested in the business through spending over $1 billion on sustaining capital. And we also delivered on our growth objectives by spending growth capital and exploration expenditure of $665 million. This was to bring Salares Norte to commercial levels of production, advance the Windfall Project and to increase life and lower costs at our existing operations, in particular, at St Ives. We delivered strong shareholder returns through $1.4 billion through our base dividend, which is aligned to our revised policy and additional returns of up to $353 million. After this, we had $944 million of cash, which was used to delever and build balance sheet flexibility on the back of the debt raise to fund both the Osisko and the Gold Road transactions. We ended the year with net debt of $1.4 billion, which includes leases of around $500 million. As communicated at the CMD through the change to our base dividend policy, we are declaring a full year dividend of $1.4 billion, special dividends of USD 253 million and a buyback of $100 million. This enables us to deliver total shareholder returns of $1.7 billion over the period, which is 44% of free cash flow before growth and 54% of total free cash flow. This is in excess of half of all our cash being returned to shareholders. On the back of the additional returns, we are also -- on the back of the stronger gold price, we are also in a position to top up our program that we announced at the CMD from $500 million to $750 million over the next 2 years. After both the special and the share buyback, this leaves $400 million under the program. This graph shows our dividend history over the last 5 years. In 2025, we are able to deliver record shareholder returns of ZAR 31.90 per share, a 220% increase from 2024. And this, we believe, equates to an industry-leading yield of 6.3%. Thanks, Mike, and back to you. Michael Fraser: Thanks very much, Alex. And look, I think just what the work that was done on revisiting our capital allocation framework has certainly given us a lot of clarity on how we position the business going forward. And what I can honestly say is that, that does not limit our ability to continue to improve the quality of our portfolio. So now we will move on to what we are doing and the 3 levers of growth that we consider around improving our portfolio. So I think during the year, despite the significant cash generation and what we have returned to shareholders, we continue to make disciplined investments across the 3 growth levers during 2025. In terms of our bolt-on M&A, we did complete the Gold Road acquisition, which allowed us to consolidate 100% of Gruyere and the surrounding land package. We also significantly advanced our Windfall Project in preparation for FID, which we are still planning for mid-2026. In addition, we have been hugely successful in extending life our assets through our brownfields exploration program. And in a short while, a few slides, we'll touch on the success we've had in reserve replacement at our assets, but we spent USD 129 million in our brownfields program in '25, which allowed us to deliver a 9% increase in reserves across the year. In addition, we have really revitalized our greenfields exploration program. We have spent $101 million during 2025. This is inclusive of a USD 35 million investment -- equity investment in Founders Metals to gain a significant exposure to Antino Gold project in Suriname. In addition, we spent $21 million on our broader land package at Windfall, which is beyond the brownfield spin. And also what we did in quarter 4, we integrated the Gold Fields exploration portfolio, which gave us a significant additional exposure for our Gruyere mine. I think one of the other things to call out is, again, not speaking it up, but Salares is going to continue to be an important part of our value accretion over the coming years. we were able to have uninterrupted operations during 2025 despite the same weather conditions that we experienced in 2024, which again spoke to the effectiveness of the work that we did to prepare it for winter. We achieved commercial level of production in quarter 3 with steady-state production achieved during quarter 4. We were also able to continue to progress the Chinchilla capture and relocation program to derisk the development of the Agua Amarga extension. In 2026, our focus is to continue to maintain the steady-state throughput and stability through the plant. We still have around 2 years of mine material sitting in front of the plant. So we're certainly not mine constrained or at risk in the mining in any way. We will continue to advance the Chinchilla capture and relocation program. and starting to prepare the second half of the year, the Agua Amarga pioneering and pre-strip activities. We will also continue to undertake near-mine exploration to identify potential additional ore bodies and ore sources for the mill. Our 2026 guidance remains intact against our CMD disclosures of 525,000 to 550,000 ounces of gold equivalent with an all-in sustaining cost of between $450 and $600 per ounce. The next big growth lever for us is really progressing Windfall to final investment decision. Our key deliverables really for 2026 is finalizing the execution plan, getting the main environmental completed and awarded during the end of H1, continuing the secondary permitting approvals, which we also require by the end of June, getting the impact benefit agreement signed and really ensuring that these are all in place to take the most advantage of the weather windows ahead of the next weather -- the winter season at the end of 2026. So our plan at this stage is to really advance those key deliverables during the first half of this year. That will ensure that we have all of the site cleared and core infrastructure in place for the start of 2027, which allows us to start plant construction during the first half of 2027, with commissioning to start commencing the back end of 2028 with first gold due in 2029. So the critical path for us over the next few months is really around the key permitting and approvals, and we are confident that we remain on track at this point in time, but we'll provide a good update at the Q1 operating update in early May. Just moving on to the Gold Road acquisition very briefly. Again, we think that this was a very well-executed transaction. We got the timing right. This was always something we wanted to do, and we feel very pleased with the outcome of what this has delivered. So for a net $1.4 billion, we were able to consolidate 100% of this asset. And that allows us to really deliver on the full potential of this asset and optimize the full life of mine. It also allows us to bring in 100% of Golden Highway and that entire Yamana land package, which we have already identified a number of targets to build into our longer-term plan. So the key focus for us in 2026 is advancing the studies to optimize the deposit, obviously, looking at ways of accelerating access to some of those high-grade material to supplement the lower-grade Gruyere deposit as well as investing in further drilling across the Yamana package. Just going on to reserve replacement. This is ultimately how we measure the health of our -- the life of our portfolio. Pleasingly, we were able to deliver additional 4 million ounces in reserves over the year, which gave us a 9% improvement in our overall reserve position. So with the 2.5 million ounce reserve depletion, we saw an increase on the Gruyere addition from the other 50%. Granny Smith, we've included the Z150 discovery. We've also added additional ounces for Santa Ana and Invincible at St Ives. Agnew replaced depletion, and this is the nature of that ore body where they just continue to replace depletion on an incremental basis, and Tarkwa, we were able to convert resources to reserves through that additional price assumption adjustment as well as removing some of the key operational constraints. And this is going to be a key focus for us to continue to replace reserves. Just moving on then to the outlook and conclusion. For 2026, our guidance really is completely in line with our guidance that we provided at Capital Markets Day for 2026 with production targeted between 2.4 million and 2.6 million ounces. Total capital is between $1.9 billion and $2.1 billion. All-in sustaining costs between $1.8 (sic) [ 1,800 ] and $2,000 and all-in cost $2,075 million to $2,300. We've included the capital markets guidance next to those numbers and the only deltas that we've adjusted for in 2026 guidance is really foreign exchange and royalties, and that we've just run through on the cost numbers. I think for our focus this year is really about continuing to improve safety performance, ensuring the predictable delivery of our plan and continue to improve the portfolio quality by advancing our greenfields program and advancing Windfall to FID. Key priorities we've set out for each of our assets are really in line with the Capital Markets Day plan for each of our assets. We have a number of studies and activities and capital investment going into each of these assets. to improve the quality of these individual assets and also clearly progressing 2 key permitting and lease renewal processes. Firstly, the Tarkwa renewal and secondly, the permitting around Windfall. So we have a very clear plan, and we are progressing against our strategic plan that we set out in our Capital Markets Day in November. So with that, we've come to the end of the presentation. Thank you for listening. And now we hand over to Jongisa to facilitate the questions. Jongisa Magagula: Thank you so much, Mike. We've got participants that are joining on the webcast as well as on the Chorus Call. So to keep it balanced. I'll take 2 questions from the webcast and then switch over to the voice-only Chorus Call questions. The first one comes from [ E Adeleke ] from [ Marotodi ] Capital Markets. He says, congratulations on your stellar set of results. The first question, what is the most troublesome KPI on your radar at the moment? And how are you anticipating moving the needle on it? His second one says, could you outline the current exploration road map and clarify if excess liquidity is being prioritized to these operations? Okay. So those are the first 2. Michael Fraser: Thank you very much for those questions. Look, I think just on the key issues undoubtedly, and I'm sure many words are going to be written about it. But across the industry, we are facing cost inflation, not just the impacts of producers, strengthening producer currencies, increasing royalty rates, but there is some pressure on costs. Pleasingly, we have a number of opportunities to really arrest that. And that was really what we were trying to unpack at our Capital Markets Day and what we try to present in here. So many of those costs are an outcome of the things that we do to improve the structure of our business, and we're very focused on that. But that's a very important focus. And I think the second one, undoubtedly is with the changes that are going on in Ghana is to really progress that the Tarkwa lease renewal and the safe and reliable transition of the Damang mine. So those would be, I think, in the top of our mind, the things that are really important for us to progress. I think in terms of exploration, I absolutely think if you think about the levers of growth and the opportunities in front of us, M&A is always really expensive, but you have to be opportunistic to really grab things that present themselves to improve the quality for future generations. Obviously, our brownfield exploration continues to be the lowest cost per ounce replaced of discovery, and we'll continue to prioritize our brownfields program, in particular, at Windfall, where we have a very, very significant land package that we're trying to identify the next Windfall opportunity. But then in terms of our greenfields program, really ramping that up because we've seen what success looks like. Salares Norte was a product of our greenfields exploration strategy. And you can just see the multiplier of that. So we are very much focused on finding ways of really building our longer-term pipeline through our greenfields program, and you've seen that through the investment in the Antino project through Founders Metals, where we've been able to put our foot on what we think is a highly prospective next horizon opportunity for us. So as you rightly identify, I think more value is going to be created through the drill bit for the next generation than it is necessarily by buying assets, although we're always going to have to be mindful of being able to be agile when those opportunities present themselves. Jongisa Magagula: Good. I'm going to pause and hand over to the operator on the Chorus call to see if there's any questions. I'm not hearing that there are any questions on the Chorus call, so we'll just carry on. The next one, sir, is from Luca Grassadonia, from VSME report. He says, good afternoon, could you please explain the rationale for a $100 million buyback on a market cap of $47 billion? Michael Fraser: Thanks for that Luca. And I think I'm going to probably hand that question to Alex to take. Alex Dall: Certainly. Thanks, Mike, and thanks, Luca, for that question. I think what we need to bear in mind is that we have competing shareholder priorities depending on the jurisdiction that they are in. We have North American shareholders who prefer buybacks and have been looking for them. So I think what we've done here with the buyback program is it is small relative to the total returns to shareholders. It approximates about 6% of the total shareholder returns. So we think it is just finding the right balance of mixing our returns between both dividends -- special dividends and buybacks, top-up returns. Michael Fraser: Alex, and I would just say that the views amongst shareholders about buybacks are quite polarized at times. This would be the first time that we've really been in the market buying back shares. And it really is an opportunity for us to just see how it goes with a very low-risk entry. Jongisa Magagula: Okay. Just the second question, also on the webcast is, do you plan on doing any joint ventures with Zijin Mining? Michael Fraser: Yes. Look, I think firstly, I would want to say that Zijin has been shown really remarkable growth. And we engage them in all of our industry bodies in the countries that we operate. And we see them as a very credible miner who've really developed their business very, very well. So we have a very productive relationship with them. And certainly, we are not closed to working with any of our peer groups around the world. Our point is always clear. We're here to exist to create value as long as we can find partners who share our values and are willing to work in line with our standards and what our expectations are of ourselves and the priorities for our shareholders. Then, frankly, it would be incumbent on us to be constructive about any potential working relationship. Jongisa Magagula: I'm going to pause again and just see if there are any questions on the Chorus Call, operator. So I'm hearing that there are, please go ahead. Operator: We have a few questions. The first question we have comes from Chris Nicholson of RMB Morgan Stanley. Christopher Nicholson: I've just got 2 questions, please. So I know we touched on it on our call this morning. So can you just go back to the current situation in Ghana. My understanding that royalty bill is now before the parliament. So is it your base case that royalties will be lifted on Tarkwa in particular? And then in relation to the ongoing lease renewal negotiations you're having with the government there. I know that there's a couple of things at stake. Could you talk to the fact whether the 10% government ownership is one of the issues that are at stake in relation to lease renewal? And then just the final one, just -- I mean, obviously, we're looking at roughly about $2 billion of CapEx this year. I mean I've been going through my model today. And the one region I'm specifically interested in is in the Australian region. It looks like you spent somewhere close to about $600 million in 2025. Could you give us what the CapEx number would be for 2026 in the Australian region? It looks to me like it's going to be north of $1 billion? Michael Fraser: Thank you, Chris. I'll come back. Alex can take the CapEx question, but let me just start with Ghana. You're quite right. The royalty bill is in front of parliament. Under that, the parliamentary procedure unless it's withdrawn, it will be passed into law within weeks. So you would expect it during the course of March, I expect to be announced as law. Under our current lease agreement at Tarkwa though, we won't be immediately impacted because our lease agreement does include some stability provisions, which means that it won't apply to us at least until the end of our lease, which expires in April of 2027, which, as we know, is not that far away, but it does provide some protection during the course of 2026. But I think the issue around the royalty rates and will it apply going forward, I think is something that is still not yet entirely clear because as you rightly call out, there's also a debate about, well, is the 10% ownership appropriate? And it's not just for -- for Tarkwa, there's many other assets don't have any local participation or any state ownership in the asset. And I think the way that we're having the conversation with government, and it's very early days. So there's nothing is hard on the table from proposals either from our side or their side, just to be clear, we're really talking about the process at the moment is it's really about how we share value here. And today, there's already a significant sharing of value with the government of Ghana. And the conversation we're having is to say, look, you can pull many levers here. But just bear in mind that you can't put all the levers because otherwise, you end up in a world where there's -- it makes very little sense for companies like ours to continue to invest. So I think the conversation is really to try and be quite broad and pragmatic. And I do think the government is aware of the fact that now that you've pulled -- you shot 1 of the arrows in terms of royalties that you've got to be quite pragmatic about how you think about the rest of the package. And I also don't think it's off the table to think that there could be potentially some other movements. The ministers and the Minister of Finance have already been talking about reducing the stability levy from the current 3% to 1%, for example, to mitigate some of those impacts to the higher royalties. So there's a degree of pragmatism. But I think as the bill stands today, we will see that new royalty rate coming through. But we certainly think that the door is now not closed to continue to talk about what a fair sharing of value looks like going forward. Alex? Alex Dall: And thanks, Chris. To just go to your capital, you are right, there are going to be significant increases in Australia. The first one is at Gruyere, an increase of about $150 million. That is just purely due to consolidating at 100% versus 50%. Then at Granny Smith, we've seen close to $100 million increase, and that's as we invest in ventilation, cooling and power upgrades to access the Zone 150 ore body that you saw Mike talk about the additional reserve of 0.5 million ounces there. And then at Agnew, we're also seeing a $50 million as we invest in tailings, paste plant construction as well as ventilation and cooling upgrades. And then also St Ives about a $50 million increase at the Invincible complex development and on the materials as we advance the materials handling system. So you're right. If you also add the strong Australian dollar that moves your $600 million closer to the sort of $1 billion mark. Jongisa Magagula: There are quite a few questions still on the Chorus Call. And I understand that there was an issue with connectivity. I'm going to take another one on the Chorus Call. Operator: [Operator Instructions] The next question we have comes from Rene Hochreiter of NOAH Capital. Ren Hochreiter: Very nice cost control, especially. Mike, you have a dividend policy, and I get that one. But would you consider having a special dividend policy? Like it looks like at the moment, a special dividend is declared depending on what your capital allocation is. But would you like have a more rigid policy going into the future some time? Michael Fraser: Look, Rene, thanks for that question, and I'll ask Alex to contribute it to as well. I think from our point of view, we look at whatever we provide in top-ups is really a function of probably 3 things. Firstly, are we maintaining a good balance sheet? So are we maintaining an investment-grade balance sheet. Secondly, are we limiting the opportunities to reinvest in our business for the future generation? And thirdly, what does the total dividend look like in relationship to our peers? And that's why we always talk about targeting upper quartile total returns to shareholders -- total dividends to shareholders. So that special dividend in my mind will always be something that is a function of those other 3 elements. And so being very precise about it, in terms of formula, I don't think really serves us well. And that's why in the way that we've described capital allocation it really is about sharing the cash flow that we generate between those 3 elements of maintaining a strong balance sheet and keeping a strong balance sheet to give us flexibility for the future, making sure that we are in the upper quartile of total dividends payable to shareholders. And then thirdly, making sure that we've got cash to reinvest in the future. So that's how we thought about it. But I don't know, Alex, if you got any other thoughts. Alex Dall: Well, I think that's right, Mike. And we also obviously benchmarked our base dividend policy, and we do believe that it is one of the top ones in the sector. And we were very strategic in how we thought about, do we allocate it purely on free cash flow, but we actually decided to go with free cash flow before growth investments that we don't penalize shareholders returns on us investing in the future. So we honestly believe giving back 1/3 of all free cash flow before growth investments will deliver strong returns to shareholders at sort of consensus gold prices. If we see gold prices above those consensus prices, I think there will be room to deliver special dividends. Ren Hochreiter: Okay. Just a couple of other questions. Under underground drilling results at Gruyere. Is there any update on that? Michael Fraser: No, early days yet, Rene. So we'll probably only be in a position to provide more detail maybe in 12 months. We've got a pretty good program during the course of this year. We know that the ore body is there. It's really just trying to size it up. And in parallel, we'll be doing the trade-offs of the additional cutback versus moving into the underground. The underground will happen at some point. But pretty early days. We know what the grade is largely. It's pretty consistent, but it's really now sizing up the size of the ore body. Ren Hochreiter: Okay. And just 1 more question, if I may. St Ives grades, mine grades were down 29% and the yield was up 3%, and Gruyere's mine rates were down 18% and the yield was down 6%. The yield was down or quite a lot different from what the mine grades were. Can you sort of explain that a little bit? I'm a mining engineer, but I still don't understand that. Michael Fraser: I think what always happens is that it's a function of how much of the stockpile material that we're processing. At St Ives, we also had an impact where we were actually processing the Swift Shore and Invincible Footwall South, which were 2 open pit operations, which come in at a slightly lower average grade than our underground material. So it really becomes a mix. And that really meant that our mining grades were slightly lower year-on-year, but we had more mined material going through the plant and therefore, you saw yields being slightly higher as it replaced -- as it replaced stockpile material. And then I think on Gruyere, it's also a function of higher stockpile processing because even though we moved massively more material in the year, we weren't able to get all of that through the mill because the mill was also stepping up in terms of its volume of process. They moved up nearly 1 million tonnes year-on-year. So that's kind of what you're dealing with. Jongisa Magagula: I'm going to come back into the webcast questions, and we're going to have to pick up pace because I'm just mindful of the time. The next one is, can you discuss any outstanding permits that might be needed for Agua Amarga? The incoming Chilean administration has hinted at easing some regulatory burdens. Do you see any potential that such executive actions could ease issues at Salares? I'm going to cluster a few of Ghana-related questions just so that we can speak to it in one go. The next 1 is from Cornelius from Robeco. He says, do you expect the proposed royalty increase in Ghana will lead to higher royalty payments for us in the next 5 years? And then the other one that is related to Ghana is for Tarkwa, how are you treating the lease renegotiation for your reserve calculation? What outcome on the lease renewal do you assume in the reserve calculation? And that's from Reinhardt van der Walt from Bank of America. Shall we do those 2? Michael Fraser: Thank you. So just on Agua Amarga, I think we feel quite confident. There's nothing additional that we require. So we are now -- it really is -- the progress is largely aligned to our Chinchilla capture and relocation program. So that's the only thing. But it's not permit related. I think in Ghana, yes, if the royalty payments -- the royalty regime would apply to us, currently, we pay what the industry pays, which is around 5% royalty. Under the new sliding scale that's 6% to 12% even if you offset 2% of the stability levy at worst -- sorry, it's likely at these kind of gold prices to still mean an additional 5% royalty payment, if that's what gets applied under our new lease conditions. So whilst in the next 12 months, it doesn't impact us. It could impact us beyond 2027. And in terms of, Reinhardt, the question that you've asked on reserves, we have applied the full life of mine reserves into our declaration, and that's what the application is for. So anything that would limit our horizon on our lease could potentially impact that. But we're certainly confident that we'll find the right path on the term of lease. Jongisa Magagula: If I can tag one on, Mike, from Shaib, which is along the same lines. Could you quantify the increase once it starts affecting Tarkwa the impact to unit costs of increased royalty? Michael Fraser: Alex, do you want to take that? Alex Dall: Yes. So at current spot prices, that would be $350 an ounce increase -- $5,000 an ounce. Jongisa Magagula: Great. I'm going to go back to the Chorus call to take an additional question or 2. Operator: The next question we have comes from Adrian Hammond of SBG. Adrian Hammond: Just to follow up a bit on Windfall. The project as it stands, you've given us a CapEx number at Capital Markets Day, although there is still due in EIA and IBA as well. And obviously, the most importantly, the feasibility study. So I guess the question is, what's your confidence in the CapEx number given the feasibility has yet to be done? And I'm assuming that your reserve gold price increase to 2,000 will have a large influence on the project and the reserves, et cetera. So I guess, should we be looking forward to a -- I'd like to call it a Tier 1 asset for Windfall, but I don't see it as a Tier 1 yet, not because of it's jurisdiction, but because of its size and cost profile, but perhaps you can enlighten us? Michael Fraser: Adrian, maybe just a couple of things. So this investment in Windfall is what we look at as almost the first phase of the development of this entire property. So the first phase of this was always designed to be -- to fit in with provincial approvals, which was always going to be the fastest process, fastest pathway to get this project started. That is going to really deliver us at 300,000 ounces for the next 10 years and banks it in. But we're already starting the next second phase of studies, which will help us to further optimize the asset. That's about looking at potential additional material handlings, potentially a shaft for the long term. We know this is a 20-year plus asset. In addition, we're looking at ways of improving the yield of that asset. But today, we have a fairly tight footprint that is within the current approval that we -- that is being developed. And so just to be very clear, the feasibility study for this asset that supports the environmental approval was actually done 2 to 3 years ago. So the only thing that we're really working on is optimizing our underground mining. So even with a change in reserve price assumptions because of the nature of our footprint, in this first phase of the project delivery, it's not going to have a material impact on the reserves in the near term. But the bigger opportunity really is to go into that second phase of permitting, which hopefully will allow us to widen the footprint and create further opportunities to mine this ore body. And then we've got the opportunities of all the nearby resource that we haven't even started including in this. So we absolutely do believe that in the long term, it's Tier 1. Yes, you may look at it today and it might be too small. But the potential of this asset is -- and the footprint is really huge, and it's up to us to now migrate to that. But the first approval is really this. In terms of the capital cost, we felt that when we got to November, we put a lot of work into understanding the underground mining. We've put a lot of work in updating our cost estimates and the execution plan. And certainly, that presented the best view of it. In terms of the IBA, that's largely going to be translated into some form of royalty equivalent-type participation, I suspect. But I do think that that's not going to necessarily hit our capital number. I think the biggest risk on capital is possibly likely to be any significant changes in exchange rates, U.S. dollar Canada, but also just an underlying contractor and project productivity. I mean we've seen and we've been engaging with some of the peers who are delivering big projects in Canada. And the biggest concern is just like as years passed, productivity rates are dropping off. So that's probably one of our bigger concerns. But Chris is on the line. I don't know if, Chris, you want to add anything to that? Chris Gratias: No, Mike, I think you covered it extremely well. Maybe I just -- the one point I would add as to the prospectivity that we see. This gets to a related question before about additional investments in exploration. Well, obviously, are prioritizing increased spend at Windfall. And as we think about future pipeline management and people always ask us, what's next after Windfall, we kind of say, we highly are excited about the next Windfall Project will be found at Windfall. Jongisa Magagula: I'm just mindful of time. I'm going to take 2 questions from... Adrian Hammond: Thanks for the color there, Mike and Chris. That's very useful. And then to follow-up, if I may, for Alex on inflation rates, which follows on about the CapEx. We've seen some incredible increases with some of your peers as well. And it sort of reminds me of the price cycle where competition for labor has become a thing. Are you able to put some color to us on what the labor landscape is like for you out there right now, given where record prices are at? Just so that we can get a sense of when we're looking at these companies, on a cost basis, what is actually a real cost increase versus a real -- an inflationary increase. It's quite nuanced. Alex Dall: Thanks, Adrian. And we're not quite seeing -- we're not seeing the inflation we saw during COVID, but I mean we are probably seeing CPI plus a couple of percentage point inflation across the board. We are continuing to see labor pressure in Australia. I think luckily with the Windfall construction, we've actually modeled sort of all the labor and other construction projects in -- that are going on in Quebec, and we think we actually fall in quite a good window from labor availability from some projects ramping off before others ramp up in that construction phase. But I think the real labor pressure we're experiencing in Australia at our mining contractors in particular. Jongisa Magagula: Thanks for that, Adrian. I'm going to take questions from Josh Wolfson, and we are on time. So I do note that there's still quite a few from the webcast. We'll take note of them and then reach out to answer them directly. The first one from Josh says, can you provide more details on turnover at Gruyere? How would the operating trends there differ from GFI's other operations in Australia? I'm assuming he's talking labor turnover. And then can you speak to high-level indications of quarterly expectations for 2026 production, thinking about sequencing and seasonality? Michael Fraser: Yes. Thanks very much, Josh. Good to chat. Look, I think Gruyere absolutely has been a challenge with our contractor. They've seen in the fourth quarter, turnover rates of up to nearly 50% amongst their workforce. That's been a combination of certainly some of the iron ore producers really being quite aggressive in hiring. But it also demonstrated that when we looked at it, that probably our contractor wasn't really being market competitive. And so we have rectified that and tried to address that trend. And we're certainly hopeful with that intervention, we'll start seeing a recovery on that number. In terms of seasonality, I think we should see, given the portfolio effect, while some of the assets have a little bit of a second half weighting that probably would be within 5% of the kind of variation by quarter. So I don't think we're going to see a huge variation across the year. And 1 of the things we're working really hard to do is to eliminate that hockey stick effect that we've had in years gone by, where we've had a lot of production weighted to the second half, which is really a function of the fact that we weren't having high degrees of mine plan compliance, which we're really working back into our system to deliver more predictable outcomes. Jongisa Magagula: Thanks, Mike. I'll hand back to you for closing comments because we are over time. Michael Fraser: Great. Yes. Thanks very much, Jongisa, and thanks so much for all the great questions that have come up. Thank you very much for the interest in Gold Fields I think we've made very good progress on our strategy last year, and we'll continue to deliver more of the same. That's our objective for this year. So thanks all for listening and look forward to engaging you in the coming weeks.
Salvador Villasenor Barragan: Good morning, everyone. I'm Salvador Villasenor, Head of Investor Relations at Walmex, and I want to thank you once again for joining our live Q&A session following our fourth quarter and full year 2025 earnings release, which was published yesterday. As always, we will make an effort to answer as many questions as we can in the 45 minutes we have scheduled for this call. [Operator Instructions] Joining me today is Cristian Barrientos Pozo, President and CEO; Paul Lewellen, our Chief Omnichannel Operating Officer; and Paulo Garcia, our Chief Financial Officer. We'll now go right straight away to the first question. Operator: [Operator Instructions] The first question is from Mr. Ben Theurer from Barclays. Benjamin Theurer: Can you guys hear me, see me? Salvador Villasenor Barragan: Yes. Benjamin Theurer: So I wanted to get a little bit your sense as you look at the market in Mexico. And in the presentation yesterday, it was very clear there's a lot of differences between regions, but also within formats. So I wanted to understand what are your targets for 2026, how to potentially address these issues, be it on the regional side and/or on a format side? What are the things that you can do that are under your control to tackle what seems to be still a somewhat challenging environment? Paulo Garcia: So first of all, Ben, on the targets and guidance for the year, we are still elaborating on that and probably you'll hear more about that in terms of the Walmarts there. I think when you think about the environment, it's still relatively soft. We still expect the environment to be still probably relatively soft in the first half of the year. The good thing, as you know, we all know the data is the GDP growth expectation for the year is better than actually what we had in 2025. That's roughly 1.5%. I think 2 things that I'll say before I pass the button, whether Cristian or Paul want to add up on that. One is -- so what we're seeing in a banner like Bodega in these moments tends to shine further. We talked about the fact that Bodega increasing the penetration in the households of the lower income, and that is helping us. But at the end of the day, you know the strength of our portfolio, it's the overall portfolio that we have. And you've seen that -- across all the last quarters, not very dissimilar performance if you think about Bodega, Sam's and Walmart. Maybe Walmart Express at times a little bit more volatile, but a very tiny part of our portfolio, as you know, roughly 2%. But maybe Paul or Cristian can elaborate a little bit more what we are doing with the banners in particular. Cristian Barrientos: Ben, from my perspective, I think we are expecting a different year 2026 compared with 2025, as Paulo mentioned. We have seen in other markets how relevant is as you mentioned, what is in our control today to be prepared when the numbers came, let me say, in growth in the market, we will be very benefit. We have seen in other markets, as I told you, that we can accelerate 3, 4x above the market if we are very well prepared. So that is why the focus will continue in EDLP availability and, of course, the acceleration of e-commerce that's going to be prepared in the future, maybe near future because it will happen this year. So that's the focus of the total company. Operator: Our next question is from Mr. Alejandro Fuchs from Itau BBA. Paulo Garcia: Let's go to the next question, and we come back to Alejandro. Operator: Our next question is from Mr. Froy Mendez from JPMorgan. Fernando Froylan Mendez Solther: I was -- I wanted to ask about private label within your EDLP strategy. What role does it play? What level of penetration should this reach in the midterm under this new enhanced EDLP strategy? And what could the impact on margins be from pushing further into the private label? Cristian Barrientos: Thank you, Froy. And maybe you saw in the report that we are focused as a company in deliver EDLP, improve availability and accelerate e-commerce. And in EDLP, EDLP is not only about a price gap. It's a business strategy that differentiates us from the rest of the market. And included in EDLP, private brands play a very important role, the same as the assortment, supply chain, modulars, all this stuff. So for us, private brands is really important, and we have seen in Q4 good evolution of the penetration inside of Walmart. And so particularly in Bodega, as you saw also in the numbers, Bodega was the highest accelerator in sales during Q4. And in Bodega, private brand plays a super important role. So we are seeing a room to improve, a room to grow. So we are leveraging in all the markets with a different brand that we have today in Mexico. But it's a clear differentiator for us today. So that's the information that we have today to share with you in terms of penetration, acceleration, all this stuff. So -- and also, as I mentioned before, EDLP, there is a lot of metrics, but at the end, we are looking for increase our price perception and private brand plays a super important role there. And we have a very good quarter in terms of how we accelerate price perception and private brand was one of the key elements there. So I don't know if you... Paulo Garcia: Just maybe on numbers because there were 2 questions directly on numbers and margin of private brands, building on what Cristian said. I think on where we need to go, we said that a couple of times probably in the past, we want to be in the mid-20s penetration minimum, and that mostly focused in the Bodega. So there's a lot of room to improve, which things Cristian was saying that we need to do, but adding more products in categories, and we have lots of white spaces, entry price points. To the second question, private brands margins, our margins today of private brands is higher than what we have in innate brands but tends to be also the portfolio. One of the things I want to let it clear because once there was adopt, we don't manage private brands for margin. We do manage private brands for the EDLP to help the customers save money and live better with the entry price points. Of course, there will be categories that we will be having better margins. So as you can imagine, in foods and consumables is roughly similar to what we have in innate branded. We do have higher margins, in particular, in the areas of seasonal entertainment in the commodities, as you can expect, because it's a commodity, we will have lower margins than a branded. So -- but of course, we will play with it, but we manage for what's relevant for the customer. Operator: Our next question is from Mr. Ulises Argote from Santander. Ulises Argote Bolio: So the question that I had was trying to get a bit more sense and a bit more detail on those 15 basis points gross margin improvement that we saw in Mexico coming from the other businesses. So just wanted to get your thoughts on how should we think about this kind of trending forward? Are this the initial levels and how much more runway is there left for this? And maybe if you can comment a little bit on which of the businesses actually are becoming more relevant and are contributing more here at the gross margin level. Paulo Garcia: On that one. So as you can see, our new business has been contributing steadily over quarter-on-quarter, roughly around 20 basis points, sometimes a little bit more than that. In this case, a little bit less as you've seen it Ulises. The big one, which is actually becoming more and more relevant is Walmart Connect, immediately followed, of course, by Byte. In this particular quarter, Ulises, as you've seen it from what we said it in the webcast, Walmart Connect was not the one that drove the most of this improvement, actually tended to be around in the space of the financial solutions as well as Byte. These were the ones that contributed. You've seen the size of Byte these days. So contributing both in terms of the revenues as well to the P&L on a stand-alone basis. We always said 2 things about the business, right, Ulises. I will refresh that. One, of course, we do look at them on a stand-alone basis because it's good practice. We need to make sure that they did deliver. But of course, the sole reason why they are here is twofold: one, to deliver a pain point of the customer and how they actually helped overall the core of the business, either more frequency or more average ticket being higher. And that's what we are seeing with some of these businesses. For instance, a customer that is in Byte, the average ticket is more than 2x what we see in a customer that's non-Byte. So that we are pushing. The other thing that we're doing at the same time, we're using these funds to continue progressing and investing in margins in more EDLP in order to fuel the growth. In this particular one, our margin was higher as you've seen it. It will always be volatile as we said it, but that's how we actually approach this area. Operator: Our next question is from Mr. Felipe Rached from Goldman Sachs. Felipe Rached: Can you hear me well? Salvador Villasenor Barragan: Yes, Felipe. Now we don't. Let's move on to the next one. Operator: Our next question is from Ms. Melissa Byun from Bank of America. Cristian Barrientos: Melissa can you hear us? Operator: Our next question is from Mr. Álvaro García from BTG Pactual. Alvaro Garcia: Can you hear me? Cristian Barrientos: Yes, sure. Alvaro Garcia: Great. Awesome. I have a few questions. The first one on reducing the number of SKUs at Bodega Aurrera Express by 30%. I was wondering if you can give some more comments on that. And the second one for Paul. Paul, nice to meet you. I was wondering as part of your sort of onboarding on to Walmex into what Mexico and Central America look like as retail markets, if you could maybe share your sort of first take or your first impressions on how different Mexico is relative to the U.S. market and what that means from a playbook standpoint for Walmex. Paul Lewellen: Sure. Thank you for the question, Alvaro. I've been with Walmart for over 35 years, and I would say that we have more in common than we do different. And I would say the biggest similarity is around culture and our people are definitely an enabler of our success. And from a global leverage standpoint, I think the way that I would describe it is that Walmart has no boundaries. So when we're looking at either technology, AI, global leverage, we're able to take best practices from around the world and apply them globally. And that's exactly what we're doing this year in Walmart, Mexico. Just a few examples of that, that I would give, is when you think about how there are no boundaries and we can enable the stores from an AI and technology standpoint, you could start at the front end with Coastal, which is a global platform, which allows our registers to run the same around the world. You can go to the sales floor where we have the same tools and same technology to speed up the way that we process freight from the back room to the sales floor, the accuracy of our on hands, the availability of our products, the availability of what we can pick and what is available inside of our catalogs for our customers to purchase regardless of where, when and how they want to shop. And then I would lastly say from an inventory standpoint, whether it's our logistics system and the exciting technology that we're implementing there in Mexico and how that's going to enable us in the stores to be more efficient. I would say we're more like than we are different. Speed is critically important to us this year in Mexico, and I think you're going to see that, and it's going to come through loud and clear. Paulo Garcia: On the SKUs... Paul Lewellen: Yes. On the SKUs in BAE, I can tell you not only in BAE, but in Mi Bodega, the 30% reduction or SKU rationalization is a process that we are undergoing right now. Space is critically important and devoting the majority of our space to those items that drive the most sales and the most traffic inside of our stores, it's nothing new about that. We're constantly reevaluating our assortment across all of our banners. But these 2 are very, very important as it comes or relates to our purpose, which is saving people money so that they can live better, and that also drives our price and our price perception. Operator: Our next question is from Mr. Antonio Hernandez from Actinver. Antonio Hernandez: Just wanted to get a sense on Byte from a P&L perspective. I mean we all know that it's part of the ecosystem and it's not per se a P&L driver. But wanted to get a sense, I mean, you've already gained so much of a very large scale in a very short period of time. So if you can provide more light on that and maybe if there's any specific target, that would be very helpful. Paulo Garcia: Yes, Antonio, thanks. So I'll say what the things that we have mentioned this about in the past. So Byte, I said to you, it's in the past, guys, it's already a profitable business. We always said that was not sole driver at the beginning as we were building it because we wanted, of course, helping people getting access to affordable phones, so to speak in affordable prices and also help the overall business. But we also see as the business is evolving, it can also get better, it can also contribute more overall even on a stand-alone basis. We have the view that this business can easily go and actually have an operating margins in line to what we have in the rest of the business in the near term. So that's actually where we actually are heading to. At the same time, as I said, and Cristian always talks about that, the role of this business is to help the core, right? That's why actually I mentioned that the frequency -- the ticket of the Byte customer is more than 2x the one that actually you see that's a non-Byte. That's actually what we're also trying to push as we fulfill our purpose. Antonio Hernandez: Okay. And do you have any idea of the scope that maybe you could achieve in terms of the amount of users? Paulo Garcia: No, I'm not going to throw that number, but you can expect us to continue growing. I'm not going to put a number in the market that holds me accountable on that. Operator: Our next question is from Mr. Alex Wright from Jefferies. Our next question is from Ms. Melissa Byun from Bank of America. Melissa Byun: Can you hear me this time? Paulo Garcia: Yes, Melissa. Melissa Byun: Sorry about that. I had some technological difficulties, so I do apologize if this question has already been asked. But can you please provide some more context around the decision to reduce the Bodega Express assortment by more than 30%? How are consumers responding to cuts given the differentiation that's historically been provided by the broad assortment? And should we think about this maybe as a broader shift in your strategy moving toward a narrower and more private label-oriented mix in the concept? Paulo Garcia: Just say, Melissa, we actually answered this question just before. I'm not sure if you listen... Melissa Byun: I did not but I can -- sorry. Paulo Garcia: Let's do one thing, Melissa, we'll try to elaborate a bit more on the question. So Paul, will add a few things to your benefit. Paul Lewellen: Yes. I would tell you, our strength comes from a very diversified format portfolio, especially with Bodega. And when I think about Bodega, I think about value and I think about how critically important price is to value. I think about the experience that our customers have inside of our store. The assortment, to your point, is critically important. In our 2 smaller formats, though, space is a premium, and we want to make sure that we are dedicating space to the items that are producing the greatest amount of sales and sales results for our customers. Also, they're tailored to our customers' needs. And these are things that our customers have actually told us that they want more space dedicated. We don't have a ton of backroom space in Bodegas as you know. Most of it is stored on the sales floor on our top steel. So space is a premium. And I think the merchants and our commercial team have done a fantastic job in making sure that we have tailored the assortment and diversified the assortment to the customers that we serve. And the last thing I would say is that it's all about trust and our customers trust us, especially in Bodega to deliver price, that value, that experience and the assortment in a lot of cases for a one-stop shop. So SKU rationalization and the way that we rationalize SKUs by category, it honestly is nothing different or anything that we don't do on an annual basis across our commercial teams. So it is the right thing to do for these 2 formats. But again, the strength comes from the diversification of all 3. Cristian Barrientos: If I may add, Melissa, in this point, maybe you know that I run this business a long time ago. And in a small format is so important availability. So the way to reach right numbers in availability came from our right assortment. So today, we're taking advantage of the program that we have here in Mexico shop. So it's an asset that we have today to run faster and have the right assortment for the customer. So we will improve availability. So immediately, sales came. So you can see numbers in the past in Bodega Aurrera Express what happened, and that's the idea to evolve every year. Operator: Our next question is from Mr. Felipe Rached from Goldman Sachs. Felipe Rached: Sorry for the tech issue before. I hope you can hear me well now? Paulo Garcia: Yes, perfect, Felipe. Felipe Rached: Great. So I was wondering if you guys could share more details on what you expect to be the main drivers for the e-commerce acceleration going forward and whether you think any further investments will be necessary in that front. And still in this context, it would be very interesting to hear more on how the maturation process of the One Hallway initiative in Mexico so far compared to the one that you guys observed in the U.S. So anything you can share on that would be very interesting. Paulo Garcia: Okay. Maybe we'll try to answer the question and to... Cristian Barrientos: So first of all, thank you, Felipe, for the question. As you saw in the report, we define -- really important element to focus on the fundamental and the acceleration of e-commerce is critical here in Mexico and all over the world, and we have a huge opportunity. We -- you saw the numbers. We are still depending in 1P in a few categories in the quarter that didn't perform so well. We are evolving on demand. And as you mentioned, we are in the learning curve in One Hallway. But for us, I think the huge opportunity that we have today is to take advantage of the footprint that we have in Mexico to accelerate and accelerate speed to the customer and also reach more customer because today, we are serving not all the households here in Mexico because of -- because we need to evolve our operational model to reach homes. And we're right now evolving that last quarter. We extend our reach and we added in our fleet, let me say, Valle de Bravo, San Miguel de Allende, some cities that we didn't get because of the restriction that we had. And today, we are adding more cities. Next quarter, we're adding more than 20 cities to reach that. So in summary, speed, reach and assortment will be critical for us, and we have the footprint, we have the team looking forward to accelerate more both business, both that Paul shared in the idea that we have today. We're in a journey to unify our platform. So we will be ready to adapt or connect, let me say, as a global platform. So that allow us to receive the assortment from the U.S., the assortment from all over the world, in the Walmart world and in both sides. But the most important part is we will receive, but we can deliver or we will deliver to the customer with the speed. And that's the idea to increase assortment, reach and also accelerate the deliveries. Paul Lewellen: Cristian, can we also talk about total availability. I think I would say the journey that we're on from a store mapping, store location, modular integrity, on-hand accuracy and being able to fulfill the items on the shelf, the moment of truth in a very timely manner with precision and accuracy like we've never done before. This availability journey that we are on allows us to have real-time data down to an item level and where it is located across all stores, increasing our availability, improving our availability and our pickability of items for on-demand. Cristian Barrientos: And helping customer, shoppers, pickers to be faster. Paul Lewellen: That's right. Operator: Our next question is from Mr. Miguel Ulloa from BBVA. Miguel Ulloa Suárez: Can you hear me? Paulo Garcia: Yes. Miguel Ulloa Suárez: Perfect. A couple on my side would be regarding the slowdown in e-commerce. Could you provide a little more color on categories or what happened in the whole market and how you are reading going forward? Paulo Garcia: And Cristian to build on that well. We are still -- when you think about the extended assortment, particularly 1P, but also marketplace, we still very [Technical Difficulty] categories like TVs, particularly during the season, when Buen Fin and Fin Irresistible didn't perform so well. So therefore, that tends to impact us. And that's when you see the e-commerce numbers, you see that our on-demand business pretty much grew almost 20%, but our extended assortment grew much less mid-single digit, and that was impacted by 1P. So that's what an impact in the short term. As you know as well, we're also going through the transition on One Hallway. And the goal of the One Hallway, of course, is to increase and broaden our assortment so that we can diversify the assortment. And today, we have roughly 20 million SKUs. In the future, we can go up to more than 1 million SKUs in the next couple of years. So that's the journey we are in. It's a gradual implementation. It's a gradual progress. We don't expect to happen from one quarter to the other. But gradually, we'll see improvements over and above the things that Cristian already talked about that we are 100% focused, which is speed and reach. So it's about speed, reach and assortment. Operator: [Operator Instructions] Our next question is from Mr. Alejandro Fuchs from Itau BBA. Alejandro Fuchs: First of all, welcome, Paul, to Mexico and to Walmex, best of luck. I want to make 2 brief questions. The first one on same-store sales in Mexico. We saw a slight decrease in traffic and most of the growth coming from ticket. I wanted to see if you can maybe explain to us a little bit more color on how much of this is mix? How much of this is price? That will be the first one. And the second one, maybe for Paulo on gross margins. The improvement on the commercial front from lower shrinkage and general merchandise, how sustainable is this improvement on commercial margin going forward? And if you could give us maybe a little bit more color on those 2 general merchandise and on the food side, that will be very helpful. Cristian Barrientos: Thank you, Alejandro. And first of all, I will begin with the traffic, as you mentioned, was negative almost flat, but we always see the trend. So we began the year with a more negative traffic in the first quarter, and we're seeing a very good, let me say, response of the customer with the program that we're putting in place. Q3, Q4 was almost 0. And as you know, and as you saw in the reports, we have seen an evolution of the focus and that we're looking today in the fundamentals on the EDLP availability and e-com that those 3 are helping us to accelerate. And the idea in the coming months is to be very well prepared because we are waiting for the country to improve growth. You know very well that we ended 2025 with 0% growth in the market in -- as a total Mexico. We are expecting 1.5%. And we have a lot of data in other markets when you are very well prepared and the economy turn, you receive all these benefits in the future. So that is why we will be continue to focus on these 3 pillars that is crucial for the business, crucial for brick and also crucial for e-com. Recently, Paul mentioned that we are working very hard to mapping all our stores, all our items in the sales floors, also in backroom, trying to connect with e-com business and create more speed, more reach and take advantage of the assortment that we have. So that's the idea to combine all together, and we will continue to focus on it, and we know we will be very well prepared when the economy turn a little bit. Okay? And the second one was? Paulo Garcia: It was around margin. Thanks, Alejandro. Yes. So let me talk about -- as you said, you've seen the improvement in the omnichannel margin was mostly from GM mix and shrink. Let me start from the second and then talk about the first. So the second one, yes, it's an area that we are attacking. It's an area because at the end of the day, it's waste. And it's ways that we better can elsewhere invested to invest in pricing for our customers. We're putting a lot of energy there across all the teams. It's an end-to-end process. It's merchants, it's operators, but everyone that is involved. And we are topping that up with AI tools and machine learning, whether that's in terms of to optimize the replenishment, but it's also improve the demand forecasting because we still have a little bit of manual process in the way we actually look at the perishables. So that is something that we are really attacking left and center. On the general merchandise, Alejandro, goes a little bit what I also said to what on the e-commerce response or the extended assortment. So the categories that actually didn't perform so well tend to be, as you know, categories that don't enjoy the best margins as well. And as a result of that, of course, we tend to have a benefit on that. I think what you can expect from us going forward is the new business continue helping our margins, and we continue to invest behind the EDLP for our customers. And you, of course, might see volatility quarter-on-quarter as we always said it every single year. Operator: That was the last question. I will now hand over to Mr. Salvador Villasenor for final comments. Salvador Villasenor Barragan: Well, thank you very much for joining, and thank you for all your questions, and we hope to see you all at Walmex Day on March 25. Thanks again. Cristian Barrientos: Thank you very much. Paul Lewellen: Thank you. Operator: Walmex would like to thank you for participating in today's video conference. You may now disconnect.
