Investment Strategy - A well-diversified portfolio should be constructed with a core foundation of a high-quality low-cost S&P 500 fund [1] - For those who can tolerate short-term risks, an overweight position in the technology sector is recommended, as it is believed to be in the early stages of a long-term secular bull market [1] - Large oil and gas companies that provide strong dividend income and growth are suggested for dividend income [1] Portfolio Management - A top-down capital allocation approach is recommended, tailored to individual investor situations such as age, retirement status, risk tolerance, income, net worth, and goals [1] - Potential allocations may include categories such as S&P 500, technology, dividend income, sector ETFs, growth, speculative growth, gold, and cash [1]

Financial Data and Key Metrics Changes - The company reported earnings of $8.25 per share for Q3 2025, doubling the earnings from the same quarter last year [4] - Revenue for Q3 2025 was $2.5 billion, an increase of $639 million or 35% compared to the previous year [6] - EBITDA for the quarter reached $414 million, a 74% increase from $238 million in Q3 2024 [9] - Free cash flow for Q3 2025 was $519 million, contributing to a year-to-date total of $632 million [9] Business Line Data and Key Metrics Changes - The electrical segment revenue grew by 71%, while mechanical revenue increased by 26% [6] - Gross profit for Q3 2025 was $608 million, up $226 million from the previous year, with a gross profit percentage of 24.8% [7] - Service revenue increased by 11%, now accounting for 14% of total revenue [14] Market Data and Key Metrics Changes - Industrial customers represented 65% of total revenue in the first nine months of 2025, with technology accounting for 42% of revenue, up from 32% the previous year [12][13] - The backlog at the end of Q3 2025 reached a record $9.4 billion, a 65% increase year-over-year [11] Company Strategy and Development Direction - The company announced the acquisition of two contractors, FZ Electrical and Meisner Electric, expected to generate over $200 million in incremental annual revenue [5][10] - The company plans to continue investing in its workforce and expanding its modular business, aiming for 3 million sq ft of space by early 2026 [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about continuing growth and strong results in 2025 and 2026, driven by solid bookings and high demand [6] - The company noted that the current market conditions are favorable, with a robust pipeline of projects and strong demand for services [12][93] Other Important Information - The company increased its quarterly dividend by 20% to $0.60 per share [6] - The effective tax rate for the year is expected to be around 23% [9] Q&A Session Summary Question: On technology side, does bidding activity match bookings and revenue growth? - Management confirmed that the pipeline remains robust with more opportunities than can be handled [18] Question: Thoughts on capital allocation and free cash flow? - Management indicated a preference for deploying cash into acquisitions and share buybacks, while also considering accumulating cash if necessary [20][23] Question: Insights on cash flow and any material advance payments in Q3? - Management clarified that the strong cash flow was not due to extraordinary events but reflected good payment terms and ongoing operations [28] Question: Backlog growth and its relation to modular and traditional construction? - Management stated that most new bookings are slated to start within the next year, with modular bookings extending further out [30][31] Question: How critical have internal recruiting efforts been to support growth? - Management emphasized the importance of a good work environment and ongoing recruitment efforts to sustain growth [46] Question: Update on automation investments in modular? - Management highlighted ongoing investments in automation and technology to improve productivity and efficiency [76][80] Question: Insights on pharma project pipeline and onshoring opportunities? - Management noted strong planning and upcoming projects in the pharma sector, particularly in the Mid-Atlantic region [82] Question: Changes in electrical or mechanical scope with large data centers? - Management indicated that the shift to DC power does not materially impact their operations, as the need for skilled electricians remains constant [87]

