Financial Data and Key Metrics Changes - The company reported a Nareit FFO per share growth of 7.2% and core FFO per share growth of 7% for 2025, with same-center NOI growth of 3.8% [5][18] - For 2026, guidance indicates mid-single digit growth rates for Nareit FFO and core FFO per share [5][20] Business Line Data and Key Metrics Changes - The company executed 1,026 leases totaling approximately 6 million square feet in 2025, with portfolio occupancy ending the year at 97.3% leased [12][18] - Comparable renewal rent spreads were reported at 20% in Q4, while comparable new leasing rent spreads were at 34.3% [13][18] Market Data and Key Metrics Changes - The company noted strong demand for necessity-based retail, with no signs of slowing, and high retention rates of 93% [11][12] - The company anticipates bad debt in 2026 to be in line with 2025, which was approximately 78 basis points of revenue [14][56] Company Strategy and Development Direction - The core business focuses on grocery-anchored shopping centers, with a disciplined acquisition strategy targeting an unlevered IRR of 9% for grocery-anchored acquisitions and above 10% for everyday retail centers [8][10] - The company plans to continue its development and redevelopment projects, with 20 projects under active construction and an estimated total investment of approximately $70 million [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the consumer and the strength of their portfolio, despite market concerns regarding consumer health and tariffs [5][18] - The company believes it can consistently deliver 3%-4% same-center NOI growth and achieve mid to high single-digit core FFO per share growth on a long-term basis [22] Other Important Information - The company has approximately $925 million of liquidity to support acquisition plans and aims to sell between $100 million and $200 million in assets in 2026 [20][21] - The company is focused on maintaining a high-quality portfolio while improving its long-term growth profile through strategic dispositions [21][70] Q&A Session Summary Question: Acquisition strategy and competition for grocery-anchored assets - Management acknowledged increased competition but noted a high level of confidence in reaching acquisition targets due to a balanced market [25][26] Question: Update on the Ocala development parcel - Management highlighted the growth in the Ocala market and expected unlevered returns above 9.5%-10% on the project [28][29] Question: Portfolio occupancy and leverage in renewal negotiations - Management indicated that high occupancy levels provide leverage in negotiations, with expectations for continued growth in inline stores [33][35] Question: Everyday retail acquisition strategy - Management sees everyday retail as a unique opportunity but emphasizes a disciplined approach to ensure high returns [39][40] Question: Capital deployment alternatives - Management discussed the potential for ground-up development and share buybacks, noting that acquisitions remain a priority [44][46] Question: Impact of Amazon's store closures on grocery demand - Management expressed that Amazon's struggles in brick-and-mortar retail do not significantly impact their grocery demand [49][50] Question: Bad debt expectations for 2026 - Management confirmed that bad debt levels are expected to remain consistent with 2025, with no significant concerns [56][57] Question: Credit rating and cost of debt - Management believes they are an underrated credit and is focused on increasing scale to improve their credit rating [60][61] Question: Disposition strategy and cap rates - Management outlined a strategy of trading out stabilized assets for higher return opportunities, with expectations for cap rates in the 5.5% to sub-5 range [68][70]

Financial Data and Key Metrics Changes - The company reported Nareit FFO per share growth of 7.2% and Core FFO per share growth of 7% for 2025, with same-center NOI growth of 3.8% [5][18] - For 2026, guidance indicates mid-single digit growth rates for Nareit FFO and Core FFO per share [5][20] Business Line Data and Key Metrics Changes - The company executed 1,026 leases totaling approximately 6 million square feet in 2025, with portfolio occupancy ending the year at 97.3% leased [12][13] - Comparable renewal rent spreads were reported at 20% in Q4, while new leasing rent spreads were strong at 34.3% [13] Market Data and Key Metrics Changes - The company noted strong demand for necessity-based retail, with no signs of slowing, and high retention rates of 93% [11][12] - The company anticipates bad debt in 2026 to be in line with 2025, which was approximately 78 basis points of revenue [14][56] Company Strategy and Development Direction - The core business focuses on grocery-anchored shopping centers, with a disciplined acquisition strategy targeting an unlevered IRR of 9% for grocery-anchored acquisitions and above 10% for everyday retail centers [8][10] - The company plans to continue its development and redevelopment projects, with 20 projects under active construction and an estimated total investment of approximately $70 million [15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the consumer and the strength of their portfolio, despite market concerns about consumer health and tariffs [5][9] - The company believes it can consistently deliver 3%-4% same-center NOI growth and achieve mid to high single-digit core FFO per share growth on a long-term basis [22] Other Important Information - The company has approximately $925 million of liquidity to support acquisition plans and aims to sell between $100 million and $200 million in assets in 2026 [18][20] - The company sold approximately $145 million of assets in 2025 at PECO share [20] Q&A Session Summary Question: Expectations for acquisition volume and competition for grocery-anchored assets - Management acknowledged increased competition but noted a high level of confidence in reaching acquisition targets due to a balanced market [25][26] Question: Update on the Ocala development parcel and timing - Management expressed excitement about the Ocala market, with expectations for unlevered returns above 9.5%-10% on the project [28][29] Question: Occupancy levels and leverage in renewal negotiations - Management indicated that high occupancy levels provide leverage in negotiations, with expectations for continued growth in inline stores [32][35] Question: Capital deployment and stock buybacks - Management stated that while they consider share buybacks, they believe better returns can be achieved through acquisitions and redevelopment [45][46] Question: Impact of Amazon's store closures on grocery demand - Management noted that Amazon's struggles with brick-and-mortar retail do not significantly impact their grocery demand, as traditional grocers maintain strong market positions [49][50] Question: Bad debt expectations and visibility - Management confirmed that bad debt levels are consistent with previous expectations, with no significant concerns moving into 2026 [56][57] Question: Credit rating and cost of debt - Management believes they are an underrated credit and that scale will help improve their credit rating, which could lower their cost of debt [60][61] Question: Disposition strategy and cap rates - Management outlined a strategy focused on trading out stabilized assets for higher return opportunities, with expectations for cap rates in the 5.5% to sub-5 range [68][70]

Momentus Inc. 2026 Special Meeting Summary Company Overview - **Company**: Momentus Inc. (NasdaqCM: MNTS) - **Event**: 2026 Special Meeting of Stockholders - **Date**: February 06, 2026 Key Proposals Discussed 1. **Issuance of Class A Common Stock for Convertible Notes and Warrants** - Proposal to approve the issuance of Class A Common Stock in connection with the exercise of certain existing convertible notes and warrants exceeding 19.99% of outstanding shares, in accordance with Nasdaq Listing Rule 5635(d) [10] - Board recommends a vote for this proposal [10] 2. **Equity Line of Credit and Pre-Funded Warrants** - Proposal to approve the issuance of Class A Common Stock to an investor related to the company's Equity Line of Credit and the exercise of certain Pre-Funded Warrants, also exceeding 19.99% of outstanding shares [11] - Board recommends a vote for this proposal [11] 3. **October 2025 Inducement Warrants** - Proposal to approve the issuance of Class A Common Stock to holders of certain existing October 2025 inducement warrants, exceeding 19.99% of outstanding shares [12] - Board recommends a vote for this proposal [12] 4. **Increase in Authorized Shares** - Proposal to amend the company's certificate of incorporation to increase the number of authorized shares of Class A common stock from 250 million to 260 million [12] - Board recommends a vote for this proposal [12] 5. **December 2025 Inducement Warrants** - Proposal to approve the issuance of Class A Common Stock to holders of certain existing December 2025 inducement warrants, exceeding 19.99% of outstanding shares [13] - Board recommends a vote for this proposal [13] 6. **Postponement or Adjournment of Meeting** - Proposal to allow for the postponement or adjournment of the meeting if necessary to solicit further votes on the proposals [14] - Board recommends a vote for this proposal [14] 7. **January 2026 Warrants** - Proposal to approve the issuance of Class A Common Stock to holders of certain existing January 2026 warrants, exceeding 19.99% of outstanding shares [15] - Board recommends a vote for this proposal [15] Voting Results - Preliminary results indicated that the following proposals were approved: - Convertible note and warrants proposal - Equity line of credit proposal - October 2025 inducement warrant proposal - December 2025 inducement warrant proposal - Adjournment proposal - January 2026 warrant proposal - The share increase proposal was not approved [17] Additional Information - A quorum was declared present with more than one-third of Class A Common Stock represented [9] - The meeting was conducted virtually, allowing stockholders to vote online [4] - Final vote results will be reported to the SEC in a Form 8-K within four business days [17]

