Financial Data and Key Metrics Changes - The company reported FFO of $0.97 per diluted share in Q4 2025, with occupancy ending the year at 81.6%, reflecting a 60 basis point sequential improvement [24] - Cash same-property NOI growth was negative 7.2% in Q4, primarily due to a sizable restoration fee recognized in Q4 2024, which detracted 350 basis points from current year growth [24] - The 2026 FFO guidance range is set at $3.25-$3.45 per diluted share, with an expected average occupancy of 76%-78%, a decline of 390 basis points at the midpoint compared to 2025 [26][27] Business Line Data and Key Metrics Changes - Fourth quarter leasing totaled approximately 827,000 sq ft, marking the strongest performance in six years, leading to a full-year leasing total of approximately 2.1 million sq ft, a significant year-over-year increase [4][5] - Key leasing highlights included a 93,000 sq ft lease with the Fitler Club in Hollywood and a 316,000 sq ft lease with UCSF at Kilroy Oyster Point Phase Two, indicating strong demand in the life sciences sector [6][8] Market Data and Key Metrics Changes - The company experienced the healthiest level of office demand since 2019, with a forward leasing pipeline growing by over 65% in the last year [6] - In San Francisco, premium sublease space is nearly gone, with 47% of the overall availability not transacted since 2021, indicating a recovery in the market [44][60] Company Strategy and Development Direction - The company is focused on disciplined execution across its platform, including driving leasing, monetizing non-core assets, and redeploying capital into high-quality opportunities [4][15] - The acquisition of Nautilus for $192 million strengthens the company's presence in the life sciences sector, positioning it to capture demand across West Coast markets [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing environment, particularly in San Francisco, where new business formation is driving demand [81] - The company anticipates a robust M&A environment in the life sciences sector, with expectations for continued growth in leasing activity [8][9] Other Important Information - The company completed approximately $755 million in sales, including $465 million from operating properties and $165 million from land sales, indicating a strategic approach to capital allocation [17] - The anticipated yield at Kilroy Oyster Point Phase Two is now in the mid-5% range, reflecting adjustments based on leasing activity and market conditions [11] Q&A Session Summary Question: Can you discuss the UCSF anchor lease and its late commencement? - Management noted that the UCSF lease is part of a new development project in shell condition, requiring time for build-out and space planning [34][35] Question: What are the expectations for retention on the 1.05 million sq ft expiring in 2026? - Management expects substantial move-outs from this pool but has already backfilled about 140,000 sq ft and anticipates additional renewals [50][51] Question: What is the competitive landscape for KOP and potential monetization? - Management remains confident in the long-term growth potential of KOP and believes it has created significant value in phase one, with future phases dependent on achieving favorable yields [76][77]

Financial Data and Key Metrics Changes - The company reported FFO of $0.97 per diluted share in Q4 2025, with occupancy ending the year at 81.6%, reflecting a 60 basis point sequential improvement [24] - Cash same-property NOI growth was negative 7.2% in Q4, primarily due to a sizable restoration fee recognized in Q4 2024, which detracted 350 basis points from current year growth [24] - The 2026 FFO guidance range is set at $3.25-$3.45 per diluted share, with average occupancy expected to decline to 76%-78% [26][27] Business Line Data and Key Metrics Changes - Fourth quarter leasing totaled approximately 827,000 sq ft, marking the strongest performance in six years, leading to full-year leasing of approximately 2.1 million sq ft, a significant year-over-year increase [4][5] - Key leasing highlights included a 93,000 sq ft lease with the Fitler Club in Hollywood and a 316,000 sq ft lease with UCSF at Kilroy Oyster Point Phase Two [6][8] Market Data and Key Metrics Changes - The company experienced the healthiest level of office demand since 2019, with a forward leasing pipeline growing by more than 65% over the last year [6] - In San Francisco, premium sublease space is nearly gone, with 47% of the 32% availability not transacted since 2021, indicating a recovery in the market [42][60] Company Strategy and Development Direction - The company is focused on driving leasing across its operating and development portfolios while monetizing non-core assets and redeploying proceeds into select opportunities [4][15] - The acquisition of Nautilus for $192 million strengthens the company's presence in the life science sector, positioning it to capture demand across West Coast markets [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing environment, particularly in San Francisco, where new business