Financial Data and Key Metrics Changes - For Q4 2024, the company reported an adjusted EBITDA loss of $81 million, primarily due to weaker automotive demand and lagged pricing [33] - Total shipments in Q4 were 3.8 million tons, lower than Q3 due to the idling of the C6 furnace and seasonally weaker demand [37] - Q4 price realization was $976 per net ton, a decrease of $70 per net ton from the previous quarter, influenced by the inclusion of Stelco and its lower price mix [37] Business Line Data and Key Metrics Changes - Direct shipments to the automotive sector in Q4 were the lowest since the pandemic, reflecting a significant impact from weak demand [33] - The company expects to improve shipment levels above 4 million tons in Q1 2025 due to better demand and full utilization of Stelco [37] - The inclusion of Stelco is expected to reduce average costs by an additional $40 per net ton in 2025 [39] Market Data and Key Metrics Changes - The demand for steel in 2024 was the weakest since 2010, with significant declines in automotive and construction sectors [8] - The company noted a significant uptick in demand for automotive products as 2025 begins, indicating a recovery in market share [23] - The first quarter of 2025 is expected to see a price increase of at least $10 per ton compared to Q4 2024 due to increased automotive shipments [101] Company Strategy and Development Direction - The company is focused on leveraging tariffs to strengthen domestic production and reduce reliance on foreign steel imports [11][12] - The acquisition of Stelco is seen as a strategic move to enhance operational efficiency and cost structure [16][18] - The company aims to achieve $120 million in synergies from the Stelco acquisition by the end of 2025, with a strong focus on maximizing value from the combination [18][145] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2025, citing improvements in order books and rising steel prices as positive indicators [6][23] - The company is prepared for the implementation of tariffs, which are expected to bolster domestic demand and reduce competition from foreign producers [10][109] - Management emphasized a commitment to debt reduction and maintaining financial flexibility despite current leverage levels [41][132] Other Important Information - The company reported a total reportable incident rate of 0.9% for 2024, highlighting a strong safety record [26] - The company has $3 billion in liquidity and plans to use free cash flow for debt reduction [40][132] - Capital expenditures for 2025 are expected to be $700 million, down from $800 million in 2024 [46] Q&A Session Summary Question: Discussion on evolving tariff environment and implications for Stelco - Management stated that tariffs are necessary and will benefit the overall business, with minimal negative impact on Stelco due to its Canadian operations [54][55] Question: Clarification on reporting tariffs in adjusted EBITDA - Management confirmed that results will be reported as they are, without excluding tariffs from adjusted EBITDA [58][59] Question: Volume cadence and cost guidance for 2025 - Management indicated that only 30% to 35% of volumes will be under fixed pricing, with cost reductions expected to materialize more in the latter half of the year [76][78] Question: Update on capital expenditures and project timelines - Management outlined a clear CapEx plan for 2025, with specific allocations for legacy operations and ongoing projects [88][90] Question: Conditions for potential restart of C6 furnace - Management stated that the C6 furnace remains indefinitely idle with no current plans for a restart [141] Question: Synergies from Stelco acquisition - Management expressed confidence in achieving and potentially exceeding the $120 million synergy target from the Stelco acquisition [145] Question: Working capital expectations for Q1 - Management indicated that working capital build in Q4 was to prepare for improved demand in 2025, with benefits expected in subsequent quarters [114][115] Question: Possibility of equity issuance - Management confirmed there are no plans for equity issuance, focusing instead on debt reduction [128][132]

Financial Data and Key Metrics Changes - The corporate breakeven price has decreased from $40 per barrel to $37 per barrel, indicating improved cost efficiency [13][10] - The company is focused on free cash flow generation, with expectations of maintaining a high free cash flow margin [10][11] Business Line Data and Key Metrics Changes - The integration of Endeavor assets is expected to enhance free cash flow generation and lower the reinvestment rate [10][12] - The company has successfully integrated operational efficiencies from both Diamondback and Endeavor, leading to improved production metrics [30][31] Market Data and Key Metrics Changes - The company is cautious about the macroeconomic environment, anticipating a potential oversupply in 2025, which influences its growth strategy [55][46] - The company has significant pipeline capacity, with about $250 million a day of space on existing pipelines, which is expected to help improve gas pricing [87][88] Company Strategy and Development Direction - The company is prioritizing shareholder returns and free cash flow generation over aggressive growth, reflecting a conservative approach in a potentially oversupplied market [55][56] - There is a focus on leveraging surface acreage and water resources to create new revenue streams, particularly in the context of rising power prices in Texas [67][68] Management's Comments on Operating Environment and Future Outlook - Management expressed a cautious view for 2025, emphasizing the need for flexibility in capital allocation and operational adjustments based on market conditions [55][46] - The company aims to maintain a balance between capital expenditures and free cash flow generation, with a target of reducing net debt to $10 billion [115][116] Other Important Information - The company is exploring opportunities in data centers and power generation to enhance the value of its natural gas assets [23][68] - The integration of best practices from both companies is expected to yield long-term operational efficiencies and cost savings [111][112] Q&A Session Summary Question: What is the expected free cash flow per barrel next year? - The company expects to maintain a high free cash flow margin, with a focus on capital efficiency and lower breakeven costs [10][11] Question: Can you elaborate on the TRP asset trade valuation? - The valuation was based on the quality of the assets, with a focus on moving lower quartile inventory to higher quartile inventory [15][18] Question: How does the company plan to manage capital expenditures in 2025? - The company is targeting a budget of $4.1 to $4.4 billion for 2025, with flexibility to adjust based on market conditions [35][36] Question: What are the plans for monetizing smaller assets? - The company is actively pursuing monetization of smaller assets, with a focus on maximizing shareholder value [41][42] Question: How will the company approach share buybacks versus dividends? - The company maintains a flexible capital allocation strategy, balancing between share buybacks and dividends based on market conditions [60][61] Question: What operational changes have been implemented post-merger? - The company has adopted clear fluid drilling and simulfrac techniques across its operations, leading to improved efficiency [78][79] Question: How does the company plan to improve realized gas prices? - The company is focusing on leveraging its pipeline capacity and diversifying its gas marketing strategies to enhance pricing [86][88]