Business – Page 1518 – NewzIntel.com

MIL-OSI: Petrus Resources Announces 2025 Budget Guidance

Source: GlobeNewswire (MIL-OSI)

CALGARY, Alberta, Feb. 12, 2025 (GLOBE NEWSWIRE) — Petrus Resources Ltd. (“Petrus” or the “Company“) (TSX: PRQ) is pleased to announce its 2025 capital guidance.

2025 BUDGET GUIDANCE

In 2025, Petrus will build on its strategy of disciplined capital investment by targeting projects designed to maintain production, increase liquids weighting, enhance capital efficiency and generate free funds flow. The Board of Directors has approved a $40 million to $50 million capital program, with approximately 70% allocated toward high-impact development drilling in its core Ferrier and North Ferrier areas. The remaining capital will be invested in strategic infrastructure, including a 12-kilometer expansion of the North Ferrier pipeline, and land acquisitions. The budget is based on price assumptions of USD$68.50/bbl WTI for oil, CAD$2.04/GJ AECO for natural gas and a USD/CAD exchange rate of $0.70. Through the execution of this capital program, Petrus expects to:

Achieve 2025 annual average daily production of 9,000 to 10,000 boe¹ per day – 65% gas and 35% total liquids

Generate $45 million to $55 million in annual funds flow² for 2025

Pay a monthly dividend of $0.01/share – annually this represents approximately 9% of the current share price

Maintain net debt flat² at $60 million

Given the inherent volatility of commodity prices, the Company recognizes it is prudent to remain disciplined and flexible from an operational and financial perspective. For 2025, the Company has hedged approximately 54% of its forecasted production at an average price of $2.78/GJ for natural gas and CAD $94.37/bbl for oil. Petrus will continue to monitor Canadian oil and natural gas prices and will evaluate the capital program on an ongoing basis.

The Company remains well-positioned to navigate changing market dynamics while delivering consistent value to shareholders. By leveraging operational efficiencies and maintaining financial discipline, Petrus continues to strengthen its financial position and reinforce long-term sustainability. As market conditions evolve, the Company is prepared to adapt and respond quickly to capture opportunities and maximize returns.

ABOUT PETRUS
Petrus is a public Canadian oil and gas company focused on property exploitation, strategic acquisitions and risk-managed exploration in Alberta.

For further information, please contact:

Ken Gray
President and Chief Executive Officer
T: 403-930-0889
E: kgray@petrusresources.com

_____________________________

¹ Disclosure of production on a per boe basis consists of the constituent product types and their respective quantities. Refer to “BOE Presentation” and “Production and Product Type Information” for further details.

² Non-GAAP financial measure. During the year ended December 31, 2023, funds flow was $78.0 million. As at September 30, 2024, net debt was $60.4 million. Refer to “Non-GAAP and Other Financial Measures”.

READER ADVISORIES

Non-GAAP and Other Financial Measures

This press release refers to the terms “funds flow” and “net debt”. These non-GAAP and other financial measures are not recognized measures under GAAP (IFRS) and do not have a standardized meaning prescribed by GAAP (IFRS). Accordingly, the Company’s use of these terms may not be comparable to similarly defined measures presented by other companies. These non-GAAP and other financial measures should not be considered to be more meaningful than GAAP measures which are determined in accordance with IFRS as indicators of our performance. Management uses these non-GAAP and other financial measures for the reasons set forth below.

Funds Flow

Funds flow is a common non-GAAP financial measure used in the oil and natural gas industry that evaluates the Company’s profitability at the corporate level. Management believes that funds flow provides information to assist a reader in understanding the Company’s profitability relative to current commodity prices. The most directly comparable financial measure that is disclosed in the Company’s primary financial statements is oil and natural gas revenue, which was $125.6 million for the year ended December 31, 2023. For additional information regarding funds flow (including a reconciliation of funds flow to oil and natural gas revenue), see the disclosure under “Non-GAAP and Other Financial Measures – Corporate Netback and Funds Flow” in the Company’s Management’s Discussion & Analysis for the year ended December 31, 2023 which is available on SEDAR+ at www.sedarplus.ca, which disclosure is incorporated by reference herein.

Net Debt
Net debt is a non-GAAP financial measure and is calculated as the sum of long-term debt and working capital (current assets and current liabilities), excluding the current financial derivative contracts, the current portion of the lease obligation and the current portion of the decommissioning obligation. Petrus uses net debt as a key indicator of its leverage and strength of its balance sheet. As at September 30, 2024, long-term debt was $25 million. For additional information regarding net debt (including a reconciliation of net debt to long-term debt), see the disclosure under “Non-GAAP and Other Financial Measures – Net Debt” in the Company’s Management’s Discussion & Analysis for the three- and nine-month periods ended September 30, 2024 which is available on SEDAR+ at www.sedarplus.ca, which disclosure is incorporated by reference herein.

Forward-Looking Statements and FOFI

Certain information regarding Petrus set forth in this press release contains forward-looking statements within the meaning of applicable securities law, that involve substantial known and unknown risks and uncertainties. Such statements represent Petrus’ internal projections, estimates, beliefs, plans, objectives, assumptions, intentions or statements about future events or performance. These statements are only predictions and actual events or results may differ materially. Although Petrus believes that the expectations reflected in the forward-looking statements are reasonable, it cannot guarantee future results, levels of activity, performance or achievement since such expectations are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Many factors could cause Petrus’ actual results to differ materially from those expressed or implied in any forward-looking statements made by, or on behalf of, Petrus. In particular, forward-looking statements included in this press release include, but are not limited to, statements with respect to: our intention in 2025 to build on our strategy of disciplined capital investment by targeting projects designed to maintain production, increase liquids weighting, enhance capital efficiency and generate free funds flow; the range of our capital program in 2025, with approximately 70% allocated toward high-impact development drilling in our core Ferrier and North Ferrier areas, and that the remaining capital will be invested in strategic infrastructure, including a 12-kilometer expansion of the North Ferrier pipeline, and land acquisitions; our belief that through the execution of our 2025 capital program we will achieve 2025 annual average daily production of 9,000 to 10,000 boe per day (65% gas and 35% total liquids), generate $45 million to $55 million in annual funds flow, pay a monthly dividend of $0.01/share, and maintain net debt flat at $60 million; our intention to remain disciplined and flexible from an operational and financial perspective; that for 2025 we have hedged approximately 54% of ours forecasted production, and the details thereof; our intention to continue to monitor Canadian oil and natural gas prices and evaluate our capital program on an ongoing basis; our belief that we are well-positioned to navigate changing market dynamics while delivering consistent value to shareholders; our belief that by leveraging operational efficiencies and maintaining financial discipline, we continues to strengthen our financial position and reinforce long-term sustainability; and that we are prepared to adapt and respond quickly to capture opportunities and maximize returns. These forward-looking statements are subject to numerous risks and uncertainties, most of which are beyond the Company’s control, including: the risk that (i) negotiations between the U.S. and Canadian governments are not successful and one or both of such governments implements announced tariffs, increases the rate or scope of announced tariffs, or imposes new tariffs on the import of goods from one country to the other, including on oil and natural gas, (ii) the U.S. and/or Canada imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas, and (iii) the tariffs imposed by the U.S. on other countries and responses thereto could have a material adverse effect on the Canadian, U.S. and global economies, and by extension the Canadian oil and natural gas industry and the Company; the risk that we do not generate sufficient funds flow and free funds flow to maintain our dividend at current levels and/or to maintain net debt flat; the impact of general economic conditions; volatility in market prices for crude oil, NGL and natural gas; industry conditions; currency fluctuation; changes in interest rates and inflation rates; imprecision of reserve estimates; liabilities inherent in crude oil and natural gas operations; environmental risks; incorrect assessments of the value of acquisitions and exploration and development programs; competition; the lack of availability of qualified personnel or management; changes in income tax laws or changes in tax laws and incentive programs relating to the oil and gas industry; hazards such as fire, explosion, blowouts, cratering, and spills, or extreme weather events, such as wild fires, floods, drought and extreme cold or warm temperatures, each of which could result in substantial damage to wells, production facilities, other property and the environment or in personal injury and/or increase our costs, decrease our production, or otherwise impede our ability to operate our business; stock market volatility; ability to access sufficient capital from internal and external sources; that the amount of dividends that we pay may be reduced or suspended entirely; that we reduce or suspend the repurchase of shares under our NCIB; and the other risks and uncertainties described in our Annual Information Form. With respect to forward-looking statements contained in this press release, Petrus has made assumptions regarding: that the tariffs that have been publicly announced by the U.S. and Canadian governments (but which are not yet in effect) do not come into effect, but that if such tariffs do come into effect, the potential impact of such tariffs, and that other than the tariffs that have been announced, neither the U.S. nor Canada (i) increases the rate or scope of such tariffs, or imposes new tariffs, on the import of goods from one country to the other, including on oil and natural gas, and/or (ii) imposes any other form of tax, restriction or prohibition on the import or export of products from one country to the other, including on oil and natural gas; the amount of dividends that we will pay; the number of shares that we will repurchase under our NCIB; future commodity prices (including as disclosed herein) and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future exchange rates (including as disclosed herein); the impact of increasing competition; conditions in general economic and financial markets; availability of drilling and related equipment and services; effects of regulation by governmental agencies; the effects of inflation on our profitability; future interest rates; and future operating costs. Management has included the above summary of assumptions and risks related to forward-looking information provided in this press release in order to provide investors with a more complete perspective on Petrus’ future operations and such information may not be appropriate for other purposes. Petrus’ actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Company will derive therefrom. Readers are cautioned that the foregoing lists of factors are not exhaustive. This press release contains future-oriented financial information and financial outlook information (collectively, “FOFI”) about Petrus’ prospective results of operations including, without limitation, our forecasts for our 2025 capital spending program, 2025 annual average daily production rate, 2025 annual funds flow, 2025 monthly dividend, and 2025 net debt, which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on FOFI. Petrus’ actual results, performance or achievement could differ materially from those expressed in, or implied by, these FOFI, or if any of them do so, what benefits Petrus will derive therefrom. Petrus has included the FOFI in order to provide readers with a more complete perspective on Petrus’ future operations and such information may not be appropriate for other purposes.

These forward-looking statements and FOFI are made as of the date of this press release and the Company disclaims any intent or obligation to update any forward-looking statements and FOFI, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.

BOE Presentation

The oil and natural gas industry commonly expresses production volumes and reserves on a barrel of oil equivalent (“boe”) basis whereby natural gas volumes are converted at the ratio of six thousand cubic feet to one barrel of oil. The intention is to sum oil and natural gas measurement units into one basis for simplified measurement of results and comparisons with other industry participants. Petrus uses the 6:1 boe measure which is the approximate energy equivalence of the two commodities at the burner tip. Boe’s do not represent an economic value equivalence at the wellhead and therefore may be a misleading measure if used in isolation.

Production and Product Type Information

The Company’s forecast 2025 annual average daily production rate disclosed in this press release (9,000 to 10,000 boe per day) consists of the following product types, as defined in National Instrument 51-101 and using the conversion ratio described above, where applicable: 15% light oil and condensate, 20% natural gas liquids and 65% conventional natural gas.

The MIL Network –

February 13, 2025

MIL-OSI: Artius II Acquisition Inc. Announces Pricing of $200 Million Initial Public Offering

Source: GlobeNewswire (MIL-OSI)

Artius II Features a 1,000,000 Distributable Class A Ordinary Share Structure (“Tontine Structure”) with Sponsor Reducing Founder Shares by an Equal Amount

Each Unit Includes One Class A Ordinary Share, One Right to Receive 1/10th of a Class A Ordinary Share and One Contingent Right to Receive a Pro Rata Share of 1,000,000 Distributable Class A Ordinary Shares Under Tontine Structure

NEW YORK, Feb. 12, 2025 (GLOBE NEWSWIRE) — Artius II Acquisition Inc. (“Artius II” or the “Company”) announced today that it priced its initial public offering of 20,000,000 units at $10.00 per unit. The units will be listed on The Nasdaq Global Market (“Nasdaq”) and trade under the ticker symbol “AACBU” beginning February 13, 2025. Each unit consists of one Class A ordinary share, one right entitling the holder thereof to receive one tenth of one Class A ordinary share upon the consummation of an initial business combination and one contingent right to receive a pro rata share of 1,000,000 (or 1,150,000 if the underwriter’s over-allotment option is exercised in full) distributable Class A ordinary shares at the closing of an initial business combination based on the number of Class A ordinary shares not redeemed prior to an initial business combination (“tontine structure”), and our sponsor will concurrently reduce founder shares by an equal amount. Once the Class A ordinary shares and rights comprising the units begin separate trading, the Class A ordinary shares and rights are expected to be listed on Nasdaq under the symbols “AACB” and “AACBR,” respectively.

Santander is acting as sole book-running manager. The Company has granted the underwriter a 45-day option to purchase up to an additional 3,000,000 units at the initial public offering price to cover over-allotments, if any.

About Artius II Acquisition Inc.

The Company is a blank check company formed for the purpose of effecting a merger, amalgamation, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. The Company intends to focus on technology enabled businesses that directly or indirectly offer specific technology solutions, broader technology software and services, or financial services to companies of all sizes. The Company was founded by Boon Sim, the Founder and Managing Partner of Artius Capital Partners LLC and founder of Artius Acquisition Inc., a special purpose acquisition company. Karen Richardson, Kevin Costello and John Stein will be serving as board members.

The offering is being made only by means of a prospectus. When available, copies of the prospectus may be obtained from Santander US Capital Markets LLC at Santander US Capital Markets LLC, Attention: ECM Syndicate, 437 Madison Avenue, New York, NY 10022, by email at equity-syndicate@santander.us, or by telephone at 833-818-1602.

A registration statement relating to the securities became effective on February 12, 2025. This press release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

Forward-Looking Statements

This press release contains statements that constitute “forward-looking statements,” including with respect to the proposed initial public offering and the anticipated use of the net proceeds. No assurance can be given that the offering discussed above will be completed on the terms described, or at all, or that the net proceeds of the offering will be used as indicated. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s preliminary prospectus for the Company’s offering filed with the U.S. Securities and Exchange Commission (the “SEC”). Copies of these documents are available on the SEC’s website, www.sec.gov. The Company undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Contact:

Jason Ozone
jason@artiuscapital.com
+1-212-309-7668

The MIL Network –

February 13, 2025

MIL-OSI Australia: ABC News with Patricia Karvelas

Source: Australian Executive Government Ministers

PATRICIA KARVELAS: As we mentioned in our headlines, the Government says they are prepared to acquire Rex Airlines if a suitable buyer for the collapsed business isn’t found. Now, rival regional airlines have questioned why the Federal Government has refused to meet with them to discuss their offers of support on key Rex routes. The Nationals say any move by the Government to buy out Rex should be a last resort.

