Financial Data and Key Metrics Changes - In 2025, the company reported approximately $14.3 billion in net sales, an increase of about $200 million year-over-year, supported by a 23% increase in light vehicle e-product sales [4][5] - The adjusted operating margin expanded by 60 basis points to 10.7%, with a 14% year-over-year growth in EPS and over $1.2 billion in free cash flow generated, representing a 66% increase compared to 2024 [5][24] - The fourth quarter sales reached just under $3.6 billion, with an adjusted operating income of $427 million, equating to a 12.0% adjusted operating margin, up from 10.2% in the previous year [17][18] Business Line Data and Key Metrics Changes - Light vehicle e-product sales drove significant growth, with a 23% increase, while organic sales growth was approximately 1.6% year-over-year, excluding declines in the battery and charging system segment [4][5] - The PowerDrive Systems segment saw substantial e-product growth, contributing to the overall performance, with expectations for continued growth in the low double digits for 2026 [34][35] Market Data and Key Metrics Changes - The company anticipates a sales decline in the battery business due to reduced North American incentives and weaker European demand, representing a 150 basis point headwind to year-over-year sales growth [19][59] - The China market, which constitutes about 20% of overall business, is experiencing a slowdown in local vehicle sales, but exports from China have reached record highs, providing opportunities for growth [76] Company Strategy and Development Direction - The company is focused on long-term profitable growth, with a new product aimed at the data center market expected to generate over $300 million in sales during its first year of production, starting in 2027 [9][11] - The strategy includes leveraging core competencies in manufacturing and technology to secure new business awards and expand into new markets, such as power generation [14][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to expand margins and grow adjusted EPS in 2026, despite anticipated declines in market volumes and battery sales [16][25] - The company is optimistic about future product launches and the potential for growth in both foundational and e-product segments, with expectations for improved performance starting in 2027 [66] Other Important Information - The company returned over 50% of its free cash flow to shareholders in 2025 through share repurchases and dividends, demonstrating a balanced capital allocation approach [5][22] - The company has repurchased over 31 million shares since 2021, representing a 13% reduction in outstanding shares [22] Q&A Session Summary Question: Can you elaborate on the data center opportunity and its margins? - The company expects a mid-teens incremental conversion on the $300 million in revenues from the data center business, which is anticipated to be EPS accretive immediately [30][31] Question: What is the size of the recovery in the PowerDrive segment? - The PowerDrive Systems segment saw about 100 basis points of benefit in Q4, with expectations for continued growth in the mid-teens for 2026 [34][35] Question: How does the company view the growth potential of the turbine generator system? - The data center market is expected to grow in the mid-teens annually for the next decade, with the turbine generator system positioned to capture significant market share [40][41] Question: What is the outlook for the battery systems business? - The battery systems business is expected to face a 150 basis point headwind in 2026, but management is optimistic about future growth opportunities and cost structure adjustments [59] Question: How does the company approach M&A opportunities? - The company remains disciplined in its M&A strategy, focusing on acquisitions that leverage core competencies and provide near-term accretion [63][64]

Financial Data and Key Metrics Changes - BorgWarner reported approximately $14.3 billion in net sales for 2025, an increase of about $200 million year-over-year, supported by a 23% increase in light vehicle e-product sales [4][5] - The adjusted operating margin expanded by 60 basis points to 10.7%, despite a 20 basis points net tariff headwind [5][15] - The company achieved a 14% year-over-year growth in EPS and generated over $1.2 billion in free cash flow, a 66% increase compared to 2024 [5][19] Business Line Data and Key Metrics Changes - Light vehicle e-product sales increased by 23%, contributing significantly to overall sales growth [4][5] - Organic sales growth was approximately 1.6% year-over-year when excluding the decline in the battery and charging system segment [4] - The battery systems business experienced a revenue decline of 35%-40% year-over-year, primarily due to challenges in North America and weaker demand in Europe [40][41] Market Data and Key Metrics Changes - The company expects