Financial Data and Key Metrics Changes - Newmont generated $3.3 billion in adjusted EBITDA and adjusted net income of $1.71 per share for the third quarter, a 20% increase from the second quarter and more than double last year's result [14] - The company achieved record third-quarter cash flow of $1.6 billion, contributing to an all-time annual record of $4.5 billion with one quarter remaining [8][15] - The balance sheet was strengthened, ending the quarter in a near-zero debt position after retiring $2 billion of debt [9][10] Business Line Data and Key Metrics Changes - Production was largely in line with the second quarter, driven by higher grades and improved productivity at Subika Underground, while Peñasquito delivered a lower proportion of gold [11][12] - The company completed mining at the Subika Open Pit and shifted activities to lower grades from the Awonsu Open Pit [11] - At Ahafo, the construction of the engineered wall of the Phase 14A layback was completed, preparing for future higher grades [12] Market Data and Key Metrics Changes - Newmont received nearly $640 million in net cash proceeds from equity and asset sales since the start of the third quarter, marking the successful completion of its asset divestment program [8] - Moody's upgraded Newmont's issuer credit rating to A3 with a stable outlook, reflecting the improved credit profile and financial management [10] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, funding cash-generative capital projects, and returning capital to shareholders [15][22] - Newmont is committed to a disciplined capital allocation strategy, prioritizing investments in its own assets and share buybacks [49] - The restructuring includes a decentralized organizational structure to enhance accountability and decision-making at operating sites [9][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year production guidance and highlighted the importance of operational performance, safety, cost, and productivity [16][21] - The company anticipates a reduction in absolute cost guidance for G&A, exploration, and advanced projects by approximately 15% [17] - Future production is expected to be within the same guidance range for 2026, but towards the lower end due to planned mine sequencing [20][71] Other Important Information - The company declared commercial production at its new mine a half mile north, which is expected to add profitable gold production over an initial 13 years [10][24] - Newmont has returned $823 million to shareholders since the last earnings call through dividends and share repurchases [10][22] Q&A Session Summary Question: Capital allocation and balance sheet management - Management remains committed to a well-defined capital allocation framework and will review returns to shareholders quarterly [30] Question: Project pipeline updates - The proposal for Red Chris remains on track for mid-next year, and all longer-dated projects will need to earn their rights for capital allocation [32] Question: Autonomy and restructuring impact - The restructuring has led to a strong leadership team with key appointments being made, focusing on operations and projects [36] Question: Production guidance for 2026 - Production for managed operations is expected to be on the lower end of the guidance range, around 4.2 million ounces [71] Question: Cost inflation and underlying cost pressures - Normal increases in labor and consumables are expected, but cost-saving initiatives are helping to offset higher royalties and taxes [72]

Financial Data and Key Metrics Changes - Newmont generated $3.3 billion in adjusted EBITDA and adjusted net income of $1.71 per share for the third quarter, a 20% increase from the second quarter and more than double last year's result [14] - The company achieved record third-quarter cash flow of $1.6 billion, contributing to an all-time annual record of $4.5 billion with one quarter remaining [8][15] - The balance sheet was strengthened, ending the quarter in a near-zero debt position after retiring $2 billion of debt [9][10] Business Line Data and Key Metrics Changes - Production was largely in line with the second quarter, driven by higher grades and improved productivity at Subika Underground, while Peñasquito delivered a lower proportion of gold [11][12] - The company completed mining at the Subika Open Pit and shifted activities to lower grades from the Awonsu Open Pit [11] - At Ahafo, the construction of the engineered wall of the Phase 14A layback was completed, preparing for future higher grades [12] Market Data and Key Metrics Changes - Newmont received nearly $640 million in net cash proceeds from equity and asset sales since the start of the third quarter, marking the successful completion of its asset divestment program [8] - Moody's upgraded Newmont's issuer credit rating to A3 with a stable outlook, reflecting the improved credit profile and financial management [10] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, funding cash-generative capital projects, and returning capital to shareholders [15][22] - Newmont is committed to a disciplined capital allocation strategy, prioritizing investments in its own assets and share buybacks [49] - The restructuring includes a decentralized organizational structure to enhance accountability and decision-making at operating sites [9][36] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year production guidance and highlighted the importance of