formation is driving demand [81] - The company anticipates a robust M&A environment in the life science sector, with expectations for continued growth in leasing activity [8][9] Other Important Information - The company successfully completed the sale of several non-core assets, including the Sunset Media Center for $61 million and Kilroy Sabre Springs for $125 million, exceeding its goal for land parcel dispositions [12][13][14] - The anticipated yield at Kilroy Oyster Point Phase Two is now in the mid-5% range, approximately 100 basis points below the original underwriting [11] Q&A Session Summary Question: Can you discuss the UCSF anchor lease and its late commencement? - Management indicated that the UCSF lease is part of a new development project in shell condition, requiring time for build-out and space planning [34][35] Question: What are the retention expectations for the 1.05 million sq ft expiring in 2026? - Management expects substantial move-outs from this pool but has already backfilled about 140,000 sq ft and anticipates an additional 50,000-100,000 sq ft in potential renewals [50][51] Question: What is the competitive landscape for KOP and potential monetization? - Management remains committed to the long-term growth potential of KOP, emphasizing the value created in phase one and the strategic leasing efforts in phase two [76][77]

Financial Data and Key Metrics Changes - The company reported FFO of $0.97 per diluted share in Q4 2025, with occupancy ending the year at 81.6%, reflecting a 60 basis point sequential improvement [22][24] - Cash same-property NOI growth was negative 7.2% in Q4, primarily due to a sizable restoration fee recognized in Q4 2024, which detracted 350 basis points from current year growth [22][24] - The anticipated yield at Kilroy Oyster Point Phase Two (KOP2) is now in the mid-5% range, approximately 100 basis points below the original underwriting [10][24] Business Line Data and Key Metrics Changes - Fourth quarter leasing totaled approximately 827,000 sq ft, marking the strongest fourth quarter performance in six years, resulting in total full-year leasing of approximately 2.1 million sq ft, a significant year-over-year increase [3][4] - Key leasing highlights included a 93,000 sq ft new lease with the Fitler Club in Hollywood and a 316,000 sq ft lease with UCSF at KOP2, bringing the lease rate at KOP2 to 44% [4][6] Market Data and Key Metrics Changes - The company experienced the healthiest level of office demand since 2019, with a forward leasing pipeline that has grown by more than 65% over the last year [4][5] - In San Francisco, premium sublease space is virtually gone, indicating a positive sign for the market recovery [41][42] Company Strategy and Development Direction - The company is focused on driving leasing across its operating and development portfolios, monetizing non-core asset sales, and redeploying proceeds into select opportunities to enhance long-term growth [3][10] - The company plans to capitalize on the recovering leasing environment and improving capital markets, targeting $300 million in operating portfolio dispositions in 2026 [21][29] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the leasing pipeline, indicating that the pipeline is about 65% higher than a year ago, with high confidence in getting tenants into occupancy over 2026 [49][50] - The company noted that the innovation pipeline remains exceptionally active, with more than 50 novel drug therapies anticipated to receive FDA approval in 2026, reflecting continued scientific advancement and investment [8][9] Other Important Information - The company successfully completed the sale of Sunset Media Center for $61 million and Kilroy Sabre Springs for $125 million, monetizing mature, capital-intensive assets [10][11] - The acquisition of Nautilus for $192 million strengthens the company's presence in the life science sector and positions it to capture cutting-edge lab and office demand [12][13] Q&A Session Summary Question: Inquiry about the UCSF anchor lease and its late commencement - Management clarified that the UCSF lease is part of a new development project currently in shell condition, requiring time for space planning and build-out [31][33] Question: Clarification on KOP2 yield and tenant improvements - The mid-5% yield is a cash stabilized yield, and all transactions signed to date have been reflected in the new cost estimates [37][38] Question: Update on leasing activity and competitive impact in San Francisco - Management noted that premium sublease space is nearly gone, and the recovery in San Francisco is evident with significant tenant activity and expansion-focused leases [41][42][80] Question: Retention expectations for expiring leases in 2026 - Management expects substantial move-outs from the 1.05 million sq ft of expiring leases, with progress already made in backfilling some of that space [48][49] Question: Market conditions and tenant space needs - Management indicated that new business formation and growth, particularly in AI, are driving demand for office space, with many