Core Viewpoint - NuVista Energy Ltd. reported record-setting reserves and strong financial and operational results for the year ended December 31, 2024, highlighting significant growth in reserves and a commitment to shareholder returns as the company aims for continued production growth towards 125,000 Boe/d in 2025 [1]. Operational and Financial Highlights - Average production in Q4 2024 was 85,635 Boe/d, exceeding guidance of 83,000 – 84,000 Boe/d, with an annual average production of 83,084 Boe/d, an 8% increase from 2023 [4]. - The company executed a capital expenditure program of $498.9 million, including drilling 43 wells and completing 38 wells throughout the year [4]. - Annual adjusted funds flow was $552.2 million ($2.68/share), with Q4 contributing $137.1 million ($0.67/share) [4]. - Free adjusted funds flow for the year was $39.6 million ($0.19/share) [4]. - The company repurchased 5.9 million common shares at an average price of $12.52 per share, totaling $74.4 million, and has repurchased 36.5 million shares since 2022 [4]. - As of December 31, 2024, net debt was $232.5 million, with a favorable net debt to annualized fourth quarter adjusted funds flow ratio of 0.4x [4][8]. Reserves Growth - Reported Proved Developed Producing (PDP) reserves increased by 9% year-over-year to 177.3 MMBoe, with Total Proved plus Probable (TP+PA) reserves rising by 21% to 779.7 MMBoe [9]. - The company replaced 150% of 2024 production on a PDP basis and 550% on a TP+PA basis, reflecting the success of its capital program [9]. - PDP Finding, Development and Acquisition Cost (FD&A) was $11.13/Boe, with a PDP recycle ratio of 1.8x based on the 2024 operating netback [9]. 2025 Guidance and Operations - The company forecasts Q1 2025 production to average 87,000 – 88,000 Boe/d, with annual production expected to average approximately 92,000 Boe/d, assuming the Pipestone Plant starts up in Q2 [13]. - Annual capital expenditure guidance for 2025 is approximately $450 million, with a minimum of $100 million allocated for share repurchases [14][7]. - The company plans to continue its disciplined growth strategy while maintaining a strong balance sheet and low debt levels [15].

Financial Data and Key Metrics Changes - The company generated net income attributable to Limited Partners of $326 million and adjusted EBITDA of $591 million in the fourth quarter [18] - For the full year 2024, net income attributable to limited partners was $1.54 billion, with adjusted EBITDA reaching $2.34 billion, exceeding the midpoint of the guidance range [19][20] - Free cash flow for 2024 totaled $1.32 billion, surpassing the high end of the guidance range [20] Business Line Data and Key Metrics Changes - Natural gas throughput increased by 4% sequentially in Q4, achieving record levels in the Delaware Basin [10] - Crude oil and NGLs throughput rose by 6% sequentially, driven by strong customer activity [10] - Produced water throughput saw an 8% sequential increase, attributed to strong producer activity [10] Market Data and Key Metrics Changes - Average throughput across all three products increased by double digits year over year, with natural gas throughput averaging 5.1 billion cubic feet per day, a 16% increase [13] - Crude oil and NGLs throughput averaged 530,000 barrels per day, representing a 12% year-over-year increase [14] - Produced water throughput averaged 1.1 million barrels per day, an 11% increase compared to the previous year [14] Company Strategy and Development Direction - The company announced a significant expansion of its produced water gathering and disposal infrastructure in the Delaware Basin, including the Pathfinder pipeline [4][5] - The strategy focuses on capital-efficient organic growth to generate strong returns for unitholders and sustain base distribution growth [7][8] - The company aims to target a long-term annual distribution growth rate of mid to low single digits, excluding potential increases from large organic growth projects [8][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about growth driven by strong operational performance and strategic positioning [29] - The company anticipates continued throughput growth in 2025, particularly in the Delaware Basin, supported by strong producer activity [15][31] - Management highlighted the importance of maintaining strong relationships with customers, particularly Occidental Petroleum, to support long-term development plans [30] Other Important Information - The company plans to retire the enhanced distribution concept to simplify its capital allocation framework and focus on sustainable base distribution growth [23] - A new long-term produced water agreement with Occidental Petroleum was executed, enhancing the company's service offerings [4][5] Q&A Session Summary Question: Growth outlook and capital allocation framework - Management explained that the mid to low single-digit distribution growth target was based on extensive forecasting and planning [36] Question: Pathfinder pipeline contract and filling capacity - Management indicated that the contract with Occidental Petroleum supports the pipeline's capacity and