operational performance, safety, cost, and productivity [16][21] - The company anticipates a reduction in absolute cost guidance for G&A, exploration, and advanced projects by approximately 15% [17] - Future production is expected to be within the same guidance range for 2026, but towards the lower end due to planned mine sequencing [19][71] Other Important Information - The company declared commercial production at its new mine a half mile north, which is expected to add profitable gold production over an initial 13 years [10][24] - Newmont has returned $823 million to shareholders since the last earnings call through dividends and share repurchases [10][22] Q&A Session Summary Question: Capital allocation and balance sheet management - Management remains committed to a well-defined capital allocation framework and will review returns to shareholders quarterly [30] Question: Project pipeline updates - The proposal for Red Chris remains on track for mid-next year, and all longer-dated projects will need to earn their rights for capital allocation [32] Question: Team structure and appointments - The executive leadership team is strong, with key appointments being made, including a focus on filling the CFO position [36] Question: Ramp-up of new mine - The ramp-up of the new mine is on schedule, with commercial production expected to be declared soon [38] Question: Reserve pricing and growth expectations - The reserve and resource review is ongoing, with outcomes expected in February next year [42] Question: Cost inflation and operational efficiencies - Normal increases in labor and consumables are expected, but cost-saving initiatives are helping to offset higher royalties and taxes [72] Question: Capital allocation for growth assets - The focus remains on internal investments and share buybacks, with any acquisitions being value accretive [49] Question: Exploration and advanced projects budget - The reduction in exploration and advanced projects budget is due to rationalization and strategic capital allocation decisions [92]

Financial Data and Key Metrics Changes - Newmont generated record third-quarter cash flow of $1.6 billion, leading to an all-time annual record of $4.5 billion with one quarter remaining [6][12] - Adjusted EBITDA for the third quarter was $3.3 billion, with adjusted net income of $1.71 per share, a 20% increase from the second quarter and more than double last year's result [11][12] - The company ended the quarter with $5.6 billion in cash and reduced gross debt to $5.4 billion, achieving a near-zero net debt position [20][21] Business Line Data and Key Metrics Changes - Production was largely in line with the second quarter, driven by higher grades and improved productivity at Subika Underground [9][10] - Peñasquito delivered a lower proportion of gold but steady lead, silver, and zinc production, consistent with planned sequences [9] - The new mine a half mile north is expected to add profitable gold production over an initial 13 years of mine life [8][10] Market Data and Key Metrics Changes - Newmont received nearly $640 million in net cash proceeds from equity and asset sales since the start of the third quarter, marking the successful completion of its asset divestment program [6][12] - Moody's upgraded Newmont's issuer credit rating to A3 with a stable outlook, reflecting improved credit profile and financial management [8] Company Strategy and Development Direction - The company is focused on maintaining a strong balance sheet, funding cash-generative capital projects, and returning capital to shareholders [12][20] - Newmont is committed to a disciplined capital allocation strategy, prioritizing investments in its own assets and share buybacks [43][44] - The restructuring into two business units aims to enhance accountability and streamline operations [7][32] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year production guidance and highlighted strong execution across all managed operations [13][14] - The company anticipates higher ounces from Nevada Gold Mines in the fourth quarter and is focused on cost discipline and productivity improvements [14][19] - Management acknowledged potential challenges from increased profit sharing, royalties, and production taxes due to higher gold prices but expects to offset these impacts through ongoing optimization [15][19] Other Important Information - The company has successfully completed its asset divestment program, generating over $3.5 billion in after-tax cash proceeds in 2025 [23] - Newmont's focus remains on maximizing capacity and responsible capital management, particularly regarding tailings capacity at Cadia [16][17] Q&A Session Summary Question: Capital allocation and balance sheet management - Management remains committed to a well-defined capital allocation framework and will review returns to shareholders quarterly [28] - If gold prices remain high, the company may accelerate cash returns