Financial Data and Key Metrics Changes - FFO per share for 2025 was $2.72, exceeding initial guidance by $0.06 and representing a 5.8% increase over 2024 [3][24] - Same Property Cash NOI increased by 4.1% year-over-year, driven by a 40 basis point increase in average occupancy [3][24] - Same Property occupancy ended the year at 94.2%, aligning with updated guidance [25] Business Line Data and Key Metrics Changes - Executed 557,000 sq ft of vacancy leasing, exceeding initial targets by 40% [12][14] - In the defense IT portfolio, 424,000 sq ft of leasing was executed, surpassing the 400,000 sq ft goal [14] - Tenant retention for the year was 78%, with cash rent spreads up 1.1% [16] Market Data and Key Metrics Changes - The defense budget for FY 2026 was signed at $841 billion, marking a 15% year-over-year increase [7][8] - The company expects continued growth in demand from government and contractors due to the increasing defense budget [9] Company Strategy and Development Direction - The company committed $278 million to new investments, with projects 81% pre-leased [3][4] - A strong pipeline of development opportunities is anticipated, particularly in the Huntsville area, with significant growth expected from the Golden Dome Initiative [9][19] - The company aims for a vacancy leasing target of 400,000 sq ft for 2026, despite limited unleased space [33] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, projecting FFO per share guidance for 2026 at $2.75, reflecting a 1.1% increase over 2025 [6][27] - The company anticipates strong tenant retention and a solid development pipeline, with a focus on maintaining liquidity and self-funding investments [33][34] Other Important Information - The company reported a conservative approach to capital expenditures, with an AFFO payout ratio forecasted to be under 65% in 2026 [28] - The company has a long runway for development in Huntsville, with 3 million sq ft of potential development capacity remaining [67] Q&A Session Summary Question: Development pipeline opportunities related to Golden Dome - Management indicated that many prospects are related to Golden Dome, with expectations for larger requirements as contracts are awarded [38][39] Question: Tenant retention and reasons for non-renewals - Non-renewals are typically smaller tenants needing different space sizes, with a historical retention rate of 80% [40] Question: Mix of acquisitions and developments for additional investments - The company targets an 8.5% cash-on-cash yield for developments, with acquisitions considered opportunistic [44] Question: Equity issuance as a funding source - Equity issuance is a last alternative, with the company confident in handling expected development investments through internal cash generation [46] Question: Growth potential in Huntsville - The company has significant development runway in Huntsville, with ample land available for expansion [67] Question: Impact of the defense budget on leasing opportunities - Demand impact from the defense budget is expected to materialize 12-18 months after appropriations [72]

Financial Data and Key Metrics Changes - FFO per share for 2025 was $2.72, a 5.8% increase from 2024 and 6 cents above initial guidance, marking the seventh consecutive year of growth [3][22] - Same-property cash NOI increased by 4.1% year-over-year, driven by a 40 basis point increase in average occupancy [3][22] - Same property occupancy ended the year at 94.2%, aligning with updated guidance and showing a 20 basis point increase from initial guidance [23] Business Line Data and Key Metrics Changes - Executed 557,000 sq ft of vacancy leasing, exceeding initial targets by 40% [12] - In the defense IT portfolio, executed 424,000 sq ft of vacancy leasing, surpassing the initial goal of 400,000 sq ft [13] - Renewal leasing totaled 2 million sq ft for the year with a tenant retention rate of 78% [15] Market Data and Key Metrics Changes - The defense budget for FY 2026 is $841 billion, an $8 billion increase over the initial request, with a total expected budget exceeding $950 billion [8][9] - The company anticipates strong demand in the defense sector, particularly in intelligence, surveillance, and reconnaissance, as well as cybersecurity and missile defense [10] Company Strategy and Development Direction - The company committed $278 million to new investments in five projects across four markets, with 81% pre-leased [3][4] - A strong pipeline of development opportunities is expected to generate an incremental $52 million of cash NOI on a stabilized annual basis [6] - The company aims to maintain a conservative approach to capital expenditures, with a forecasted AFFO payout ratio under 65% in 2026 [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in continued growth, projecting a midpoint FFO per share guidance of $2.75 for 2026, reflecting a 1.1% increase over 2025 [7][24] - The company expects to benefit from the increasing defense budget and ongoing demand for secure facilities [9][10] - Management noted that the impact of the new defense appropriations will likely be felt 12 to 18 months after funding is allocated [69] Other Important