[Excerpt]

DAVID LITTLEPROUD: We don’t want the taxpayer to have to prop up what should be a commercially viable enterprise. The reality is Rex proved that until they took a change of course, and it’s difficult for then other smaller aviation companies to actually compete with the Australian taxpayer if we enter it. So, what needs to happen is that we need to accelerate the process to allow the solution to be created by the aviation sector themselves. They’re willing and able. They’re prepared to come to the table, but they’ve been locked out because it’s been the unions that have been dictating to the Government about who can actually put their hand up to buy Rex.

[End of excerpt]

PATRICIA KARVELAS: To tell us more, Transport Minister Catherine King joins us live. Catherine King, welcome.

CATHERINE KING: Hi. It’s really lovely to be with you.

PATRICIA KARVELAS: It is. You have put this on the table, but you say it’s not your preference. So, what? Is it just a political tactic?

CATHERINE KING: No, not at all. What we’ve seen, and we’ve been working with the voluntary administration right the way along, the first sort of thing that we had to do was we put in the guarantee, so you’ll either fly or you’ll get your money back. Luckily, that hasn’t had to be drawn on, passenger numbers are keeping up. The next thing we had to do is – obviously, there was a first sale process that was not successful and we are working our way with the administrators on how can we best support a second sale process – we have come to the party with a credit, a line of credit, in order to keep the administration going. It’s not a grant. It’s a line of credit so that the administration can keep flying the airline. And then, what we’ve also done is stepped into the shoes of the largest creditor so that the company doesn’t get liquidated while we have this second sale process.

What we’ve said today is that it’s abundantly clear that a second sale process won’t be successful without government support. And we are saying we are prepared to, where there are credible bidders that make its way through the administration process, that we will negotiate that support. Which is also why I can’t meet with individual airlines because they are potential bidders. [Indistinct]…

PATRICIA KARVELAS: [Interrupts] Okay. Because the Financial Review is reporting that 43 airlines under the Regional Aviation Association of Australia wrote to you last year requesting a meeting that you wouldn’t.

CATHERINE KING: I can’t meet with them for probity reasons because some of them will be bidders and they will be in a negotiation again, possibly against each other, and I will have to treat every bidder equally, which is why they need to work through the administration. So I can’t, for probity reasons, meet with them. I have met with their peak body before, I meet with them regularly, but I can’t meet with individual airlines who may be bidders in terms of Rex itself.

PATRICIA KARVELAS: The RAAA Chief Executive has said that you’ve refused to meet them, but also says that they want to put forward a market-based solution for their association’s members. So, perhaps something quite different.

CATHERINE KING: Yep.

PATRICIA KARVELAS: Isn’t that worth pursuing?

CATHERINE KING: They can now do that. That’s what this has opened up today, through this second sale process.

PATRICIA KARVELAS: [Talks over] Has that meeting happened?

CATHERINE KING: They can now do that, but I can’t meet with them because-

PATRICIA KARVELAS: [Interrupts] The department can?

CATHERINE KING: The department’s been meeting with potential bidders all the way along, and that’s been happening. That’s been happening all the way along. But I can’t meet with them because this is now a process where the Government will step in with some support, and we will need to treat every single bidder exactly the same. And so, I don’t know who those are going to be so I can’t meet with individual potential bidders, and I really welcome that there are airlines wanting to do that.

What I don’t want to see, though, is the cannibalisation of the routes, and some people saying, well, we want this bit, not this bit, and it really hollowing out.

PATRICIA KARVELAS: [Talks over] Correct. I was going to go to that, because some people are proposing different-

CATHERINE KING: Yeah.

PATRICIA KARVELAS: What’s wrong with that if it provides a commercial solution rather than the government stepping in?

CATHERINE KING: It might provide a solution. But again, what – from the first principles of policy – what the Government wants to do is keep routes in regional aviation. We want to keep them flying and we want to make sure they’re viable, not just in the short term but in the longer term as well. Which is why we think the second sale process won’t be successful without government support, and that’s why we’ve got this process now in place. It may be-

PATRICIA KARVELAS: [Interrupts]When you say with government support…

CATHERINE KING: Yep.

PATRICIA KARVELAS: …does that look like a sort of co-ownership model? Like, what sort of [indistinct] could it look like?

CATHERINE KING: Yeah. At the moment, we’re very open to all of that. And different bidders will come forward and say, you know, we will buy the airline if you do X, Y and Z. And that is the competitive tension that needs to happen as part of this second sale process.

PATRICIA KARVELAS: [Talks over] Does that mean the government could have, let’s say, a 40 per cent stake?

CATHERINE KING: It could say that. But the biggest barrier for a sale of this airline at the moment has been that the planes are old and it is highly capital intensive to replace them. And so, that has been the largest barrier. And again, we will have to look at what someone is bringing to the table and what is the best value for taxpayer money; where we’re we going to be able to keep as many of the routes going as possible – I want to keep all of them going if we can; and-

PATRICIA KARVELAS: [Interrupts]Well, is that a guarantee, if I can just pick you up on that?

CATHERINE KING: I would like to but, obviously, we’re going to- that is in the hands of whoever purchases the airline.

PATRICIA KARVELAS: Shouldn’t it be, actually, a pre-condition that you must keep them all open?

CATHERINE KING: It is certainly one of the things that we will be looking at as part of that process. But at the first principle, what the Government is absolutely determined to do is to keep regional aviation and regional communities connected. I was pretty shocked today to see some of the commentary from the National and the Liberal Party who are, basically – I don’t know what that was about today – who are, basically I think, abandoning regional communities and regional aviation.

PATRICIA KARVELAS: Well, they’re arguing there should be a commercial solution.

CATHERINE KING: Well, and we’re saying that as well, but we’re also saying that if there isn’t, we are saying that we will start the process to consider if government should acquire it. We’ll need to do that with states and territories as partners, they subsidise a lot of these routes currently. And we’ll need to start the process for that as the buyer of last resort.

PATRICIA KARVELAS: Okay. And the buyer of last resort, does that mean that sort of states and territories go in with you?

CATHERINE KING: We would certainly- we’re certainly in discussions with states and territories who subsidise many of the intrastate routes, which are their responsibility now.

PATRICIA KARVELAS: And can you give me a sense of which states are showing an interest in going in?

CATHERINE KING: Well, every state wants to keep regional aviation going. All of them want regional aviation to… Rex flies everywhere. There’s more than 40 routes that are different routes that are flown weekly. Almost half of those are routes where they’re the only airline that actually flies in. And that’s pretty critical to getting people in regional communities to medical appointments, to their homes, to keep businesses going, to get FIFO workers in. They’re pretty- it’s a pretty important piece of economic infrastructure for our regions.

PATRICIA KARVELAS: Just on another topic, but still very much in your portfolio, is it right that the Victorian Government wants a top-up to the contentious Suburban Rail Loop?

CATHERINE KING: So, I mean, it’s in- all in the public domain. I must admit, I’ve been reluctant to comment on this because there’s a fair bit of gossip going around and it’s unhelpful, I think, as we [Indistinct] not you just-

PATRICIA KARVELAS: [Interrupts] I am happy for you to just tell us the facts now.

CATHERINE KING: So I will say- yeah. So on Suburban Rail Loop, I have released the $2.2 billion. Infrastructure Australia and my department have now assessed that and recommended that money be released to the Victorian Government on the basis of very specific things that it will be going towards. And so I have now signed that off. And the Victorian Government, I’m sure, will be receiving the news of that now as we speak. So you’ve got [Indistinct].

PATRICIA KARVELAS: [Talks over] So, can you just be clear, that’s not- just the distinction, I know that they’re asking for a top up. You’re saying that’s not the top up? That’s…?

CATHERINE KING: No, that’s the- so that’s the existing money that we’ve had on the table for Suburban Rail East. We will continue discussions, as we do through budget processes with every state and territory, and the Victorians are no different, who come to us with an ask. But I’ve been pretty consistent in terms of suburban rail to say there are still some hurdles that the Victorian Government will need to overcome in relation to advice that I will receive from Infrastructure Australia about particularly the costings around value capture before the Commonwealth can make another investment.

PATRICIA KARVELAS: So you’re not convinced that this is a value for money proposition?

CATHERINE KING: I do think it’s a really good project. As a Victorian, I actually know- you know, and I grew up in the south eastern suburbs of Melbourne. That was my home and was my home well into my 20s. And I would catch that Glen Waverley train…

PATRICIA KARVELAS: [Talks over] Same here.

CATHERINE KING: [Indistinct]…train into the city as a 14-year-old all the time. I’ve seen the huge population growth around Box Hill where you and I would go shopping and you’d take your friends there as well. So really, it’s an important project for the city. It’s a big project for the city. You know, I’m a supporter of it, but I also need to make sure that I’m getting value for money for Australian taxpayers’ dollars and [Indistinct].

PATRICIA KARVELAS: [Interrupts] So, to be clear, you’ve now- you said that they’ll be finding out now you’ve handed over two- just to be clear?

CATHERINE KING: Yeah. The 2.2, which was the election commitment we made, Infrastructure Australia and the- my department have now provided me with advice on the assessment of their- the project appraisal report, which is pretty routine. That’s what I do. And that’s now been released to the Victorian Government.

PATRICIA KARVELAS: Okay. And that now draws a line for a while, you’re saying no extra funding?

CATHERINE KING: Well, what I’m saying to them is there’s some more work that will need to be done before further investment in Suburban Rail Loop. But there’s also other projects, of course, that we continue to talk to the Victorians about. I work with very closely [Indistinct]…

PATRICIA KARVELAS: [Interrupts] Because it brings me to the Werribee by-election and some of the lessons there. There are parts of your heartland who feel very neglected. Is that part of the lesson here?

CATHERINE KING: I think that, again, I stood with Jacinta Allan to talk about and to put money into a road project, two road projects in Werribee, and they had been worked with and negotiated on and talked with the Victorian Government well over six months ago. You know, they were not new. They were things that the Victorian Government had brought to me to say, we need to invest in the West.

PATRICIA KARVELAS: But beyond that, you’re talking about something that’s already committed. There’s clearly more demand [Indistinct]…

CATHERINE KING: [Interrupts] Yeah, absolutely. And that’s what happens through budget processes, through the mid-year economic financial outlook. They come to me with projects that they want to invest in, they want us to co-invest in, and they do that all the way around the state. They’ve done- you know, in regional communities, they’ve put $1 billion into a road blitz to really deal with potholes and a range of things in regional communities. You know, we’re really keen to partner with them on a whole range of projects, and we’ll keep talking to them as part of the budget process.

PATRICIA KARVELAS: Catherine King, thanks for coming in.

CATHERINE KING: Good to talk to you.

MIL OSI News –

February 13, 2025

MIL-OSI Australia: Can artificial intelligence save the Great Barrier Reef?

Source: University of South Australia

13 February 2025

[embedded content]

Australian researchers are designing a global real-time monitoring system to help save the world’s coral reefs from further decline, primarily due to bleaching caused by global warming.

Coral reefs worldwide are dying at an alarming rate, with 75% of reefs experiencing bleaching-level heat stress in the past two years.

The World Heritage-listed Great Barrier Reef (GBR), considered the jewel in the crown of coral reefs worldwide and one of Australia’s most significant ecological and tourism assets, has been decimated by severe bleaching events since 2016, exacerbated by ongoing crown-of-thorns starfish outbreaks and coastal development.

A collaborative project led by the University of South Australia (UniSA), with input from Queensland and Victorian researchers, is integrating remote sensing technologies with machine learning, artificial intelligence and Geographic Information Systems (GIS) to monitor and hopefully stall the damage to the world’s most fragile marine ecosystems.

A multimodal platform will distil all research data relating to coral reefs, including underwater videos and photographs, satellite images, text files and time-sensor readings, onto a central dashboard for real-time global monitoring.

UniSA data analyst and lead researcher Dr Abdullahi Chowdhury says that a single centralised model will integrate all factors affecting coral reefs and provide environmental scientists with real-time predictions.

“At the moment we have separate models that analyse substantial data on reef health – including bleaching levels, disease incidence, juvenile coral density and reef fish abundance – but these data sets are not integrated, and they exist in silos,” Dr Chowdhury says.

“Consequently, it is challenging to see the ‘big picture’ of reef health or to conduct large scale, real-time analyses.”

The researchers say an integrated system will track bleaching severity and trends over time; monitor crown-of-thorns starfish populations and predation risks; detect disease outbreaks and juvenile coral levels; and assess reef fish abundance, diversity, length, and biomass.

“By centralising all this data in real time, we can generate predictive models that will help conservation efforts, enabling earlier intervention,” according to Central Queensland University PhD candidate Musfera Jahan, a GIS data expert.

“Our coral reefs are dying very fast due to climate change – not just in Australia but across the world – so we need to take serious action pretty quickly,” Ms Jahan says.

Coral reefs are often referred to as the “rainforests of the sea”. They make up just 1% of the world’s ocean area but they host 25% of all marine life.

The technology will bring together datasets from organisations like the National Oceanic and Atmospheric Administration (NOAA), the Monterey Bay Aquarium Research Institute (MBARI), the Hawaii Undersea Research Laboratory (HURL) and Australia’s CSIRO.

“The future of coral reef conservation lies at the intersection of technology and collaboration. This research provides a roadmap for harnessing these technologies to ensure the survival of coral reefs for generations to come,” the researchers say.

The study has been published in the journal Electronics.

A video accompanying this release is available: How can we save our coral reefs from dying?

…………………………………………………………………………………………………………………

Media contact: Candy Gibson M: +61 434 605 142 E: candy.gibson@unisa.edu.au
Lead researcher: Dr Abdullahi Chowdhury E: abdullahi.chowdhury@unisa.edu.au

MIL-OSI: WinVest Acquisition Corp. Announces Extension of Termination Date and Additional Contribution to Trust Account to Extend Termination Date

Source: GlobeNewswire (MIL-OSI)

Cambridge, MA, Feb. 12, 2025 (GLOBE NEWSWIRE) — WinVest Acquisition Corp. (NASDAQ: WINV, the “Company”), a special purpose acquisition company, announced today that its Board of Directors (the “Board”) has approved an extension of the period of time available to the Company to consummate an initial business combination by one month from February 17, 2025 to March 17, 2025 (the “Termination Date”), as permitted under the Company’s Amended and Restated Certificate of Incorporation, as amended. The purpose of the extension is to provide additional time for the Company to complete an initial business combination.