Operator: Thank you for standing by. My name is Kate, and I will be your conference operator today. At this time, I would like to welcome everyone to Kinross Gold Fourth Quarter and Year-End 2025 Results Conference Call and webcast. [Operator Instructions] I would now like to turn the call over to David Shaver, Senior Vice President. Please go ahead. David Shaver: Thank you, and good morning. With us today, we have Paul Rollinson, CEO; and from the Kinross senior leadership team; Andrea Freeborough, Claude Schimper, Will Dunford and Geoff Gold. For a complete discussion of the risks and uncertainties, which may lead to actual results differing from estimates contained in our forward-looking information, please refer to Page 3 of this presentation. Our news release dated February 18, 2026, the MD&A for the period ended December 31, 2025, and our most recently filed AIF, all of which are available on our website. I will now turn the call over to Paul. J. Rollinson: Thanks, David, and thank you all for joining us. This morning, I will provide an overview of our fourth quarter and full year results, highlight our operations and projects and discuss our outlook for the business going forward and review our achievements in sustainability. I will then hand the call over to the team to provide more detail. Looking back, 2025 was another strong year for our business, underpinned by consistent operational and financial performance. We produced just over 2 million ounces and achieved our cost guidance, demonstrating a rigorous focus on cost control. As a result, our margins increased by 66% compared to a 43% increase in the gold price. This margin expansion resulted in a record free cash flow generation for our business with $769 million generated in Q4 and $2.5 billion for the full year. This free cash flow strengthened our balance sheet, and allowed us to return significant capital in 2025. In addition to returning approximately $1.5 billion of capital to debt and equity holders, we also ended the year with approximately $1 billion of net cash. With respect to operations, Tasiast and Paracatu continue to anchor the portfolio in 2025. Together, they accounted for approximately 1.1 million ounces for the full year or more than half of our production at strong margins. At Paracatu, full year production of over 600,000 ounces exceeded the midpoint of guidance with production exceeding 500,000 ounces for the eighth consecutive year. At Tasiast, full year production also exceeded the midpoint of guidance and the mine was once again our highest margin operation in the portfolio. At La Coipa, we delivered on full year production guidance and saw a strong performance in the fourth quarter. In the U.S., our assets delivered another solid year of operations with full year guidance achieved. Turning now to our projects. In 2025, we continue to make excellent progress across our attractive pipeline. In mid-January, we announced that we are proceeding with the construction of 3 high-quality organic growth projects which will extend mine life and benefit the long-term cost of our U.S. portfolio. Each of these projects demonstrate compelling economics at a range of gold prices and represent a strong case to invest capital to grow the overall value of the business. We also saw notable progress across our broader resource base with resource additions at several assets enhancing our strong resource optionality and long-term production outlook. We also continue to advance our 2 world-class development projects, Great Bear and Lobo-Marte. At Great Bear, surface construction for the AEX is well advanced, and we look forward to starting construction of the exploration decline later this year. I'm very pleased to report that we were just designated under the Ontario 1P1P process, which Geoff will elaborate more on. For the main project, detailed engineering and permitting continues to advance as we work with the Ontario and federal authorities, including the Impact Assessment Agency of Canada. The third and final phase of the impact statement submission remains on schedule to be filed at the end of this quarter. At Lobo-Marte, we are progressing baseline studies and plan to submit an EIA by Q2, and we look forward to providing a project update later this year. With respect to our outlook, we are reaffirming our stable multiyear production profile. Production of 2 million ounces for '26 and '27 remains consistent with our previous guidance and we are introducing a new year of production of 2 million ounces for 2028. At which time, our new higher-grade U.S. projects are expected to come online coinciding with higher-grade mining at Tasiast. Together, we expect this will provide an organic offset to cost inflation through great enhancement within the mine plan. Looking further ahead, we expect production to remain around the 2 million-ounce level through the end of the decade, supported by the higher grade mining at Tasiast, the U.S. projects, open pit extensions at La Coipa and the start-up of Great Bear. As with everyone in the industry, costs are expected to increase compared to 2025, primarily on higher royalties and inflation. However, I want to stress that we are holding the line on what we can control through continued cost discipline. With respect to future capital allocation plans, we will continue to remain disciplined to ensure that we are investing in our operations to maintain a reliable low-risk business, growing net asset value through continued pipeline development and strengthening our balance sheet while also returning meaningful capital to shareholders. The outlook for our business remains very robust, and Andrea will speak more on our plans to return capital to shareholders later. Turning to sustainability. In 2025, we continue to advance several priorities across this important area. In Q2, we will publish our annual sustainability report which will provide a detailed review on our sustainability performance and initiatives throughout 2025. Some highlights from the past year include, under the heading of Environment, we completed an energy efficiency program, delivering an estimated 1.5% reduction in greenhouse gas emissions through the implementation of more than 30 projects across our sites. Under the heading of Social, in Mauritania, we donated medical supplies through our long-standing partnership with Project C.U.R.E. and Mauritania's Ministry of Health. To date, the program has supported more than 70 health clinics. And under the heading of Governance, we were once again named the top scoring mining company in the Global Mail's Annual Corporate Governance ranking including maintaining placement in the top 15% of companies overall. With that, I will now turn the call over to Andrea. Andrea Freeborough: Thanks, Paul. This morning, I will review our financial highlights from the quarter and full year, provide an overview of our balance sheet and our capital allocation plans and discuss our outlook and guidance. We finished the year producing just over 2 million ounces, in line with guidance, with 484,000 ounces produced in the fourth quarter. Cost of sales of $1,289 per ounce and all-in sustaining costs of $1,825 per ounce in the fourth quarter were higher compared to the prior quarter as expected due to higher gold prices and lower planned production related to mine sequencing. Full year cost of sales of $1,135 per ounce and full year all-in sustaining cost of $1,571 per ounce were in line with guidance despite the impact from higher royalties. Margins were strong at $2,847 per ounce sold in Q4 and $2,283 per ounce for the full year. Our adjusted earnings were $0.67 per share in Q4 and $1.84 per share for the full year. Adjusted operating cash flow was a record $1.1 billion in Q4 and a record $3.6 billion for the full year. Attributable CapEx was $362 million in Q4 and $1.18 billion for the full year, in line with our full year guidance. Attributable free cash flow was a record $769 million in Q4 and a record $2.5 billion for the full year. Turning to the balance sheet. We continue to strengthen our financial position with significant cash flow generation in 2025, $700 million of debt repayment and significant growth in our cash position. In Q1, we repaid the remaining $200 million on the term loan we used to fund the acquisition of Great Bear and after redeeming our $500 million 2027 senior notes in December, we ended the year with $1.7 billion in cash, approximately $3.5 billion of total liquidity and net cash of approximately $1 billion. We now have no near-term debt maturities with $500 million due in 2033 and $250 million due in 2041. In December, we received a credit rating upgrade from Moody's Investor Services, upgrading our rating to Baa2 from Baa3. Also in December, we renewed our $1.5 billion revolving credit facility restoring the 5-year term. Turning to our guidance and outlook. We're forecasting production in the range of 2 million ounces for 2026 remaining consistent with previous guidance. Production is expected to be relatively evenly split across the year at approximately 490,000 to 510,000 ounces each quarter. With respect to cost this year, we are guiding $1,360 per ounce for cost of sales and $1,730 per ounce for all-in sustaining costs at a gold price of $4,500 per ounce. The expected increase of 10% for all-in sustaining costs compared to 2025 is driven by 3 factors. First, higher royalty costs due to higher gold prices, resulting in an approximate impact of 4% or $55 per ounce. Second, overall cost inflation of approximately 5% or $75 per ounce and the remaining 1% is primarily related to mine plan sequencing across the portfolio. With the increase in costs largely related to noncontrollable factors, our cost guidance continues to demonstrate our effective cost management strategy. Our capital expenditure guidance of $1.5 billion for 2026 reflects annual inflation and planned higher capital investment as we reinvest more in our business to extend my life and increase production in the late 2020 and 2030. Approximately $1.05 billion of our total CapEx is expected to be nonsustaining with the remaining $450 million expected to be sustaining capital. Looking ahead, our production guidance of 2 million ounces remains unchanged for 2027. And we have now added another year 2028 to our stable 2 million-ounce profile. Capital expenditures for 2027 and 2028 are expected to be approximately in line with 2026 subject to ongoing inflation and potential other project opportunities for the 2030s that are currently under study. As Paul noted, we will maintain our disciplined capital allocation strategy which includes reinvesting in our business, where we have chosen to increase capital expenditures by $350 million this year, continuing to strengthen our investment-grade balance sheet, and returning meaningful capital to shareholders. This year, we are targeting to return approximately 40% of our free cash flow back to shareholders through both dividends and share repurchases. Our shares remain a strong return on invested capital, considering our attractive valuation and free cash flow yield. With respect to dividends, we are further increasing our dividend by $0.02 per share annually or 14%, following a 17% increase we announced in Q4 for a total increase of 33%. Also, as a reminder, as typical for us, we expect Q1 to be a higher cash outflow quarter due to annual tax payments in Brazil and Mauritania and semiannual interest payments on the remaining senior notes. We expect to start executing our share buyback program next week. I'll now turn the call over to Claude to discuss our operations. Claude J. Schimper: Thank you, Andrea. I'd like to start with our safety culture. In the fourth quarter, our risk management practices continue to be strengthened across all the assets, ensuring that our highest risk activities are consistently and effectively controlled in the field. Building on our safety excellence programs, we continue to enhance capability at the frontline by investing in our field supervisors, equipping them with practical tools targeted training and visible leadership expectations to improve the quality of our critical control verifications. In December, we signed a 5-year collective labor agreement at Tasiast and a 2-year CLA at La Coipa, reflecting our ongoing partnership with our employees and ensuring stability for both the local workforce and our businesses in Mauritania and Chile. Our culture of operational excellence, which is backed by dedicated site teams continues to drive strong performance from our operations. Beginning with Paracatu, the mine delivered another strong year of production, exceeding 600,000 ounces, resulting in significant cash flow. Full year production of 601,000 ounces exceeded the midpoint of guidance and cost of sales of $978 per ounce was below the midpoint of guidance. Production of 155,000 ounces in the fourth quarter increased over the prior quarter due to timing of ounces processed through the mill partially offsetting lower planned throughput. Paracatu is expected to produce 600,000 ounces at a cost of sales of $1,240 per ounce in 2026. Tasiast delivered another strong year of operations with full year production of 503,000 ounces at a cost of sales of $884 per ounce, both meeting guidance. Tasiast was once again our lowest cost operation in 2025, delivering a robust cash flow. In the fourth quarter, the site delivered 126,000 ounces at a cost of sales of $1,002 per ounce. Production was higher over the prior quarter due to higher grades and strongest throughput. Production is expected to be slightly higher in 2026 and 2027 compared to the technical report due to ongoing mine plan optimization. The site is expected to maintain production at around 500,000 ounce level until we are back into higher grades in 2028. In 2026, Tasiast is expected to deliver 505,000 ounces with a target cost of sales of $1,050 per ounce and is expected to be our lowest cost operation once again this year. La Coipa delivered a strong final quarter with production of 67,000 ounces, improving over the prior quarter on higher mill throughput. Full year production of 232,000 ounces was in line with guidance. In 2026, mining at La Coipa will continue to take place at the 2 open pits, Phase 7 and Puren and blend ore feed into the process plant. La Coipa is anticipated to produce 210,000 ounces at a cost of sales of $1,320 per ounce in 2026. Our U.S. assets collectively delivered full year production of 676,000 ounces at a cost of sales of $1,426 per ounce, in line with guidance. Production of 136,000 ounces in the final quarter was on plan. In Alaska, fourth quarter production of 65,000 ounces was lower compared to the prior quarter and cost of sales of $1,673 per ounce was higher as a result of planned mine sequencing, including lower contributions from Manh Choh. At Bald Mountain, we produced 38,000 ounces at a cost of sales of $1,492 per ounce, and production was lower over the prior quarter, while costs were higher due to planned mining of lower-grade areas at the Galaxy and Royale pits. At Round Mountain, production of 32,000 ounces was lower compared to the prior quarter as Phase S continue to transition into initial ore while processing from lower grade stockpiles, resulting in a higher cost per ounce sold. With that, I'll now pass the call over to William to discuss our resource update and projects. William Dunford: Thanks, Claude. I will start by providing an update on our year-end reserve and resource. For this year, we have updated our reserve price to $2,000 per ounce and our resource price to $2,500 per ounce. The intention was to be more reflective of the recent gold price environment while still maintaining discipline and a focus on strong margins. Starting with reserves, I'm pleased to report that we added approximately 1.2 million ounces of reserve before depletion. At Paracatu, we saw a 700,000 ounce addition, largely offsetting depletion through mine design optimization and successful near-mine exploration. At Bald Mountain, we added 200,000 ounces before depletion, primarily through conversion of resources to reserves and the 5 satellite pits that were approved as part of the Redbird 2 project. At Tasiast, we added 200,000 ounces before depletion, with additions, both at West Branch and the existing pit design and at the Fennec satellite pit. At Round Mountain, the transition to underground replaced just over 1 million ounces of lower margin, lower grade open pit reserves with approximately 1.2 million ounces of higher grade, higher-margin underground reserves, fully offsetting our depletion. We are pleased to continue to see this type of progress in our reserve base, extending mine life as we advance exploration, optimizations and project studies across the portfolio. We have also grown our resource base by 1.6 million ounces of M&I and 3.4 million ounces of inferred. These resource additions were spread across our portfolio and were reflective of both exploration success and the impact of higher gold prices as we continue to hold the line on costs, increasing the size of potential future open pit laybacks at some assets. Just as we are holding the line on costs, we are also holding the line on our cutoff grades to ensure we maintain the margin and quality of our resource and only saw a small resource addition from additional mill feed at the end of mine life at the higher gold price. We are pleased to see these strong additions to enhance our long-term resource optionality. You can see on this slide a summary of that significant resource optionality which now includes 27 million ounces of M&I and approximately 17 million ounces of inferred. These resources, which include a number of projects across our operating and development sites form the pipeline of potential opportunities that we are progressing to support our production profile through the end of the decade and into the 2030s. Our January announcement of progression to construction across 3 high-return projects in the U.S. is a great example, demonstrating the depth and quality of the significant resource base and how we are progressing these projects into our business plan. Phase X at Round Mountain is a low-cost bulk tonnage underground opportunity that it extends operations through 2038 with average annual production of approximately 140,000 ounces. Curlew is a high-grade underground opportunity that leverages existing infrastructure at the Kettle River mill and at a historic Curlew mine bring online an additional high-margin line produces up to 100,000 ounces per year. And the Redbird 2 project is a highly efficient extension of mining at Bald Mountain, providing the next anchor pits alongside 5 satellite pits that combines to deliver 640,000 ounces. We have progressed the construction across these 3 projects on the back of strong margins with an average ASIC of $1,660 per ounce, quick paybacks of less than 2 years, combined NPV of $4.3 billion and combined IRR of 59% at $4,500 gold. Together, they are expected to add over 3 million ounces of production just based on the initial resource and mine plan inventory we have drilled to date. We are excited to be moving ahead with 3 high-quality projects as we continue to execute our portfolio of grade enhancement strategy. Beyond our initial life of mines at Phase X and Curlew, which go out to 2038 both projects have significant potential for mine life extension down dip to further enhance our return on asset value. At Phase X, we have recently completed drilling 220 meters down dip, which has demonstrated that mineralization continues with similar strong width of grade, providing further confirmation of our hypothesis that this system extends significantly down dip. This mineralization provides potential for both mine life extensions and for mining rate increase through opening of more mining horizons, potentially increasing the production rates. At Curlew, Stealth and Roadrunner exploration development completed last year has provided drilling access to target wide, high-grade resource extensions in these areas to augment our production profile in the mid-30s and drilling is now underway. As you can see on the slide, we have seen strong intercepts outside of the current resource and mine plan inventory in both of these zones with good widths and grades that have potential to extend the mine life and enhance the margins of the asset. Exploration will continue to be a priority for these 2 sites, and we look forward to providing further drilling updates through 2026. With these 3 projects now progressing to construction expected to come online in 2028. Our focus is now shifting to adding value-accretive production in the 2030s. This slide shows a summary of some of the longer-term projects in that extensive resource base that are our next focus to progress. I'll come back to an update on Great Bear, which is next in line shortly. Moving across to Chile. At Lobo-Marte project team continues to advance technical work as well as baseline studies to support our upcoming EIA submission and we look forward to providing a project update later this year. At Tasiast, we continue to see positive results down dip at West Branch and are setting both open pit and underground optionality there for mine life extensions in the '30s. At the same time, we are continuing to progress exploration on satellite opportunities similar to Fennec, which we added to the production profile last year and where we saw further reserve growth this year. At Maricunga, this year, we will be progressing technical and baseline studies and refreshing the mine plan to refine our view given the incentive resource base. Beyond these projects, we are continuing to progress exploration and studies for open pit layback opportunities that you can see in our resource base across our portfolio with a strong focus on Paracatu, Fort Knox and La Coipa extension. Now moving to Great Bear. Both the AEX program and Main Project are progressing well, with the Main Project on schedule for first production later in 2029, subject to permitting. Starting with updates on AEX, we made strong progress on site construction. Surface construction for AEX is 80% complete. As Paul noted, we look forward to construction of the exploration decline later this year pending receipt of provincial permits, which Geoff will comment on shortly. With respect to the Main Project, which remains on track detailed engineering and technical work continues to advance well, with detailed engineering now approximately 35% in fleet. Initial major equipment procurement for process plant and surface infrastructure is already underway with contract awards in progress. Manufacturing and selected long lead items is anticipated to commence later this year. With respect to exploration at Great Bear, in 2025, our efforts shifted to focus on regional exploration on the 120 square kilometer land package. Step-out drilling completed up to 1.8 kilometers along strike of the main LP zone returned encouraging results, indicating high-grade mineralization beyond the current resource base. Drilling on the broader land package outside of the main LP trend, also returned encouraging results. We will progress additional drilling to follow up on these results along trend and on the broader land package this year. I'll now hand it over to Geoff to discuss the permitting progress at Great Bear. Geoffrey P. Gold: Thanks, Will. Permitting of the AEX program and the Main Project continue to advance as we work hand-in-hand with the Ontario and federal authorities. Focusing on AEX, we continue to work with the Ontario Ministry of Environment Conservation and parks to finalize the 2 remaining AEX permits. We anticipate receiving these permits and to commence construction of the decline by Q2 of this year. Turning to the Main Project, which remains on schedule work has commenced on both federal and provincial permits. Federally, we continue to work with the Impact Assessment Agency of Canada, IAC, to advance the project impact statement. The first 2 of 3 phase submissions for the project's impact statement were filed on time in September and December, respectively. The third and final phase is scheduled to be submitted at the end of Q1 of this year as previously noted. As a reminder, finalizing the impact statement and receiving the final impact assessment report from IAC is the critical first step to obtaining the other federal and provincial permits we require to construct and operate to Great Bear mine. Work has also commenced another main project federal permits with technical documents submitted to Fisheries and Oceans Canada and Environment and Climate Change Canada during the quarter. Provincially, we were pleased that the main project was recently designated for the 1 project, 1 process permitting framework by the Ontario Minister of Energy and Mines Stephen Lecce. This helpful initiative aims to better coordinate, integrate and streamline Ontario mining project authorizations, permitting and indigenous community consultation, which we support. We expect this more coordinated framework will facilitate the Ontario component of Great Bear permitting and targeted first gold production later in 2029. Respecting indigenous communities, we continue to advance the negotiation of benefits agreements in a constructive and positive manner. I will now turn it back to Will to discuss our exploration portfolio. William Dunford: Thanks, Geoff. Beyond the significant portfolio of projects under study, permitting and construction that already sit in our resource base, we are also actively progressing brownfield and greenfield exploration across the portfolio with a total $185 million budget in 2026. We had a strong year of brownfields exploration, driving both the significant reserve additions we spoke about earlier and identification of additional resource potential across a number of projects, a few of which I will now highlight. First, at Tasiast, we have continued to see positive results at West Branch with 2025 deep drilling demonstrating that mineralization continues at least 1.8 kilometers down plunge of our existing underground resource. Next, in Alaska, the team spent 2025 building on our knowledge of the Gil satellite deposit at Fort Knox. alongside opportunity drilling near the Fort Knox pit to enhance the optionality of our next playback. Results at Gil were encouraging with a few highlight intercepts shown on the slide, strong grades and widths, including a 15.2 gram per tonne intercept over more than 4 meters. Gil is a satellite opportunity with potential to augment production for future phases of the Fort Knox main pit. And as the last highlight, at Bald Mountain, efforts have continued to explore our large land package at the site, and we're successful in bringing in the 200,000-ounce reserve add I mentioned earlier, primarily through satellite pit extensions. We have also seen strong results outside of those satellite pits that were added to reserves as part of the Redbird 2 project. One highlight was the drilling of the Rat satellite pit, saw intercepts with significant grades and widths including 10 grams per tonne over 16 meters. Rat is 1 of more than 40 historic mining areas on the property and will be a focus to explore and study for potential to complement our next anticipated anchor pit at Bald Mountain, the top pit. You can find more details on the strong results from our 2025 brownfields program and our plans for 2026 in our press release. Moving to our greenfields program. We completed approximately 40 kilometers of drilling across targets in Canada, in the U.S. and Finland. In Canada, exploration was primarily focused in Manitoba, New Brunswick and Ontario. At Snow Lake in Manitoba, we saw exciting new results both from our first drill program on a McCafferty property, including an intercept of 4 meters at 34 grams per tonne and from grab sampling on the SLG property which returned to a number of results of strong gold grades. These properties further complement the high-grade vein system we have outlined at Laguna North, providing critical mass for further exploration work in the area. In New Brunswick work consisted of mapping and drilling in the Williams Brook JV property, where Gold rich course veins were identified at the Lynx Zone. At Red Lake North in Ontario, field work also identified several high-grade quartz veins and rock grab samples returned numerous strong grades with the highest assay returning to 65 grams per ton. In Nevada, we completed 2 drill holes at PWC JV project to test for lower placed Carlin-type host drops. Program returned 149-meter mineralized intercept, confirming the presence of Carlin-type disseminated gold, work this year will focus on following up on this exciting result. We continue to be encouraged by our success identifying earlier-stage brownfields and greenfields opportunities to progress into our resource base and project pipeline and plan to build on this success in 2026. I will now turn it back to Paul for closing remarks. J. Rollinson: Thanks, Will. After delivering on our commitments in 2025, we are well positioned for a strong 2026. Our business is in great shape, both operationally and financially, with a number of upcoming catalysts for the year ahead, including ongoing return of capital through our dividend and share repurchases, continued strengthening of our balance sheet, supported by strong operational performance and cash flow generation, advancing our project pipeline, including the U.S. projects discussed in January, as well as Great Bear and Lobo-Marte, which we intend to provide a project update later on this year and continued exploration intended to bring in new projects and mine life extensions. Looking forward, we are excited about our future. We have a strong production profile. We are generating significant free cash flow. We have an excellent balance sheet. We have an attractive return of capital. We have an exciting pipeline of both exploration and development opportunities, and we are very proud of our commitment to responsible mining that continues to make us a leader in sustainability. With that, operator, I'd like to open up the line for questions. Operator: [Operator Instructions] Your first question comes from the line of Fahad Tariq with Jefferies. Fahad Tariq: On Great Bear, the 1 project, 1 process designation. I believe Kinross is the first major mining company to receive that. Can you maybe talk about the relationship with the provincial government and whether this could help get Great Bear into the major projects office designation at the federal level? Geoffrey P. Gold: Yes, sure. It's Geoff. I'll take that question. Look, let me start by saying that we were pleased by the Interior Minister of Energy's and Mines decision to designate the Great Bear project for inclusion in the 1P1P process. And we believe this designation represents an important milestone. I was -- I'm going to talk about both processes. But at the 1P1P level, the main benefit of the designation is a more streamlined and integrated approach for the provincial component of main project permitting. And it gives us a single point of contact at the Ontario Ministry of Energy and Mines to coordinate all required provincial authorizations permitting and First Nations consultation. And so as a result, we expect that will help facilitate the provincial piece of main project permitting and targeted first gold production in late 2029. And we've worked hand-in-hand through this process with the Ministry of Mines and other provincial permitting agencies, and we're pleased with the relationship. It's a strong relationship as we continue to work together to develop the project. On your federal piece of the question, I can tell you that we've been in touch with the federal Major Projects office. And they, along with other federal agencies are aware of the Great Bear project and its potential significant economic and sustainable benefits for not only Ontario, but Canada and indigenous communities. And it's absolutely possible to obtain designations under both the 1P1P permitting framework that I talked about previously and the federal national project of interest framework. But we've elected at this juncture to not apply for that federal designation. We believe that with the benefit of the 1P1P designation that we currently have, along with the fact as Paul noted, that we're far enough along with the federal impact assessment process overseen by IAC. As we've told the markets, we'll be filing the third and final phase of our impact statements at the end of Q1. So we believe we are well positioned for our targeted first gold production in late 2029. Fahad Tariq: Great. I appreciate the detailed response. That's very clear. And then maybe just switching gears to 2026 cost guidance. Can you just break out the impact of the royalties, the higher royalties because of the higher gold price and underlying cost inflation? Andrea Freeborough: Sure, I can take that. It's Andrea. I'll start with talking about all-in sustaining costs. So our total all-in sustaining cost guidance is up about 10% over 2025. And most of that is related to those 2 items. So inflation and higher royalties on gold price. So of the 10% increase, 5% is inflation and 4% is royalties from using the $4,500 gold price versus where we were for 2025. And then there's about a 1% increase that's left, and that's just really puts and takes across the portfolio on mine plan sequencing. When we look at cash costs, there's a bigger increase, so the increase looks like 20% year-over-year. So half of that 20% is the inflation in royalties and the other half is sequencing as well. There's a bit of a different impact there. It's kind of accounting characterization of our stripping costs. We started to see this -- starting kind of second half of last year where stripping costs move from being characterized as sustaining capital at some of our assets into operating costs. So we see the increase in cash costs, but the offset of that is in sustaining capital. So that's why there's no impact or very small impact on the all-in sustaining cost guidance. I'd say overall, we're moving the same time. it's just a characterization of cost shows up differently. Operator: Your next question comes from the line of Daniel Major with UBS. Daniel Major: First question, just on the capital allocation and cash returns going forward. I mean I think it's great that you're anchoring a capital return to free cash flow going forward. But I suppose 2 parts to the question. Is there a preference? Or can you comment on the split between ongoing buybacks and potential special dividends to get to the 40% of free cash capital return? And then 40% of free cash flow with $1 billion net cash position implies you're going to continue to build net cash? What are you going to use that for? And is there a maximum limit above which you'd pay it all out to shareholders? J. Rollinson: Why don't I start on -- and Andrea can jump in. To the first part of the question, we have a baseline dividend, which is meant to be there forever. And the bulk of the return of capital really comes in the form of buyback. We like the buyback. We think a lot of our investors prefer the buyback. And one of the things we like about buyback is it does come with that benefit of reducing our share count and therefore improving our per share metric. We reduced our share count last year, and our intention is to do that again this year. So in terms of the preference between dividend and buyback, we'll do both. But the greater volume or total of cash will be returned through the form of the buyback. Looking forward, I think our focus is to get the appropriate return of capital. And that's why, as you acknowledge, we focused on the percentage of free cash flow, that is the focal point. We do realize that in the context of current prices that will be more cash flow and therefore, more returns than we had last year. So we are increasing. But at the same time, we're reinvesting in our business. We do expect in the context of spot that our balance sheet will continue to strengthen. But I guess the point there is we also have to look at the other side of it with these higher gold prices, as we've already seen, we expect higher royalties, higher taxes. We just demonstrated with the announcement on the U.S. projects, we've got lots of optionality in our pipeline. And we'll take a sort of a steady as she goes with the balance sheet while reinvesting in our business with the appropriate return of capital expecting that we may have higher taxes, royalties and opportunities to reinvest in our business. Daniel Major: Okay. And then well, I guess, maybe a follow-on to that in terms of the inorganic options. Are you kind of optically looking at many opportunities at this point? J. Rollinson: I would say we get the question reasonably frequently. We do have -- we have a very strong internal technical team. We do look at opportunities, particularly if there's a process but I would say we're hard markers. We're not under any pressure. When you look at our reserve resource really more of our resource optionality. We've got a lot of depth in our organic portfolio. We've given good visibility on our guidance for 3 years and beyond. So we don't feel under any pressure and what that means is if we saw the right thing and we felt it created value, we'd have a look at it. But we certainly don't feel under any pressure and we're quite happy with the organic profile as it looks today. As I said, we'll our objective really with the free cash flow is to continue to grow our per share metrics. Daniel Major: Great. And then last one for me. First, I guess you slowly changed the way of the accounting for the tax payables. But just on that, in terms of the Q1, now we're past the year-end, what we should be expecting in terms of the cash outflow. I know you've obviously given the guidance of cash tax for the full year. And then with respect to the run rate of capital returns, free cash flow will be lower in Q1 because of the tax payments, would you -- should we read that you'll slow the buyback? Or will you just look to distribute that at a similar rate through the year? Andrea Freeborough: Yes. We're -- as I noted in my remarks, we haven't started the buyback yet just because of more significant cash outflows in Q1, largely related to tax, and I'll come back to that. But we are planning to get on the buyback next week. So on the whole Q1 may be lower than the rest of the year. But given we're targeting the 40% of free cash flow for total return on capital, it will be a bit of a -- we'll have to calibrate it as we go throughout the year, and then we'll report back each quarter. Like last year, we do expect to be in the market systematically sort of daily throughout the year, repurchasing our shares. In terms of the tax payments, in Q1, we expect to be paying over $400 million, and that's largely related to 2025. And then we gave the guidance for the full year, but I think $500 million of that is related to 2025. Sorry, probably closer to $600 million. Daniel Major: Okay. So $400 million in the first... Andrea Freeborough: In the first quarter. Daniel Major: $400 million in the first quarter and then the remainder of the $1.25 billion -- so $1.25 billion over the year. Andrea Freeborough: Q4 typically had sort of the lowest payments, Q1 the highest then Q2. So more weighted to the first half and Q1 being the highest. Operator: Your next question comes from the line of Carey MacRury with Canaccord Genuity. Carey MacRury: Congrats on the strong year. Just going back to the 40% target. That's just to clarify, that's for 2026, and that's a number that you'll revisit, I guess, in 2027. Andrea Freeborough: That's right. Carey MacRury: Okay. And then just in terms of the 2 million ounces, is there a quarterly progression we should be expecting or pretty flat quarter-to-quarter like last year? Andrea Freeborough: Pretty flat quarter-to-quarter. J. Rollinson: MacRury, as Andrea noted, and she gave her comment. We'd like to range sort of consistency, but obviously, at 2 million divided by 4 million, that's 500, but you have ups and downs. So we think anything 485 to 515 or 490 to 510 , that's kind of the average. Operator: Your next question comes from the line of Tanya Jakusconek with Scotiabank. Tanya Jakusconek: Yes. Okay. Perfect. Great. Some have been asked, but I just wanted to follow back on just the contract renewals. Are there any other ones that are coming up for renewal this year for your labor contracts that we should be aware of? Claude J. Schimper: Yes, Tanya, there is. We're busy -- we're currently busy working through the Brazil Paracatu contract negotiations. Those are pretty standard. We do them almost annually or 18 months. It's slightly different to the other side. Geoffrey P. Gold: A bit more legislative. Claude J. Schimper: Yes, a bit more legislative as well. So it's just a bit more of a process and that's why it's taken on into this year. But for the rest of the sites, as our U.S. sites, we don't have them, and then it's just Tasiast, Mauritania. Chile, we completed. So we're... Tanya Jakusconek: Okay. And I should be thinking about labor, the inflation and wage inflation in that 4% to 5%, would that be fair? Claude J. Schimper: Yes, it's really relative to the country. Our inflation in Mauritania is like 10%. Brazil, it's about 8%. So relative to each country. And then overall, for us as a portfolio, it's in the 4% to 5% range. Tanya Jakusconek: Okay. So it's not out of one. Okay. My second question is on Great Bear and thank you for the information on the permitting side. Hopefully, we get that permit in Q2. That would be good to see. But I read that you're going to give us an update later in the year on Great Bear. What exactly are we getting in terms of an update? Is it a new technical study? Maybe just some clarity on what's coming. J. Rollinson: Yes, just for kind of -- that may have come out a little bit on the script. The update we're going to provide is on Lobo-Marte. And we were talking about Great Bear and Lobo at the same time. I don't know that there's a specific update that we're planning. It's just continued milestones in the case of Great Bear getting those 2 remaining permits, starting to decline filing the third and final impact assessment filing. So there's not a specific deliverable that I think we're thinking about with Great Bear, in the case of Lobo, we will be filing the EIA, and we plan to give a project update on economics. Tanya Jakusconek: Okay. Now that makes more sense because I was just like what's coming on Great Bear that needs an update. But okay. And then my final question is there is a slide that we talked about -- you talked about on some mine life extensions and Paracatu was there. And I'm just wondering, many years ago, there was a potential to do a layback that would add quite a bit of ounces on Paracatu. Is that what you're still thinking about? Is that something -- that make sense? J. Rollinson: Yes, you can see that I mean, there's a variety of layback optionality, both in reserve and resource at Paracatu. You can see that we put about 700,000 ounces into the reserve this year as it converts that's material that is now in our strategic business plan, and that's a further redesign of layback. So that full reserve is now approved in part of our business case. So it's an easy way to think about the direct business case is the laybacks that sit in the reserve. And then there's also a significant multimillion ounce resource that we're looking at for the next stage of optionality there. Operator: I will turn the call back over to Paul Rollinson for closing remarks. J. Rollinson: Thank you, operator, and thanks, everyone, for joining us this morning. We look forward to catching up with you all in person in the coming weeks. Thanks for dialing in. Operator: Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.
Operator: Thank you for standing by. My name is Jordan, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the GATX 2025 Fourth Quarter Earnings Call. [Operator Instructions] I would now like to turn the call over to Shari Hellerman, Head of Investor Relations at GATX. Please go ahead. Shari Hellerman: Thanks, Jordan. Good morning, everyone, and thank you for joining GATX's fourth quarter and full year 2025 earnings conference call. Joining me today are Bob Lyons, President and Chief Executive Officer; Tom Ellman, Executive Vice President and Chief Financial Officer; and Paul Titterton, Executive Vice President and President of Rail North America. As a reminder, some of the information you'll hear through our discussion today includes forward-looking statements. Actual results or trends may differ materially from those statements or forecasts. For more information, please refer to the risk factors in our earnings release GATX's 2024 Form 10-K and our other filings with the SEC. GATX assumes no obligation to update or revise any forward-looking statements to reflect subsequent events or circumstances. I'll start with a brief overview of our fourth quarter and full year 2025 results, then I'll turn the call over to Bob for additional commentary on 2025 and our outlook for 2026. After that, we'll open the call up for questions. Earlier today, GATX reported fourth quarter 2025 net income of $97 million or $2.66 per diluted share, this compares with fourth quarter 2024 net income of $76.5 million or $2.10 per diluted share. Results for both periods include net positive impact from tax adjustments and other items of $0.22 per diluted share in 2025 and $0.17 per diluted share in 2024. For the full year 2025, GATX reported net income of $333.3 million or $9.12 per diluted share, this compares with net income of $284.2 million or $7.78 per diluted share in 2024. Full year results for both 2025 and 2024 include impact from tax adjustments and other items. A net positive impact of $0.37 per diluted share in 2025 and a net negative impact of $0.11 per diluted share in 2024. Additional details can be found in our earnings release. And with that quick overview, I will now turn the call over to Bob. Robert Lyons: Thank you, Shari, and thank you all for joining the call today. I'll open with some brief comments on 2025 performance versus the outlook we had coming into the year, and then talk a little bit about 2026 and what we see on the horizon. For those of you that participate in our calls regularly, we're usually very brief at the opening. But today, I'm going to take a little bit more time as I did last year at this time to talk through our outlook for the year ahead and recap a little bit about the past year. First of all, I want to thank all the employees of GATX around the world for their outstanding efforts and contributions this past year, especially those who were central to the Wells Fargo Rail acquisition and the integration efforts, which are ongoing. We asked a lot from people, and they delivered across the board. And they did so because everyone sees the long-term benefit of this transaction. Regarding 2025 results, we came into the year expecting EPS growth in the 8% range over 2024. And as reported this morning, our EPS actually increased 11% over 2024. Importantly, we achieved this strong EPS growth while posting another year of ROE above 12%. And I think this is important to point out because we continue to maintain a very conservatively structured balance sheet with leverage steady at [ 3.301 ]. On top of the positive EPS and ROE metrics, we continue to find investment opportunities. We put $1.3 billion of capital to work in what we believe will be attractive earnings growth and return opportunities for our shareholders. Given the magnitude of the Wells Fargo Rail acquisition, it'd be easy just to jump past 2025 and focus on this opportunity, which we'll do. But I don't want to lose sight of how our business is delivered in 2025. So allow me a few minutes to recap some of the highlights. At Rail North America, we maintained utilization at 99%, we closed on over $640 million of new investments. We continue to invest in our own maintenance network, and we stayed focused on safety and customer service. Additionally, the secondary market was very robust and demand for GATX leased assets was strong. We capitalized on that by optimizing our portfolio and generating substantial remarketing income. Within Rail International, coming into the year, we were hopeful that the economic environment would improve as the year progressed, but it did not. Despite these challenges, the team at GATX Rail Europe did an outstanding job by raising lease rates on many car types and holding utilization at solid levels. And on top of that, we closed a very large and important transaction, acquiring nearly 6,000 railcars from DD cargo. In India, the economic environment was very strong, and our results showed it as the GATX India team grew the portfolio to over 12,000 wagons. Demand for spare aircraft engines was very robust in 2025, and we grew our asset base on earnings at both the joint venture and wholly owned levels. In fact, the earnings growth within engine leasing was the strongest among the various GATX businesses in 2025. We saw solid lease rate increases and substantial engine sale opportunities. Overall, I was very pleased with the operating performance across our businesses last year. And we've set the stage for a very solid year in 2026, one that will have a number of new and unique elements as we integrate the Wells Fargo rail portfolio and management activities into our daily operations. So let's talk about 2026, and I'll start right there with the acquisition. There are 3 elements of the transaction that I'd like to recap. And for some, this will be a repeat but I think it's important because it helps set the stage for additional discussion. First, GATX and Brookfield formed a new joint venture that acquired 101,000 railcars from Wells Fargo Rail constituting all of their railcar operating leased assets. GATX owns 30% of the JV, Brookfield owns 70%, and we have the option to buy down Brookfield's interest over time. Second, Brookfield acquired approximately 22,000 railcars directly from Wells Fargo, those being under finance leases. And third, GATX will manage all the railcars involved in both transactions. So I'll walk through each segment and our outlook for 2026, starting with Rail North America and some housekeeping matters to keep in mind. As we've previously discussed, GATX will consolidate 100% of the newly formed JV into our financial statements and show Rail North America as a single segment with consolidated operating metrics. U.S. GAAP requires consolidated financial reporting because we're the controlling partner from day 1. Among other things, that means that each line item of the income statement and balance sheet will include 100% of the combined balance of the legacy GATX business and the JV with any intercompany activity eliminated. Brookfield's share of the JV earnings will be recognized in a single line item on the income statement, net income attributable to noncontrolling interest. That will be deducted from net income to arrive at the net income attributable to GATX. Now I know that's a mouthful and probably a little difficult to follow, but it will be much easier in Q1 and beyond when we have actual results to go along with the nomenclature. Reporting requirements aside, we have an obligation to our partner to treat all of the JV railcars exactly as we treat our legacy portfolio. In other words, we cannot and will not discriminate in any way. The GATX portfolio of 107,000 railcars and the acquired portfolio of 101,000 is now one fleet, 208,000 railcars fully under the control of GATX. And that's how we're going to manage the business. For example, if a customer has 500 cars renewing, some are with GATX, legacy fleet and some at the JV, honestly, they're indifferent as to who the owner is. All they want is 1 point of commercial contact, 1 renewal discussion, 1 maintenance plan, 1 fleet plan, et cetera, and that's what we're going to deliver. On a macro level, we expect a similar operating environment in North America as we experienced in 2025. Looking at a few of the key commercial metrics for our consolidated Rail North American fleet, this is the full 208,000 cars. For the LPI, we expect to be in the high teens to low 20% positive following the 21.9% posted in Q4. This reflects the continuation of a very solid existing car market. The Wells Fargo fleet was running at approximately 97% utilization at closing. And factoring that starting point in, we expect utilization for the consolidated fleet to be 98% to 99% by year-end. And we expect our renewal success rate to be in the high 70s to low 80% range. Again, a really, really strong outcome. With those metrics in mind, I'll walk through our expectations for some key line items at Rail North America and noting that the vast majority of the variances versus '25 for those revenue and expense items that I'm going to talk about are due to the addition of the Wells Fargo rail fleet. Looking first at revenue. In 2026, we expect Rail North America lease revenue to be in the range of $1.6 billion or approximately $550 million over 2025. As indicated by the LPI, we continue to benefit from opportunities to reprice leases into a strong existing car market. We also have other revenue, which is largely related to repair revenue. We expect that to be in the range of $160 million, up $25 million versus last year. As for asset sales and scrapping, which drive our net gain on asset dispositions, a very robust secondary market we experienced in 2025 shows all signs of continuing. In fact, given our increased scale, we're having a number of positive conversations with a range of secondary market participants about what GATX will put into the marketplace in the year ahead. So in 2026, we expect approximately $200 million of net gains on asset dispositions versus $130 million last year. That's a material increase. But keep in mind that we now have a pool of cars to select from in terms of sale candidates, that's twice the size of our historical fleet. And we're going to continue utilizing the strong demand to optimize and rebalance the entire portfolio. Of course, along with all the benefits of an increased fleet size, we have ownership costs and maintenance costs associated with the new additions. Interest expense is expected to be in the range of $440 million in 2026, that's a $180 million increase over '25. Depreciation should be in the range of $520 million, a $230 million increase. And regarding maintenance expense, we expect to be in the range of $500 million in 2026, a $150 million increase over '25. And all of those increases are largely driven by the new fleet. The last item to note is other operating expense, the bulk of which relates to items like car taxes, mileage charges, freight charges, et cetera, as we move cars around North America. And thankfully, we have a lot more cars to move around today. So we expect these expenses to be in the range of $85 million in the year ahead, about $25 million over last year. Bringing all this together, we expect segment profit at North America rail to be in the range of $415 million in 2026, that's a $55 million to $65 million increase over last year. At Rail International, in Europe, the economic environment, we expect will remain challenging. However, the GATX Rail Europe team has done an excellent job investing in building the business, and we're going to see profit growth there. The same in India, although there we have the benefit of a very strong economic tailwind. Taken together, we expect Rail International segment profit to increase by $5 million to $10 million in 2026. At GATX engine leasing, the market environment remains quite favorable. Not only is global air travel strong, but the long-term trends in this market are positive. In addition to base demand for new engines, you have the fact that the lead time to acquire a newly built engine or complete repairs on existing engines is extended. That's a continuation of a global supply chain constraints, but also a reflection of the fact that there's limited capacity to build or repair these very complex assets. That means the installed base of these assets is more valuable. We see that same trait in rail. In 2025, our RRPF 50% owned joint venture, invested over $1.4 billion, bringing its total asset base to over $5.7 billion. GATX has grown its directly owned engine portfolio to over $1 billion. Given our outlook for the engine investments, we expect Engine Leasing segment profit to increase by $15 million to $20 million in 2026 and this is after increasing almost $50 million between '24 and '25. On SG&A, we continue to work hard to hold the line on costs. And for 2026, we came in at '24 -- for 2025, we came in at $246 million. We expect this to be in the range of $275 million in 2026. The majority of the increase is related to staff we've added for the acquisition. To put this in perspective and to highlight the scalability of our business, we added over 100,000 owned railcars and 22,000 managed railcars to our franchise, more than doubling the size of our owned and managed fleet while seeing an increase in SG&A of just over 10%. And that includes the standard cost and wage inflation we'd see in a normal year. Putting all these factors together, we expect EPS to be in the range of $9.50 to $10.10 per diluted share in 2026, which would mark another year of record EPS. Importantly, this is roughly a 10% increase in EPS in a year in which we'll complete and integrate the largest acquisition in our history. For those who enjoy the vagaries of lease accounting, you know that acquiring one railcar is often dilutive in the early years of ownership from a GAAP income standpoint. Adding over 100,000 cars is 100,000x more challenging on that front. Yet, given the scalability of our platform, the management services we're providing and the fact that we acquired the assets at an attractive valuation, we still expect to generate strong EPS growth in the year ahead. So I'd like to provide a quick update on the acquisition integration process because we're getting -- we have received a number of very good investor questions on this point. I'm pleased to report that the closing and the integration to date are progressing very well. As noted, we closed on January 1. And on that day, we did an IT cutover that entailed hundreds of thousands of data points, car files, contract records, mechanical records, customer data and myriad other supporting documents. The cutover went very well and I'd like to take a second just to thank the Wells Fargo Rail team for all of their work in assisting with that effort. From a commercial perspective, our sales team hit the ground running. While we added some new customers through the acquisition, by and large, the biggest accounts are existing customers of GATX that we know very well. So all the customer interaction right now is under one umbrella. And with an expanded fleet, we will have more customer interaction than we've ever had before, and we believe we can bring additional value to our customers. On maintenance, historical maintenance spend on the acquired fleet was in the range of $135 million annually. As a bank, Wells Fargo was not allowed to own its own shops, and therefore, it utilized third-party shops for 100% of this spend. As we've indicated before, given that the GATX shops are currently at full capacity, we'll continue to utilize those third-party shops for maintenance of the acquired fleet. Over time, based on investments we're making in our shops and efficiency improvements, we will have an opportunity to move some of this work in-house. That does not mean that we can't add value immediately in the maintenance process. For example, previously, there were close to 80 shops providing service on the Wells Fargo fleet. In just 7 weeks of ownership, we've already paired this down materially and we'll keep doing so as we transfer work to our preferred third-party providers. In the process, we will find cost efficiencies. Just one example of how our team is integrating the fleet, applying their experience and expertise and bringing additional value for our customers and our shareholders. So I'll close with comments on the dividend and the share repurchase, authorization that was announced today. Our Board has approved an increase in the quarterly dividend of 8.2%, and this follows several years of increases in the 5% range. The stepped-up percentage increase versus prior years reflects the Board's confidence and the strength and quality of our cash flow, the increased scale and strength of our global businesses and the positive outlook for GATX. So I appreciate the Board's confidence. And as always, we appreciate the support of our shareholders who have been with us for years and in several cases decades. The Board also approved a new $300 million share repurchase authorization as we exhausted the prior one, which was granted in 2019 in the fourth quarter. We view stock repurchase as a tool to use periodically to return capital to shareholders. Our capital allocation has been consistent and clear. We believe our first mission is to acquire hard assets at attractive valuations to grow our business. Second, we'll do that while always managing our balance sheet and leverage prudently. And third, we'll return excess capital to shareholders, either through the dividend or share repurchase. Again, I want to thank the Board for their support in providing the authorization. So thank you for your patience. This was a much longer preamble than normal, but I hope you found it helpful as we are trying to provide some background and foundation as we look at the year ahead. This is a very exciting time at GATX. A year of transition as we fully integrate the acquired fleet and bring all the assets fully under our commercial and operational control. And we have the foundation in place to execute on this while also pursuing and maximizing growth and return opportunities in all of our global businesses. With that, let's go to Q&A. Operator: [Operator Instructions] Your first question comes from Andrzej Tomczyk from Goldman Sachs. Andrzej Tomczyk: Wanted to start off on the guidance for EPS. First, are you just able to frame up the magnitude of gains on sales factored into the low versus the high end? And then maybe just a question on if supply-demand tightens further for railcars through 2026, given below replacement delivery. Is that a scenario where you could see upside to your gains target through the year? Thomas Ellman: Yes. So maybe I'll start on the first part and then let Paul chime in on the second. So as Bob stated, we're targeting something in the range of $200 million for gains on sales. As you know, those tend to be pretty lumpy quarter-to-quarter. But if you look over the past few years on how the year has actually played out compared to what our original expectations were, that gives you a pretty good guidance to what magnitude the range might be. So something on the order of $10 million, $15 million either way is something that we've seen historically. But that's no guarantee for the future. It's really hard to say exactly how that will play out. Paul Titterton: And then I'll just add to that. This is Paul speaking. We've talked about some of the benefits of the fact that new car production is down to levels that we have not seen in quite some time. And what I'll say is there remains a tremendous amount of capital that would like to be deployed in the railcar market, and we believe that capital and we're seeing evidence that, that capital is going to flow into the secondary market as it looks for investments. So if you're in a situation like we are where you're the largest owner of railcars in North America, that should be a very supportive environment to generate the secondary market gains. Andrzej Tomczyk: Understood. And maybe just one follow-up there. Apart from the gains, what areas of the business could you see sort of more variability around the results in 2026 relative to the guidance you laid out between North America, international and engine leasing and then just maybe what's driving the variability across those segments? Thomas Ellman: Yes, Andrzej. So you definitely pointed out the biggest one in the way you teed up the original question, purely in terms of financial results, variance and projected remarketing gains, both at Rail North America and in our engine leasing business are the biggest source of upside or downside. And as I noted, that's particularly true because it can be difficult to precisely predict the timing of these asset sales. But our guidance also assumes that we're able to manage the Rail North America maintenance spend, whether owned or third-party shops very tightly. As Bob mentioned in his opening comments, gross maintenance spend is projected to be approximately $500 million. So even a small percentage change in this line item could be impactful. We also assume no material disruption in the global economy in general or to the global aviation market in particular. Again, we highlighted the strength that we've seen in engine leasing, but it is a market that is subject to periodic disruption. Andrzej Tomczyk: Makes sense. And just maybe following on the synergies from earlier. I was curious if you could give some more detail on synergies in total and maybe how we think about capturing the synergies through year 1. And then when you said previously year 2 would be more than modestly accretive. Are you able to put a frame around that if it's mid-single or high single-digit type accretion or even double digits depending on sort of what avenues you take with the business. Any framing there would be helpful. Appreciate it. Robert Lyons: Yes, Andrzej, it's Bob. I'll start out, and Tom may jump in, but we gave the guidance in the press release of the $0.20 to $0.30 from the impact of the transactions that's early-stage synergies and benefits. It also is reflective of the fact that, as I mentioned in my opening comments, operating lease accounting is not a new acquirers friend, whether it's 1 car or 100 cars or 100,000 cars operating lease accounting can be dilutive in the early days. So we're overcoming that through some of the synergies we're realizing through the management fees that we're receiving and through some of the other benefits of the transaction. Beyond 2026, I think I'd like to hold off on speculating what that may be. But as the year progresses, we'll be very clear with you as to how the integration and the benefits are coming along and what those will mean longer term. Thomas Ellman: So just putting a couple of numbers to some of the synergies and the discussion of SG&A that we talked about. So we earn 2 different types of management fees. As Bob noted, we're managing the long-term lease portfolio that Brookfield wholly owns, and for that, we expect management fees of approximately $11 million a year. We also manage the JV that we are a 30% owner of, and for that, we expect management fees on the order of $44 million per year. So combined, it's a little over $50 million. Now keep in mind, the JV portion of those is 30% owned by GATX. So you need to think of that as the 70% that we don't own. But if you compare that to the $30 million of incremental SG&A that Bob talked about, most but not all of which is related to the increased asset size, give you some idea. As far as long term, as Bob mentioned, we've historically always given 1 year of guidance. We're going to continue to adhere to that. Bob mentioned in his comments, a couple of different things related to maintenance that where we could see some things. The only other qualitative point I would make is as we introduced our cyclically-aware management philosophy to the Wells Fargo portfolio, you should continue -- you should see some benefits there as well. Robert Lyons: Yes. I'd just add to that, Andrzej. From the standpoint of the guidance we gave today, outside of the numbers Tom just hit on and the guidance we put in the press release. We're not factoring in any significant incremental synergies beyond that. Now we believe they're there long term, but we haven't really factored that into the 2026 guidance because it will take some time to realize those in 2027, we'll address that as we get into that year. Andrzej Tomczyk: Understood. Appreciate all the color there. Maybe just shifting gears a little bit to engine leasing. It sounds that's been a strong segment for you guys through the year. It sounds like Airbus just announced lower delivery expectations for the year with bottlenecks being seen around aircraft engine availability. So I was just wondering if you could talk to how this is playing out on your aircraft spare engine leasing business. And maybe if you could share sort of what you expect through 2026 from affiliates. Appreciate it. Thomas Ellman: Yes. So what I'll tell you is, in general, the global aviation market and aircraft engine leasing, in particular, remains very strong. Certainly contributing to that is the supply constraints, both on the engine production side and on the maintenance backlog. So all of that is quite helpful. As far as the total magnitude that we'll see in engine leasing, it's exactly what Bob hit in his opening comments in terms of the total dollar amount that we'll see. Robert Lyons: So total segment profit kind of forecast whether from JV or 100% owned assets is in the $180 million range, segment profit wise, up over $165 million or so in 2025. So a very significant meaningful contributor. And again, you hit on it. There is supply chain issues, whether it's on new engines or whether it's on engines that are in MRO facilities, waiting on repairs. These are complex assets, not everybody can do the work. Nobody -- you can't really scale up quickly to do that kind of work. So the lead times are long. That raises the value of the existing portfolio, and it gives you more lease rate leverage as well. Operator: Your next question comes from the line of Ben Mohr from Citi. Benjamin Mohr Mok: I wanted to start off by asking about whether you're seeing any potential railcar shortages in any particular car types, if you're seeing any of that in any places in interacting with investors, there's thought that it could be starting to happen here and there due to the scrapping and age of fleet would be curious to hear your thoughts on what you're seeing? Paul Titterton: Yes. Thanks, Ben. This is Paul. I'll take that. So we continue to stand by the thesis we've been advancing for a few years now, which is that we are in a market that is what we're calling supply led, which is to say that there are fewer new cars being produced, and thanks to supportive scrap rates, we are seeing cars leave the fleet. And as a result, we're seeing net fleet shrinkage in the North American fleet. And again, that's a positive when you're the largest owner of railcars in North America because those conditions should be supportive of stable utilization and stable pricing environment. So certainly, those are favorable dynamics for our business. In terms of outright shortages, I would say no, we're not seeing outright shortages, but we certainly continue to see a stable and supportive market in most of the car types in which we invest. Benjamin Mohr Mok: My next question then is on the sort of -- at least from what we view as greater than expected step down in your LPI to the 21.9%, that's kind of towards the lower end of the low to mid-20s expectation and a step down from your 3Q is 22.8%. I wanted to hear your thoughts. Could that be indicative of lower renewal rate gains catching up from the shell bus in COVID to be expected over the next 2 years? Or could it maybe just be a blip this quarter and step back up? And then kind of mudding that with your Brookfield JV would just love to hear kind of how you account for all of these. Robert Lyons: Yes, Ben, it's Bob. I'll start. Paul may jump in. But from an LPI standpoint, I would say actually in 2026, something in the high teens, 20% range is very positive, especially given kind of the renewal -- the trend in the number of cars renewed and the expiring rate over time. I would take 20% LPI every year to Infinity, if I could. That's a really, really positive outcome for us. And it is on the combined fleet, so that's a good thing and a good metric to provide. There are some economically sensitive car types, as we referenced in the press release, where we're seeing a little bit more challenge in terms of the lease rate environment. And I'll let Paul comment on that. Paul Titterton: Yes, sure. So as Bob said, there are certain segments of the fleet. Unfortunately, for us, these are the distinct minority of our overall fleet, but certain segments of the fleet box cars would be a great example where those are more sensitive to some of the macroeconomic uncertainty we're seeing. And so there, there is a little bit of downward pressure, and I think we're watching that in those and certain other car types. But having said that, the core franchise for GATX, which is what I call the heavy haul bulk franchise and specifically tank cars and specialty covered hoppers that we continue to see very supportive, stable pricing utilization. Those dynamics remain, I would say, favorable, and we expect them to continue to be favorable. Benjamin Mohr Mok: Great. And maybe kind of related to that, the step-up in your renewal success rate into the low 90s from the mid- to high 80s, that's been kind of for some time now, that seems to be of note. Could that help offset a gradual decline in LPI. And just wanted to get your thoughts on that. Robert Lyons: Yes. I would view the low 90s as a bit of an anomaly based on certain renewals that we concluded in the fourth quarter that's -- I can't recall being north of 90% on a quarterly basis before. So being anywhere in the high 70s, 80% range is commercially what we expect and consistent with history. I'd say the key on that renewal success rate number is, if you're in that high 70%, 80% range, et cetera, those are cars that are staying with existing customers, those are cars that are not then going to customer B and winning through the shop. So there is a benefit there in terms of us not having to handle those cars upon return. So anything up in that high 70s, 80% range is really good. Benjamin Mohr Mok: Great. And I know that you've been continuing to do your railcar qualification tests. And so we've been expecting maybe a higher maintenance expense. And it seems like it stepped down quite nicely this past quarter. Is this step down more temporary kind of a blip and we can see it step back up or how would you guide on kind of cadence that you did give kind of the full year, but the cadence throughout '26? Paul Titterton: From quarter-to-quarter, a lot of it is, frankly, noise. So I think you really -- when you think about the compliance calendar, it's really an annual calendar. 2026 will be another fairly busy compliance year for us, and we're anticipating though, after that, that our compliance calendar will moderate somewhat. Benjamin Mohr Mok: Great. And then maybe just if I can squeeze in one last one. Your due diligence on the Wells portfolio is that completely done? Or what actually not that you've already acquired it? That's a new point. So let me just scratch that. Robert Lyons: No, that's fine, Ben. And just to add on to that question, I would say that based on the amount of due diligence we were able to do pre-close, there were very few, if any, surprises at closing. By and large, the fleet we expected to acquire we acquired with the underlying car types, customer base, et cetera. So no issues there. Operator: Your next question comes from the line of Harrison Bauer from Susquehanna. Harrison Bauer: I wonder if just a quick follow-up on your $0.20 to $0.30 accretion from the Wells deal. Is the variability in that largely due to gains? Is there anything else that might take you from the low end to high end? Thomas Ellman: So I would say that -- I'll start and I'll let Bob add on. But Overall, what I would say is the same factors that drive the overall business is what drives the incremental piece from Wells Fargo. It's the same business, the same core business that we're in. So the #1 thing, of course, is variability around gains on asset sales. And then I would make the same comment I made about the magnitude of the maintenance spend and a small variability being potentially impactful. Robert Lyons: Yes, that's -- I have nothing to add on that, Harrison. Harrison Bauer: Okay. And then aside from maybe your games assumption within the Wells fleet this year, and you mentioned as well the some of the purchase accounting impacts. Can you give us a sense of any additional onetime cost or the purchase accounting that might roll off over time? Just so we can understand what the incremental earnings contribution might look like from that business as you scale your ownership over time? Robert Lyons: Yes. Well, there's no significant onetime costs in there. We had some of those in 2025, which we called out and normalized for in our EPS numbers. So there's no significant onetime items in there. And the way operating lease accounting works because you flat -- you straight-line depreciation, it's really the interest expense that burns down over time as cash flow continues to generate on the fleet. So that's really the biggest variable. And then what we're able to do from a commercial and maintenance perspective, adding our skill set expertise and knowledge of those assets, we feel we can get incremental benefit there as well. Harrison Bauer: Great. And along the lines of the capital that you're willing to deploy on that deal over time? You structured the Wells transaction to preserve some flexibility between new car investment and then the incremental equity over time. Given the muted new build environment and then your re-up share authorization, how are you thinking about your capital allocation priorities as you go through the integration of this fleet this year? Thomas Ellman: Yes. So the philosophy is unchanged from what Bob talked about. So first and foremost, we want to invest in economically accretive assets. We want to make sure that we're maintaining the proper balance sheet and doing things that preserve our cost of capital, and then we'll return excess capital to shareholders. As you noted, part of the reason for structuring the deal the way we are, the way we did is because we have really attractive investment opportunities throughout all of our businesses. So in 2025, we did $1.3 billion of investment, the 2 years prior to that, we did something on the order of $1.6 billion. So if you look at the investment level that we expect outside of the Wells Fargo Rail transaction in 2026, it'd be a little over $1 billion. Regarding the Wells Fargo Rail transaction, we recently made our initial equity investment of a little under $400 million to acquire the 30% ownership in the JV. Currently, we anticipate exercising our first option to acquire another 3.5% of the JV on June 30 for approximately $66 million. So if you add those numbers, the investment absent Wells Fargo, the initial equity investment and the anticipated option exercise you come to about $1.5 billion, so very much in line with what we've seen recently. Operator: And the next question comes from the line of Brendan McCarthy from Sidoti. Brendan Michael McCarthy: Just wanted to circle back to that CapEx question. Can you provide a further breakdown there as you look into 2026 just among railcar assets in the engine leasing business? Thomas Ellman: Yes. So thank you for that follow-up. So the $1 billion, I would say, about 3/4 of that is expected to be at Rail North America and about 1/4 of it expected to be in Rail International. But in addition to that, we anticipate doing significant investment via the JV. So GATX does not typically have to make nor do we anticipate making any capital contribution, but in 2025, the JV invested about $1.4 billion. So our percentage share of that investment would have been another $700 million. And in 2026, we anticipate the JV will do another $1 billion of investment or more. So that would translate our share to being another $500 million. But again, the engine leasing, the JV is self-funded, so GATX does not typically make a capital contribution. Brendan Michael McCarthy: Great. I appreciate that. That's helpful. And just on the engine leasing segment, just really strong results there in 2025. I have it driving pretty much all of the year-over-year gain in segment profit. Can you provide a breakdown there of that year-over-year gain between what you saw from remarketing income and then what you saw from operating income? Thomas Ellman: Yes. So again, as a reminder for that, the quarter-to-quarter variability can be pretty lumpy just because of the way the gains come in. But for the full year, about 2/3 of that was operating income and about 1/3 of it remarketing gains. Brendan Michael McCarthy: Got it. And as you look into 2026, I think you mentioned $15 million to $20 million uplift in segment profit for engine leasing should that break down maybe stay right around the same for 2026? Thomas Ellman: You answered your own question. That's a very good assumption to make going in. But again, with the caveat that there's a certain degree of lumpiness on the remarketing side. But assuming that it would be similar to this year is a reasonable assumption. Brendan Michael McCarthy: Got it. Got it. And last question for me, just on the outlook for $200 million in railcar remarketing income for 2026. How do you kind of expect the Wells Fargo fleet to play into that? Maybe you can talk about the average age of the Wells Fargo fleet. Any certain railcar types that you feel you're maybe oversupplied in at the moment? Do you think that the -- I guess, overall, do you think the quarterly cadence might be somewhat to the past? Or do you think there might be some front-end impact there just as you kind of gauge the Wells Fargo fleet? Robert Lyons: Yes. It will take a little bit of time to fully assess the Wells portfolio in terms of what we want to go to market with. But let's just start with the $200 million to begin with. The GATX legacy fleet 2025, we generated about $130 million. We would expect about the same roughly in 2026. So the incremental amount, that $70 million incremental amount is really from the Wells side of the ledger. But again, we're managing the whole portfolio as one from a standpoint of what we're going to be in the market with. The very good news is, as I mentioned in my opening comment, we have 2x the portfolio now to work with. And there is a lot of demand in the secondary market. So it's really going to be a decision we make from a fleet management perspective on whether it's credits or car types that we may want to sell into the secondary market, and I'll let Paul add some color on that. Paul Titterton: Yes. I'll just say one of the nice things about the Wells Fargo business, we said when we announced the deal that it's been a well-managed business. We're not buying a distressed problematic asset. We're buying an asset that actually has been a portfolio that has been managed effectively. And so what that means is there are actually quite a few quality saleable deals within that portfolio that we think the secondary markets will want. And so as Bob said, we're still determining what parts of that portfolio we want to dispose of. We think about things like concentrations in credit or commodity or car type or tenor of exposure. And we're really trying to do a portfolio balancing exercise as we sell down. But ultimately, the good news is really however we decide we want to rebalance the portfolio, there are quite a few saleable transactions in both the legacy GATX and the Wells Fargo portfolio. Robert Lyons: Yes. And I would just to add to that, that the most liquid car type in the secondary market is freight cars versus tank. Tank, it's not that you can't sell cars in the secondary market, but there's a limited buyer universe and it's a more specialized asset. So the most active market by far is for freight cars, and the Wells Fargo fleet was 95% freight cars. So we have a lot to work with. Brendan Michael McCarthy: That makes sense. And just as a follow-up, just curious as to the Wells Fargo fleet, doubled the fleet size and you just mentioned a much more higher proportion of freight cars. But then you kind of mentioned in 2026, the breakdown might be like $130 million in remarketing income from the GATX legacy fleet plus the $70 million from the Wells Fargo fleet. I guess why would the breakdown look like that, just considering the Wells Fargo fleet was a higher proportion of freight? Robert Lyons: Well, there's really no reason in particular, we continue to see very good demand on the legacy side of the business, while it's half of what we do on the legacy portfolio, freight cars, that's still over 50,000 cars you're talking about. So it is a very big universe of cars. And we'll continue to balance what makes sense to be in the market with, whether it's car type or credit. And again, we'll be working with our partner on what's the most logical thing to be putting in the marketplace from the JV side. We think that's a good mix going in. It could shift, could very well shift as the year progresses. But in total, that's a very reasonable number, that $200 million to work with. Paul Titterton: I'll just add too, over the last several years of supportive railcar markets, we have put on a lot of very good leasing business in the legacy fleet. So in terms of deals that we have on our balance sheet, legacy balance sheet that are attractive to sell. We've done a good job restocking the shelves there. Operator: Next question comes from the line of Justin Bergner from Gabelli Funds. Justin Bergner: Congratulations on closing the deal for Wells Fargo. First question would be any contours around the specifics of the repurchase? Or is it just pretty open-ended time-wise and pace-wise? Robert Lyons: It's very open ended. As I mentioned, the authorization that we just exhausted in the fourth quarter was granted in 2019. And so we look first, invest; second, manage the balance sheet; and third, as we said, kind of what is the increment or the extra left over for dividends and share repurchase. So we don't have a targeted amount in any given year. It's just what makes sense in the overall capital allocation framework. Justin Bergner: Okay. Did you actually repurchase a modest amount of shares in the fourth quarter, you said it was exhausted or just exhausted time-wise? Thomas Ellman: Yes. So again, as Bob mentioned, the initial authorization was in 2019. In the fourth quarter, we purchased approximately $46.5 million of stock at an average price of $160 a share. Justin Bergner: Okay. Any comments on sequential lease rates? It's usually asked earlier in the call, but since it hasn't come up figured out? Paul Titterton: Yes. Justin, this is Paul speaking. And broadly speaking, across most car types, we're seeing sequential lease rates roughly flattish. Bob mentioned a handful of what we call economically sensitive car types where there are a few headwinds. But across the broad bulk of the fleet flattish. Justin Bergner: Okay. I think when you spoke about the Wells Fargo transaction, you announced it and had the call, you spoke about modest accretion in '26. I forget, were you including gains from sale on the Wells Fargo side at that point in time? Or has the mix become a little bit more gains? Robert Lyons: No, that was all in, Justin. Justin Bergner: And then just lastly, the Wells Fargo fleet is going to continue to operate and run off mode, right? There's going to be minimal investments that $70 million in gains would just shrink it by however many cars are sold as part of that roughly $70 million of gains? Robert Lyons: Yes, the joint venture itself is structured to run down over time. It's not set up to reinvest. All of that activity will be taking place on the GATX side of the ledger. So to the extent there's replacement opportunities and reinvestment opportunities that come out of the fact that, that portfolio will burn down over time, they'll be on GATX's side. But again, we're looking at a few thousand -- 3,000 or 4,000 car sale package roughly spread out over 2026 to generate those gains. So you would have a very long tail of selling cars at that rate before you put serious reduction into that portfolio. Justin Bergner: Got it. That's helpful. So 3,000 or 4,000 cars sold that would be the Wells Fargo side of the ledger? Robert Lyons: Yes, we'll be in that ballpark, yes. Operator: Final question comes from the line of Ben Mohr from Citi. Benjamin Mohr Mok: Just one clarification question on your very strong guide of the $200 million in remarketing for 2026. If we take your midpoint of your EPS guide range and we left out that $200 million and try to compare apples-to-apples versus 2025, it looks like the net income less the remarketing appears to be kind of down 20% or so for 2026 year-over-year. Are we missing anything? Is that because you only have a 30% impact of that? Or how should we think about the net income less remarketing for 2026? Thomas Ellman: Yes, Ben, I think you found your way to it near the end of that question. It's all tied up in the fact that the asset sales that we do from the JV are subject to the NCI, the noncontrolling interest piece of it. So GATX will economically enjoy 30% of those gains as opposed to the wholly owned portfolio. Operator: There are no further questions. I would now like to turn the call back over to the CEO of GATX for closing remarks. Robert Lyons: I don't have any closing remarks, but Shari probably does. Shari Hellerman: Well, I'd like to thank everyone for their participation on the call this morning. Please contact me with any follow-up questions. Have a great day. Thank you. Operator: That concludes today's meeting. You may now disconnect.