its light vehicle business, which comprises over 80% of sales, to perform broadly in line with the weighted light vehicle market, which is projected to be flat to down 3% for 2026 [20][22] - The battery business is anticipated to represent a 150 basis point headwind to year-over-year sales growth due to a lack of North American incentives and weaker European demand [21][41] Company Strategy and Development Direction - BorgWarner is focusing on long-term profitable growth by investing in new product developments, including a Turbine Generator System for the data center market [6][10][16] - The company secured a record number of new product awards across its foundational and e-product portfolios, indicating a robust pipeline for future growth [5][16] - The strategic focus includes leveraging core competencies and exploring inorganic opportunities to enhance capabilities and shareholder value [44][45] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to expand margins, grow adjusted EPS, and generate strong free cash flow in 2026, despite anticipated declines in markets and battery sales [5][16][27] - The company expects to see top-line benefits from new product launches starting in 2027 and beyond, driven by recent business wins [34][47] - Management acknowledged the challenges in the EV market but remains optimistic about future growth opportunities from new product developments [34][46] Other Important Information - BorgWarner announced a Master Supply Agreement with TurboCell for the Turbine Generator System, expected to generate over $300 million in sales during the first year of production [10][12] - The company has repurchased over $400 million of its stock in the second half of 2025, returning approximately 52% of free cash flow to shareholders [24][25] Q&A Session Summary Question: Can you elaborate on the data center opportunity and its margins? - Management indicated that the $300 million in revenues from the data center business is expected to have a mid-teens incremental conversion margin, consistent with the automotive business [29] Question: What is the size of the recovery in the PowerDrive segment? - Management noted a 100 basis point benefit in the fourth quarter, with expectations for continued growth in light vehicle e-products in the low double digits for 2026 [30][31] Question: What is the outlook for the battery systems business? - The battery systems business is expected to face continued sales headwinds, with management taking actions to minimize losses and adjust the cost structure [40][41] Question: How does the company view its M&A strategy in light of current market conditions? - Management emphasized a disciplined approach to M&A, focusing on acquisitions that leverage core competencies and provide near-term accretion [44][45]

Financial Data and Key Metrics Changes - Q4 2025 revenues were $80.6 million, up 11% year-over-year and 1% sequentially, marking solid execution across the portfolio [2][3] - Adjusted gross margin for Q4 was 37%, down from 40.5% in Q3, impacted by $3 million in headwinds [15][17] - GAAP net loss was $1.9 million, or $0.14 per diluted share, while adjusted diluted EPS was $0.07 [16][17] - Adjusted EBITDA was $6 million, or 7.5% of revenue, compared to $9.2 million or 11.5% of revenue in Q3 [17] Business Line Data and Key Metrics Changes - **Sensors Segment**: Q4 revenue declined 4% sequentially but was up 18% year-over-year; bookings rose 4% sequentially, resulting in a book-to-bill of 1.15 [4][5] - **Weighing Solutions Segment**: Q4 sales increased modestly from Q3 and grew 7.8% from the prior year; orders were up 14.9% sequentially, resulting in a book-to-bill of 1.02 [7][8] - **Measurement Systems Segment**: Q4 revenue was $22.4 million, up 9% sequentially and 6% year-over-year; however, orders declined 16% from Q3, resulting in a book-to-bill of 0.81 [9] Market Data and Key Metrics Changes - Total Sensors orders were up 18% in the second half of 2025 compared to the first half, with backlog at the highest level since Q3 2023 [5][6] - Weighing Solutions showed strength in precision agriculture, medical, construction, and e-bike applications, while transportation orders increased for onboard weighing systems [8] Company Strategy and Development Direction - The company is focusing on accelerating growth through the creation of two new senior executive positions: the Office of the Chief Business and Product Officer and the Office of Chief Operating Officer [10][11] - Aiming for a mid- to high-single-digit revenue growth in 2026, with a target of $45 million from business development initiatives, representing a 20% increase from 2025 [14][39] - Emphasis on Physical AI technologies and humanoid robotics as key growth areas, with expectations for continued momentum in 2026 [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding recovery in the marketplace, particularly in the Sensors and Weighing