rather than build cash reserves [29] Question: Project pipeline updates - The proposal for Red Chris is on track for mid-next year, with no delays from the recent incident [30] Question: Team structure and key appointments - The company has a vacancy for CFO and has restructured into two business units, each led by strong Managing Directors [32] Question: Production expectations for Yanacocha - Production is expected to taper slightly in the fourth quarter as mining concludes at Ketchum Mine Pit [48] Question: Cost inflation and guidance for 2026 - Management indicated that cost inflation will be part of the budgeting process, with normal increases expected for labor and consumables [61] Question: Exploration and advanced projects budget - The reduction in exploration budget is due to a deliberate review of asset potential and strategic capital allocation decisions [76][79]

Financial Data and Key Metrics Changes - Newmont generated record third quarter cash flow of $1,600 million, enabling an all-time annual record of $4,500 million with one quarter still remaining [9][13] - Adjusted EBITDA for the third quarter was $3,300 million, and adjusted net income was $1.71 per share, a 20% increase from the second quarter and more than double last year's result [13] - The company ended the quarter with $5,600 million in cash and reduced gross debt to $5,400 million, achieving a near zero net debt position [21][22] Business Line Data and Key Metrics Changes - Production was largely in line with the second quarter, driven by higher grades at Brucejack, improved productivity at Cerro Negro, and success from patented injection leaching technology at Yanacocha [11] - Penasquito delivered a lower proportion of gold but steady lead, silver, and zinc production, consistent with planned sequences [11] - Ahafo North mine declared commercial production, expanding the existing footprint in Ghana and adding profitable gold production over an initial thirteen years [10][24] Market Data and Key Metrics Changes - The company received nearly $640 million in net cash proceeds from equity and asset sales since the start of the third quarter, marking the successful completion of its asset divestment program [9][14] - Moody's upgraded Newmont's issuer credit rating to A3 with a stable outlook, reflecting improved credit profile and prudent financial management [10] Company Strategy and Development Direction - Newmont is focused on maintaining a strong balance sheet, funding cash-generative capital projects, and returning capital to shareholders [15][22] - The company has streamlined its organizational structure into two business units, enhancing decision-making authority at operating sites [9][10] - Future capital allocation will prioritize internal investments and share buybacks, with a disciplined approach to any potential acquisitions [54][56] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year production guidance and highlighted strong execution across all managed operations [15] - The company anticipates a reduction in absolute cost guidance for 2025 by approximately 15% due to cost-saving initiatives [16] - Management acknowledged the potential impact of elevated gold prices on profit sharing, royalties, and production taxes, but expects to offset these through ongoing optimization [20] Other Important Information - Newmont has returned $823 million to shareholders since the last earnings call through dividends and share repurchases [10][22] - The company has repaid $3.9 billion of debt over the last two years and returned over $5.7 billion to shareholders [24] Q&A Session Summary Question: Capital allocation and balance sheet strategy going into 2026 - Management remains committed to a defined capital allocation framework and will review returns to shareholders quarterly [29][30] Question: Updates on project pipeline and potential delays - Red Chris remains on track for a proposal to the Board by mid-next year, with ongoing investigations from a previous incident incorporated into feasibility studies [32] Question: Key appointments and team structure post-restructuring - The executive leadership team is capable, with a focus on operations and projects, and a key appointment for CFO is being prioritized [36][38] Question: Ahafo North ramp-up and commercial production - The ramp-up is on schedule, with commercial production declared after running for thirty days at over 65% of design capacity [39] Question: Reserve pricing and growth expectations - Management is in the middle of budgeting and resource review, with outcomes expected in February next year [44] Question: Cost inflation and underlying cost pressures - Normal increases in labor and consumables are expected, but cost-saving initiatives are helping to offset some inflationary pressures [81] Question: Exploration and advanced projects capital allocation - The reduction in exploration spending is a result of a deliberate review of