is expected to enhance returns over time [39] Question: Discussions with other customers for pipeline capacity - Management confirmed ongoing discussions with other producers to fill the pipeline and improve returns [43] Question: Competitors in the Permian produced water market - Management emphasized the unique long-term midstream solution offered by the company compared to shorter-term oilfield service solutions [45] Question: Future contract extensions with Occidental Petroleum - Management noted ongoing efforts to maintain and extend contracts with all customers, particularly in the Delaware Basin [50] Question: Capital expenditures for 2026 - Management indicated that capital expenditures for 2026 would be higher due to the Pathfinder project and ongoing growth initiatives [53] Question: Criteria for bolt-on acquisitions - Management outlined that acquisitions should complement existing operations and meet midstream return requirements [61] Question: Timing of buybacks given capital requirements - Management stated that while a buyback program was authorized, significant market dislocation would be needed to consider it in the near term [68]

Financial Data and Key Metrics Changes - Consolidated revenue growth of 12.8% in Q4 2024, with operating income rising by 31.5% compared to the previous year [21] - Net consolidated income increased by 78.3% to nearly MXN 11 billion, driven by a non-cash change gain of MXN 2.7 billion and higher net income from discontinued operations of MXN 3.3 billion [21][22] - Gross margin expanded by 230 basis points to 47.7%, with operating margin increasing by 50 basis points to 11.7% of sales [25][26] Business Line Data and Key Metrics Changes - Proximity Americas division saw total revenues grow by 13.2%, with same-store sales growth of 3.8% despite a 2.8% decline in average traffic [24] - Health division revenues grew by 13.3%, with same-store sales increasing by 9.4% and operating income rising by 109.7% [29] - OXXO Gas reported a 9.7% increase in same-station sales and an 8% increase in total revenues [32] Market Data and Key Metrics Changes - Proximity Europe revenues increased by 21.5% in pesos, driven by retail revenue growth across countries [27] - Coca-Cola FEMSA recorded double-digit increases across their income statement, with income from operations rising by 25% [36] Company Strategy and Development Direction - FEMSA Forward initiative is nearing completion of planned divestitures, having monetized approximately $10.7 billion to focus on core business units [11][39] - Plans for 2025 include deploying nearly MXN 66 billion or $3.2 billion in capital returns, including ordinary and extraordinary dividends and share buybacks [14][15] - The company aims to maintain a disciplined approach to capital allocation, focusing on long-term intrinsic value per share [16] Management's Comments on Operating Environment and Future Outlook - Management acknowledges macroeconomic uncertainties and a softer consumer environment in Mexico, emphasizing the urgency to drive growth and profitability [46] - The company remains optimistic about growth opportunities across its business units, leveraging digital capabilities and operational efficiencies [10][46] Other Important Information - The succession process for the CEO position is underway, with a special committee formed to oversee the process [16][18] - The digital ecosystem has been rebranded as Spin, with significant growth in active users and sales linked to the loyalty program [34][35] Q&A Session Summary Question: Insights on shareholder remuneration and buybacks - Management plans to execute a mix of local buybacks in Mexico and accelerated share repurchases in the US, similar to previous years [55][56] Question: OXXO store expansion versus same-store sales trends - Management is confident in the ongoing expansion of OXXO stores, monitoring performance closely to ensure value creation [62][63] Question: Traffic decline attribution and operating leverage - Traffic decline is attributed to various factors, including weather and cannibalization, but management is confident in the store performance metrics [72][76] Question: Growth strategy in the US - The focus will be on organic growth through OXXO standalone stores and small bolt-on acquisitions, with an emphasis on profitability [90][91] Question: Financial services growth and potential banking license - The company is expanding financial services and plans to apply for a banking license, focusing on responsible growth in this area [100][101]