In connection with the extension, $30,000 (representing approximately $0.116 per unredeemed share of common stock issued in the Company’s initial public offering) has been deposited into the trust account established in connection with the Company’s initial public offering pursuant to the Company’s third drawdown upon an unsecured non-interest-bearing promissory note in the aggregate principal amount of $180,000 issued by the Company to WinVest SPAC LLC (the “Sponsor”) on December 16, 2024.

About WinVest Acquisition Corp.

WinVest Acquisition Corp. is a blank check company formed for the purpose of effecting a merger, share exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses.

Forward-Looking Statements

This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, including statements about the successful consummation of the Company’s initial business combination, are subject to risks and uncertainties, which could cause actual results to differ from those contemplated by the forward-looking statements. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s registration statement and prospectus for the Company’s initial public offering and other reports filed with the Securities and Exchange Commission. The Company expressly disclaims any obligations or undertaking to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the Company’s expectations with respect thereto or any change in events, conditions or circumstances on which any statement is based, except as required by law.

Contact:

WinVest Acquisition Corp.
Manish Jhunjhunwala
(617) 658-3094

The MIL Network –

February 13, 2025

MIL-OSI: Brookfield Real Assets Income Fund Inc. Announces Portfolio Management Team Changes

Source: GlobeNewswire (MIL-OSI)

NEW YORK, Feb. 12, 2025 (GLOBE NEWSWIRE) — Brookfield Public Securities Group LLC (“PSG”) today announced upcoming changes to the Brookfield Real Assets Income Fund Inc. (“RA” or the “Fund”) portfolio management team.

Riley O’Neal, CFA, Director of Risk Management, will join the portfolio management team for RA. Riley has been a member of PSG’s risk management team since joining the firm in 2016 and currently serves as director of risk management. To address current market dynamics, PSG believes it is critical that it continue to invest in the quantitative resources of the firm and align those resources with its investment teams. PSG believes Riley will bring a valuable quantitative analysis skillset to his role as co-portfolio manager for the Fund.

Paula Horn, PSG’s President and Chief Investment Officer, also will join the Fund’s portfolio management team. Paula brings 31 years of investment experience, a wealth of credit knowledge, valuable macro insights and facilitates connectivity across Brookfield. Both portfolio management team appointments will be effective on March 31, 2025.

Riley and Paula are joining Gaal Surugeon, Larry Antonatos and Chris Janus as Co-Portfolio Managers to the Fund. Riley, Paula, Gaal, Chris and Larry together will be responsible for all allocation decisions of the Fund. They will continue to leverage PSG’s deep expertise and investment capabilities across real asset sectors, capital structures and the liquidity spectrum to create diversified real asset solutions for investors.

Finally, PSG announced that Larry Antonatos, Co-Portfolio Manager to the Fund, is retiring after 14 successful years at Brookfield. Larry’s departure will be effective June 30, 2025. Larry will be available to ensure a smooth transition.

Contact information:

Investing involves risk; principal loss is possible.

A fund’s investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Read the prospectus carefully before investing.

Brookfield Real Assets Income Fund Inc. is distributed by Foreside Fund Services, LLC.

Quasar Distributors, LLC, provides filing administration for Brookfield Real Assets Income Fund Inc.

Brookfield Real Assets Income Fund Inc. is managed by Brookfield Public Securities Group LLC (PSG). The Fund uses its website as a channel of distribution of material information about the Fund. Financial and other material information regarding the Fund is routinely posted on and accessible at https://www.brookfieldoaktree.com/fund/brookfield-real-assets-income-fund-inc

The MIL Network –

February 13, 2025

MIL-OSI: Oportun Reports Fourth Quarter and Full Year 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

Returned to GAAP profitability with net income of $9 million in fourth quarter

Adjusted EBITDA of $41 million, up 315% year-over-year

Quarterly annualized net charge-off rate of 11.7%, lowest since third quarter of 2022

Total quarterly operating expenses of $89 million, reduced 31% year-over-year

Raising full year 2025 expectations

SAN CARLOS, Calif., Feb. 12, 2025 (GLOBE NEWSWIRE) — Oportun Financial Corporation (Nasdaq: OPRT) (“Oportun”, or the “Company”) reported financial results today for the fourth quarter and full year ended December 31, 2024.

“We finished the year stronger than anticipated and believe that we’ve turned the corner, well-poised to capitalize on our momentum and advance our strategic priorities into 2025 and beyond,” said Raul Vazquez, CEO of Oportun. “I’m pleased that we returned to GAAP profitability in the quarter by generating $9 million of net income, a $51 million year-over-year increase. Furthermore, fourth quarter Adjusted Net Income increased by $30 million year-over-year, while Adjusted EBITDA more than quadrupled, and we returned to originations growth at 19%. I am also pleased that we delivered quarterly GAAP and Adjusted Return on Equity (ROE) of 10% and 25%, respectively, demonstrating good progress towards consistently delivering annual ROE in the 20% to 28% range. Our focus on cost discipline and improved credit performance is continuing to yield tangible results, laying the foundation to return to growth in 2025. We’re raising our expectations for full year 2025 Adjusted EPS to $1.10 to $1.30 per share, which implies 53 to 81% growth.”

Fourth Quarter and Full Year 2024 Results

Metric	GAAP				Adjusted¹
	4Q24	4Q23	FY24	FY23	4Q24	4Q23²	FY24	FY23²
Total revenue	$251	$263	$1,002	$1,057
Net income (loss)	$9	$(42)	($79)	($180)	$22	$(8.2)	$29	$(71)
Diluted EPS	$0.20	$(1.09)	($1.95)	$(4.88)	$0.49	$(0.21)	$0.72	$(1.93)
Adjusted EBITDA					$41	$9.9	$105	$19
_{Dollars in millions, except per share amounts.}
_{¹See the section entitled “About Non-GAAP Financial Measures” for an explanation of non-GAAP measures, and the table entitled “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of non-GAAP to GAAP measures.}
_{²Beginning 1Q24, we updated our calculations of Adjusted EBITDA and Adjusted Net Income (Loss). Prior periods presented here have been updated to reflect the prior period numbers on a comparable basis. See Appendix for non-GAAP reconciliation to the most comparable GAAP measure.}

Fourth Quarter 2024

Aggregate Originations were $522 million, a 19% increase compared to $437 million in the prior-year quarter
Portfolio Yield was 34.2%, an increase of 155 basis points compared to the 32.7% in prior-year quarter
Owned Principal Balance at end-of-period was $2.7 billion, a decrease of 8% compared to $2.9 billion in the prior-year quarter
Annualized Net Charge-Off Rate of 11.7%, a decrease of 55 basis points compared to 12.3% in the prior-year quarter
30+ Day Delinquency Rate of 4.8%, a decrease of 113 basis points compared to 5.9% for the prior-year quarter

Full Year 2024

Aggregate Originations were $1,775 million, a 2% decrease compared to $1,813 million in the prior year
Portfolio Yield was 33.5%, an increase of 125 basis points compared to 32.2% in the prior year
Annualized Net Charge-Off Rate of 12.0%, a decrease of 18 basis points compared to 12.2% in the prior year

Financial and Operating Results

All figures are as of or for the quarter ended December 31, 2024, unless otherwise noted.

Operational Drivers

Originations – Aggregate Originations for the fourth quarter were $522 million, an increase of 19% as compared to $437 million in the prior-year quarter as the Company returned to year-over-year growth for the first time in ten quarters. Aggregate Originations for full year 2024 were $1,775 million, a decrease of 2% as compared to $1,813 million in 2023.

Portfolio Yield – Portfolio Yield as of the end of fourth quarter was 34.2%, an increase of 155 basis points as compared to 32.7% in the prior-year quarter. Portfolio Yield for the full year 2024 was 33.5%, an increase of 125 basis points as compared to 32.2% in 2023.

Fourth Quarter 2024 Financial Results

Revenue – Total revenue for the fourth quarter of $251 million was a decrease of 4% as compared to $263 million in the prior-year quarter. The decrease was due to the November 12th sale of the Company’s credit card receivables portfolio and a decline in average daily principal balance in its personal loans portfolio. The decline in average daily principal balance was due to prior credit tightening actions, the revenue impact of which was partially offset by a 155 basis point increase in portfolio yield to 34.2%. Excluding the impact of the credit card receivables portfolio sale, the fourth quarter’s total revenue declined by only 2%.

Net revenue for the fourth quarter was $93 million, up 30% as compared to Net Revenue of $72 million in the prior-year quarter. Lower net charge-offs and non-cash fair value marks more than offset lower total revenue and higher interest expense. Excluding a one-time, non-cash write-off of $17 million of deferred financing fees relating to the Company’s November corporate debt refinancing, net revenue would have been up 53% year-over-year.

Operating Expenses and Adjusted Operating Expense¹ – For the fourth quarter, total operating expense was $89 million, a decrease of 31% as compared to $129 million in the prior-year quarter and below the $97.5 million the Company was targeting. The decrease is principally attributable to a combined set of cost reduction initiatives announced in 2023 and 2024. The fourth quarter 2024 figure includes approximately $6 million in one-time benefits, including those related to capitalization of previous accrued expenses associated with the Company’s debt refinancing, true-ups related to estimated costs of exiting the credit card product and other benefits management does not consider to be part of a normalized run rate. Without the benefit from these one-time items, operating expense would have been approximately $95 million, still below the $97.5 million target. Adjusted Operating Expense, which excludes stock-based compensation expense and certain non-recurring charges, decreased 17% year-over-year to $89 million.

Net Income (Loss) and Adjusted Net Income (Loss)¹ – Net income was $9 million as compared to a net loss of $42 million in the prior-year quarter. The increase in net income was attributable to the increase in net revenue and a decrease in operating expenses as a result of cost reduction initiatives. Adjusted Net Income was $22 million, as compared to Adjusted Net Loss of $8.2 million in the prior-year quarter. The increase in Adjusted Net Income was attributable higher net revenue and the decrease in operating expense.

Earnings (Loss) Per Share and Adjusted EPS¹ – GAAP earnings per share, basic and diluted, were both $0.20, as compared to basic and diluted loss per share of $1.09 each in the prior-year quarter. Adjusted earnings per share was $0.49 as compared to adjusted loss per share of $0.54 in the prior-year quarter.

Adjusted EBITDA¹ – Adjusted EBITDA was $41 million, up from $10 million in the prior-year quarter, driven by a significant reduction in operating expenses along with reduced charge-offs.

Full Year 2024 Financial Results

Revenue – Total revenue for the full year was $1.0 billion, a decrease of 5% as compared to total revenue of $1.1 billion in 2023. The decrease was due to decreased interest income attributable to a lower Average Daily Principal Balance including impact from the November sale of the credit card receivables portfolio and decreased non-interest income. Excluding the impact of the credit card receivables portfolio sale, full year total revenue declined by 4%.

Net revenue for the full year was $295 million, an increase of 5% compared to net revenue of $281 million in the prior year, primarily due to an improvement in net decrease in fair value, including reduced marks on asset backed notes and reduced charge-offs. This net revenue favorability was partially offset by an increase in interest expense, including a one-time, non-cash write-off of $17 million of deferred financing fees related to the Company’s debt financing in the fourth quarter, and the decline in total revenue.

Operating Expense and Adjusted Operating Expense¹ – For the full year, total operating expense was $410 million, a decrease of 23% as compared to $534 million in 2023, enabled by the cost reduction initiatives announced in 2023 and 2024. Adjusted Operating Expense, which excludes stock-based compensation expense and certain non-recurring charges, decreased 20% year-over-year to $381 million due to similar drivers.

Net Income (Loss) and Adjusted Net Income (Loss)¹ – Net loss was $79 million, as compared to a net loss of $180 million in 2023. Adjusted Net Income increased to $29 million, as compared to Adjusted Net Loss of $71 million in 2023. The improvements in net loss and Adjusted Net income were attributable to reduced operating expenses coupled with higher net revenue, including reduced charge-offs.

Earnings (Loss) Per Share and Adjusted EPS¹ – GAAP net loss per share, basic and diluted, were both $1.95 for the full year 2024 as compared to basic and diluted loss per share of $4.88 each in 2023. Adjusted earnings per share was $0.72 in 2024 as compared to an adjusted net loss per share of $1.93 in 2023.

Adjusted EBITDA¹ – Adjusted EBITDA was $105 million, an increase of $86 million , or 463% as compared to $19 million in 2023, also driven by reduced operating expenses coupled with higher net revenue, including reduced charge-offs.

Credit and Operating Metrics

Net Charge-Off Rate – The Annualized Net Charge-Off Rate for the fourth quarter was 11.7%, a 55 basis points reduction from 12.3% in the prior-year quarter, and 12.0% for the full year 2024, an 18 basis points reduction from 12.2% in 2023. Dollar Net Charge-offs for the quarter were down 12% to $80 million, compared to $91 million for the prior-year quarter, and down 9% to $331 million for the full year 2024, compared to $364 million for 2023.

30+ Day Delinquency Rate – The Company’s 30+ Day Delinquency Rate was 4.8% at the end of 2024, a 113 basis points improvement compared to 5.9% at the end of 2023.

Operating Expense Ratio and Adjusted Operating Expense Ratio¹ – Operating Expense Ratio for the quarter was 13.1% as compared to 17.5% in the prior-year quarter, a 434 basis points improvement. Adjusted Operating Expense Ratio was 13.1% as compared to 14.5% in the prior-year quarter, a 141 basis points improvement. For the full year 2024, Operating Expense Ratio was 14.8% as compared to 17.9% for 2023, a 302 basis points improvement. For the full year 2024, Adjusted Operating Expense Ratio was 13.8% as compared to 16.0% for 2023, a 224 basis points improvement. The Adjusted Operating Expense Ratio excludes stock-based compensation expense and certain non-recurring charges, such as expenses related to the credit card portfolio sale. The improvement in Adjusted Operating Expense Ratio is primarily attributable to the Company’s focus on reducing operating expenses, partially offset by a decrease in Average Daily Principal Balance due to prior credit tightening actions.

Return on Equity (“ROE”) and Adjusted ROE¹ – ROE for the quarter was 10%, as compared to (39)% in the prior-year quarter. The increase was attributable to the increase in net income. Adjusted ROE for the quarter was 25%, as compared to (8)% in the prior-year quarter. ROE for the full year 2024 was (21)%, as compared to (38)% for 2023. Adjusted ROE for the full year 2024 was 8%, as compared to (15)% for 2023.