Operator: Good morning, everyone, and welcome to the Blue Owl Capital Corporation's Fourth Quarter and Full Year 2025 Earnings Call. As a reminder, this call is being recorded. At this time, I'd like to turn the call over to Mike Mosticchio, Head of BDC Investor Relations. Mike, please go ahead. Michael Mosticchio: Thank you, operator, and welcome to Blue Owl Capital Corporation's Fourth Quarter and Full Year 2025 Earnings Conference Call. Yesterday, OBDC issued its earnings release and posted an earnings presentation for the fourth quarter and full year ended December 31, 2025. These should be reviewed in connection with the company's 10-K filed yesterday with the SEC. All materials referenced during today's call, including the press release, presentation and 10-K are available on the News and Events section of the company's website at blueowlcapitalcorporaton.com. Joining us on the cup today are Craig Packer, Chief Executive Officer; Logan Nicholson, President; and Jonathan Lamm, Chief Financial Officer. I'd like to remind listeners that remarks made during today's call may contain forward-looking statements, which are not guarantees of future performance or results, and involve a number of risks and uncertainties that are outside of the company's control. Actual results may differ materially from those in forward-looking statements as a result of a number of factors, including those described in OBDC's filings with the SEC. The company assumes no obligation to update any forward-looking statements. We'd also like to remind everyone that we'll refer to non-GAAP measures on the call, which are reconciled to GAAP figures in our earnings presentation available on the Events and Presentations section of our website. Certain information discussed on this call and in the company's earnings materials, including information related to portfolio companies, was derived from third-party sources and has not been independently verified. The company makes no such representations or warranties with respect to this information. With that, I'll turn the call over to Craig. Craig Packer: Thanks, Mike, and good morning, everyone. We appreciate you joining us today. There's been a lot of recent investor attention on OBDC and the other BDCs that we manage, as well as the private credit industry more broadly. Much of this focus has been on credit quality and whether fundamentals are holding up. At a certain level, we understand investor concerns as the industry has grown significantly in the last few years. So I'd like to start off by reassuring you that credit quality in OBDC remains strong, and we expect that to continue. Before we get into our results, I want to address our future plans for OBDC II, following the termination of the proposed merger with OBDC that we announced last quarter. OBDC II is a 9-year-old private fund, which was required to eventually consider a liquidity event to return capital to shareholders. We believe the merger into OBDC was the most logical path due to the high asset overlap and benefits of scale. However, in light of the market reaction and working with our Board, we concluded the proposed merger no longer made sense, so we terminated it. Since then, OBDC II has been working to determine the best path forward. Yesterday, we announced a sale of a portfolio of OBDC II assets at book value totaling $600 million, or approximately 35% of the fund's total assets, and plan to distribute most of those proceeds to OBDC II shareholders. We believe this outcome prioritizes shareholders by providing significant near-term liquidity for OBDC II investors at attractive valuations. This asset sale process initially focused on OBDC II. But given significant demand from several high-quality institutional investors, we expanded the process to opportunistically sell modest amounts of additional assets from two other funds, including OBDC. In total, $1.4 billion of assets are being sold, including $400 million from OBDC. These sales are being executed at exactly our book value and at an average price of [ $99.7 ]. Not only is this a strong endorsement of our valuation process and NAV, but it further underscores the high quality of our portfolios. I want to emphasize this. Most industry private secondary sales are almost always executed at a discount to book value, and we are pleased to execute this transaction at our marks across approximately 130 names to a very select group of high-quality leading institutional buyers. We believe this sale sends a clear signal as to the strength of our portfolio and the quality and integrity of our marks. To be clear, this is a partial strip sale across OBDC Holdings, where we are selling small pieces of over 70 individual loans at an average size of $5 million per position, or approximately 5% of each position size. This transaction modestly increases OBDC's portfolio diversity and reduces leverage by approximately 0.05x, positioning OBDC with greater flexibility to deploy capital into the most attractive risk-adjusted opportunities. Moving forward, we are not changing our philosophy. As a buy-and-hold lender, we are not in the regular business of selling our private assets. In this situation, we started out by focusing on returning capital to OBDC II shareholders, and we received so much additional demand that we decided to fine-tune the OBDC portfolio from a position of strength. Alongside these actions, we were also active in supporting OBDC through our share repurchase program. Against the backdrop of volatility post merger and the broader industry selloff, we repurchased $148 million of stock at an average discount to net asset value of 14%. These purchases were accretive to NAV per share and reflect our conviction in OBDC's long-term value. Taken together, we believe that this highlights disciplined capital allocation. We monetized assets at book value and at an average price of [ 99.7 ], repurchased shares at 86% of book value, reinforcing our view that the trading discount does not reflect the underlying strength of the portfolio. Now turning to our performance. In the fourth quarter, we delivered solid results, supported by the continued strength of our portfolio, which generated adjusted NII per share of $0.36, which represents an ROE of 9.7%. These results are consistent with last quarter as headwinds from lower base rates were offset by positive onetime items. NAV as of quarter end was $14.81, down modestly from the prior quarter, primarily reflecting write-downs on a small handful of watchlist names, partially offset by accretive share repurchases. As we look back at 2025, we believe OBDC executed well amid a shifting rate environment. We closed the [ OBD ] merger, increasing our scale and establishing OBDC as the second largest publicly traded BDC in the market. Throughout the year, we prioritized optimizing our capital structure to reduce costs and enhance flexibility while improving our credit profile, highlighted by our very recent Moody's upgrade in January to [ BAA2 ]. On the origination front, in 2025, we deployed more than $4 billion at OBDC, and $45 billion across the Blue Owl direct lending platform while maintaining our disciplined approach to credit selection. Over the past year, we selectively broadened our deal funnel by leveraging Blue Owl's expanded capabilities in alternative and asset-based credit, as well as digital infrastructure to access attractive risk-adjusted opportunities adding accretive non-correlated returns. All the while, our portfolio companies maintain their solid credit quality with revenue and EBITDA growth accelerating in the second half of the year. We are very pleased with our performance over the past year, and we entered 2026 on solid footing with continued confidence in the quality and resilience of the portfolio. Now I will turn the call to Logan to provide more detail on our investment activity and credit performance. Logan Nicholson: Thanks, Craig. Starting with investment activity this quarter, we continue to see healthy deal flow across our core sectors. We had our third largest originations quarter ever at over $12 billion across the direct lending platform, while at OBDC we were more selective, with capital used to reduce leverage and fund share repurchases. This quarter, OBDC had fundings of $820 million against $1.4 billion of repayments, resulting in lower net leverage at 1.19x. Further, with the additional deleveraging from the previously mentioned opportunistic asset sales at book value, we have ample dry powder to lean into the best risk-adjusted opportunities as the pipeline builds in 2026. Our originations this quarter were once again anchored by our existing relationships, with approximately 50% coming from large incumbent borrowers. That incumbency remains a core advantage of the Blue Owl platform. We incrementally deployed capital into our joint ventures and specialty finance investments with $80 million of fundings across several vehicles as we continue to ramp these platforms. Turning to the portfolio. We want to take a step back and provide some perspective on the composition and performance of our borrowers. As a reminder, OBDC is a broadly diversified portfolio with companies spanning 30 industries, and average physician sizes of approximately 40 basis points. We focus on lending to noncyclical defensive sectors and all of our largest sector allocations are performing well, including software. While we appreciate there has been increasing attention on software over the past several weeks, it represents only 4 of the top 25 investments in OBDC. That said, software has been a sector we've always liked and our focus continues to be a mission-critical, scaled enterprise software providers. Borrowers in our software portfolio saw LTM revenue and EBITDA growth of 10% and 16%, respectively, in the fourth quarter, outpacing the average earnings growth rate of all other sectors in the portfolio. Our 40-person technology investment team reviewed our exposures again through an AI lens and confirm the fundamental health of our assets. This, coupled with the fact that our software investments are primarily first lien, senior secured loans with LTVs of approximately 30%, gives us confidence that our portfolio remains well positioned. We see a similar pattern in health care, where we have 45 investments totaling $2.5 billion. The majority of these names are also performing well, with revenue and EBITDA growth of 11% and 10%, respectively. The strength is broad-based. Overall, in the fourth quarter, every subsector in our portfolio delivered positive year-over-year growth, with revenue and EBITDA increasing 8% and 11%, respectively, and both metrics accelerated as compared to the fourth quarter of 2024. Across our key credit KPIs, the story is similarly constructive. Interest coverage ratios remain healthy at approximately 2x, revolver draws declined over the year, and amendment activity was stable. Our [ 3 to 5 rated ] names currently represent 9% of the portfolio, which is consistent with a year ago. Additionally, we saw refinancings of several of our PIK investments in the quarter, which reduced PIK income to 10.3% of total investment income, down from 13.2% a year ago. As we've highlighted in previous earnings calls, approximately 90% of our PIK names were underwritten that way at inception, and we have never taken a principal loss on those intentionally structured positions. Our nonaccrual rate decreased to 1.1% at fair value this quarter, down from 1.3% in the prior quarter due to the addition of 3 small positions and the removal of another position. Our nonaccruals have been relatively stable over the past few years and are well below public market default rates. Finally, I'd like to share some perspective on our specialty finance and joint venture investments. We view these as differentiated complements to our core lending platform designed to help offset rate and spread volatility and support NAV growth. Today, OBDC has 7 joint venture and specialty finance partnerships spanning multiple verticals, including asset-based finance, equipment leasing, life sciences and life settlements. These investments benefit from strong underlying diversification with exposure to more than 300 loans and approximately 10,000 individual asset line items. Each of these platforms generate predictable income streams that are less correlated with base rates than our traditional direct loans, and have generated ROEs of over 14% over the last year. We also established 2 vehicles last year, that once fully ramped, we expect will generate attractive low double-digit yields accretive to fund level ROEs over time. These are great examples of how we leverage the breadth of the Blue Owl platform to create value for shareholders. Across all our specialty finance and joint ventures, OBDC's exposure is approximately 12%, providing us with ample opportunity to selectively increase our allocation as market conditions warrant. To close, the breadth and strength of our portfolio remains resilient in a shifting and more recently uncertain market backdrop. With 10 years of operating history, and an even longer tenure of experienced professionals, underwriting and managing the book, we are seeing durable fundamental performance of our borrowers, and we remain convicted in our diversified lending strategy. Now I'll turn it over to Jonathan to review our financial results. Jonathan Lamm: Thank you, Logan. In the fourth quarter, OBDC earned adjusted investment income of $0.36 per share, in line with the prior quarter. Our adjusted NII had a few moving pieces this quarter that I want to spend a moment discussing. Despite headwinds from lower base rates and a modest decrease in average spreads throughout 2025 that are making their way through our book, there were several nonrecurring events, including higher onetime income and lower operating expenses. These nonrecurring items had a positive impact of approximately $0.02 per share this quarter which is elevated relative to our historical average. The Board declared a first quarter base dividend of $0.37, which will be paid on April 15, 2026, to shareholders of record as of March 31, 2026. Our spillover income continues to remain healthy at $0.36 per share, and supported our base dividend this quarter. Moving to the balance sheet. Our fourth quarter NAV per share was $14.81, down from $14.89 last quarter, following additional breakdowns of existing watch list positions, partially offset by accretive share repurchases. As Craig mentioned earlier, we executed on our repurchase program in the fourth quarter, where we bought back $148 million of stock. In total, the company repurchased 11.6 million shares, which was accretive to net asset value per share by approximately $0.05. This was the largest share repurchase in the history of OBDC. OBDC's Board of Directors has also authorized a new share repurchase program of up to $300 million, replacing our current $200 million share repurchase plan. Despite this repurchase activity, we were able to manage our net leverage down to 1.19x from 1.22x, which is within our target range of 0.9 to 1.25x, as we intentionally reduced leverage. On liquidity, we manage the balance sheet closely and conservatively to be prepared for unforeseen situations or uncertain market environments. We remain well capitalized with approximately $4 billion in total cash and capacity on our facilities, which comfortably exceeds our unfunded commitments, and provides ample capacity to meet all of our funding needs. Also demonstrating the strength of our business and credit profile was the Moody's upgrade that we received in late January to [ BAA2 ] credited to only a few other BDCs. This ratings upgrade was a reflection of our strong portfolio and liability management capabilities, and our long-term track record of disciplined underwriting and solid credit performance. We are very focused on reducing borrowing costs, and we are optimistic that the ratings upgrade will help us achieve better execution on new unsecured issuance in the future. Overall, we remain pleased with the strength and durability of our portfolio and believe our balance sheet is well positioned to support continued portfolio performance in 2026. Now I will turn it over to Craig for some closing remarks. Craig Packer: Thanks, Jonathan. To close, I want to underscore our confidence in the portfolio. Credit quality is solid, and losses overall remained low, consistent with our downside focused approach of lending to large, highly diversified recession-resistant businesses. Looking ahead, we anticipate that our forward earnings will be impacted by two important dynamics. Lower base rates flowing through our majority floating rate book, and tighter spreads on new and repriced assets. We are focused on the impact of lower rates on the earnings power of our portfolio, and having managed this fund for 10 years across various interest rate environments, we view rate sensitivity as a natural driver of BDC results. Importantly, there is a delay from the time when rates are lowered to when we see the full impact on the portfolio. At the same time, industry spreads have tightened resulting in the weighted average spread on our portfolio compressing by approximately 30 basis points over the last year. For this quarter, given our strong results, we are maintaining the regular dividend of $0.37. However, we will continue to discuss this carefully with our board and evaluate the dividend each quarter, particularly as the full effect of these lower rates and spreads are now impacting the portfolio. While lower rates and [indiscernible] spreads will compress asset yields and NII returns across the industry, they generally improve borrower fundamentals and, in turn, credit quality. Against that backdrop and given the solid borrower performance we continue to see, we do not expect broad-based credit issues in our portfolio. This contrasts with what seems to be reflected in our stock price, where the dividend yield is approximately 10% on NAV, but over 12% based on current trading levels. You've heard me say this before, but this is a very high-quality portfolio built through disciplined underwriting, with the appropriate structures and protection to perform across cycles. The recently announced $1.4 billion Blue Owl BDC asset sale transaction reflects the full book value of the underlying investments, and provides clear third-party validation of the strength of our book, the rigor behind our marks, and the discipline in our underwriting. We have conviction in our strategy and are focused on acting in the best interest of our shareholders, supported by our share repurchase activity and prudent management of our balance sheet. As we close our call, I want to mention that over the past year, spreads have generally trended tighter, but renewed macro uncertainty could drive widening, which we are currently observing in the public [indiscernible] markets. Should this environment persist, it could present an opportunity to selectively deploy capital at higher spreads on new deals. The market is asking questions [ of ] private credit managers. We believe we will continue to deliver and ultimately, that performance is what will matter. Thank you for your time today, and we will now open the line for questions. Operator: [Operator Instructions] Our first question today is coming from Brian McKenna from Citizens. Brian Mckenna: Okay. Great. So there are some headlines out there this morning that OBDC II is halting redemptions permanently. Is that how you view last night's announcement? And then can you just remind us how much of that portfolio is turning over on a quarterly basis? And then what you plan to do with those [indiscernible] Craig Packer: Thanks, Brian. I appreciate the question. First, I want to reiterate, we think this is a terrific transaction for the investors in the funds that are affected OBDC II, OBDC and [indiscernible] and also extremely endorsing for our entire credit platform. I think it's a really strong statement for us to be able to complete the sale of $1.4 billion of private assets in a very short time line at book value at [ 99.7% ]. I think that's strong for any asset class to clear that kind of size at that kind of price at book value, and an extremely strong statement. As you noted, there are a few headlines. I think most of the feedback has been quite positive, but there are a few headlines that we think are a complete mischaracterization of what's happening here. We aren't halting redemptions. We've been tendering [indiscernible] of the shares of this fund for 8 years. We instead of resuming 5% a quarter, we are, in fact, accelerating redemptions, and we're going to return to this investor group, 30% of their capital at book value in the next 45 days. So investors that would have thought they were getting 5% are getting 6x the amount of capital in cash at book value immediately. So we're not halting redemptions. We're simply changing the method by which we're providing redemptions. A tender offer, as you know, is subject to the investor choosing to get their capital back, in a fund that can place different incentives for investors that are [ hitting ] the redemption or waiting. It can treat investors differently. We thought it was more important to treat all investors the same. So we're doing a 30% pro rata distribution. So investors don't have to elect into this, or worry if they don't elect into a tender that they'll get a weaker portfolio. They're all going to get the same 30% distribution at the same time. As you asked, what should investors expect going forward? I want to remind everyone this fund is a different structure than our non-traded perpetual BDCs. This fund was raised 8 years ago, and was raised more akin to a private institutional fund. It was always anticipated that at some point, this fund would have some type of strategic transaction, whether that be a merger, a listing, or an IPL. And the other alternative that was stated very clearly at the outset was at some point, we may just choose to return the investors' capital. That is the path that we are choosing here. We are going to accelerate the return of the investors' capital, and we're starting with a very significant down payment of 30% immediately. This fund has significant earnings. We're going to continue to pay our dividend. But as you know, we also get regular repayments. And so as we get those repayments, we're going to discuss with our Board, but our intention is to continue to return capital on an accelerated basis. So we assume for this purpose, we'll get redemptions of 5% a quarter. Every quarter investors should expect we will evaluate a return of capital of 5%. We've got some debts. We have to make sure we're properly handling the debt. But basically, if you assume 5% per quarter, we could be in a position by the end of this year that we've returned half of the investors' capital. So again, not only are we not halting redemptions, but I think it's going to be significant cash flow to these investors. And more to the point, I want the audience to appreciate, we've had extensive conversations with the investors and the financial advisers that work with them over the last couple of months discussing alternatives for what we would do with this fund. And as we discuss those alternatives, we are confident that the plan we're pursuing is going to be extremely well received by those investors for the reasons I've outlined. Brian Mckenna: That's helpful, Craig. And then just a follow-up on OBDC. Cash ended the year at $570 million, you have the additional $400 million coming in from the sale. So depending on where leverage [ shakes out ] you have about $1 billion of capital to deploy before assuming any additional prepayment. So what's the most accretive use of capital today? Where are you leaning in from a deployment perspective? And you mentioned maybe an opportunity with spreads widening here. We'll see exactly how that plays out. And then are buybacks still on the table at current prices? Craig Packer: So we -- as we noted in the press release, but maybe everyone hasn't had a chance to review it yet. We started this process really focused on solutions for OBDC II. However, in our conversations with the small group of buyers that we went out to, we saw very significant additional demand for these assets, well in excess of what we were planning to sell out of OBDC II. And so we thought it was important to consider taking advantage of that strong demand at a very high price, and see whether there were additional tactical goals that could be accomplished. With respect to OBDC, the portfolio is in extremely good shape, but we use this as an opportunity to -- really with a scalpel like precision, modestly trim some larger positions just in the name of good housekeeping portfolio management. I do think it's an environment where we're seeing capital start to constrict a bit. We're seeing it in the public loan market. We're seeing that in some of the private markets. And so we're hopeful that, that will lead to a better environment to deploy capital and start to see some spread widening on some attractive investments. And by selling these assets, we put OBDC in an even stronger position to be able to deploy capital. However, as you know, our stock price is also trading significantly below book value. We just completed the largest repurchase of shares in the company's history, and the stock price still stayed -- is at a very depressed level. And so we increased our stock buyback program with our Board, replenished it to $300 million. We increased it, and we're going to actively look at comparing buying stock versus deploying capital into the market. But again, maybe not everybody has had a chance to study this carefully, I just want to call your attention to it. We think it's quite striking that we can easily sell $1.4 billion of assets at book value, or [ 99.7% ], and at the same time, a portfolio of those same assets trading in the low 80s to high 70s percent of book value. So we will continue to look at the stock and continue to find ways to do accretive things for shareholders. Operator: Our next question today is coming from Finian O'Shea from Wells Fargo. Finian O'Shea: A follow-up on the [indiscernible] Craig Packer: Fin it's hard to hear you. Sorry, can you try to get a little bit closer to the microphone? Finian O'Shea: Yes, sorry. So yes, to follow up on the portfolio. I appreciate how the LPs had more interest. But with OBDC, was there -- you just answered this a little bit with Brian. You've pruned some [indiscernible] positions. But just looking at it like you didn't have too much need for liquidity. You're not too concentrated either. It's something like 70-something names you guys sold. So is there a -- I guess, if it's a fine-tuning issue on concentration, is that roster of names say, concentrated in your top 10 or top 20? Or is there another benefit to the portfolio sale? Craig Packer: Sure. So look, this was a really thorough process involving 4 really high-quality institutional investors in a very tight time frame. We -- they were very engaged with us. They did detailed due diligence on the names in the portfolio, even though several of them knew us well, they were buying a portfolio, they did detailed due diligence. And we certainly wanted to make sure if they were to do that work, that they would have an opportunity to make an investment. And so as we work this through with them and we're looking at our portfolio, we settled on these asset sales splits. I think for OBDC II -- for OBDC, at the end of the day, we sold 2% of the assets. It's really immaterial. This would be like we got one repayment in a quarter. It's not material. But as I said, we thought we have this interest. It's at a very high price. The market is starting to loosen up. We just bought back some stock, if we can, on the margin, create a little bit of liquidity, it's worth doing. It also accomplishes the goal of having 4 large investors who each bought, by the way, the same exact amount, the same exact price all have transactions that they were excited about. So I think it accomplished that goal as well. But I guess I would also say, and I said this in the prepared remarks, but I think it's worth revisiting. We understand and we see the same things that you're reading. There's skepticism about marks, the skepticism about valuation. We've always been saying we feel really good about the quality of our portfolio and the quality of our marks. But just saying it in some [indiscernible] doesn't seem to have done enough. So we're putting our money where our mouth is. We sold the assets to 4 different third parties at [ 99.7% ]. I should point out that while OBDC only sold $400 million worth of assets, these -- very sliver portion of 75 different line items, our exposure in OBDC to those line items is almost half the portfolio. So we view the sale at OBDC as validating almost half the portfolio. Not only at book value, but at [ 99.7 PAR ] sold these assets at [ par ]. That's not only for OBDC, but it's true for the entire Blue Owl direct lending platform. The assets we're selling here represent our largest names, our biggest exposures, and we had resounding demand at [indiscernible] I think that's a really strong statement and I think it was a statement worth making in an environment where people are asking questions and they're skeptical about marks. People read one article about 1 mark and one portfolio somewhere and they extrapolate it out, and we're giving a stake in the ground with a different set of facts, and a set of facts that spread across 130 positions in our portfolio. Finian O'Shea: I appreciate that. Sort of a follow-up on, I guess, a continuation of this discussion in the mechanics. One small part, can you clarify. We just get a lot of inbound on this. Is there any sort of, like, delayed settlement accrual, like extra -- I don't know if I'm working this right, but the extra sort of compensation to the buyer? And then also, given the sort of -- we don't see this often in [indiscernible] vehicles selling to another account managed by the same adviser you guys. Is there anything to this structure where maybe this runs down quickly? Maybe this is a swath of the portfolio that you expect to repay really soon, and therefore, it's not truly a fun kind of thing, or anything else that... Craig Packer: If I could rephrase your question, is there something we're missing behind the scenes, right? I get it. I get it. I -- again, we're in an environment now where there's a high degree of skepticism about private credit. And unfortunately, that skepticism can be amplified by folks that aren't even in private credit and don't spend any time in the industry, and don't hesitate to forward things and amplify them in a way that makes them seem more prominent than they are. The transaction is exactly what appears. We're selling 128 positions at [ 99.7 ] to 4 different institutional investors, that each made their own investment decision at the same time and not only bought this portfolio, they would have bought multiple amounts more. It is common when you do secondary asset sales for them to come at a discount to book value, these didn't. Sometimes, you'll see other types of transaction structures, particularly with a continuation vehicle structure where perhaps the purchaser is getting the benefit of elongated interest payments that's reducing their basis. And that's behind the scenes, and it doesn't -- it's not obvious. That's not happening here. They're buying it at [ 99.7 ] and we're using standard LSTA loan trade settlement procedures, just like every trading desk is using every day, it's plain vanilla. The buyers, arm's length, several of them just had accounts already set up with us. As we've highlighted, we are going to continue to own most of the positions in these loans and manage them. And so the buyers found it convenient to keep their portion of that strip in an account they have set up with us, made it easy to do, but it's their economic risk. We'll help them manage the position. They made an arm's length economic decision, and there's nothing behind the scenes that would any way undermine that conclusion. Operator: Our next question is from Arren Cyganovich from Truist Securities. Arren Cyganovich: One of the questions we got from investors was why not sell all of OBDC II? Is there something just maybe just from a debt perspective, or we're just trying to understand why not just kind of get rid of that, I don't know, perceived issue or perceived problem from investors? Craig Packer: Sure. We had -- we canceled the merger in November. We thought it was really important to be able to do something very quickly. The merger and the cancellation caused a lot of confusion for the OBDC II investors and for investors in our other funds. And we thought it was important to be able to do something quickly and to demonstrate the quality of the portfolio and to return capital very quickly. This was that transaction. This -- we went through a number of alternatives. We wanted to do something of significant size. We returned 30%. We wanted to do something that demonstrated our marks, which it did. But we also wanted to do something quickly and that left the remaining portfolio in really good shape. That portfolio has about 0.5 turns of leverage. It has plenty of liquidity. It's diversified. It will be easier for us to continue to run it, and harvest it, and return the capital. There could have been other possibilities. As you said, sell the whole portfolio. I'm sure we could have done that. It would have taken longer, it would have been more complicated. As you might imagine, there are shareholder protections. If you're going to sell an entire portfolio that results in a much longer process. We opted for something faster, certain and that we put cash in the investors' pockets by the end of March. We'll continue to manage this fund. Again, this is a fund of loans. They contractually repay. We have high visibility on these repayments. We're not speculating about getting the capital back. We're going to continue to get capital back, and we'll continue to return the capital. As I mentioned earlier, by the end of this year, we may wind up returning half the investors' capital. So we'll continue to evaluate it. There's nothing particularly unique here. Funds in the private markets return capital to their clients all the time in the private credit markets, in the private equity markets. And there's nothing unique to this particular fund. Its just akin to any other fund and we'll manage it in a way that benefits investors. Arren Cyganovich: Yes, it makes sense. And to your point, you are returning it more quickly. And for OBDC shares, you're selling it NAV and having the ability to buy that at -- the big discount. So it's a benefit for OBDC. I totally get it. These are just the questions we're kind of getting from investors. The other thing I had was just on software. Obviously, this is an area that you guys have been very confident in all along. You have BDCs that are completely kind of designed towards this. What's your appetite for, kind of, new software loan purchases in -- is this creating more of a beneficial opportunity, I guess, as maybe some other peers might be a little bit afraid to step into the area? Craig Packer: So we covered this a bit in the comments. Look, we've always liked software. We have a significant team. We think we're one of the largest investors and have the capacity to differentiate between a software business that's going to be well protected in an AI world, and one that's going to be more vulnerable. We also have funds that are dedicated to the technology sector that have capacity to do software. OBDC was designed as a diversified fund as Logan mentioned, software is the biggest sector, but it's a relatively small percentage of the overall fund. So we have capacity to do best-in-class deals that we have extreme high levels of confidence are going to continue to hold up well. That bar has always been high. It's even higher now. We're certainly not taking lightly the potential impact for AI. Having said that, we continue to see our best-in-class companies perform well [indiscernible] think they'll endure. And if we see opportunities, we'll do it. But I would say we're going to be very discriminating. And I don't think our software percentage will go up. If anything, I would expect it to modestly decline over the next year or 2, but it will depend upon the opportunity set. Operator: Our next question today is coming from Robert Dodd from Raymond James. Robert Dodd: I think you've covered OBDC II pretty well on that front. On the sales book, I mean, there's some disclosure in there that, obviously, about, I think, 13% was Internet and software. Any information you can give us on like what vintage were those assets? I mean they are the larger assets. I'm going to presume, and we know what that makes me, that those were probably lower spread assets as well as the larger side of the portfolio. I mean any color like on those assets being sold, what was the weighted average spread versus what it is on the portfolio? You gave us Software and the Internet, but I mean, was there less PIK in that book, or more PIK in that book? Any other metrics you can give us on how it's going to evolve the -- modestly, right, because it's not that big a piece. But how it's going to impact the portfolio on those kind of metrics? Logan Nicholson: Yes. So -- thanks, Robert. It's Logan. The portfolio sales were a slice across mostly first liens and the weighted average spread was just over 500. So relatively consistent with the broader portfolio. It wasn't a select few that were outliers across the book. And from a PIK exposure percentage, it was about in line with our PIK exposure. So again, we just referenced, we've got about 10% PIK exposure and the portfolio sold. It was about 10% to 11% PIK exposure across the book. So consistent across how our portfolio looks really no different. And it's not changing the portfolio in any meaningful way at OBDC. In particular, first lien percentages, non-accrual percentages, everything is the same pre and post. As Craig mentioned, on diversity, it helps to touch 3 of our top 5 position percentages go down a little bit as part of the transaction. And it helps us with some opportunistic capital to redeploy into a market that's increasingly more interesting. Robert Dodd: Got it. Got it. I mean, that's -- as we look forward, I mean, as you mentioned, spreads have started to widen a little bit, I mean, and we'll sell them those stick. But I mean, what's the view for the remainder of the year? I think you've covered all the things that have gone on this quarter and last year. But I mean -- are you optimistic on spreads staying wider and creating some incremental accretive opportunities from that perspective? On the other hand, you're saying you don't expect credit to deteriorate, which I probably agree with. And normally, if that doesn't happen, spreads -- sooner or later tighten back up despite what the public equity markets seem to think at the moment. So I mean -- how do you -- anything that's going to play out? Craig Packer: Yes. It's a good question. Look, from our perspective, we commented on this pretty regularly over the last year. Spreads have been extremely tight in all credit markets over the last 12 to 18 months. And not just private credit, leverage loans, IG, high yield, all spreads are tight. And we anticipate at some point, it would widen just to get to more of a baseline not to be wide, but just to get -- to be more of a baseline. You're starting to see that. I'm hopeful that, that will continue. Again, not dramatically so, but just get to more of a typical range. When the public loan markets arts to back up, private credit spreads move quickly. Our comments on the economy -- or excuse me, on the portfolio just based on the sectors we're in and the companies and they're doing well and they continue to do well. And we're seeing low single-digit, high single-digit growth rates, revenues and EBITDA. The companies are performing really well. That's why we're confident. Let me put it this way. I -- you can't have a view that there's a massive credit problems coming and spreads are going to be really tight. Like those things are, as you say, not compatible. What I expect is credit performance [ will continue ] to be good, not only for us but for the large players in the private credit space. And I think you'll see some modest widening of spreads and hopefully, some modest pickup in M&A activity. I do think that will favor the larger platforms that have capital and the smaller firms that don't have as much capital. I think the private equity firms, they -- they've had a lot of opportunity to talk to different liners in the last year or so, but when they see conditions start to tighten up, they moved to the largest funders and the ones that know them the best and they have to wear with [indiscernible] We're one of them. So I think it will be a better environment, but I'm cautious on it. We'll see how long it lasts. Operator: Our next question today is coming from Kenneth Lee from RBC Capital Markets. Kenneth Lee: Just one more on the loan sales transaction there. To clarify the mark that you received, the 99.8%, how does it compare with the previous fair value marks in general? Craig Packer: I mean it's -- we sold it at our marks. Marks -- the fair value was [ 99.7% ]. It's very consistent with where marks have been every quarter. Most of our book for the last year has been valued close to [ par ]. And we sold this basket of loans at [ par ], consistent with the last year or so. I just want to make sure we're being clear on this. We didn't negotiate price by price with investors. We said we want you to pay our book value. And we did our same valuation process that we always do, and we said we want you to pay book value. They agreed to pay book value. So not only is that endorsing of -- we got par, it's also endorsing of our valuation process. They trusted our valuation process the same way we trusted it. For independent parties doing their own work, agreed to pay book value. And we updated that book value. Jonathan Lamm: As of February 12 [indiscernible] a valuation for us on that day. So they're up to date, and the moves in the valuations were minor across the portfolio as a whole. Kenneth Lee: Got you. Very helpful there. And just one follow-up, if I may, just on the dividend. And could you talk about some of the inputs or considerations that the Board may take into account, or present the common dividend, [ then go forward ]? Craig Packer: The -- our process with the Board on dividend is the same we've been doing for 10 years. We looked at all the kinds of metrics that you would expect. What we're earning, what we expect to earn, credit performance, dividend coverage. But the outlook is -- we generally like to have a stable base dividend. We put in place the supplemental a couple of years ago because we're earning a lot with higher rates. But look, as we said in the script, and I think you're hearing from other managers, although credit performance is very strong, it's different rate environment. Rates are lower. Rates are expected to continue to go lower. Spreads [indiscernible] and so particularly as a result of rates. Rates went up, we earn more. Rates have come down. We're earning less. This quarter, we looked at it and we earned $0.36 with a $0.37 dividend. We felt it was reasonable to continue to keep the dividend where it is. But as we said in the script, we're going to see, we're seeing now the full impact of rates and the full impact of spreads, and we're going to sit down with the Board every quarter, but certainly next quarter, see where our earnings are coming in, see what our outlook is over the next few quarters and assess the dividend. And we don't like to move the dividend around every quarter. So we'll have a thorough discussion, just completed our Board meetings yesterday, we talked about this early, and we'll continue to do that just like we have since inception. Operator: Your next question today is coming from Casey Alexander from Compass Point. Casey Alexander: I can appreciate your frustration that in this environment right now, everything is being looked at through the most skeptical lens possible. And that's kind of what happens when the market paints things [indiscernible] brush. But what I want to ask is now that the market knows that Blue Owl II is in runoff, and you did this transaction with just 4 investors, there's a tremendous amount of dry powder that is still out there in LPs and places like that. I would expect that your inboxes might be pretty busy from other folks that would like to take a look at that Blue Owl II portfolio and see if there are things that they might want to buy. Would you guys consider additional asset sales out of that portfolio to accelerate the process of winding it down? Craig Packer: Casey, we'll consider anything that's going to deliver great value to our investors. And you're right, we got inbound since November. And I already highlighted that these investors that we sold assets to had additional demand that would have taken more of the paper now. Look, [indiscernible] folks appreciate, these are great questions. The answers are complicated, how you decide to wind something down, when does something require some type of shareholder vote or engagement? These processes are not -- these aren't public loans where we're just selling out in an afternoon. This is a company, it has a Board and it has a process. We've been following that process as we always have and we'll continue to do so. But I think the guts of your question is we would like to continue to accelerate the return of capital. This, again, not -- as it has always meant to be, as it has always meant to be, it was always meant that at this point in the fund's life cycle, we would come up with a strategic transaction that result in the investors getting liquidity. And so we are -- we now have a defined path. This is the path, and we will look for repayments, earnings and also potential additional asset sales to continue to return that capital. I just want to come back to something I said earlier. I know there's a lot of questions. And part of the question is, how are the investors feeling? A lot of folks that are wondering, they're speculating. The investors feel like we've treated them very well. Investors really [indiscernible] with this transaction, and I think they'll continue to be happy with us if we continue on a path of really carefully managing it and getting the capital back at a good price. We're not getting pushed by the investors to try to sell out quickly and not get fair value. They just want us to manage it prudently like we always have. And if I could, I would broaden the lens. Again, we recognize our platform is very much in the public's eye. We also think we've treated investors really well in our non-traded funds, where we've stepped up and met increased redemptions. So the client base there, I think, also appreciates that we continue to try to put our investors first. So that's what we'll do. If we see transactions that are at a great price and can accelerate the return of capital, we're very open to that. But it's a little more complicated than deciding tomorrow morning to just sell the assets. Casey Alexander: I could certainly appreciate that, and thank you for that answer, Craig. Since this is an OBDC call, ask a question that is relevant to OBDC. Jonathan, can you give us a little more granularity on the onetime income and the lowering OpEx that produced the $0.02 tailwind? Just give us a feel for where some of that came from? Jonathan Lamm: Sure. The majority of it was from a repayment where we got some call protection. And then on the OpEx side, call it, $0.05 or so, is really just when we completed the merger at the beginning of the year, OBDC and OBDE. Although we promised synergies, we budgeted in the context of in a conservative manner in terms of not necessarily hitting all of those synergies. And so when you get a lot of your invoicing and your expenses coming through at the end of the year, we effectively saw a positive true-up, which is nonrepeatable related to those synergies. And so that contributes to what I'll call a onetime OpEx adjustment. Operator: Next question today is coming from John Hecht from Jefferies. John Hecht: Just looking at the published material. If you look at the principal amount of investments sold or repaid, it's -- and you addressed this in some of the remarks earlier, it's fairly elevated. I'm wondering, can you break that down versus what you proactively sold last quarter, versus what was a scheduled paydown versus -- what might have been a prepayment? And then what's your perspective on -- obviously, you've announced the additional sales this quarter. But what's your perspective on that type of activity beyond the planned sales, right, or announced sales at this point in time? Logan Nicholson: Sure. Great. Great question. We reported the number of just over $1 billion of repayments, that's entirely repayments in normal course. The asset sales of $400 million or not in those numbers yet. They will be forthcoming and closing over the next few weeks, and we'll be in the first quarter numbers. So everything was normal course in the last quarter. Kabir Caprihan: And is that -- do you expect that pattern to persist? Or was it just sort of a confluence of a lot of maturities or something like that, that happened last quarter? Logan Nicholson: I'd say it's in a normal course that we saw repayments in the fund at around $1 billion. It's been consistent with our last few quarters. And we have the opportunity in any given quarter to decide how much we reinvest or not. And as mentioned, we prioritized other things during the quarter like paying down debt as well as share repurchases in particular. And so it's our opportunity to take a look at that normal accordance repayment cycle that happens every quarter, and then choose to reinvest a portion or not depending on our priorities. And that's really on the reinvesting side was where we made the decisions, the repayment side was all normal course. John Hecht: Okay. That's helpful. And then where are we at with respect to like [ rate floors ] and ongoing sensitivity to potential Fed rate declines? Logan Nicholson: Sure. rate floors are not yet in effect. Where we have rate floors on a portion of the portfolio. They're typically around 1% and they were really a legacy of the zero interest rate environment of years ago. And so at this point, as with most lenders in the space, our loans would still be floating rate and true to that level of SOFR as we go down, it would be effectively one-to-one. Operator: Our final question today is coming from Paul Johnson from KBW. Paul Johnson: In terms of the mix of the transaction, I noticed you mentioned both funded and seems like funded and unfunded commitments. What is, I guess, kind of the composition mix for OBDC in terms of what was funded on the balance sheet and what's leading in terms of a commitment? Logan Nicholson: On the asset sales, it's about 10% unfunded. It's consistent with our existing. So if you look across the portfolio, it's really a slice of the [ existing ] and consistent with our unfunded revolver and DDTL mix. And so when we say [ 400 ], that's the full commitment size about 90% of that is funded and 10% of that unfunded. Again, broadly across the 3 different portfolios involved that's consistent. Paul Johnson: Got you. Okay. That makes sense. And then maybe just a little bit more on the transaction. I was wondering if you could just, maybe kind of, give us an idea of like what was, I guess, kind of the process here? I mean, was this like a solicited transaction? I mean you mentioned excess demand here. And the other question I have, maybe an odd question, but I'm just curious, where do the assets actually go? You mentioned like you have -- they have an account with you. So do they stay in one way or another on the platform? Or are these transferred into structures that are off the platform? Craig Packer: Look, the process we went through, we -- when we canceled the merger, we reached out to a very small handful of investors that knew us and that we thought had the [ wherewithal ] to make a sizable investment in private credit assets, high-quality private credit assets at book value. We had limited time and limited bandwidth, and we got great reception. And worked with the 4 that we're closing on, and they all got there. And so just a private process that we went through in expedited time frame, and they did their work and we made our teams available, and it was a very efficient process. Do you want to speak to the -- I mean in terms of -- again, it's no -- on the platform, I mean we set up vehicles or, in some cases, they had vehicles already set up with us where those vehicles bought these assets. I guess maybe if you're not familiar, big pension plans and insurance companies generally work with outside managers to manage their private credit exposure. These aren't public securities that they have the systems and team to monitor and they typically roll eye on managers like [indiscernible] to do that work for them to follow the credits, provide the information, track the assets, track the payments, and that's what's happening here. They didn't have to have us manage these assets. They could have a [indiscernible] to manage these assets. But not only do we [indiscernible] all these assets extremely well. We also own 90% of the positions. And so we're ideally suited to continue to manage them. But that's just typical of any purchase for -- from an institutional investor. That's how they would do it with us or any other big manager. Paul Johnson: Got it. I appreciate that, Craig. That's helpful. Last question I'd ask just bigger picture broadly on bank competition. Just love to get your thoughts there. It feels like the banks are positioning fairly competitively here. Just be curious to get your thoughts just kind of with the recent volatility, if that's changed at all and what the outlook may be is for the year? Craig Packer: I don't think there's anything new. The banks are -- the public loan market is a competitor to ours. It has been since the start of the firm, always will be. There are times where both markets are strong. Last year, that was the case. The public loan market tends to be more volatile, and that's the way the banks participate in the leveraged loan market. You've seen some volatility pick up and that impacts -- generally impacts how banks think about underwriting risk when things are backing up. They just tend to get more cautious and that can swing deals in our direction where we're seeing a few deals that would have otherwise gone to the public markets, that are quickly moving to the private markets. I don't want to extrapolate a trend for a few weeks to infinity. But in the last couple of weeks, we've seen that. I expect that will continue. But we have great relationships with the big banks. They do -- we do lots of business with them. They are a big source of financing. And there's no profound change to the competitive environment, but it's more a function of just where market demand is. And again, I suspect the pendulum swing a little bit more to private credit, but we'll see. Operator: Thank you. We have reached the end of our question-and-answer session. I'd like to turn the floor back over to management for any further or closing comments. Craig Packer: Look, we obviously covered a lot of ground. I would just urge everyone, please read the release that we put out on the asset sales. Don't just read the headline, don't just read the tweet. Read the announcement. We put a lot of information in there. I'm confident if you read the details of what we did, it will be very clear. And you have clarifying questions, we welcome them. Please ask us. We think this is a really strong outcome for the investors in our funds and I think a really strong endorsement of the quality of our assets, and want to make sure that you see it that way as well. Thank you, and have a great day. Operator: That does conclude today's teleconference and webcast. You may disconnect your lines at this time, and have a wonderful day. We thank you for your participation today.