Financial Data and Key Metrics Changes - Consolidated net revenue for Q4 2024 increased 4% to a record $750 million compared to $721 million in Q4 2023 [13] - Adjusted net income rose to $81 million or $2.88 per diluted share [16] - Adjusted EBITDA for Q4 2024 reached a record $132 million, reflecting an adjusted EBITDA margin of 17.6% [16] - Same branch sales growth was up 1% for Q4 2024, with a 1.2% increase in price mix offsetting a less than 1% decrease in job volumes [13][14] Business Line Data and Key Metrics Changes - Single-family sales growth was supported by a diverse mix of builders, contributing to nearly 6% consolidated sales growth for the year [8] - Multifamily installation sales growth remained resilient, with same branch sales increasing over 6% in 2024 [9] - Commercial sales in the installation segment improved modestly from the prior year [9] Market Data and Key Metrics Changes - Single-family starts in 2024 were up 7%, indicating a stable demand environment for installation services [10] - The company expects a 20% to 25% decline in multifamily units under construction, which will take at least six months to normalize [24][66] Company Strategy and Development Direction - The company continues to invest in growth opportunities, with approximately $87 million allocated to acquisitions and $230 million towards dividends and share repurchases in 2024 [6][7] - The Board approved a 6% increase in both the regular quarterly cash dividend and the annual variable dividend, reflecting confidence in the financial position [6][19] - The company aims to expand its geographic footprint and product offerings, particularly in the multifamily segment [9][34] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the long-term demand for installed services despite current challenges in housing affordability and regulatory uncertainties [11] - The company anticipates stable demand for single-family installation services in 2025, with expectations of low single-family starts growth [26] - Management noted that while the environment is softer, it is not dire, and they remain constructive about medium and long-term demand for new construction [62][63] Other Important Information - The company generated $340 million in cash flow from operations for the year, maintaining a strong liquidity position [17] - The net debt to trailing twelve-month adjusted EBITDA leverage ratio was 1.08x, well below the target of 2x [18] - The company repurchased 383,000 shares in Q4 2024, totaling $145 million for the year, with a new stock buyback program authorized for $500 million [18][19] Q&A Session Summary Question: Expectations for multifamily and single-family work in the New Year - Management expects to outperform the multifamily market despite a projected decline in units under construction, while single-family growth is anticipated to be low to mid-single digits [24][26] Question: Outlook on price mix at the beginning of the year - The current environment is benign for inflation, with price mix benefits primarily from prior periods [28] Question: Growth plans for multifamily and CQ's role - CQ is expected to expand into new markets, with significant opportunities for growth in multifamily [33][36] Question: Competitive dynamics and pricing pressures - The company acknowledges a competitive environment but emphasizes maintaining relationships and fair pricing over volume [60][62] Question: Impact of inventory levels on builders - Builders are managing high inventory levels, and the company is observing varied conditions across different regions [95][98] Question: Internal distribution capabilities and margin impact - The company is making progress in internal distribution, which is expected to benefit margins over time [101][103]

Financial Data and Key Metrics Changes - Sales from continuing operations in Q4 2024 were approximately $180 million, with organic sales up 5% year-over-year after adjusting for foreign exchange and discontinued revenue streams [10][12] - Adjusted diluted earnings per share for Q4 were $0.43, with adjusted EBITDA from continuing operations at nearly $29 million [11] - For the full year, sales from continuing operations were approximately $688 million, with adjusted diluted earnings per share of $1.35, a 31% increase compared to the prior year [12][11] - The company generated $83 million of free cash flow in 2024, an increase of almost $70 million compared to the previous year [14] Business Line Data and Key Metrics Changes - The enteral feeding portfolio grew almost 12% organically in Q4, reaffirming the company's leading position in short-term, long-term, and neonatal feeding [15] - The pain management and recovery portfolio saw normalized organic sales down approximately 3% in Q4, but a sequential growth of 13% compared to Q3 [17][18] - The interventional pain business posted high single-digit growth in Q4, supported by increased procedural volumes [19] Market Data and Key Metrics Changes - The company served over two million patients in 2024 through its enteral feeding and pain management solutions [9] - The NeoMed product line benefited from strong demand for ENFit conversions in North America, while the Ambit product grew more than 30% in each quarter of 2024 [16][21] Company Strategy and Development Direction - The company is focused on a three-year transformation process, having completed the divestiture of its respiratory health business [8][26] - Key transformation priorities include optimizing the organization, transforming the product portfolio, enhancing operating profitability, and efficient capital allocation [25] - Starting in Q1 2025, the company will report under three operating segments to improve transparency and guide internal