_{¹ Beginning 1Q24, we updated our calculations of Adjusted EBITDA, Adjusted Net Income (Loss) and Adjusted Operating Expense. To align with these updated calculations we also updated Adjusted EPS and Adjusted Return on Equity. Prior periods presented here have been updated to reflect the prior period numbers on a comparable basis. See Appendix for non-GAAP reconciliation to the most comparable GAAP measure.}

Other Products

Secured personal loans – As of December 31, 2024, the Company had a secured personal loan receivables balance of $162 million, up 38% from $117 million at the end of 2023, and up 15% quarter-over-quarter. Available only in California as of the end of 2023, Oportun now also offers secured personal loans in Texas, Florida, Arizona, New Jersey and Illinois. During 2024, secured personal loan losses ran approximately 500 basis points lower compared to unsecured personal loans, with fourth quarter revenue per loan approximately 75% higher due to larger average loan sizes.

Funding and Liquidity

As of December 31, 2024, total cash was $215 million, consisting of cash and cash equivalents of $60 million and restricted cash of $155 million. Cost of Debt and Debt-to-Equity were 8.0% and 7.9x, respectively, for and at the end of the fourth quarter 2024 as compared to 7.1% and 7.2x, respectively, for and at the end of the prior-year quarter. Cost of Debt and Debt-to-Equity were 7.8% and 7.9x, respectively, for and at the year ended December 31, 2024 as compared to 6.0% and 7.2x, respectively, for and at the year ended December 31, 2023. These fourth quarter and full year 2024 Cost of Debt figures exclude a $17 million non-cash write-off of deferred financing costs relating to the repayment of the Company’s prior corporate financing facility as part of a November refinancing. As of December 31, 2024, the Company had $227 million of undrawn capacity on its existing $766 million personal loan warehouse lines. The Company’s personal loan warehouse lines are committed through September 2027 and August 2028.

Financial Outlook for First Quarter and Full Year 2025

Oportun is providing the following guidance for 1Q 2025 and full year 2025 as follows:

	1Q 2025	Full Year 2025
Total Revenue	$225 – $230M	$945 – $970M
Annualized Net Charge-Off Rate	12.30% +/- 15 bps	11.5% +/- 50 bps
Adjusted EBITDA¹	$18 – $22M	$135 – $145M
Adjusted Net Income	—	$53 – $63M
Adjusted EPS	—	$1.10 – $1.30

_{¹ See the section entitled “About Non-GAAP Financial Measures” for an explanation of non-GAAP measures, including revised Adjusted EBITDA, and the table entitled “Reconciliation of Forward Looking Non-GAAP Financial Measures” for a reconciliation of non-GAAP to GAAP measures.}

Chief Financial Officer & Chief Administration Officer Announces Retirement

On February 7, 2025, Mr. Jonathan Coblentz notified the Company that effective March 28, 2025, he plans to retire from his role as Chief Financial Officer (“CFO”) and Chief Administrative Officer (“CAO”) of the Company. Mr. Coblentz has served as the Company’s CFO since 2009.

Mr. Coblentz will continue in his CFO and CAO roles until March 28th to support a smooth transition to Casey Mueller, the Company’s Principal Accounting Officer and Global Controller, who, following Mr. Coblentz’s departure will serve as our interim CFO. The Company has retained an executive search firm to conduct a thorough search process to identify Mr. Coblentz’s successor, considering both internal and external candidates.

Mr. Mueller is 43 years old and has served as Global Controller since joining the Company in 2018 and assumed the role of Principal Accounting Officer in 2022. Prior to joining the Company, Mr. Mueller held various leadership roles of increasing scope and responsibility within finance at OneMain Financial from 2013 to 2018. Mr. Mueller also previously served as Audit Manager at Deloitte LLP, a public accounting firm, which currently serves as the Company’s auditor. Mr. Mueller is a Certified Public Accountant and received a B.S. in Accounting and Master of Accountancy from Brigham Young University.

Conference Call

As previously announced, Oportun’s management will host a conference call to discuss fourth quarter 2024 results at 5:00 p.m. ET (2:00 p.m. PT) today. A live webcast of the call will be accessible from the Investor Relations page of Oportun’s website at https://investor.oportun.com. The dial-in number for the conference call is 1-866-604-1698 (toll-free) or 1-201-389-0844 (international). Participants should call in 10 minutes prior to the scheduled start time. Both the call and webcast are open to the general public. For those unable to listen to the live broadcast, a webcast replay of the call will be available at https://investor.oportun.com for one year. A file that includes supplemental financial information and reconciliations of certain non-GAAP measures to their most directly comparable GAAP measures, will be available on the Investor Relations page of Oportun’s website at https://investor.oportun.com following the conference call.

About Non-GAAP Financial Measures

This press release presents information about the Company’s Adjusted Net Income (Loss), Adjusted EPS, Adjusted EBITDA, Adjusted Operating Expense, Adjusted Operating Efficiency, Adjusted Operating Expense Ratio, and Adjusted ROE, all of which are non-GAAP financial measures provided as a supplement to the results provided in accordance with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes these non-GAAP measures can be useful measures for period-to-period comparisons of its core business and provide useful information to investors and others in understanding and evaluating its operating results. Non-GAAP financial measures are provided in addition to, and not as a substitute for, and are not superior to, financial measures calculated in accordance with GAAP. In addition, the non-GAAP measures the Company uses, as presented, may not be comparable to similar measures used by other companies. Reconciliations of non-GAAP to GAAP measures can be found below.

About Oportun

Oportun (Nasdaq: OPRT) is a mission-driven financial services company that puts its members’ financial goals within reach. With intelligent borrowing, savings, and budgeting capabilities, Oportun empowers members with the confidence to build a better financial future. Since inception, Oportun has provided more than $19.7 billion in responsible and affordable credit, saved its members more than $2.4 billion in interest and fees, and helped its members save an average of more than $1,800 annually. For more information, visit Oportun.com.

Forward-Looking Statements

This press release contains forward-looking statements. These forward-looking statements are subject to the safe harbor provisions under the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact contained in this press release, including statements as to future performance, results of operations and financial position; achievement of the Company’s strategic priorities and goals; expectations regarding the departure of the Company’s CFO and CAO and regarding its interim CFO; the Company’s expectations regarding macroeconomic conditions; the Company’s profitability and future growth opportunities; the effect of and trends in fair value mark-to-market adjustments on the Company’s loan portfolio and asset-backed notes; the Company’s first quarter and full year 2025 outlook; the Company’s expectations regarding Adjusted EPS in full year 2025; the Company’s expectations related to future profitability on an adjusted basis, and the plans and objectives of management for our future operations, are forward-looking statements. These statements can be generally identified by terms such as “expect,” “plan,” “goal,” “target,” “anticipate,” “assume,” “predict,” “project,” “outlook,” “continue,” “due,” “may,” “believe,” “seek,” or “estimate” and similar expressions or the negative versions of these words or comparable words, as well as future or conditional verbs such as “will,” “should,” “would,” “likely” and “could.” These forward-looking statements speak only as of the date on which they are made and, except to the extent required by federal securities laws, Oportun disclaims any obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events. In light of these risks and uncertainties, there is no assurance that the events or results suggested by the forward-looking statements will in fact occur, and you should not place undue reliance on these forward-looking statements. These statements involve known and unknown risks, uncertainties, assumptions and other factors that may cause Oportun’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Oportun has based these forward-looking statements on its current expectations and projections about future events, financial trends and risks and uncertainties that it believes may affect its business, financial condition and results of operations. These risks and uncertainties include those risks described in Oportun’s filings with the Securities and Exchange Commission, including Oportun’s most recent annual report on Form 10-K, and include, but are not limited to, Oportun’s ability to retain existing members and attract new members; Oportun’s ability to accurately predict demand for, and develop its financial products and services; the effectiveness of Oportun’s A.I. model; macroeconomic conditions, including fluctuating inflation and market interest rates; increases in loan non-payments, delinquencies and charge-offs; Oportun’s ability to increase market share and enter into new markets; Oportun’s ability to realize the benefits from acquisitions and integrate acquired technologies; the risk of security breaches or incidents affecting the Company’s information technology systems or those of the Company’s third-party vendors or service providers; Oportun’s ability to successfully offer loans in additional states; Oportun’s ability to compete successfully with other companies that are currently in, or may in the future enter, its industry; and changes in Oportun’s ability to obtain additional financing on acceptable terms or at all.

Contacts

Investor Contact
Dorian Hare
(650) 590-4323
ir@oportun.com

Media Contact
Michael Azzano
Cosmo PR for Oportun
(415) 596-1978
michael@cosmo-pr.com

Oportun and the Oportun logo are registered trademarks of Oportun, Inc.

Oportun Financial Corporation
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and per share data, unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2024			2023			2024			2023
Revenue
Interest income	$	233.5		$	242.2		$	925.5		$	963.5
Non-interest income		17.5			20.5			76.3			93.4
Total revenue		250.9			262.6			1,001.8			1,056.9
Less:
Interest expense		73.7			52.0			238.2			179.4
Net decrease in fair value		(83.9	)		(138.5	)		(468.4	)		(596.8	)
Net revenue		93.4			72.1			295.2			280.7

Operating expenses:
Technology and facilities		37.9			54.8			166.2			219.4
Sales and marketing		17.3			18.1			67.0			75.3
Personnel		19.7			25.1			87.2			121.8
Outsourcing and professional fees		8.1			11.2			36.8			45.4
General, administrative and other		6.4			20.2			53.2			72.4
Total operating expenses		89.5			129.4			410.4			534.3

Income (loss) before taxes		3.9			(57.3	)		(115.2	)		(253.7	)
Income tax benefit		(4.8	)		(15.5	)		(36.5	)		(73.7	)
Net income (loss)	$	8.7		$	(41.8	)	$	(78.7	)	$	(180.0	)

Diluted Earnings (Loss) per Common Share	$	0.20		$	(1.09	)	$	(1.95	)	$	(4.88	)
Diluted Weighted Average Common Shares		43,550,693			38,485,406			40,356,025			36,875,950

Note: Numbers may not foot or cross-foot due to rounding.

Oportun Financial Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(in millions, unaudited)

	December 31,			December 31,
		2024			2023
Assets
Cash and cash equivalents	$	60.0		$	91.2
Restricted cash		154.7			114.8
Loans receivable at fair value		2,778.5			2,962.4
Capitalized software and other intangibles		86.6			114.7
Right of use assets – operating		9.8			21.1
Other assets		137.6			107.7
Total assets	$	3,227.1		$	3,411.9

Liabilities and stockholders’ equity
Liabilities
Secured financing	$	535.5		$	290.0
Asset-backed notes at fair value		1,080.7			1,780.0
Asset-backed borrowings at amortized cost		984.3			581.5
Acquisition and corporate financing		203.8			258.7
Lease liabilities		18.2			28.4
Other liabilities		50.9			68.9
Total liabilities		2,873.3			3,007.5
Stockholders’ equity
Common stock		—			—
Common stock, additional paid-in capital		612.6			584.6
Accumulated deficit		(252.5	)		(173.8	)
Treasury stock		(6.3	)		(6.3	)
Total stockholders’ equity		353.8			404.4
Total liabilities and stockholders’ equity	$	3,227.1		$	3,411.9

Note: Numbers may not foot or cross-foot due to rounding.

Oportun Financial Corporation
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions, unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
		2024			2023			2024			2023
Cash flows from operating activities
Net income (loss)	$	8.7		$	(41.8	)	$	(78.7	)	$	(180.0	)
Adjustments for non-cash items		100.4			139.0			498.0			585.3
Proceeds from sale of loans in excess of originations of loans sold and held for sale		0.2			2.9			4.5			8.5
Changes in balances of operating assets and liabilities		(17.9	)		6.2			(30.3	)		(21.1	)
Net cash provided by operating activities		91.4			106.3			393.5			392.8

Cash flows from investing activities
Net loan principal repayments (loan originations)		(101.7	)		(91.8	)		(228.1	)		(257.5	)
Proceeds from loan sales originated as held for investment		51.7			1.3			54.5			4.1
Capitalization of system development costs		(6.1	)		(6.1	)		(19.2	)		(31.3	)
Other, net		(0.3	)		(0.2	)		(0.9	)		(1.4	)
Net cash used in investing activities		(56.4	)		(96.8	)		(193.7	)		(286.2	)

Cash flows from financing activities
Borrowings		691.2			429.4			1,736.7			945.5
Repayments		(740.1	)		(432.1	)		(1,927.7	)		(1,047.1	)
Net stock-based activities		—			(0.4	)		(0.3	)		(2.7	)
Net cash used in financing activities		(48.9	)		(3.1	)		(191.2	)		(104.4	)

Net increase (decrease) in cash and cash equivalents and restricted cash		(13.9	)		6.4			8.6			2.2
Cash and cash equivalents and restricted cash beginning of period		228.5			199.6			206.0			203.8
Cash and cash equivalents and restricted cash end of period	$	214.6		$	206.0		$	214.6		$	206.0

Note: Numbers may not foot or cross-foot due to rounding.

Oportun Financial Corporation
CONSOLIDATED KEY PERFORMANCE METRICS
(unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
Key Financial and Operating Metrics		2024			2023			2024			2023
Aggregate Originations (Millions)	$	522.2		$	437.3		$	1,775.3		$	1,813.1
Portfolio Yield (%)		34.2	%		32.7	%		33.5	%		32.2	%
30+ Day Delinquency Rate (%)		4.8	%		5.9	%		4.8	%		5.9	%
Annualized Net Charge-Off Rate (%)		11.7	%		12.3	%		12.0	%		12.2	%

Other Metrics
Managed Principal Balance at End of Period (Millions)	$	2,973.5		$	3,182.1		$	2,973.5		$	3,182.1
Owned Principal Balance at End of Period (Millions)	$	2,678.2		$	2,904.7		$	2,678.2		$	2,904.7
Average Daily Principal Balance (Millions)	$	2,714.4		$	2,940.5		$	2,766.6		$	2,992.6

Note: Numbers may not foot or cross-foot due to rounding.

Oportun Financial Corporation
ABOUT NON-GAAP FINANCIAL MEASURES
(unaudited)

This press release dated February 12, 2025 contains non-GAAP financial measures. The following tables reconcile the non-GAAP financial measures in this press release to the most directly comparable financial measures prepared in accordance with GAAP.

The Company believes that the provision of these non-GAAP financial measures can provide useful measures for period-to-period comparisons of Oportun’s core business and useful information to investors and others in understanding and evaluating its operating results. However, non-GAAP financial measures are not calculated in accordance with GAAP and should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. These non-GAAP financial measures do not reflect a comprehensive system of accounting, differ from GAAP measures with the same names, and may differ from non-GAAP financial measures with the same or similar names that are used by other companies.

As previously announced on March 12, 2024, beginning with the quarter ended March 31, 2024 the Company has updated it’s calculation of Adjusted EBITDA and Adjusted Net Income for all periods. To align with these updated calculations the Company also updated Adjusted Operating Efficiency, Adjusted EPS and Adjusted Return on Equity. Comparable prior period Non-GAAP financial measures are included in addition to the previously reported metrics.