tenants discussing expansion [78][79]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported FFOA per share of $0.64 and full-year FFOA per share of $2.54, achieving the midpoints of previously provided guidance ranges [11][12] - Same-store revenue growth met guidance, while same-store expense and NOI growth results exceeded expectations [11][12] - The company repurchased approximately $93 million of common stock at a weighted average share price of $35.56, reflecting a sizable discount to NAV [13] Business Line Data and Key Metrics Changes - The acquisition of the Enclave at Potomac Club for $147 million is expected to outperform the market based on predictive analytics [12] - The company contributed four apartment communities to a joint venture, increasing its size to approximately $850 million [12] - The company anticipates blended lease rate growth of 1.5% to 2% in 2026, which is approximately 100 basis points higher than 2025 [21][22] Market Data and Key Metrics Changes - The company noted a slowdown in supply completions across its markets, which is expected to bolster growth [8][16] - The average rent-to-income ratio for residents remains below the long-term average, indicating affordability for rent increases [15] - The company expects a more muted job growth environment but anticipates continued demand due to high home prices and mortgage rates [14][15] Company Strategy and Development Direction - The company emphasizes a culture of innovation and data-driven decision-making to enhance shareholder value [6][7] - Ongoing investments in customer experience and AI tools are expected to drive incremental NOI growth [9][27] - The company plans to be a net seller of assets in 2026, actively marketing numerous apartment communities for sale [18][48] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the operating momentum achieved in late 2025 continuing into 2026, with expectations for high occupancy and lease rate growth [8][29] - The company is focused on optimizing occupancy and reducing turnover, with expectations for continued strong performance in key markets [38][81] - Management acknowledged potential regulatory risks but remains confident in the company's ability to navigate these challenges [72][74] Other Important Information - The company welcomed Ellen Goitia as a new board member, enhancing its governance expertise [9][10] - The company reported that its same-store revenue growth was at or above peer median across 13 of 14 markets shared with public peers in 2025 [30] Q&A Session Summary Question: Can you talk about your blended rate growth expectation for the full year? - Management noted that they are off to a better start than expected, with January's blended rate growth at about 1%, which is 50-75 basis points better than originally thought [32][34] Question: What are your thoughts on occupancy and retention? - Management emphasized efficiency in the turn process and expects to maintain occupancy around 96% while pushing for renewals in the 5% range [36][39] Question: Can you provide detail on the variance across your regions? - Management indicated stronger acceleration in the Sunbelt markets compared to coastal markets, with Dallas showing positive trends [41][42] Question: How much could you step on the gas on dispositions this year? - Management stated they are comfortable executing on a midpoint of dispositions while being mindful of tax gain capacity [46][48] Question: What factors will drive the contribution from other revenues in 2026? - Management expects mid-single-digit growth from initiatives like Wi-Fi and parking, with a focus on optimizing storage and pet rent [50][52] Question: What is your expectation for key coastal markets? - Management expects stronger performance in New York and San Francisco, while Boston and D.C. may not perform as well [78][81]

Financial Data and Key Metrics Changes - For the full year 2025, XPLR Infrastructure reported adjusted EBITDA of $1.88 billion and Free Cash Flow before growth of $746 million, reflecting strong cash flow-generating capabilities [5][17] - The adjusted EBITDA results were impacted by the absence of a $40 million one-time settlement payment from 2024 and asset dispositions, but were partially offset by improved pricing and lower operating costs [17] - The company expects adjusted EBITDA for 2026 to be between $1.75 billion and $1.95 billion, with Free Cash Flow before growth projected at $600 million to $700 million [18] Business Line Data and Key Metrics Changes - The company successfully simplified its capital structure by addressing over $1.1 billion in Convertible Equity Portfolio Financings (CEPF) and completed asset sales generating approximately $160 million in net proceeds [6][19] - XPLR has completed nearly 1.3 GW of its repowering plan, with projects achieving commercial operations on time and on budget [7] Market Data and Key Metrics Changes - XPLR's diversified portfolio of power generation assets is expected to benefit from increasing demand in U.S. power markets, with long-term contracts providing substantial cash flows [7][15] - Approximately 80% of the MWh sold are contracted at prices below current market prices, indicating potential for over $200 million in incremental revenue by 2040 as contracts mature [15] Company Strategy and Development Direction - The company is focused on capital allocation, simplifying its capital structure, and executing selected investments in energy infrastructure assets to maximize long-term value for unitholders [4][8] - XPLR is enhancing its portfolio value through a co-investment agreement with NextEra Energy Resources, monetizing surplus interconnection capacity and rights [9][10] - The company plans to increase its equity ownership in CEPF 5 and execute additional repowerings and battery storage projects, funded primarily by retained cash flows [23][24] Management's Comments on Operating Environment and Future Outlook - Management believes that long-term fundamentals for energy infrastructure assets are improving, and the strategy will enhance financial and strategic flexibility [7][9] - The company is positioned to capture future investment opportunities as market dynamics evolve, with a disciplined approach to capital allocation [15][24] Other Important Information - XPLR has reduced its corporate revolver from $2.5 billion to $1.25 billion, demonstrating discipline in aligning with funding needs [24] - The company has a strong liquidity position, with $750 million or less in corporate debt maturities over any 12-month period through 2030 [24] Q&A Session Summary Question: Capital allocation and potential for unit buybacks - Management indicated that retained cash flows will cover CEPF buyouts and investments, but did not commit to unit buybacks or distributions at this time [26][27] Question: Timing of battery storage projects - Battery storage projects are expected to reach commercial operations by the end of 2027, contributing to cash flows in 2028 and beyond [34] Question: Future opportunities with NextEra Energy Resources - Management clarified that there are no commitments beyond the announced transaction, focusing on the current capital plan [36][37] Question: Returns on battery investments versus repowerings - Management stated that repowerings target minimum double-digit returns, while battery investments are also expected to yield attractive returns [46][47]

Financial Data and Key Metrics Changes - For the full year 2025, XPLR Infrastructure reported Adjusted EBITDA of $1.88 billion and Free Cash Flow before growth of $746 million, reflecting strong cash flow-generating capabilities [5][17] - The 2025 Adjusted EBITDA was impacted by the absence of a $40 million one-time settlement payment from 2024 and asset dispositions, but was partially offset by improved pricing and lower operating costs [17] - The company expects 2026 Adjusted EBITDA to be between $1.75 billion and $1.95 billion, with Free Cash Flow before growth projected at $600 million to $700 million [18] Business Line Data and Key Metrics Changes - XPLR completed the sale of investments in the Meade Pipeline and certain distributed generation assets, generating approximately $160 million in net proceeds [6] - The company achieved a reduction of over $1.1 billion in third-party non-controlling equity interests through addressing two Convertible Equity Portfolio Financings (CEPF) [5][19] Market Data and Key Metrics Changes - XPLR's diversified portfolio of power generation assets is positioned to benefit from increasing demand in U.S. power markets, with expectations of significant embedded value and investment opportunities [15] - Approximately 80% of the megawatt-hours sold are contracted at prices below current market prices, indicating potential for over $200 million in incremental revenue by 2040 as contracts mature [15] Company Strategy and Development Direction - The company is focused on simplifying its capital structure and executing selected investments, particularly in wind repowering projects, to enhance financial and strategic flexibility [4][8] - XPLR is pursuing a capital allocation strategy that includes retaining cash flows to fund CEPF buyouts and selected investments, while maintaining balance sheet strength [8][24] - The company announced a co-investment agreement with NextEra Energy Resources to monetize surplus interconnection capacity and invest in battery storage projects, enhancing its portfolio [9][10] Management's Comments on Operating Environment and Future Outlook - Management believes long-term fundamentals for energy infrastructure assets are improving, particularly for those providing efficient, clean energy [7] - The company is positioned to capture future opportunities as market dynamics evolve, with a disciplined approach to capital allocation and investment [15][24] Other Important Information - XPLR has completed nearly 1.3 gigawatts of its repowering plan, with projects achieving commercial operations on time and on budget [7] - The company plans to increase its equity ownership in CEPF 5 with partial buyout investments of approximately $150 million in 2026 and $470 million in 2027 [23] Q&A