capital allocation decisions [29][32] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging market environment for some product categories in 2025, with expected net sales in the range of $665 million to $685 million [33][34] - The guidance reflects currency headwinds and pricing pressures, with expectations for flat to low single-digit organic growth in the Pain Management and Recovery segment [34][35] - Management expressed confidence in reigniting margin expansion in 2026 as macroeconomic uncertainties are resolved [44] Other Important Information - The company exited its deferred prosecution agreement with the DOJ in January 2025, marking a significant milestone in its transformation journey [27] - The company has a strong balance sheet with $108 million in cash and $135 million in debt as of December 31, 2024 [14] Q&A Session Summary Question: Insights on 2025 margin improvement pause - Management indicated that the 2025 guidance is conservative due to macroeconomic uncertainties, with expectations to finish 2025 at similar revenue levels as previously stated [42][44] Question: Progress on business evaluation and urgency - Management acknowledged the connection between the impairment charge and the evaluation process, noting that volume growth was achieved but offset by pricing dynamics [48] Question: Guidance details and potential upside/downside - Upside potential includes tariff certainty and demand growth from competitor back orders, while downside risks are primarily macroeconomic [54][57] Question: Cash flow expectations for 2025 - Management expects free cash flow in 2025 to be similar to 2024, with ongoing opportunities for improvement in working capital [62] Question: Product innovations for 2025 - Management anticipates launching one to three product innovations in the Specialty Nutrition Systems segment within the next 12 months [66][68]

Financial Data and Key Metrics Changes - The company reported consolidated GAAP diluted earnings per share for Q1 2025 at $1.75, down from $1.93 in the prior year, while operating earnings per share was $1.92 compared to $1.95 in the previous year [16] - Restaurant level margin percentage remained flat year-over-year at 23.2%, aided by the completion of a new beverage partner contract [13] Business Line Data and Key Metrics Changes - Jack in the Box achieved positive same-store sales growth of 40 basis points for the quarter, despite challenges from California wildfires and unusual weather, which negatively impacted sales by approximately 20 basis points [11] - Del Taco faced a challenging quarter with pressured same-store sales and is also expected to post negative same-store sales in Q2, although a menu optimization initiative has shown encouraging results [14] Market Data and Key Metrics Changes - The company opened five restaurants and closed six in Q1, with expectations to open between 35 and 45 restaurants for fiscal year 2025 [13] - Del Taco's restaurant count at the end of the quarter was 589, with one opening and six closures [15] Company Strategy and Development Direction - The company is focused on capital allocation and cash flow improvement, with a slight reduction in capital expenditure guidance for the year [17][18] - The strategy includes a barbell approach to marketing, value leadership, and digital evolution to drive sales [12] Management's Comments on Operating Environment and Future Outlook - Management acknowledged ongoing macro pressures and anticipated negative same-store sales results for Q2, but expressed confidence in the marketing calendar and digital capabilities to drive future sales [12][39] - The leadership transition is seen as an opportunity to build on a strong foundation for growth and maximize long-term potential [9][22] Other Important Information - The company repurchased 124,000 shares for $5 million during the quarter, but plans to halt further repurchase activity for the year to focus on reducing leverage [16][17] - An updated capital expenditure range for the year is set at $100 million to $105 million, reflecting a slight reduction [18] Q&A Session Summary Question: Capital allocation and cash flow focus - Management confirmed a sharpened focus on capital allocation and cash flow, indicating that further announcements regarding free cash flow acceleration opportunities are expected in May [27][30] Question: Company store openings strategy - Management stated that while there is a place for company store builds, the focus will be on complementing franchisee growth rather than leading it [36] Question: Consumer environment and sales strategy - Management acknowledged the cautious consumer environment but expressed confidence in their sales strategy, emphasizing value and menu innovation to reestablish positive momentum [38]