Solutions segments, despite softness in the steel market [21][22] - Anticipated improved gross margins in Q1 2026, with no lingering impacts from unusual headwinds identified in Q4 [23][27] - The company is prepared to support customer production demands in the humanoid robotics market, which is expected to see significant developments in 2026 [6][7] Other Important Information - The company generated adjusted free cash flow of $1.3 million in Q4, down from $7.4 million in Q3 [17] - As of the end of Q4, the cash position was $87.4 million, with long-term debt of $20.6 million, resulting in a net cash position of $66.8 million [18] Q&A Session Summary Question: Revenue guidance and its bias towards the sensor segment - Management is optimistic about recovery signs in the marketplace, particularly in Sensors, and expects higher revenues in the second half of the year [21][22] Question: Gross margin impact and lingering effects - Management identified a $3 million unusual effect in Q4, which is not expected to persist into Q1, leading to improved gross margins [23][27] Question: Organizational changes and financial targets - The new organizational structure aims to standardize processes and improve operational efficiency, with expected cost savings of $6 million in 2026 [36][39] Question: Details on new humanoid development customer - The new customer is smaller and still in the design stage, with no clear timeline for ramp-up, but the company is prepared to support them [40][41] Question: Discussions with other humanoid developers - The company is in dialogue with multiple humanoid manufacturers and hopes to report prototype orders from them in the future [42]

Financial Data and Key Metrics Changes - In 2025, the company generated $28 billion in cash flow from operations, exceeding the anticipated $25 billion [21][24] - The net adjusted income reached $15.6 billion, with a return on equity of 13.6% and a return on average capital employed (ROACE) of 12.6% [24][36] - The company maintained a strong balance sheet with a gearing ratio of 14.7% [25] Business Line Data and Key Metrics Changes - The upstream segment achieved a 4% growth in production, significantly above the guidance of 3% [15][18] - Integrated power production grew by over 20%, contributing to a total electricity net production of approximately 50 terawatt-hours in 2025 [19][20] - LNG sales increased by 10% compared to the previous year, aligning with production growth [19] Market Data and Key Metrics Changes - The company reported a 10% growth in integrated LNG production and sales, despite a low price environment [30][31] - The refining utilization rates were in line with targets after addressing technical incidents earlier in the year [19] Company Strategy and Development Direction - The company is focused on a balanced strategy with two pillars: oil and gas, and integrated power, aiming for sustainable growth and emission reductions [12][38] - Significant investments were made in energy efficiency programs, totaling $1 billion from 2023 to 2025, resulting in a reduction of 2 million tons of CO2 equivalent emissions [10][11] - The company aims to achieve near-zero methane emissions by 2030, having already reduced methane emissions by 65% compared to 2020 [9] Management's Comments on Operating Environment and Future Outlook - Management anticipates a challenging environment in 2026, prompting the launch of a cash-saving program to enhance resilience [69] - The company expects continued demand for oil and gas, with no peak demand anticipated in the near future [70] - The fundamentals of supply and demand remain stable, with a projected oil price planning at $60 per barrel [72] Other Important Information - The company has entered into a significant agreement in Namibia, establishing a new hub for future developments with substantial discovered resources [42][44] - The listing of ordinary shares on the NYSE aims to attract new investors and enhance liquidity [34] Q&A Session Summary Question: What are the key achievements in Namibia? - The company confirmed substantial discovered resources in Namibia, with projects like Venus and Mopane forming the basis of a new deepwater hub [42][43] Question: How is the company addressing emissions? - The company has exceeded its emission reduction targets, achieving a 65% reduction in methane emissions and a 38% reduction in Scope 1 and 2 greenhouse gas emissions [9][10] Question: What is the outlook for integrated power? - The integrated power segment is expected to generate $3 billion in cash flow, reinforcing the company's resilience against oil and gas market cycles [69]