Adjusted EBITDA
The Company defines Adjusted EBITDA as net income, adjusted to eliminate the effect of certain items as described below. The Company believes that Adjusted EBITDA is an important measure because it allows management, investors and its board of directors to evaluate and compare operating results, including return on capital and operating efficiencies, from period to period by making the adjustments described below. In addition, it provides a useful measure for period-to-period comparisons of Oportun’s business, as it removes the effect of income taxes, certain non-cash items, variable charges and timing differences.

The Company believes it is useful to exclude the impact of income tax expense, as reported, because historically it has included irregular income tax items that do not reflect ongoing business operations.
The Company believes it is useful to exclude depreciation and amortization and stock-based compensation expense because they are non-cash charges.
The Company believes it is useful to exclude the impact of interest expense associated with the Company’s corporate financing facilities, including the senior secured term loan and the residual financing facility, as it views this expense as related to its capital structure rather than its funding.
The Company excludes the impact of certain non-recurring charges, such as expenses associated with our workforce optimization, and other non-recurring charges because it does not believe that these items reflect ongoing business operations. Other non-recurring charges include litigation reserve, impairment charges, debt amendment and warrant amortization costs related to our corporate financing facilities.
The Company also excludes fair value mark-to-market adjustments on its loans receivable portfolio and asset-backed notes carried at fair value because these adjustments do not impact cash.

Adjusted Net Income
The Company defines Adjusted Net Income as net income adjusted to eliminate the effect of certain items as described below. The Company believes that Adjusted Net Income is an important measure of operating performance because it allows management, investors, and the Company’s board of directors to evaluate and compare its operating results, including return on capital and operating efficiencies, from period to period, excluding the after-tax impact of non-cash, stock-based compensation expense and certain non-recurring charges.

The Company believes it is useful to exclude the impact of income tax expense (benefit), as reported, because historically it has included irregular income tax items that do not reflect ongoing business operations. The Company also includes the impact of normalized income tax expense by applying a normalized statutory tax rate.
The Company believes it is useful to exclude the impact of certain non-recurring charges, such as expenses associated with our workforce optimization, and other non-recurring charges because it does not believe that these items reflect its ongoing business operations. Other non-recurring charges include litigation reserve, impairment charges, debt amendment and warrant amortization costs related to our corporate financing facilities.
The Company believes it is useful to exclude stock-based compensation expense because it is a non-cash charge.
The Company also excludes the fair value mark-to-market adjustment on its asset-backed notes carried at fair value to align with the 2023 accounting policy decision to account for new debt financings at amortized cost.

Adjusted Operating Expense, Adjusted Operating Efficiency and Adjusted Operating Expense Ratio
The Company defines Adjusted Operating Expense as total operating expenses adjusted to exclude stock-based compensation expense and certain non-recurring charges, such as expenses associated with our workforce optimization, and other non-recurring charges. Other non-recurring charges include litigation reserve, impairment charges, and debt amendment costs related to our Corporate Financing facility. The Company defines Adjusted Operating Efficiency as Adjusted Operating Expense divided by total revenue. The Company defines Adjusted Operating Expense Ratio as Adjusted Operating Expense divided by Average Daily Principal Balance. The Company believes Adjusted Operating Expense is an important measure because it allows management, investors and Oportun’s board of directors to evaluate and compare its operating costs from period to period, excluding the impact of non-cash, stock-based compensation expense and certain non-recurring charges. The Company believes Adjusted Operating Efficiency and Adjusted Operating Expense Ratio are important measures because they allow management, investors and Oportun’s board of directors to evaluate how efficiently the Company is managing costs relative to revenue and Average Daily Principal Balance.

Adjusted Return on Equity
The Company defines Adjusted Return on Equity (“ROE”) as annualized Adjusted Net Income divided by average stockholders’ equity. Average stockholders’ equity is an average of the beginning and ending stockholders’ equity balance for each period. The Company believes Adjusted ROE is an important measure because it allows management, investors and its board of directors to evaluate the profitability of the business in relation to its stockholders’ equity and how efficiently it generates income from stockholders’ equity.

Adjusted EPS
The Company defines Adjusted EPS as Adjusted Net Income divided by weighted average diluted shares outstanding.

Oportun Financial Corporation
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
Adjusted EBITDA		2024			2023			2024			2023
Net income (Loss)	$	8.7		$	(41.8	)	$	(78.7	)	$	(180.0	)
Adjustments:
Income tax benefit		(4.8	)		(15.5	)		(36.5	)		(73.7	)
Interest on corporate financing		11.4			14.6			51.1			51.8
Depreciation and amortization		12.5			13.8			52.2			54.9
Stock-based compensation expense		2.8			4.8			13.1			18.0
Workforce optimization expenses		0.1			6.8			3.1			22.5
Other non-recurring charges ⁽¹⁾		14.2			10.8			31.0			15.5
Fair value mark-to-market adjustment		(4.0	)		16.4			69.3			109.5
Adjusted EBITDA⁽²⁾	$	41.0		$	9.9		$	104.5		$	18.6

	Three Months Ended December 31,						Twelve Months Ended December 31,
Adjusted Net Income		2024			2023			2024			2023
Net income (Loss)	$	8.7		$	(41.8	)	$	(78.7	)	$	(180.0	)
Adjustments:
Income tax benefit		(4.8	)		(15.5	)		(36.5	)		(73.7	)
Stock-based compensation expense		2.8			4.8			13.1			18.0
Workforce optimization expenses		0.1			6.8			3.1			22.5
Other non-recurring charges ⁽¹⁾		14.2			10.8			31.0			15.5
Net decrease in fair value of credit cards receivable		—			—			36.2			—
Mark-to-market adjustment on ABS notes		8.5			23.6			72.1			100.0
Adjusted income before taxes		29.5			(11.3	)		40.2			(97.7	)
Normalized income tax expense		8.0			(3.0	)		10.8			(26.4	)
Adjusted Net Income (Loss) ⁽³⁾	$	21.5		$	(8.2	)	$	29.3		$	(71.3	)

Stockholders’ equity	$	353.8		$	404.4		$	353.8		$	404.4
GAAP ROE		10.2	%	(39.2		)%	(20.8		)%	(37.8		)%
Adjusted ROE (%) ⁽⁴⁾		25.2	%	(7.7		)%		7.7	%	(15.0		)%

Note: Numbers may not foot or cross-foot due to rounding.
_{⁽¹⁾ Certain prior-period financial information has been reclassified to conform to current period presentation.}
_{⁽²⁾ Our calculation of Adjusted EBITDA was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q4 2023 and FY 2023 values for Adjusted EBITDA shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been $6.1 million and $1.7 million, respectively.}
_{⁽³⁾ Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q4 2023 and FY 2023 values for Adjusted Net Income (Loss) shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been $(20.6) million and $(124.1) million, respectively.}
_{⁽⁴⁾ Calculated as Adjusted Net Income (Loss) divided by average stockholders’ equity. ROE has been annualized. Due to the Adjusted Net Income (Loss) revisions in Q1 2024, the Q4 2023 and FY 2023 Adjusted ROE values would have been (19.3)% and (26.1)%, respectively.}

Oportun Financial Corporation
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, unaudited)

	Three Months Ended December 31,						Twelve Months Ended December 31,
Adjusted Operating Efficiency		2024			2023			2024			2023
Operating Efficiency		35.7	%		49.3	%		41.0	%		50.6	%
Total Revenue	$	250.9		$	262.6		$	1,001.8		$	1,056.9

Total Operating Expense	$	89.5		$	129.4		$	410.4		$	534.3
Adjustments:
Stock-based compensation expense		(2.8	)		(4.8	)		(13.1	)		(18.0	)
Workforce optimization expenses		(0.1	)		(6.8	)		(3.1	)		(22.5	)
Other non-recurring charges ⁽¹⁾		2.6			(10.5	)		(12.9	)		(14.4	)
Total Adjusted Operating Expense	$	89.2		$	107.3		$	381.3		$	479.4

Adjusted Operating Efficiency⁽²⁾		35.5	%		40.9	%		38.1	%		45.4	%

Average Daily Principal Balance	$	2,714.4		$	2,940.5		$	2,766.6		$	2,992.6

OpEx Ratio		13.1	%		17.5	%		14.8	%		17.9	%
Adjusted OpEx Ratio		13.1	%		14.5	%		13.8	%		16.0	%

Note: Numbers may not foot or cross-foot due to rounding.
_{⁽¹⁾ Certain prior-period financial information has been reclassified to conform to current period presentation.}
_{⁽²⁾ Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. We have removed the adjustment related to acquisition and integration related expenses from our calculation of Adjusted Operating Efficiency to maintain consistency with the revised Adjusted EBITDA and Adjusted Net Income (Loss) calculations. The Q4 2023 and FY 2023 values for Adjusted Operating Efficiency shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been 38.4% and 42.7%, respectively.}

Oportun Financial Corporation
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(in millions, except share and per share data, unaudited)

	Three Months Ended December 31,					Twelve Months Ended December 31,
GAAP Earnings (loss) per Share		2024		2023			2024			2023
Net income (loss)	$	8.7	$	(41.8	)	$	(78.7	)	$	(180.0	)
Net income (loss) attributable to common stockholders	$	8.7	$	(41.8	)	$	(78.7	)	$	(180.0	)

Basic weighted-average common shares outstanding		42,720,229		38,485,406			40,356,025			36,875,950
Weighted average effect of dilutive securities:
Stock options		—		—			—			—
Restricted stock units		830,464		—			—			—
Diluted weighted-average common shares outstanding		43,550,693		38,485,406			40,356,025			36,875,950

Earnings (loss) per share:
Basic	$	0.20	$	(1.09	)	$	(1.95	)	$	(4.88	)
Diluted	$	0.20	$	(1.09	)	$	(1.95	)	$	(4.88	)

	Three Months Ended December 31,					Twelve Months Ended December 31,
Adjusted Earnings (loss) Per Share		2024		2023			2024			2023
Diluted earnings (loss) per share	$	0.20	$	(1.09	)	$	(1.95	)	$	(4.88	)

Adjusted Net Income	$	21.5	$	(8.2	)	$	29.3		$	(71.3	)

Basic weighted-average common shares outstanding		42,720,229		38,485,406			40,356,025			36,875,950
Weighted average effect of dilutive securities:
Stock options		—		—			—			—
Restricted stock units		830,464		—			500,705			—
Diluted adjusted weighted-average common shares outstanding		43,550,693		38,485,406			40,856,730			36,875,950

Adjusted Earnings (loss) Per Share⁽¹⁾	$	0.49	$	(0.21	)	$	0.72		$	(1.93	)

Note: Numbers may not foot or cross-foot due to rounding.
_{⁽¹⁾ Our calculation of Adjusted Net Income (Loss) was updated in Q1 2024 to more closely align with management’s internal view of the performance of the business. The Q4 2023 and FY 2023 values for Adjusted EPS shown in the table above have been revised and presented on a comparable basis, prior to these revisions the values would have been $(0.54) and $(3.37), respectively.}

Oportun Financial Corporation
RECONCILIATION OF FORWARD LOOKING NON-GAAP FINANCIAL MEASURES
(in millions, unaudited)

	1Q 2025								FY 2025
	Low				High				Low		High
Adjusted EBITDA
Net (loss)	$	(5.4	)	*	$	(2.2	)	*	$	23.2	$	33.4
Adjustments:
Income tax expense (benefit)		(1.3	)			(0.5	)			6.3		9.0
Interest on corporate financing		9.2				9.2				36.7		36.7
Depreciation and amortization		10.6				10.6				40.6		40.6
Stock-based compensation expense		3.5				3.5				15.0		15.0
Other non-recurring charges		1.4				1.4				5.8		5.8
Fair value mark-to-market adjustment	*				*					7.4		4.4
Adjusted EBITDA	$	18.0			$	22.0			$	135.0	$	145.0

*Due to the uncertainty in macroeconomic conditions and quarterly volatility in the fair value mark to market adjustment, we are unable to precisely forecast the fair value mark-to-market adjustments on our loan portfolio and asset-backed notes on a quarterly basis.

	FY 2025
Adjusted Net Income and Adjusted EPS	Low		High
Net income	$	23.2	$	33.4
Adjustments:
Income tax expense (benefit)		6.3		9.0
Stock-based compensation expense		15.0		15.0
Other non-recurring charges		5.8		5.8
Mark-to-market adjustment on ABS notes		22.3		22.3
Adjusted income before taxes	$	72.6	$	85.6
Normalized income tax expense		19.6		23.1
Adjusted Net Income	$	53.0	$	62.5

Diluted weighted-average common shares outstanding		48.2		48.2

Diluted earnings per share	$	0.48	$	0.69
Adjusted Earnings Per Share	$	1.10	$	1.30

Note: Numbers may not foot or cross-foot due to rounding.

The MIL Network –

February 13, 2025

MIL-OSI: Clairvest Reports Fiscal 2025 Third Quarter Results

Source: GlobeNewswire (MIL-OSI)

TORONTO, Feb. 12, 2025 (GLOBE NEWSWIRE) — Clairvest Group Inc. (TSX: CVG) today reported results for the fiscal 2025 third quarter and nine months ended December 31, 2024. (All figures are in Canadian dollars unless otherwise stated)

Highlights

December 31, 2024 book value was $1,234.3 million or $86.78 per share compared with $1,196.9 million or $84.06 per share as at September 30, 2024
Net income for the quarter ended December 31, 2024 was $38.5 million or $2.70 per share
Net income for the nine months ended December 31, 2024 was $101.3 million of $7.00 per share
Clairvest and Clairvest Equity Partners VII (“CEP VII”) invested in Redstone Food Group
Clairvest and Clairvest Equity Partners III (“CEP III”) sold its investment in Chilean Gaming Holdings

Clairvest’s book value was $1,234.3 million or $86.78 per share as at December 31, 2024, compared with $1,196.9 million or $84.06 per share as at September 30, 2024. For the quarter ended December 31, 2024, Clairvest recorded net income of $38.5 million, or $2.70 per share, which was driven by the realization of its investment in Chilean Gaming Holdings, a net increase in the valuation of Clairvest’s private equity investment portfolio and net foreign exchange gains due to material weakness in the Canadian dollar as the Company has various assets in foreign currencies which are not hedged against the Canadian dollar.

For the nine months ended December 31, 2024, the net income was $101.3 million, or $7.00 per share.

In November 2024, and as previously announced, Clairvest together with CEP VII made a $42.1 million minority preferred equity investment in Redstone Food Group, a leading commercial bakery of bread and bakery products, focused on the in-store bakery segment. Clairvest’s portion of the investment was $10.5 million. Redstone Food Group is the first investment of CEP VII’s US$1.2 billion investment program, which commenced on April 1, 2024.