Financial Data and Key Metrics Changes - The company reported a modest revenue decline in 2024 to approximately $3.9 billion, with adjusted EBITDA of $866 million at a margin of 22.4%, slightly ahead of the previous year [19][20] - Free cash flow reached a record $229 million in Q4, contributing to a total of over $640 million for the year [18][23] - Q4 revenues surpassed $1 billion, with adjusted EBITDA of over $251 million at a margin of 24.8% [20][22] Business Line Data and Key Metrics Changes - Food Processing segment achieved 4.7% organic revenue growth in Q4, resulting in revenues exceeding $219 million and an adjusted EBITDA margin of 29.6%, up 200 basis points year-over-year [20][21] - Residential segment reported Q4 revenues of $185 million, a sequential increase from Q3, but down 2.4% year-over-year, with an adjusted EBITDA margin of 13% [21][22] - Commercial segment's Q4 revenues were over $609 million, with organic revenues down 2.8% year-over-year, maintaining healthy margins over 28% [22] Market Data and Key Metrics Changes - The company noted gradual improvement in macro conditions for both commercial and residential businesses, despite challenges persisting [14][15] - The Food Processing business finished the year strongly, with expectations for continued growth driven by favorable long-term market drivers [15][19] Company Strategy and Development Direction - The company announced plans to separate its Food Processing business into a stand-alone public company, aiming to enhance strategic and operational focus for both entities [5][6] - The remaining Middleby Corporation will focus on commercial and residential kitchen equipment, with an emphasis on innovation and automation [9][10] - The company is positioned to capture market opportunities through strategic acquisitions and investments in new product categories [10][30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the recovery of the residential business, anticipating gradual improvement in 2025 [50][110] - The company expects low single-digit organic revenue growth across segments in 2025, with profitability growth rates exceeding organic revenue growth [30][31] - Management highlighted the importance of M&A activities and strategic investments to drive future growth [62][66] Other Important Information - The company added two new Board members, enhancing its governance and strategic direction [11][12] - The separation of the Food Processing business is expected to be executed through a tax-free spinoff by early 2026 [10] Q&A Session Summary Question: Can you walk us through the decision to separate Food Processing? - Management indicated that the decision was based on a long-term strategic review, believing that separation will accelerate growth for both entities [41][44] Question: What are the expected free cash flow conversions for the separate businesses? - Management suggested that both businesses could achieve 100% or greater free cash flow conversion, although specific long-range guidance for Food Processing is still being developed [46][47] Question: How do you view the recovery in the residential business? - Management noted that the residential business is at a cyclical trough but has significant growth potential, with expectations for gradual recovery in 2025 [49][50] Question: What is the leverage profile expected post-spin? - Management anticipates less leverage on the Food Processing business, allowing for more focus on M&A opportunities [95] Question: Are there any strategic alternatives being considered for the residential business? - Management confirmed that the residential business is continuously reviewed, but currently, it is seen as a strong platform with potential for margin expansion [72][110]

Financial Data and Key Metrics Changes - Targa Resources reported a record adjusted EBITDA of $4.1 billion for 2024, a 17% increase compared to 2023, despite weak natural gas and NGL prices [13][37] - The fourth quarter adjusted EBITDA was $1.122 billion, reflecting a 5% increase over the third quarter, driven by higher Permian volumes [36][37] - The company expects full-year 2025 adjusted EBITDA to be between $4.65 billion and $4.85 billion, representing a 15% increase over 2024 [39] Business Line Data and Key Metrics Changes - Permian GMP volumes grew by 14% year-over-year, with an incremental 709 million cubic feet per day moving through the system [11] - NGL pipeline transportation volumes averaged a record during the fourth quarter, with fractionation volumes also reaching a record of 1.1 million barrels per day [21] - The logistics and transportation segment is expected to benefit from full-year contributions of the Daytona NGL pipeline and trains nine and ten [40] Market Data and Key Metrics Changes - The company anticipates continued volume growth in the Permian Basin, which will drive operating margins across its businesses [39] - The outlook for NGL supply growth remains robust, supported by downstream system expansions to handle growth from the Permian systems [22] Company Strategy and Development Direction - Targa Resources announced three new projects aimed at increasing NGL capacity, including the Delaware Express pipeline expansion and new fractionators [9][10] - The company is focused on organic growth opportunities while maintaining a strong balance sheet to support capital returns to shareholders [34][66] - The strategy includes opportunistic share repurchases and significant dividend increases, with a 33% increase