Financial Data and Key Metrics Changes - For the full year 2025, system-wide RevPAR growth was up 40 basis points year over year, with record adjusted EBITDA of $3.7 billion, up 9% year over year [5][6] - In the Fourth Quarter, system-wide RevPAR increased 50 basis points year-over-year, with adjusted EBITDA at $946 million, up 10% year-over-year [6][15] - The company returned $3.3 billion to shareholders in 2025, the highest total capital return in its history [6] Business Line Data and Key Metrics Changes - Leisure transient RevPAR was up 2.3%, while business transient RevPAR was down 2.1% due to U.S. government shutdown impacts [6][15] - Group RevPAR increased by 2.6%, driven by strong international group growth [6][15] - The company opened nearly 200 hotels in the Fourth Quarter, totaling nearly 26,000 rooms, contributing to a full-year net unit growth of 6.7% [7][8] Market Data and Key Metrics Changes - In the Americas outside the U.S., Fourth Quarter RevPAR increased 3.8% year-over-year, while Europe saw a 5.3% increase, and the Middle East and Africa region experienced a 15.9% increase [16][17] - Asia-Pacific region's Fourth Quarter RevPAR was up 9.2% excluding China, while China saw a decline of 1.4% [17] Company Strategy and Development Direction - The company is focused on expanding its brand portfolio, including the launch of the Apartment Collection by Hilton and Outset Collection, targeting the apartment-style lodging segment [10][12] - The pipeline reached over 520,000 rooms, with expectations for sustained net unit growth of 6%-7% for 2026 and beyond [11][17] - The company aims to enhance its Hilton Honors program, making loyalty more accessible and rewarding [12][13] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for 2026, expecting stronger economic conditions and improved performance in EMEA and APAC regions [7][30] - The CEO highlighted macroeconomic factors such as decreasing inflation and increased investment in technology as positive indicators for future growth [21][25] - Management noted that early 2026 showed positive trends in group bookings and leisure demand, with expectations for RevPAR growth of 1%-2% year-over-year [7][18] Other Important Information - The company was named the number one world's best workplace by Fortune and Great Place to Work for 2025 [13] - The company continues to see strong performance in its luxury and lifestyle brands, with nearly 30% of total openings in the quarter coming from these segments [8][9] Q&A Session Summary Question: Overview of the broader economy and lodging industry - Management expressed optimism about the economy, citing macro and micro forces that are converging positively, including decreasing inflation and a favorable investment environment [21][30] Question: AI and technology partnerships - The company is actively exploring AI applications across its operations and is engaged with major tech players to enhance efficiencies and customer experience [34][41] Question: Growth of lifestyle and luxury brands - Management indicated that as the lifestyle and luxury brands gain scale, they will benefit from network effects, leading to increased market share and profitability [46][49] Question: Development environment and key money usage - The company remains disciplined regarding key money, with a focus on maintaining a competitive edge while managing development costs [53][56] Question: RevPAR guidance and quarterly cadence - Management acknowledged the complexity of the upcoming year but expressed confidence in the guidance range, citing potential upside from events like the World Cup [60][62] Question: EPS growth rate compared to EBITDA growth - Management clarified that EPS growth is impacted by share count and interest expenses, with adjusted EPS growth expected in the low double digits [67][68]

Financial Data and Key Metrics Changes - The company reported revenues of $87.5 million for Q4 2025, or $85 million excluding EUA related to the emission trading system. The fleet averaged TCE at $71,100 per day. Net income for Q4 was $21.6 million, resulting in an earnings per share of $0.40. Adjusted net income was $23.3 million, or adjusted earnings per share of $0.43 [3][5] - For the full year 2025, revenues reached $340 million, with an adjusted EBITDA of $251 million. The full year TCE was $72,000 per day [6][12] - The company maintained a cash balance of $448 million at year-end, with no debt maturing before 2029 [5][13] Business Line Data and Key Metrics Changes - The company traded two vessels in the spot market in 2025: FLEX Artemis and FLEX Constellation. Four drydockings were completed in 2025 [6][12] - In 2026, the company expects to complete three drydockings and has a TCE guidance of $65,000-$75,000 per day [9][12] Market Data and Key Metrics Changes - Global LNG exports rose 4% year-over-year in 2025, with Europe leading demand. U.S. LNG exports increased by 25% compared to 2024 [16] - European gas storage levels were reported to be around 40% entering 2026, indicating a potential strong demand pull from Europe [18] - The company noted that while new LNG supply is firm, there are too many ships delivered ahead of the new volumes, leading