Session Summary Question: Capital allocation and potential for unit buybacks - Management indicated that retained cash flows will cover CEPF buyouts and investments, with potential for about $1 billion available for investments and debt reduction over the next five years [26][28] Question: Update on CEPF 3 and asset sales - Management clarified that there is no change in the plan for CEPF 3, and options for asset sales remain open without urgency to exercise call options [29][30] Question: Timing for battery storage projects - Battery storage projects are expected to reach commercial operations by the end of 2027, contributing to cash flows in 2028 and beyond [34] Question: Future opportunities with NextEra - Management stated that there are no commitments beyond the current transaction with NextEra, focusing on the capital plan laid out [37] Question: Returns on battery investments versus repowerings - Management targets minimum double-digit returns for repowerings, while battery storage projects are expected to yield attractive returns as well [46][47]

Financial Data and Key Metrics Changes - For the full year 2025, XPLR Infrastructure reported an Adjusted EBITDA of $1.88 billion and Free Cash Flow before growth of $746 million, reflecting strong cash flow-generating capabilities [5][17] - The 2025 Adjusted EBITDA was impacted by the absence of a $40 million one-time settlement payment from 2024 and asset dispositions, but was partially offset by improved pricing and lower operating costs [17] - For 2026, the company expects Adjusted EBITDA to be between $1.75 billion and $1.95 billion and Free Cash Flow before growth to be between $600 million and $700 million [18] Business Line Data and Key Metrics Changes - The company successfully simplified its capital structure by addressing over $1.1 billion in Convertible Equity Portfolio Financings (CEPF) and completed asset sales generating approximately $160 million [5][19] - XPLR has completed nearly 1.3 gigawatts of its repowering plan, with projects achieving commercial operations on time and on budget [6] Market Data and Key Metrics Changes - XPLR's portfolio is positioned to benefit from increasing demand in U.S. power markets, with a focus on clean energy infrastructure [4][15] - Approximately 80% of the megawatt-hours sold are contracted at prices below current market prices, indicating potential for over $200 million in incremental revenue by 2040 [15] Company Strategy and Development Direction - The company is focused on capital allocation, simplifying its capital structure, and executing selected investments in energy infrastructure assets [4] - XPLR is enhancing its portfolio value through repowering projects and a new co-investment agreement with NextEra Energy Resources for battery storage projects [9][10] - The updated capital investment plan includes increasing equity ownership in CEPF 5 and adding battery storage capacity [23] Management's Comments on Operating Environment and Future Outlook - Management believes long-term fundamentals for energy infrastructure assets are improving, particularly for those providing efficient, clean energy [6][15] - The company is committed to maintaining balance sheet strength while advancing its capital simplification strategy [8][24] Other Important Information - XPLR has a strong liquidity position with a fully undrawn revolving credit facility and reduced corporate revolver size to $1.25 billion [24] - The company plans to fund its capital investments primarily through retained cash flows, supplemented by project-level financing [23] Q&A Session Summary Question: Capital allocation and potential for unit buybacks - Management indicated that retained cash flows will cover CEPF buyouts and investments, with incremental cash flow available for other uses [26][27] Question: Timing of battery storage projects - Battery storage projects are expected to reach commercial operations by the end of 2027, contributing to cash flows in 2028 and beyond [34] Question: Future opportunities with NextEra - Management clarified that there are no commitments beyond the announced transaction, focusing on current capital plans [35][37] Question: Returns on battery investments versus repowerings - Management stated that repowerings target minimum double-digit returns, while battery projects are also expected to deliver attractive returns [46]