in the common dividend per share expected for 2025 [14][68] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, highlighting strong commercial success and increased infrastructure investments [7][10] - The company expects a back-half weighted growth in 2025, with significant contributions from new commercial agreements [51][52] - Management noted that 2026 is projected to be even stronger than 2025, driven by the addition of four new plants [53][118] Other Important Information - Targa Resources repurchased $755 million of common shares in 2024, a substantial increase from $347 million in 2023 [33] - The company closed a new five-year $3.5 billion revolving credit facility, enhancing its liquidity position [43][44] - Targa purchased BP's 12% interest in Cedar Bayou Fractionators for approximately $111 million, now owning 100% of the asset [25] Q&A Session Summary Question: Forward outlook and EBITDA trajectory - Management indicated a strong growth outlook for 2025, with expectations for more back-half growth and significant contributions from commercial deals [50][52] Question: Badlands buy-in clarification - Management stated the decision was opportunistic, driven by a strong balance sheet and the potential for $80 million in annual cash savings [62][63] Question: Capital allocation priorities - The company maintains an all-of-the-above approach, focusing on organic growth while also executing opportunistic share repurchases [66][68] Question: Commercial success across footprint - Management highlighted good commercial success in both the Midland and Delaware basins, with significant acreage positions available for growth [76][78] Question: Expected returns on new projects - Management confirmed that the previously provided framework holds, with expectations to exceed the five and a half times build multiple [104] Question: North Texas Mountain Valley NGL pipeline timing - Management discussed the need for new capital and the flexibility provided by third-party offload deals to manage growth [127][131]

Financial Data and Key Metrics Changes - For full year 2024, the company reported a net income of $659 million and adjusted EBITDA of $1,136 million, representing a growth of approximately 12% from 2023 [14][18] - The adjusted EBITDA for Q4 was $298 million, an increase from $287 million in Q3, driven by higher throughput volumes [18][19] - The company anticipates adjusted EBITDA for 2025 to be in the range of $1,235 million to $1,285 million, reflecting an approximate 11% growth at the midpoint compared to 2024 [10][22] Business Line Data and Key Metrics Changes - Gas processing volumes averaged 447 million cubic feet per day in Q4, with full year 2024 averaging 420 million cubic feet per day [9][10] - Crude terminaling volumes averaged 127,000 barrels of oil per day in Q4, with a full year average of 123,000 barrels per day [9][10] - Water gathering volumes averaged 130,000 barrels of water per day in Q4, with a full year average of 125,000 barrels per day [9][10] Market Data and Key Metrics Changes - Bakken net production averaged 208,000 barrels of oil equivalent per day in Q4, with a full year average of 204,000 barrels per day, marking a 12% year-over-year increase [7][8] - The company expects gas volumes to grow by more than 25% from 2024 through 2027, driven by Hess' planned development activity and increasing third-party volumes [6][10] Company Strategy and Development Direction - The company plans to maintain annual capital expenditures in the range of approximately $250 million to $300 million through 2027, focusing on disciplined, low-cost investments to meet growing basin demand [12][24] - A new gas processing plant with a capacity of 125 million cubic feet per day is set to begin construction in 2025, expected to support throughput growth through at least the end of the decade [10][12] - The company aims to generate sustainable cash flow and return additional capital to shareholders, with a targeted distribution growth of at least 5% annually through 2027 [16][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the growth trajectory supported by Hess production and third-party opportunities, with a disciplined approach to capital allocation [35][36] - The company anticipates a strong recovery in volumes following severe winter weather impacts in Q1 2025, with expectations for significant growth in EBITDA throughout the year [57][58] - Management highlighted the importance of maintaining a strong balance sheet while prioritizing shareholder returns through unit repurchases and distribution increases [16][25] Other Important Information - The company has returned $1.95 billion to shareholders since 2021 through accretive repurchases, with a distribution per Class A share growth of approximately 55% since 2021 [16][18] - The gross adjusted EBITDA margin for Q4 was maintained at approximately 80%, above the 75% target, indicating strong operating leverage [18] Q&A Session Summary Question: Multi-year growth outlook and EBITDA growth potential - Management explained that the MVCs provide visibility to the volumes underpinning growth, with gas processing