Operator: Good morning, good afternoon, ladies and gentlemen. And welcome to Besi's quarterly conference call and audio webcast to discuss the company's 2025 fourth quarter and full year results. You can register for the conference call or log into the audio webcast via Besi's website, www.besi.com. Joining us today are Mr. Richard Blickman, Chief Executive Officer; and Mrs. Andrea Kopp, Senior Vice President, Finance. [Operator Instructions]. As a reminder, ladies and gentlemen, this conference is being recorded and cannot be reproduced in whole or in part without written permission from the company. I'd like to remind everyone that on today's call, we'll be making -- management will be making forward-looking statements. All statements other than statements of historical facts maybe forward-looking statements. Forward-looking statements reflect Besi's current views and assumptions regarding future events, many of which are, by nature, inherently uncertain and beyond Besi's control. Actual results may vary materially from those in the forward-looking statements due to various risks and uncertainties including, but not limited to factors that are discussed in the company's most recent periodic and current reports filed with the AFM. Such forward-looking statements, including guidance provided during today's call speak only as of this date, and Besi does not intend to update them in light of new information or future developments nor does Besi undertake any obligation to update the forward-looking statements. I would now like to turn the call over to Mr. Richard Blickman. Please go ahead. Richard Blickman: Thank you. For today's call, we'd like to review the key highlights for our fourth quarter and year ended December 31, 2025, and update you on the market, our strategy and outlook. First, some overall thoughts on the fourth quarter. Besi's revenue, gross margin and operating expense development in the fourth quarter '25 exceeded the favorable end of prior guidance. Revenue of EUR 166.4 million and orders of EUR 250.4 million, increased by 25.4% and 43.3% versus the third quarter of '25, due principally to a broad-based increase in demand by Asian subcontractors for 2.5D data center applications, renewed capacity purchases for photonics applications and a significant increase in hybrid bonding orders. Net income of EUR 42.8 million increased by 69.2% versus the third quarter of '25 due to higher revenue, increased gross margins from a more favorable product mix and lower-than-anticipated operating expense growth. Besi's progress in 2025 reflected the favorable influence of increased AI infrastructure spending on our business development. Orders of EUR 685 million increased by 16.8% versus 2024 due to strength in AI-related 2.5D demand for data center applications by Asian subcontractors and renewed capacity purchases for photonics applications. Growth accelerated in the second half of the year, with orders increasing 63.6% versus the first half of '25. Orders for AI applications represented approximately 50% of our total orders in '25 and revenue from Besi's computing end user market grew by approximately 40% of revenue in 2024 to 50% in 2025. For the year, revenue of EUR 591.3 million decreased by 2.7% versus 2024 due to lower shipments for mobile, automotive and industrial end user markets as a result of ongoing weakness in overall assembly markets. We continued to maintain attractive levels of profitability with gross operating and net margins realized of 63.3%, 29.3% and 22.3%, respectively. Given profits earned in 2025 and our solid liquidity position, we will propose a cash dividend of EUR 1.58 per share for approval at Besi's April AGM, which represents a 95% payout ratio. Liquidity remained strong at year-end with cash and deposits of EUR 543 million and net cash of EUR 36 million, increasing by EUR 24.4 million and EUR 43.8 million, respectively, versus September 30, '25. We distributed EUR 254.8 million in the form of dividends and share repurchases in 2025, roughly equal to levels of 2024. Next, I'd like to discuss the current market environment and our strategy. Tech insights currently forecast relatively flat assembly market growth between '24 and '25 driven by a push out of the anticipated assembly upturn from '25 to '26. However, they expect growth of 74% between '25 and 2030. Based on increased AI use cases and infrastructure spending, new product introductions, new fabs coming online and a recovery in mainstream assembly applications, we expect to significantly exceed such projected growth rates given our leadership position in advanced packaging. We are pleased with our operational progress in 2025 as we completed a comprehensive strategic plan review with enhanced revenue and profit targets and organized additional production capacity and infrastructure to help support that growth. We also experienced progress on our wafer level assembly agenda as hybrid bonding adoption expanded to 18 customers cumulative order grew to 150-plus systems and new use cases were identified for cold package optics, ASICs and consumer applications. In addition, 6 integrated hybrid bonding production lines were installed at a leading logic customer incorporating 30 Besi-hybrid bonders in collaboration with Applied Materials. The first 15-nanometer placement accuracy prototype system was also completed and available for customer qualification. Our position in the TC market was further enhanced as Besi's TC NXT adoption expanded to five customers for logic, memory and photonics applications. In addition, our Flip Chip and multi module die attach systems gained significant share in the market for AI-related 2.5D assembly structures addressing the rapid growth in demand for data center and photonics capacity. Further, we successfully introduced a variety of next-generation die bonding and packaging systems for each of our traditional mainstream markets as we prepare for the next market upturn. We see market conditions improving in overall mainstream assembly markets based on favorable semiconductor unit growth trends and a significant reduction of excess semiconductor inventory. Green shoots are appearing after an extended downturn of nearly 4 years in each of our principal end user markets. Customer road maps also point to expanded adoption of wafer-level assembly over the next 2 years related to hybrid bonding and TC NXT adoption in HBM 4, 4E, co-package optics, ASICs and new high-performance computing and mobile introductions. In addition, recent announcements of substantial AI-related infrastructure investments are expected to increase demand for advanced packaging. Increased AI investment has created capacity shortages for 2.5D packaging which has caused producers to secure increased production for many Asian subcontractors. Further, many new advanced packaging fabs are planned globally which should increase demand for our advanced packaging portfolio. Now a few words about our guidance. We entered '26 with increased optimism based on strong order momentum experienced in the second half of '25, which has continued to date in the first quarter of 2026. Our current optimism is based on anticipated growth in 3 promising Besi revenue streams, 3D wafer level assembly, AI-related to 2.5D capacity and more traditional mainstream assembly applications. Our optimism also relates to the significant increase in demand from Chinese subcontractors as the country builds out its AI infrastructure. For the first quarter '26, we anticipate that revenue will increase between 5% and 15% versus the fourth quarter of last year with gross margins ranging between 63% and 65%, aided by improved revenue and a more favorable advanced packaging product mix. Operating expenses are anticipated to increase by 10% to 15% as we maintain discipline in overhead growth while continuing to increase development spending to support long-term growth opportunities. That ends my prepared remarks. I would like to open the call for some questions. Operator? Operator: [Operator Instructions] The first question comes from Madeleine Jenkins from UBS. Madeleine Jenkins: My first one is just, Samsung has publicly said that they'll be dual tracking hybrid bonding and TCB 4E in HBM and the samples are being sent to customers. I was just wondering if you could kind of help us understand from a customer's perspective, what would make them choose the hybrid bonding version versus the TCB and vice versa? And then on that, just generally, when are you expecting the first high-volume orders to come through for hybrid bonding for HBM? Richard Blickman: Well, excellent, Madeleine, happy to share some more background. 2026 will be a very important year to understand the adoption of hybrid bonding for HBM stacking. As is publicly shared by Samsung in particular, keynote speech last week in Korea at the SEMICON is a very clear road map to adopt hybrid bonding for very important reasons and that is performance and also heat. And that, with all kinds of tests in previous years should be superior to using a reflow process to build these stacks. We are currently in the evaluation process, customer sample and qualification process. And as was published by that customer in the course of this year, early Q2, maybe Q2, May, June time frame, it should become clear how that inroad of hybrid bonding stacked in HBM 4, but also in the previous three, the 12 stack should find its way into the end markets. That is Samsung. As we all know, our other memory customer started already much earlier in testing and sampling hybrid bonded stacks and they are ready as soon as the market demands these technologies used for either HBM 4E or other stack devices. Also the 12 supposedly shows much better performance using a hybrid process than a refill process. And last but not least, the #3, the largest of all the memory -- the three memory producers, has also announced that it will start qualification of the hybrid bonding process in the second quarter of this year to also come towards the end of this year to the conclusion whether this is a technology used for high-volume mainstream in the generation of HBM 4 or whether that is in preparation of the next generation, the 20 stack. So all these tests, we will update you every quarter on the progress. Also, there's a lot of press coverage and those companies share that with the community also in conferences. So a very important year for hybrid adoption in the memory space. Madeleine Jenkins: That's very helpful. And then just my second question is on China. They're clearly adding a lot of AI capacity. Kind of how sustainable do you see this demand as being? Is it multiple customers? And also how high is your market share in this region for the AI bit? Richard Blickman: The market share is very high. To our surprise, we would have expected and, let's say, solid market share as we have with mass reflow for a long time, but our share has gone up significantly also among the Chinese. How sustainable that is? Well, the answer is that the world expects an enormous increase in building data centers. So for that 2.5D, some qualified that we are only at the beginning. Our position, as I said earlier, is very strong with a very solid market share. And that you can also derive from our margin, our ongoing margin, gross margin but also net margin development. Operator: The next question comes from Sandeep Deshpande from JPMorgan. Sandeep Deshpande: Richard, my question to you is regarding the logic market and the foundry market. I mean you've seen that some orders coming through in the last quarter on the foundry side. Do you expect that these orders from the foundry side continue into the first quarter? And when you say on your release that the order momentum remains strong in the first quarter, how would you quantify it? I mean, are we going to expect a strong sort of orders in the first quarter like you saw in the fourth quarter? Richard Blickman: Well, the answer is, first of all, yes. So as we guided, continued momentum, that also means that we expect more orders in the logic space for hybrid bonders. And as we all know, the program in Taiwan entails several steps to build out a complete new factory. The first install start in June and operators have to be trained, maintenance has to be organized and that's all underway. And you can expect, as was also the case with the current factory, the AP6, that over the course of several quarters, that capacity will be built because supposedly demand is building. So that looks very promising. Sandeep Deshpande: Then following up on that -- on the logic side, do you expect in the logic business this year that is '26 will be much better than in '25 because when you look at how your order intake was at the end of '24, you had about 100 cumulative hybrid bonding orders, you've had 150 at the end of '25. So there was a slight slowdown in terms of the order intake. And if this could accelerate now into '26? I mean, clearly, memory will also contribute to that, but will logic itself accelerate? Richard Blickman: Well, as I just explained to your first question, if all goes according to public shared plans, it should increase because already AP7 is supposedly twice the size of AP6 and that's only one customer. So the adoption for logic is continuing. We saw that in the whole of '25. Again, we now have 18 customers, of which most are the far most are logic oriented customers with all kinds of different device designs. Remember, the first was AMD which has expanded its family throughout. And then we have many others now following. The big question here is when will the largest end customer have a product line using this technology, that should be on the horizon. So that then will create a significantly higher demand than what we have witnessed in '25. But that's according to the road map we've shared forever. There's a nice slide in our deck where we see a development in the past 5 years and an expected significant growth in the next 5 years. As we've said many times, that line of growth, it can have several variations, especially as you said, the adoption of memory will change that landscape significantly in terms of total volume required but we're still on track on that, let's say, road map, we, ourselves derived from what is happening in the market in the past 4 years, which we update every year. So that's in a nutshell, the overall picture, we should or we could expect. Operator: The next question comes from Didier Scemama from Bank of America. Didier Scemama: Richard, I have a couple of questions. So first question is on HBM. If everything goes according to plan and your two lead partners decided to put the trigger on TCB or TC NXT and hybrid bonding, can you give us a sense of the magnitude of orders sort of the volumes that would be required to create a production line? I've got a follow-up. Richard Blickman: Well, as a rule of thumb, typically, one needs a factor more memory supporting a logic device. So when you take the rule of thumb of a factor of 4, then with the installed base so far for logic, which is now over 130 systems, shortly coming up 150. Then if you multiply that, then you know how much capacity you would -- or how many machines you would require to support the capacity for memory. It doesn't work exactly like that, but the factor for number of machines capacity required is significantly higher than for the logic. So that's a major step up what we can expect when that adoption occurs. But that, again, you see in that picture we share on the adoption scenarios. Didier Scemama: Understood. Very clear. My second question is on mobile. So if you remember, like, obviously, a few years back, very high-end smartphone adoption bonding. Can you just give us a sense as to, first, whether we should expect the traditional order intake in the first quarter related to high-end smartphone, new features, cameras, et cetera? And then if you look a bit further out, how this is shaping up to be in terms of hybrid bonding adoption, whether it's '27 or further out in at least your best guess? Richard Blickman: Well, this year, as we already shared a quarter ago, we should see some improvements or new updates on features on high-end smartphones. On the camera front, there are some new developments. But also maybe foldable versions are, let's say, on the road maps, and that requires also different solutions inside those cameras. So those are developments, which we see. But then the next question is what kind of computing power will need to support AI functions? And that is a big, let's say, question and that could have a significant impact and whether they are built with a reflow process or with a hard bonding process, chiplet architectures. As we've shared many times, there's a lot of development going on and certain road maps indicate those new major inflection points in technology, either already in '26 or certainly in '27. That is how it develops and there is no change in that road map. Does that answer your question? Didier Scemama: Yes. Just had a quick follow-up. For your third quarter guidance, I just wonder why your order conversion is quite a lot lower than it normally is? So I think it's about 100% plus or minus. So why on EUR 250 million in Q4, you're sort of guiding to only EUR 185 million or so at the midpoint? Richard Blickman: Well, a very easy answer. The orders were -- or let's say, the order placements were very much to the end of the quarter and the manufacturing throughput time for many of these orders, so take the high-end Flip Chip machines, the CHAMEOs, but also the multi-module attach, which is very much also for photonics, they take 12 to 16 weeks. So you simply can't physically arrange the shipment in the first quarter. So the answer also implies that you should see a significant impact on the second quarter. Operator: The next question comes from Charles Shi from Needham & Company. Yu Shi: The first one -- I want to go back to the comment about the hybrid bonding cumulative revenue orders, it was 150 plus by the end of last year. And if I do the math, and it looks like last year, the number of orders you got was actually more or less comparable with 2024. So the question here is what about 2026? What's the overall sense where the cumulative order number will go? 200 seems possible. I mean that basically assumes, I mean, flattish number of orders you're going to add this year versus 2025. But can you go to 250? Can you go to 300? And I mean, to go to higher numbers, what do you think needs to happen for -- yes? Richard Blickman: Two things need to happen. Number one, the adoption of hybrid bonding for mainstream applications for logic devices next to what is already now using hybrid bonding. So think about the big AI providers, which are still building certain modules using mass reflow, using TC, if they switch to hybrid bonding, that could change the landscape dramatically. And number two is as we discussed to earlier question, is the adoption of hybrid bonding for memory stacking. Yu Shi: Got it. But -- okay. So maybe I'll just go direct into memory. Now Samsung HBM 4E, that is the fact that it's happening. But I mean, on the other hand, if we understand correctly, the other 2 HBM customers have not even have a order from you -- hybrid bonding order from you. Why the hesitancy? That's the question I believe top of the mind for a lot of people here. And what's delaying them? And could they start getting some orders this year? Richard Blickman: Well, it's -- the other two. One of them with the U.S. base. They have ordered already several hybrid bonders to develop HBM stacking for about 3 years now. It's also known publicly that the other one, the Korean, will start evaluating the hybrid bonding process in April-May time frame, we are invited for that, and they have publicly shared that their end customer demands them to have hybrid bonded version available by the end of this year. So although cost is higher using a hybrid process, performance is better in two ways. Number one is speed and number two is heat. So it is gradually moving from TC solutions for stacking to a hybrid version. And the big question, will this move in '26 or certainly in '27? That's how we read the inputs from all three and the biggest end customer driving, ultimately, the change in specification for these end products. Next question. Operator: [Operator Instructions] The next question comes from Robert Sanders from Deutsche Bank. Robert Sanders: Yes. Good afternoon, Richard, maybe the first question would just be around the situation with Apple, which seems to be moving to using SoIC-X for the M5 Pro and M5 Max. Is that beachhead do you think going to be swiftly followed by other SKUs? Or is it going to remain do you think a relatively niche use of SoIC-X for high-end notebook type situations? And I have a follow-up. Richard Blickman: Well, that's precisely put. So they're all preparing from a production and technology readiness to be able to adopt this technology shift when decided. For us, what we can do is continue to offer whatever qualification samples, testing to be ready for that. There is one big question out there, how much additional computing power will be required for AI functionality? And that is what we hear, still the question to be answered. How does that impact the choice of the technology used in these mobile devices? Because in the end, it will increase the cost but then the functionality is significantly more advanced. So that open debate, you follow at conferences directly from customer engineers, and also, we had our technology advisory board meeting 2 weeks ago in Taiwan, where there were also technology persons from the community sharing road maps and thoughts exactly on this subject. Robert Sanders: And just quickly on China. Maybe you could just discuss a bit about what's happening in China. I mean I think it was 27% of your sales in the first half, but it has been higher than 45%. I mean it sounds like it's going to go up to close to 50%. Is that fair? And how do you think about the sustainability of that spending? Richard Blickman: Well, so far, we've always had this typical mix. You have non-Chinese customers producing in China. Since 30 years, all non-Chinese customers have set up assembly capabilities in every technology and that is still today the case. Although there's a lot new established outside China and Asia, in Vietnam, in Thailand, in Malaysia, Philippines and then India, but that's still slow and coming. So to be less dependent upon China. And then you have the emerging Chinese technology, which is growing year by year. And as we said for the 2.5D modules, we are very much engaged in these Chinese versions. So supposedly, the cost of ownership using our equipment is beneficial for local compared to local alternatives. Don't forget, we built all these machines in China. We have a wonderful facility in Leshan, which is expected this year to surpass the peak it achieved in '21. So although there's a lot of expectation that, that will become less, we don't see that at all. But we are expanding in Vietnam. As many of you know, we have set up a factory 3 years ago. We're expanding that significantly this year. By the end of this year, we're also able to build one of our die attach systems in Vietnam. And then as I said earlier, the expansion in Thailand, in Malaysia, the whole Pacific Rim, is preparing to have next-generation products produced in those countries rather than establishing more capacity in China. But the Chinese market itself is growing rapidly. Any next question? Operator: The next question comes from Daniel Schafei from Citi. Daniel Schafei: Basically, the first one would be on TCB NXT. You mentioned 5 players. I was just wondering, just to clarify, this is a testing or are some of them already high-volume manufacturing? And then if hybrid bonding will take longer for some customers, what is your expectation now going forward for TCB, especially given you are now gaining traction within TCB NXT? That would be helpful to understand. Richard Blickman: Well, number one, our system is designed for bond pad pitch below 20 micron. The world today is still above that, 25, 30. So the preparation with these five customers is to be ready once technology moves to smaller bond pad pitches and stretch the life of using a reflow process because the reflow has many advantages compared to hybrid bonding. One of them is simply cost. We have mentioned several times that our system has demonstrated even to be able to bond successfully at 10-micron bond pad pitches, and that comes very close to the crossover point with hybrid. So we cover the space between mass reflow Flip Chip and as mentioned earlier, very successful at this moment. And then the TC space where it becomes difficult for TC and then beyond that, the hybrid bonding. So gradually, always the industry moves to smaller geometries, and that is where exactly this TC NXT is aimed for. Your question, how much in high volume? Not yet. It's in the early stages in qualifications and in two areas. So in the logic space, so single die, but also one of the major memory producers is using TC NXT to prepare for the next generation. And that is what we mentioned last year when we received the order, 5 systems ready to go once that becomes the mainstream. Daniel Schafei: Perfect. And just as a follow-up, then you mentioned also earlier the adoption of hybrid bonding within '26 or '27. Just to understand what your expectations are right now, do you see hybrid bonding being adopted between all the HBM layers or only within certain layers? Yes, that would be just interesting to understand. Richard Blickman: Well, it can be a mix. There are different road maps showing a combination of a certain hybrid part of the stack and also a reflow part. So one has to go into a bit more detail to understand all of the road maps, but that is also why we have this 2-track development strategy that you have to cover both. Daniel Schafei: Okay. Is it then dependent on the HBM structure itself, where I would say the mix is more a hybrid bonding. Basically, the taller you go. My question... Richard Blickman: The reason -- sorry to interrupt you, is simply performance. If you connect direct copper-to-copper you have less heat in operating such as stack. And that allows you to get a higher power out of that stack and the higher the stack, the more, let's say, loss of power you have due to the heat. So a mix can already help in that performance. Operator: The next question comes from Nabeel Aziz from Rothschild & Co Redburn. Nabeel Aziz: So the first was just on hybrid bonding tool maturity. So I was just wondering if you could provide an update on the hybrid bonding tool maturity and progress that you're making on throughput and yield improvements? Richard Blickman: Well, we've come a long way that after 4 years, you certainly can see enormous progress. And where do you see that progress is, number one, the predictability of any application. So understanding the right preparation time required and the preparation processes, remember, cleaning, tracking, wet, clean plasma. And that is the most, yes, let's say, process technology, which sets us apart from many others. There are many bonders in the world which can place accurately. But exactly that bond process is where it's all about. Where are we right now? As I said in the beginning, we certainly have -- but there's still a long way to go. The process itself is, each time you could say every day, improved. One of the issues is always throughput, so the time required to place the die accurately. And the faster you can do that, you have more output of that machine and that influences the cost of ownership. So that [ battle ] is identical to what we have gone through with mass reflow Flip Chip for 25 years every year, either focus on accuracy improvement or focusing on throughput. And that combination is exactly the same challenge we have with now over 130 hybrid bonders operating in the field for larger die, smaller die, stacking dies and that's where we are. Nabeel Aziz: Very clear. And just a quick follow-up on that. A lot of your competitors are starting to develop hybrid bonding solutions of their own and in some cases, shipping R&D tools. So I just wondered how you see the competitive landscape in hybrid bonding evolving? And how competitive are your peers' tools with your own? Richard Blickman: Well, what we did share end of October was the simple fact that for the next round in Taiwan, that was based on the outcome of a complete landscape evaluation where -- because the orders were placed with us and are placed with us, the outcome is what it is today. But if you look at the whole landscape, everyone understands that hybrids sooner or later will become the mainstream technology for advanced packaging. So that's why every bonder company is focused on this market. How can you maintain your leadership? Because after 10 years nearly where we started this development with that big Taiwanese customer, it's all what I just said along the accuracy and speed. So today, the 100-nanometer is sufficient covering the logic and the memory requirements as it looks today. In the next year, we have to move down 250 because of the next-generation technology. And then the accuracy and speed combination is what sets us apart from others. Also, what is very important is the partnerships in this change of technology inflection from the assembly reflow space to hybrid bonding, hybrid bonding has to occur in front end. And front end requires complete different support structure than what we have in back end. Through the partnership with Applied Materials, now for 5 years, we have come at the levels that is supporting the highest end customers in the industry. And that combination is unique. So that support, so not only having a successful bonder, but also how to support customers 24/7 in a front-end environment is a complete different challenge than in the back end. So we see certainly competitors trying to participate in this market as well. But there is a very clear challenge for us to maintain in that lead. Operator: The following question comes from Ruben Devos. Ruben Devos: I just had one on your prepared comments where you talked about new hybrid bonding use cases that were identified for co-packaged optics. I was curious, is that mostly referencing sort of the material you presented at the Investor Day in June? I think you talked about sort of NVIDIA Spectrum X, which requiring 36 hybrid bonding tests per device. I think earlier in this call, you talked a bit about the factor difference between memory and logic, but how does that shape up for maybe co-packaged optics? And yes, I think the mid case was also somewhere around 50 cumulative units through 2030. But with the prepared comments around new use cases, might that really be contributing this year or next year? Richard Blickman: Well, that's a very, very big question. Number one, co-packaged optics is still in early days and a lot of development is going on with the use of hybrid bromine because the accuracy is required. So as shared in the Capital Markets Day or in the Investor Day, that is going on, that's continuous development. How many systems that entails? I can't tell you at this very moment. So that's -- you could qualify that as the next step in technology. So we first have the interconnect and co-packaged optics is a step beyond. Ruben Devos: Okay. And maybe something unrelated, talking about the mainstream market, basically, that's what I was thinking about. It's -- I think you also talked about green shoots, right, after a full year downturn. I think you mentioned smartphones in the mobile market, obviously, automotive and industrial are two other end-user markets. 50% of your business might already be computing. But so yes, a bit more color on maybe what you're seeing across the industry? What are maybe the die bonder utilization rates at this point? That would be very helpful. Richard Blickman: Well, we have seen, as we said, green shoots. We see some of our main customers for years in automotive and industrial after a long time showing signs and having new programs where equipment will be required, which gives a positive outlook for '26. That is referenced to Techinsights, which also expects the market to carefully improve in '26, more sizable in '27. So that's how our comment is also based on. What we have seen in these 4 years of very modest capacity increase only for new devices. We have seen development of many new devices ready for next-generation electronics, especially power devices for automotive, supposedly for hybrid application. So hybrid cars, I mean, not hybrid bonding. So in power, there's a lot happening. But still, the overall picture is not recovering to the extent which we are used to. But the growth in the other areas is so significant that, that offsets the -- yes, usually, our revenue, we've shared that forever. Automotive was between 15% and 20% of revenue. Now it's somewhere around 10% to 15%, depends on which quarter. It probably will drop in the next quarters or it has to turn. But that's about -- well, it is 10% to 15% of revenue. Operator: The following question comes from Marc Hesselink from ING. Marc Hesselink: Yes. Can we have a bit more view on the 2.5D photonics opportunity? I think that is sort of a momentum that's been building up throughout the year in '25. And I think with an extremely strong end with the order intake towards the end of the year, can you maybe see -- I would assume that in this business, maybe the -- because it's strategic investments, the visibility is a bit higher than in your usual mainstream product portfolio. So can you maybe see -- how do you see this ramping the capacity? Is it just a few quarters? Or is this a longer-term trend? Is this going to accelerate from where you are today? It would be very helpful if we get some extra detail there. Richard Blickman: Well, there are two growth drivers. Number one is simply the data center, let's say, capacity built in the world. So the connectors to connect those computers inside those, yes, data center units, that is what we have been involved in for the past -- over 10 years. But the second driver is that there is a technology step and that will require twice the amount of steps, the interconnect steps in these connectors than the current generation. So there is definitely more growth ahead of us for these two drivers. So not just the growth in data centers, but also in technology. I mentioned already, 10 years -- that started, well, over 10 years ago with Cisco modems. And these connectors, it's a set of 5 main customers, and they all produce for the very big end customer. And as long as that is growing as the world expects, we are directly linked to that. Does that answer your question? Marc Hesselink: Yes, it does. And maybe as a follow-up on that. Now that you're also seeing a lot of that volume coming from the OSAT. Is it then fair to assume that implies that it becomes even more mainstream and even more adoption beyond what you just mentioned? Richard Blickman: Yes, certainly. Certainly. And that's also publicly known that the IDMs, as usual, they offload more mature products to the subcontractor space and the more complex the technology, the more attractive that is for the subcontractor space. And we know the big two leaders, both starting with an A. But then there are many subcontractors who are also involved in this expansion into mainstream for data center computing applications. Any further questions? Operator: The following question comes from Martin Marandon-Carlhian from ODDO BHF. Martin Marandon-Carlhian: My first question is on the new fab of your Taiwanese customer, the AP7. Do you think the vast majority of the demand there will come from new customers adopting hybrid bonding? Or do you also expect AMD to be a big contributor since the announcement of its deal with OpenAI? That's the first one. Richard Blickman: Well, what we hear, and I was just there 2 weeks ago, there are several big companies, and we all know the names, either for high-end smartphones or for data center computing who are supposedly on the brink of changing from reflow process designs to hybrid bonded designs in whatever end products. And that is the driver for a factory, which is twice the size of what is currently the AP6. But then there is a next plan, AP7 is not the end. So there are major plans. So look at the model, which is shared by many of the front-end companies, what they expect in the next 3 years, the demand for AI translated into capacity that similar model you can use for the advanced packaging. So the next note plus an enormous expansion in end market demand. Whether that will -- as presented, we all know this industry but anyway, that's the picture driving the programs in Taiwan. Martin Marandon-Carlhian: Okay. Very clear. And the second one is a bit of a different one, is on high-bandwidth flash HBF, some expect HBF to be necessary to improve the memory capacity in future AI chip packaging. So my question is just what do you think about this? Do you think it's a driver for hybrid bonding or TCB? Is it part of the current discussion with your customer? Or is it not really relevant in the near future? Richard Blickman: Well, I can't answer that. Yes, simply, I have no, let's say -- if I would, I would answer it, of course, for you, but time will tell, and we are certainly following that closely. Operator: Ladies and gentlemen, we have arrived at the end of the presentation. I would now like to hand the word over to Mr. Richard Blickman for any closing remarks. Richard Blickman: Well, thank you all for joining us today. And in case you have any further questions, don't hesitate to contact us. Thank you. Bye-bye. Operator: Ladies and gentlemen, you may now disconnect.
Operator: Thank you for standing by. My name is Olivia, and I'll be your conference operator for today. Welcome to the Canadian Tire Corporation Earnings Call. [Operator Instructions] Now, I will pass along to Karen Keyes, Head of Investor Relations for Canadian Tire Corporation. Karen? Karen Keyes: Thank you, Olivia. Good morning, everyone. Welcome to Canadian Tire Corporation's Fourth Quarter and Full Year 2025 Results Conference Call. With me today are our President and CEO, Greg Hicks, and Executive Vice President and CFO, Darren Myers. Before we begin, I'd like to remind you that today's discussion contains information that may constitute forward-looking information within the meaning of applicable securities laws, including management's current expectations regarding future events and the company's True North strategy. Although the company believes that the forward-looking information in today's discussion is based on information, estimates and assumptions that are reasonable, such information is necessarily subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking information. For information on these material risks, uncertainties, factors and assumptions, please see the company's MD&A available on our website and filed on SEDAR +. The company does not undertake to update any forward-looking information whether written or oral, except as is required by applicable laws. I would also highlight that our discussion today will focus mainly on the normalized results of the business on a continuing operations basis. Within our financial results, Helly Hansen has been presented as discontinued operations since the sale of the business completed on May 31, 2025. To help you bridge the results to reported numbers, please consult Slides 5 and 6 of our quarterly earnings deck, which can be found on our website. By way of a reminder, we would also highlight that the fourth quarter and full year 2025 results include one additional week of retail operations compared to the fourth quarter and full year 2024 results. With the exception of comparable sales growth, comparisons include the additional week in 2025. After our remarks today, the team will be happy to take your questions. We will try and get in as many questions as possible this morning, but we ask that you limit your time to one question plus a follow-up before cycling back into the queue, and we welcome you to contact Investor Relations if we don't get through all the questions today. And with that, I'll hand the call over to Greg. Greg? Greg Hicks: Thank you, Karen, and good morning, everyone. For about a year since the March launch of True North, I've spoken frequently about CTC's twin tasks, performing our business while transforming our company. As we look back on 2025, I am immensely proud of the accomplishments of our team. We got the business moving sharply in the right direction and performed at levels that put us among the best of our North American peers, achieving some of our strongest retail sales and profitability in recent memory. Fiscal year retail sales and revenue were up 5%, profitability grew 14% and EPS increased 19% to $13.77. And while those numbers benefited from an extra week, annual comp retail sales were up 4%, exceeding 4% in 3 of 4 quarters, in a year that saw both tailwinds and headwinds. All banners contributed with SportChek up 6% and Mark's and CTR, each up close to 4% for the year. Triangle Rewards tied everything together, driving traffic to banner stores at sites, with membership up and active registered members growing 6% to 9.8 million. We saw increased uptake on personalized offers, which drove about $300 million in incremental sales. Throughout the year, we resonated with customers who remained resilient but discerning. And at a time when we'd all agree it meant more to be Canadian, it meant more to be Canadian Tire. Through the wintery weather, the rise of patriotic purchasing, the rush for stripes blankets, the tariff threats, the consumer pivot to value, Canadians consistently named us their most trusted retailer, and we gained meaningful market share. As we performed, we also transformed. Our first year of transformation included significant organizational change, a new operating model and major strategic advances. Now in 2026, we are building momentum for long-term value creation. Before I come back to that and highlight some of the key initiatives and metrics to watch for this year, I'll turn it over to Darren to walk through our fourth quarter results and our perspective on 2026. As I do, I'll simply say, while we are clear-eyed about our operating environment to the inevitable ups and downs of retail, we got nice momentum and detailed plans to deliver True North. Over to Darren. Darren Myers: Thank you, Greg, and good morning, everyone. Q4 was an exceptionally strong finish to the year across all banners. We executed well while continuing to build momentum in our True North transformation. Strong retail performance, lower finance costs and stable financial services results led to 33% growth in normalized IBT. Normalized earnings per share increased 38% year-over-year to $4.47, supported by improved retail profitability and ongoing share repurchases. Let me take you through the quarter, starting with retail. As Karen noted, our results reflect the 53-week year for retail compared to a 52-week period in 2024. The 53rd week, which benefited from favorable weather-related demand, contributed positively to results. We estimate the extra week generated $287 million of retail sales, excluding Petroleum, and approximately $40 million of IBT in 2025. All in, retail revenue and sales grew close to 9% and more than 10% excluding Petroleum. Underlying 13-week quarter performance was exceptional, with comp sales up 4.2%, with all banners and regions growing. Key contributors included strong in-stock positions to meet weather-driven demand, successful Black Friday promotions across our banners and a meaningful contribution from loyalty sales, with increased loyalty engagement and more active members. Looking at sales on a banner-by-banner basis. At CTR, comparable sales grew 2.7%. Seasonal & Gardening led the way with double-digit growth, supported by an early start to winter, which pulled forward sales in categories like snowblowers, shovels and ice melt. We also saw good sell-through of Christmas trees and decor, along with healthy toy sales. Winter footwear in categories like ice fishing also contributed good growth in playing. Automotive posted its 22nd quarter of consecutive growth, driven by strength in sales of batteries, wipers and tires. SportChek had an incredible quarter with comp sales up 9.5%. Fan gear demand surged with the Blue Jays post season run and the early lead up to World Cup. Outerwear performed strongly, helped by favorable weather. Finally, we continue to gain traction on winning with athletes in categories such as hockey. Mark's had a strong quarter, with comparable sales up 7.2% year-on-year. Workwear and industrial footwear sales were growth standouts this quarter, while traffic continues to be up at Bigger, Better, Bolder stores. Our first BBB store in Quebec contributed to strong sales in the province, while leveraging Triangle promotional tools helped drive record Black Friday and e-commerce sales. We're pleased with our progress in managing our gross margin throughout 2025. In Q4, normalized retail gross margin rate, excluding Petroleum, was up 118 basis points to 35.4%. CTR and SportChek margins benefited from overall mix dynamics, which included lower promotional intensity in the prior year. Ongoing benefits from our DaiVID implementation and improved margin sharing with our dealers also contributed to CTR margin performance. Our SG&A rate as a percentage of revenue, excluding Petroleum, improved 40 basis points as increased operating discipline and higher revenue contributed to modest leverage. We realized $30 million in restructuring savings in the quarter, in line with expectations. Restructuring savings and higher vacancies partially offset higher volume-related costs as well as increase in True North's IT investments, real estate expenses and variable compensation. Bringing it all together, we delivered strong operational results in our retail business. Normalized retail EBITDA increased 19% to $557 million and normalized retail IBT grew 49% to $242 million. Corporate inventory ended the quarter up 8%, primarily driven by CTR and SportChek, with improved aging and increased newness in the assortment as we support high growth -- higher growth levels. At CTR, dealer inventory was up 5%. Moving to Financial Services. 2025 was a year of investment to set the bank up for long-term growth and resilience. Credit card sales in Q4 increased 3.9% as we continue to deepen engagement with cardholders. GAAR grew 2.5%, driven by higher average account balances, while active accounts increased modestly on the back of increased cardholder acquisition. We continue to leverage loyalty issuance as a tool to engage cardholders and drive retail sales. eCTM issuance to cardholders increased more than 12% to $329 million over the course of 2025, reflecting deeper integration with retail. Gross margin dollars at CTFS increased 11% as a result of higher revenue and lower net impairment losses. Normalized IBT was up 3%, driven by the increase in gross margin, which more than offset higher SG&A as we continue to invest in the business. Overall risk metrics remained stable. PD2+ improved slightly, finishing the year at 3.5%, down 11 basis points. The net write-off rate was 7.2%, up 13 basis points year-over-year but stable versus last quarter. Portfolio stability saw the allowance remain relatively unchanged. With an increase in the ending receivable balance to $7.7 billion, the allowance rate ended the quarter at 12%. While economic recovery remains uneven across the country, we have continued to see stable trends. As always, we keep a close eye on the environment, and are prepared to act should we see any meaningful change. Let me provide some color on what we're seeing so far in Q1 and how we are thinking about 2026. Despite ongoing geopolitical uncertainty, inflation and continued mortgage renewals, Canadian consumers have remained resilient. Q1 is off to a good start, with winter weather driving sales in late January and into February in what is normally our smallest and least discretionary quarter. Keep in mind, though, that we're comping very favorable weather last February as well as a strong end to March, which is always the biggest month of the quarter. Turning to the year as a whole. At CTR, we continue to buy for growth in 2026. However, it's worth noting that we will be cycling tough weather comps, along with the strong patriotic purchasing in the first half of 2025. At SportChek, we expect events like the Olympics and World Cup to help us sustain momentum in the first half, while the rollout of BBB stores in Quebec and Ontario will continue to be key to sales growth at Mark's. Our North Star retail gross margin rate of 35% plus remains a good long-term anchor. Our 2025 results demonstrate that through disciplined execution, we can balance value to customers while delivering results above that level. The rollout of DaiVID to SportChek and Mark's in late 2026, along with the continued optimization of CTR, will help underpin our gross margin rate, notwithstanding we will always have some quarter-to-quarter variation. Our retail, although we continue to see inflation in our advancing targeted investments, including in AI, we remain focused on managing the rate of OpEx growth. At the bank, we don't expect the same profitability headwind we saw in 2025, but ongoing investments will create some pressure on SG&A rate and profitability in the first half. Finally, we remain committed to a balanced approach to capital allocation, investing in the business for long-term value, while also giving back to our shareholders. For 2025, our return on invested capital improved to 11%. 2025 operating CapEx came in below our range at $502 million due to tighter project discipline and timing. We expect CapEx in the range of $500 million to $550 million in 2026. Finally, we continue to repurchase shares under our 2026 share repurchase intention. In 2025, we supported EPS with over $440 million of share repurchases, reducing share count by about 5%. In summary, 2025 was a strong year built on a new operating model, tighter execution and a clear strategic direction. We intend to carry that discipline and momentum into 2026. We look forward to updating you further at our Q1 results call in May. With that, I'll hand things back to Greg. Greg Hicks: Thanks, Darren. Following a strong year, our job is not only to celebrate, but to demonstrate that our progress is durable. And while we continue to detail the specifics of our initiatives, I want to start at a slightly higher altitude. I want to describe what we're building because it's fundamental to the success of True North. In a new era of retail and a world of global mega competitors, we are setting a path that is uniquely our own. By rapidly building a new go-to-market approach predicated on a retail system of unique assets that nobody can match, we are digging a moat. Our retail system starts with the highest consumer trust in Canada. It connects our banners, brands and partnerships together through the engagement and privileged data of Triangle Rewards. It elevates our insights and actions to new technologies and tools like AI. And it moves us from individual banner selling products to a retail enterprise ready to serve the big and small occasions of Canadian life. That's what we mean when we call it a retail system. By extension, I'd encourage you to think about the initiatives in our 4 strategic cornerstones, not in isolation, but as part of a larger plan. You can expect us to put those puzzle pieces together more tightly through our actions and commentary in 2026. Our retail forward cornerstone is fundamentally about growing core retail sales. You've seen the results in 2025, but we're also reshaping the customer experience. We continue to drive new store concepts and store refreshes with 52 last year and approximately 70 planned for 2026. We're strengthening our investments at Mark's, with bigger store concepts that are attracting new and younger customers, expanding assortments and elevating brand experiences. SportChek's refreshes and new format stores are lifting already outstanding NPS and reinforcing its position as a top destination for leading brands. Likewise, we are growing our e-commerce performance at twice the rate of bricks and mortar. On the hypothesis, the future of retail is by lowering friction for customers, however they shop, in person, from home, or in combination. We have rolled out faster fulfillment options, easier transactions and contextual AI search. And as we have ramped up same-day delivery, related NPS scores have been remarkable and among the best that we track. Retail forward also includes retail fundamentals. Darren spoke about DaiVID and our surgical work to balance sales and margin. But I want to highlight how that has shown up for customers. Last year, we adjusted tens of thousands of prices based on deeper and deeper insights. Some moved up, others, down. By Q4, year-over-year improvements in our consumer price-value perception were industry leading, with perceptions of our regular pricing up a staggering 15 points. As you think about retail forward, think of it as a portfolio of strategies meant to change the way Canadian consumers experience CTC. Our stores, digital convenience, price, value, brands and all the factors that help us balance sales margin over the long run. Moving on to the progress of our Triangle-powered everyday cornerstone is clear in our 2025 loyalty results. But in 2026, Triangle is not just about member count, it's about velocity. Engagement is up, members are more responsive to promotions, and we are delivering more AI-informed offers that generate sales. Growing loyalty attachment also allows us to inspire members to move between banners. CTR customers are shopping Mark's or Mark's customers are shopping CTR, and the flywheel turns driving quantifiable sales. Then, of course, we have our growing roster of big brand loyalty partners to give members more ways to earn Canadian Tire money for everyday activities like filling their tank, banking, travel and the morning ritual of grabbing a Tim's. As you know, eCTM has a multiplier effect, driving sales in our stores. By extension, our most engaged members drive the most sales as we lead into partnerships, engagement clients. Many members are already making incredible use of our Petro-Canada partnership. RBC has come out of the gates quickly, and WestJet and Tim's are on the horizon. As these partnerships come fully online, let me give you a sense of what it can mean in terms of volume and velocity. And there are 2 stats that stand out. First, in terms of volume, today, we have a growing population of about 2 million members engaged in our partnerships through mechanisms like offers, our credit card or the simple act of linking programs. Over time, we see a path to doubling that count. Then in terms of velocity, we have a large pool of members who are highly engaged in our partnership program, including the more than 600,000 who have linked Triangle and Petro points. Analysis shows that these customers are spending about 10% more with us, that's similar but less engaged members. Whatever the measure, growing partnerships is an important lever for growing sales, and we are making good progress in the early innings. True North is ultimately about a more modern company organized around stronger customer connections. Our last 2 cornerstones, customer insights and action, and one team, agile and scaled, are key. Automotive service is a great example of what is possible. In a category that is built on customer centricity and relationships, we have established a clearer understanding of who does or does not come to us and why, applying our existing local knowledge, the growing power of Triangle and new customer insights. As we accelerate automotive service, consider a few numbers. Over the last 5 years, we have grown to $1 billion of sales, compounding at a rate of 7% per year. This is an impressive new baseline and a trend line that suggests further growth. For instance, if we compare our average 15% share in general merch categories to our 10% share in automotive service, we could be looking at a growth opportunity of more than $0.5 billion. In a large, highly fragmented market, we have the assets to compete harder, to keep it capital light and deliver considerable upside for both our customers and shareholders. But our future is a bit more than just identifying categories right for growth. It's more fundamental. It's about a different go-to-market strategy with customers a bit more. We will deliver primarily through faster, more insightful, coordinated strategies across our enterprise and assets. We offered something of a sneak peek yesterday with the announcement of our work with Microsoft on an AI intelligence engine called MOSaiC. Together, we are scaling a program that matches our retail system, stores, sites, marketing, loyalty, partners, products and services to the moments of Canadian life. Last year, we conducted a pilot, prompted an LLM to compute huge sums of internal data and external contacts to be asked to identify the moments of life where CTC is best positioned to serve Canadians, and it surfaced more than 1,000 occasions, from basement floods to weekend workouts, to anything you'd imagine in your own day to day, where we can combine all of our existing assets and new insights to pivot from simply selling products to serving the occasions of Canadian life. If that sounds conceptual, it's not. We will begin to commercialize this approach in the back half of 2026, and I look forward to telling you more in the quarters ahead. I'll conclude by reminding you of our True North vision, 3 simple phrases that represent all we set out to achieve by 2028: stronger customer connections, higher retail performance, accelerated shareholder value. On the back of a strong 2025 results, I hope you agree we've already come a great distance and that we are moving at pace, ready to go distance more. Our strategy underpins our conviction that the business should, over the long term, deliver annual retail sales growth of 3% to 5%, with earnings growing faster than sales. While this is not near-term guidance and any year can be affected by factors such as geopolitics, economics, even weather, True North should position us to deliver these kinds of results more consistently in the long run. I want to thank our team from our offices, to stores, to distribution facilities and beyond. 2025 was a year of considerable change. People performed with determination and transformed with grace. They have my very personal thanks. And while we're on the topic of high performance, I want to add my voice to those cheering on our Olympic athletes, including many with deep ties to the Jumpstart charity. And our very own Trennt Michaud, a figure skater and SportChek team member who not only inspired his teammates here at CTC, but the entire nation. With that, go, Canada, go! We can open the call for questions. Operator: [Operator Instructions] And our first question coming from the line of Irene Nattel with RBC Capital Markets. Irene Nattel: Certainly, you gave us a lot to unpack there. So taking a step back, 2025, certainly unfolded in a more bullish way, shall we say, than what we might have thought a year ago. Can you please walk through what the biggest upside surprises were? And then sort of, I guess, the follow-up question is how some of the initiatives that you put in place in '25 and that are accelerating in '26 can sustain that momentum as we move through this year? Greg Hicks: Yes. Thanks, Irene. So biggest surprises, I think the resiliency of the Canadian consumer just comes top of mind. I think when we started 2025, we suggested to you that we didn't have a lot of certainty in the economic environment looking forward, but we were buying for growth, and that we hoped to see a more resilient consumer coming off a tough period through '23 and '24. So I think when we look to our data in retail, we continue to see spend increases for all income level households. The largest increases this quarter actually came from the highest debt household, debt-burdened households. But for the quarter of the year, we see similar spend increases percentage-wise across income levels and debt burden. So that would be one big surprise. The other big pleasant surprise is just the separation that we're seeing between our loyalty sales and our non-loyalty sales. So I think it speaks to the fact that members are both seeking and we are providing value. So large separation in Q4 and for the year. And that, we believe, is indicative of us managing the system that I spoke to, to engage customers or with that privileged data. So to continue to see that separation, more separation, I would say was a nice and pleasant surprise. And then third that comes to mind is just the power of partnerships. The -- I personally wouldn't have expected to see such phenomenal incremental retail sales performance at the customer member level associated with engaged Petro points, Triangle Rewards linked members, so that 600,000 strong cohort who have linked their programs. I think we're really starting to see the value creation that could come back into our banners in the form of incremental spend or engagement at the member level, and we're excited by continued momentum of our ability to grow, link members with Petro-Canada and now as we as we carry on with other partnerships. I mentioned RBC being strong out the gate. We're already 150,000 members linked. And I think there's a strong value proposition there. So I think our ability to extend our system to get some brand scale around moments in Canadians lives that -- where we don't have a particularly strong owned assets that can help engage members, I think all very positive. I forgot the second part of your question. Those are the 3 big surprises. Irene Nattel: The second part of the question was how you build on that momentum into 2026? Because if we think about what you -- the last comment you made in your prepared remarks about 3% to 5% revenue growth and more earnings growth than that, clearly, you delivered that very well in '25. How do you keep that going? . Greg Hicks: Yes. It's a lot more of the same, Irene. We're going to continue to focus with our dealers and across our corporate-owned banners around the fundamentals of being in stock. That was a big driver in 2025 of winning seasons. The partnerships, as I just talked about, we've got 3 brand new ones rolling into 2026, which will provide wraparound benefit into 2027. And I think one of the things that is exciting, especially as AI is advancing is -- we've talked a lot about our ability to improve our personalization capability. That's been a big focus of us as an organization. But for the most part, that personalization capability has been delivered at a, call it, kind of a look alike or a cohort audience level. And we're really starting to see evidence now and the technology is helping to get that true personalization at the member level. And that's a whole new exciting frontier. It's completely brand new and nascent to us in terms of the opportunity. So I'm very excited about how AI will help shape our personalization journey to truly be more one-on-one. And -- so I lean to those critical areas, Irene, and we're really excited about MOSaiC. We think this is a strategic pivot -- just pivot from selling products to selling occasions. We think it feels natural for us. We're going to stand up. It's grounded in not only customer insight in terms of our brands' ability to travel in those spaces, but also market size and opportunity. So we're going to stand up a couple of what we're calling lighthouses in key occasions in 2026. I'll stop short of telling you what those are for competitive reasons, but we'll certainly talk to you this year about how they perform. So we're excited about this new pivot and our ability to be even more customer-centric going forward. Darren Myers: Irene, maybe let me just add. I think it's clear to everyone that when Greg said the 3% to 5%, it wasn't -- it's not a guide for this year. I mean, clearly, as you think of 2026, we still see the economy bouncing back. We have some tough weather comps, patriotic purchasing. So just consider that as you do your modeling for the year. Operator: Our next question in queue coming from the line of Brian Morrison with TD Cowen. Brian Morrison: Greg, can we just circle back to the same-store sales growth at CTR for the quarter and it was strong, obviously, in the auto and seasonal categories. But at 2.7%, it's not -- it's lower than your 3% to 5% target. I realized for the year, you're within that target. But your 2.7% off of 1.1% last year and the negative the prior year, what is underperforming? Or what categories have room to improve maybe is probably the better way to ask? Darren Myers: Maybe I'll just start, Brian, on that. Just really for the year, I think you highlighted it, it's -- and you got to be careful never to look at a quarter because there's so much variability year-over-year on its own. But recall, when we started the quarter, we were flat in October. So we had a very slow start, and we had a very strong December last year. So when the math comes together, we did well, obviously, in a number of categories that I outlined. I would say the growth was across many, many parts of the business. But more importantly was we hit 3.7% for the whole year. So we're pleased with the full year growth. We're pleased with the Q4 growth as well. But there's always year-over-year impacts and quarter-to-quarter variability. Greg Hicks: I would just add, Brian, I mean the growth was widespread in CTR, almost 90% of categories grew in the quarter, uneven, as you pointed out. So I would point to 2 things. One or two areas. One, we still have quite a bit of separation between -- in this quarter between discretionary and essential. So discretionary was up 4.7% -- or sorry, essential was up 4.7%, discretionary up 1.6%. So that speaks to that kind of discerning purchasing again. We did have some good growth in snow blowers. So I take it discretionary. But beyond that, that kind of healthy discretionary business is something we would look to come around in 2026. And then second is our living division in CTR is underperforming relative to the other divisions. Again, still growing, but an area of focus for the team. We're not feeling the same level of newness and the innovation from our suppliers that we have in many of the categories in that business. And it's something that TJ and Micheline Davies, the team and all of our merchants are working on pretty aggressively and trying to turn that newness in living on its head and really drives excitement for 2026. Brian Morrison: Okay. And my follow-up is, maybe Darren, you gave us good color on the gross margin expectations for this year. I'm more focused on the OpEx in 2026. Maybe just directionally, should we expect leverage this year? And maybe the key drivers that we should be looking at to take into consideration? . Darren Myers: Yes. Brian, as I mentioned in my prepared remarks, the way to think about OpEx is, I mean, certainly with True North and changes we're making and operating in a more disciplined way and better alignment on the organization, we are very focused on managing the rate of growth. Of course, the actual rate is going to depend greatly on where the revenue number falls. So I want to be careful, if not trying to position -- overly position that. But we do see inflation. We continue to have targeted investments, including in AI. And then we will have productivity. As you know, we have $30 million of savings this quarter. It was the first quarter of full savings. Those restructuring savings started in Q3. We also had higher vacancy rates in 2025 that you need to consider as we were going through True North and taking the actions we took. We obviously weren't hiring. So we'll have a little bit of a headwind from vacancies. Probably the best way to think about the restructuring savings is we're on track to the $100 million relative to 2024. So if you kind of want to model that, and maybe I'll leave it at that. Operator: Our next question coming from the line of Mark Petrie with CIBC. Mark Petrie: I wanted to ask just a very high-level question actually, just about the revised org structure and executive alignment and how you think that has affected the business? What's gone as expected, and what's sort of been a surprise coming out of that? . Greg Hicks: Mark, it's Greg. Yes. I mean I think True North fundamentally is about transforming our operating model to better compete in this new era of retail defined by scale players. So fundamentally, it was about aggregating the scale that we created for ourselves. That was the primary rationale for the extensive changes we made to the workforce. As we talked before, very difficult but important decisions to make. We think the rationale was well understood by our teams. So organization is now complete. It probably completed more towards the end of, kind of, call it, September, October. So it's still relatively fresh. But our focus now is turning that -- all of our attention to value creation. So we're working through process changes, working through technology duplication, tech and data infrastructure so that we can better deploy AI for value going forward. And then working through the new and vacant roles created through the organization. I think whenever you do a big organization like this, you don't get everything right. So we probably got some tweaking to do in 2026 in some areas. But I really like what I'm seeing so far, especially in the areas of resource and capital prioritization, performance management. Darren's committed to put a real strong focus on in-season performance management. And as we look to where we're spending our cash and how we're kind of allocating resources, I feel like we're in a much better rhythm and management system for making trade-offs. And just managing the decision-making associated with ensuring that those investments create value because we're prioritizing it at an enterprise level, not banner by banner. So lots more work to do to kind of deliver on that value creation. Big, big change. But now the work really gets started on process reengineering, technology duplication, all the stuff kind of behind the curtain, so to speak, that will make us a more efficient, agile retailer. Darren Myers: Mark, maybe I'll just add, since I joined, and Greg, obviously, before I joined was talking to the HoldCo and OpCo. And it's been a big change. I mean, the kind of the -- as Greg said, the rhythm and the performance management alignment of the team, I mean in the fourth quarter, we're able to make decisions much sooner, and it is showing up in our results, and it will continue to get better. We still have work to do. It's hard to turn a big ship, but we're making good progress, and I do think it will lead to longer-term consistency and improved results. Mark Petrie: Yes. Okay. I appreciate that. I wanted to also just follow up on your comment, Greg, with regards to the assortment and sort of, I think, newness is the word you used. I think this is another year where own brands penetration was relatively stable, down a little bit. Does that figure into that comment at all? And how are you feeling about that as a lever in the business today? Greg Hicks: I feel really good about own brands performance, the overall role they play. We feel really good about the portfolio. I would say the most proud in terms of an accomplishment in 2025 is what we're seeing from a product quality standpoint. The whole portfolio reached the lowest defect rates that it has since starting own brands. The business on the top line is performing better than national brands, both in the quarter and for the year, continues to appreciate our margins, while differentiating the offering in the retail system. The penetration, we're not as fast as that -- on that, Mark, as we once were. And mostly, it relates to Mark's and Chek, especially Mark's, the BBB concept is our concept for the future. We think it's the best representation of our assortment standing really tall in front of our membership. And the mix of national brands to own brands is significantly different in those stores, the non-BBB stores. And we think that's good. We're managing the blended margin associated with that concept. We can see evidence, and you've heard us talk to the fact that we've got brands now in the mix -- the national brands in the mix that are attracting a much younger demographic. I think I've talked about the fact that my teenagers think that Mark's is pretty cool these days based on some of the brands that they carry. So yes, all that to say, not as fast about penetration increases going forward at the system level, and continue to feel really, really good about its ability to -- the portfolio's ability to differentiate us with product quality, great value and running harder on the sales line than national brands for us. Operator: Our next question coming from the line of John Zamparo with Scotiabank. John Zamparo: I wanted to ask about patriotic purchasing. And I wonder if you've seen a resurgence or a continuation of that. And this is obviously hard to measure. It sounds like HPC has contributed to that, the timing of the Winter Olympics add some noise there. So surely, those are both contributing, but I wonder if you get a sense that this wasn't just a onetime item in '25 and that lapping that in the first half of this year might not be as meaningful a headwind as perhaps we thought it would be a few months ago. Greg Hicks: John, it's Greg. Really tough, as you pointed out, your question to tease out, I think we suggested that back coming out of Q2's call. We kind of -- we felt -- it felt more subjective and objective when we were in it in Q2, and I think we had suggested in Q3 that we kind of felt kind of waning sentiment around patriotic purchasing. So I don't really know, to be honest, how to think about it. I don't think we haven't planned it as a major kind of negative building block for the year. I think we're going to continue to play our game and do all the things that we have outlined in terms of our go-to-market strategy in 2026. I think where it is most objective, John, is probably in the SportChek business. It's not really patriotic purchasing, although maybe some of it's caught up, but that is when you think about Blue Jays and Olympics. Blue Jays probably represented about 1.5 points a comp, incremental comp for the SportChek business. But this year, we have the World Cup and the Olympics to work to offset that. So I do believe there was some Canadian pride associated with the nation getting behind the Blue Jays. So objectively, that's probably the finest point that we can put on some degree of patriotism with the fact base. John Zamparo: Right. Okay. That's helpful. And then just a modeling question. I want to better understand the impact of the extra week. So first, can you confirm, I think you said $287 million in additional retail sales and $40 million in IBT. If that's the case, that's about 9% of last year's retail sales number in Q4, but it's about 20% of last year's IBT. That's more than I think we would have expected on the income line. So can you help us understand how SG&A is accounted for in that calculation? Darren Myers: On SG&A, so your numbers, the absolute numbers were correct. I have a little trouble following your math on the percentages. But the SG&A, I'll leave it to you, we're not giving gross margin and SG&A. But if you apply just the regular gross margin rate or the rate we had, you'd see a slightly lighter SG&A, which is typical on the extra weeks because you don't have all the same costs within there. But John, I'm not sure I caught your percent growth. That was year-over-year for the quarter, I assume? John Zamparo: Correct. Yes. Darren Myers: Yes. So if you took it for the quarter, it'd be about half the growth on the revenue, maybe you did say that. And just under -- we would be just probably under half the growth on the EPS. So 20% EPS without it type of number without the extra week. Operator: Our next question coming from the line of Vishal Shreedhar with National Bank Financial. Vishal Shreedhar: With respect to the underlying business, and it seems like management feels some enthusiasm with regard to the initiatives that you've implemented. But when we're looking at it, we see the start of the quarter with respect to sales, indicated last conference call starting out flattish. Then obviously it ended out strong. There's a few more transient events in there, including weather and some other events in there as well. So how should we think about how to assess the underlying momentum? Q1 is going to get a weather benefit as well. So what would you point to, to help us better understand what the true comp is moving at? Greg Hicks: Yes. I don't know if we can help you discern to a finite point impact of whether I think Darren suggested that we did have tough comps in October. We had strong comps in December. That wasn't -- the October comps we were dealing with, which came in post and then some other things in the performance of the business. We can tell you, we feel -- we believe that we were on pace for a strong quarter before weather hit in December. But make no mistake, it was a positive contributor in the quarter for all banners that we spoke to, some of the categories that performed really well across the banners, and those are rather dependent. I'd remind you though, your commentary around Q1 of this year, we basically just traded off weather in January of 2026 for February of 2025. So we had -- if you recall, last year, we -- Central Canada, Ontario right through to Quebec had very, very strong snowfalls, ice issues, et cetera. So we're comping that as we speak. But listen, we've worked really hard to be Canada's destination for winter weather, like we make no excuses for that. And so I think the teams executed really, really well. The dealers are replenished. Our supply chain stood up resiliently and got as much inventory back in stock. So we think our in-season management was really strong. But it does layer over top of a healthy underlying business. I'm not sure what else I could say on that. Vishal Shreedhar: Okay. And just moving on to the gross margin performance, very solid again. And I think, Darren, you can correct me if I misinterpreted this, but you expressed the North Star being 35% plus, and I don't recall it being expressed in that way as well. Does that -- is that increasing of the expectation of what the North Star is? Or should we think about it's in line with what you've said in the past? . Darren Myers: Yes, it's a good observation. We weren't saying plus, we were around 35%. We've added the plus. We feel very good about the capabilities that we've built, the muscles that we've built in terms of our processes. And we're making, as Greg mentioned, good progress with the value orientation while doing this. So the actual math, if you did the real math based on removing Helly, the True North would be 35.2%. We called it 35%. We came in at 35.5%. We like the plus, and we certainly are looking to maintain our momentum, but we're not going to start giving guidance on the gross margin line. Good observation. Vishal Shreedhar: Okay. Congrats on the quarter. Operator: Our next question in queue coming from the line of Jonathan Matuszewski with Jefferies. Andres Padilla: This is Andres on for Jonathan. My first one will be on Triangle Rewards. So with the RBC partnership ramping quickly, how is that informing how you're thinking about WestJet and Tim's later in the year? And as you look to expand that network further, what verticals do you see the biggest opportunities for future partnerships? Greg Hicks: Yes. Thanks for the question. You're right, we're feeling good about the ramp thus far in the RBC partnership. It's early days. I think I may have mentioned, we're up to 150,000 linked members. 50,000 came in January. So we would love that to be kind of a run rate. More Canadian Tire money is being issued. We're seeing new Triangle sign-ups. I think the 3x accelerated is a strong value prop for the RBC partnership and functionality to be able to convert Avion points to eCTM will be in place by spring. So I think, generally speaking, we are developing the playbook here with respect to how to set expectations and objectives for each partnership and then work with the partner in a joint business planning-type relationship, whereby we both have the same targeted outcomes. We have an integrated scorecard. And we've stood up a small but mighty partnership team to help manage the relationship advantage to the outcomes that we're looking for. So I think that -- those kind of organizational muscles, I'm happiest in terms of what I'm seeing because it is net new. I just love the fact that it's grounded in the outcomes that we're trying to achieve. And I think we're deploying the same type of playbook all the way from kind of my relationship with the top of the house in each of our most critical partners, all the way down to this integrated scorecard. So we're on track, feeling good about launching WestJet and RBC this year. Each partnership has different expectations for those outcomes that I spoke to and membership engagement, and we're just actively managing it. We're -- I think we've said before, we're not looking to build a vast coalition to the last component of your question. We're focusing on strategic industry verticals that align with everyday customer needs. I think we're leveraging this kind of asset-light approach to grow in financial services, travel. It's a limited number of other verticals that we would consider. I'll probably stop short of naming them, but just think about where Canadians have a good amount of spend in a vertical that we don't participate in, and you can probably figure out where we're active. But we've got our -- we have our hands full with partnerships we have here. And because, as I said earlier, we see so much value, turning our attention to making sure that we get value in each partnership before we add a bunch more is really important to us. Andres Padilla: Great. And then just a quick follow-up. So you guys have made meaningful progress in reshaping the customer experience through the store refreshes with now the 70 planned refreshes for '26, up from 52 in '25. How are you thinking about the cadence of the store refresh plans from here? Greg Hicks: Yes. So this year leans much more into Mark's. We've got, I think it's about 13 BBBs in market. Right now, we've got 10 on the docket this year. I think we've got just over 30 total projects of the 70 would be Mark's, so 10 BB and then some refreshes, et cetera. That's because of what I talked about earlier, we're loving how the concept is showing up in front of the customer. It's providing a strong customer engagement, top line performance at returns that are above our hurdle rate. So we'll all day long kind of invest in those types of dynamics. We're 150 in on Concept Connect across CTR. So more work to do. I think when we originally identified Better Connected, we thought that we could get to 225. So more work to do there. That's how to think about the runway. And then SportChek kind of feels to us similar to Mark's in just kind of, call it, a year or 2 behind. The destination sport concept is off the charts performance right now. We couldn't be happier with what we're seeing. We've got 4 in market. We're opening 3 this year. Performance is well above our hurdle rate. And certainly, our expectation from '27 onward is that we will build more per year than we're doing this year. So I think this is our opportunity to refresh the brand, the experience, either for the athlete, tell stories with and for our brand partners. I think when we really zero in on that business, we look to Dick's Sporting Goods in the U.S. and see us a few years behind their journey. I think we should be able to invest in this concept for growth, drive strong returns and deliver both great customer and employee experiences. The athletes that work in our stores, a lot of these destination sport concept. So hopefully, that kind of gives you a picture in terms of how we're thinking about the life cycle and stage of each of the big concepts. Operator: Now last question will come from the line of Chris Li with Desjardins. Christopher Li: I know there's obviously a lot of moving parts. But when you exclude the extra week, it seems like CTR revenue growth this quarter was more in line with POS. Do you expect this to be the case for 2026? I think last quarter, you mentioned that inventory levels for spring and summer were slightly elevated, but I think that was because of air conditioners in Alberta. But just overall, I wanted to see how we should think about revenue growth? Should we be more in line with comp sales for this year? Greg Hicks: Yes. Thanks for the question, Chris. So we expected last year, the U.S. revenue ratio to be fairly in line, but revenue ended up outpacing sales as dealers build for inventory through the year. As you point out, the dealers did end Q3 a little heavy in spring/summer inventory and the end of the year with a build and winter inventory. So overall, up about 5%, but their winter inventory has been clearing given the weather experience to date. So we'll update you as we normally do regular course after Q1 ends and give you a sense of their ending inventory position and its expected impact on revenue in the fourth quarter. Generally speaking, though, because of the build, now we got this planning assumption wrong last year, but we do expect -- we expect some drawdown in inventory relative to POS. In 2026, we think that it's healthy given the starting position and the elevation in spring/summer. So that's our expectation and planning assumption for the year. And we'll keep you posted, obviously, as we move through it. Christopher Li: That's helpful, Greg. And maybe my follow-up, you mentioned that you recently negotiated some amendments to the contract with the dealers. I was wondering, to the extent that you can, can you share with us how some of those amendments help you further align your objectives with your True North strategic priorities? Greg Hicks: Yes. So you're right. We did amend the contract with the dealers. And I would say, at the highest level, the requirement for engaging in contract discussions was really about making sure that we had broad and joint alignment on the True North strategic priorities. And so we really feel -- I think the relationship is so strong. We came together on the fundamental principles and financial frameworks that have historically made our CTC dealer partnerships so strong and effective. And we added new specificity to make sure we were aligned on True North to share commitments like expanding omnichannel retail. Certainly, the growth of Triangle Rewards, how we think about investing in the issuance of Canadian Tire money. And then because brand trust is just underpinning of this entire True North strategy and our retail system going forward, as I explained in my prepared remarks, just making sure that we had high standards of performance across our network stores. And so those 3 or 4 critical areas, all in service of True North, and dealers completely aligned to the intent and feel really good that the dealers are with us on True North. They're super, super excited about MOSaiC and AI, I can tell you, in terms of what that could do for their businesses. And so I really feel, strategically, we're in a really good spot and the dealer just -- or the contract just reinforces the strength of the relationship and the alignment. Operator: I will now turn the call back over to Mr. Greg Hicks for any closing remarks. Greg Hicks: Well, thank you for your questions and for joining us today. We look forward to speaking with you when we announce our Q1 results at the AGM on May 14. Bye for now. Operator: This will conclude today's call. You may now disconnect.