to modest expectations for earnings from spot exposure [10][20] Company Strategy and Development Direction - The company has a robust financial position and a solid contract backlog, with 78% of available days fixed on long-term charters for 2026 [6][8] - The company is optimistic about its open exposure later in the decade, aligning with expectations of an attractive shipping market due to significant new supply volumes [8][20] Management's Comments on Operating Environment and Future Outlook - Management indicated that the spot market is expected to remain volatile in 2026, with many fixtures anticipated due to new LNG export volumes ramping up [7][10] - The long-term outlook remains optimistic, with a comfortable backlog and visibility despite current market challenges [10][20] Other Important Information - The board declared a quarterly dividend of $0.75 per share, marking the 18th consecutive dividend at this rate, with a total distribution of around $770 million since 2021 [5][10] - The company generated cash flow of $44 million from operations, with a net operating cash flow of approximately $36 million after accounting for working capital movements and drydocking expenditures [13] Q&A Session Summary Question: Can you provide more details on the upcoming options and their likelihood of being declared? - Management stated that they are also waiting for the charters to declare options during 2026, and regardless of the outcome, these options will not affect the fleet portfolio significantly [23] Question: How should the increased market exposure and decision factors be viewed regarding future dividend payments? - Management emphasized that each dividend payment is decided by the board at each meeting, and while some decision factors have been adjusted, the majority remain strong, supporting the dividend [24] Question: Will the company order new ships given the current market exposure? - Management indicated that they are in a position to order ships if needed but prefer to be disciplined and wait for contracts to be attached before making such decisions [26]

Financial Data and Key Metrics Changes - In 2025, the company achieved 36% revenue growth, 32% EBITDA growth, and 22% FFO per share growth while deleveraging its balance sheet [4][11] - The fourth quarter reported net income attributable to common stockholders of $0.14 per diluted share and normalized FFO of $1.45 per diluted share, representing 28.3% year-over-year growth [33] Business Line Data and Key Metrics Changes - The senior housing operating portfolio reported a same-store net operating income (NOI) growth of 20.4% in the fourth quarter, marking the 13th consecutive quarter of growth exceeding 20% [18][19] - Organic revenue growth remained around 10%, driven by 400 basis points of year-over-year occupancy gains and healthy rate growth [8][19] Market Data and Key Metrics Changes - The company noted a significant increase in occupancy, with 400 basis points of year-over-year growth, among the highest levels in its history [19] - The company expects strong occupancy upside in 2026, supported by a growing 80+ population and a favorable demand-supply picture [8][9] Company Strategy and Development Direction - The company is focused on transforming from a real estate deal-oriented business to an operations and technology-first model, emphasizing customer trust and employee experience [6][10] - A significant capital rotation was executed, with nearly $11 billion in net investment activity, primarily in high-growth senior housing properties [11][12] - The company launched its private funds management business and closed Senior Housing Equity Fund One, marking a significant expansion of its capital allocation strategy [17][31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for senior housing products, anticipating continued growth despite macroeconomic uncertainties [8][9] - The company highlighted the importance of operational excellence and technology in driving future growth and enhancing customer experiences [22][24] Other Important Information - The company completed the sale of its outpatient medical business for $7.2 billion, which significantly contributed to its capital rotation strategy [11][12] - The management team has undergone significant changes, with a focus on attracting high-caliber talent to drive the company's transformation [23][24] Q&A Session Summary Question: Can you provide more quantitative insights on compounding and duration? - Management emphasized the focus on partial earnings and cash flow growth, indicating a belief in double-digit NOI growth for the long term [49][51] Question: What challenges remain in the senior housing space? - Management acknowledged that while the data science platform is mature, there is still significant work to be done in operational technology [55][56] Question: How does the Integra disposition frame the skilled nursing