In November 2024, Chilean Gaming Holdings, an acquisition entity for Clairvest, CEP III and other co-investors, sold its ownership interests in various casino properties in Chile. Proceeds on the sale totalled $41 million for Clairvest, compared with a cost of $28 million. There may be additional cash proceeds on this realization which are subject to certain conditions and are not expected to be material. Clairvest made its initial investment in Chilean Gaming Holdings in January 2008, and its realization represents the sale of the last investment of CEP III.

“This past quarter was a productive one for Clairvest, highlighted by a new investment and a portfolio realization. We are pleased to partner with Rob Wheeler, an entrepreneur who shares our vision for growth, and we look forward to supporting Redstone Food Group in its next chapter. Additionally, we completed the sale of a legacy portfolio company, enabling our team to focus on value creation within our existing investments and on the strategic deployment of capital in CEP VII. This sale also concluded the CEP III investment program which generated a net return of 2.5x and a 17% IRR for our third-party investors, making this another top quartile fund for Clairvest,” said Ken Rotman, CEO of Clairvest.

Summary of Financial Results – Unaudited

Financial Results	Quarter ended			Nine months ended
	December 31			December 31
	2024	2023		2024	2023
($000’s, except per share amounts)	$	$		$	$
Net investment gain (loss)	22,304	(19,116	)	3,810	(41,409	)
Net carried interest from Clairvest Equity Partners III and IV	2,930	892		4,461	2,695
Distributions, interest income, dividends and fees	27,250	14,319		137,678	40,439
Total expenses, excluding income taxes	6,154	2,168		28,194	38,232
Net income (loss) and comprehensive income (loss)	38,450	(4,950	)	101,321	(29,456	)
Basic and fully diluted net income (loss) per share	2.70	(0.34	)	7.00	(1.97	)

Financial Position	December 31	March 31,
Financial Position	2024	2024
($000’s, except share information and per share amounts)	$	$
Total assets	1,408,658	1,342,139
Total cash, cash equivalents, temporary investments and restricted cash	305,444	330,193
Carried interest from Clairvest Equity Partners III and IV	48,809	52,188
Corporate investments⁽¹⁾	927,853	870,660
Total liabilities	174,309	165,842
Management participation from Clairvest Equity Partners III and IV	37,764	41,506
Book value⁽²⁾	1,234,349	1,176,297
Common shares outstanding	14,223,531	14,673,701
Book value per share⁽²⁾	86.78	80.16

⁽¹⁾ Includes carried interest of $133,597 (March 31: $143,617) and management participation of $98,788 (March 31: $103,740) from Clairvest Equity Partners V and VI, and $168,351 (March 31: $90,973) in cash, cash equivalents and temporary investments held by Clairvest’s acquisition entities.
⁽²⁾ Book value is a Non-IFRS measure calculated as the value of total assets less the value of total liabilities.

Clairvest’s third quarter fiscal 2025 financial statements and MD&A are available on the SEDAR website at www.sedar.com and the Clairvest website at www.clairvest.com.

About Clairvest
Clairvest’s mission is to partner with entrepreneurs to help them build strategically significant businesses. Founded in 1987 by a group of successful Canadian entrepreneurs, Clairvest is a top performing private equity management firm with over CAD $4.6 billion of capital under management. Clairvest invests its own capital and that of third parties through the Clairvest Equity Partners limited partnerships in owner-led businesses. Under the current management team, Clairvest has initiated investments in 67 different platform companies and generated top quartile performance over an extended period.

Contact Information
Stephanie Lo
Director of Investor Relations and Marketing
Clairvest Group Inc.
Tel: (416) 925-9270
Fax: (416) 925-5753
stephaniel@clairvest.com

Forward-looking Statements
This news release contains forward-looking statements with respect to Clairvest Group Inc., its subsidiaries, its CEP limited partnerships and their investments. These statements are based on current expectations and are subject to known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Clairvest, its subsidiaries, its CEP limited partnerships and their investments to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include general and economic business conditions and regulatory risks. Clairvest is under no obligation to update any forward-looking statements contained herein should material facts change due to new information, future events or otherwise.

www.clairvest.com

The MIL Network –

February 13, 2025

MIL-OSI Global: The Paris summit marks a tipping point on AI’s safety and sustainability

Source: The Conversation – Canada – By Robert Diab, Professor, Faculty of Law, Thompson Rivers University

United States Vice President JD Vance made headlines this week by refusing to sign a declaration at a global summit in Paris on artificial intelligence.

In his first appearance on the world stage, Vance made clear that the U.S. wouldn’t be playing ball. The Donald Trump administration believes that “excessive regulation of the AI sector could kill a transformative industry just as it’s taking off,” he said. “We’ll make every effort to encourage pro-growth AI policies.”

His remarks confirmed a widespread fear that Trump’s return to the White House will signal a sharp turn in tech policy. American tech companies and their billionaire owners will now be shielded from effective oversight.

But upon a closer look, events this week point to signs that just the opposite may be unfolding. A host of nations took notable steps towards address growing safety and environmental concerns about AI, indicating that a regulatory tipping point has been reached.

Prime Minister Justin Trudeau delivered the keynote address at the AI Action Summit in Paris, France.

Wide consensus

The two-day global summit in Paris, chaired by France and India, led to broad consensus. Some 60 countries signed on to a Statement on Inclusive and Sustainable AI. This included Canada, the European Commission, India and China.

Both the U.S. and the United Kingdom declined to sign on. But the prevailing winds are against them.

The meeting in Paris was the third global summit on AI, following meet-ups at Bletchley Park in the U.K. in 2023 and in Seoul, South Korea, in 2024. Each of them ended with similar declarations widely endorsed.

The Paris communiqué calls for an “inclusive approach” to AI, seeking to “narrow inequalities” in AI capabilities among countries. It encourages “avoiding market concentration” and affirms the need for openness and transparency in building and sharing technology and expertise.

The document is not binding. It does little more than tout principles, or affirm a collective sentiment among the parties. One of these — perhaps the most important — is to keep talking, meeting and working together on the common concerns that AI raises.

Environmental challenges

Meanwhile, a smaller group of countries at the Paris summit, along with 37 tech companies, agreed to form a Coalition for Sustainable AI — setting out a series of goals and deliverables.

While nothing is binding on the parties, the goals are notably specific. They include coming up with standards for measuring AI’s environmental impact and more effective ways for companies to report on the impact. Parties also aim to “optimize algorithms to reduce computational complexity and minimize data usage.”

Even if most of this turns out to be merely aspirational, it’s important that the coalition offers a platform for collaboration on these initiatives. At the very least, it signals a likelihood that sustainability will be at the forefront of debate about AI moving forward.

Signing the first international treaty on AI

A further notable event at the summit was that Canada signed the Council of Europe’s Framework Convention on Artificial Intelligence and Human Rights, Democracy and the Rule of Law. In recent months, 12 other countries had signed, including the U.S. (under former president Joe Biden), the U.K., Israel and the European Union.

The convention commits parties to pass domestic laws on AI that deal with privacy, bias and discrimination, safety, transparency and environmental sustainability.

The treaty has been criticized for containing no more than “broad affirmations” and imposing few clear obligations. But it does show that countries are committed to passing law to ensure that AI development unfolds within boundaries — and they’re eager to see more countries do the same.

If Canada were to ratify the treaty, Parliament would likely revive Bill C-27, which contained the AI and Data Act.

The act aimed to do much of what Canada agrees to do under the convention: impose greater oversight of the development and use of AI. This includes transparency and disclosure requirements on AI companies, and stiff penalties for failure to comply.

What does this really mean?

While the U.S. signed the convention on AI and human rights, democracy and rule of law in the fall of 2024, it likely won’t be implemented by a Republican Congress. The same might happen in Canada under a Conservative government led by Pierre Poilievre. He could also decide not to fulfil commitments made under other agreements about AI.

And if Poilievre comes to power by the time Canada hosts the next G7 meeting in June, he might decline to honour the Trudeau government’s commitment to make AI regulation a central focus of the meeting.

The Trump administration may have ushered in a period of more lax tech regulation in the U.S., and Silicon Valley is indeed a key player in tech — especially AI. But it’s a wide world, with many other important players in this space, including China, Europe and Canada.

The events in Paris have revealed a strong interest among nations around the globe to regulate AI, and specifically to foster ideas about inclusion and sustainability. If the Paris summit was any indication, the hope of sheltering AI from effective regulation won’t last long.

Robert Diab does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.

– ref. The Paris summit marks a tipping point on AI’s safety and sustainability – https://theconversation.com/the-paris-summit-marks-a-tipping-point-on-ais-safety-and-sustainability-249706

MIL OSI – Global Reports –

February 13, 2025

MIL-OSI United Nations: Policies to Bolster Social Resilience in Context of More Frequent, Complex Crises among Topics Discussed, as Commission for Social Development Continues Session

Source: United Nations General Assembly and Security Council

During one of two round-table discussions held today by the Commission for Social Development, panelists emphasized the importance of governance, preparedness and investment in human capital to strengthen “social resilience” — the ability of individuals and societies to prevent, absorb, adapt and recover positively from crises.

The Commission — established in 1946 by the Economic and Social Council as one of its functional commissions — advises the United Nations on social development issues, and its sixty-third session will run through 14 February.

The first panel discussion, titled “Policies to bolster social resilience in the context of more frequent and complex crises”, featured presentations that together offered a comprehensive understanding of the multidimensional nature of resilience and the policy actions needed to reinforce it.

“The sixty-third session of the Commission for Social Development comes at a pivotal time as we reflect on the legacies of the World Summit for Social Development held three decades ago in Copenhagen,” said Moderator Angela Kawandami, Permanent Secretary at the Ministry of Community Development and Social Services of Zambia. While the principles of social inclusion, poverty eradication and equity remain as vital as possible, the global landscape has transformed significantly, presenting new and compounding challenges that demand urgent and innovative solutions today, she said, adding that crises — more frequent, interconnected and complex, spanning geopolitical, economic, health and environmental spheres — are testing the resilience of societies and institutions.

Meir Bing, Chief Executive Officer at the Open University of Israel, presented a case study of building resilience in minority populations in his country, where the number of minority students in higher education more than doubled in the last decade. He said that a year ago, he was General Director of the Ministry of Social Equality in charge of minorities. Of the 10 million people in his country, 2 million are religious and ethnical minority groups, including Muslim, Christian and Druze, he said, adding that many of them are young and face socioeconomic challenges.

He highlighted the three keys to building resilience in vulnerable populations: fostering trust between Government and social and business sectors; enhancing infrastructure and public services; and creating communities. Sharing how educational and other infrastructure and socioeconomic projects are expanded in the country’s local communities, he said that the percentage of students from minority groups in bachelor’s degree programmes increased from 10 per cent in 2010 to nearly 20 per cent in 2023.

Marek Kamiński, explorer and founder of the Kaminski Foundation, said that during his expeditions, he learned that physical strength isn’t enough, stating: “The real fight happens in the mind, with fear and doubt. We all need to ask, are we strong enough inside to face the challenges ahead?” Today’s world needs practical solutions to help people handle crises. That’s why he created LifePlan Academy, a programme that teaches mental resilience, stress management and how to adapt to challenges. It’s a practical tool that works in any country with any culture, he said, stressing: “With the right tools and support, anyone can overcome challenges and achieve their goals.”

Michael Woolcock, Lead Social Scientist in the Development Research Group at the World Bank, said that development policies are as effective as the shared legitimacy they enjoy. Development policies will struggle, where societal groups despise one another, where elite factions use lies and violence to secure power, where there is little coherence or trust between local and national authority, and where Governments reject international law and covenants to which they are a signatory. “So all these nice policies that we come up with — unless they can engage with these local contexts and imbue them with the legitimacy they need to do their difficult work — are probably going to struggle,” he said.

Obiageli Ezekwesili, President of Human Capital Africa, founder of the School of Politics Policy and Governance, and Senior Economic Adviser at the Africa Economic Development Policy Initiative, said that “democracy is in crisis more than it had ever been”. The power of society to be resilient depends on how everyone feels cared for within society. Today’s democratic processes are exclusionary in many ways. That’s because the tiny fraction of people who exercise political leadership in many countries have become monopoly democrats. “We must fix politics,” she said, noting a strong correlation between the quality of politics and economic performance. “Let’s keep an eye on the United States of America,” she added.

Michael Woolcock, Lead Social Scientist, World Bank, served as moderator for the second panel, which focused on “Universal rights-based social protection systems that adapt to evolving risks and support social resilience”. “For our present purposes, we are going to recognize that social resilience refers to the capacity of individuals and societies to prevent, resist, absorb, adapt, respond and recover positively, efficiently and effectively when faced with a wide range of long-term prospects for sustainable development, peace and security, human rights and well-being for all,” he said before commencing the panel discussion.

Danilo Türk, President of Club de Madrid and former President of Slovenia, stressed the need to make sure that social development is guided in a way that promotes the full realization of human rights. “This means adopting an approach which anticipates and addresses the vulnerabilities of people,” he went on to stress. That must include the consequences of climate change and its effect on populations, especially those vulnerable to displacement. Innovations like digital cash transfers, mobile health services and data driven risk assessment can significantly improve service delivery, particularly for marginalized and remote populations. Social protection systems must consider the interests of vulnerable segments of societies, particularly women, youth, older people and persons with disabilities.

Angela Chomba Kawandami, Permanent Secretary at the Ministry of Community Development and Social Services, Zambia, said that social protection systems are central to addressing vulnerabilities, reducing poverty and mitigating the impacts of various risks such as climate change, pandemics and economic crises. “Social protection systems in Zambia are designed to address both short-term needs and long-term vulnerabilities,” she added. These systems include cash transfers, food assistance and social insurance schemes. “The goal is to ensure that individuals, especially those in our rural areas, older persons, persons with disabilities and other vulnerable groups, have access to basic services and support mechanisms,” she emphasized. Zambia’s social protection programmes aim to reduce vulnerability by providing financial support to households living below the poverty line. Climate change is also included into Zambia’s protection system as the phenomenon poses an increasing threat with more frequent droughts and floods.

Héctor Ramón Cárdenas Molinas, Executive Director of the Technical Unit of the Social Cabinet of the President of Paraguay, said that extreme weather events cause major damage and loss. “Most of them are linked to climate events,” he said, noting their high economic and social impact. Exposure depends not only on geographic location but also on the development policies and adaptation measures taken to mitigate the risks of climate change. “It is absolutely essential that we integrate policies and strategies that promote sustainable and resilient development,” he said. Underscoring other initiatives in health, education and poverty eradication, he said Paraguay aims to ensure that services meet very high standards in terms of efficiency and effectiveness. “The main challenge remains financing,” he added.

