Financial Data and Key Metrics Changes - Total company inbound for the year was $11.2 billion, with a backlog ending at $16.6 billion, and total company revenue grew 9% to $9.9 billion [5] - Adjusted EBITDA improved to $1.8 billion, an increase of 33% compared to the prior year, with full-year free cash flow increasing to $1.4 billion and shareholder distributions growing to $1 billion, both more than double the levels achieved in the prior year [5][23] Business Line Data and Key Metrics Changes - In Subsea, revenue for the quarter was $2.2 billion, a decrease of 5% versus the third quarter, with full-year revenue growing 11% compared to the prior period [16] - Surface Technologies reported revenue of $323 million, a decrease of 2% from the third quarter, but adjusted EBITDA increased by 8% sequentially due to higher services activity [17] Market Data and Key Metrics Changes - The Subsea opportunity list reflects approximately $29 billion of opportunities for future development, marking the highest level ever recorded [11] - The company expects a greater share of capital spending to move offshore, with operators increasingly adopting a portfolio approach to offshore development [10][11] Company Strategy and Development Direction - The company is focused on expanding its Configure-to-order applications and improving project execution efficiency, which is expected to drive margin expansion [28][14] - The management emphasized the importance of reducing cycle time and enhancing project returns, which is seen as a key differentiator in the market [15][64] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strength in offshore activity through the end of the decade, driven by a shift in customer behavior towards simultaneous development of multiple projects [10][11] - The company anticipates further growth in Subsea inbound orders, expecting $10 billion in 2026, with an adjusted EBITDA margin of 21.5% [19][23] Other Important Information - The company reported a net cash position of $602 million and ended the year with cash and cash equivalents of $1 billion [18] - The company is committed to returning at least 70% of free cash flow to shareholders in 2026 through dividends and share repurchases [22] Q&A Session Summary Question: Margin expansion potential from industrializing the SURF process - Management discussed the focus on expanding Configure-to-order applications and improving project certainty, indicating substantial opportunities in the water column [28] Question: Visibility on further margin expansion in Subsea - Management confirmed that the company is inbounding at a level that is accretive to backlog margin, indicating a strong quality backlog [30] Question: Renewed interest in Greenfield developments - Management noted that there is substantial greenfield development potential, with many projects that had been previously stalled now moving forward [36] Question: Expectations for subsea services growth - Management indicated that subsea services are expected to grow in line with top-line growth, estimating around $2 billion for the year [56] Question: Discussions with customers in a choppy macro environment - Management highlighted that offshore projects are seen as more stable investments, with customers regaining confidence in project execution [64]

Financial Data and Key Metrics Changes - Total company inbound for the year was $11.2 billion, with a backlog ending at $16.6 billion [4] - Total company revenue for the year grew 9% to $9.9 billion, with Adjusted EBITDA improving to $1.8 billion, an increase of 33% compared to the prior year [4] - Full-year free cash flow increased to $1.4 billion, and shareholder distributions grew to $1 billion, both more than double the levels achieved in the prior year [4][21] Business Line Data and Key Metrics Changes - In Subsea, orders in the quarter were $2.3 billion, resulting in $10.1 billion of inbound for the full year, with iEPCI projects being the largest contributor [5] - Subsea revenue for the quarter was $2.2 billion, a decrease of 5% versus the third quarter, while full-year Subsea revenue grew 11% [15] - Surface Technologies revenue was $323 million, a decrease of 2% from the third quarter, with an adjusted EBITDA margin improving to 18% [16] Market Data and Key Metrics Changes - The Subsea opportunity list reflects approximately $29 billion of opportunities for future development, marking the highest level ever recorded [10] - The company expects a greater share of capital spending to move offshore, with operators increasingly adopting a portfolio approach to offshore development [9][10] Company Strategy and Development Direction - The company is focused on expanding its Configure-to-order applications and improving project certainty through industrialization and simplification [12][27] - The management emphasizes the importance of reducing cycle time and enhancing project returns, which is seen as a key differentiator in the market [13][63] - The company aims to maintain a disciplined, asset-light approach to capital management, with expectations of returning at least 70% of free cash flow to shareholders in 2026 [20][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued strength in offshore activity through the end of the decade, driven by a shift in customer behavior towards a portfolio approach [10][11] - The management noted that the industry is seeing renewed interest in greenfield developments, with exploration budgets increasing and new basins being identified [36] - The company anticipates further growth in backlog and revenue, with a guidance of $9.4 billion in Subsea revenue for 2026 and an Adjusted EBITDA margin of 21.5% [18][21] Other Important Information - The company repurchased $168 million of stock in the fourth quarter, with total shareholder distributions exceeding $1 billion for the full year [17] - Cash and cash equivalents ended the year at $1 billion, with a net cash position increasing to $602 million [17] Q&A Session Summary Question: Margin expansion potential from industrializing the SURF process - Management highlighted the focus on expanding Configure-to-order applications and improving project certainty, indicating substantial opportunities in the SURF process [25][27] Question: Visibility on further margin expansion in Subsea - Management confirmed that the company is inbounding at a level that is accretive to backlog margin, with a focus on reducing cycle time and improving project returns [28][30] Question: Renewed interest in Greenfield developments - Management noted that there are substantial greenfield developments where exploration has already been done, and increased exploration budgets are being observed [35][36] Question: Expectations for subsea services growth - Management indicated that subsea services revenue is expected to align with overall revenue growth, estimating around $2 billion for the year [53][54] Question: Customer behavior in a choppy macro environment - Management stated that customers are regaining confidence in offshore investments, focusing on prolific reserves and improved project returns [62][63] Question: Portfolio approach and its impact on revenue - Management acknowledged that while the portfolio approach is still a smaller portion of discussions, it is gaining traction among customers [88][90]

Core Insights - The company operates under a 'performance-driven culture' that enhances earnings across cycles by interchanging between refined oil products and complex chemical cargoes [1] Financial Performance - Achieved a low cash breakeven of $11,700 per day through disciplined cost management and the redemption of $30,000,000 in preferred shares, which enhances financial resilience [1] Strategic Initiatives - Strategic fleet expansion included the acquisition of three modern MR tankers, which have appreciated in value by 15% since purchase [1] Operational Efficiency - Operational efficiency is supported by a fully integrated global platform that employs AI-driven voyage optimization and advanced hull coatings to reduce fuel consumption, the largest expense for the company [1] Future Outlook - Completion of an intensive drydocking program in 2025, covering nearly half the fleet, is expected to increase revenue days and lower CapEx in 2026 and 2027 [1] Market Dynamics - Management attributes market strength to the 'dislocation of oil refineries' shifting East, which extends voyage lengths and increases ton-mile demand for the compliant fleet [1] Chartering Strategy - A 'portfolio approach' to chartering maintains 82% spot market exposure to capture volatility while incorporating high-quality fixed-rate time charters to enhance earnings quality [1]