Financial Data and Key Metrics Changes - In Q4 2025, revenues increased by 72.6% sequentially, primarily driven by growth in product revenue [16] - Gross margin for the quarter was 37.7%, impacted by provisions for slow-moving inventory; excluding these provisions, gross margin would have been approximately 43% compared to 42.4% in the prior quarter [16] - The company reported an IFRS net loss of $87.1 million in Q4, compared to a net profit of $900,000 in the prior quarter; on a non-IFRS basis, the net loss was $18.5 million, or $1.19 per ADS [18] Business Line Data and Key Metrics Changes - The IoT semiconductor business generated $7 million in revenue in Q4, with over 94% from product sales and roughly 6% from services [8] - For the full year 2025, total revenue was approximately $27.2 million, with an adjusted underlying business closer to $20 million [8] - The company expects to target approximately $40 million-$45 million of total global revenue in 2026, supported by a significant order backlog [8] Market Data and Key Metrics Changes - The revenue funnel exceeded $550 million in potential three-year product revenue, including over $300 million from design win projects, with 44% already in production [9] - The company is seeing strong demand in verticals such as smart metering, telematics, and asset tracking, with CAT-M and CAT-1 bus technologies driving growth [10] Company Strategy and Development Direction - The company remains focused on executing its IoT strategy and advancing its 5G product roadmap, aiming to unlock the full strategic value of the IoT business [5] - A disciplined approach to capital management includes right-sizing operating expenses and investing in key R&D programs [7] - The company is evaluating strategic alternatives to add profitability and unlock additional value across both the IoT business and its treasury strategy [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the design win pipeline, with expectations for continued momentum and a path toward cash flow breakeven by the end of 2026 [21] - The company is addressing supply chain challenges, including substrate constraints and memory pricing pressures, while maintaining strong customer relationships [12] - Management anticipates little to no impact on business in the first half of 2026, with a focus on reducing cash burn and achieving breakeven [12] Other Important Information - The company repurchased approximately 9.7% of its outstanding ADSs in Q4 and has board authorization for an additional 10% buyback [6] - At year-end 2025, the company held 2,139 Bitcoin with a market value of $187.1 million, with 1,617 Bitcoin pledged as collateral for convertible debt [19] Q&A Session Summary Question: Guidance on licensing and design wins - Management indicated a conservative approach to licensing revenue, expecting around $5 million secured for the year, with 80%-85% of revenue from products and 15%-20% from services [26][28] Question: Break-even cash goal and operating expenses - Management targets a combined R&D and SG&A expense of around $10.5 million in the second half of the year, with expectations for cash flow breakeven [50] Question: Progress on 5G eRedCap chip - Revenue from the 5G eRedCap chip is expected around mid-2028, contingent on infrastructure readiness and customer engagement [52][55] Question: Customer receptiveness to price increases - Customers have been generally receptive to price increases, understanding the supply chain challenges and cost pressures [73] Question: Bitcoin treasury strategy and debt redemption - Management is evaluating options for debt redemption based on Bitcoin prices, with a preference for redeeming debt sooner rather than later if Bitcoin does not rally [78]

Core Viewpoint - Sitka Gold Corp. has appointed Louis Archambeault as an independent director to its Board, bringing over 20 years of mining industry experience to support the company's strategic development and project advancement [1][2][3][4]. Company Overview - Sitka Gold Corp. is a well-funded mineral exploration company based in Canada, with over $45 million in its treasury and no debt [6]. - The company focuses on exploring economically viable mineral deposits, primarily emphasizing gold, silver, and copper [6]. Recent Developments - The company is advancing its flagship RC Gold Project, which spans 431 square kilometers and has year-round road access [7]. - Sitka has discovered three gold deposits at the RC Gold Project, with significant resources including 1,291,000 ounces of gold in the indicated category and 1,044,000 ounces in the inferred category at Blackjack, as well as 440,000 ounces in the inferred category at Eiger [7]. - An updated technical report is expected to be announced in Q1 of 2026, which will include an initial Mineral Resource Estimate for the newly discovered Rhosgobel deposit [7]. Appointment of Louis Archambeault - Louis Archambeault's appointment is seen as a strategic move to enhance the company's project development capabilities, particularly as it plans a 60,000-meter exploration program and a Preliminary Economic Assessment [4]. - He holds both bachelor's and master's degrees in mining engineering and has a strong background in capital allocation strategy, project financing, and M&A execution [3][4]. Stock Options - In connection with his appointment, Sitka Gold Corp. has granted Mr. Archambeault 700,000 incentive stock options, exercisable at $0.90 per share for three years [5]. Additional Properties - Besides the RC Gold Project, Sitka Gold Corp. has a portfolio of other mineral properties across North America, including the Alpha Gold Project in Nevada, the Burro Creek Gold and Silver Project in Arizona, and the Coppermine River Project in Nunavut, all of which are 100% owned by the company [8].