Operator: Good day, and thank you for standing by. Welcome to the Praxis Precision Medicines Fourth Quarter and Full Year 2025 Earnings Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Dan Ferry, Investor Relations. Please go ahead. Daniel Ferry: Good morning, and welcome to the Praxis Precision Medicines Fourth Quarter and Full Year 2025 Financial Results and Business Update Conference Call. This call is being webcast live and can be accessed on the Investors section of Praxis' website at www.praxismedicines.com. Please note that remarks made during this call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These may include statements about the company's future expectations and plans, clinical development time lines and financial projections. While these forward-looking statements represent Praxis views as of today, they should not be relied upon as representing the company's views in the future. Praxis may update these statements in the future, but is not taking an obligation to do so. Please refer to Praxis' most recent filings with the Securities and Exchange Commission for a discussion of certain risks and uncertainties associated with the company's business. Joining us on today's call are Marcio De'Souza, President and Chief Executive Officer of Praxis; and Tim Kelly, our Chief Financial Officer. After updates on our key programs, we'll move to a brief Q&A session, where Marcio and Tim will be joined by Steve Petrou, President of Research and Development; and Megan Sniecinski, Chief Operating Officer. With that, it's my pleasure to turn the call over to Marcio. Marcio Souza: Thank you, Dan. Good morning, and thank you for joining the Praxis Fourth Quarter 2025 Conference Call. Let me start by saying that 2025 was a remarkable year for Praxis. It was marked with the breadth of significant clinical achievements and regulatory advance across our portfolio with positive readouts and FDA interactions for ulixacaltamide, relutrigine and vormatrigine as well as accelerated development plan for elsunersen. Standing here today, we deliver on our goal to submit two NDAs one for ulixacaltamide in essential tremor and one for relutrigine in SCN2A and 8A DEEs. Just like 2025, this year will continue to enhance our clinical portfolio and mark our transformation into a commercial company. Next quarter, we expect to have the top line results for POWER1 for vormatrigine in focal epilepsy and the elsunersen EMBRAVE data. In the second half of the year, we expect to complete enrollment for POWER2. The EMERALD trial for relutrigine in broad disease is expected to serve as the base of an sNDA by next year. And those are only a fraction of the deliverables expected in the next 12 months. We have the drugs, the people and the capital to deliver yet another transformational year, bringing innovative treatment to patients with CNS disorders. Let me now deep dive a little bit on each one of the clinical programs. Now focusing on ulixacaltamide. Last October, we reported the positive top line results from the Essential3 program with both studies delivering clinically meaningful and statistically significant results. Study 1 met its primary and all key secondary endpoints with ulixa showing meaningful improvements in the mADL11 in the rate of disease progress, PGI and CGI. Study 2 also met its prespecified primary endpoint with ulixa demonstrating a superior maintenance of effects during the randomized withdrawal phase. This was the first time an investigational therapy designed specifically for patients with ET showed positive results in a comprehensive clinical program. Based on this positive data and the fact that there is no other specific therapy delivering such results as ulixacaltamide, we have granted breakthrough designation by the FDA in December. Had a very productive pre-NDA meeting in December with the FDA and worked diligently to prepare the NDA submission. We have recently completed the NDA submission to the FDA. Now as we move towards expecting an approval in the near future, our preparations for the commercial launch for ulixacaltamide are well underway. We estimate that more than 7 million people in the United States live with essential tremor with about 2 million of them being an immediate need for therapy or an addressable population, as we call. And we're excited about the opportunity to deliver a therapy that can meaningfully improve their daily lives. As we interact with more neurologists in this space, we continue to hear this a drug that meets a large unmet need in their practice and their interest continues to improve towards the potential use of ulixacaltamide when available in the future. We believe ulixacaltamide has a big potential of over $10 billion annually. Given the size of the population, the strength of the clinical data, the opportunity for responsible pricing that recognize the value of the drug, we have been building our commercial organization infrastructure, including key hires and core aspects of the prelaunch plan, including preparing a comprehensive medical education campaign, which we plan to launch at the upcoming American Academy of Neurology Annual Meeting in April. At AAN, we also share additional data from the Essential3 studies in multiple presentations. We look forward to interacting with our core IDNs in Chicago next quarter and share the exciting data from the Essential3 program. Moving on to our epilepsy programs. We started the discussion with our relutrigine program in developmental and epileptic encephalopathies, a group of severe epilepsies characterized by developmental delays with early onset for which there are limited to no currently approved treatments. In December, at the Annual Meeting of the American Epilepsy Society, we presented data from the EMBOLD study in SCN2A and 8A DEEs. We delivered overwhelming efficacy with relutrigine treatment leading to a clinically meaningful and statistically significant change in seizure and associated developmental endpoints like disruptive behavior, alertness and communication. Beyond the impressive overall results, the effect of relutrigine was rapid, durable and continue to deepen with time. Given the strong efficacy results and the favorable safety profile, underscoring relutrigine best-in-class potential and alignment with the FDA, we have submitted the NDA earlier this year. It's worth mentioning that relutrigine has rare pediatric drug designation, making it eligible for the pediatric review voucher program upon approval. The initial addressable population for relutrigine for SCN2A and 8A DEEs is roughly 10,000 patients in the U.S. However, there are currently over 200,000 patients with DEE for which we believe relutrigine could offer benefits. The ongoing EMBOLD study is assessing relutrigine in the broader DEE population and we are on track to complete enrollment in this study this year. If the NDA in SCN2A and 8A we just submitted is approved and the EMBOLD study is positive, we expect to submit a supplemental NDA for the treatment of broad disease by 2027. We believe the full potential of relutrigine in DEE space could be as large as $5 billion in annual revenue. Similarly to the efforts for ulixacaltamide in essential tremor, we have initiated prelaunch activities, including key hires and building sufficient inventory for a successful expected launch of relutrigine. Our team has been accelerating the efforts to ensure patients have access to this potential first disease-modifying treatment for SCN2A and SCN8A. Moving on to vormatrigine. Our comprehensive ENERGY program for vormatrigine, a next-generation functionally selective small molecule in development as a once-day treatment for adults with common epilepsies. At the December AES meeting, we shared the full data from our RADIANT Phase III study, where vormatrigine demonstrated its best-in-disease potential in patients with focal onset seizures. Vormatrigine had fast-acting efficacy with 58% of patients achieving at least 50% reduction in seizures at week 1 without the need for titration. This effect continues to increase with patients who proceed to the OLE were achieving 100% median weekly seizure reduction at week 9, which was sustained through week 16. Additionally, we saw the vormatrigine improved efficacy on top of other common antiseizure medications patients were taking. We are on track for multiple readouts from the pivotal studies for vormatrigine in the next 12 to 18 months. The next clinical update will be for POWER1, our study in focal onset seizures, which exceeded its original enrollment targets. We expect to share the top line results in the second quarter of this year. The second Phase III study, POWER2, has been enrolling patients and we anticipate enrollment to be completed by the end of the year. Those two studies, if successful, will serve as the base of a new drug application for vormatrigine. We're also on track to initiate the POWER3 study, which will evaluate vormatrigine as a monotherapy in the first half of this year as well. Altogether, it's a very robust registrational program that we believe will demonstrate vormatrigine's potential to address the significant unmet needs of approximately 3 million people in the United States suffering from common epilepsies, potential to achieve over $4 billion in annual revenue. Turning on to our fourth program in the clinic, elsunersen. Elsunersen is being developed for the treatment of gain-of-function at SCN2A DEE, a rare genetic epilepsy characterized by early onset seizures and very detrimental developmental impact. This past December, we have had a favorable meeting with the FDA where the agency agreed to update the EMBRAVE3 registrational trial design, simplifying it by converting from the double-blind sham control design to a single-arm baseline controlled study where approximately 30 patients will be enrolled. We are quickly enrolling this study and expect it to be completed later this year with a potential NDA for elsunersen next year. While EMBRAVE3 is enrolling, we'll have some additional data from the EMBRAVE study Part A, our Phase I/II study evaluating the safety and efficacy of elsunersen versus sham procedure. The trial is ongoing and are on track to report the top line results from the original nine patients in the first half of this year. Elsunersen also has rare pediatric drug designation and we qualify for a pediatric review voucher upon approval. Once approved, we believe elsunersen has the potential for over $1 billion in annual revenue. In summary, 2025 was a year of major portfolio advancements as we enter our pre-commercial phase. We started 2026 strong with two NDA submissions, and we're positioned for another catalyst-rich year with multiple readouts of our innovative pipeline. We are planning an R&D Day next quarter to discuss our clinical programs and preclinical programs and a commercial day to follow where we highlight our launch strategy, readiness and more aspects of the launch for ulixacaltamide and relutrigine. With a very strong balance sheet, we're well capitalized and focused on discipline of execution to deliver on the preclinical, clinical and pre-commercial activities this year to come. while unlocking the more than $20 billion of opportunities across our comprehensive CNS portfolio. With that, I'll hand over our call to our CFO, Tim Kelly. Tim? Tim Kelly: Thanks, Marcio. Good morning, everybody, and thank you for joining today's call. I'll provide a quick summary of our fourth quarter and full year financial results. 2025 was a year of continued investment into the pipeline while maintaining rigorous financial stewardship. In Q4, operating expenses totaled $97 million, broken down to $77.5 million for R&D and $19.5 million for G&A. That compares to Q4 of 2024, where total operating expenses were $71.4 million, broken down to $56.3 million for R&D and $15.1 million for G&A. For the full year, operating expenses totaled $326 million for 2025 compared to $209 million for 2024. The increases in both Q4 and full year were driven by an increased spend in our Cerebrum and Solidus platforms to progress the portfolio of clinical programs. As we go into 2026, we expect to have a significant increase in spend as we invest into our commercial launch activities that Marcio just discussed as well as continuing to progress the pipeline. We ended Q4 with $926 million in cash, equivalents and marketable securities compared to $469 million as of December 31, 2024. This increase of $457 million was primarily due to net proceeds from Praxis October 25 follow-on public offering and net proceeds from the at-the-market sales of common stock offset by cash used in operations. Our cash position was further strengthened through proceeds from a public offering in January this year, which yielded $621 million. When added to our year-end position, our pro forma cash is approximately $1.5 billion, which is expected to fund operations into 2028. With that, I will pass it back over to you, Marcio. Marcio Souza: Thank you, Tim. We're going to now open the call for Q&A. Shannon, would you compile the queue, please? Operator: [Operator Instructions] Our first question comes from the line of Yasmeen Rahimi with Piper Sandler. Yasmeen Rahimi: Congrats to the outstanding timing of the filing. So congrats. Two questions, one directed to Tim and one for Marcio. Tim, if you could maybe walk us through the pre-commercial activities that are going on currently and what the cadence are going to be throughout 2026. That's very helpful. And then for Marcio, maybe help us understand sort of what additional new data we could be seeing at AAN, and I'll jump back into the queue for respect to my colleagues to ask questions. Tim Kelly: Yes. Thanks very much, Yas. And glad to be talking about what we're doing to prepare for two launches. As you can imagine, we're at the stage now where we're making some key hires and looking to build out the talent for our commercial organization. We've also been focusing on ensuring that we have sufficient inventory for what we expect will be good strong launches, and we never want to run out and be sure that we've got inventory on hand for all scenarios. That's a long lead time activity, so very well in hand to ensure that, that's in good shape. And then also looking at for -- particularly for ulixacaltamide, helping to improve awareness of the disease. And Marcio in a moment will talk about our activities at AAN and all the data we're sharing there. We're also looking at that at a time when we can start sharing more about the disease and help patients understand about the innovative therapies we're developing. Marcio Souza: Yes. Thanks, Tim. That's a lot going on, as you mentioned, right, in terms of making sure that not only the highest quality NDAs were submitted as, of course, was always our priority, but now moving on to making sure a smooth review with the agency. And then on the other side of that, the prescribers really understand or potential prescribers really understand the disease in one hand, which they understand well, but there's obviously a good reminder there. And on the other hand, the clinical data for ulixa and then relutrigine later in the year as well. In regards to the American Academy of Neurology meeting next quarter, we have about 15 different presentations going on at the meeting. It just speaks about the number of things across the company. A number of them are about the Essential3 program and essential tremor in general. What we're going to be doing there, as you will see, and I hope to see you there in Chicago is oral presentations on the clinical data. AAN actually is very nice for that because the presentations are reasonably long. So we can go into a fair bit of detail on the clinical program, which, of course, very important for the 13,000 or so neurologists that are our audience. They're going to be there also to expand the understanding on the overall community of this very strong clinical data set. So we're going to be discussing like other aspects like the response on the drug and what happens to these patients and just how meaningful it is the combination of all the endpoints, but particularly the primary measure here that's the mADL11. And you're going to see throughout all the presentations, there are very robust number of new data points. We put a lot out there. So it's not to say that there is any scarcity of data on the Essential3 program, but it is definitely more geared towards the future prescriber here that is the neurologist. So incredibly excited, very grateful to the scientific community of AAN to giving us the podium there to present the strong clinical data. Operator: Our next question comes from the line of Ritu Baral with TD Cowen. Chi Wen Chin: This is Athena Chin on for Ritu. I have another one on ulixa. You previously indicated that the label may include alternative titration schedules. What is the status on this? And are you currently running additional studies to support this? If the label doesn't include these schedules, how will you be educating and guiding prescribers upon launch? And then I have another follow-up. Marcio Souza: Yes. Thanks, Athena. So maybe I'll break it down, if I may, your questions in two parts, right? So we've been discussing since you asked about education. And surprisingly, I would say there's very little education needed here. We've been presenting the data for advisory boards for consultation meetings to a number of key opinion leaders in the country, very top key opinion leaders. And it's very clear that they see this incredibly robust and very, very easy to deal with the potential tolerability for a subset of patients here that we know might have that. Now going back to the matter of the label, as we previously discussed, we proposed not only submitted proposed label to the FDA, not only the standards titration that was done in the clinical study, right? So seven days 20 milligrams, seven days at 40 and then seven days at a stable dose of 60, but also an alternative that we discussed with the FDA. I think as we move forward, as we continue to engage with the agency here, it's now their view has to prevail in terms of what the final label is going to be. So it would be pretentious to us to say what's going to happen there. But it came in the heels of discussions with them and alignment. The agency was incredibly clear with us that they did not expect us to conduct clinical studies preapproval on this regard. So as we always respect the opinion of the FDA and the guidance they give, of course, we're not doing. I believe, and now that's my interpretation, that is because this is really not a safety issue, right? That is some tolerability that happens on a subset of patients. It's very quick. It resolves very quickly. And the efficacy, most importantly, is very strong. So when you put from a benefit risk perspective, that is both our interest, the prescribers' interest and the agent's mandate that is all maintained quite nicely. We're going to see how this progress during the review, and we're very enthusiastic about the ability to have serving not only the 70% or so of patients that stay and do really well, but hopefully 100% of the patients that try this drug. Chi Wen Chin: Got it. And as to the commercial prep for both relutrigine and ulixa, how much capital allocation should we be thinking about between the two programs? Marcio Souza: I think in terms of allocation, you can imagine that with ulixa being a much broader market, we will be probably putting more of the allocation there. I think we're looking at, as I said, the disease awareness campaign, probably a bigger field force as we get into that part of the work as well. The inventory build is going to be a bit bigger. So we want to be sure I go back to the old line, you only get one chance to launch a drug, and we want to be sure we're investing appropriately for a great launch. I think with relutrigine, when we look at that market, particularly focused initially on the 2A and 8A population, it is a bit more focused. So there's a lot of disease awareness for us to be. Doing there. It's a more focused effort though with those physicians, but we want to be laying the groundwork for the indication expansion that we hope will come in 2027 with the EMERALD study. So it's a bit of a strategic move on how we will do the commercial prep for relutrigine also. Operator: Our next question comes from the line of Yatin Suneja with Guggenheim. Yatin Suneja: I have two questions. With regard to the POWER3 study, can you just articulate to us how will that study help you move towards the frontline setting or to in FOS. So that's one. And then the second question is around the review time line. So we -- I think, Marcio, it will be good if you can address the review time line for both the NDAs. We do get questions from investors in terms of priority review or not. So it will be good to sort of address it today. Marcio Souza: Yes. Thanks, Yatin. So starting with POWER3, right? So just a reminder of what we are trying to accomplish here. So POWER1 as the like first study here for -- towards registration for vormatrigine reading out as we just narrowed here in Q2. The study enrolled a fair bit more than the original 230 patients that were planned. So we're very, very happy with how enthusiastic the investigators were on enrolling patients on this study, particularly like when you consider competitively how well this study enrolls, right? Power2, as we're enrolling quite nicely right now as well, would be the second registrational. But when you look into the market, and it's something quite interesting what this goes on and on that features. You do have, I would say, a part of this market that is the more refractory patients or going to even argue hyper-refractory being super treated multiple ASMs really struggling for years and years, possibly decades here. And that's where most of drug development and most of what the Level 4 epilepsy centers, the key opinion leaders in epilepsy have been focusing. But when you go to the rest of the market, and it's probably a little physicians to call rest because it's the majority of the market, right, the patients that are 70%, 80% of the patients with focal onset seizures, they still can strive. They still can carry on with their lives. There's all sort of restrictions because they're having like breakthrough seizures from time to time, and they're really not doing well. That market has stayed untapped until now. So speaking with those physicians and people who treat a significant number of patients, right, which is a different subset of the ones we're looking. The need there is for a drug that they can trust and understand how to remove the treatments, so they can be confident and they are very enthusiastic about vormatrigine for that matter. So we've been in consultation with them finalizing the design. We're getting this off the ground very soon. We thought today was the day to reinforce and celebrate submitting two NDAs. So we're going to be talking about that more in the near future. But what it does to the drug, while not required for registration, right? This is not a requirement as is the ever-evolving requirement for registration in the United States as we are seeing this week. So we're very excited about what's to come. But it is something we can see as moving to first-line potentially this drug in the future, which is from a serving patients is what we all should be aiming for. We're just in a very privileged position that vormatrigine might be the drug that allows patients and physicians to do that. On your second question about the review time lines, you can imagine that the decisions we have to make are multiple fold, right? So, one, obviously, the timing of the submission is now in the past. The second is the entire understanding and relationship and workload and so forth with the agency. A good reminder here that DN1 or Division of Neurology I and II are two different divisions, there's a lot of shared resource. We're having two NDAs at the same time with them. Very obviously, relutrigine is easier. I'm going to say not because it's easier from a clinical or anything like that. It's just much, much less data by single study rare indication and that by itself from a workload perspective is smaller. So we decided to request a priority review for that application, but we decided not to request for ulixacaltamide for multiple reasons, right? Those that I just mentioned, but there's a broader business reason about the time of the launch and the maximization of the revenues over time for this drug, particularly around PIC, particularly around payer and overall dynamics of discounting and so on that happens here later in the launch. So on a drug that can be and will be as big as ulixacaltamide, we can't like pick up the dollars and forget about the millions on this one. So I think we need to be -- and we were very focused strategically on the overall value here. Operator: Our next question comes from the line of Joon Lee with Truist Securities. Joon Lee: Congrats on all the progress. I just want to clarify the response from the prior question that you just answered. So you mentioned business reasons for not asking for priority review for ulixacaltamide in ET. Just to clarify, is that because asking for standard review as opposed to priority review would result in almost a year delay in being forced to negotiate under IRA? That's question number one. Question number two, looking forward to your presentations at AAN, can we expect any long-term follow-up data? The reason I ask is long-term efficacy came up as a key point for our payer KOLs regarding reauthorization of ulixa in ET. And the last question is, in the past, you telegraphed around $50,000 list price for ulixacaltamide. Is that still the case? And can you help us understand your thought process behind the pricing strategy? Marcio Souza: Yes. Joon, I think you are in the right direction there, right, in terms of when you're looking at and we're forecasting this drug. Of course, there are multiple dynamics, and you just named some of them, right, like what payers and reauthorization and like potential step edits and you name it, but the Inflation Reduction Act and the dynamics of the Act right now is an important consideration as always a very important consideration. This is a heavily Medicare Part D population. So we want to make sure we're both responsible on how we're launching. We're also maximizing and giving the proper value for the drug. And that includes looking to the life cycle of evolution of the current iteration of the act when it impacts, when it kicks in, I believe that's where you're going there. There's a pretty big difference in value depending on when that negotiation happens. And it was a key consideration on our filing strategy. The second on the data to be presented, I think multiple fold, yes, we're always like going to be presenting more and more data to reinforce the short-term and long-term value of ulixacaltamide in essential tremor. One point we believe there's still room to explore here is really how strong the data is. I know you recently spoke to some payers and like payer groups. And they -- if I understand correctly, they agree with how strong this data is and how high the potential for this drug is. But it's what is the understanding is not clear yet in the market because we haven't put the data out there is just how deep the effect is on a very large proportion of patients. And when you look into drugs, it's not one size fits all. So we want to make sure that gets reinforced, that gets holistically reviewed. While we're very excited about having our principal investigators presenting this data to their peers. They've been thrilled with the execution, with the results. And I think now is the time to let them take the stage and present this data as key opinion leaders in the field. So stay tuned. I know we're trying to cover a lot in this call, but stay tuned for April. I'm sure we're going to be pleased. Operator: Our next question comes from the line of Andrew Tsai with Jefferies. Lin Tsai: Congrats on all the progress. I appreciate the updates. Maybe shifting to relutrigine actually. You're pursuing this broader label, the EMERALD study for all DEEs. So how many different DEE patients in the Phase III does the FDA want to give you a broad label? And how many different DEEs have you enrolled so far? And secondly, for that study, as we think about what you want to see, is it fair that you might be expecting efficacy to be similar or even stronger than what you saw in SCN2A/8A and maybe explain why? Marcio Souza: Yes. Thanks, Andrew. So, if you look into EMERALD right now, right, let me separate a couple of things there. So, one, as I mentioned in the remarks and then Tim mentioned as well in one of the answers, the goal here at this point in time is to get that sNDA by next year, right? And it should give you the confidence on what's happening on the study right now. Really incredible interest, incredible enthusiasm and engagement from the physicians that are referring to the sites or participating at sites in this study. We took a very basic approach, right? If you go and you look into the most recent definition of these, Dr. Scheffer recently published around this and really going back to the basics, right? What is the developmental epileptic encephalopathy, what are the drivers, like what should we be treated? And relutrigine sits like on that junction of really helping the broadest population, at least hypothetically right now since we're going to have to see the results in DEE. So we took the approach of phenotypically defined versus genotypically defined these patients for this study. What I can tell you right now without saying too much is that it is a very diverse group of patients that we have on the study, both enrolled studies and patients in screening, very diverse, not completely unexpected or unexpected at all. And when we position and we discuss this study with the agency, and I can never speak on their behalf, but I tell you our interpretation is that the idea here is to treat the disease, is not to treat the cause of the disease, would be pretentious to any of us to try to do that. And the understanding is that you cannot have a seizure without participation of sodium channel in the neurons. And therefore, this is like omnipresence type of mechanism that we can use. So that is the definition right now. There is no subgroups or there are no quotas for different, if I may, for different etiologies. So we're really looking into like an overall effect. When you go back to the last part of your question, and what to expect here. We need to go back to translation. We need to go back to the preclinical data since we do not have the clinical data yet. And when you go back there and we look into all different models and we tested all the fundamental electrophysiology and basic biology of this channel, deposition, the physical density of the channels in a critical juncture in the neurons, what we see is like quite overwhelming preclinical efficacy. So when we had that before on SCN2A, on the different models with SCN8A on the allogenic model, I think the way we're looking into that is like those are very good translational models. Now we have clinical data on those indications that translated well. So we expect to translate well as well. I think it would be a little bit too early to guide on how well the translation would be. But you've got to remember, from an overall DEE perspective, there is basically nothing for these patients as well. So while I'm incredibly excited about showing results maybe the same, maybe better than what we're seeing on 2A and 8A, it's absolutely not needed to deliver a very fundamental change on the way these patients are treated right now. But as I said in the past, we're going to see this soon enough. So we're just going to keep our heads down executing on EMERALDs, and soon enough, we're going to be discussing hopefully, significant benefit for patients on that population. Operator: Our next question comes from the line of Douglas Tsao with H.C. Wainwright. Douglas Tsao: Marcio, maybe a little bit of a follow-up on that last question in terms of relutrigine and then I have a follow-up on vormatrigine. But just sort of when you anticipate utilization, do you see sort of utility across the -- it sounds like you see utility across the entire spectrum and even in indications where there are sort of ASOs or sort of more targeted therapies being developed and arguably sort of relutrigine will sort of become a workhorse used regardless of what other therapies may also be deployed for a particular patient populations. Marcio Souza: Yes. No, that's a very good question, Doug. The workhorse, probably I wouldn't use that term, but I'm glad you did because I think that's one way to look into a drug like in a toolbox like relutrigine, where physicians would have that available that they don't have right now, right? They have to ask too many questions, too many trials. Like unfortunately, a lot of those patients don't have that time to keep trying and optimizing. And quite importantly, like there's, what, 20, 25 drugs that are normally tried in this population, virtually none of them have been tried and officially, like with randomized studies properly developed in pediatric populations or in adolescents or early adults here. So we never talk about that other side of label use that we really don't know what you're doing on those populations. So what we hear a lot from physicians here globally is that certainty of the drug that's being rationally developed for this indication. So there's a lot of enthusiasm there. Now to think that this is a silver bullet would be like completely absurd, right? There is not such a thing as a silver bullet in medicine. I think we all wish there was, but that isn't. So we do see this as a kind of an overall background therapy for some patients, ideally would be monotherapy. For other patients, they're going to continue in other drugs. You mentioned ASOs, particularly. I think ASOs are getting consolidated as kind of the second workhorse I think we're finally beyond some of the dreams we had about other modalities on gene therapy and really understanding that, that's a very, very good mechanism. So combinations between ASOs, for example, and others and relutrigine, we expect to be the norm. We look forward for the moments where these discussions are about how the use is happening versus all these hypotheticals because these patients don't have a lot of time and really excited about helping them. Douglas Tsao: Okay. Great, Marcio. That's really helpful. And then just on vormatrigine, I'm just curious, in the RADIANT study, as patients go sort of past the initial point and we're in the open-label extension, I'm just curious, have you gotten data or seeing data of patients who are withdrawing some of their background meds, sort of a little bit of a preview or look, if you will, into the POWER3 study, and in particular, patients who are maybe able to pull off sort of some of the more problematic -- sort of efficacious but perhaps more sort of less tolerable drugs like cenobamate or carbamazepine, et cetera? Marcio Souza: Yes. We're seeing across the board reduction, elimination, removal of background therapies as patients continue to have experience on the open label vormatrigine. Physicians are very excited about the possibility, and I would say patients are more excited about that. As you can imagine, of course, efficacy is king here, right? But the queen is safety for these patients. And it is very hard for them to daily operate as humans when they are like on all those medications. So it's always very important. It's not only that, right? I think one of the drugs you just mentioned has just been like put on a new warning for drug-induced liver injury. So you got to think about the long-term impacts of these drugs and being vormatrigine at least so far, like so clean, it's quite important for these patients as well. So we're seeing more and more enthusiasm. Of course, every time you remove a drug, the first question you need to ask is what happens to the primary measure, what happens to seizures. And I'm very happy to preliminarily report they were seeing exactly what we were expecting to, it's maintenance of seizure control while really not being necessary to use. I believe you asked this from a clinical perspective, but I'm going to jump into here into the commercial perspective as we believe the value proposition of by the very first time on a drug that you can sequentially reduce the use of other drugs is very different than a drug that is just from the top, get used for a little bit and may be removed. So very excited. I think we're going to have more data and more discussions to talk about that when we have the POWER1 results as well and giving an overall program update. Operator: Our next question comes from the line of Francois Brisebois with LifeSci Capital. François Brisebois: Congrats on all the progress. It's quite a 2025 for you guys. So, maybe on elsunersen, there's a lot to touch on, but I don't think much has been touched on this one. Can you help us -- EMBRAVE data is coming soon. So just maybe set expectations there a little bit. And I think there's so much going on with the company that maybe help us understand why it's so important that the update on just having a single-arm comparison for EMBRAVE3 and what that means. Marcio Souza: Yes. So, thanks for that, Francois. The -- so elsu, as we call like elsunersen slide, it definitely sometimes gets the backseat on this question. So I appreciate we see in a sense, right, linking your questions to the questions, this is like an ecosystem. All these drugs are all going to be used. They're going to be different case on use one more and the other less or combinations and you name it in the future. So we have this cohort right now, nine patients, 3:1 randomized to sham or drug. Our intention there was to continue to understand the safety, the efficacy, the PK of this drug. But we're very excited because every time you have control data independently or even open-label data independently of the number of patients is yet another opportunity for us to understand the drug impact. We know the study went really well with these patients like did really well from a safety perspective since that we can monitor like generally, which is not a given, right, in any given disease. And we believe that it can be quite informative. The FDA left the door open for us on the discussions we had about the overall value of the data set on the overall program, right? So we wanted to make sure we're very respectful and we're mindful of that, but it can have a very high value depending on the results here in the next few months. Now when you look into the -- we're very pleased and slightly surprised that the agency was really pushing us to actually get EMBRAVE3 to be controlled on baseline. I think they're definitely putting their money where their mouth is in terms of accelerating drug development for drugs with a high potential translatability plausible mechanism and this drug fits right in all of that. We did switch the study globally to a single arm with the patients randomized -- well, I guess, not randomizing now they're dosing on the study. And it's been like great experience with all the PIs and all the patients globally. So a little bit longer on the time lines, not really long on biotech years, but long for us since there's a lot going on. But we do expect to be done with the study this year as well, which would potentially get another -- yet another NDA in the near future. Very different positioning, as you can imagine, commercially very complementary to the relutrigine efforts that we're doing same prescriber population, overall same patient population. So we can see how synergistic this can be on the overall life cycle of the company. François Brisebois: That's very helpful. And then on ulixacaltamide, I don't think you mentioned anything about ex U.S. efforts. I was just wondering, such a big market here. I assume ET is everywhere else. Any thoughts there that you can share? And then the launch, obviously, without priority review, this is maybe a little premature, but you've had so many trials and so many patients on this. I'm just wondering in terms of line of sight in terms of the launch trajectory off the bat, do we know where these patients are? Or any color there would be helpful. Marcio Souza: Yes, yes, absolutely. So, maybe the easiest part of the question, you absolutely know where these patients are. I think we have daily motivation as patients keep calling our IR line, keep sending us messages and keep reminding us to keep pushing that they are waiting. It's quite motivating for me and for the rest of the team to keep moving there. And just like the millions of patients that we have mapped to prescribers in the U.S., that in a sense, I think it answers the second question or the first question that I'm answering second, while there is huge unmet need outside of the U.S., and we appreciate that, and we are very compassionate in relation to that, the focus of the company has to be in the U.S. right now. We were laser-focused on making sure the highest possible quality NDA was submitted. Now we are laser-focused at the highest possible quality launch is done for this. And when looking into the magnitude of this launch, I think you would be conceived and intended for us to get distracted at this point in time with other geographies. So very good trajectory, very good number of patients, as you can imagine, in open-label extension right now, which we would expect they would transition right away to commercial. other pools of patients that we believe are going to be right before and then just the spontaneous demands that we are seeing piling up on top of our database already for the launch. So I don't want to get over our skis here, but it is definitely trending towards a successful launch. Operator: Our next question comes from the line of Ami Fadia with Needham & Company. Ami Fadia: Congratulations on the submissions, both the submissions this month. My question is on vormatrigine and regarding how -- what you assumed for your peak revenue potential, particularly regarding utilization in first line and if you could provide some color on how you see utilization in earlier lines of therapy impacting persistency of patients and duration of treatment? And how will the POWER program help you build the clinical data that supports or provide some color on how long patients stay on treatment as they get treated with vormatrigine in earlier lines of therapy? Marcio Souza: No. Thanks, Ami. So the retention we are seeing right now, right, as an early indicator of what you are asking, it's incredibly high. And once we talk about POWER1 results, we're going to be able to talk about that as well. Patients not only participating in these studies, but really staying on the long run. So that gives us an early flavor of how retention in overall commercial is going to be. And of course, they are staying on drug differently from other drugs and different from other trials because they are having a benefit and because they're having a safe experience with this drug. The way we currently forecast the movement between third line, second line, first line is actually very responsible, I would say. So we're not looking for this at day one of launch, we're not even looking to the year one at launch, we know it takes time for these things to happen. We know that the overall penetration is not like the highest. But when you look into our peak revenue right around $4 billion or so in overall, like you can imagine that we couldn't just be hyper penetrating the first line because otherwise, this would be much, much higher than what we have right now. So there is a huge potential there for upside, as you can imagine. But at the same time, as we -- there are many firsts that happened for us, right, in the last few years. And I think we're always very responsible to say what we knew and what we didn't. And I think what we know right now is that there's incredible interest on utilizing this drug. What we don't know is the dynamic of that. So we are really keeping, I would say, very tempered our enthusiasm in terms of how the penetration is going to be there, and that's reflected on our conservative to realistic one could call PIC revenue right now. Operator: Our next question comes from the line of Brian Skorney with Baird. Brian Skorney: I guess we'll get some guidance on NDA acceptance, but wanted to just get your preliminary thoughts on if the review division has given any indication on an advisory committee for either relutrigine or ulixa. I mean it seems that ADCOMS are getting more rare under this current iteration of the FDA. And relutrigine's mechanism seems pretty straightforward with the data. I probably wouldn't require one, but thoughts on ulixa in particular. Marcio Souza: Yes. No indication whatsoever at this point in time. One wouldn't expect much of an indication before day 60 and day 74 interactions with the agency, but there is no indication right now, Brian. Operator: Our next question comes from the line of Jay Olson with Oppenheimer. Jay Olson: Congrats on all the progress. As you plan your prelaunch activities for both ulixa and relutrigine, can you talk about the potential synergies you can leverage between these two launches? And then eventually, how those synergies could help set up your future launches of vormatrigine and elsunersen? Marcio Souza: Certainly. So from a -- I'll take from the borrowing side, right? From an infrastructure perspective, back-office perspective, lots of synergy and how things are set up, and we've been doing a lot of that on the backgrounds, like how the systems are set up and so on. Until not that far in the past, we were actually considering a lot more synergy in the field as well and on the approach to the market because we believe before EMBOLD's positive results last year that would have a little bit more time with relutrigine, so we'll be able to leverage that. And that changed a lot once we are now really launching two drugs in about the same time. While there is a very significant overlap in I'm going to call ZIP codes, right, like hospitals that have or clinics that have very high overlap of patients with ET and DEEs or focal, we don't believe that it's prudent right now to take any distraction. So we're taking a go-to-market strategy for both for individually for DEEs and individually for essential tremor to maximize each one of them. Now since your question extrapolated to the future, Jay, when you look into like focal set seizures, for example, generalized seizures, you name it, other things that might come in the future. There's very, very high overlap between prescribers for the majority of the epilepsy patients today and the majority of the essential tremors today in the market. So you can see how a Praxis presence might be beneficial at that point in time. Now we are talking maybe two or three years from now and that we're going to be maximizing that. Now let me bring back to like 60 days or so from now when we're going to be in Chicago with all these prescribers. If we were to count the universe of prescribers coming to the Annual Meeting of the Academy of Neurology, we're talking about over 70% of the prescriptions for ET and Focal in the U.S. are present at that meeting. So there is a natural overlap here. We're just going to be maximizing that overlap more a few years from now than a few months from now. Operator: Our next question comes from the line of Kambiz Yazdi with BTIG. Kambiz Yazdi: Congrats on the NDA submissions. Three questions on my end. First, can you provide an update on the essential tremor patient database? How is that already validated the size of the ET market? Second, the FDA's default position is that one adequate and well-controlled study combined with confirmatory evidence will serve as the basis of marketing authorization of novel products. How do you think about that with regards to vormatrigine and FOS? And then my third and final question is, how should we think about the timing of relutrigine EMERALD top line? Would an interim analysis be a possibility for EMERALD? Marcio Souza: Thanks, Kambiz. I try to go through your questions here if I understood them correctly, right? So on -- and I think I missed the very first one, so I might ask you to repeat which one was on ET. Kambiz Yazdi: Yes. The first one was, can you provide an update on your essential tremor patient database? How is that already validated in the size of the ET market? Marcio Souza: Yes. So we'll continue to both validate and grow. And I think we intentionally didn't talk about this today since now we are moving from the clinical focus one to the commercial focus effort, and we're going to give like a larger update at our Commercial Day in the near future there. So I'm going to keep you holding your breath a little bit in relation to that. I'm going to go to the EMERALD and then go back to the second question. So, of course, there's always an opportunity for In-Trem. It's not a current plan for EMERALDs. And the reason why it's not a current plan is really the pace of enrollment in EMERALD right now. I think we've been realistic/conservative about the time lines today, but that is really a very fast pace of enrollment that might not allow for that. And then on the last one and how we think about generation effects vis-a-vis the Commissioner like New England Journal of Medicine yesterday publication, we applaud it. I think it can be and will be -- I have but trust on our country that's going to be used responsibly. And we believe that in drugs where very clearly like epilepsy, very clearly, the second study was not necessary in the best. Those are good case studies and tests for the future. We could not possibly be trying to guide you today that, that's going to be the standard for our drugs. There's a lot of water that needs to go under that bridge, but we are enthusiastic about what that can do for drug development and for Praxis, particularly in the near future. So stay tuned. Operator: Our next question comes from the line of Justin Walsh with JonesTrading. Justin Walsh: With your clinical successes, have you been seeing increased attention paid to your Cerebrum platform? And related to that, can you remind us how both Cerebrum and Solidus are differentiated in their ability to select quality candidates for your pipeline? Marcio Souza: Yes, yes, absolutely. We do. As you can imagine, that is I think just in like a renaissance, maybe I would say, on understanding that the best mechanism to address a lot of this disease is through antisense oligonucleotides. So we're seeing a lot of interest across the board actually on this. You're going to hear more in the near future about how we're going to maximize. I also believe that there's a different way. We talked about standards today. I talked about plausible mechanism today. There are different things there to maximize. We always follow two pillars, right, the biology, and what is the best way to address and then the business on the other side. Without business, biology is irrelevant. Without biology, business is irrelevant. So I think we try to do both of them, and that's why we're here today discussing the successes and the future success. So I think that is -- stay tuned, but there's going to be a lot more on that platform as well. Operator: Our next question comes from the line of David Hoang with Deutsche Bank. David Hoang: So maybe first one on ulixacaltamide in essential tremor. Could you just discuss a little bit about the distribution of the prescriber base? How well do you understand whether these prescribers will be based in, let's say, academic centers versus community, this is a product that would be prescribed by general neurologists broadly? And then one on vormatrigine. As we think about the evolving landscape in focal epilepsy, there's several potassium channel focused therapies that are in late-stage development and potentially coming to market soon. How do you think vormatrigine fits in amongst those products? And what would docs look at when selecting a therapy? Marcio Souza: Thanks, Dave. The distribution, and I would say the distribution of patients and the distribution of drug and the prescribing pattern is very well understood. I think we've been talking about that for a bit. It was one of the very first functions and knowledge that we built in the company. I would arrogantly tell you that we have an exquisite understanding on this. And each one of the physicians that have case in the U.S. right now is the majority of them, the vast majority, general neurologists, and they're very eager and willing to engage with us. I think on pharma and the competitive landscape, this was not and never going to be a zero-sum game. We welcome. We are cheering for the next readouts on this space coming up soon. And we believe that, that is really -- is in the best interest of patients that there are multiple positive readouts and drugs, and we can use them. And we just see the path to first line only happens with vormatrigine. So competitively, welcome going to have some competition on the refractory patients on the third line, but there's no competition on the earlier lines. Thanks for your question. Operator: Our next question comes from the line of Ben Burnett with Wells Fargo. Benjamin Burnett: I want to come back to an earlier question on ulixacaltamide and just the potential to explore titrating patients. I think you mentioned an alternative titration protocol. I guess curious if you could give us a little more color on this. And I guess, would this alternative titration protocol start patients at a lower dose? And then secondly, you also talked about standard review for ulixacaltamide, and I think you walked through a couple of sort of business reasons for that. But it feels like it also would give you some time to maybe iron out a titration protocol. And was that also a consideration? Marcio Souza: Yes. Thanks, Ben. The -- no, there was not a consideration. Actually, I'll say there was not an important consideration. Of course, it's always up to the FDA if they want to discuss more. We had a very robust discussion about that topic with the agency before it was very good to see that this is not a major concern, but there's obviously an interest from us and from them when there is an efficacious drug that we try to actually expose and get the maximum amount of patients. That is the idea. It is not a lower dose, right, starting at 20 milligrams. It's just staying at 20 milligrams for longer because what we see here is what looks like it's really just a few days that they stay longer on that dose that tends to subside the side effects and then they have the opportunity to have the effect. So that's the idea there. I think, of course, there's thousands of things that can come up in conversations with the agency, but that was not one of them that we are planning as a main conversation for sure. Operator: I would now like to turn the call back over to Marcio De'Souza for closing remarks. Marcio Souza: Yes. Thank you, everyone. I think we run a little bit even over the allotted time. So I appreciate you all hanging in with us here, the enthusiasm shared by all the analysts and our shareholders. I can't say how much I appreciate and all of us here at Praxis appreciate the patients that participate in all these studies that continue to engage with us as we are here very humbly submitting NDAs, which I don't believe has ever been done by a company in our stage on the same quarter. The real motivation for everyone that worked like days and nights on the last several years, but particularly in the last few months has been the fact that there is someone, as we say, outside of the door that we don't know they need these drugs. So just going to dedicate this moment to all of them and thank them for participating in our studies. I looking forward to interact with all of you soon, and thanks for tuning in. Operator: This concludes today's conference. Thank you for your participation. You may now disconnect.