Information - The company has a strong liquidity position and plans to self-fund the equity component of its capital investments [30] - The development pipeline includes nearly $450 million in active projects, with 86% pre-leased [18] Q&A Session Summary Question: Development pipeline opportunities related to Golden Dome - Management indicated that many prospects are related to Golden Dome and expect larger requirements as contracts are awarded [34][36] Question: Tenant retention and reasons for non-renewals - Non-renewals are typically smaller tenants needing different space sizes, with a historical retention rate of 80% [37] Question: Mix of acquisitions and developments for additional investments - The company targets an 8.5% cash-on-cash yield for developments and considers acquisitions opportunistic [40][41] Question: Equity issuance as a funding source - Equity issuance is a last resort, with the company confident in handling expected development investments through internal cash generation [42][43] Question: Outlook for Huntsville's growth - The company has significant development runway in Huntsville, with 3 million sq ft of potential development capacity [64][65] Question: Impact of the defense budget on leasing opportunities - Demand impact from the defense budget is expected to materialize 12 to 18 months after appropriation [69][70]

Financial Data and Key Metrics Changes - FFO per share for 2025 was $2.72, exceeding initial guidance by 6 cents and representing a 5.8% increase over 2024 [3][23] - Same-property cash NOI increased by 4.1% year-over-year, driven by a 40 basis point increase in average occupancy [3][23] - Same property occupancy ended the year at 94.2%, aligning with updated guidance [24] Business Line Data and Key Metrics Changes - Executed 557,000 sq ft of vacancy leasing, exceeding initial targets by 40% [11][12] - In the defense IT portfolio, 424,000 sq ft of vacancy leasing was executed, surpassing the 400,000 sq ft goal [12] - Tenant retention for the year was 78%, with cash rent spreads up 1.1% [15] Market Data and Key Metrics Changes - The defense budget for FY 2026 was set at $841 billion, a 15% year-over-year increase, indicating strong future demand for defense-related properties [7][8] - The company expects continued growth in demand from government and contractors in the Huntsville area due to significant military initiatives [9][66] Company Strategy and Development Direction - The company committed $278 million to new investments in five projects across four markets, with 81% pre-leased [3][4] - A strong pipeline of development opportunities is anticipated, with a focus on high-security facilities for defense contractors [19][21] - The company aims for a vacancy leasing target of 400,000 sq ft for 2026, reflecting an aggressive growth strategy [30] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued increase of the defense budget and its positive impact on the company's growth [8][9] - The company anticipates a solid performance in 2026, with FFO per share guidance set at $2.71-$2.79, implying 1.1% growth at the midpoint [25][26] - Management highlighted the importance of maintaining a conservative approach to capital expenditures and financing [27] Other Important Information - The company has a strong liquidity position and expects to self-fund the equity component of its capital investments [30] - The development pipeline currently stands at nearly $450 million, with 86% pre-leased [18] Q&A Session Summary Question: Development pipeline opportunities related to Golden Dome - Management indicated that many prospects are tied to Golden Dome, with expectations for increased velocity in contract processing [34][35] Question: Tenant retention and reasons for non-renewals - Non-renewals are primarily from smaller tenants needing different space sizes, with a historical retention rate of 80% [36][37] Question: Mix of acquisitions and developments for additional investments - The company targets an 8.5% cash-on-cash yield for developments, with acquisitions considered opportunistic [40][41] Question: Equity issuance as a funding source - Equity issuance is a last resort, with the company confident in handling development investments through internal cash generation [42][43] Question: Future development plans beyond 2026 - Management confirmed ongoing evaluations for additional development opportunities, with significant spending expected in 2027 and 2028 [51][52] Question: Demand driven by existing versus new tenants - Demand is roughly 50/50 between existing and new tenants, with some migration from other regions [58] Question: Outlook on Huntsville's growth potential - The company has significant development runway in Huntsville, with ample land available for future expansion [66]