Edgilson Tavares de Araújo, Ministry of Development and Social Assistance, Brazil, said that Brazil’s social protection system is based on the principles of universality, equity and democracy. “Since 2023, we have seen a drop of 84 per cent in severe food insecurity, according to a 2024 UN survey,” he added. With the creation of a global alliance to fight hunger and poverty, Brazil hopes to continue to make progress. A strong State working with a healthy civil society must be resilient to truly transform society. “We are increasing our budgetary commitments and broadening our global alliance to combat hunger and poverty,” he went on to say. Brazil is committed to providing decent employment and “an economy of solidarity” which can help build social resilience. “Being protected means having someone to rely on,” he added.

MIL OSI United Nations News –

February 13, 2025

MIL-OSI: James Altucher Video Released: “Trump and Musk’s AI Power Play Will Reshape America’s Future”

Source: GlobeNewswire (MIL-OSI)

Washington, D.C., Feb. 12, 2025 (GLOBE NEWSWIRE) — AI expert James Altucher is sounding the alarm in a recent video presentation: the collaboration between President Donald Trump and Elon Musk is about to trigger a seismic shift in America’s technological and economic landscape.

“The world’s two most powerful men… are about to change America — forever.”

According to Altucher, Trump’s anticipated repeal of Executive Order #14110 will unleash AI 2.0—a new era of artificial intelligence that could rapidly transform industries, government operations, and global competition.

“I have reason to believe that in his first 100 days… Donald Trump will overturn Executive Order #14110… limiting the development of U.S. artificial intelligence.”

At the center of this revolution is Elon Musk’s secretive AI supercomputer, Project Colossus—an innovation so powerful that it has already outpaced the world’s leading AI firms, including Microsoft, OpenAI, and Google.

“Right here, at a remote warehouse in Memphis, TN… Elon Musk has created the AI mothership.”

“Developed by his new company, xAI… it contains not just one or two… but 100,000 units of Nvidia’s most advanced AI chip… making it the most powerful AI facility known to man.”

With Musk expanding Project Colossus and Trump clearing regulatory hurdles, Altucher warns that America is on the verge of an AI arms race that could define the 21st century.

“We are about to enter an age of exponential innovation — and wealth.”

About James Altucher

James Altucher is a leading AI expert, author, and entrepreneur with nearly four decades of experience in emerging technologies. He has been featured in major media outlets and is known for his forward-thinking insights on AI’s impact on society.

The MIL Network –

February 13, 2025

MIL-OSI: Farmers & Merchants Bancorp, Inc. Reports 2024 Fourth-Quarter and Full-Year Financial Results

Source: GlobeNewswire (MIL-OSI)

ARCHBOLD, Ohio, Feb. 12, 2025 (GLOBE NEWSWIRE) — Farmers & Merchants Bancorp, Inc. (Nasdaq: FMAO) today reported financial results for the 2024 fourth quarter and twelve months ended December 31, 2024.

2024 Fourth Quarter Financial and Operating Highlights (on a year-over-year basis unless noted):

87 consecutive quarters of profitability
Net income increased 51.2% to $8.4 million, or $0.61 per basic and diluted share, from $5.5 million, or $0.41 per basic and diluted share
Asset quality remains at historically strong levels with nonperforming loans of only $3.1 million at December 31, 2024, compared to $22.4 million at December 31, 2023
Net charge-offs to average loans were 0.00%
Allowance for credit losses was 826.70% of nonperforming loans
Tier 1 leverage ratio was 8.12%
Net interest margin increased 27 basis points to 2.84%
Efficiency ratio improved to 59.82%, compared to 69.23% for the same period a year ago

2024 Full-Year Financial Highlights Include (on a year-over-year basis unless noted):

Total loans, net were $2.56 billion at December 31, 2024, compared to $2.58 billion at December 31, 2023 and $2.54 billion at September 30, 2024
Total assets increased 2.5% to $3.36 billion
Deposits increased 3.0% to a record $2.69 billion
Stockholders’ equity increased 5.9% to $335.2 million
Net interest income after provision for credit losses increased 7.5% to $85.6 million
Return on average tangible equity was 8.91%
F&M ended 2024 with excellent liquidity levels, and over $690 million in contingent funding sources, and a cash-to-assets ratio of 5.3%, compared to 4.3% at December 31, 2023
Dividend raised 3.8% year-over-year, representing the 30^th consecutive annual increase in the Company’s regular dividend payment since 1994

Lars B. Eller, President and Chief Executive Officer, stated, “Our strong 2024 financial performance reflects solid execution of our multi-year strategic plan, as we have remained focused on continual improvements, managing the items under our control, and providing our customers and communities with outstanding, and local financial services. Thanks to the unwavering dedication of our team and the trust of our customers, F&M’s financial and operating results strengthened throughout 2024. This performance creates a solid foundation and further solidifies F&M’s position as a leading community bank in the Ohio, Indiana and Michigan markets we serve.”

Mr. Eller continued, “Strong earnings growth in 2024 was driven by the success of ongoing strategies aimed at expanding our net interest margin, maintaining excellent asset quality, and driving efficiencies across our business. Core earnings for the 2024 fourth quarter were strong as net interest income after provision for credit losses increased 16.1% year-over-year to a quarterly record of $22.6 million, and noninterest income expanded 4.1% year-over-year to $4.0 million. We believe these trends highlight the improvements we have made to profitability, and we expect these trends to continue in the second half 2025.”

Income Statement
Net income for the 2024 fourth quarter ended December 31, 2024, was $8.4 million, compared to $5.5 million for the same period last year. Net income per basic and diluted share for the 2024 fourth quarter was $0.61, compared to $0.41 for the same period last year. Net income for the 2024 twelve months ended December 31, 2024, was $25.9 million, compared to $22.8 million for the same period last year. Net income per basic and diluted share for the 2024 twelve months was $1.90, compared to $1.67 for the same period last year.

Deposits
At December 31, 2024, total deposits were a record $2.69 billion, an increase of 3.0% from December 31, 2023. The Company’s cost of interest-bearing liabilities was 3.01% for the quarter ended December 31, 2024, compared to 3.02% for the quarter ended December 31, 2023. For the 2024 twelve months ended December 31, 2024, F&M’s cost of interest-bearing liabilities was 3.12%, compared to 2.53% in the prior year reflecting the higher rate environment and growth in interest-bearing checking and savings accounts.

Mr. Eller commented, “Throughout 2024, we pursued strategies aimed at optimizing our deposit base and growing low-cost checking (DDA) deposits. Since the beginning of 2024, we added nearly 7,500 new checking accounts, and benefited from new and expanded relationships at offices that were opened in 2023. As a result, we ended 2024 with a loan-to-deposit ratio of 94.4%, compared to 98.0% at December 31, 2023.”

Loan Portfolio and Asset Quality
“While the demand for loans is high across our markets, our approach to risk and pricing remains prudent. This strategy has contributed to historically strong asset quality over the past two quarters and is a testament to F&M’s risk, lending, and compliance capabilities and high-performing teams. We expect loan growth to increase modestly in 2025, with growth weighted in the back half of the year. In addition, 31.4% of our loan portfolio is subject to reprice in the next 12 months. We believe these favorable trends will contribute to higher net interest income in 2025,” continued Mr. Eller.

Total loans, net at December 31, 2024, decreased 0.7%, or by $19.3 million to $2.56 billion, compared to $2.58 billion at December 31, 2023. The year-over-year decline was driven primarily by lower consumer real estate, consumer, and agricultural real estate loans, partially offset primarily by higher commercial and industrial and agricultural loans. Compared to the quarter ended September 30, 2024, total loans, net at December 31, 2024 increased by 0.9% or $23.5 million.

F&M continues to closely monitor its loan portfolio with a particular emphasis on higher risk sectors. Nonperforming loans were $3.1 million, or 0.12% of total loans at December 31, 2024, compared to $22.4 million, or 0.87% of total loans at December 31, 2023, and $2.9 million, or 0.11% at September 30, 2024.

F&M maintains a well-balanced, diverse and high performing CRE portfolio. CRE loans represented 51.2% of the Company’s total loan portfolio at December 31, 2024. In addition, F&M’s commercial real estate office credit exposure represented 5.2% of the Company’s total loan portfolio at December 31, 2024, with a weighted average loan-to-value of approximately 64% and an average loan of approximately $958,100.

F&M’s CRE portfolio included the following categories at December 31, 2024:

CRE Category	Dollar Balance		Percent of CRE Portfolio⁽^*)	Percent of Total Loan Portfolio⁽^*)

Industrial	$	269,315	20.6%	10.5%
Multi-family		233,868	17.8%	9.1%
Retail		219,395	16.7%	8.6%
Hotels		141,514	10.8%	5.5%
Office		134,139	10.2%	5.2%
Gas Stations		70,767	5.4%	2.8%
Food Service		49,246	3.8%	1.9%
Senior Living		31,799	2.4%	1.3%
Development		29,491	2.3%	1.2%
Auto Dealers		28,081	2.1%	1.1%
Other		103,196	7.9%	4.0%
Total CRE	$	1,310,811	100.0%	51.2%

* Numbers have been rounded

At December 31, 2024, the Company’s allowance for credit losses to nonperforming loans was 826.70%, compared to 111.95% at December 31, 2023. The allowance to total loans was 1.07% at December 31, 2024, compared to 1.06% at December 31, 2023. Including accretable yield adjustments, associated with the Company’s prior acquisitions, F&M’s allowance for credit losses to total loans was 1.08% at December 31, 2024, compared to 1.13% at December 31, 2023.

Mr. Eller concluded, “Throughout the new year, we will leverage F&M’s strong banking platform, while continuing to make strategic investments that expanded our operations, capabilities, and services. We believe this will expand operating efficiencies and produce better outcomes for our customers. I am proud of our strong performance in 2024, and expect 2025 to be another good year for F&M.”

Stockholders’ Equity and Dividends
Total stockholders’ equity increased 5.9% to $335.2 million, or $24.47 per share at December 31, 2024, from $316.5 million, or $23.17 per share at December 31, 2023. The Company’s Tier 1 leverage ratio of 8.12%, remained stable compared to December 31, 2023.

Tangible stockholders’ equity increased to $270.0 million at December 31, 2024, compared to $254.2 million at December 31, 2023. On a per share basis, tangible stockholders’ equity at December 31, 2024, was $17.74 per share, compared to $16.29 per share at December 31, 2023.

For the twelve months ended December 31, 2024, the Company declared cash dividends of $0.8825 per share, representing a 3.8% increase over the same period last year. F&M is committed to returning capital to shareholders and has increased the annual cash dividend for 30 consecutive years. For the twelve months ended December 31, 2024, the dividend payout ratio was 46.07% compared to 50.65% for the same period last year.

About Farmers & Merchants State Bank:
F&M Bank is a local independent community bank that has been serving its communities since 1897. F&M Bank provides commercial banking, retail banking and other financial services. Our locations are in Butler, Champaign, Fulton, Defiance, Hancock, Henry, Lucas, Shelby, Williams, and Wood counties in Ohio. In Northeast Indiana, we have offices located in Adams, Allen, DeKalb, Jay, Steuben and Wells counties. The Michigan footprint includes Oakland County, and we have Loan Production Offices in Troy, Michigan; Muncie, Indiana; and Perrysburg and Bryan, Ohio.

Safe Harbor Statement
Farmers & Merchants Bancorp, Inc. (“F&M”) wishes to take advantage of the Safe Harbor provisions included in the Private Securities Litigation Reform Act of 1995. Statements by F&M, including management’s expectations and comments, may not be based on historical facts and are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21B of the Securities Exchange Act of 1934, as amended. Actual results could vary materially depending on risks and uncertainties inherent in general and local banking conditions, competitive factors specific to markets in which F&M and its subsidiaries operate, future interest rate levels, legislative and regulatory decisions, capital market conditions, or the effects of the COVID-19 pandemic, and its impacts on our credit quality and business operations, as well as its impact on general economic and financial market conditions. F&M assumes no responsibility to update this information. For more details, please refer to F&M’s SEC filing, including its most recent Annual Report on Form 10-K and quarterly reports on Form 10-Q. Such filings can be viewed at the SEC’s website, www.sec.gov or through F&M’s website www.fm.bank.

Non-GAAP Financial Measures
This press release includes disclosure of financial measures not prepared in accordance with generally accepted accounting principles in the United States (GAAP). A non-GAAP financial measure is a numerical measure of historical or future financial performance, financial position or cash flows that excludes or includes amounts that are required to be disclosed by GAAP. Farmers & Merchants Bancorp, Inc. believes that these non-GAAP financial measures provide both management and investors a more complete understanding of the underlying operational results and trends and Farmers & Merchants Bancorp, Inc.’s marketplace performance. The presentation of this additional information is not meant to be considered in isolation or as a substitute for the numbers prepared in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures is included within this press release.