Operator: Hello, everyone, and thank you for joining us on today's call Royal Gold 2025 Full Year and Fourth Quarter Conference Call. During today's call, we will have a Q&A session. [Operator Instructions]. With that, it's my pleasure to hand over to Alistair Baker to begin. Please go ahead when you are ready. Alistair Baker: Thank you, operator. Good morning, and welcome to our discussion of Royal Gold's fourth quarter and year-end 2025 results. This event is being webcast live, and a replay of this call will be available on our website. Speaking on the call today are Bill Heissenbuttel, President and CEO; Paul Libner, Senior Vice President and CFO; and Martin Raffield, Senior Vice President of Operations. Other members of the management team are also available for questions. During today's call, we will make forward-looking statements, including statements and other projections and expectations for the future. These statements are subject to risks and uncertainties that could cause actual results to differ materially from these statements. These risks and uncertainties are discussed in yesterday's press release and our filings with the SEC. We will also refer to certain non-GAAP financial measures, including adjusted net income, adjusted net income per share, adjusted EBITDA and cash G&A. Reconciliations of these measures to the most directly comparable GAAP measures are available in yesterday's press release, which can be found on our website. Bill will start with an overview of 2025 performance. Martin will provide portfolio commentary and Paul will give a financial update on the quarter. After the formal remarks, we'll open the lines for a Q&A session. I'll now turn the call over to Bill. William Heissenbuttel: Good morning, and thank you for joining the call. I'll begin on Slide 4. 2025 was a transformational year for Royal Gold. We set records for revenue, operating cash flow and earnings and completed some material acquisitions that set us up very well for the current strong gold price environment and over the longer term. We also had developments within our portfolio that adds significant value to some of our largest assets. For the full year, revenue was $1 billion. Operating cash flow was $705 million, and earnings were $466 million. These were increases of 43%, 33% and 40%, respectively, over 2024. After adjusting for unusual items throughout the year, net income was a record $510 million a 47% increase over 2024. We are a gold-focused company, and gold contributed 78% of total revenue for the year. The strong gold price, combined with our low and stable cash G&A allowed us to maintain an adjusted EBITDA margin of 82% for the year. During the year, we paid over $118 million to shareholders and dividends and raised our annual dividend to $1.90 per share for 2026. This is the 25th consecutive annual dividend increase, which is an unmatched record in the precious metals industry. Since our first dividend in 2000, we have returned approximately $1.2 billion to shareholders. We were very active during the year and made several meaningful acquisitions. We acquired Sandstorm Gold and Horizon Copper, which allowed us to meaningfully grow and diversify our portfolio. We now have the largest and most diversified portfolio of mining assets in our sector. We acquired a gold stream on the producing Kansanshi mine from First Quantum, which adds another large, long life and cash flowing assets to the portfolio. And we acquired a gold stream and royalty on the Warintza development project increased our exposure to the Xavantina mine and added a further royalty interest on the Lawyers-Ranch project. Our portfolio performed well during the year, and we achieved full repayment of the advanced stream deposits on a Rainy River, Pueblo Viejo and Andacollo mine. We acquired these interests in 2015 and each remains an important contributor to the portfolio. We also saw some very positive news from within the portfolio with the life of mine extension at Mount Milligan, the recently approved expansion at Khoemacau, and significant exploration success of Fourmile. And finally, we got off to a quick start on rationalizing and simplifying the Sandstorm and Horizon portfolios. The integration of these portfolios is largely complete, and we're looking forward to further daylighting the value in those portfolios. Paul will discuss the fourth quarter in more detail, but I'd like to comment that there were several unusual financial items last year and in particular, this last quarter that were onetime in nature and related to this acquisition activity. We started 2026 with these items behind us, and we are hosting an Investor Day on March 31 to put our 2025 activity into context, provide 2026 guidance and give directions on how we see growth over the longer term. Turning to Slide 5. We performed well in 2025 compared to guidance. Our annual guidance was issued in March 2025 based on the interest in our portfolio at that time. We didn't update guidance during the year to include the impacts of the Sandstorm, Horizon or Kansanshi acquisitions and we likewise didn't include the impacts of these acquisitions in the comparison of actual results to our guidance ranges. Compared to the guidance ranges for the year before the new acquisitions, all categories were within the guidance range except for revenue from other metals, which exceeded the high end of that range. I'll now turn the call over to Martin to discuss portfolio performance in the fourth quarter. Martin Raffield: Thanks, Bill. Turning to Slide 6. Portfolio performance was solid for the quarter. Volume was 90,800 GEOs with record revenue of $375 million, which included new revenue of $32 million from Kansanshi and $49 million from Sandstorm, Horizon. We closed the Sandstorm, Horizon transaction on October 20, so the revenue from these interest does not reflect the full quarter. Royalty revenue was up by 42% from the prior-year quarter to $111 million. We saw very strong revenue from the quarter's CC Zone in Penasquito, partially offset by weaker revenue from the Cortez legacy zone. Revenue from our stream segment was $265 million, up over 110% from the same period last year. We saw higher contributions from all our stream interest with materially higher sales from Pueblo Viejo, Andacollo, Rainy River and Mount Milligan. I'll now turn to Slide 7 and give some high-level commentary on notable developments within the portfolio in the last quarter. The portfolio has grown to include interest on about 80 producing and 30 development assets. And we've changed our disclosure this quarter to group our interest on a regional basis and break out the revenue for the largest interests. This should help you track our most material revenue drivers. At Mount Milligan, Centerra reported it continues to progress engineering and studies to support permitting for the life of mine extension to 2045. At Pueblo Viejo, Barrick reported continued progress on the life of mine extension with a focus on housing and resettlement and the engineering and permitting for the new tailings facility. Barrick also reported guidance for its share of gold production of 350,000 to 400,000 ounces in 2026. At Cortez, Barrick reported continued exploration success at Fourmile with the extension of the Dorothy zone and identification of new mineralization below the Mill Canyon stock and down to the Charlie area. Barrick also reported 2026 production guidance for the quarters complex of approximately 700,000 to 780,000 ounces on a 100% basis. Our royalties overlap the quarters, and we expect an average blended royalty rate of 3.5% to 4% over this production in 2026 versus 2.6% in 2025. At Xavantina, Ero filed an updated technical report showing a 4-year extension to the life of mine to 2032. Ero expects 2026 gold production to range between 40,000 and 50,000 ounces. Ero further disclosed that it sold approximately 15,000 ounces of gold and gold concentrate in the fourth quarter, and it expects concentrate sales to continue through mid-2027. The sale of gold and gold concentrate is not included in their guidance. At Fruta del Norte, Lundin Gold reported continued exploration success and recent drilling continues to advance the understanding of the emerging porphyry belt adjacent to the mine. Lundin has identified a large intrusive complex hosting several shallow copper-gold porphyry systems within a short distance of each other, and the newest discovery extends the porphyry corridor to at least 10 kilometers in length. At MARA, Glencore reported that feasibility study work is ongoing with a final investment decision targeted for the second half of 2027. And first production expected from the Agua Rica deposit in 2031. At Kansanshi, we received our first stream delivery in early October, and we are now receiving regular monthly deliveries. First Quantum declared commercial production at the S3 expansion in December and 3-year copper production guidance that increases with the ramp-up of the S3 expansion feed. Based on First Quantum's copper production guidance and production to delivery to sales timing, we expect 2026 gold sales attributable to our stream interest of 26,000 to 31,000 ounces, which rises to 38,000 to 43,000 ounces in 2028. At Khoemacau, MMG reported that the feasibility study for the expansion was approved by the Board and production of concentrate is expected in the first half of 2028. MMG is targeting annual silver production of 4 million to 4.5 million ounces, and we expect our share to be about 60% at this level. We expect silver production to our account of 1.45 million to 1.55 million ounces in 2026. Recall that our stream has a 90% payable factor applicable to this production. At Platreef, by Ivanhoe mines reported that development continues on schedule. The first sale of concentrate from Phase 1 was completed late in the fourth quarter and the Phase II expansion is targeted for completion in the fourth quarter of 2027. We expect to see first revenue from Platreef in the first half of 2026. And finally, at Hod Maden, SSR announced the results of a feasibility study for a 10-year life of mine with annual average production of 159,000 ounces of gold and 21 million pounds of copper and a development capital cost of $910 million. I'll now turn the call over to Paul. Paul Libner: Thanks, Martin. I'll turn to Slide 8 and give an overview of the financial results for the quarter. For the discussion on Slides 8 and 9, I'll be comparing the quarter ended December 31, 2025, to the prior year quarter. Revenue for the quarter was up strongly by 85% to $375 million. As Martin noted, during the quarter, we saw a combined new revenue of about $82 million from the Kansanshi Gold stream and the Sandstorm Horizon interest. Metal prices were also a major driver of the revenue increase with gold up 55%, silver up 74% and copper up 21% over the prior year. Gold remains our dominant revenue driver, making up 78% of total revenue for the quarter, followed by silver at 11% and copper at 8%. Royal Gold has the highest gold revenue percentage when compared to our large cap peers in the royalty and trimming sector, and we expect our revenue mix will remain consistent after the recent acquisitions. To help you with your Q1 estimates, we expect first quarter 2026 GEO sales to be in line with the fourth quarter. We will provide details on 2026 revenue guidance at our Investor Day. But at this point, we expect the first quarter sales to be the lowest of the year and not reflective of the full year. Turning to Slide 9. I'll provide more detail on certain financial items for the quarter. G&A expense was $17.6 million, which is approximately $9 million higher than the prior year. The higher G&A expense this period was mostly due to higher corporate costs related to integration activities associated with the Sandstorm and Horizon Copper acquisition. These integration costs were nearly $4.5 million, and many of these costs are largely onetime in nature and are not expected to be recurring. Employee-related costs, which also includes noncash stock compensation, were $3 million higher during the quarter. Like the integration-related costs, much of these additional employee costs this quarter are not expected in future periods. Moving forward, we are estimating our 2026 total G&A expense to range between $50 million and $60 million. This estimate reflects some of the cost synergy savings we expected when we announced the Sandstorm and Horizon Copper acquisition. Our DD&A expense increased to $80 million from $34 million in the prior year. On a unit basis, this expense was $881 per GEO for the quarter compared to $444 per GEO last year. The higher overall expense was primarily due to $33 million in additional depletion attributable to the producing interest acquired from Sandstorm and $13 million in additional depletion from the new Kansanshi gold stream. Depletion expense and depletion rates for the producing Sandstorm interest are higher than historical amounts reported by Sandstorm. This is primarily due to an increase in the carrying values of these interests, which were stepped up as part of purchase accounting rules under U.S. GAAP. Excluding the additional depletion as part of the Sandstorm interest and the new Kansanshi stream, our 2025 DD&A expense was within guidance range we provided earlier in 2025. We will provide more detail on 2026 DD&A expectations when we provide 2026 guidance at our upcoming Investor Day. Costs related to the Sandstorm Horizon Copper acquisition were $14 million for the quarter. We highlighted these costs on our last conference call, and these costs are attributable to financial advisory, legal, accounting, tax and consulting services specific to the acquisition. Again, these costs are onetime in nature, and we do not expect much, if any, of these costs beyond this quarter. As we announced in November, we sold all the Versamet Royalties common shares that we acquired with Sandstorm. The sale resulted in a onetime loss of approximately $48 million during the quarter. The loss is due to the difference between the sale price of CAD 8.75 per share and the fair market value of the shares on the date we acquired Sandstorm, which was CAD 11.60 per share. We view the value of this shared position at CAD 5.20 per share on the date of the Sandstorm transaction announcement in July. So while we recognize an accounting loss, we sold the position at a price that was 68% higher than our original valuation. Interest and other expense increased to $17.7 million from $1.4 million in the prior period, due primarily to higher average amounts outstanding under the revolving credit facility in the current quarter. Tax expense for the quarter was $53 million, resulting in an effective tax rate of 36% compared to tax expense of $26 million in the prior year. The higher income tax expense is primarily attributable to higher pretax income and onetime acquisition-related tax items. Absent the unusual and nonrecurring items, our effective tax rate for the quarter was approximately 22.5%. Our annual effective tax rate for 2025 was 17.8% and within the guidance range we provided earlier. We will provide more detail on the expectations of our effective tax rate, when we give our 2026 guidance. Net income for the quarter was $94 million or $1.16 per share, which compares to $107 million or $1.63 per share in the prior year. The decrease in net income was largely due to the onetime loss on the sale of the Versamet shares and the onetime costs related to the Sandstorm Horizon Copper acquisition I just outlined. After adjusting for these items, adjusted net income was $155 million or $1.92 per share. Finally, our operating cash flow this quarter was a record $242 million, up significantly from $141 million in the prior period. The increase was primarily due to higher stream and royalty revenue and proceeds from the first delivery of deferred gold for the Mount Milligan cost support agreement. These increases were partially offset by the higher acquisition-related costs I mentioned earlier. In summary, it was a solid operating quarter, but with some unusual items related to the Sandstorm and Horizon Copper acquisition that impacted our financial results. As much of the Sandstorm and Horizon copper acquisition-related noise is behind us, I am anticipating that we will return to a steadier state beginning with our first quarter results. I'll turn to Slide 10 for a summary of recent changes to our outstanding debt. As discussed in our last conference call, we drew an additional $450 million on the credit facility on October 10 for the closing of the Sandstorm and Horizon Copper transaction, which resulted in a debt balance of $1.225 billion. Since October, we have made significant process paying down our debt. We ended the year with outstanding debt of $900 million. And with further repayments in early 2026, we have reduced our outstanding balance to $725 million and now have $675 million available under revolver. New growth within the portfolio, strong metal prices and the proceeds received from the Versamet share's sale have helped us reduce our debt faster than we originally expected. Based on current metal prices and absent further significant acquisitions, we now expect to fully repay the balance in early 2027, earlier than our previous forecast of mid-2027. I will end on Slide 11 and summarize our financial position. At the end of December, we had total available liquidity of $757 million between the available amount on the revolver and $257 million of working capital. With respect to further financial commitments, $200 million of funding outstanding for the warrants acquisition. We expect to fund the remaining commitment in 2 tranches of $50 million this year, with the first tranche expected in the first quarter and the second in May. Although we will work to convert the Hod Maden joint venture entrance into another investment structure, we plan to continue to fund our share of project costs during the year in order to maintain our 30% ownership interest. That concludes my comments on our financial performance for the quarter, and I'll now turn the call back to Bill proposing comments. William Heissenbuttel: Thanks, Paul. 2025 was a very active year for us, and this quarter had a lot of unusual items related to that activity and introduced significant noise into the results. These onetime items are now behind us. Our underlying portfolio is performing well and after a record year in 2025, we're starting 2026 from a position of strength. Royal Gold has the most diversified and gold-focused portfolio amongst our large-cap peers, and we believe we're positioned as a premier company in our sector. We are looking forward to sharing our vision of the future at our upcoming Investor Day. Operator, that concludes our prepared remarks. I'll now open the line for questions. Operator: [Operator Instructions] Our first question comes from Fahad Tariq from Jefferies. Fahad Tariq: And can you provide maybe some color on what the deal pipeline looks like right now. We're hearing from one of your competitors that because of this maybe potentially larger copper builds that are coming, there could be significant byproduct streams available as part of the financing strategy. So just curious what you think in terms of the deal pipeline and thoughts around bigger copper projects. William Heissenbuttel: Yes. Thanks very much for the question. I might see, if I can get Dan Breeze on the line who runs our business development, just to give you -- he can give you a sense for what he's seeing. Daniel Breeze: Yes. Thanks, happy to give you a bit of color on what we're seeing. And obviously, 2025 was a great year for us, a great year for the industry. And I think what we're seeing is more of the same in terms of our pipeline, it looks pretty strong at the moment. I think one of the things that we've noticed is the market has been pretty volatile looking at the commodity prices, but it just doesn't seem to be slowing down the activity. I mean, we've seen a number of deals announced this year already -- so I'd say I think the -- sort of the framework of what we're seeing in terms of actual deals is very much like what we've seen announced year-to-date. So third-party royalties, great market to sell those into -- and then to your specific comment around the base level producers and looking to surface value by selling noncore precious exposure. I think that's fair to say. Obviously, the BHP, Wheaton deal this week. But if you look back at our transactions last year at Kansanshi and Warintza, they fit that category as well. And that's really where our product works extremely well. It works for both the seller and the buyer. So I think that's a fair comment. I think it's a good market to consider that from a base metal producer perspective. And then we're also seeing development opportunities over projects on primary gold assets as well. So overall, it's a good -- it looks like it's going to be a good market for us going forward into 2026. Does that help you? Fahad Tariq: Yes, that's great. Yes, that's great. Operator: Our next question comes from Cosmos Chiu from CIBC. Cosmos Chiu: Bill and team. Maybe my first question is on Hod Maden as you mentioned, SSR Mining have recently put out a new technical report on the asset as the operator. Were you happy with those numbers? And then secondly, are you happy with the time line that they kind of put out there, knowing that a construction decision has yet to be made. And when I ask SSR Mining, it sounds like they're trying to involve all parties involved to make a final decision. So on that front, is Royal Gold actively involved in terms of any discussions in terms of a go-ahead decision? And then lastly, as a royalty company, what's your long-term strategy here at Hod Maden. Right now, you're a joint venture partner, you need to contribute CapEx into it. Ultimately, are you looking to convert that into some kind of royalty, some kind of stream -- so sorry, multipart, but I'm sure you can answer all my questions. William Heissenbuttel: There are a lot of pieces to the question. Let me see, if I can cover all. Cosmos Chiu: Answer the questions, that you want to answer Bill. William Heissenbuttel: Were we happy with the technical study? Yes, we were. We knew when we were doing the due diligence on Sandstorm and Horizon, we knew the capital costs were higher. That was part of the due diligence. So it wasn't a surprise you look at the IRRs, it's outstanding gold project. I mean, if we were in the business of being an operating partner, it would certainly be 1 I think we'd want to hang on to. So yes, happy with the technical report. A construction decision, I think our approach might be a little bit different than an operating company. If the construction decision gets put off a little bit that gives us a little more time before there's heavy spending to work on what we might ultimately try to convert this into. So a delay here is not all that bad. And I think Rod was talking about 2 to 3 years until production. That's fine. We're not saying to investors, we're going to deliver Hod Maden ounces in a certain period of time. So -- that's not an issue. But we are a joint venture partner. So yes, we are involved in discussions with SSR on the technical report, on development strategy, on spending -- right now, we're proceeding as though we are a joint venture partner, and we're taking that responsibility. And then I think the last part of your question was the strategy, I think we've been pretty clear, we would like to turn it into something that looks a little more familiar, where we don't have the overrun risk, the operating cost risk. But that's going to take some time. And as you can well imagine, SSR has been busy with the technical report. We've been busy with the press release, working on the partners trying to move forward to a construction decision. So I think that, to the extent we're able to do it, I think it plays out over the course of the rest of this year. Cosmos Chiu: That's great. Maybe moving on to another stream or option that you acquired from Sandstone MARA, it's in Argentina, certainly, Argentina is looking much better now in terms of supporting mining. This is an option to convert into a 20% gold stream eventually. So could you maybe talk about the mechanics behind that potential conversion? What needs to happen and potential timing here? And the payment that you need to make? William Heissenbuttel: Yes. So I think we've got like -- we've got a very small royalty as it is and what we're able to do is -- it is basically forgo that royalty and convert it into the stream. We have to spend, I believe it's $225 million. It could be off there a little bit over the course of whatever the construction period is to earn that gold stream. The economics of how that investment was calculated was formulaic with a cap -- and I think, if you didn't have the cap, the formula would result in a much larger investment. So economically, we have every incentive to invest that money to turn the small royalty into a meaningful gold stream. Cosmos Chiu: Great. And then maybe 1 last question. Looking back, as you mentioned 2025, you hit all your different guidances for commodity, but you also exceeded in other metals. Could you maybe talk about some of the details behind how you exceed it, I think, you came in at $25 million. Guidance was $18 million to $21 million in terms of revenue. What drove that outperformance? And is that sustainable? Should we expect that to be factored into how you guide other metals in for 2026? William Heissenbuttel: I may turn this over to Paul. Paul, I believe the excess was primarily due to metal price. But correct me, if I'm wrong there. Paul Libner: That is largely the case, Bill. And if you want more specifics, I mean, on the -- Martin, if you also have further information or details you can provide there, but largely was metal price. Operator: [Operator Instructions] Our next question comes from Derick Ma from TD Cowen. Derick Ma: I wanted to ask about Pueblo Viejo, the silver stream there. Barrick seems to be making progress from the tailing situation perspective. And I recognize there isn't much detail on the silver side. But conceptually, because of the size of the silver stream and the deferred ounces, is there a lack of incentive for the operator to prioritize silver here? And what can Royal Gold do to kind of pull that forward? William Heissenbuttel: A lack of incentive. I don't think so. If you just break down the math. So it's a 75% Silver Stream, but we pay a 30% cash price. So if you take 70% of 75%, you're basically splitting the economics almost in half, and it only covers 60% of the projects. So -- when you do that math, Newmont actually has a 40% interest in the silver, and we and Barrick sort of have around a 30% interest. So I don't think there's a lack of incentive to do that. And I would also think that the entity that has 100% interest in economically in the silver is probably the DR government that gets royalties and taxes on it. So I don't think we don't get the sense. We go to site every year. I don't get the sense that Barrick is just sitting on solutions because they don't see the economic benefit as a whole. Derick Ma: Okay. So that's clear. And then in terms of the royalty revenue, it's a bit lower than my expectations at least for Q4. Why doesn't Royal Gold provide preliminary royalty -- sorry, royalty revenue expectations on that side of the business? Is it a matter of information right to get on some of these assets because some of your peers do you put out preliminary revenue in GEOs inclusive of the royalty assets? William Heissenbuttel: Yes. And I'm actually surprised we're able to do it, to be honest with you, just given -- maybe it is just information rights. But Paul, maybe you can just walk through when we tend to get the information from the end of a quarter or a year to when we put out financials, what happens is we start to find operators reporting over a period of time, and we don't necessarily have an expectation of what it's going to be. But I don't know, Paul, can you give him a little more detail there? Paul Libner: Sure. Yes. So Derick, on the information rights, yes, largely a lot of the royalties that we have, we're not entitled to a lot of the information until 15 to 30 to sometimes 45 days after the respective month end or quarter end. So as you -- because of that, it's difficult for us to put together that with a good estimate there. Now I would point to you to that we have historically provided our stream sales guidance on a quarterly basis. And if you look back at just history of the 2 segments between streams and royalties, roughly 70% is streams and 30% is royalty revenue on average. So that could be another measuring stick for you, if that's helpful. But just, yes, I think going back to just a lot of the information rights that we have, we do look at the revenue over the course of the year and kind of with expectations. But just not having that firm kind of paper in hand to help with that, you probably wouldn't help with estimation. So I probably would point you back to that stream release that we put out and then just thinking to the 70%, 30% split. Derick Ma: Yes, it's -- it might be a bit of Cortez and it was a bit tricky to model that one, that kind of throws a rent in our estimates, but understood. Maybe 1 last question. Your comment on Q1, Paul, you mentioned flat sales quarter-over-quarter. That's metal sales, right, not revenue? William Heissenbuttel: Correct. Operator: Our next question comes from Tanya Jakusconek from Scotiabank. Tanya Jakusconek: Great. Okay. Sorry, I just want to make sure I understood. So the Q1 guidance on the GEO sales, you said that only the metals portion? William Heissenbuttel: Sorry, Tanya, could you just repeat that? Are you asking if it's only on the stream side? Or we're talking about sort of total GEOs. Tanya Jakusconek: Okay. So you're talking total GEOs for Q1 is going to be similar to Q4 of '25, and it's going to be the lowest of your 2026 number? William Heissenbuttel: That's our estimate. Yes. Tanya Jakusconek: Okay. Got it. Sorry, I just wanted to clarify that, that it wasn't just the streaming portion of it. And then I heard metals and I'm like I wasn't sure what it was. Okay, I got it. Maybe I could just go back to Pueblo Viejo again. Barrick indicated on their conference call that like they're not going to get to the gold recovery that they were anticipating. Never mentioned anything on silver. So I'm just kind of wondering and the new technical report will be out shortly. I guess we can wait for that as well. But how much work is being done on this silver? I mean, obviously, the focus has been on this gold and I understand that. Is there any concern that we may not get to what the silver recovery could be as well? William Heissenbuttel: Yes, Tanya, what I might do is just ask Martin to hop on here and just give you a little background or a sense of where -- what they've been working on recently. Yes, just give you as much background as we have. Martin Raffield: Yes. Thanks, Bill. Tanya. So over the past year, what we've seen is that Barrick have really focused at Pueblo Viejo along improving the throughput and they've made great strides towards that. And towards the end of the year, we saw it coming up to the levels that they were expecting, and we expect that to continue going forward. So we think that they -- from a throughput point of view, they're going to be fairly consistent going forward. We don't, in the short term, expect any material change to silver recovery. And you pointed out that gold recovery expectations are lower long term and that they are working on those. So really, those recovery issues are related to the type of feed that they're putting in at the moment. They're putting a lot of the old stockpile material in that stockpile is highly weathered and it's highly variable, probably more variable than they expected, when they put the expansion plan in place -- and that weathering is affecting their flotation and autoclave plants. I'm not really able at the moment to comment specifically on silver recovery going forward. And I think as you pointed out, we'll wait for that technical report to come out in March. What I will say is that they are highly focused on both gold and silver recovery. We spend quite a bit of time during the year outside visits, talking to the operating team on site, talking to the corporate team. And we're very happy with the amount of effort they're putting into it, in order to improve both gold and silver recovery. But the tech report comes out, and that will give us more information on the future of the operation. Tanya Jakusconek: No, I appreciate the stockpiles, but the stockpiles are going to be part of the ore feed for the next 5 years. So just -- they're there. So we got to deal with that. Okay. We'll wait for the technical study. Hopefully, we'll have more guidance there. Maybe I'll move on to the -- yes, the transaction environment. Appreciate you going through what's available out there. Just a couple of things I wanted to get an understanding of, #1, are you still in -- you've got about $700 million of available liquidity to use for transactions. Are you still focused in that $100 million to $500 million range? Or what are you focused? Or what are you seeing -- or could you see yourself doing those multibillion-dollar transactions given your focus on debt reduction as well? William Heissenbuttel: Well, just in terms of capital allocation, I would still always say that if we can find good investments, that's the best use of the capital. And if we stopped repaying debt or even borrowed more to fund the right transaction, that would be a priority. So we are not prioritizing debt repayment over new investments. As far as the transaction size, I think it has reverted to what we've seen historically. I think $100 million to $500 million is a good estimate. As you can imagine, with metal prices where they are, every GEO we buy is going to be more expensive. So when we refer to $100 million to $300 million might be $200 million to $500 million at this point for the same number of GEOs, but yes, so that's really in terms of the size of investment. That's the range that we are seeing and we are still actively working. Tanya Jakusconek: Okay. And then my other second part of that same question is, I've seen some of your peers double down or go shopping in their own closets. -- i.e., for assets that they already own and increase exposure there. Is there opportunities for you to do the same? William Heissenbuttel: We're always looking. We have a great relationship with them. I think Xavantina was a great example. We were able to put another $50 million to work at an asset that has really developed the way we thought it would, but an asset that we quite like. So again, that should be fertile ground given the relationships we have and the knowledge we have of the assets. Tanya Jakusconek: Now just thinking of some of these larger-sized ones? And how much... William Heissenbuttel: Yes, I mean, if you look at the larger ones, if Centerra needed money, if -- I can't imagine Barrick coming to us on Pueblo Viejo. We're certainly open to that. And I think the nice thing about transactions like Antamina is, if you can get a BHP to do streaming, that just opens the market to almost every mining company, including companies that were probably resistant. So I actually see that transaction is opening the door to some other opportunities with bigger companies. Operator: Our next question comes from Josh Wolfson from RBC. Joshua Wolfson: Just looking back at that first quarter production guidance that was discussed, I guess, thinking about the fourth quarter having been a partial contribution from the Sandstorm assets, first quarter will be a full contribution and then also there's some annual payments for some of the assets that are paid in the first quarter and then the inventories that are at normal levels. I'm wondering what is causing production really not to increase quarter-on-quarter? William Heissenbuttel: Yes. Thanks, Josh. I might -- I know Martin, can I ask you from a production profile perspective? Because obviously, what's happening, yes, we have things that are going up. But there's always variability quarter-to-quarter. And so Martin, I don't know, if there's any color you can add there? Martin Raffield: Yes. I think it would -- Josh, it would be around delivery timing. Some of our bigger assets on it from a delivery point of view fluctuate quite significantly on a quarter-to-quarter basis. And I think I would put that lower estimate for Q1 down to delivery timing in general. Joshua Wolfson: Okay. So there's no material mine plan changes or seasonality we're thinking about here? Martin Raffield: No, not at all. It's all around deliveries. Joshua Wolfson: Got it. Okay. And maybe just along those lines, given the portfolio is larger now, should we expect to see inventories build up from current levels? Or even with the new assets that are streaming related entities should the inventory level be stable? William Heissenbuttel: Yes, John, I wouldn't -- so go ahead, Martin. Martin Raffield: I was hoping to leave that one to you, Bill, but I'll say no. I think our inventory levels are going to be fairly stable. William Heissenbuttel: Yes. The only color I was going to add to it, Josh, is our inventory is the product of our sales policy. And what we try to do is sell metal over the period of time between delivery. So if we expect the next delivery in 21 days, we'll sell the metal we just got over 21 days. There's not an inventory strategy. The inventory at the end of the quarter is just a result of what deliveries occurred and where are we in that sales cycle? Operator: Our next question comes from Brian MacArthur from Raymond James. Brian MacArthur: To the comment made that you're going to fund Hod Maden this year to maintain your interest, which makes sense to me. Is it -- it's not significant funding this year. If I look at the way the feasibility works, the big capital tends to be a few years out. Is that right the way you look at it right now? Because, again, I think, one of the things you would probably trying to restructure this before you had to put significant capital into it because it's a different business model then. William Heissenbuttel: Yes. I mean, if we can restructure this before our significant capital goes in, that -- I agree with you. That is the best outcome for us. As far as the spending this year, again, I think SSR is talking about a 2- to 3-year construction period. What we spend this year is going to be very much dependent on when the investment decision gets made, because I think what [ Rod ] talked about yesterday was spending about -- it was [ $50 million ] a month, but that would increase. So if an investment decision is made in 2 weeks, that's different than an investment decision is made in a couple of months. And I think once we have more clarity on that, we can come back to you and say, okay, if we don't restructure this, this is what the spend will be for this year. I just don't know what that number is right now. Operator: With that, we have no further questions in the queue at this time. So that does conclude the Q&A portion of today's call. I'll now hand back over to Bill Heissenbuttel for closing comments. William Heissenbuttel: Well, thank you for taking the time to join us today. We certainly appreciate your interest, and we look forward to updating you during our upcoming Investor Day. Take care. Operator: Thank you all for joining. That concludes today's call. You may now disconnect your lines.
Operator: Thank you for standing by. This is the conference operator, and welcome to the Equinox Gold Fourth Quarter and Full Year 2025 Results and Corporate Update. [Operator Instructions] The conference call is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Ryan King, EVP of Capital Markets for Equinox Gold. Please go ahead. Ryan King: Well, thank you, operator. Well, good morning, everyone, and thank you for taking the time to join the call this morning. Before we commence, I'd like to direct everyone to our forward-looking statements on Slide 2. Our remarks and answers to your questions today may contain forward-looking information about the company's future performance. Although management believes our forward-looking statements are based on fair and reasonable assumptions, actual results may turn out to be different from these forward-looking statements. For a complete discussion of the risks, uncertainties and factors that may lead to actual operating and financial results being different from the estimates contained in our forward-looking statements, please refer to the risks identified in the section titled Risks Related to the Business in Equinox Gold's most recently filed annual information form, which is available on SEDAR+, on EDGAR and on our website. Due to the Calibre merger, asset sales and classifying Brazil as discontinuing operations, the audit is taking a bit longer. We do not expect any changes compared to the unaudited results we have released, and we will issue a news release once the final audited results are filed in the coming days. Finally, I should mention that all figures in today's presentation are in U.S. dollars unless otherwise stated. With me on the call today are Darren Hall, Chief Executive Officer; Peter Hardie, Chief Financial Officer; and David Schummer, Chief Operating Officer. Today, we will be discussing our fourth quarter and full year 2025 production and cost results, provide an update on ramp-up progress at our Greenstone and Valentine Gold Mines. Darren will also discuss the improvements of our balance sheet that allowed us to announce capital return initiatives, and then we will take questions. The slide deck we're referencing is available for download on our website at equinoxgold.com. And with that, I'll turn the call over to Darren. Darren Hall: Turning to Slide 3, and thanks, Ryan. Good morning, and thank you for joining the call today. Firstly, I would like to thank the entire Equinox Gold team, including all of our business partners across the Americas for their commitment to safety, operational excellence and disciplined execution. There is no better demonstration of their commitment than delivering a year with no material environmental events and a 30% reduction in our all injury frequency rate. Well done, and thank you to the entire team. 2025 was a transformational year for Equinox Gold, one that not only reset the foundation of the business, but marked the beginning of a new chapter. The team delivered record gold production, streamlined the portfolio and dramatically strengthened the balance sheet, positioning the company to deliver meaningful value as we look to the future. The entire organization is aligned on creating shareholder value by consistently delivering on their commitments, which are focused on demonstrating operational excellence, maintaining strict cost discipline and advancing high-return organic growth. We have made material progress on all fronts, including delivering 922,000 ounces in 2025 with cash and all within cash and all-in cost guidance. This strong finish to the year reflects continued progress at Greenstone and Valentine alongside reliable performance from the balance of the portfolio. Greenstone ramped steadily throughout the year with Q4 gold production 60% higher than Q1. Valentine commissioning progress exceeded expectations with first gold achieved in September and commercial production declared in November. The result of the team's focus and commitment to deliver is also measured in the significant transformation of our balance sheet. In June 2025, our net debt was approximately $1.4 billion. And at the end of January, we had reduced it to $75 million. All while completing construction and commissioning of Valentine. With a stronger balance sheet and consistent robust cash flow, we are well positioned to take the next step in returning capital to our shareholders. Given this strong position, I am pleased to announce the company's inaugural quarterly cash dividend of $0.015 per share. Additionally, we are filing our notice of intent to initiate a share buyback of up to 5% of the issued and outstanding shares. Together, these actions mark the start of a disciplined capital return strategy and reinforce our commitment to delivering long-term per share value. Turning to Slide 4. Touching briefly on the financial results, and Pete can provide additional color as required. Equinox had a strong finish to the year with 247,000 ounces (sic) [ 247,024] produced in Q4. We sold over 242,000 ounces (sic) [ 242,392 ] at a realized price of $4,060 per ounce, generating $579 million in adjusted EBITDA and $272 million (sic) [ $272.9 million ] in adjusted net income or $0.35 per share. Importantly, we exited 2025 with over $400 million in cash and minimal net debt, giving us financial flexibility heading into 2026. Looking forward, we are encouraged by the strength of the gold price. However, the organization's focus is clear: cost control, disciplined capital allocation and delivering consistent performance across the portfolio. As our cornerstone assets ramp up to nameplate, we see a clear path to expanding margins and strengthening free cash flow generation. Turning to Slide 5. Greenstone finished with a strong fourth quarter, producing over 72,000 ounces, a 29% increase over Q3. We saw meaningful improvements in mining rates, mill throughputs and grade with the plant achieving nameplate capacity for 30 consecutive days during December. For 2026, we anticipate production of 250,000 to 300,000 ounces at all-in sustaining costs of between $1,750 and $1,850 per ounce. To support continued performance gains, we are making targeted investments in the operations, including the purchase of a trommel and other mobile equipment designed to optimize mine and process plant performance. Our long-term objective remains clear at Greenstone to establish life-of-mine production around 300,000 ounces annually. We've demonstrated that the mill can process 30,000 tonnes a day. With the team we now have in place, I'm confident that we'll continue to build on the demonstrating meaningful operational improvements. Consider the progress on the key metric of daily tonnes processed greater than nameplate over the last year. In H1 2025, we delivered 17% of the days greater than nameplate. In Q3, we increased to 28% in Q4 to 36%. Looking at Q1 to date through yesterday, we're at 50%. So we're demonstrating continued and demonstrated steady ramp-up of the assets, which sets us up well for the future. At Valentine, we poured over 23,000 ounces (sic) [ 23,207 ] of gold in Q4, its first quarter with the plant averaging 90% of nameplate capacity. We expect to achieve constant or consistent nameplate throughput during Q2 2026 as we anticipate Valentine to contribute 150,000 to 200,000 ounces of gold this year. We are working on the feasibility study for the Phase 2 expansion that would increase throughput to 4.5 million to 5 million tonnes per year and result in production of greater than 200,000 ounces a year for more than the next decade. I anticipate completing the feasibility study over the next couple of months, which will then go to the Board for investment approval in Q2 with work anticipated to commence in the second half of the year. Valentine continues to show strong exploration upside. Our 2025 drill results confirm consistent high-grade mineralization over broad width at the Frank Zone, supporting the potential for a fourth open pit. In 2026, we have 25,000 meters of drilling plan, planned to advance the Frank Zone. We also announced a new discovery, the Minotaur Zone located 8 kilometers north of the mill with a 20,000-meter drill program set to begin this spring, the zone remains open for expansion. Importantly, the Minotaur discovery confirms that significant gold mineralization exists well outside of the main Valentine Lake Shear zone, opening the broader property and reinforcing the long-term growth potential of the Valentine District beyond the current mine plan. Turning to Slide 6. As we close, I want to underscore the momentum across the business. We have the key ingredients in place to deliver top quartile valuation, new high-quality, long-life assets in Tier 1 jurisdictions, and organic growth pipeline, a team focused on delivering into expectations, which deliver strong free cash flow and return capital to shareholders. In 2026, our priorities are clear: ramp up Greenstone and Valentine to nameplate capacity, allocate capital in a disciplined and balanced manner across the portfolio, sustaining investment and shareholder returns while maintaining a strong balance sheet. Our inaugural dividend and application for a share buyback are key steps in this strategy. Consistent with our focus on disciplined growth, we are investing in the long-term value creation. This year, we will advance Phase 2 at Valentine, refresh Castle Mountain studies and progress Los Filos, both technically and socially. At Los Filos, I'm encouraged by the continued engagement with our host communities and support from the state and national governments as we remain focused on realizing the asset's full potential and unlocking significant long-term value for all stakeholders. With a stronger portfolio, solid cash flow and clear execution priorities, we are entering into 2026 from a position of strength. Our focus remains on disciplined growth, operational delivery and creating long-term value responsibly and consistently for our shareholders and all stakeholders. With that, we'll turn it over to the operator for any questions. Operator: [Operator Instructions] And the first call for today will come from Francesco Costanzo with Scotiabank. Francesco Costanzo: I'll start with my first one here. It's great to see the announcement of an inaugural dividend alongside an NCIB. And with production and free cash flow growth on the horizon, can you speak to the potential for this dividend to grow in the future and maybe your approach to fixed versus variable dividends? And then on the buyback program, can you explain your strategy for how you plan to deploy those funds? Darren Hall: Yes, Francesco, thanks for the comments. And I'll pass it across to Pete to talk about some of the capital allocation and specifically address the questions in around dividends and buybacks. Peter Hardie: Yes. Thanks, Darren. Yes, we're really excited to be in a position to announce the inaugural dividend. It's been a long-term goal for the company, something we have talked about it over the past years. So we're really pleased to be able to do that now. And it underscores the confidence we have in our forward production profile and in our forward cash flow. We started small with our inaugural dividend. We started with a fixed dividend. You can expect it to stay there for the coming future, probably the next 12, 24 months. As we firm up the development pipeline, the peer-leading development pipeline that we have, starting with our Valentine Phase 2 that Darren already mentioned and then looking forward to Castle Mountain heading into 2027. So with that development in front of us, you can expect we'll stay on a fixed dividend, and we will be looking to increase that over time. And that will be a bit of a stay tuned story with respect to those plans. But again, we're just really excited to have been able to announce the inaugural dividend. With respect to the share buyback, we still feel there's a lot of opportunity in our stock price. And at these levels and again, being conservative in our approach, we want to be in a position to when we felt like we -- the shares were not trading as we think they should to be able to buy some of those back and also return capital to shareholders in that manner. And you can expect us to continue to do that. But again, with the peer-leading pipe development pipeline we have and the dollars we're going to devote to that over the coming years for it to remain somewhat conservative. Darren Hall: Thanks, Pete. And just kind of layer there, Francesco, is that we will take a somewhat conservative view, but as we work through 2026, and we have a fulsome understanding about our capital requirements in '27 in light of Valentine Phase 2, importantly, Castle Mountain with the record decision anticipated at the end of the year and the positivity we see in and around the dialogue in Mexico, we will have some demands in 2027. We feel very comfortable in being able to fund those organically, but we want to make sure we don't put ourselves in a position where we overcommit to a return on capital through dividends and find ourselves compromised to fund the organic growth, which we don't anticipate, but I think that we've got an outstandingly positive look forward on our organic growth. So thanks for the question. Francesco Costanzo: Yes, that's great. And maybe just one more, switching gears here. The sale of the Brazilian assets definitely simplified the portfolio and it accelerated deleveraging with the transaction closing in late January and the $900 million check already cleared. Although post close, there was a bit of news out of a certain Brazilian regulator. So I'm just wondering, Darren, if you can just explain the situation from your side of the table and tell us if there's anything to be concerned about here. Darren Hall: Yes. No, thanks, Francesco. No, it's an interesting situation there. I mean we're confident that the sale of the Brazilian operations fully comply with all laws and contractual obligations. And I'll provide a little context and bear with me as I do in. In Brazil, mineral resources are constitutionally owned by the federal government and the mining titles are granted and administrated by the National Mining Agency. Mining titles such as those for Aurizona, Fazenda and RDM are administered through this federal framework. A group in Bahia, CPPM has made claim that their consent was required regarding the sale of the Santa Luz operation. However, the transaction took effect through the sale of the outstanding shares of 2 non-Brazilian wholly owned subsidiaries that then indirectly own all of the Brazilian operations. So we're kind of arm's length away from that claim. But again, we as Equinox and the partners on the other side of the transaction are confident that the sale of the Brazilian operations fully complied with Brazilian law and all contractual obligations were met, and we remain committed to constructive dialogue with any party who wants to raise an issue. And as you mentioned, as the sale closed on January 23, we deployed proceeds towards debt reduction, strengthening the balance sheet. And along with cash flow from operations resulted in ending cash with net debt of around $75 million, which has positioned the company to commence the capital return programs, which we just discussed. Operator: The next question will come from Jeremy Hoy with Canaccord Genuity. Jeremy Hoy: I'd just like to revisit something that was asked about a month ago when some of the team was through Toronto. And that's with -- if there was to be a positive development at Los Filos, it seems like the timing of that build could coincide with Castle Mountain. Could you give us an update and a refresh on your thinking about how you would approach the development of both of those opportunities if they were both available at the same time? Darren Hall: Yes. Jeremy, I mean, it'd be great to be in that "Sophie's Choice, first world" sort of situation. But we are encouraged by the dialogue we're having in Mexico. We've got still a lot of work to do to establish robust 20-year land access agreements, which sets us up for most reliable production over the long term. But Filos is a significant asset. If we think about 16 million ounces in all resource category, the opportunity that sits there is significant. So our focus this year is really about understanding scope and scale. And the early works that were done there back in '21, 2022 with the feasibility study were all conceived at a $1,350 gold price in terms of the designs and around the open pits and the underground. Not suggesting we would plan around [Audio Gap] that this year, which will allow us to be in a much more intelligent decision at the -- position at the end of the year to make a decision if we're presented with the opportunity to develop. But we are comfortable in. We see great opportunity in. And to my earlier comments in and around the rate at which we increase dividends and buybacks will be somewhat foreshadowed by the rate at which we see these organic growth opportunities presented. But to make a decision between those 2 properties, we're a long way from that right now. We're confident in what we're seeing at Los Filos. But we do have a guaranteed record of decision at Castle Mountain here in December of this year. So that is a known entity. We are working on that feasibility to be able to firm up those estimates. So we're well positioned to be able to make a commitment decision there in H1 of 2027. So let's see how the year progresses. But yes, "spoiled for choices" is kind of the way I would characterize it and funded as well for whatever choices we make, which will be great. Jeremy Hoy: Yes. Thanks, Darren, and we'll watch for developments at Los Filos and Castle eagerly. You did mention that we're going to see a refreshed study for Castle Mountain. Also, we would see the same for Los Filos if positive developments come there. Are you planning to release anything on Greenstone as we've spoken often about expectations for that operation to be somewhat different from what was presented in the last feasibility study. Just wondering what we might see in terms of an updated life-of-mine plan? Will it come in the form of a study, what the timing might be, et cetera? Darren Hall: Yes. No, absolutely, Jeremy. To remove any ambiguity, we will provide updated technical reports for both Greenstone and Valentine right around the end of this quarter associated with our annual filings. So we get everything current, nice and ticked and tied with the AIF and the AIF will also include a refresh and clarity on our reserves and resources as at December 31st as well. So that's the timing for those properties. For Castle, we're continuing to work in the background on the feasibility study and, yes, no surprises from what we've articulated over the last 6 months. We're just going through crossing Ts, dotting Is, firming things up so that we have a high level of confidence in and around the scope of work, so we can go out there and have constructive discussions with EPCM contractors and the like in the back half of this year. Filos is a little earlier in the process. We're in the process of kind of doing an order of magnitude study to understand scope and scale associated with that property. And I would anticipate that, that will probably lead into a, I'll call it, a pre-feas, if you will, early in Q2 as we have a bit of an appreciation for scope and scale. Hopefully, we're in a situation where we've debottlenecked some of the land access agreements, which will allow us then to actively explore across all portions of the deposit and then allow us to appropriately scope and scale. So a little bit of what might sound like confusion there in Filos, but it's actually very positive. And again, we see -- again, I think the stat is probably somewhere in the fourth or fifth largest not operating gold asset in the Americas right now. So the talk there is significant. The opportunity is real, and we're definitely seeing a change in narrative out of Mexico, which is great. Operator: The next question will come from Anita Soni with CIBC World Markets. Anita Soni: Just a few on Greenstone. So I was just wondering, the recovery rate declined a little bit from third quarter to fourth quarter. Could you give us some color on why that was? Darren Hall: Yes. Anita, thank you. And absolutely did. As I think we've discussed previously that there is an association with arsenic and grade. We did see much higher grades in the fourth quarter and a consequence saw lower recoveries associated with the arsenic lockup. So not an issue per se. It's kind of all anticipated and expected as part of the metallurgy of the deposit. Anita Soni: And then just a similar question, just on the unit cost. The G&A was a little bit higher this quarter. Was there anything specific that was happening this quarter that would be alleviated in the go forward? Darren Hall: Yes, there is. I'll pass it to Pete. Peter Hardie: Yes. Anita, sorry, I don't have the G&A detail at hand. Can I reach out to you or one of your associates after the call? I'll pull that together. Anita Soni: And then I had one more on just a question that I noticed for both Valentine and Greenstone. I wanted you to explain to me how you guys are calculating the recovery rates as they come out? Because when I put the tonnes to grade and the output of production, I'm getting to recovery rates that are a little bit different. Said differently, I would have got about 75,000 ounces of gold by the 3 numbers there, and you reported 72,000 and Valentine is a similar issue. So I'm just wondering like are you calculating it as it exits the mill? Or is there a different point at which you're saying this is production? Darren Hall: No, I think we'll find that the small differences we may see there is that -- the numbers we quote as production are poured and bullion and some of the tonnes grade recovery will be metallurgical as well. So there will be a minor change there based on inventory changes. And to your point, I think you'll probably end up with a marginally higher recovery at Greenstone in Q4 than maybe what we reported if you back into the metal content because we actually did see an inventory build at Greenstone in fourth quarter. But we can -- we're happy to sit down and walk through that in a model discussion, happy to do that. But I think we'll find it's kind of the metallurgical production versus the poured production differences. Operator: The next question will come from Mohamed Sidibe with National Bank. Mohamed Sidibe: I maybe staying on Greenstone. And given your comments on the throughput and the ability to achieve over the nameplate capacity, how should we think about the throughput levels in 2026 and call it, in the medium term at Greenstone? Should we still be thinking about 27,000 tonnes per day or work towards increasing it towards that 30,000 tonnes per day to maybe offset some of the out updates that may be coming in the tech report? Darren Hall: Yes. Thanks, Mohamed. And as I say here, is that have a good Ramadan, right, day 1. So -- if we think about throughput, we've guided 250,000 to 300,000 ounces at Greenstone this year, and we hold firm on that. We will see opportunities over the course of the year to continue to improve throughput. Some of that is already baked into our numbers. We've demonstrated the ability to do more than 30,000 tonnes a day, which will be more longer term. But through this year, I think that the big round numbers are, if you think about 9.5 million tonnes of around 1.1 grams per tonne at feasibility recoveries, you get into that midpoint of guidance. And I think that's a good place to hang our hats. So I think of recoveries average over the year in that 25,000, 26,000 tonnes a day. There will be days we do better. And as we're demonstrating as we -- when we operate the plant, as I mentioned earlier, I mean, month or quarter-to-date, we've got 49% or 50% of the days greater than nameplate. So we are seeing sustained and improved performance on a daily basis. Our focus now is reducing downtime and getting the operations guys more time to be able to run the plant. And that's our focus. And it's going to be a journey through this year, and there will be dips and weaves along the way. The grades will be higher and lower depending on where we're mining. The recoveries, as Anita foreshadowed, will be different based on different metallurgical types. So there will be some peaks and valleys through the year, but the trends on a quarter-by-quarter basis will remain positive. And I would like us to see us coming out of 2027, looking to be talking more intelligently to those 30,000 tonne a day rates going forward. As we -- the HPGRs have installed capacity of probably mid-30,000s, 34,000, 35,000 tonnes a day. But we've got to get the reliable performance through the plant before we can start to talk about those sort of numbers openly and publicly. I am now, but to be able to commit to those is we've got some work to do this year. Mohamed Sidibe: Maybe if we could switch quickly to Valentine. And given the asset is in ramp-up phase, can you give us some color on the cadence in terms of quarter-over-quarter production? Should we expect higher production in the second half? And what magnitude should we be modeling for 2026? Darren Hall: Yes. No, absolutely. I mean we're in the second quarter of a ramp-up. And Newfoundland threw some surprises at us in January, full disclosure, and we think about -- we had 90% throughput in percentage of nameplate in Q4. And we think about January and January was 70%, right? It got cold, it got better. There were some learnings associated with the winter, and we've worked through those. I mean, -- in February, we're now at 110% of nameplate. So there's peaks and troughs and valleys as we work through. But the team are systematically addressing those things. We will continue to see quarter-on-quarter improvements in reliability in the plant, which will lead to higher tonnes, which will lead to improved confidence in feeding higher-grade materials. So we'll see that grades will be manifested that way as well. So we're still comfortable with our guidance of 150,000 to 200,000 ounces, but it's definitely H2 weighted as a function of throughput and also grade and making progress in developing the Berry Pit. So -- but we're happy to sit down and walk through a model and fill in some blanks for you as well quarter-on-quarter. Not fill in, but with that. Operator: Your next question will come from John Tumazos with John Tumazos, Very Independent Research. John Tumazos: Looking at the big picture, the current gold price is $5,000 neighborhood and say, $800 million of CapEx, you generate something like $600 million more cash paying off all the debt. It looks like you're -- you got a couple of extra dollars laying around. Are you planning the business on $400 gold plus success at all 5 locations where all the capital calls come in because you've got more gold to produce as opposed to building a war chest for acquisitions. Darren Hall: Yes. John, no, it's a first world predicament we're in, I guess, is that our focus is given the opportunities we see with organic growth is ensuring that we exit this year well funded to be able to do that organic growth. M&A is not on our radar. If something passes our screen that makes sense, we will do something. But I can assure you, as of today, we do not have a CA signed with anyone. So our focus is absolutely optimizing what we've got. We spent a lot of time and effort putting all of these assets together over the last 6 or 7 years, and now is our time to be able to start to realize that from that growth. With 400,000 to 500,000 ounces of organic growth in our portfolio that we can see over the next 5 years. I mean that's where our focus is. So there's a bit of positive confusion in our story right now as we've significantly delevered from $1.5 billion worth of net debt to 0. We're generating cash. We see the opportunities that present in 2027 and beyond. And let's make sure that we do the intelligent thing for the long term in 2026, which is to remain absolutely focused on operational performance and don't lose sight of the fact that we produce widgets at a cost. So let's keep that business focused on that so we can maximize our margin at whatever gold price there is and then use that capture to be able to fund our organic growth. I don't know, Pete, anything you'd layer on that? Peter Hardie: We're -- you've highlighted, John, really well that we're in a great position to fund this future growth. And we're really focused on ensuring that we retain the very solid and build on the very solid foundation that we've laid in place here over the last several months, as Darren said, to build out these world-class assets that we are very fortunate to have in our pipeline. John Tumazos: If I can ask one more. Darren Hall: Sorry, go ahead John. John Tumazos: No, you go ahead. You're the boss. Darren Hall: No, no, no. You guys, we work for you, right? So as the investors, I mean, our focus is we're aligned with you. John Tumazos: So in Nicaragua, you projected $1,800 cash costs up 40% or a little more on 225,000 ounces of output. The second half came in better than that. Could you give us some color on how the costs are going up so much in Nicaragua? Darren Hall: Yes. No. Thanks, John. It's a bit of a first world problem. What we're seeing here is the majority of the cost increase is not cost inflation per se, but it's volume driven. As we develop some newer pits in an underground that are going to basically fund or fuel a level of production at that 200,000 to 250,000 ounces a year over the next 5 years, there's some increased capital that results in those higher strip ratio and reflects in a higher all-in sustaining cost. So that's really where that comes from. It's not a drive in a kind of cost per tonne mine or a cost per tonne process. It's volume driven as we go from arguably what I'll call smaller pitlets to larger pits, higher strip ratios this year, and that's manifested itself in higher all-in sustaining costs. So which lays us up well for the next 5 years, which is kind of what our story has been over the last 5 years in Nicaragua is to take some assets that were headed towards closure. And we produced, what, [1.2 million, 1.3 million ] ounces from those properties in the last 5 years, and we've taken reserves from extensively 0, 100,000 ounces to in excess of 1 million ounces. So let's say, 5 years at 400,000 ounces a year of organic growth. Now we're starting to see track in front of the train. We're investing in that from developing these larger pits, which will continue that momentum for the next 5 years. So that's really what it is, John. John Tumazos: Well, the cash costs and the second year out 2027 drop, say, the $1,500 in Nicaragua after this surge? Darren Hall: I mean I think we'll see that the strip ratio go down, and that will have a positive impact on all-in sustaining costs. John Tumazos: Congratulations. Darren Hall: Appreciate, John. Thanks for your support. I know you've been a shareholder for a long time and persistent through the journey. So thank you. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Darren Hall for any closing remarks. Please go ahead. Darren Hall: Yes. Thank you, operator. And I'd like to thank all of our shareholders for their continued support and your participation and the questions today. It is appreciated and valued. As always, Ryan, Dave, Pete and I are always available if you have any further questions. And take care, be well, and I'll pass it back to the operator. Operator: This brings a close to today's conference call. You may now disconnect your lines. Thank you for your participation, and have a pleasant day.