Financial Data and Key Metrics Changes - The company reported Nareit FFO per share growth of 7.2% and core FFO per share growth of 7% for 2025, with same-center NOI growth of 3.8% [3][11] - For 2026, guidance indicates mid-single digit growth rates for Nareit FFO and core FFO per share [3][12] - Fourth quarter Nareit FFO increased to $88.8 million or $0.64 per diluted share, while Core FFO increased to $91.1 million or $0.66 per diluted share [11] Business Line Data and Key Metrics Changes - The core business remains focused on grocery-anchored shopping centers, with a strong operating platform driving rent and NOI growth [5] - The company executed 1,026 leases totaling approximately 6 million square feet in 2025, with portfolio occupancy ending the year at 97.3% leased [7][9] - Comparable renewal rent spreads were 20% in Q4, and new leasing rent spreads were strong at 34.3% [8] Market Data and Key Metrics Changes - The company noted high demand for necessity-based retail with no signs of slowing, contributing to strong leasing activity [6] - The portfolio retention rate remained high at 93% at year-end, indicating strong tenant stability [8] - The company expects bad debt in 2026 to be in line with 2025, which was approximately 78 basis points of revenue [9] Company Strategy and Development Direction - The company aims to deliver gross acquisitions guidance of $400-$500 million in 2026, focusing on grocery-anchored opportunities and under-managed retail centers [4][10] - The company is committed to maintaining a disciplined acquisition strategy with targeted unlevered IRR of 9% for grocery-anchored acquisitions and above 10% for everyday retail centers [4][10] - Development and redevelopment projects are a key growth driver, with 20 projects under active construction and an estimated investment of $70 million [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the consumer and the strength of the grocery-anchored portfolio despite market uncertainties [3][12] - The company anticipates continued solid earnings growth, projecting net income guidance for 2026 in the range of $0.74-$0.77 per share [12][14] - Management believes that the company can consistently deliver 3%-4% same-center NOI growth and achieve mid to high single-digit core FFO per share growth on a long-term basis [14] Other Important Information - The company has approximately $925 million of liquidity to support acquisition plans as of December 31, 2025 [11] - The company sold approximately $145 million of assets in 2025 and plans to sell between $100 and $200 million in 2026 [13] - The company is focused on maintaining a high-quality portfolio while improving long-term growth profiles through strategic dispositions [14] Q&A Session Summary Question: Expectations for acquisition volume and competition for grocery-anchored assets - Management noted increased competition but also a high level of product on the market, maintaining confidence in reaching acquisition targets [16][17] Question: Update on the Ocala development parcel and other strategic land acquisitions - Management highlighted the growth in the Ocala market and the potential for strong returns on the project, with ongoing discussions for larger grocery-scale developments [20][21] Question: Insights on portfolio occupancy and leverage in renewal negotiations - Management indicated that high occupancy levels provide leverage in negotiations, with expectations for continued demand and potential for further increases in inline occupancy [24][25] Question: Capital deployment strategies beyond acquisitions - Management discussed the potential for ground-up development and share buybacks, emphasizing a focus on acquisitions and dispositions to manage capital effectively [35][38] Question: Impact of Amazon's store closures on grocery demand - Management acknowledged Amazon's challenges in brick-and-mortar retail but emphasized the strength of traditional grocers in the market [40][41] Question: Discussion on bad debt and expectations for 2026 - Management confirmed that bad debt levels are consistent with previous expectations, with no significant concerns noted [47][49] Question: Credit rating and cost of debt considerations - Management believes they are an underrated credit and is focused on increasing scale to improve credit ratings and reduce borrowing costs [52][54] Question: Insights on disposition strategy and market conditions - Management outlined a strategy focused on trading out stabilized assets for higher-return opportunities, with expectations for continued strong pricing in the disposition market [63][64]

Financial Data and Key Metrics Changes - The loss before income taxes for the first quarter was $1.3 million, significantly improved from a pretax loss of $18.9 million in the previous year quarter, driven by revenue growth and improving margins [8] - Gross margin for the first quarter improved to 36.6%, up 6.7 points from the prior year, primarily due to overhead absorption from higher volumes and price increases [8] - Operating expenses increased by $2.1 million from the prior year, mainly due to increased sales volume-related expenses, partially offset by decreased warranty expenses [8] Business Line Data and Key Metrics Changes - The fishing segment, particularly the Minn Kota and Humminbird brands, showed solid performance with strong demand for new products like the XPLORE Series and MEGA Live 2 fish finders [4] - In the camping and