portfolio? - The skilled nursing strategy involves acquiring assets with operational turnaround stories, with a focus on high-quality operators [60][61] Question: What is the size and characteristics of the non-same store pool? - The non-same store portfolio is primarily composed of recently acquired assets, with characteristics similar to the same store portfolio but generally less occupied [63][64] Question: How is occupancy performance being driven? - Management highlighted the importance of marketing, customer experience, and operational execution in driving occupancy growth [68][69] Question: How long can the company continue to acquire unstabilized SHOP? - Management stated that acquisition opportunities depend on market conditions and emphasized the goal of creating value for shareholders [71][72]

Crown Crafts (NasdaqCM:CRWS) Q3 2026 Earnings call February 11, 2026 09:00 AM ET Company ParticipantsClaire Spencer - VP and CFODoug Ruth - PresidentIgor Novgorodtsev - Portfolio ManagerJohn Deysher - President and Portfolio ManagerJohn McNamara - Managing DirectorOlivia Elliott - President, CEO, and DirectorConference Call ParticipantsAnthony Lebiedzinski - Senior Equity AnalystNone - AnalystOperatorPlease note this event is being recorded. I would now like to turn the conference over to John McNamara with ...

Financial Data and Key Metrics Changes - In 2025, the company achieved over 4.5% growth in AFFO per share, with a total investment of $1.55 billion across its platforms, marking over 60% year-over-year growth [6][8] - Core FFO per share for Q4 was $1.10, representing a 7.3% year-over-year increase, while full-year Core FFO per share was $4.28, reflecting a 5.1% increase [21] - AFFO per share for Q4 was $1.11, a 6.5% year-over-year increase, and for the full year, it was $4.33, indicating 4.6% year-over-year growth [21][22] Business Line Data and Key Metrics Changes - In Q4, the company invested approximately $377 million in 94 retail net lease properties, with a weighted average cap rate of 7.1% and a weighted average lease term of 9.6 years [11][12] - For the full year 2025, nearly $1.6 billion was invested in 338 retail net lease properties, with over $1.4 billion originating from the acquisition platform [12][13] - The development and DFP platforms had a record year with 34 projects, representing approximately $225 million of committed capital [13] Market Data and Key Metrics Changes - The company's investment-grade exposure at year-end stood at nearly 67%, with occupancy increasing to 99.7%, reflecting a 50 basis point improvement since Q1 [16] - The properties acquired during Q4 were leased to leading operators in various sectors, including home improvement and grocery stores, indicating a diverse market presence [12] Company Strategy and Development Direction - The company aims to increase its 2026 investment guidance to a range of $1.4 billion-$1.6 billion, representing a 10% increase from the prior range [9] - The company is focused on maintaining a fortress balance sheet and executing on its investment guidance without raising additional equity capital [20] - The company is enhancing operational efficiencies through IT improvements and anticipates a material reduction in G&A as a percentage of revenue [8][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the fundamentals supporting the company's outlook, citing a strong portfolio and exceptional team depth [6] - The management highlighted the ongoing challenges faced by middle-income consumers due to rising costs, which may impact retail trends [101] - The company expects to maintain a growth trajectory with a goal of delivering 10% operational returns and achieving two-year stacked AFFO growth [108] Other Important Information - The company raised approximately $1.5 billion in capital during 2025, including a $400 million bond offering and a $350 million term loan [17][18] - The company achieved an A- rating from Fitch, validating its strong balance sheet and disciplined capital allocation [20][21] Q&A Session Summary Question: Increase in 2026 investment guidance - Management noted that the increase is due to secured transactions, including sale-leaseback deals and increased confidence in development projects [26] Question: Non-core asset sales - Management explained that capital recycling focuses on opportunistic sales of non-core assets, driven by valuations and confidence in future performance [27] Question: Cap rate trends - Management indicated no material changes in cap rates and noted that rent escalators have been embedded with historic inflation [31][32] Question: Sale-leaseback interest - Management stated that while there hasn't been a significant increase in sale-leaseback velocity, they have specific transactions lined up with existing tenants [40] Question: Development investment commitments - Management expressed optimism about growth in development investments but noted that timing is often subject to third-party approvals [69] Question: Credit loss assumptions - Management indicated that the assumed credit loss for 2026 guidance is 25-50 basis points, consistent with 2025 performance [70]