Operator: Good morning, ladies and gentlemen, and thank you for standing by. Today's call is being recorded. I'll now turn the call over to Zoe Lawrenson, Senior Director of Strategy and Corporate Development, Liberty Latin America. Zoe Lawrenson: Good morning, and welcome to Liberty Latin America's Full Year 2025 Investor Call. [Operator Instructions] Today's formal presentation materials can be found on the Investor Relations section of Liberty Latin America's website, www.lla.com. Following today's formal presentation, instruction will be given for a question-and-answer session. As a reminder, this call is being recorded. Today's remarks may include forward-looking statements, including the company's expectations with respect to its outlook and future growth prospects and other information and statements that are not historical facts. Actual results may differ materially from those expressed or implied by these statements. For more information, please refer to the risk factors discussed in Liberty Latin America's most recently filed annual report on Form 10-K, along with the associated press release. Liberty Latin America disclaims any obligation to update any forward-looking statements or information to reflect any change in its expectations or in the conditions on which any such statement or information is based. In addition, on this call, we may refer to certain non-GAAP financial measures, which are reconciled to the most comparable GAAP financial measures, which can be found in the appendices to this presentation, which is accessible under the Investors section of our website. I would now like to turn the call over to our CEO, Mr. Balan Nair. Balan Nair: Thank you , Zoe, and welcome, everybody, to Liberty Latin America's Fourth Quarter and Full Year 2025 Results Presentation. I will be running through our group highlights and an overview of our operating results by Credit Silo before Chris Noyes, our CFO, reviews the company financial performance. We'll then get straight to your questions. As always, I'm joined by my executive team from across our operations, and I will invite them to contribute as needed during the Q&A following our prepared remarks. As a point of housekeeping, we will both be working from slides, which you can find on our website at www.lla.com. All right. Starting on Slide 4 and our highlights. Our business performed very well in 2025. We added over 225,000 mobile postpaid subscribers across the group, notably driven by Costa Rica and supported by fixed mobile convergence efforts and continuing prepaid to postpaid migrations. The postpaid adds this quarter included a positive net add contribution from Puerto Rico for the first time since the migration. We also recorded $1.7 billion of adjusted OIBDA in full year 2025, which represented 9% growth on a rebased basis. This performance was driven by good execution of cost initiatives as well as effective customer management and came despite headwinds in the fourth quarter from Hurricane Melissa. We worked hard to drive a steep recovery in profitability in Puerto Rico as well as double-digit adjusted OIBDA growth in Cable & Wireless Panama. B2B came in very strong in the fourth quarter, which is seasonally our best B2B quarter. LLA registered P&E additions for the group at 14% as a percentage of revenue for full year 2025, in line with previously communicated intentions and representing a 2 percentage point decline versus the prior year. With adjusted OIBDA expanding, the P&E additions falling, the adjusted OIBDA less P&E additions increased by 27% for the full year 2024. Our adjusted OIBDA after P&E additions margin came in at 24% for full year 2025. When comparing on a like-for-like basis, including adjusting for different lease accounting under the IFRS reporting, this compares very favorably to peers across the region and in the U.S., and there is still room to grow here. Finally, in Jamaica, I would like to thank all those involved in our recovery efforts following the effects of Hurricane Melissa. Against the backdrop of a Category 5 hurricane, our mobile network held up well, recovering service very quickly. While our fixed infrastructure was more impacted by the storm, we continue to reconnect homes and B2B customers. As we rebuild in fixed and continue our network transformation in mobile, we aim to invest in an innovative and returns-focused manner. I'll cover more on this later. Turning to Slide 6. I'll provide an update on Liberty Caribbean, which inevitably felt the impact of the hurricane in Jamaica in both Q4 and full year numbers. On the top left of the slide, we present our mobile KPIs. Postpaid mobile additions of 55,000 registered a strong cadence through 2025 and notably continued through Q4 despite the impact of hurricane. Momentum here continues to bring from rising FMC penetration and prepaid to postpaid migration, which are tailwinds we anticipate continuing over the coming periods. On the bottom left of the slide, we show our fixed KPIs. We have managed to keep the broadband base broadly steady throughout the first 9 months of the year, with Q4 largely reflecting the impact of lost customers in Jamaica. Elsewhere, we saw some modest pressure on volumes in Trinidad and Tobacco and the Bahamas. Moving to the center of the slide. Despite headwinds from Hurricane Melissa, we held Liberty Caribbean segment revenue flat in full year 2025 at $1.5 billion. Within this, we registered rebased residential mobile revenue growth of 4%, given structural support from postpaid additions as well as selective price increases on both prepaid and postpaid throughout the year. This offset pressures on the fixed residential business and on B2B, which mainly was due to the impact of the hurricane in the fourth quarter. Looking forward to 2026, we continue to be fully focused on rebuilding in Jamaica, which I will turn to in more detail on the next slide. In addition and looking region-wide, we aim to continue driving FMC where penetration is now within 40%, in the B2B segment, which reflects over 1/3 of segment revenue, we also see a significant opportunity to expand this revenue pool. Turning to Slide 7. I'll provide an update on Jamaica post Melissa and outline our investment focus for 2026, during which we will be deploying proceeds from the payout under our weather derivatives program, which totaled $81 million on a net basis. First, the mobile. Our mobile network recovered quickly. And through quarter end, we were running at a higher level of mobile subscribers and carrying more data traffic over the network than prior to the hurricane. As of the latest data available through early February, this trend has been continuing. Our mobile business in Jamaica is largely prepaid, and these improving KPIs translated into higher prepaid and higher overall residential mobile revenue in Q4. Our postpaid mobile business has also proven to be resilient. We feel good about the outlook for our mobile business in Jamaica, seeing not only the opportunity to maintain this recovery, but to further build upon it. We have been transforming our network over the course of 2025. And as a result, we have been recognized by Ookla as the fastest mobile network in the island for the second half of 2025. We will continue our transformation journey into 2026, leveraging an improved spectrum position and greater site density. With over 85% of our mobile customer base on the prepaid tariff, we see continued opportunities to migrate customers to postpaid, and we will continue to focus on attracting higher-value prepaid customers within this segment. On the fixed side, as we have mentioned, the fixed network was materially more damaged than our mobile network, impacting both our residential fixed customers and our B2B customers who weigh more towards fixed services. As a result, we have taken out 133,000 home passed from the count, where we don't foresee a restoring of fixed service in the near term. To provide more clarity on our outlook for the fixed network, it's instructive to break down the country into 3 geographic zones. Across the country, we have over 75% of our fixed broadband customers back online today, but see significant regional differences. The capital city, Kingston is in what we term as Zone 1, an area which represents the largest driver of GDP, over half of pre-Melissa homes passed and is where the bulk of our B2B customers are based. In Zone 1, economic activity and daily life is fully restored and the vast majority of homes are back online. In Zone 2, representing 30% of pre-Melissa homes is still recovering. Our plans are to rebuild in the Parish of St. James, where Jamaica's second city, Montego Bay is located. Once complete, this should move the needle in terms of further bringing customers back online. Meanwhile, in the West, Zone 3 felt the largest impact of the storm and just over 50% of broadband customers still remain offline. Our rebuild here is following and subject to the cadence of reconstruction of homes and businesses in the region. Through the course of the year, we will continue to restore homes and B2B customers with a focus on return on investment and innovation. We look forward to building back stronger in Jamaica and on a run rate basis, we target being back close to pre-hurricane levels of profitability by the end of 2026. Moving to Slide 8 and our C&W Panama segment. Starting on the top left of the slide. We delivered accelerating momentum in postpaid adds throughout 2025 as customers continue to migrate from prepaid, which creates more predictable revenues. We increased prices in postpaid and improved pricing plans in our prepaid business. On the bottom left of the slide, we show our fixed KPIs. We delivered another robust quarter of Internet subscriber adds, while competitive conditions caused some offset on price over the course of the year. Looking at revenue and as we show in the center of the slide, we registered rebased revenue growth of 3% for C&W Panama for full year 2025, which in turn was driven by rebased residential mobile revenue growth of 7% in 2025. Encouragingly, we also saw an improving performance in our B2B segment in 2025, with the contribution weighing more towards the end of the year. We have registered a number of new wins, including the Ministry of Education of Panama, MEDUCA, which signed a contract with us to provide high-speed Internet to all public schools nationwide. B2B rebased revenue growth for full year 2025 was 1%, mainly driven by the fourth quarter that registered 24% growth on a year-over-year basis. Looking to 2026, we aim to build on our success in B2B and B2G and continue to drive postpaid momentum in residential segment while staying vigilant on costs and disciplined on capital investments. Next to Slide 9 and our final segment within the C&W Credit Silo, Liberty Networks. On the left side of the slide, we present our full year 2025 revenue evolution. Wholesale revenue grew 6% on a rebased basis. Stripping out headwinds from noncash IRUs, underlying wholesale revenue growth would have been 12% year-over-year, mainly driven by revenue from a new key project win and new lease capacity sales. In December last year, we announced that we were chosen to design, construct, activate and operate El Salvador's first submarine cable. This is a 1,800-kilometer cable to connect the country to major international hubs, boosting high-speed Internet capacity and resiliency. This investment goes beyond building critical infrastructure. It lays the foundation for economic growth, innovation and opportunity for all Salvadorians. Enterprise revenue was a smaller part of the growth engine, but still showing momentum in IT-as-a-Service and connectivity solutions. These services are helping us bring a strong base of monthly recurring revenue, which supports long-term stability and positions us well for the future. As we look forward, we remain focused on continuing to deliver growth in underlying subsea capacity as well as executing on our El Salvador project and on MANTA as well, our 5,600-kilometer joint build with Sparkle and Gold Data. On track to be operational in late 2027 or early 2028, MANTA is expected to establish a solid foundation of monthly recurring revenue, enhancing long-term profitability and positioning Liberty Networks as the region's primary data hub. Given expenditure is front-end loaded for this project, we look forward to turning current FCF headwinds into future tailwinds. Turning to Slide 11 and Liberty Costa Rica. Starting on the top left of the slide. The postpaid business segment in Costa Rica continues to be the highlight for the LLA Group. In 2025, we added over 160,000 postpaid subscribers, representing a 16% expansion on the 2024 base. In particular, we have seen strong take-up in the lower-end postpaid segment, which is nevertheless accretive relative to our prepaid ARPU levels. Moving to the bottom left of the slide. On the fixed side, we continue to do a good job growing our subscriber base under competitive market conditions with an improved performance in the fourth quarter. Moving to the center of the slide, we show Costa Rica registering rebased revenue growth of 1% in 2025. The driver of this was our residential mobile business, which grew revenue by 6% on a rebased basis. Despite the growing broadband base, price competition led to fixed revenue declining by 4% on a rebased basis, while we also faced a tough comparison on B2B. Looking forward, we see no immediate reason for a slowdown in the drivers of our prepaid to postpaid mobile strategy. We expect 5G to become even more important, and Liberty was the first operator to launch 5G in Costa Rica in 2024, and we have over 300,000 customers today. Following the acquisition of 5G spectrum in 2025, we expect a continued lift as we deploy 5G stand-alone in partnership with Ericsson. Knowledging the tougher fixed market conditions, we will leverage our FMC advantage and stay innovative. In Q3 of last year, for example, we launched an offer for new and existing customers to have access to the most popular over-the-top platforms, including in their phone plan. A unique move in the Costa Rican market. Finally, and following Sutel's rejection of the proposed merger with Tigo in Costa Rica, we have now turned our attention to costs. We believe we have a strong track record on cost reduction across the LLA Group, and we are focused on delivering similar margin benefits in Costa Rica over time. Moving to Slide 13 and our third credit silo, Liberty Puerto Rico. Starting on the top left of the slide. In Q4, we registered the first quarter of positive postpaid mobile adds since the migration. This follows significant commercial efforts in the second half of the year, focused on the launch of Liberty Mix. This new multiline plan has captured customers' imagination, offering flexibility designing to mix and match plans within multi-bundle packages. It also has transparency with no hidden fees and value add through hotspots and roam like home, which are particularly important to our customer base. Additionally, in mobile, we are pleased to have completed the migration of our Boost MVNO customers onto our network. These are high ARPU prepaid customers and retaining these customers while removing wholesale costs is an important milestone for the business. Our postpaid base also saw a pickup in the quarter from a small number of migrators Boost customers who opted to switch into our Liberty postpaid offering. Moving to the bottom left of the slide. On the fixed side, we continue to see competitive pressures impacting our subscriber base, though we registered lower broadband losses in the fourth quarter. In part, this follows greater commercial efforts on the fixed side, including campaigns focusing on network quality and reliability. Moving to the center of the slide, we registered a 6% revenue decline for the year. This largely reflects a 6% decline in residential mobile revenue, in turn a function of the negative impact from the migration of customers to our mobile network and network challenges in 2024, which caused a decline in the average number of postpaid mobile subscribers. B2B revenue declined by 16% year-over-year, in part due to similar migration factors. Residential fixed declined by 1% year-over-year with support coming from price increases early in 2025. Looking to 2026, Puerto Rico remains a competitive market, and we aim to keep laser focus on our commercial proposition. We have seen a nice lift in NPS to start the year on both fixed and postpaid side. We will continue to work hard to improve our customer propositions as we try to stabilize the fixed business and scale up in postpaid mobile. Finally, on Slide 14, we summarize our strategic vision for Liberty Latin America as we look to 2026. Firstly, on the commercial front. You have heard me mention FMC or fixed mobile convergence a number of times on the call. We have complementary high-speed fixed and mobile infrastructure across almost all of our entire footprint, and we aim to continue to leverage this in our commercial proposition. We sometimes talk a little less about B2B, though this represents almost 1/3 of group revenue. This contribution could be higher, and we are particularly excited about our recently announced partnership with AWS to bring AWS compute and AI models to our local markets for our customers. We have a number of innovative products to be launched that will reduce our video costs to bring more resilience to our Internet service to bring 100% coverage to our mobile service and to bring more AI agents to our Care service. Operationally, we remain focused on investing in our business in a returns-focused manner. Of key importance is our rebuild in Jamaica, both in terms of reconnecting homes, but also further transformation of our mobile network. We are excited to be pursuing 2 key projects within Liberty Networks, building connectivity on behalf of El Salvador and our ongoing MANTA project. We will be very focused on successful execution on Build through 2026, of 5G, which is now available in Puerto Rico, Panama, Costa Rica, the Cayman Islands and Barbados. This helps us maintain and enhance our commercial position in the mobile market as well as supporting FMC. We remain attuned to future opportunities to deploy 5G across our footprint. Finally, we are committed to rewarding our shareholders and have financial aspirations to deliver. I won't steal Chris' thunder, but suffice to say, cost efforts, capital investment discipline and a focus on free cash flow delivery lay at the heart of our outlook. And with that, I'll pass you over to Chris Noyes, our Chief Financial Officer, who will take you through our financial performance before we move on to your questions. Chris? Christopher Noyes: Thanks, Paul. Over the next slides, I will provide key highlights of our Q4 and full year results for 2025 with a focus on the fourth quarter. For Q4, we delivered revenue of $1.2 billion, reflecting 1% year-over-year rebased growth. This was fueled by double-digit top line growth at Liberty Networks and CWP, offset in large part by declines in LC, principally due to the hurricane and LPR as a result of the year-over-year decline in customers. On a full year basis, LLA revenue was slightly down on a rebased basis to $4.4 billion. Moving to the right. We reported adjusted OIBDA of $451 million in Q4, bringing our 2025 full year adjusted OIBDA to $1.7 billion. These results reflect year-over-year rebased growth of 8% for Q4 and 9% for 2025, with both periods adversely impacted by $27 million stemming from Hurricane Melissa. For LLA, our operating focus on cost control and efficiency contributed to our roughly 300 basis point improvement in adjusted OIBDA margins in 2025. We expect our 2025 actions will continue to benefit our 2026 results. Slide 17 recaps our Q4 results for the C&W credit silo. Starting on the left, in Q4, LC reported $356 million in revenue and $153 million in adjusted OIBDA. Both metrics declined year-over-year on a rebased basis, which was entirely due to Hurricane Melissa as the Jamaican business experienced declines of $20 million in revenue and $27 million in adjusted OIBDA in the last 2 months of Q4. Overall, it is important to not let the hurricane detract from what was a very strong year from the LC team, especially in light of their margin improvement and 7% adjusted OIBDA rebased growth for full year 2025. With that being said, we do expect that the next quarters will be financially challenging in Jamaica and obviously, the year-over-year comps will be difficult until we lap the hurricane in Q4. Next, moving to CWP. Aided by revenue from government-related projects. In Q4, CWP posted double-digit rebased year-over-year growth for both revenue and adjusted OIBDA, reporting $230 million of revenue and $94 million of adjusted OIBDA. CWP's focus on improved gross margin contribution and content activities was reflected in expanded adjusted OIBDA margins in Q4 and full year 2025. Turning to Liberty Networks. LN generated $129 million in revenue and $75 million in adjusted OIBDA, which accounts for year-over-year rebased increases of 14% and 21%, respectively. Results in Q4, as Balan highlighted, were fueled in part by the El Salvador build and continued ramping of its wholesale infrastructure business. Aggregating all 3 operating segments within the C&W credit silo. For Q4, we reported $693 million in revenue, reflecting a year-over-year rebased increase of 4% and $322 million in adjusted OIBDA, resulting in 5% year-over-year rebased growth. As noted earlier in LC, the results for the silo were hampered by the hurricane impact. Rounding out our other 2 credit silos, Liberty Costa Rica and Liberty Puerto Rico. On the left, we highlight LCR. We delivered Q4 revenue of $168 million and adjusted OIBDA of $66 million, representing rebased declines of 2% for revenue and 3% for adjusted OIBDA. Residential mobile continued to deliver year-over-year growth, but was not able to offset a particularly soft quarter in B2B. With respect to full year 2025, adjusted OIBDA of $236 million was flat on a rebased basis. Importantly, the operating team has launched a comprehensive effort to improve its cost structure during 2026 and would expect momentum to build throughout the year, like we have seen in other markets. Concluding with Puerto Rico on the right, LPR posted Q4 revenue of $301 million, a slight increase from Q3 levels and which reflects a 4% rebased year-over-year decline. The rebased decline over last year is primarily a result of the full year impact of customer losses experienced from the 2024 migration. Importantly, the business has shown stabilizing trends over the last few quarters. Turning to adjusted OIBDA. We reported $89 million in Q4, reflecting double-digit rebased growth year-over-year. LPR has significantly improved their cost structure during 2025 to align more with their current customer base and also returned to more normalized customer service levels, which have positively impacted their collection efforts and bad debt expense. These steps have been necessary to help compensate for the lower revenue base and the net impact is reflected in LPR's improving adjusted OIBDA margins. Turning to Slide 19. Two important metrics that we are focused upon at LLA as we think about driving long-term value, adjusted OIBDA less P&E additions and adjusted FCF before partner distributions. Starting on the left, we have already briefly discussed adjusted OIBDA, but the other key input to the calculation is P&E additions. Even in light of the various commitments we had and events that occurred during the year, including new project wins and hurricane impacts, we remain disciplined during 2025. In aggregate, we invested $640 million in 2025, including $220 million in Q4 as compared to $725 million in 2024, including $240 million in Q4 of 2023. LLA's P&E additions as a percentage of revenue were 14% in 2025 versus 16% in 2024, a measurable year-over-year reduction. Combined with our improved LLA adjusted OIBDA performance and margins, we delivered adjusted OIBDA less P&E additions of $1.1 billion in 2025, including $231 million in Q4, representing year-over-year growth for fiscal 2025 of 27% and for Q4 of 30%. Our 2025 result represents 24% of revenue, a significant improvement over 2024 levels and one we look forward to continuing to drive higher over time. Turning to adjusted free cash flow before partner distributions. We had a particularly robust Q4, delivering $278 million in the quarter, which brought our full year figure to $150 million, a 29% year-over-year increase. A key driver of this improvement was the significant expansion in adjusted OIBDA less P&E additions of $226 million over this period, which was offset somewhat by working capital and related movements. Additionally, in Q4, we collected $81 million in net proceeds from our Parametric program, which helps to mitigate to a large extent, the physical damage and business interruption from Hurricane Melissa. As discussed earlier, we suffered financial impact in Q4 from Melissa, but a substantial amount of the adverse impact, including a large portion of the recovery investment is expected to occur in 2026. Although it will continue to evolve throughout the year, we generally expect that the 2026 adjusted FCF impact from the storm will be in the neighborhood of $100 million. Our operating goal is to be run rating near pre-hurricane levels by year-end, which should set us up for a full recovery in 2027. Next is Slide 20 and a review of our capital structure. At the consolidated level, we have total debt of $8.4 billion and liquidity consisting of $800 million in cash and $900 million in availability under our credit lines. At year-end 2025, we had consolidated net leverage of 4.3x, an improvement from 2024 levels. If we exclude LPR leverage, which is undergoing a liability management exercise as previously discussed, LLA leverage would decline into the mid-3s. Turning to the middle of the slide, which summarizes our 2 credit silos of C&W and LCR. We have total debt at C&W of $4.9 billion and covenant leverage of 3.5x and total debt at LCR of $515 million and covenant leverage of 1.8x. As seen by the combined maturity schedule, approximately 75% of borrowings are due in 2031 and later. Moving to the right, Liberty Puerto Rico has $2.9 billion of total debt with reported borrowing group net leverage of nearly 8x, while covenant leverage of the restricted subsidiaries was 14x as of Q4 2025. As seen today, LPR performance has stabilized over the last few quarters, but has a long road back to gain market share and expand the top line. And LPR continues to look for ways to improve its leverage profile. Of note, LPR may also need to raise additional liquidity in the near future to cover ongoing operating costs, although no definitive decisions have yet been taken in this regard. As discussed in our Q2 2025 earnings, LPR embarked on a liability management exercise with its creditors in 2025. And as part of that, a transaction proposal was provided to the creditors' advisers in early November, and those advisers were provided with access to significant levels of information and diligence since that time. To date, while no response to such proposal has been received, the team hopes for engagement from the creditors in the near future. As previously highlighted, LPR has substantial flexibility in its credit documents that will enable the business to continue to utilize its assets to meet any near-term liquidity needs as they arise, as demonstrated by the $250 million secured financing raised through an unrestricted subsidiary of LPR that was announced in September 2025. Additionally, and consistent with our previously stated intention of separating LPR and LLA, we are actively working on this and we'll update when appropriate. Moving to Slide 21 and our closing remarks. As compared to 2024, we delivered robust financial performance in 2025 with nearly double-digit rebased adjusted OIBDA expansion, 27% adjusted OIBDA less P&E additions growth and adjusted FCF before partner distributions improvement of 29%. In Jamaica, we have generally recovered our mobile business and will be disciplined in our capital approach to reconnecting homes and businesses as conditions on the ground improve. No doubt the full recovery will take time and impact our reported results in the coming quarters, but we anticipate that we will be running at a much fuller tempo by 2027. Looking forward, Balan highlighted his 2026 strategic vision on his concluding slide covering commercial, operational and financial priorities. Without repeating, I believe they can be further summarized into our continued focus on driving organic growth within our operating businesses and cash flow improvement. We clearly have near-term headwinds, especially with the timing of the Jamaican recovery and given our planned cadence for 2026. We would expect our financial performance at LLA and across our markets to be heavily weighted to the second half of the year. Activities related to cost out, our investments in projects like MANTA and product innovation, including our new arrangement with AWS, all speak to setting the stage for future growth. Finally, for our equity investors, certainly, 2025 did have its share of ups and downs, but trending positively at the end of the year. Management remains committed to working to unlock value, including returning capital to shareholders and we will be focused on executing Balan's 2026 priorities, which we believe will be beneficial to value creation in 2026 and beyond. With that, operator, we will open it up for questions. Operator: [Operator Instructions] Our first question today will be from the line of [ Matthew Harrigan ] with [ StoneX ]. Unknown Analyst: I wonder if AI will ever enable the Q&A to not be conducted electronically. Actually, 2 questions. Firstly, you have some really abusive expectations on private equity infrastructure investment at one point. That didn't materialize, but certainly, the results are really inflecting upward. Even apart from MANTA and El Salvador, just by virtue of economic growth and increased volume even at lower per bit pricing. Do you think you've got a really nice tailwind just organically from economic activity? Or is it really just going to be largely a step function of MANTA and El Salvador and whatever other discrete projects materialize? And then I have a follow-up. Balan Nair: On the MANTA and El Salvador project, they're actually quite different projects. The MANTA project is both building more resiliency as well as adding a huge amount of capacity on routes we think are going to be highly profitable. So -- and it's being built right now, and we'll start selling into it very soon, starting later this year, early next year. And we've got quite a bit of interest in that. The El Salvador project on the flip side, it's really a build operate transfer kind of a model with the government of El Salvador. But it has some really good upsides for us as well, including the fact that we will be running, maintaining that network. And in the future, perhaps we could put a branching unit and add some capacity to some of the other drops. So both projects are hugely accretive and have very good margins on it. But they are very complex projects. Ray Collins, who leads our business unit there. He and his team have been really on top of it. The build and the engineering is ongoing right now. And we have a lot to deliver on here, but the team is really up for it. Unknown Analyst: And then as a follow-up, Mike Fries yesterday, this wasn't his expectation, but I think he said one of the hyperscaler executives said that it was possible that they could reduce Liberty Telecoms OpEx from $15 billion to $7 billion or $8 billion. Mike certainly didn't endorse that, but he implied that there was going to be a long run of AI and cost improvements given, obviously, telecom, you've got a lot of repetitive processes and big data lakes and network management, customer management. Do you think you're going to have that type of improvement? Obviously, not of that scale, but do you think we're going to be seeing very, very significant prolonged margin benefits? And then I was also curious, this month, you just the other day with AWS and then Liberty Global with Google and Gemini somewhat before that, both entered into relationships. And I'm curious how the expectations are vary between Google and Amazon. And was there any clear explanation as to why they went with Google and you went with AWS? Balan Nair: Sure. Let me answer your last question first, and I'll get back. I really can't comment on Liberty Global's decision with Google, like Google Cloud and the work the Google team is doing. It's extremely impressive. Chris, myself or a whole bunch of my executives visited with the Google Cloud folks just 2 weeks ago in California, 3 weeks now. Our relationship with AWS is slightly different, and it's really focused on our business. Most of our models and most of our services and compute and storage is done over AWS. Most of our customers prefer AWS. The relationship with AWS is strong for our internal usage. And certainly, it's a great product for us to partner with our customers. We have quite a number of customers today, cloud customers on our premises that are migrating, and we think the migration to AWS makes a lot of sense for them and for us. And the folks that AWS has been really great to work with as well in this partnership. So that's really kind of why we went down that path. We think it's great for ourselves internally, and it's great for our customers as well. In addition, by the way, AWS is making investments in our region with us building out what they call outposts and their wavelength product in our data centers in Panama, in Colombia. So this is not just a reseller agreement. This is a really deep partnership between us and them. To your second question -- or your first question on AI benefits, I think we are really in the first innings here on this. This requires -- the opportunity is large. Let's be clear. I don't want to put a number on this. But clearly, as you pointed out, we have a lot of repetitive processes in our company, and we have a lot of things that perhaps we're not really good at. And AI can actually make us a lot better. It will take cost out. It will help us be more productive. And in addition to that, it will have a better front end for us to our customers as well. And on all those fronts, we have either trials, we have implemented, we have launched, and we're just seeing the beginnings of it. I think the challenge in our company that we are challenging ourselves is how do we translate all of this into some real tangible free cash flow improvement. And that's really, as Chris pointed out, our primary goal. Everything that we work on here has to, at some point, translate to a free cash flow expansion. And we are working on it. I think if you ask the same question 2 quarters from now, I will probably have a slightly different answer with much more tangible initiatives that we are working on. I can tell you now, if you go to Costa Rica, you call our call centers right now, there's a high likelihood an AI agent will be answering the call. Operator: The next question today will be from the line of Michael Rollins with Citi. Michael Rollins: Curious if you could help us -- help all of us understand the fixed to mobile convergence opportunity. In your major markets or regions, can you frame what the current level of converged take rates are, where you see that potentially going on a volume basis? And to get there, do you have to do substantial discounting? Or can it be nearly as accretive as if you were getting these customers on the stand-alone services and just coincidentally package together? Balan Nair: The fixed mobile convergence have been a real benefit for us. Yes, there's a few ways to look at it. One, if you know, most of our markets, with the exception of Puerto Rico, it's primarily prepaid, primarily prepaid markets. So when you go to fixed mobile convergence, there's 2 things -- 2 steps here. One, you go from pre to post and then you link the post to our fixed product. And it's primarily postpaid mobile with our fixed broadband. That's really the golden product, the bullseye product we call. And this has worked quite well across our markets. And in Puerto Rico specifically, we've been looking at -- we have more than 50-some percent market share in our fixed broadband in Puerto Rico. And we have right about slightly under 20% in our mobile postpaid. And clearly, the opportunity to link both of them is pretty high. So for every fixed broadband customer that do not have our postpaid, it's really an opportunity for us. And for any of our postpaid customers that don't have fixed broadband, also an opportunity for us. And the trick is really our systems, and we've been going through, as you know, in Puerto Rico, quite a significant upgrade in our systems and stabilizing them. We are now at a point where we can start doing a lot of this postpaid and fixed mobile -- sorry, and fixed broadband convergence. And it's really kind of -- it provides 2 things. One, a higher ARPU in the home or that specific customer, so the customer ARPU goes up. And secondly, churn goes down. And these are proven facts across all telcos over many years. And I think we've been quite successful. We have quite a number of my general managers who are really steeped into this, focused on it, and this is really one of our growth opportunities in '26 and beyond. Michael Rollins: Maybe just a follow-up on the revenue side. Can you give us an update when you take into account the -- what you just described in terms of the FMC opportunities, the opportunity to continue to grow in your markets, what's a fair range of annual rebased revenue growth that Liberty Latin America should operate within on a multiyear basis? Balan Nair: That's a great question. I've got to be careful I don't give guidance here. But here's how you look at it. Our mobile product is growing because as we move from pre to post, ARPU gets better, we attach it to our fixed and we start growing. So the mobile product, you'll see growth. It won't be in the double digits, but it will be very respectable single-digit growth annually. And that -- we have a long runway in that. On the fixed side, broadband continues to grow, however, offset by headwinds on video and voice. So as you look at the fixed product, you'll see flattish to slight growth, but it's mostly because we have some legacy products that you got to adjust for. Eventually, will wash out and we'll get to a steady cadence. B2B has good growth as well. And the B2B growth, we are really excited now getting into more and more cloud services that we're selling. We still continue to sell connectivity. But in addition to connectivity, we're selling a lot more cloud services. But even in B2B, there is a headwind. And the headwind is mostly a lot of customers are canceling their voice products. So there's voice services that will continue to decline a bit, but it's offset by these new cloud services. And the second thing that kind of offsets our revenue going forward is roaming. -- clearly, as people travel, this is a great market for us because a lot of the cruise ships, a lot of people roam. But clearly, with new technologies and most people getting on WiFi via WhatsApp, the roaming revenue is going to be continuously, it's going to slightly decline, and that kind of adds to a headwind to our product. So our product portfolio has a lot of really nice good products and a few headwinds that it's just the nature of where the technology is at. I think the way we look at it is we are going to invest further and deeper into all the products that are growing. And then we're just going to manage the rest of the products that we are challenged with, voice, video, roaming, those kinds of products, we're going to just try to manage that. And I think the team has done a pretty good job. You can see it in our numbers. And that's why you can see while revenue is kind of flattish at the top, there's a significant EBITDA expansion. The EBITDA expansion comes from cost cutting, this base management and really us moving to higher-margin products. So that's kind of one way to look at it. Operator: [Operator Instructions] The next question today will be from the line of Chris Hoare with New Street Research. Chris Hoare: I had a question on the top line trajectory in Puerto Rico. Obviously, great news on the inflection in postpaid net adds. I wonder if you can give sort of any color on the shape of how that sort of played out in the quarter. And obviously, what I'm trying to think of is what we should expect going forward, whether you'd expect to see further improvements in terms of postpaid net adds? And then also on the top line in Puerto Rico, obviously, that was sort of slightly offset by a bit of weakness on B2B. And I think you said that, that's a function of sort of hangover from the transition, but I'd just be interested in sort of if you can give any more color on what happened there as well and therefore, also trajectory on B2B revenues in Puerto Rico. Balan Nair: In '25, we had a whole bunch of headwinds there. We started the year with an outlook that's very, very different than what we ended the year with, meaning extremely positive in the way we ended the year compared to how we saw it at the beginning of the year because there were some headwinds and challenges that we did not anticipate as we came into 2025, the first quarter of '25. Here's a few things that can show the improvements. One, of course, you see financially, we're turning this business around. And -- but it's really based on a whole bunch of things that we fixed in the business, whether it's the leadership talent, whether it's the processes in it, the stabilization of the systems and really coming out with value propositions and products that make sense to our customers. There's a huge amount of improvements in business when somebody walks into our store today than they did last year. So a number of things that I think will give us some nice tailwind into '26. The net adds you saw in the fourth quarter of '25 were driven by all these improvements, including a real big turnaround in our NPS scores. And -- but it was also assisted by the fact that we were migrating a ton of these subscribers -- we bought from DISH. They were prepaid subscribers that came to us. But because of our really strong postpaid value proposition, a number of those prepaid subscribers actually ended up buying our postpaid product instead of moving as to prepaid. And so that drove as well some of the growth of net adds in fourth quarter '25. Now if I look into '26, January, we had a very good month in January. So without any of the Boost subscribers moving up to postpaid. So we continue to see the progress in that. But I think this is a journey that's going to take a lot more than 1 or 2 quarters. And my sense is by the end of '26, we'll be an even better state to set up for a really nice opening balance into 2027. And then back to the revenue miss, you correctly pointed out, B2B was a challenge for us in 2025. We opened the year with a very weak opening balance coming into 2025 and struggled throughout the year. We made a number of changes in the team in the B2B team. We brought in a new leader for the group. She is extremely focused. And if I look at my budget for 2026, has a very good and a very, I think, a budget that when we hit it, I think people are going to be quite happy. So the turnaround is happening, but we have to be patient. This is going to take many quarters. Chris Hoare: Okay. And maybe one follow-up would just be on the slide on equity value unlock where you talk about shareholder returns focus. Is there any more color you can give there in terms of either what you're thinking of or timing around when anything might be announced there? Balan Nair: I think things are looking on the up and up here. We feel really confident about the business. We really feel really confident about the future. As Chris pointed out, the cash flow generation in the fourth quarter looks really good. And you can see that our intention, as Chris pointed out, is we're going to expand that into '26. Now as you know, most of our free cash flow comes in, in the second half of the year. So there's a number of things that we've been thinking about. I suspect that sometime during the course of this year, we are going to come out with something that together with our Board, make some decisions that I think will reward a lot of the shareholders that's been with this. Operator: That will conclude today's question-and-answer session. I'd like to hand back to Balan Nair for any additional or closing remarks. Balan Nair: Well, firstly, I'd like to say thank you for everybody that's been patient with this. Certainly, the story has got lots of moving parts, and we've had a fair share of challenges. And some of it is self-inflicted, some of it, clearly, mother nature is -- we weren't expecting that hit in Jamaica and the hurricane. But we're going to power through all of it. And one thing that's really good about this team is it's we are quite resilient. And when we see things going off, we try to fix it and we do, I think, a pretty dang good job bringing things back to where it should be. And we'll do the same thing within Jamaica as well, as Chris pointed out, I think by the end of this year, you're going to see that Jamaica is back to where it should be, which sets us up for a great 2027 as well. But we've had our setbacks, and we say in our company, all these setbacks, great for a great comeback. And I think we are on our path to a great comeback. So thank you very much for all your support, and we look forward to talking to you again next quarter. Operator: Ladies and gentlemen, this concludes Liberty Latin America's Full Year 2025 Investor Call. As a reminder, a replay of the call will be available inn the Investor Relations section of Liberty Latin America's website at www.lla.com. And you can also find a copy of today's presentation materials.
Jonathan Paterson: Okay. Good afternoon, and welcome, everyone, to VSBLTY's earnings call. This call is being recorded. [Operator Instructions] However, we may not be able to answer every question and suggest that you reach out to Investor Relations via our website. Our call today will be led by VSBLTY's President and Chief Executive Officer, Jay Hutton. Before we begin our formal remarks, I would like to remind everyone that some of the statements on this conference call may be forward-looking statements. Forward-looking statements may include, but are not necessarily limited to, financial projections or other statements of the company's plans, objectives, expectations or intentions. These matters involve certain risks and uncertainties. The company's actual results may differ significantly from those projected or suggested and any forward-looking statements due to a variety of factors, which are discussed in detail in our regulatory filings. A recording of today's presentation will be available in the Investor Relations section of our website, www.vsblty.net. I will now turn the call to President and CEO, Jay Hutton. Go ahead, Jay. James Hutton: Thank you, Jonathan. Good afternoon, everyone. And for those of you that are on the West Coast like me, good morning, and thank you all for joining us. Today's call covers our audited 2024 financial results and our performance through the end of 2025 third quarter. I want to begin by acknowledging that the timing of our filings has been challenging. The audit is now complete, and we are focused on restoring full regulatory compliance and advancing the business with discipline and transparency. Before turning to the numbers, I also wanted to address our audit relationship directly and out of the gate. The Board has made the decision to move forward with a new external audit firm, and we are in the final stages of that transition. The decision was not taken lightly, while with respect to the capabilities of our current auditors, we do not feel the level of urgency and responsiveness aligned with the needs of our growing public company operating in dynamic markets. The Board concluded that a change was necessary to ensure that our reporting time lines were met and our strategic objectives were supported going forward. This is about alignment and forward momentum. Now turning to fiscal 2024. A reminder that we report exclusively in U.S. dollars and all numbers cited will be expressed in that currency. For the year ended December 31, 2024, revenue increased to approximately $1.51 million compared to 869 in 2023 -- $869,000 in 2023. That growth was driven primarily by media management and professional services. More importantly, gross performance improved materially. In 2024, we reported a positive gross profit of $61,000 compared to a gross loss in 2023. That shift reflects improved deployment efficiency, better cost alignment and stronger execution discipline. Operating loss was reduced significantly year-over-year from approximately $8.95 million in 2023 to $5.45 million in 2024. That is a reduction of more than $3.5 million. While we are not yet profitable, the direction of travel is clear. And once we've sorted out the cost side of our business, the ability to get to profitability now is a much easier or at least well-understood task. Turning now to 2025. For the 9 months ended September 30, 2025, revenue reached approximately $1.86 million for the first 9 months of 2025 compared to $968,000 in a similar period in 2024, effectively doubling year-over-year for the comparable period. Gross profit for that 9-month period improved to approximately $414,000, up from $236,000 in the prior year. Net loss for the 9 months ended September 30, 2025, is approximately $4.96 million, reflecting continued investment in product development and deployment capacity while maintaining tighter cost controls than in earlier periods. Stepping back for a moment, I would summarize our financial progress in 3 ways: first, revenue momentum is improving; second, gross margins have stabilized and turned positive; third, operating discipline has materially strengthened. Now I would like to address near-term revenue visibility. We are currently in advanced stages of closing 2 or 3 contracts across both retail media and security verticals. These opportunities are at various stages of final documentation and commercial negotiation, while we remain disciplined in not recognizing revenue until contracts are executed and deployments begin, the level of activity gives us increasing confidence in near-term revenue growth. Assuming successful execution, we expect these engagements to begin contributing in the short term to the company's numbers. Turning now to a more strategic update. In separate disclosures, we have updated shareholders on Winkel Media, our joint venture with Anheuser-Busch. The Winkel network has recently added approximately 5,400 locations, further scaling its in-store retail media footprint across Latin America. As with any network expansion, there is a natural lag between install, activation, advertising onboarding and full revenue ramp. However, we believe this recent expansion will have meaningful revenue impact in 2026, both at the joint venture level and indirectly for VSBLTY as the technology platform powering that network. This scale reinforces the long-term value of our retail media strategy and demonstrates that patient deployment can lead to substantial network expansion. Now I'd like to speak separately about our strategic evolution within the company. Over the past year, we've been engaging with key channel partners who bring established enterprise and government relationships in regions, including India and the Middle East. These engagements have introduced us to large-scale opportunities requiring deep integration across multiple systems. As a result, we have formally expanded our platform capabilities into the category of data fusion. Computer vision remains foundational to our business. We interpret live video, detect objects, analyze behavior and generate contextual intelligence in real time. Data fusion elegantly builds on that foundation. It integrates multiple data streams, video analytics, access control systems, IoT sensors, license plate recognition, environmental inputs, satellite connection and third-party data feeds into unified operational intelligence environment, particularly valuable to militaries and to smart cities. Instead of asking what is happening in this camera, we ask what is happening across the entire environment. This capability is particularly relevant in smart cities, command centers, integrating traffic, safety and event analytics, critical infrastructure environments such as airports, port utilities and transportation hubs, multisite enterprise security operations, integrated traffic management systems, cross-system anomaly detection and alert prioritization. The value proposition is contextualized intelligence, reducing noise, prioritizing actionable events and enabling faster operational decision-making. You can see the value that this would have for militaries, for example, that are overloaded with inbound data in silos in different databases. The ability to merge them and make meaning of them with artificial intelligence is the opportunity. From a commercial standpoint, data fusion deployments tend to be broader in scope, longer in duration than single site and longer in duration than single-site analytics projects. They embed our platform deeper into mission-critical workflows and expand our addressable market, making us stickier. To be clear, this is not a pivot away from our core business, it is a natural progression of it. Our computer vision engine remains central. Data fusion expands the intelligence layer around it. In closing, the last year tested this organization financially and operationally. What matters now is execution. We are seeing improving revenue trends. We are entering late-stage commercial discussions that support long-term growth and near-term revenue. Our Retail Media joint venture continues to scale meaningfully. And we are expanding our platform into higher-level applications through data fusion, both in civilian and military markets. I remain confident in the relevance of our technology, the markets we serve and the discipline with which we are operating. VSBLTY has a remarkably committed assembly of management developers and strategic partners. We are highly resilient and are convinced that our true value of -- the true value of this company will begin to be expressed in the near future. With that, Jonathan, I'll open the call for questions. Jonathan Paterson: Thanks, Jay. First question, will Winkel Media revenue be recognized in VSBLTY's earnings soon? Also, what is the status with that relationship? James Hutton: Revenue recognition for a software company is always challenging because it always leads to some level of disagreement and point of view between the auditors and the company. The rules are the rules. Of course, we've got to follow them. With respect to revenue recognition, since day 1 with Winkel Media, we have recognized not a single dollar from those contract, which means we have an embedded bank of dollars that the moment we're able to recognize it under the rules for IFRS, we will be able to recognize it. That is projected to be this calendar year. The mechanism or the mechanics of recognition of revenue have to do with when that entity, the joint venture in this case, is reliably, predictably and repeatedly making payments against those debts. Now we have 2 engagements at Winkel that are meaningful to this discussion and a third that is relevant with respect to the balance sheet. We have a large working capital loan to them in several million dollars. That's one. Number two, we have a SaaS trailing revenue for Software as a Service, and that has gone into deferred revenue from the very beginning. Not $1 of that has been recognized under the IFRS revenue recognition rules. And we have a third piece that's a managed services agreement that was transferred to us in February of '25. That is being recognized. It's the only element of the 3 that is -- of the 2 that is being recognized. Both on the debt service and on the SaaS recognition, we expect it to impact our balance sheet Q3, Q4 of this year. Jonathan Paterson: Great. Thank you, Jay. A follow-up question regarding other partnerships. Are there any other previously announced partnerships that are starting to show fruit or potential revenue growth going forward? James Hutton: Well, the answer is yes, but I'm not going to disclose them at the moment because we're at various stages of contract agreements, deployments. And under the rules, we don't announce the revenue until that revenue is real. In fact, there is a specific prohibition for public companies to talk about what a contract could be. We are governed very aggressively with the kind of language that we're allowed to use. And at this moment, because the company is emerging from a very difficult time, I'm going to play by all the rules and not be creative in any regard. Jonathan Paterson: Understood. Can you give an update on the number of projects that you've mentioned in the past, specifically like the cooler doors? James Hutton: Sure. I mean, every company has to prioritize projects against the resources that we have. And that particular category, if you're asking me specifically to speak about cooler doors, there are 3 or 4 large customers that are evaluating in some cases or at least in one case, engineering that board engineering that product into their current product category, adding our product to their product. None of those are at the point where I'm prepared to talk about either predictive revenue or current revenue, they remain in the development modality. Jonathan Paterson: Great. Thank you. A relevant one for today. When do we resume trading? Since you're not profitable, would there be a capital raise on the horizon? And could you talk about the current cash burn and how much you need until profitability? So there's a few questions in there. So maybe when do we resume trading? And then if you could talk about any potential capital raise, and what does it look like for us to become profitable? James Hutton: Well, if you look at the numbers, we're around $6.5 million on an annual basis, plus or minus, to turn net profit. So that would mean that you -- that our -- if we make more than $500,000 to $550,000 in a single month, we are, by definition, profitable. I mean these are -- it's spiky. Some months are higher than others. But on an annualized basis, our target is between $6 million and $7 million. And we have multiple projects in the pipeline at this moment. Some of them sitting at a very high probability, almost completed kind of thing that would satisfy that requirement by themselves. That's the kind of contract we are pursuing, which is the reason why it takes -- one thing I've learned after almost 25 years, the bigger they are, the longer they take to get done. So it is our expectation that at least a portion of and potentially all of our burn will be managed by or addressed by revenue. If, however, an occasion arises that in order to deliver the contracts flawlessly, we may need to get additional capital, we will do that. But we have a couple of hidden secrets in VSBLTY. One of them is that between $0.09 a share and I believe $0.75 a share, we have more than $15 million in warrants. And it is my hope that the stock price will create an environment where it makes sense for those to come in. I'm not Pollyanna about it. I don't believe that 100% of the dollars are going to come in just based upon the movement of the stock price. But the mechanics are clear. And once we get announcements out and we've got a few that we are expecting soon, we believe that the marketplace will respond because the announcements, none of them are modest. They're all pretty significant. And should we be able to land them in the time frame that I expect we should and they're of the size that they appear to be at the moment, then we will have the benefit of being able to fund the company by way of revenue. And if we have to tap the public markets, it would be by way of warrants. I'm not dismissing the idea of a small capital raise. We could do that, but we would only do that should we be seeking execution capital. It's to enable the contracts that we have. Jonathan Paterson: And then could you touch upon just -- obviously, there's a little bit of confusion on the back of the CSE's announcement earlier today about the resumption of trading for VSBLTY? James Hutton: Yes. I think it was clumsy, quite honest with you. They said that the company has satisfied all the requirements to resume trading, leaving the inference that we are resuming trading. Well, we're not. They don't get to make that call. We are currently in the hands of an analysis or review that occurs with BCSC as the lead, but also involves other regulatory authorities. But BCSE is the lead. We know who our analyst is. She's working the file. And if she gets done quickly, we'll be trading quickly. If they take their time, it will be a little bit longer. I think the reasonable expectation is between 2 to 6 weeks. I'm on the front end of that from an expectation point of view because the company went through a continuous disclosure review, which happens once every several years for public companies in Canada, just standard fair. We went through one in January of '25. So that would suggest we're pretty fresh on the items that they're going to review. What they're reviewing is that the company has adequately and completely disclosed all the major events that the insiders have behaved themselves. So they'll review the insider filings that we've got update background checks. All of that we knew was coming in terms of the various things they would ask for. And when we submitted our application to resume trading, we submitted it with all those things with the expectation that they were going to ask us for them anyway. So we're doing everything we can to shorten the process. But ultimately, it is the decision of the regulator, which does not respond to our persuasion influence or anything. So it is -- it runs at their speed. Jonathan Paterson: Great. So we have a question. Is it safe to say that VSBLTY has ongoing deals and discussions in progress now regarding military and data fusion deals and partnerships? James Hutton: Yes. Jonathan Paterson: Okay. Staying with Data Fusion, Data Fusion does seem like a very organic expansion of VSBLTY's mission. Is it possible for you to talk about a few concrete examples of the integration of services? James Hutton: Yes. Yes. But in my example, I am not specifying a current use case, I am specifying a sample use case. Borders and perimeters have always been important to VSBLTY. A lot of what computer vision does and can be is the ability to protect borders for insurgent activity, illegal crossings, this sort of thing, both for vehicles, people, weapons, all of that. This is partly what computer vision is very good at doing and doing so in a way that is not necessarily attended by an operator, it is autonomous. It can do that and then inform an operator as to something that needs to be addressed. But you would imagine in a border application, maybe it's a conflict zone, maybe it's just a standard nonconflicted border, there are other things going on, right? There's a satellite above, maybe there's drones flying above. All of those entities or capabilities are producing data, and they're pushing that data down to the ground. Radars are picking up signatures that are pushing that into a database. There may be voice traffic. There may be mobile detection of devices, mobile devices. All these are data pods or data streams. Data Fusion is the idea of taking those streams into a single ingestion layer and providing a visualization of what's happening. So you see multimodalities of what's happening in a specific threat area or border area or conflict area. That's the opportunity. I don't like to say this with too much authority, but what VSBLTY is doing in the area of signals intelligence, computer vision intelligence, satellite intelligence and of course, streaming intelligence coming from drones and other things is like a little Palantir really because the primary value proposition of Palantir is taking structured and unstructured data, congesting it into an environment where it can be viewed and made sense of. AI has made that whole domain far more reachable. And in terms of the use cases, you can imagine if you're sitting at a border location and all this data is coming into you, today, just understanding that data is overwhelming, like just too much. But the idea of creating a Data Fusion layer and then running AI on top of that layer to provide for natural language query and all the things that we can do in AI databases now, that is compelling. And it's close proximity to our current marketplace. I wouldn't view this to be a new direction for the company. I would say it's a natural extension of where we are today because we're one of those very many data sets, data streams. Jonathan Paterson: Thanks, Jay. And then just the final question for today. Is the Data Fusion being done with Blaze? James Hutton: We've spent a long time. Our CTO, Gary Gibson, has poured a lot of energy along with the computer vision team and others to certify our platform on top of multiple silicon sets. And at this moment, we are certified -- we have certified ourselves on Intel, Qualcomm, Blaze, and we're about to be certified on NVIDIA. What that means is that we get to ride the shirttails of the innovation and development in the silicon space. Because the moment somebody comes up with something new, fascinating, exciting, either low power or high capacity, we are able to utilize that in a deployment that is relevant to us. And the conversation we just had about Data Fusion is very relevant because Data Fusion, when properly implemented, occurs at the edge of the network, right? So we're -- we have now 3, 3.5, almost 4 options to do that, which means we can go to a systems integrator who is our likely go-to-market partner. And say, well, we've got lots of options with respect to silicon and let's together find out which is the best one for us from a price performance point of view, and we have that capability. Our relationship with Blaze is strong. Our legacy relationship with Intel is very strong, has been for 10 years, and we're building new relationships now. Qualcomm, 2 years old, 3 years old relationship now doing well, and there's more coming with Qualcomm as we're working on specific projects and initiatives together with Qualcomm. But both Qualcomm and Blaze have invested in this company. So I would say that we're -- now is time for us to yield some of the benefit of that. Jonathan Paterson: Great. Thank you, Jay. That ends the Q&A session. I'll hand it back to you just to finish off the call. James Hutton: Well, it would be wrong of me to have this call without clearly recognizing that it's been a tough 8 months. Ironically, within those 8 months, the progress of the business has been material. And you'll see what I mean. I mean, I can't disclose that until it's disclosable, but I'm here because I continue to believe. And what's very interesting about this is despite the fact that we've got a company that is facing significant challenges with respect to an external event, we don't -- we haven't lost a lot of people. We've got a bunch of people that are incredibly believing in the mission, incredibly -- they have incredible belief in the mission. And because they're exposed to some of the momentum that I've been now referring to at a distance here, we all believe that we're going to get there. So my job in the next several months is to continue to be transparent about the company's progress to make it clear what we're doing specifically and with as much reference to revenue as possible and continue to broaden the appeal of the company. I know we've got to rebuild our shareholder base, and I'm at that job in the moment we get back trading and possibly before. Jonathan Paterson: Fantastic. Thank you, Jake. Thank you for everyone that participated in the call today. Thank you. James Hutton: Thank you, everybody.
Operator: Good day, everyone, and welcome to the Fortuna Mining Corp. Fourth Quarter and Full Year 2025 Financial and Operational Results Call. [Operator Instructions] It is now my pleasure to hand the floor over to your host, Carlos Baca, Vice President of Investor Relations. Sir, the floor is yours. Carlos Baca: Thank you, Matthew. Good morning, ladies and gentlemen, and welcome to Fortuna Mining's conference call to discuss our financial and operational results for fourth quarter and full year 2025. Hosting today's call on behalf of Fortuna are Jorge Alberto Ganoza, President, Chief Executive Officer and Co-Founder; Luis Dario Ganoza, Chief Financial Officer; Cesar Velasco, Chief Operating Officer, Latin America; David Whittle, Chief Operating Officer, West Africa. Today's earnings call presentation is available on our website at fortunamining.com. Statements made during this call are subject to the reader advisories included in yesterday's news release, in the webcast presentation or management discussion and analysis and the risk factors outlined in our annual information form. All financial figures discussed today are in U.S. dollars unless otherwise stated. Technical information presented has been reviewed and approved by Eric Chapman, Fortuna's Senior Vice President of Technical Services and a qualified person as defined by National Instrument 43-101. I will now turn the call over to Jorge Alberto Ganoza, President, Chief Executive Officer and Co-Founder of Fortuna Mining. Jorge Durant: Thank you, Carlos. Good morning, and thank you for joining us today. I'll start very briefly with the quarter before moving to our growth outlook. In the quarter, we delivered record adjusted net income of $0.23 per share, generally in line with analysts' consensus. Net cash from operations before working capital adjustments was a strong $0.48 per share, exceeding consensus estimates of $0.43. We also generated record free cash flow of $132 million for the quarter and again, record $330 million for the full year, highlighting the strength of our operations and balance sheet, which ranks amongst the strongest in our peer group, with over $700 million in liquidity and a net cash position of approximately $380 million. With that context, let me turn to the more important part of the story now, which is growth and value creation. As we have stated, our objective is clear: to grow Fortuna to more than 0.5 million ounces of annual gold production from long-life assets, achieving this over the next 24 months. This will represent approximately 65% growth from current production levels. Importantly, this is growth that we control. The ounces are already contained within our mineral inventory across advanced projects in our portfolio. As this production comes online, we expect it to translate into meaningful growth in free cash flow per share, supported by scale, asset quality, good geographic distribution and capital discipline. The delivery of this growth is driven by 2 core assets: Diamba Sud in Senegal and Seguela in the Ivory Coast. Starting with Diamba Sud, the project continues to advance on a fast track approach towards a formal construction decision in midyear, aligned with the publication of the feasibility study. This morning, we released an updated mineral resource estimate, showing a 73% increase in indicated resources to 1.25 million ounces of gold, which will form the key foundation for the study. For 2026, we have approved a $100 million budget at Diamba Sud, with $67 million of that allocated to early works, which include the camp facilities, major excavations and other enabling infrastructure. We began breaking ground this week and we filed our exploitation permit application earlier this month, marking important execution milestones. Mineralization at Diamba remains wide open, and we continue to carry out aggressive drilling in parallel with project development activities as we pursue further resource growth while growing, continuing and derisking project time line. Turning to Seguela. We're preparing for the next phase of growth through a plant upgrade study currently underway, evaluating throughput expansion options that potentially take the mine to 200,000 ounces of annual production. This work builds on recent reserve growth and position Seguela to deliver higher production and cash flow from an already high-quality long-life asset. In summary, Fortuna's growth to over 0.5 million ounces is visible, controlled and executable, supported by a strong balance sheet, a sound base of mineral resources and reserves and a clear focus on per share value creation. With that, I'll turn the call over to the operating team. David, do you want to share your update? David Whittle: Thank you, Jorge. Seguela delivered another strong quarter and for the second consecutive year, exceeded the upper end of production guidence. This consistent outperformance reflects the strength of the operation and the quality of the asset. Encouragingly, recent exploration drilling results providing further momentum, presenting opportunities to increase production levels beyond the current mine plan assumptions. At Diamba Sud in Senegal, the project continues to advance on schedule, early works programs have been approved, key contracts have been tendered and awarded and the project team is mobilizing in preparation for the next development phase. Importantly, during the fourth quarter, no significant incidents were recorded across our West African operations, underscoring our commitment to maintaining a safe and healthy workplace for all personnel. At Seguela, we produced 36,942 ounces of gold in the fourth quarter, consistent with prior quarters and ahead of the mine plan. For the full year, production totaled 152,420 ounces, exceeding the upper end of guidance by 4%. Mining during the quarter totaled 340,000 tonnes of ore, at an average grade of 3.71 grams per tonne gold, along with 3.92 million tonnes of waste, resulting in a strip ratio of 11.5:1. The processing plant created 410,000 tonnes of ore at an average grade of 3.01 grams per tonne gold, with throughput averaging 214 tons per hour. Ore was primarily sourced from the Antenna Ancien and Koula pits with waste mining also commencing for the Sunbird pit. The Sunbird underground project continues to advance strongly. Based on drilling completed through to the end of June 2025, we declared a reserve of just over 400,000 ounces. During the second half of 2025, 5 diamond drill rigs were allocated to Sunbird, delivering excellent results that support further resource growth. Given the strength of the Sunbird underground and the incorporation of Kingfisher Open pit into the life of mine plan, we've identified an opportunity to increase plant capacity. Like a [ podium ], the original plant builder has been engaged to evaluate expansion options, targeting throughput of between 2 million and 2.5 million tonnes per year. Early indications are positive and we expect to complete the study early this year. So again a strong operational performance translated into a cash cost of $710 per ounce of gold for the quarter and $679 per ounce for the year. AISC was $1,576 per ounce of gold for the quarter and $1,560 per ounce for the year, at the midpoint of guidance, despite an $86 per ounce impact from higher royalties lead to increased gold prices. Cost discipline remains a clear strength of the operation. In 2026, exploration drilling will continue at pace, with increased focus on infill drilling and step-out testing along [ stopes ] and at depth at Kingfisher as well as continued evaluation of additional targets across the 35 kilometers strike length from the Seguela [ land ] package. Drilling at Sunbird underground will also continue as we advance technical studies and progress permitting activities. Capital has already been allocated for long-lead underground mining equipment. Turning to Diamba Sud, exploration, environment permitting and feasibility work advanced meaningfully during the quarter. Government approvals were received for early works programs the ESIA during its final stages of approval. Following the rainy season, drill rigs were remobilized at SEMARNAT and other deposits with continued positive results, further strengthening our confidence in this already robust package. Thank you. Back to yourself Jorge. Jorge Durant: thank you, David. Now sure, Cesar will share the update on Lat Am operations. Cesar, please? Cesar Velasco: Thank you, Jorge, and good afternoon, everyone. Our Latin Africa operation delivered resilient performance in 2025 with no reportable safety incident, supported by strong production execution during the first 3 quarters of Lindero and consistent results at Caylloma throughout the year, where base metal production exceeded the upper end of guidance. Fourth quarter results at Lindero by impacted by mechanical downtime in the crushing circuit, which affected full year production. At Lindero, full year gold production totaled 87,489 ounces, approximately 6% below the lower end of guidance, affected entirely by the fourth quarter production, which totaled 19,201 ounces of gold, driven by 2 independent mechanical interruptions during the same period. An engineering review identified the structural fatigue risk in the primary crusher foundations. To address the root cause, we have approved a 35-day foundation replacement schedule for late March 2026 at an estimated cost of $2.2 million. Ore is being pre-stockpiled to maintain stacking continuity during the repair. This has been fully considered within our production plan and guidance for the year. From a financial perspective, Lindero generated $294.2 million in annual gold sales and EBITDA margin remained strong at 57% to sales. Cash cost of $1,117 per ounce of gold for Q4 and $1,132 for the year, well within guidance range. Q4 all-in sustaining cost improved to $1,639 per ounce of gold due to lower sustaining capital and reduced stripping, offset by the impact of maintenance interventions and temporary crushing solutions. AISC for the full year of $1,716 per ounce within guidance range. We are currently conducting approximately 6,500 meters of diamond drilling below the pit bottom, where mineralization remains open at depth. The objective of this program is to upgrade and estimated 40,000 ounces of inferred resources to the indicated and measured categories. These resources are located beyond the limits of the current final pit design and the resources pit shell. Lindero remains a high-margin, long-life mine with strong fundamentals. Now turning to Caylloma, the operation continued to deliver consistent and disciplined performance throughout 2025. In the fourth quarter of 2025, Caylloma produced 250,000 ounces of silver at an average head grade of 65 grams per tonne, maintaining production levels in line with the previous quarter. Zinc and lead production totaled 12.1 million and 8.4 million, respectively, at an average head grades of 4.32% zinc and 2.95% lead. Production remained steady quarter-over-quarter as mining continued from the same levels and stopes, supporting predictable milled feed and recoveries. For the full year production of [Technical Difficulty] Operator: Ladies and gentlemen, please remain on the line while we reconnect the speaker to the conference room. Thank you for your patience. Once again, ladies and gentlemen, please remain on the line while we reconnect the speaker to the conference room. Once again, ladies and gentlemen, please remain on the line while we reconnect the speaker to your conference. And Carlos your line is connected. Your line is live. Carlos Baca: Yes. We're back. Okay. Jorge Durant: I think we can move on to the financial summary with the CFO. Luis, please go ahead. Luis Durant: Thank you. So attributable net income for the quarter was $68.1 million or $0.22 per share. On an adjusted basis, excluding noncash charges, net income was $71.3 million or $0.23 per share. This represents a significant increase over the $0.06 reported in Q4 of 2024 and the $0.17 in Q3 of 2025. Year-over-year, that increase was primarily driven by higher gold prices. We realized an average price of 4,166 per ounce, an increase of over $1,500 per ounce, while consolidated cash costs rose only marginally by 5% to $971 per ounce. This pricing benefit was partially offset by lower production volumes stemming from the HPGR downtime at Lindero in December, as referenced by Cesar. Compared to Q3 of 2025, the $0.06 increase in EPS was similarly driven by a $700 per ounce rise in realized gold prices. I will take a couple of minutes to make a few other comments pertaining to certain items of our annual results. We recorded $26 million in general and administration expenses for Q4, which includes $6.9 million in stock-based compensation. This total is $9.5 million higher than Q4 of 2024. This increase was driven by 2 main factors: $5.3 million related to higher stock-based compensation due to our year-over-year share price appreciation; and $3.5 million in higher site level G&A, primarily due to timing of expenses. A full breakdown is available on Page 10 of our MD&A. Looking ahead, we expect quarterly G&A, excluding stock-based compensation to range between $14 million and $16 million across our corporate and site operations. Continuing with G&A, full year expenses totaled $97.7 million, an increase of $29 million over 2024. About 2/3 of this variance, approximately $20 million stems from stock-based compensation, driven once again by the year-over-year appreciation of our share price. We recorded a foreign exchange loss of $2.9 million for the quarter and $7.8 million for the full year. The annual figure includes a $13.8 million realized foreign exchange loss, primarily driven by our operations in Argentina. Notably, over $6 million of this realized loss stemmed from cash balances held [ in country ] during the first half of the year. However, this was fully offset by hedging strategies we implemented to protect the U.S. dollar value of our local currency. Interest and finance costs for the quarter were $2.6 million, which is $3 million lower than Q4 of 2024. And for the full year, interest costs totaled $12.3 million. This is a $12 million decrease from the previous year. This improvement was driven primarily by a significant increase in interest income which rose to $14.5 million in 2025 compared to $3.7 million in 2024, reflecting our growing cash balances. Finally, on the income statement, our effective tax rate for the fourth quarter was 33%, while the full year 2025 rate was 26%. These figures reflect the statutory tax rates in our operating jurisdictions as well as withholding taxes associated with the repatriation of profits. Looking ahead to 2026, we expect our effective tax rates to average between 30% and 33%. Moving to cash flow and liquidity. Our total capital expenditures was $44.5 million for the quarter and $178.1 million for the full year. Of the annual total, $109 million was dedicated to sustaining capital and $69 million to growth initiatives. This growth spend included $48 million for exploration across Diamba Sud, our operating sites and greenfield initiatives, along with $14 million to advance the Diamba Sud project. Free cash flow from ongoing operations, which accounts for sustaining capital reached $132 million for Q4 and $330 million for the full year. This represents an EBITDA conversion rate of 84% and 60%, respectively. We ended 2025 with $704 million in total liquidity, a $327 million increase over 2024, driven by our strong operating results and the sale of Yaramoko earlier this year. Back to you, Jorge. Jorge Durant: Carlos. That's all for management, and we can open the floor for Q&A. Operator: [Operator Instructions] Your first question is coming from Mohamed Sidibe from National Bank. Mohamed Sidibe: Maybe my first question, I can start with Diamba Sud and the positive resource update that you provided this morning. How should we think about the upcoming technical report? Will the increased resource be geared towards extending the mine life there? Or should we think about an improvement of the production profile in the first 2 to 5 years with maybe a little bit tonnage than previously expected. Any color would be great there. Jorge Durant: Yes. No, we do not anticipate this will lead to a change in throughput against what we presented in the PEA, which was released in October. So this will, I believe, have 2 impacts this new update Mohamed, one will lead to an extension of life of mine, right? And second, the new resources coming in come at a higher grade. So the new deposit in the inventory is Southern Arc, which today is the largest deposit at the Diamba Sud camp. And it is also the highest grade one. So at 1.9 grams, I do would expect that annual production -- the annual production profile benefits to some degree from that uplift as well. Mohamed Sidibe: That's clear on that front. And then so I guess a little bit more high grade in the front and then the lower grade material from the other assets can be used to extend the mine life there. If I can maybe ask yourself or David, maybe on the gold price assumption. So Diamba, you took it from about $2,600 to $3,300 per ounce. What was -- what are the key drivers behind that assumption? And if you can walk us through any reasoning behind that, using that price for the resource, please? Jorge Durant: Yes. That is the resource that we have used. Right now, everybody is adjusting their price decks and we are using the methodology we use, the number we derived is $3,300 for the resource. So you should anticipate that for the reserve estimate, we use a lower gold price. Just as a reference, for our budgets and reserves for 2026, it's something we estimate with a cutoff date of -- in the second half of the year. And we use $2,600 gold for the resources and $2,300 gold for the reserve. So you should anticipate we use for reserves a lower number, a lower gold price compared to the 3,300 in the resource. Mohamed Sidibe: That's great. And then maybe my final question on just the broader portfolio. I know you already guided to 2026, but how should we think about the cadence of production in the first half versus second half, specifically as with shipping at Seguela and production at Lindero? Just any color there would be appreciated. Jorge Durant: Production through the year should be, in general, steady. The only one is Lindero, where production in Q1 should be -- Q1, Q2 should be expected to be a bit on the softer side as -- that's part of our plans. As Cesar described, we are engaged in improvements, changes to the foundations of the primary crusher and then gradually picking up a bit better in the second half of the year once all of those works are complete. Where do -- we do see an more variation is in AISC through the year. We do expect a bit of a higher AISC in the beginning of the year, smoothing out, lowering throughout midyear into the second half to be where we guided, right? And that is just a function of capital expenditures being a bit more heavier in the first half of the year compared to the second half. Operator: [Operator Instructions] Your next question is coming from John Pereira. John Pereira: Sorry, I -- my line got disconnect. I'm not sure if there's any duplication from the previous caller. My questions are -- 1 of my questions is similar and really in terms of -- you talk about your plan to get to 500,000 ounces. And I'm just wondering if we could hear a little bit more color around that when you look at Seguela at current running rate of, we'll say, 160,000 ounces annually, if you can indeed achieve a 40% increase through your studies, that takes you to 225,000. And then obviously, Diamba Sud, if that goes forward, would contribute. So I'd just like to understand a little bit more color on from the various projects, how you equate to 500,000 when you expect or how does that ramp over '26, '27 and '28? Answer whatever you can. I know I'm asking a lot here. And then in terms of cost for the various projects for example, in Seguela, if we want to move that from 160 to 225, do you have a sense of what the CapEx cost would be for that? Diamba Sud talked about in terms of previous news releases and in terms of capital costs. But can you just give a little bit more flavor and then maybe if there's any increase in production expected from Lindero as well? Jorge Durant: Yes, absolutely. Let's start with Seguela. Seguela is a mine that was originally designed to operate at a throughput rate of 1.25 million tonnes per year. That was the nameplate capacity of what we built and commissioned in mid-2023. Today, the mine is operating. For 2026, we have budgeted and guided for 1,750,000 ounces of throughput in the year, right? Our aim is to take it to 2.2 million, 2.3 million tons per year. That is a brownfields expansion of the processing plant. We're well advanced with the studies, and we have confidence right now that technically, it's a very straightforward project. Most of the work will reside on the wet portion of the circuit, be it that thinners, pumping capacity, leach tanks. And we will certainly have to add a regrind ball mill. But as we understand it today, very little work will likely take place on the combination. So I can give you a broad range of the figure, we believe, will be required to materialize this expansion right now as the study is not complete, but the order of magnitude is in the range of probably $50 million, $60 million to $100 million on the high end. And by midyear, we will have a trade-off between the different options that we have and certainly final numbers for that. But in terms of order of magnitude, those are the magnitude we're talking about, right? In -- but of course, the processing capacity is just a portion of this project because the foundation for this resides in the resource and in the reserve. And we just published a few weeks ago, an updated reserve and resource estimate for this mine. And what we're showing is that we have 1.5 million ounces of gold in reserves and 400,000 ounces in the indicated category and 700,000 ounces in the inferred. And we continue drilling and finding more. So you should expect that before midyear, probably April, May, we will be updating again the resources and reserves for this mine. And it will be a constant deterioration for the next foreseeable future because we are having -- enjoying a lot of success with our drilling. So that is the foundation really for the expansion. And we are targeting 2.2 million tonnes per year, 2.3 million in that range. That range still needs to be well defined in the study. And that, with the grades we have in the reserve and in the resources that we do our modeling, should lead to a production in the range of 200,000 ounces of gold annually. So that is our target based on the work we're delivering. When can we achieve this? If we have a study completed by mid-2026, I think a project of this nature, advancing it at a fast pace, we're not subject to any financial limitations on this one, we can advance it quickly and expectation would be that 12 to 18 months, I think, would be -- probably the limiting factor is delivery times on key equipment, for example, a rig or a mill, right? Right now, delivery times are around 12 months. So 12 to 18 months, I believe, is what should be expected from the gold decision. We might a long way decide to derisk the time line, advancing with some early purchases. That's something that we can consider. But we are not there yet. We're still in the study phase. Moving on to the Diamba Sud, the same. Diamba Sud has a robust rich resource. We just updated it. We are very confident on the technical viability and economics of this project. We have a very strong PEA published in October that using $2,750 gold yields, an internal rate of return of 72% for our investment. So -- and that was with a smaller resource. So now with the figures we just updated, those -- this new resource, 1.25 million ounces indicated are going to inform the feasibility study that we aim to publish in May, June. But we are confident and the best use of our funds right now is advance the project in a way that we derisk the time line for first gold. So we have decided to commit this year $100 million for the Diamba Sud project and $67 million of that $100 million figure are allocated for early works. What does that entail? We're building the camp. We are initiating excavations. We plan to initiate excavations on the water storage facility and other ancillary infrastructure. We are planning to purchase -- place early purchase orders for critical equipment packages, power generators, SAG mill and other equipment packages. Placing those early orders will not only help secure our budget through the construction but also safeguard or time line to first gold. Everybody is happy right now about $4,000, $5,000 gold, but no one is thinking that everybody now wants to build a gold mine and the delivery times on the critical equipment that we use, the consumables or mines require, the people needed to execute all of these are quickly going to come in high demand and shortage, right? So how are we mitigating that risk? Putting our capital to work and advancing as much as we can, placing early -- getting ourselves early in the queues for critical equipment, securing the best people and the best teams from the engineering firm. So we're doing a lot of that right now. John Pereira: What do you consider long life? So you took a long life mine. You talked about 8 to 10 years is what you may be comfortable with? Jorge Durant: The target for us is a decade. We need to see not solely on reserves, but also considering at least our resources, we need to see a decade, a decade plus. Yes. John Pereira: So that tells me that we say within the next 2 or 3 years, you want to ramp to 500,000, 0.5 million ounces per year, then you are obviously in aggregate, going to target a resource of close to 5 million ounces through the various projects. So I guess you're well underway, certainly with Seguela, right? And Diamba Sud at 1.5 million [ ounces ] already, right? Jorge Durant: Let me help you there. if I do something in -- currently today in our aggregate or consolidated reserves, if you look at our website, what you will see is that we have 3 million ounces in reserves today on a consolidated basis, 2.2 million ounces in indicated resources, which are of good quality and it's just a function of timing until we start converting a big chunk of that into the reserve. And we have 2 million ounces of gold in inferred categories, plus $50 million in drilling being spent this year in exploration, not just drilling, but exploration. So the aggregate number, if I aggregate, which the regulators don't like, but if I -- just for the sake of conversation, the aggregate is over 7 million ounces. So we feel comfortable we have the resource base and reserve base to achieve our ambition. John Pereira: Right. Do you still have anything -- any exploration going on in Mexico? Jorge Durant: Yes. We do have some early stage exploration at 2 projects. One is being currently drilled. We don't talk much about those because those are early stage exploration. But yes, we still do some work. It's not a significant portion of the overall budget, but we're still there. John Pereira: Okay. Great. And then just lastly on Lindero. Where do you see that the production for Lindero going? Is there any growth or expansion plans planned for Lindero? Jorge Durant: Today, Lindero enjoys a decade in reserves, right? Reserves and resources, we clearly have a -- we're comfortable with 19 years there, right now as it sits. And Cesar touched on this during his intervention. We currently have a drill program because at the pit -- at the bottom of -- below the bottom of the pit, we have a open mineralization and we are targeting -- this is a target of 400,000 ounces of gold that we're currently drilling at the bottom of the pit. How much of that are we going to capture? Let me get back to you once the drilling is complete, but that is the target. And we're drilling -- we're set to start drilling in March, I believe, and so before year -- midyear, that program should be completed, and I expect we'll see a big portion of those ounces coming into the inventory mid in the second half of the year. Our budget there for exploration is about $5 million this year. Yes. Operator: Your next question is coming from Mohamed Sidibe from National Bank. Mohamed Sidibe: Just Seguela, maybe as you relate to the underground, could you share some color on when -- about the underground development plans you have there for Sunbird and when we could start to see ore from the underground within your plan? I'm not sure if you can give any color on that front. Jorge Durant: Yes. We have, Mohamed, a budget this year of around $14 million that will likely grow some. This year, we want to start the box cut and some purchases of underground equipment. The idea is that we are doing excavations in 2027, so probably late 2027, early 2028 is when we can start seeing production. Remember that we're still permitting. We're still permitting underground. So we expect we can achieve our permits late this year. I was at Indaba with the team, David and the team, we had a good meeting with the Director of Mines. For Sene -- Ivory Coast, and he was very keen to advance with the permitting and with the aim of having it permitted this year. So if we take his word, if we're permitted this year, we can initiate mining next, right? This will require ramps and crosscuts and ancillary infrastructure that will likely be developed throughout 2027 and first production in 2028. Operator: [Operator Instructions] That concludes our Q&A session. I will now hand the conference back to Carlos Baca, Vice President of Investor Relations, for closing remarks. Please go ahead. Carlos Baca: Thank you, Matthew. If there are no further questions, I'd like to thank everyone for joining us today. We appreciate your continued support and interest in Fortuna Mining. Have a great day. Operator: Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.