expected to drive significant revenue [27][29][30] Question: Long-term outlook in Bakken and potential for M&A - Management confirmed no plans to expand outside of Bakken, focusing on organic growth supported by Hess production and potential third-party volumes [34][35][36] Question: Capital expenditures and future growth CapEx - Management indicated that the increase in CapEx is driven by activity phasing and efficiency improvements, with expectations for a step down in CapEx post-2027 [41][44][45] Question: Capital allocation program and potential changes - Management reiterated confidence in the return on capital framework, emphasizing continued unit repurchases and distribution growth, while considering public participation in repurchases as ownership changes [48][50] Question: Use of leverage and financial flexibility - Management discussed the balance between leverage capacity and excess free cash flow, maintaining a focus on shareholder returns while exploring organic growth opportunities [53][55] Question: Q1 guidance and weather impacts - Management acknowledged the unpredictability of Q1 weather but expressed confidence in recovery and growth in volumes for the remainder of the year [56][57][58]

Financial Data and Key Metrics Changes - Revenue increased by 20% sequentially to $3.5 billion [10] - Net income attributable to Alcoa was $202 million, up from $90 million in the prior quarter, with earnings per share doubling to $0.76 [10] - Adjusted EBITDA rose by $222 million to $677 million, driven by higher alumina and aluminum prices, increased shipments, and lower energy costs [11] Business Line Data and Key Metrics Changes - In the alumina segment, third-party revenue increased by 45% due to higher average realized prices and higher shipments [10] - The aluminum segment saw a 5% increase in third-party revenue, primarily from higher average realized prices [10] - The alumina segment's adjusted EBITDA increased by $349 million, mainly due to higher alumina prices and volumes [11] Market Data and Key Metrics Changes - Alumina prices reached an all-time high in Q4 due to tight market conditions and lower-than-expected supply [26] - Global demand for aluminum remained resilient, particularly in the packaging and electrical sectors, while building and construction faced challenges [27] - The bauxite market is currently tight, with pricing into China at $120-$130 per ton, impacting alumina availability [56] Company Strategy and Development Direction - The company aims to enhance safety and operational excellence, particularly in Brazilian operations, and prioritize customer-focused decisions to become the supplier of choice [24] - Plans for targeted growth through organic and inorganic opportunities where returns exceed the cost of capital [25] - Deleveraging and repositioning debt are priorities for 2025, with expectations of generating sufficient cash for further debt reductions [25] Management's Comments on Operating Environment and Future Outlook - Management noted that alumina prices are expected to remain tight in the first half of 2025, with new production in India and Indonesia needed to balance the market [57] - The outlook for aluminum demand outside China is expected to rebound, supported by higher real incomes and lower interest rates [29] - Management expressed caution regarding potential tariffs and their impact on supply, demand, and trade flows [35] Other Important Information - The company completed a $385 million debt repayment while maintaining its quarterly dividend [9] - The profitability improvement program exceeded its $645 million target ahead of schedule, with significant savings from raw materials and productivity initiatives [8][14] - The company has a cash balance of $1.1 billion and expects capital expenditures of $700 million in 2025 [19] Q&A Session Summary Question: Impact of potential tariffs on Midwest premium and trade flows - Management indicated that the Midwest premium would likely increase significantly if tariffs are imposed, disrupting trade flows and potentially leading to higher costs for U.S. customers [43][45] Question: Net debt position and capital return timing - The company closed the year with $2.1 billion in adjusted net debt and will prioritize deleveraging in 2025, considering capital returns if excess cash is available [50][52] Question: Bauxite availability for new refineries - The bauxite market is tight, and alumina prices are expected to remain high, impacting the ramp-up of new refineries in India and China [56] Question: Cash balance and MOU progress at San Cyprian - Cash consumption is still depleting weekly, and while the MOU is a positive step, it does not guarantee a deal will be reached [62][64] Question: Monetizing excess energy offtake - The company has opportunities to monetize energy in Brazil and potentially in Wort, but these are currently being utilized for smelting operations [66] Question: Monetizing idle sites for data centers - The company has a history of successfully monetizing legacy assets and is in contact with developers for potential sales, but maximum value is the priority [70][73]