asset potential and targeting dollars towards high-value areas [103]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 was $118 million, down from $142 million in the prior year [4] - Daily operating margins in Canada were $13,007, compared to $12,877 in Q3 2023 [4] - U.S. daily operating margins were $8,700, down from $9,026 in the previous quarter [5] - Net debt to trailing 12-month EBITDA ratio is approximately 1.3 times, with an average cost of debt of 6.6% [10] Business Line Data and Key Metrics Changes - In Canada, drilling activity averaged 63 active rigs, a decrease of 9 rigs from Q3 2023 [4] - U.S. drilling activity averaged 36 rigs, an increase of 3 rigs from the previous quarter [4] - International drilling activity averaged 7 rigs, down from 8 rigs in the prior year [5] - CMP segment adjusted EBITDA was $19.3 million, slightly down from $19.7 million in the prior year [7] Market Data and Key Metrics Changes - International day rates averaged $53,811, an increase of 14% from the prior year [6] - U.S. gas basins saw a nearly 20% increase in rig activity year-to-date [67] Company Strategy and Development Direction - The company increased its 2025 capital budget by $20 million for additional rig upgrades, reflecting a long-term view of energy demand [3] - The strategic focus includes leveraging scale, utilizing technology for rig performance, and maintaining customer focus [15][19][20] - The company aims to allocate between 35% and 45% of free cash flow to share buybacks [8] Management's Comments on Operating Environment and Future Outlook - The management expressed optimism for the fourth quarter, expecting Canadian activity to meet or slightly exceed last year's winter drilling season [9] - U.S. rig counts are expected to remain stable in the upper 30s for Q4 [9] - The company is committed to long-term debt reduction and increasing direct returns to shareholders [12] Other Important Information - The company has repurchased $54 million worth of shares during the first nine months of the year [8] - The leadership transition included the appointment of Carey Ford as President and CEO, with a focus on maintaining operational excellence [2][11] Q&A Session Summary Question: Comments on contract duration visibility for 2026 - Management noted a trend towards longer-term contracts in the Montney and Marcellus regions, with ongoing constructive conversations for future contracts [26][28] Question: Rig upgrades and CapEx expectations for 2026 - Management indicated a commitment to maintaining capital commitments for debt pay down and share repurchases, with expectations for continued rig upgrades driven by customer demand [31][32] Question: Changes in strategy under new leadership - The new CEO emphasized continuity in successful strategies while sharpening focus on supporting field operations and customer performance [37][38] Question: Impact of mobilization costs on margins - Management clarified that mobilization costs in Canada would not be substantial, while U.S. costs have stabilized [39] Question: Performance-based contracts and M&A strategy - Management confirmed no significant changes in M&A strategy, focusing on organic growth opportunities and the potential for more performance-based contracts in the future [44][45] Question: Demand for rig upgrades next year - Management expressed optimism about ongoing demand for rig upgrades, particularly in heavy oil and gas markets [54][70]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was $118 million, down from $142 million in the prior year [4] - Daily operating margins in Canada increased to $13,007 per day from $12,877 per day in Q3 2023 [4] - U.S. daily operating margins decreased to $8,700 per day from $9,026 per day in the previous quarter [5] - The company reduced its debt by $101 million, achieving its annual debt reduction target [7] Business Line Data and Key Metrics Changes - In Canada, drilling activity averaged 63 active rigs, a decrease of 9 rigs from Q3 2023 [4] - U.S. drilling activity averaged 36 rigs, an increase of 3 rigs from the previous quarter [4] - International drilling activity averaged 7 rigs, down from 8 rigs in the prior year [5] - CMP segment adjusted EBITDA was $19.3 million, slightly down from $19.7 million in the prior year [6] Market Data and Key Metrics Changes - International day rates averaged $53,811 per day, an increase of 14% from the prior year [5] - The U.S. rig count increased from a low of 27 rigs in Q1 to a high of 40 rigs [5] - The company expects Q4 rig counts in Canada to be similar to Q4 2024, averaging 65 rigs [8] Company Strategy and Development Direction - The company increased its 2025 capital budget by $20 million for additional rig upgrades, reflecting a long-term view of energy demand [3] - The strategic focus includes leveraging scale, utilizing technology for rig performance, and maintaining customer focus [14][18][19] - The company aims to achieve a net