Operator: Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Adamas Trust Fourth Quarter 2025 Results Conference Call. [Operator Instructions] This conference is being recorded on Thursday, February 19, 2026. I would now like to turn the conference over to Kristi Mussallem, Investor Relations. Ma'am, please go ahead. Kristi Mussallem: Good morning, and welcome to the Fourth Quarter 2025 Earnings Call for Adamas Trust. A press release and supplemental financial presentation with Adamas Trust's fourth quarter 2025 results was released yesterday. Both the press release and supplemental financial presentation are available on the company's website at www.adamasreit.com. Additionally, we are hosting a live webcast of today's call, which you can access in the Events and Presentations section of the company's website. At this time, management would like me to inform you that certain statements made during the conference call, which are not historical, may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Adamas Trust believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ materially from expectations are detailed in yesterday's press release and from time to time in the company's filings with the Securities and Exchange Commission. Now at this time, I would like to introduce Jason Serrano, Chief Executive Officer. Jason, please go ahead. Jason Serrano: Hello. Thank you for joining us today to discuss our 2025 fourth quarter results. With me this morning is Nick Mah, President; and Kristine Nario, our CFO. We are excited about entering a new year as 2025 represented a strategic inflection point for the company, characterized by significant balance sheet growth, accelerating profitability and a strategic expansion into Constructive, a leading business purpose loan originator. We exited 2025 stronger and larger than at any point in our history. The transformation of Adamas over the past year has been deliberate and decisive. We expanded scale, materially enhanced recurring earnings power, strengthened the balance sheet and positioned the company for durable long-term growth. Our Q4 results are another validation to our strategy, which reinforce our confidence in the trajectory ahead. Salient 2025 company performance highlights include: $3.1 billion investment portfolio expansion, a 44% increase to earnings available for distribution year-over-year, where we generated over $100 million of net income, leading to a 15% increase to our common dividend. All these factors contributed to generating a 36% cumulative total stockholder return, a transformational year where we also grew company book value. We stay firm with the disciplined capital allocation, active portfolio management and a clear strategic vision by meaningfully increasing our allocation to Agency RMBS. We improved liquidity, reduced credit volatility, enhanced financing flexibility and strengthened the trajectory of earnings. The balance sheet today is materially more resilient than it was a year ago and positioned well for 2026. The addition of a powerful new earnings engine in the full acquisition of Constructive strategically positioned Adamas to benefit from both stable spread income and scalable origination economics, a combination that we believe differentiates our platform. As an update to fourth quarter, GAAP book value and adjusted book value increased by 4.3% and 2.4%, respectively, continuing the positive momentum we generated throughout the year. Quarterly EAD of $0.23 per share fully covered our dividend but declined by $0.01 sequentially. This slight reduction from last quarter was anticipated and directly tied to the J-curve effect discussed in our third quarter communication related to the integration of Constructive. Importantly, this temporary negative impact reflects upfront integration and scaling costs, not structural earnings pressure. As we transition from integration to production, we expect Constructive to be a positive contributor to EAD in the first quarter. Throughout 2025, we found scaling Agency RMBS to be both an attractive investment on an absolute and relative basis, providing mid- to high-teens equity returns. We increased the company's Agency RMBS portfolio by $3.4 billion or 56% of company capital from 23% a year earlier at an attractive average spread to treasury interpolated between 5- to 10-year maturities of 139 basis points. The strategic reallocation of capital throughout the year enhanced liquidity and balance sheet flexibility, also lowered our credit exposure and tail risk as well as increased visibility into book value performance. Now against that base, Constructive's DSCR origination platform introduce a significant upside potential. As volume scales and efficiencies are realized, we believe the earnings contribution from the DSCR production from both a gain on sale as well as interest income from loans held can expand materially. We are excited to demonstrate the operating leverage embedded within our business model in the new year. Despite the transformation of the company, Adamas shares continue to trade at a substantial discount to intrinsic value. At year-end, the shares traded at a 31% discount to book value. Even more compelling, the market capitalization represents approximately a 14% discount to just the Agency capital held on our balance sheet alone. In practical terms, the market in 2025 and continuing in early 2026 is assigning limited to no value to our non-Agency and multifamily holdings, our scaled origination platform with an exciting embedded earnings growth track and our ability to grow book value. We believe the discount creates compelling upside potential as we continue to execute and expand earnings and demonstrate sustained book value accretion. We have entered 2026 with strong momentum. In the first quarter, we are off to an exceptional start as adjusted book value is up between 3% to 4%. At the same time, Constructive DSCR originations are beginning to contribute to earnings as expected. As acquisition efficiencies are realized, we see a clear path to expanding EAD in 2026. We are highly encouraged by the early results and increasingly confident in the earnings power of the platform. We approach 2026 with conviction and optimism in the macro backdrop. The progression of the Fed easing cycle, coupled with declining volatility has created a favorable environment of lower rates and tighter spreads. The current administration's policy focus of improving housing affordability and reducing mortgage rates further reinforces our positive outlook on the residential assets. Our goal is to maintain flexibility to capitalize emerging opportunities and to direct capital to the most attractive risk-adjusted returns in the residential mortgage market. Dividend sustainability remains a core priority. In the year, we are focused on balancing competitive yields to expand reoccurring earnings with robust coverage and long-term capital preservation. We are energized by the opportunity in front of us and confident in our ability to deliver long-term value for our stockholders. At this time, I'll pass the call over to Nick for a market and strategy update. Nicholas Mah: Thank you, Jason. As we close out 2025, we are excited to have delivered significant EAD expansion alongside book value growth. Looking forward, we are confident that our two-pronged approach of investing in Agency RMBS and high-quality residential credit remains the optimal strategy for the current market environment. In the quarter, we deployed $810 million into residential assets, reflecting another period of solid investment activity. Agency RMBS purchases totaled $347 million in the fourth quarter as tightening spreads moderated the pace of acquisitions. In residential credit, we invested in $276 million of BPL-Rental loans and $181 million of BPL-Bridge loans. This marks the first quarter where rental loan purchases exceeded bridge loan purchases, reflecting our deeper utilization of Constructive's origination capabilities in rental loans. We anticipate that this trend will continue. Our Agency portfolio ended the year at $6.6 billion, doubling in size over the course of 2025, constituting 63% of our investment portfolio and 56% of our equity capital, Agency RMBS now represents our single largest asset exposure. In the fourth quarter, our Agency purchases were concentrated entirely in 5% coupon spec pools. We have continued to target low pay-up spec pools at or slightly under the current coupon, where we see the best balance of positive net interest margin duration upside and a more favorable convexity profile. Agency leverage also declined slightly in the quarter, falling to 7.7x from 7.8x. The pace of Agency acquisitions was tempered by meaningful spread compression during the period. Current coupon agency spreads tightened by 16 basis points, narrowing from 126 basis points to 110 basis points. Interest rate volatility fell meaningfully in the fourth quarter and has steadily declined since the tariff announcement in April, providing the impetus for tightening spreads in agencies. Despite spreads normalizing toward longer-term averages, we continue to see value in Agency RMBS. Our capital allocation to Agency is expected to grow through 2026 to between 60% and 70% of equity capital. We will adjust the pace and magnitude of future acquisitions opportunistically in response to spread movements and broader market conditions over the course of the year. Our BPL-Rental portfolio has almost doubled over the course of 2025, growing from $770 million to $1.4 billion. This core strategy has benefited from the integration of Constructor's origination platform alongside our disciplined underwriting standards. Borrower metrics remain strong across the BPL-Rental portfolio with a 748 average FICO, 71% average LTV and 1.36x DSCR. Credit performance has been robust with delinquencies remaining low at 1.4%, a direct result of our focus on credit quality. In 2025, we completed 4 securitizations across our home loan portfolio. We continue to aggregate loans to execute securitizations, and we are on pace for executing one BPL-Rental deal a quarter, targeting a mid- to high teens levered return. In the fourth quarter, non-QM AAA spreads remain range bound at around 130 basis points. Into the new year, however, we have seen meaningful spread compression as non-Agency AAA spreads have converged towards Agency levels, creating a favorable environment for us to grow our BPL-Rental loan securitization program. We continue to take a selective approach in BPL-Bridge, where the portfolio stands at $820 million of UPB, a decline from $1.2 billion at the beginning of the year. The proliferation of revolving securitizations across a myriad of issuers has intensified buyer competition, driving yields tighter. At this juncture, we see more compelling opportunities in agencies and BPL-Rental, and we expect the size of the BPL-Bridge portfolio to decline throughout 2026. Constructive continues to scale successfully, delivering its highest volume quarter of the year in Q4 with $474 million of originations. Constructive originated $1.8 billion worth of loans in 2025, with 93% of those originations in BPL-Rental, reflecting a strong alignment with our core credit strategy. Origination quality remains robust with a weighted average FICO of 751 and an average LTV of 74%. After our full acquisition of the platform, Constructive's loan production now matches closely with Adamas' investment criteria. We target strong borrower profiles in the stable segments of the credit spectrum. Beyond disciplined credit underwriting, we have deliberately minimized originations at the margins of securitization eligibility and shifting institutional buyer mandates, concentrating production where institutional sponsorship and secondary market liquidity are the strongest. Over the past 12 months, new construction loans have represented less than 2% and multifamily loans have represented less than 5% of Constructive's total origination. We expect Constructive to become a strategic earnings driver and sourcing engine for the firm. In the quarter, Adamas purchased 44% of Constructive's originations, deliberately striking a balance of investment portfolio growth and the cultivation of Constructive's third-party distribution network. Through Constructive, we benefit from a capital-light model that produces both gain on sale revenue and a proprietary investment pipeline. We have the flexibility to direct BPL-Rental originations to our portfolio or to the secondary markets as conditions warrant, and we expect a broadly balanced allocation between the two in 2026. In multifamily, we had another positive quarter of resolutions at an accelerated 39% annualized payoff rate. Performance has been strong throughout 2025 with only one delinquent and one restructured asset, both unchanged over the course of the year. As the portfolio seasons, we anticipate that the pace of payoffs to be higher than the historical average of 26%, and we will continue to redeploy the proceeds into our higher-yielding core strategies. Our diversified agency and credit portfolio paired with constructive origination capabilities provide us multiple avenues to grow earnings in this market environment. We are well positioned to extend this momentum in portfolio growth and earnings through 2026. I will now pass the call to Kristine to walk through our financial highlights. Kristine Nario: Thank you, Nick, and good morning, everyone. For the fourth quarter, we reported GAAP net income attributable to common stockholders of $41.6 million or $0.46 per share and earnings available for distribution of $0.23 per share, which fully covered our quarterly dividend. After accounting for a $0.23 dividend, we generated a 6.85% economic return on GAAP book value and a 4.62% economic return on adjusted book value. For full year 2025, economic return on GAAP and adjusted book value was 12.72% and 11.01%, respectively. Our quarterly performance benefited from strong investment mark-to-market gains. We saw spread tightening across Agency RMBS and certain portions of our residential loan portfolio, which increased asset valuations and contributed meaningfully to earnings. In addition, gains on our interest rate swaps contributed to our results as swap spreads widened during the quarter. Adjusted net interest income increased to $46.3 million in the fourth quarter from $42.8 million in the third quarter, and net interest spread remained stable at 152 basis points. These results reflect our continued portfolio repositioning toward Agency RMBS and BPL-Rental loans while also benefiting from improved financing costs. Partially offsetting the positive valuation impact that I mentioned earlier, we recorded $14.9 million of realized losses, primarily related to discounted payoffs and resolution activity on certain nonperforming residential loans and valuation adjustments on foreclosed properties primarily related to our BPL-Bridge portfolio. These actions reflect ongoing active portfolio management and credit resolution efforts. And in most cases, the realized losses have been substantially reflected in prior period marks. Turning to Constructive. The platform continued to demonstrate solid origination momentum during the quarter. Constructive generated $12.5 million in mortgage banking income, driven by higher origination volumes and related origination fees, partially offset by lower valuation on interest rate lock commitments and the prudent increase in loan repurchase reserves. Constructive incurred $4.3 million in direct loan origination costs and $10.2 million in direct G&A expenses, resulting in a $2 million loss for the quarter on a stand-alone basis. Direct G&A for Constructive increased in line with higher production volumes, the full quarter impact of consolidation and also continues to include expenses associated with integration. We view these items as part of normal progression of integrating and scaling the platform. Origination activity and pipeline trends remain healthy and as integration efforts moderate and production continue to grow, we expect a more consistent earnings contribution from Constructive. At acquisition, we estimated Constructive to generate approximately 15% annual equity return, and our current expectations remain aligned with that target. Total consolidated Adamas G&A expenses were $25.1 million for the quarter, up from $23.3 million last quarter, reflecting the full quarter consolidation of Constructive. From a capital markets perspective, we continue to strengthen our balance sheet. During the year, we issued $198 million senior unsecured notes to extend and diversify our funding profile. Subsequent to quarter end, we issued $90 million of 9.25% senior unsecured notes due 2031 and redeem our $100 million 5.75% senior unsecured notes due 2026 at par, retiring that obligation ahead of its April maturity. As a result, we now have no corporate debt maturities for the next 3 years. This provides meaningful flexibility and positions us to focus our capital on growing the investment portfolio rather than addressing near-term refinancing needs. At year-end, we maintained $206 million of available cash and approximately $420 million of total liquidity capacity, including financing available on unencumbered and underlevered assets. Our company recourse leverage ratio was 5x and portfolio recourse leverage ratio was 4.7x, with leverage primarily concentrated in Agency financing. Overall, our strategic repositioning has strengthened the durability of our earnings profile and positioned the company for continued growth in recurring income. We remain focused on disciplined execution and delivering sustainable returns for our stockholders. That concludes our prepared remarks. Operator, please open it up for questions. Operator: [Operator Instructions] Our first question will come from the line of Doug Harter with UBS. Marissa Lobo: It's Marissa Lobo on for Doug today. On the pace of deployment between Agency MBS and residential loans in 2026, how are you viewing the relative attractiveness of Agency MBS given the significant spread tightening year-to-date? Nicholas Mah: Yes. So from a levered return perspective, we do see a higher return on the non-Agency credit that we invest in, in particular, BPL-Rental. So for that particular asset class, we see somewhere in the mid- to high -- mid- to high teens type levered return compared to agencies today, somewhere in the mid-teens type return on a levered hedge basis. So we are still constructive on both. We still like both asset classes. We like the balance and the diversity that having both on our portfolio gives us. As I mentioned in my earlier remarks, we do expect the Agency portfolio to grow. So right now, it's at 56% of equity capital. We do expect it to grow into the 60s, assuming market conditions hold. We do think that the Agency -- the non-Agency part of our portfolio will stay about the same, but that's not because we are not increasing our BPL-Rental exposure. We're going to continue to increase that. But because BPL-Bridge does pay down relatively quickly and we find less opportunity there that effectively the mix within non-agencies will change, but we expect that the percentages in the non-Agency side to remain relatively static. So where does the additional equity capital come from? It comes from the continued resolutions in the multifamily portfolio and other noncore strategies. Marissa Lobo: That's very helpful. And looking at the expenses related to the Constructive acquisition, how should we think about the remaining integration costs and the 2026 run rate for operating expenses related to Constructive? Kristine Nario: We still see in first quarter partially some integration costs with Constructive. We've only been there for about 6 months. But in terms of G&A ratio, when you think about it, it's going to be approximately 77.5% of stockholders' equity and really approximately 44% of that would be attributable to Constructive with the rest really Adamas. And if you think about Constructive, roughly 40% of their G&A is variable and directly tied to origination activity. And this really provides us meaningful expense flexibility as volumes fluctuate. So as I said, it's about 7% or -- and 7.5% of stockholders' equity would be a run rate. Marissa Lobo: Got it. And finally, just on that comment about the gain on sale change this quarter, reflecting lower commitment valuations and the increase in loan repurchase reserves. Could you expand on that? Are there -- what are the implications to the valuation of loans on balance sheet? Kristine Nario: We don't -- yes, we think it is transitional. And let's talk about the interest rate lock valuation. It was really primarily driven by a smaller pipeline compared to last quarter and modestly lower pull-through rate, reflecting pricing conditions -- during the period, these changes are consistent with kind of normal quarter-to-quarter market fluctuations, and we continue to actively monitor and manage the pipeline and align it with current market conditions. In terms of purchase reserves, we think it was prudent to increase the repurchase reserves, and it is really tied into our purchase of the 50% interest into Constructive, and Nick can go into a little bit more detail. Nicholas Mah: Yes. We effectively coordinated the magnitude and timing of some of these repurchases and the corresponding reserves with -- in collaboration with our former equity partner in the Constructive business. And primarily, these actions were executed in the fourth quarter to take advantage of provisions and indemnities that were provided as part of the Constructive purchase transaction. We don't see the repurchase loan loss reserves as an extrapolation of higher loss trends or credit concerns for 2026. We feel very comfortable with the credit underwriting that we currently have in Constructive. Operator: Our next question will come from the line of Bose George with KBW. Francesco Labetti: This is actually Frank Labetti on for Bose. I want to start with discussing about the balancing between capital deployment between scaling Constructive originations versus increasing Agency deployment or share repurchases? And then is there like a preferred return threshold guiding that allocation going forward? Jason Serrano: Yes. Thanks for the question. So ultimately, we're focusing on mid- to high teens returns on a risk-adjusted basis throughout the different avenues which we deploy capital into. The interchange of that does change per quarter based on what's available in the market and different underwriting trends that we're seeing. Going back to Constructive, we see it as more of a capital-light model given their wholesale origination business. Nick mentioned earlier that we're focused on both gain on sale through selling to third parties as well as holding on balance sheet for our origination activity, securitization activity, which we expect one securitization a month in the space. But we don't expect to have a significant increase of capital allocation towards that strategy even with origination volumes that would prefer to grow. That was one of the primary focuses that we looked at Constructive many years ago and why we were excited about their business model. It provides for flexibility on the cost side, keeping it flat with origination trends going up or down. So we think it will be consistent kind of capital allocation there. And then the trends of looking at different asset classes, again, it's really -- we're -- Nick mentioned a target of 60% on agencies, and that's just looking at where we see value in today's market, the interchange between BPL-Bridge and rental, the fact that BPL-Bridge, we think will start -- will be reduced on our balance sheet just due to payoffs that are happening there and a lack of opportunity that we're seeing. And on the Bridge -- on the rental side, continuing to support efforts there for Constructive and seeing value in that space. So ultimately, it really depends on what the market is giving us, and we're going to make the prudent capital allocations accordingly. Nicholas Mah: One follow-on comment on Constructive. So we're still in the process of transition, and there are still things that we can do to more -- to increase volume and increase efficiencies and reduce cost that does not require capital, like, for example, getting them better financing lines with better terms, whether it's providing our captive capital to reduce the time, the warehouse time that they have their loans under. So there's things that we can do that doesn't necessarily require additional capital, and we're actually focused on those things first before planning to put additional capital in. Francesco Labetti: Great. That's very helpful. And then sticking on Constructive, can you just talk about the competition in the business purpose lending channel. Demand for the product is clearly very strong. Are you seeing any new entrants in the space and any pressure on margins there? Nicholas Mah: Yes. On the competition in DSCR loans, in particular, yes, we -- this is a space that Constructive has been in for a while. So we have seen the ebbs and flows in terms of competition. Obviously, at this juncture, it is a relatively competitive business. There's also very strong demand for loans from institutional buyers across both non-QM as well as BPL-Rental/DSCR. So there's fortunately a strong demand there in terms of -- and therefore, originators have tried to grow in that particular space. I think from our perspective, Constructive has always been a top-tier player. They have very long-term relationships. They're navigating the competition very well. And I think one of the things that we are seeing is some of the larger non-QM originators having a higher percentage allocation of originations into BPL-Rental. That is a trend that we think will continue. In some cases, we have also or Constructive has partnered with some of these larger entities to grow volume as well. So the market continues to evolve and change. Fortunately, there's strong demand, but the competition is something that we have been mindful of and navigating very well. Francesco Labetti: Great. And just one more, if I can. Just if you guys -- did you guys provide an update on book value quarter-to-date? Nicholas Mah: Yes. So in Jason's remarks, he mentioned that book value -- adjusted book value is up somewhere between 3% to 4% thus far quarter-to-date. Operator: [Operator Instructions] Our next question comes from the line of Matthew Erdner with JonesTrading. Matthew Erdner: There's been a lot of talk about institutionals or I guess, institutions being banned kind of from that rental space. Could you talk about just the profile of borrower that you guys have? And if that were to occur, what impact it would have? Nicholas Mah: Sure. We think that if this policy ultimately goes through, that it will be positive for Constructive's business. So Constructive originates loans really to individual investors, not to institutional investors. Every single one of Constructive's borrowers of loans originated in 2025 owns less than 80 single-family properties and the average is significantly lower than that. So -- and institutional investors own SFR properties by the thousands. So we don't have a lot of details yet, but in the White House executive order, the policy is really looking to limit purchases and I quote from Wall Street investors and large institutional investors. So the definitions of which are forthcoming, but these are not necessarily descriptors of Constructive's client base. So overall, I think if there was a ban institutions owning SFR, positive for Constructive, it should increase the supply of homes and transactions and reduce the demand for homes that our borrowers target. Matthew Erdner: Got it. Got it. That's helpful. And then apologies if I missed this on the last question, but could you kind of talk about share repurchases? If you did any during the quarter, I don't think you did and how you're viewing that going forward? Jason Serrano: Yes. So the way we look at share repurchases is just as a different capital allocation relative to the opportunities we see in the market as a whole. We did not repurchase shares in the quarter, in the fourth quarter. We do look at where our price to book is and the accretive value of actually utilizing capital for that. and share repurchases, it's a permanent capital reduction in retiring those shares. We don't get the ability to hold in treasury and try to issue later. So what we have to do is just -- we focus on whether or not the capital that we have allocated to and budgeted for our investment programs is accretive relative to using that capital and permanent dilution of that capital related to those share repurchases. So it's something that we consistently look at and we monitor. We throw in our models as it relates to core capital allocations, and we will continue doing that. We have, in previous quarters, repurchased shares as the market provided some opportunities there, and we'll continue to look at that going forward. Matthew Erdner: Got it. That's helpful. And then last one for me. How are you guys looking at Agency leverage given that we've kind of moved into a tighter spread range. Obviously, there's the GSE backstop, I guess, with their loan purchases. Just how are you guys thinking about leverage? Nicholas Mah: Yes. So in the quarter, leverage declined slightly. Right now, it's about 7.7x. Historically, we have run leverage up into 8, 8.5x leverage. For now, we are probably going to be trending on the lower end, so closer to the 7.7x. But depending on how market conditions, we could go higher. Operator: Our next question will be from the line of Timothy D'Agostino with Equity Research. Timothy D'Agostino: With the comments on 60% to 70% of equity capital being Agency and potentially seeing a decline in BPL-Bridge in 2026. I was just wondering, the total investment portfolio size currently is at $1.5 billion. Do you have like a target size you or goal you're trying to reach? Or do you have any near-term like percentage increases? Just thinking about what you're striving for in terms of the total portfolio size maybe at the end of '26 or at the end of 2027. Jason Serrano: Yes. So the goal is to maximize our total return within our portfolio. And that's the core -- that's where we start with looking at capital allocation. So in doing so, when the market has different moves and whether it's on credit or any Agency, we will look to change our capital allocation relative to those 2 different asset classes. So there is not a target that we are focused on reaching as a sense of just reaching the target versus maximizing our recurring earnings that we have in our portfolio. The comments that Nick made earlier on the targets around 60% is based on what we see the market giving us today and the different roll-offs of noncore strategies we have in our balance sheet. So yes, we don't have a capital allocation model that focuses on either investment portfolio size or a certain percent that we need to be in either strategy. It's really where we see the best risk-adjusted returns in the market and how do we maximize our earnings potential. Timothy D'Agostino: Okay. Great. And then just as a second question, regarding available cash, you probably averaged maybe around like $170 million over the trailing 5 quarters. And obviously, at year-end, you have $206 million available cash. I guess, could you just provide maybe an overview of how you plan to allocate that cash, whether you want to continue to hold stockpile, if you're going -- if you're just seeing kind of rotation of capital? I guess just any sort of color on the available cash at year-end would be great and how you plan to use it. Jason Serrano: Yes. We -- as the Agency strategy and spreads tighten into year-end, we -- it did take away some of our expectations of what we could grow our portfolio in the beginning of that quarter. So we ended up the quarter with a little bit more cash than we would have expected, which was partially the reason why we ended up maturing our 5.75% notes due April 2026. We just saw an opportunity there given the cash allocation that we had and the fact that there was a near-term maturity coming up and utilize the capital in that way. But I think overall, the opportunity for us is continued deployment in 2 areas. We talked about a capital-light model on the Constructive side and then looking for opportunities within Agency. So to the extent that the market winds down on the Agency side, we expect to have further deployment there and looking for more opportunistic trades in the market as a whole versus kind of a scheduled deployment. Operator: I am showing no further questions at this time. And I would now like to hand the conference back over to Jason Serrano for closing remarks. Jason Serrano: Yes. We appreciate your continued support and look forward to discussing our first quarter results in April. Have a great day. Operator: This concludes today's conference call. Thank you for participating, and you may now disconnect. Everyone, have a great day.
Operator: Thank you for standing by. This is the conference operator, and welcome to the Equinox Gold Fourth Quarter and Full Year 2025 Results and Corporate Update. [Operator Instructions] The conference call is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Ryan King, EVP of Capital Markets for Equinox Gold. Please go ahead. Ryan King: Well, thank you, operator. Well, good morning, everyone, and thank you for taking the time to join the call this morning. Before we commence, I'd like to direct everyone to our forward-looking statements on Slide 2. Our remarks and answers to your questions today may contain forward-looking information about the company's future performance. Although management believes our forward-looking statements are based on fair and reasonable assumptions, actual results may turn out to be different from these forward-looking statements. For a complete discussion of the risks, uncertainties and factors that may lead to actual operating and financial results being different from the estimates contained in our forward-looking statements, please refer to the risks identified in the section titled Risks Related to the Business in Equinox Gold's most recently filed annual information form, which is available on SEDAR+, on EDGAR and on our website. Due to the Calibre merger, asset sales and classifying Brazil as discontinuing operations, the audit is taking a bit longer. We do not expect any changes compared to the unaudited results we have released, and we will issue a news release once the final audited results are filed in the coming days. Finally, I should mention that all figures in today's presentation are in U.S. dollars unless otherwise stated. With me on the call today are Darren Hall, Chief Executive Officer; Peter Hardie, Chief Financial Officer; and David Schummer, Chief Operating Officer. Today, we will be discussing our fourth quarter and full year 2025 production and cost results, provide an update on ramp-up progress at our Greenstone and Valentine Gold Mines. Darren will also discuss the improvements of our balance sheet that allowed us to announce capital return initiatives, and then we will take questions. The slide deck we're referencing is available for download on our website at equinoxgold.com. And with that, I'll turn the call over to Darren. Darren Hall: Turning to Slide 3, and thanks, Ryan. Good morning, and thank you for joining the call today. Firstly, I would like to thank the entire Equinox Gold team, including all of our business partners across the Americas for their commitment to safety, operational excellence and disciplined execution. There is no better demonstration of their commitment than delivering a year with no material environmental events and a 30% reduction in our all injury frequency rate. Well done, and thank you to the entire team. 2025 was a transformational year for Equinox Gold, one that not only reset the foundation of the business, but marked the beginning of a new chapter. The team delivered record gold production, streamlined the portfolio and dramatically strengthened the balance sheet, positioning the company to deliver meaningful value as we look to the future. The entire organization is aligned on creating shareholder value by consistently delivering on their commitments, which are focused on demonstrating operational excellence, maintaining strict cost discipline and advancing high-return organic growth. We have made material progress on all fronts, including delivering 922,000 ounces in 2025 with cash and all within cash and all-in cost guidance. This strong finish to the year reflects continued progress at Greenstone and Valentine alongside reliable performance from the balance of the portfolio. Greenstone ramped steadily throughout the year with Q4 gold production 60% higher than Q1. Valentine commissioning progress exceeded expectations with first gold achieved in September and commercial production declared in November. The result of the team's focus and commitment to deliver is also measured in the significant transformation of our balance sheet. In June 2025, our net debt was approximately $1.4 billion. And at the end of January, we had reduced it to $75 million. All while completing construction and commissioning of Valentine. With a stronger balance sheet and consistent robust cash flow, we are well positioned to take the next step in returning capital to our shareholders. Given this strong position, I am pleased to announce the company's inaugural quarterly cash dividend of $0.015 per share. Additionally, we are filing our notice of intent to initiate a share buyback of up to 5% of the issued and outstanding shares. Together, these actions mark the start of a disciplined capital return strategy and reinforce our commitment to delivering long-term per share value. Turning to Slide 4. Touching briefly on the financial results, and Pete can provide additional color as required. Equinox had a strong finish to the year with 247,000 ounces (sic) [ 247,024] produced in Q4. We sold over 242,000 ounces (sic) [ 242,392 ] at a realized price of $4,060 per ounce, generating $579 million in adjusted EBITDA and $272 million (sic) [ $272.9 million ] in adjusted net income or $0.35 per share. Importantly, we exited 2025 with over $400 million in cash and minimal net debt, giving us financial flexibility heading into 2026. Looking forward, we are encouraged by the strength of the gold price. However, the organization's focus is clear: cost control, disciplined capital allocation and delivering consistent performance across the portfolio. As our cornerstone assets ramp up to nameplate, we see a clear path to expanding margins and strengthening free cash flow generation. Turning to Slide 5. Greenstone finished with a strong fourth quarter, producing over 72,000 ounces, a 29% increase over Q3. We saw meaningful improvements in mining rates, mill throughputs and grade with the plant achieving nameplate capacity for 30 consecutive days during December. For 2026, we anticipate production of 250,000 to 300,000 ounces at all-in sustaining costs of between $1,750 and $1,850 per ounce. To support continued performance gains, we are making targeted investments in the operations, including the purchase of a trommel and other mobile equipment designed to optimize mine and process plant performance. Our long-term objective remains clear at Greenstone to establish life-of-mine production around 300,000 ounces annually. We've demonstrated that the mill can process 30,000 tonnes a day. With the team we now have in place, I'm confident that we'll continue to build on the demonstrating meaningful operational improvements. Consider the progress on the key metric of daily tonnes processed greater than nameplate over the last year. In H1 2025, we delivered 17% of the days greater than nameplate. In Q3, we increased to 28% in Q4 to 36%. Looking at Q1 to date through yesterday, we're at 50%. So we're demonstrating continued and demonstrated steady ramp-up of the assets, which sets us up well for the future. At Valentine, we poured over 23,000 ounces (sic) [ 23,207 ] of gold in Q4, its first quarter with the plant averaging 90% of nameplate capacity. We expect to achieve constant or consistent nameplate throughput during Q2 2026 as we anticipate Valentine to contribute 150,000 to 200,000 ounces of gold this year. We are working on the feasibility study for the Phase 2 expansion that would increase throughput to 4.5 million to 5 million tonnes per year and result in production of greater than 200,000 ounces a year for more than the next decade. I anticipate completing the feasibility study over the next couple of months, which will then go to the Board for investment approval in Q2 with work anticipated to commence in the second half of the year. Valentine continues to show strong exploration upside. Our 2025 drill results confirm consistent high-grade mineralization over broad width at the Frank Zone, supporting the potential for a fourth open pit. In 2026, we have 25,000 meters of drilling plan, planned to advance the Frank Zone. We also announced a new discovery, the Minotaur Zone located 8 kilometers north of the mill with a 20,000-meter drill program set to begin this spring, the zone remains open for expansion. Importantly, the Minotaur discovery confirms that significant gold mineralization exists well outside of the main Valentine Lake Shear zone, opening the broader property and reinforcing the long-term growth potential of the Valentine District beyond the current mine plan. Turning to Slide 6. As we close, I want to underscore the momentum across the business. We have the key ingredients in place to deliver top quartile valuation, new high-quality, long-life assets in Tier 1 jurisdictions, and organic growth pipeline, a team focused on delivering into expectations, which deliver strong free cash flow and return capital to shareholders. In 2026, our priorities are clear: ramp up Greenstone and Valentine to nameplate capacity, allocate capital in a disciplined and balanced manner across the portfolio, sustaining investment and shareholder returns while maintaining a strong balance sheet. Our inaugural dividend and application for a share buyback are key steps in this strategy. Consistent with our focus on disciplined growth, we are investing in the long-term value creation. This year, we will advance Phase 2 at Valentine, refresh Castle Mountain studies and progress Los Filos, both technically and socially. At Los Filos, I'm encouraged by the continued engagement with our host communities and support from the state and national governments as we remain focused on realizing the asset's full potential and unlocking significant long-term value for all stakeholders. With a stronger portfolio, solid cash flow and clear execution priorities, we are entering into 2026 from a position of strength. Our focus remains on disciplined growth, operational delivery and creating long-term value responsibly and consistently for our shareholders and all stakeholders. With that, we'll turn it over to the operator for any questions. Operator: [Operator Instructions] And the first call for today will come from Francesco Costanzo with Scotiabank. Francesco Costanzo: I'll start with my first one here. It's great to see the announcement of an inaugural dividend alongside an NCIB. And with production and free cash flow growth on the horizon, can you speak to the potential for this dividend to grow in the future and maybe your approach to fixed versus variable dividends? And then on the buyback program, can you explain your strategy for how you plan to deploy those funds? Darren Hall: Yes, Francesco, thanks for the comments. And I'll pass it across to Pete to talk about some of the capital allocation and specifically address the questions in around dividends and buybacks. Peter Hardie: Yes. Thanks, Darren. Yes, we're really excited to be in a position to announce the inaugural dividend. It's been a long-term goal for the company, something we have talked about it over the past years. So we're really pleased to be able to do that now. And it underscores the confidence we have in our forward production profile and in our forward cash flow. We started small with our inaugural dividend. We started with a fixed dividend. You can expect it to stay there for the coming future, probably the next 12, 24 months. As we firm up the development pipeline, the peer-leading development pipeline that we have, starting with our Valentine Phase 2 that Darren already mentioned and then looking forward to Castle Mountain heading into 2027. So with that development in front of us, you can expect we'll stay on a fixed dividend, and we will be looking to increase that over time. And that will be a bit of a stay tuned story with respect to those plans. But again, we're just really excited to have been able to announce the inaugural dividend. With respect to the share buyback, we still feel there's a lot of opportunity in our stock price. And at these levels and again, being conservative in our approach, we want to be in a position to when we felt like we -- the shares were not trading as we think they should to be able to buy some of those back and also return capital to shareholders in that manner. And you can expect us to continue to do that. But again, with the peer-leading pipe development pipeline we have and the dollars we're going to devote to that over the coming years for it to remain somewhat conservative. Darren Hall: Thanks, Pete. And just kind of layer there, Francesco, is that we will take a somewhat conservative view, but as we work through 2026, and we have a fulsome understanding about our capital requirements in '27 in light of Valentine Phase 2, importantly, Castle Mountain with the record decision anticipated at the end of the year and the positivity we see in and around the dialogue in Mexico, we will have some demands in 2027. We feel very comfortable in being able to fund those organically, but we want to make sure we don't put ourselves in a position where we overcommit to a return on capital through dividends and find ourselves compromised to fund the organic growth, which we don't anticipate, but I think that we've got an outstandingly positive look forward on our organic growth. So thanks for the question. Francesco Costanzo: Yes, that's great. And maybe just one more, switching gears here. The sale of the Brazilian assets definitely simplified the portfolio and it accelerated deleveraging with the transaction closing in late January and the $900 million check already cleared. Although post close, there was a bit of news out of a certain Brazilian regulator. So I'm just wondering, Darren, if you can just explain the situation from your side of the table and tell us if there's anything to be concerned about here. Darren Hall: Yes. No, thanks, Francesco. No, it's an interesting situation there. I mean we're confident that the sale of the Brazilian operations fully comply with all laws and contractual obligations. And I'll provide a little context and bear with me as I do in. In Brazil, mineral resources are constitutionally owned by the federal government and the mining titles are granted and administrated by the National Mining Agency. Mining titles such as those for Aurizona, Fazenda and RDM are administered through this federal framework. A group in Bahia, CPPM has made claim that their consent was required regarding the sale of the Santa Luz operation. However, the transaction took effect through the sale of the outstanding shares of 2 non-Brazilian wholly owned subsidiaries that then indirectly own all of the Brazilian operations. So we're kind of arm's length away from that claim. But again, we as Equinox and the partners on the other side of the transaction are confident that the sale of the Brazilian operations fully complied with Brazilian law and all contractual obligations were met, and we remain committed to constructive dialogue with any party who wants to raise an issue. And as you mentioned, as the sale closed on January 23, we deployed proceeds towards debt reduction, strengthening the balance sheet. And along with cash flow from operations resulted in ending cash with net debt of around $75 million, which has positioned the company to commence the capital return programs, which we just discussed. Operator: The next question will come from Jeremy Hoy with Canaccord Genuity. Jeremy Hoy: I'd just like to revisit something that was asked about a month ago when some of the team was through Toronto. And that's with -- if there was to be a positive development at Los Filos, it seems like the timing of that build could coincide with Castle Mountain. Could you give us an update and a refresh on your thinking about how you would approach the development of both of those opportunities if they were both available at the same time? Darren Hall: Yes. Jeremy, I mean, it'd be great to be in that "Sophie's Choice, first world" sort of situation. But we are encouraged by the dialogue we're having in Mexico. We've got still a lot of work to do to establish robust 20-year land access agreements, which sets us up for most reliable production over the long term. But Filos is a significant asset. If we think about 16 million ounces in all resource category, the opportunity that sits there is significant. So our focus this year is really about understanding scope and scale. And the early works that were done there back in '21, 2022 with the feasibility study were all conceived at a $1,350 gold price in terms of the designs and around the open pits and the underground. Not suggesting we would plan around [Audio Gap] that this year, which will allow us to be in a much more intelligent decision at the -- position at the end of the year to make a decision if we're presented with the opportunity to develop. But we are comfortable in. We see great opportunity in. And to my earlier comments in and around the rate at which we increase dividends and buybacks will be somewhat foreshadowed by the rate at which we see these organic growth opportunities presented. But to make a decision between those 2 properties, we're a long way from that right now. We're confident in what we're seeing at Los Filos. But we do have a guaranteed record of decision at Castle Mountain here in December of this year. So that is a known entity. We are working on that feasibility to be able to firm up those estimates. So we're well positioned to be able to make a commitment decision there in H1 of 2027. So let's see how the year progresses. But yes, "spoiled for choices" is kind of the way I would characterize it and funded as well for whatever choices we make, which will be great. Jeremy Hoy: Yes. Thanks, Darren, and we'll watch for developments at Los Filos and Castle eagerly. You did mention that we're going to see a refreshed study for Castle Mountain. Also, we would see the same for Los Filos if positive developments come there. Are you planning to release anything on Greenstone as we've spoken often about expectations for that operation to be somewhat different from what was presented in the last feasibility study. Just wondering what we might see in terms of an updated life-of-mine plan? Will it come in the form of a study, what the timing might be, et cetera? Darren Hall: Yes. No, absolutely, Jeremy. To remove any ambiguity, we will provide updated technical reports for both Greenstone and Valentine right around the end of this quarter associated with our annual filings. So we get everything current, nice and ticked and tied with the AIF and the AIF will also include a refresh and clarity on our reserves and resources as at December 31st as well. So that's the timing for those properties. For Castle, we're continuing to work in the background on the feasibility study and, yes, no surprises from what we've articulated over the last 6 months. We're just going through crossing Ts, dotting Is, firming things up so that we have a high level of confidence in and around the scope of work, so we can go out there and have constructive discussions with EPCM contractors and the like in the back half of this year. Filos is a little earlier in the process. We're in the process of kind of doing an order of magnitude study to understand scope and scale associated with that property. And I would anticipate that, that will probably lead into a, I'll call it, a pre-feas, if you will, early in Q2 as we have a bit of an appreciation for scope and scale. Hopefully, we're in a situation where we've debottlenecked some of the land access agreements, which will allow us then to actively explore across all portions of the deposit and then allow us to appropriately scope and scale. So a little bit of what might sound like confusion there in Filos, but it's actually very positive. And again, we see -- again, I think the stat is probably somewhere in the fourth or fifth largest not operating gold asset in the Americas right now. So the talk there is significant. The opportunity is real, and we're definitely seeing a change in narrative out of Mexico, which is great. Operator: The next question will come from Anita Soni with CIBC World Markets. Anita Soni: Just a few on Greenstone. So I was just wondering, the recovery rate declined a little bit from third quarter to fourth quarter. Could you give us some color on why that was? Darren Hall: Yes. Anita, thank you. And absolutely did. As I think we've discussed previously that there is an association with arsenic and grade. We did see much higher grades in the fourth quarter and a consequence saw lower recoveries associated with the arsenic lockup. So not an issue per se. It's kind of all anticipated and expected as part of the metallurgy of the deposit. Anita Soni: And then just a similar question, just on the unit cost. The G&A was a little bit higher this quarter. Was there anything specific that was happening this quarter that would be alleviated in the go forward? Darren Hall: Yes, there is. I'll pass it to Pete. Peter Hardie: Yes. Anita, sorry, I don't have the G&A detail at hand. Can I reach out to you or one of your associates after the call? I'll pull that together. Anita Soni: And then I had one more on just a question that I noticed for both Valentine and Greenstone. I wanted you to explain to me how you guys are calculating the recovery rates as they come out? Because when I put the tonnes to grade and the output of production, I'm getting to recovery rates that are a little bit different. Said differently, I would have got about 75,000 ounces of gold by the 3 numbers there, and you reported 72,000 and Valentine is a similar issue. So I'm just wondering like are you calculating it as it exits the mill? Or is there a different point at which you're saying this is production? Darren Hall: No, I think we'll find that the small differences we may see there is that -- the numbers we quote as production are poured and bullion and some of the tonnes grade recovery will be metallurgical as well. So there will be a minor change there based on inventory changes. And to your point, I think you'll probably end up with a marginally higher recovery at Greenstone in Q4 than maybe what we reported if you back into the metal content because we actually did see an inventory build at Greenstone in fourth quarter. But we can -- we're happy to sit down and walk through that in a model discussion, happy to do that. But I think we'll find it's kind of the metallurgical production versus the poured production differences. Operator: The next question will come from Mohamed Sidibe with National Bank. Mohamed Sidibe: I maybe staying on Greenstone. And given your comments on the throughput and the ability to achieve over the nameplate capacity, how should we think about the throughput levels in 2026 and call it, in the medium term at Greenstone? Should we still be thinking about 27,000 tonnes per day or work towards increasing it towards that 30,000 tonnes per day to maybe offset some of the out updates that may be coming in the tech report? Darren Hall: Yes. Thanks, Mohamed. And as I say here, is that have a good Ramadan, right, day 1. So -- if we think about throughput, we've guided 250,000 to 300,000 ounces at Greenstone this year, and we hold firm on that. We will see opportunities over the course of the year to continue to improve throughput. Some of that is already baked into our numbers. We've demonstrated the ability to do more than 30,000 tonnes a day, which will be more longer term. But through this year, I think that the big round numbers are, if you think about 9.5 million tonnes of around 1.1 grams per tonne at feasibility recoveries, you get into that midpoint of guidance. And I think that's a good place to hang our hats. So I think of recoveries average over the year in that 25,000, 26,000 tonnes a day. There will be days we do better. And as we're demonstrating as we -- when we operate the plant, as I mentioned earlier, I mean, month or quarter-to-date, we've got 49% or 50% of the days greater than nameplate. So we are seeing sustained and improved performance on a daily basis. Our focus now is reducing downtime and getting the operations guys more time to be able to run the plant. And that's our focus. And it's going to be a journey through this year, and there will be dips and weaves along the way. The grades will be higher and lower depending on where we're mining. The recoveries, as Anita foreshadowed, will be different based on different metallurgical types. So there will be some peaks and valleys through the year, but the trends on a quarter-by-quarter basis will remain positive. And I would like us to see us coming out of 2027, looking to be talking more intelligently to those 30,000 tonne a day rates going forward. As we -- the HPGRs have installed capacity of probably mid-30,000s, 34,000, 35,000 tonnes a day. But we've got to get the reliable performance through the plant before we can start to talk about those sort of numbers openly and publicly. I am now, but to be able to commit to those is we've got some work to do this year. Mohamed Sidibe: Maybe if we could switch quickly to Valentine. And given the asset is in ramp-up phase, can you give us some color on the cadence in terms of quarter-over-quarter production? Should we expect higher production in the second half? And what magnitude should we be modeling for 2026? Darren Hall: Yes. No, absolutely. I mean we're in the second quarter of a ramp-up. And Newfoundland threw some surprises at us in January, full disclosure, and we think about -- we had 90% throughput in percentage of nameplate in Q4. And we think about January and January was 70%, right? It got cold, it got better. There were some learnings associated with the winter, and we've worked through those. I mean, -- in February, we're now at 110% of nameplate. So there's peaks and troughs and valleys as we work through. But the team are systematically addressing those things. We will continue to see quarter-on-quarter improvements in reliability in the plant, which will lead to higher tonnes, which will lead to improved confidence in feeding higher-grade materials. So we'll see that grades will be manifested that way as well. So we're still comfortable with our guidance of 150,000 to 200,000 ounces, but it's definitely H2 weighted as a function of throughput and also grade and making progress in developing the Berry Pit. So -- but we're happy to sit down and walk through a model and fill in some blanks for you as well quarter-on-quarter. Not fill in, but with that. Operator: Your next question will come from John Tumazos with John Tumazos, Very Independent Research. John Tumazos: Looking at the big picture, the current gold price is $5,000 neighborhood and say, $800 million of CapEx, you generate something like $600 million more cash paying off all the debt. It looks like you're -- you got a couple of extra dollars laying around. Are you planning the business on $400 gold plus success at all 5 locations where all the capital calls come in because you've got more gold to produce as opposed to building a war chest for acquisitions. Darren Hall: Yes. John, no, it's a first world predicament we're in, I guess, is that our focus is given the opportunities we see with organic growth is ensuring that we exit this year well funded to be able to do that organic growth. M&A is not on our radar. If something passes our screen that makes sense, we will do something. But I can assure you, as of today, we do not have a CA signed with anyone. So our focus is absolutely optimizing what we've got. We spent a lot of time and effort putting all of these assets together over the last 6 or 7 years, and now is our time to be able to start to realize that from that growth. With 400,000 to 500,000 ounces of organic growth in our portfolio that we can see over the next 5 years. I mean that's where our focus is. So there's a bit of positive confusion in our story right now as we've significantly delevered from $1.5 billion worth of net debt to 0. We're generating cash. We see the opportunities that present in 2027 and beyond. And let's make sure that we do the intelligent thing for the long term in 2026, which is to remain absolutely focused on operational performance and don't lose sight of the fact that we produce widgets at a cost. So let's keep that business focused on that so we can maximize our margin at whatever gold price there is and then use that capture to be able to fund our organic growth. I don't know, Pete, anything you'd layer on that? Peter Hardie: We're -- you've highlighted, John, really well that we're in a great position to fund this future growth. And we're really focused on ensuring that we retain the very solid and build on the very solid foundation that we've laid in place here over the last several months, as Darren said, to build out these world-class assets that we are very fortunate to have in our pipeline. John Tumazos: If I can ask one more. Darren Hall: Sorry, go ahead John. John Tumazos: No, you go ahead. You're the boss. Darren Hall: No, no, no. You guys, we work for you, right? So as the investors, I mean, our focus is we're aligned with you. John Tumazos: So in Nicaragua, you projected $1,800 cash costs up 40% or a little more on 225,000 ounces of output. The second half came in better than that. Could you give us some color on how the costs are going up so much in Nicaragua? Darren Hall: Yes. No. Thanks, John. It's a bit of a first world problem. What we're seeing here is the majority of the cost increase is not cost inflation per se, but it's volume driven. As we develop some newer pits in an underground that are going to basically fund or fuel a level of production at that 200,000 to 250,000 ounces a year over the next 5 years, there's some increased capital that results in those higher strip ratio and reflects in a higher all-in sustaining cost. So that's really where that comes from. It's not a drive in a kind of cost per tonne mine or a cost per tonne process. It's volume driven as we go from arguably what I'll call smaller pitlets to larger pits, higher strip ratios this year, and that's manifested itself in higher all-in sustaining costs. So which lays us up well for the next 5 years, which is kind of what our story has been over the last 5 years in Nicaragua is to take some assets that were headed towards closure. And we produced, what, [1.2 million, 1.3 million ] ounces from those properties in the last 5 years, and we've taken reserves from extensively 0, 100,000 ounces to in excess of 1 million ounces. So let's say, 5 years at 400,000 ounces a year of organic growth. Now we're starting to see track in front of the train. We're investing in that from developing these larger pits, which will continue that momentum for the next 5 years. So that's really what it is, John. John Tumazos: Well, the cash costs and the second year out 2027 drop, say, the $1,500 in Nicaragua after this surge? Darren Hall: I mean I think we'll see that the strip ratio go down, and that will have a positive impact on all-in sustaining costs. John Tumazos: Congratulations. Darren Hall: Appreciate, John. Thanks for your support. I know you've been a shareholder for a long time and persistent through the journey. So thank you. Operator: This concludes our question-and-answer session. I would like to turn the conference back over to Mr. Darren Hall for any closing remarks. Please go ahead. Darren Hall: Yes. Thank you, operator. And I'd like to thank all of our shareholders for their continued support and your participation and the questions today. It is appreciated and valued. As always, Ryan, Dave, Pete and I are always available if you have any further questions. And take care, be well, and I'll pass it back to the operator. Operator: This brings a close to today's conference call. You may now disconnect your lines. Thank you for your participation, and have a pleasant day.