1. **State the problem:** Simplify the expression $X^2 - 4$. 2. **Formula and rules:** Recognize that $X^2 - 4$ is a difference of squares, which follows the formula: $$a^2 - b^2 = (a - b)(a + b)$$ where $a = X$ and $b = 2$. 3. **Apply the formula:** $$X^2 - 4 = (X - 2)(X + 2)$$ 4. **Explanation:** The difference of squares factorization allows us to rewrite the expression as a product of two binomials, which can be useful for solving equations or simplifying expressions. **Final answer:** $$X^2 - 4 = (X - 2)(X + 2)$$