debt to adjusted EBITDA ratio of less than one times and increase free cash flow allocated to shareholders towards 50% [9] Management's Comments on Operating Environment and Future Outlook - Management expressed a positive outlook for the remainder of the year, dependent on commodity prices [7] - The company anticipates that winter drilling activity in Canada will meet or slightly exceed last year's levels [8] - Management highlighted the importance of customer focus and the successful upgrade program as key drivers for future performance [19] Other Important Information - The company completed a leadership transition with the appointment of new executives, including Carey Ford as CEO [2] - The company has a strong balance sheet with over $400 million in total liquidity [9] Q&A Session Summary Question: Visibility on contract extensions for 2026 - Management noted that longer-term contracts are being seen in the Montney and Marcellus regions, with some short-term contracts in oil basins [25][26] Question: Future rig upgrades and CapEx - Management indicated that while they hope for more upgrades, the focus will remain on debt pay down and shareholder returns [28][29] Question: Changes in strategy under new leadership - The new CEO emphasized continuity in strategy, focusing on supporting field operations and enhancing customer performance [32][34] Question: Performance-based contracts and M&A approach - Management confirmed no significant changes in M&A strategy, with a focus on organic growth through asset utilization and rig upgrades [41][42] Question: Demand for rig upgrades next year - Management is closely working with customers to understand rig requirements and expects continued demand for upgrades [50][52]

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q3 2025 was $118 million, down from CAD 142 million in the prior year [5][6] - Daily operating margins in Canada were $13,007, compared to $12,877 in Q3 2024, while in the U.S., margins were steady at $8,700, down from $9,226 in Q2 2025 [6][12] - The company reduced its debt by CAD 101 million, achieving its annual debt reduction target [11] Business Line Data and Key Metrics Changes - In Canada, drilling activity averaged 63 active rigs, a decrease of nine rigs from Q3 2024 due to deferred customer projects [5][6] - U.S. drilling activity averaged 36 rigs, an increase of three rigs from the previous quarter, reflecting strength in gas-weighted basins [6][7] - Internationally, drilling activity averaged seven rigs, down from eight rigs in the prior year, with day rates averaging $53,811, a 14% increase from the previous year [8] Market Data and Key Metrics Changes - The U.S. natural gas market has seen an increase in rig count from 27 in Q1 to 40 rigs currently, driven by strong field performance [7][8] - The company expects Q4 rig counts in Canada to be similar to Q4 2024, averaging 65 rigs, while U.S. rig counts are expected to remain in the upper 30s [12][13] Company Strategy and Development Direction - The company increased its 2025 capital budget by $20 million to fund five additional contracted rig upgrades, indicating a long-term view of energy demand [3][4] - Precision Drilling aims to leverage its scale, utilize technology for rig performance, and maintain a strong customer focus as key pillars of its strategy [22][28] - The company is committed to long-term debt reduction and increasing direct returns to shareholders, with plans to allocate 35-45% of free cash flow to share buybacks [11][18] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the future, citing a strong balance sheet and a commitment to capital returns while navigating commodity market challenges [18][30] - The outlook for the remainder of the year remains positive but is dependent on commodity prices, with expectations for winter drilling activity to meet or slightly exceed last year's levels [12][13] Other Important Information - The company has completed a leadership transition, appointing Carrie Ford as CEO, Gene Stahl as COO, and Dustin Honing as CFO [2][16] - Precision Drilling has a strong presence in Canada’s heavy oil and unconventional natural gas markets, which positions it well for future growth [8][9] Q&A Session Summary Question: Visibility on contract extensions for 2026 - Management noted that longer-term contracts are being seen in the Montney and Marcellus regions, with some short-term contracts in oil basins due to volatility [35][36] Question: Future rig upgrades and CapEx - Management indicated that while they hope to see more rig upgrades, the focus will remain on maintaining commitments to debt paydown and shareholder returns [40][42] Question: Changes in strategy under new leadership - The new CEO emphasized continuity in strategy, focusing on supporting field operations and enhancing customer performance [47][49] Question: Performance-based contracts and M&A approach - Management confirmed no significant changes in M&A strategy, with a focus on organic growth through improved asset utilization and performance-based contracts [55][56] Question: Demand for rig upgrades next year - Management expressed optimism about demand for upgrades, particularly in heavy oil and unconventional plays, with ongoing discussions with customers [67][70]