watercraft segment, investments in digital and e-commerce have paid off, with Jetboil and Old Town seeing growth driven by online sales [4][5] - The diving segment experienced increased sales due to improved global market conditions and innovation, particularly with the SCUBAPRO's new HYDROS PRO 2 product [5][6] Market Data and Key Metrics Changes - The overall market showed signs of stabilization, contributing to double-digit growth in the first quarter, which is typically a slower period [3] - Trade dynamics improved, allowing for healthy demand and sell-in during the first quarter, positioning the trade in a good inventory state [17] Company Strategy and Development Direction - The company aims to maintain a strong innovation pipeline, grow digital and e-commerce momentum, and improve product costs and operating efficiency through cost-saving initiatives [7] - The focus on innovation is critical for maintaining market leadership amidst strong competition [13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the start of fiscal 2026, noting improvements in profitability and execution of growth plans despite uncertainties in the broader environment [4][6] - The company remains confident in its ability to create long-term value for shareholders, with a debt-free balance sheet and ongoing dividend payments [9] Other Important Information - The inventory balance at the end of the first quarter was $183.9 million, down about $17.7 million from the previous year quarter [9] Q&A Session Summary Question: Pricing versus unit volumes - Management indicated that most of the increase in the quarter was driven by unit volume, although pricing adjustments were made in response to cost increases [12] Question: Contribution of new products to sales - Management confirmed that innovation remains critical, with improvements in new product success contributing to growth [15] Question: E-commerce revenue percentage and future goals - E-commerce is the fastest-growing channel, with plans to continue expanding its contribution to overall revenue [16] Question: Current trade inventory levels - Management noted that trade inventory levels are healthy, allowing for good sell-in during the first quarter [17] Question: Future cost savings initiatives - Management emphasized the importance of ongoing cost-saving initiatives to optimize product costs and improve efficiency [18] Question: Warranty expense impact on operating expenses - Warranty expenses had a minor impact on the operating expense percentage, which decreased in the quarter [19] Question: Future tax rate expectations - Management indicated that the tax rate may fluctuate based on profits in various geographies, particularly due to a valuation allowance in the U.S. [21]

Financial Data and Key Metrics Changes - For the full year 2025, total company production grew by 11% to approximately 100,000 barrels of oil equivalent per day, with oil production growing by 4% to nearly 40,000 barrels per day [7][16] - Fourth quarter adjusted net income was approximately $71 million or $0.38 per diluted share, with adjusted EBITDA at $216 million [8][16] - Free cash flow for the full year exceeded $425 million, with approximately 75% returned to shareholders through dividends and share repurchases [9][16] - The balance sheet ended the year with a cash balance of $267 million, providing ample liquidity [20] Business Line Data and Key Metrics Changes - The company achieved a new production record in the fourth quarter, averaging nearly 104,000 barrels of oil equivalent per day, reflecting a sequential increase of 3% [8][16] - Operationally, field-level cash operating expenses declined by 7% to $5.12 per BOE during 2025 [7] Market Data and Key Metrics Changes - Total revenue per BOE declined 13% quarter-over-quarter due to lower oil prices [21] - The company remains unhedged for all oil and natural gas production, with anticipated oil price differentials of approximately $3 per barrel [23] Company Strategy and Development Direction - The company's strategy focuses on steady mid-single-digit production growth, high pre-tax margins, and reliable free cash flow while maintaining a low reinvestment rate [10][11] - The company plans to maintain capital spending at similar levels in 2026 while targeting a production growth of approximately 5% [13][23] - The company emphasizes a disciplined approach to capital allocation and operational efficiency, aiming to maximize returns while minimizing financial risk [11][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate product price volatility and highlighted the importance of maintaining low leverage [11][15] - The outlook for 2026 is optimistic, with expectations for gradual production growth despite potential weather impacts in the first quarter [23][44] Other Important Information - The company repurchased approximately 8.9 million shares throughout 2025, reducing the diluted share count by roughly 4.5% [9][17] - A 10% increase in the quarterly dividend was announced, marking the fifth consecutive annual increase [19][14] Q&A Session Summary Question: Performance of recent wells