Financial Data and Key Metrics Changes - In 2025, total underlying replacement cost profit was $7.5 billion, supported by high upstream plant reliability and refining availability despite a weaker oil price environment [3] - Operating cash flow reached $24.5 billion, with a $2.9 billion adjusted working capital build during the year [3] - Capital expenditure was reduced by 10% compared to 2024, with organic CapEx at $13.6 billion [3] - Return on average capital employed increased to around 14% in 2025 from 12% in 2024 [8] Business Line Data and Key Metrics Changes - In Gas & Low Carbon Energy, the underlying result was $1.4 billion, down from $1.5 billion in the third quarter due to lower realizations [8] - Oil Production & Operations reported an underlying result of $2 billion, down from $2.3 billion in the third quarter, impacted by lower realizations and production mix [8] - In Customers, the underlying result decreased to $900 million from $1.2 billion in the third quarter, reflecting seasonally lower volumes [9] - Products segment maintained an underlying result of $500 million, with stronger refining margins offset by lower throughput due to higher turnaround activity [9] Market Data and Key Metrics Changes - The company reported a reserves replacement ratio of 90%, up from an average of around 50% in the previous two years [4] - The initial estimate of the Boomerang discovery indicates approximately 8 billion barrels of liquids in place, with plans for an appraisal program to start by year-end [5] Company Strategy and Development Direction - The board decided to suspend share buybacks to prioritize strengthening the balance sheet, creating a more resilient platform for disciplined investments [4] - The company aims to high-grade its portfolio and has increased its structural cost reduction target to $5.5 billion-$6.5 billion by 2027 [7] - The strategic review of Castrol led to the decision to sell a 65% shareholding, expected to generate around $6 billion in net proceeds to reduce net debt [5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the tragic loss of four colleagues in 2025, emphasizing an unwavering commitment to safety [2] - The company expects reported upstream production to be broadly flat in the first quarter of 2026, with underlying production slightly lower for the full year [13] - Guidance for capital expenditure in 2026 is projected to be in the range of $13 billion-$13.5 billion, with divestment proceeds expected to be between $9 billion-$10 billion [15] Other Important Information - The company reported a fourth quarter IFRS loss of $3.4 billion due to impairments primarily related to transition businesses [11] - Operating cash flow for the fourth quarter was $7.6 billion, with a cash conversion improvement of 6 percentage points [12] Q&A Session Summary Question: What are the expectations for production in 2026? - Management expects reported upstream production to be broadly flat, with underlying production slightly lower than in 2025 [13] Question: How is the company addressing safety concerns? - The company has taken decisive actions to enhance safety protocols following tragic incidents, including stopping roadside assistance next to active traffic lanes [2] Question: What is the outlook for capital expenditures? - Capital expenditure for 2026 is expected to be in the range of $13 billion-$13.5 billion, with a focus on maintaining capital discipline [15]