Financial Data and Key Metrics Changes - The company reported operating revenue of $2.6 billion in Q3 2025, up 1% from the prior year, primarily due to contractual revenue growth in Supply Chain Solutions (SCS) and Fleet Management Solutions (FMS) [12] - Comparable EPS from continuing operations increased to $3.57, up 4% from $3.44 in the prior year, reflecting higher contractual earnings and benefits from share repurchases [13] - Return on equity (ROE) was 17%, up from the prior year, driven by higher contractual earnings and share repurchases, partially offset by lower rental demand and used vehicle sales [13] - Year-to-date free cash flow increased to $496 million from $218 million in the prior year due to reduced capital expenditures and lower income tax payments [13] Business Line Data and Key Metrics Changes - Fleet Management Solutions operating revenue was in line with the prior year, with pre-tax earnings of $146 million, reflecting higher ChoiceLease performance but lower used vehicle sales and rental results [14] - Supply Chain operating revenue increased by 4%, driven by new business in omnichannel retail, although earnings decreased by 8% due to e-commerce network performance and higher medical costs [16] - Dedicated operating revenue decreased by 6% due to lower fleet count, but earnings before tax (EBT) remained in line with the prior year, reflecting acquisition synergies [17] Market Data and Key Metrics Changes - The company expects 60% of 2025 revenue to come from asset-light businesses, up from 44% in 2018, indicating a shift in revenue mix towards supply chain and dedicated services [10] - The company anticipates a free cash flow forecast of $900 million to $1 billion for 2025, reflecting lower year-over-year capital spending [9][23] Company Strategy and Development Direction - The company remains focused on creating value through operational excellence and investment in customer-centric technology, aiming for earnings growth driven by resilient contractual businesses and strategic initiatives [6] - A new discretionary share repurchase program was authorized, reflecting the company's commitment to disciplined capital allocation [8] - The company expects to realize approximately $100 million in benefits from strategic initiatives by year-end 2025, benefiting all three business segments [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to outperform prior cycles, citing a strong performance from the transformed business model and the execution of the balanced growth strategy [11] - The company anticipates continued earnings growth in 2025, driven by contractual earnings and strategic initiatives, despite headwinds from the freight market [22] - Management noted that the prolonged freight downturn and economic uncertainty are causing some customers to delay decisions, but robust sales and pipeline activity in SCS are encouraging [22][26] Other Important Information - The company has repurchased approximately 22% of its shares outstanding since 2021 and increased the quarterly dividend by 57% [8] - The company expects to generate approximately $10.5 billion from operating cash flow and used vehicle sales proceeds over a three-year period, creating $3.5 billion of incremental debt capacity [20] Q&A Session Summary Question: Impact of CDL regulations on the business model - Management indicated that tighter driver markets could benefit the dedicated business as companies seek help in driver recruitment, with minimal impact expected on the lease side [30][31] Question: Drivers of earnings growth for 2026 - Management expects contractual earnings growth and benefits from strategic initiatives to drive earnings growth, with strong performance anticipated in supply chain solutions [33][34] Question: Used vehicle pricing and tariffs - Management noted uncertainty regarding the impact of truck tariffs on pricing but suggested that higher new truck prices could eventually benefit used truck values [41][42] Question: Supply chain performance and headwinds - Management acknowledged temporary headwinds in supply chain performance due to higher medical costs and lower e-commerce volumes but remains optimistic about future growth [52][53] Question: SelectCare performance volatility - Management views the recent lower activity in SelectCare as temporary, expecting a return to normal levels in the fourth quarter [57] Question: Non-domicile CDL role and timing of impacts - Management indicated that the impact of CDL regulations would unfold over time, with expectations of increased demand for dedicated services as the driver market tightens [62]