Financial Data and Key Metrics Changes - For Q4 2025, the company reported GAAP net income of $0.24 per share, while distributable earnings were -$2.07 per share, with distributable earnings prior to charge-offs at -$0.51 per share [4][20] - The distributable earnings prior to charge-offs increased over 20% from Q1, covering the dividend for the second consecutive quarter [5] - The book value ended the year at $20.75 per share, which includes $0.47 per share of accumulated depreciation and amortization [23] Business Line Data and Key Metrics Changes - The loan portfolio is now 99% performing, with $575 million of impaired loans resolved during the quarter, reducing the impaired loan balance to just under $90 million [5][14] - The investment portfolio stands at $20 billion, up from $19.5 billion last quarter, with the loan portfolio at $18 billion and net lease assets now representing 5% of the portfolio [13] - In Q4, the company closed $1.5 billion of investments, including $1.4 billion of new loan originations, all secured by multifamily and industrial assets [11] Market Data and Key Metrics Changes - The real estate credit market is highly liquid, with CMBS issuance accelerating to its highest level since the GFC, up 40% year-over-year [6] - New loan requests in January were up 50% from the prior year, indicating increased enthusiasm from investors [7] - Nearly half of the loans are located in international markets, with almost 40% in Europe, where strong demand is driven by limited new supply [16] Company Strategy and Development Direction - The company has strategically broadened its scope to target complementary investment channels, focusing on multifamily and industrial loans [5] - The strategy remains focused on essential-use retail with attractive credit characteristics, with a net lease portfolio scaling to over $300 million [17] - The company aims to maximize long-term shareholder value while remaining patient and disciplined in capital deployment [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong investment and asset management results achieved in 2025, with a positive outlook for the coming year [19] - The company anticipates cash flows from owned real estate to decline in Q1 but expects consistent positive distributable earnings over time [22] - Management noted that the current dividend yield of 9.5% implies a compelling relative value proposition for the stock [10] Other Important Information - The company executed over $5 billion of corporate and securitized debt transactions in the past 12 months, reducing the weighted average borrowing spread by nearly 90 basis points [8] - The total CECL reserve declined nearly 60% quarter-over-quarter due to reserve charge-offs, which had a minimal impact on book value [23][24] - The company has been active in share repurchases, with approximately $140 million since the program's inception in July 2024 [10] Q&A Session Summary Question: Thoughts on supporting the value of loans in the portfolio - Management is exploring all opportunities to maximize shareholder value and feels good about the stock's direction given 2025's performance [29][30] Question: Views on the REO portfolio and specific assets - Management sees improved fundamentals and investor demand in key markets like New York and is strategically considering exits for several assets [33][35] Question: Investment in the Blackstone BREDS Fund - The fund will focus on high-quality core-plus real estate in the U.S. and Canada, with no fees for the fund commitment [39][40] Question: Future portfolio outlook and diversification strategy - The company intends to continue diversifying its portfolio while maintaining its core lending strategy [41][42] Question: Multifamily lending opportunities - The company views multifamily as a structurally undersupplied market and is actively lending in this space [46] Question: Initial general reserve on new loans - The current general reserve is a good proxy for the majority of the portfolio, and as the portfolio grows or shrinks, this will be a reference point [53] Question: Impaired loan resolutions and market conditions - The resolution of impaired loans was aided by the strength of the asset management team and improved market liquidity [56][58] Question: Target allocation for multifamily and industrial properties - The company prioritizes finding the right investments with the best risk-adjusted returns, focusing on diversifying across sectors and geographies [59][60] Question: Cost of capital between CLOs and bank facilities - The company aims for a well-structured, diversified balance sheet and has reduced corporate term loan borrowing spreads significantly [67][68]