in Giddings - Management noted that recent wells have outperformed type curves due to improved drilling practices and better rock quality [25][26] Question: M&A activity and pricing trends - Management acknowledged increased competition and rising prices for acreage but emphasized a preference for undeveloped opportunities rather than PDP-heavy deals [28][30] Question: Well-cost reductions and capital efficiency - Management indicated that well costs have decreased, with current costs around $1,000 per foot for standard Giddings wells, and service costs are expected to remain flat to slightly down [35][36] Question: Production outlook for 2026 - Management expects steady growth throughout 2026, with a heavier capital outlay in the first half of the year [44][23] Question: Maintenance capital estimates - Management suggested that maintenance capital is likely around $400 million, reflecting efficiencies gained over the years [78][80]

Financial Data and Key Metrics Changes - CNO Financial Group achieved an operating return on equity of 11.4% for 2025, an improvement from 10% in 2024, and is on track to reach a target of 12% by 2027 [14][19] - Operating earnings per diluted share increased by 11% to $4.40, with a full-year operating earnings per share of $4.02, exceeding the high end of original guidance [5][14] - The company returned $386 million to shareholders, marking an 11% increase over 2024, and raised its quarterly common stock dividend for the 13th consecutive year [6][24] Business Line Data and Key Metrics Changes - The consumer division reported a record total new annualized premium (NAP) growth of 15%, with life NAP up 10% and Medicare supplement NAP up 49% for the year [8][9] - The worksite division also achieved record insurance sales, up 15% for the full year, with life insurance sales increasing by 36% [11][12] - Overall, the company experienced its 14th consecutive quarter of sales growth and 12th consecutive quarter of growth in producing agent count [4][8] Market Data and Key Metrics Changes - Total health NAP increased by 22%, marking 14 consecutive quarters of growth, while Medicare Advantage policies sold decreased by 3% for the year [9][10] - The company holds over $18 billion in client assets, up 11% from 2024, reflecting strong growth in brokerage and advisory channels [10][11] - The investment portfolio remains high quality, with 97% rated investment grade and an average rating of single A [18] Company Strategy and Development Direction - CNO Financial Group focuses on the underserved middle-income market, leveraging a last-mile captive agent distribution model as a competitive advantage [5][6] - The company is investing in technology modernization with an expected investment of approximately $170 million over three years, with $20 million deployed in 2025 and $75 million expected in 2026 [22] - The strategic exit from the fee services business within the worksite division is progressing on schedule, expected to be largely complete in the first half of 2026 [12] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about the lack of visibility in the operating environment due to economic factors such as layoffs and job numbers, which could impact consumer behavior [28][31] - Despite potential headwinds, the company remains optimistic about the demand for Medicare products, with 11,000 Americans turning 65 each day [10][32] - The outlook for 2026 includes expected operating earnings per share between $4.25 and $4.45, reflecting an 8% increase at the midpoint from 2025 results [20][22] Other Important Information - The effective tax rate on operating income was 20.6% for the year, below the guidance of 22%-22.5%, due to tax strategies implemented in the fourth quarter [14][15] - The consolidated risk-based capital ratio was 380%, within the target range of 360%-390%, providing flexibility for growth and capital deployment [19] Q&A Session Summary Question: Earnings emergence and target returns - Management indicated that the time to hit target returns varies by product, but confidence remains in meeting ROE targets due to strong sales momentum [26][27] Question: Environment impact on recruiting and agent count growth - Management expects to grow producing agent count in 2026, emphasizing productivity over sheer numbers, while acknowledging economic pressures on discretionary purchases [28][30] Question: Sustainability of growth levels - Management believes that while Medicare Advantage sales may decline, Medicare supplement sales will continue to rise due to demographic trends [39][40] Question: Impact of Medicare Advantage distribution fees - Management has reflected expected pressures in Medicare Advantage in their projections, focusing more on Medicare supplement products [42][43] Question: Capital deployment strategy - Management plans to return excess capital to shareholders through share repurchases while being measured in capital deployment [46][47] Question: Investment portfolio exposure to software - The company has a small exposure to software in its investment portfolio, with a focus on mission-critical software [69][70]