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME & COMPREHENSIVE INCOME (Unaudited) (in thousands of dollars, except per share data)

	Three Months Ended															Twelve Months Ended
	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			December 31, 2024			December 31, 2023
Interest Income
Loans, including fees	$	36,663		$	36,873		$	36,593		$	35,200		$	34,493		$	145,329		$	129,344
Debt securities:
U.S. Treasury and government agencies	1,882			1,467			1,148			1,045			987			5,542			4,090
Municipalities	384			387			389			394			397			1,554			1,598
Dividends	367			334			327			333			365			1,361			882
Federal funds sold	24			7			7			7			8			45			44
Other	2,531			2,833			2,702			1,675			2,020			9,741			3,850
Total interest income	41,851			41,901			41,166			38,654			38,270			163,572			139,808
Interest Expense
Deposits	15,749			16,947			16,488			15,279			15,015			64,463			46,923
Federal funds purchased and securities sold under agreements to repurchase	274			277			276			284			293			1,111			1,474
Borrowed funds	2,713			2,804			2,742			2,689			2,742			10,948			8,876
Subordinated notes	285			284			285			284			285			1,138			1,138
Total interest expense	19,021			20,312			19,791			18,536			18,335			77,660			58,411
Net Interest Income – Before Provision for Credit Losses	22,830			21,589			21,375			20,118			19,935			85,912			81,397
Provision for (Recovery of) Credit Losses – Loans	346			282			605			(289		)	278			944			1,698
Provision for (Recovery of) Credit Losses – Off Balance Sheet Credit Exposures	(120		)	(267		)	(18		)	(266		)	189			(671		)	46
Net Interest Income After Provision for Credit Losses	22,604			21,574			20,788			20,673			19,468			85,639			79,653
Noninterest Income
Customer service fees	237			300			189			598			415			1,324			1,332
Other service charges and fees	1,176			1,155			1,085			1,057			1,090			4,473			4,343
Interchange income	1,322			1,315			1,330			1,429			1,310			5,396			5,318
Loan servicing income	771			710			513			539			666			2,533			4,405
Net gain on sale of loans	223			215			314			107			230			859			699
Increase in cash surrender value of bank owned life insurance	248			265			236			216			216			965			834
Net gain (loss) on sale of other assets owned	22			–			49			–			(86		)	71			(135		)
Net loss on sale of available-for-sale securities	–			–			–			–			–			–			(891		)
Total noninterest income	3,999			3,960			3,716			3,946			3,841			15,621			15,905
Noninterest Expense
Salaries and wages	7,020			7,713			7,589			7,846			6,981			30,168			26,915
Employee benefits	2,148			2,112			2,112			2,171			1,218			8,543			7,520
Net occupancy expense	1,072			1,054			999			1,027			1,187			4,152			3,833
Furniture and equipment	1,032			1,472			1,407			1,353			1,370			5,264			5,022
Data processing	160			339			448			500			785			1,447			3,147
Franchise taxes	312			410			265			555			308			1,542			1,487
ATM expense	328			472			397			473			665			1,670			2,611
Advertising	498			597			519			530			397			2,144			2,606
FDIC assessment	505			516			507			580			594			2,108			1,982
Servicing rights amortization – net	244			219			187			168			182			818			611
Loan expense	236			244			251			229			246			960			1,055
Consulting fees	242			251			198			186			192			877			832
Professional fees	368			453			527			445			331			1,793			1,430
Intangible asset amortization	446			445			444			445			446			1,780			1,780
Other general and administrative	1,465			1,128			1,495			1,333			1,532			5,421			6,373
Total noninterest expense	16,076			17,425			17,345			17,841			16,434			68,687			67,204
Income Before Income Taxes	10,527			8,109			7,159			6,778			6,875			32,573			28,354
Income Taxes	2,146			1,593			1,477			1,419			1,332			6,635			5,567
Net Income	8,381			6,516			5,682			5,359			5,543			25,938			22,787
Other Comprehensive Income (Loss) (Net of Tax):
Net unrealized gain (loss) on available-for-sale securities	(7,403		)	11,664			2,531			(1,995		)	13,261			4,797			10,781
Reclassification adjustment for realized loss on sale of available-for-sale securities	–			–			–			–			–			–			891
Net unrealized gain (loss) on available-for-sale securities	(7,403		)	11,664			2,531			(1,995		)	13,261			4,797			11,672
Tax expense (benefit)	(1,554		)	2,449			531			(418		)	2,784			1,008			2,451
Other comprehensive income (loss)	(5,849		)	9,215			2,000			(1,577		)	10,477			3,789			9,221
Comprehensive Income	$	2,532		$	15,731		$	7,682		$	3,782		$	16,020		$	29,727		$	32,008
Basic Earnings Per Share	$	0.61		$	0.48		$	0.42		$	0.39		$	0.41		$	1.90		$	1.67
Diluted Earnings Per Share	$	0.61		$	0.48		$	0.42		$	0.39		$	0.41		$	1.90		$	1.67
Dividends Declared	$	0.22125		$	0.22125		$	0.22		$	0.22		$	0.22		$	0.88250		$	0.85

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (in thousands of dollars, except per share data)

	December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023
				(Unaudited)			(Unaudited)			(Unaudited)
Assets
Cash and due from banks	$	174,855		$	244,572		$	191,785		$	186,541		$	140,917
Federal funds sold	1,496			932			1,283			1,241			1,284
Total cash and cash equivalents	176,351			245,504			193,068			187,782			142,201

Interest-bearing time deposits	2,482			2,727			3,221			2,735			2,740
Securities – available-for-sale	426,556			404,881			365,209			347,516			358,478
Other securities, at cost	14,400			15,028			14,721			14,744			17,138
Loans held for sale	2,996			1,706			1,628			2,410			1,576
Loans, net of allowance for credit losses of $25,826 12/31/24 and $25,024 12/31/23	2,536,043			2,512,852			2,534,468			2,516,687			2,556,167
Premises and equipment	33,828			33,779			34,507			35,007			35,790
Construction in progress	–			35			38			9			8
Goodwill	86,358			86,358			86,358			86,358			86,358
Loan servicing rights	5,656			5,644			5,504			5,555			5,648
Bank owned life insurance	34,872			34,624			34,359			34,123			33,907
Other assets	45,181			46,047			49,552			54,628			43,218
Total Assets	$	3,364,723		$	3,389,185		$	3,322,633		$	3,287,554		$	3,283,229

Liabilities and Stockholders’ Equity
Liabilities
Deposits
Noninterest-bearing	$	516,904		$	481,444		$	479,069		$	510,731		$	528,465
Interest-bearing
NOW accounts	850,462			865,617			821,145			829,236			816,790
Savings	671,818			661,565			673,284			635,430			599,191
Time	647,581			676,187			667,592			645,985			663,017
Total deposits	2,686,765			2,684,813			2,641,090			2,621,382			2,607,463

Federal funds purchased and securities
sold under agreements to repurchase	27,218			27,292			27,218			28,218			28,218
Federal Home Loan Bank (FHLB) advances	246,056			263,081			266,102			256,628			265,750
Subordinated notes, net of unamortized issuance costs	34,818			34,789			34,759			34,731			34,702
Dividend payable	2,996			2,998			2,975			2,975			2,974
Accrued expenses and other liabilities	31,659			40,832			27,825			25,930			27,579
Total liabilities	3,029,512			3,053,805			2,999,969			2,969,864			2,966,686

Commitments and Contingencies

Stockholders’ Equity
Common stock – No par value 20,000,000 shares authorized; issued
14,564,425 shares 12/31/24 and 12/31/23; outstanding 13,699,536	135,565			135,193			135,829			135,482			135,515
shares 12/31/24 and 13,664,641 shares 12/31/23
Treasury stock – 864,889 shares 12/31/24 and 899,784 shares 12/31/23	(10,985		)	(10,904		)	(11,006		)	(10,851		)	(11,040		)
Retained earnings	235,854			230,465			226,430			223,648			221,080
Accumulated other comprehensive loss	(25,223		)	(19,374		)	(28,589		)	(30,589		)	(29,012		)
Total stockholders’ equity	335,211			335,380			322,664			317,690			316,543

Total Liabilities and Stockholders’ Equity	$	3,364,723		$	3,389,185		$	3,322,633		$	3,287,554		$	3,283,229

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES SELECT FINANCIAL DATA

	For the Three Months Ended										For the Twelve Months Ended
Selected financial data	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		December 31, 2024		December 31, 2023
Return on average assets		0.99%		0.78%		0.69%		0.66%		0.67%		0.78%		0.71%
Return on average equity		10.00%		7.93%		7.13%		6.76%		7.27%		7.98%		7.46%
Yield on earning assets		5.20%		5.27%		5.22%		5.00%		4.93%		5.17%		4.67%
Cost of interest bearing liabilities		3.01%		3.21%		3.18%		3.06%		3.02%		3.12%		2.53%
Net interest spread		2.19%		2.06%		2.04%		1.94%		1.91%		2.05%		2.14%
Net interest margin		2.84%		2.71%		2.71%		2.60%		2.57%		2.72%		2.72%
Efficiency		59.82%		67.98%		69.03%		74.08%		69.23%		67.54%		68.48%
Dividend payout ratio		35.75%		45.99%		52.35%		55.52%		54.23%		46.07%		50.65%
Tangible book value per share	$	17.74	$	17.72	$	16.79	$	16.39	$	16.29
Tier 1 leverage ratio		8.12%		8.04%		8.02%		8.40%		8.20%
Average shares outstanding		13,699,869		13,687,119		13,681,501		13,671,166		13,665,773		13,679,955		13,641,336

Loans	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
(Dollar amounts in thousands)
Commercial real estate	$	1,310,811	$	1,301,160	$	1,303,598	$	1,304,400	$	1,337,766
Agricultural real estate		216,401		220,328		222,558		227,455		223,791
Consumer real estate		520,114		524,055		525,902		525,178		521,895
Commercial and industrial		275,152		260,732		268,426		256,051		254,935
Agricultural		152,080		137,252		142,909		127,670		132,560
Consumer		63,009		67,394		70,918		74,819		79,591
Other		24,978		25,916		26,449		26,776		30,136
Less: Net deferred loan fees, costs and other ⁽¹⁾		(676)		1,499		(1,022)		(982)		517
Total loans, net	$	2,561,869	$	2,538,336	$	2,559,738	$	2,541,367	$	2,581,191


Asset quality data	December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023
(Dollar amounts in thousands)
Nonaccrual loans	$	3,124	$	2,898	$	2,487	$	19,391	$	22,353
90 day past due and accruing	$	–	$	–	$	–	$	–	$	–
Nonperforming loans	$	3,124	$	2,898	$	2,487	$	19,391	$	22,353
Other real estate owned	$	–	$	–	$	–	$	–	$	–
Nonperforming assets	$	3,124	$	2,898	$	2,487	$	19,391	$	22,353


Allowance for credit losses	$	25,826	$	25,484	$	25,270	$	24,680	$	25,024
Allowance for unfunded		1,541		1,661		1,928		1,946		2,212
Total allowance for credit losses	$	27,367	$	27,145	$	27,198	$	26,626	$	27,236
Total allowance for credit losses/total loans		1.07%		1.07%		1.06%		1.05%		1.06%
Adjusted credit losses with accretable yield/total loans		1.08%		1.10%		1.10%		1.11%		1.13%
Net charge-offs:
Quarter-to-date	$	4	$	68	$	15	$	55	$	531
Year-to-date	$	142	$	138	$	70	$	55	$	551
Net charge-offs to average loans
Quarter-to-date		0.00%		0.00%		0.00%		0.00%		0.02%
Year-to-date		0.01%		0.01%		0.00%		0.00%		0.02%
Nonperforming loans/total loans		0.12%		0.11%		0.10%		0.76%		0.87%
Allowance for credit losses/nonperforming loans		826.70%		879.37%		1016.08%		127.28%		111.95%
NPA coverage ratio		826.70%		879.37%		1016.08%		127.28%		111.95%

⁽¹⁾ Includes carrying value adjustments of $1.1 million as of December 31, 2024, $3.0 million as of September 30, 2024, $612 thousand as of June 30, 2024, $969 thousand as of March 31, 2024 and $2.7 million as of December 31, 2023 related to interest rate swaps

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (in thousands of dollars, except percentages)

	For the Three Months Ended						For the Three Months Ended
	December 31, 2024						December 31, 2023
Interest Earning Assets:	Average Balance		Interest/ Dividends		Annualized Yield/Rate		Average Balance		Interest/ Dividends		Annualized Yield/Rate
Loans	$	2,543,628	$	36,663	5.77	%	$	2,553,023	$	34,493	5.41	%
Taxable investment securities	450,648		2,554		2.27	%	386,931		1,660		1.72	%
Tax-exempt investment securities	18,571		79		2.15	%	24,145		89		1.87	%
Fed funds sold & other	209,307		2,555		4.88	%	142,642		2,028		5.69	%
Total Interest Earning Assets	3,222,154		$	41,851	5.20	%	3,106,741		$	38,270	4.93	%

Nonearning Assets	174,172						189,202

Total Assets	$	3,396,326					$	3,295,943

Interest Bearing Liabilities:
Savings deposits	$	1,548,638	$	9,459	2.44	%	$	1,392,304	$	8,570	2.46	%
Other time deposits	666,896		6,290		3.77	%	701,347		6,445		3.68	%
Other borrowed money	255,490		2,713		4.25	%	265,948		2,742		4.12	%
Fed funds purchased & securities
sold under agreement to repurchase	27,341		274		4.01	%	28,739		293		4.08	%
Subordinated notes	34,799		285		3.28	%	34,683		285		3.29	%
Total Interest Bearing Liabilities	$	2,533,164	$	19,021	3.01	%	$	2,423,021	$	18,335	3.02	%

Noninterest Bearing Liabilities	527,751						567,813

Stockholders’ Equity	$	335,411					$	305,109

Net Interest Income and Interest Rate Spread			$	22,830	2.19	%			$	19,935	1.91	%

Net Interest Margin					2.84	%					2.57	%

Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts


	For the Twelve Months Ended						For the Twelve Months Ended
	December 31, 2024						December 31, 2023
Interest Earning Assets:	Average Balance		Interest/ Dividends		Annualized Yield/Rate		Average Balance		Interest/ Dividends		Annualized Yield/Rate
Loans	$	2,557,213	$	145,329	5.68	%	$	2,491,502	$	129,344	5.19	%
Taxable investment securities	410,764		8,129		1.98	%	394,424		6,204		1.57	%
Tax-exempt investment securities	20,154		328		2.06	%	24,686		366		1.88	%
Fed funds sold & other	176,307		9,786		5.55	%	85,018		3,894		4.58	%
Total Interest Earning Assets	3,164,438		$	163,572	5.17	%	2,995,630		$	139,808	4.67	%

Nonearning Assets	164,464						197,726

Total Assets	$	3,328,902					$	3,193,356

Interest Bearing Liabilities:
Savings deposits	$	1,502,365	$	39,750	2.65	%	$	1,376,318	$	27,424	1.99	%
Other time deposits	663,320		24,713		3.73	%	640,390		19,499		3.04	%
Other borrowed money	262,094		10,948		4.18	%	220,175		8,876		4.03	%
Fed funds purchased & securities
sold under agreement to repurchase	27,750		1,111		4.00	%	35,421		1,474		4.16	%
Subordinated notes	34,755		1,138		3.27	%	34,640		1,138		3.29	%
Total Interest Bearing Liabilities	$	2,490,284	$	77,660	3.12	%	$	2,306,944	$	58,411	2.53	%

Noninterest Bearing Liabilities	513,588						580,931

Stockholders’ Equity	$	325,030					$	305,481

Net Interest Income and Interest Rate Spread			$	85,912	2.05	%			$	81,397	2.14	%

Net Interest Margin					2.72	%					2.72	%

Yields on Tax exempt securities and the portion of the tax-exempt IDB loans included in loans have been tax adjusted based on a 21% tax rate in the charts

FARMERS & MERCHANTS BANCORP, INC. AND SUBSIDIARIES AVERAGE BALANCE SHEETS AND RELATED YIELDS AND RATES (in thousands of dollars, except percentages)

	For the Three Months Ended December 31, 2024													For the Three Months Ended December 31, 2023
	As Reported				Excluding Acc/Amort				Difference					As Reported				Excluding Acc/Amort				Difference
	$		Yield		$		Yield		$			Yield		$		Yield		$		Yield		$			Yield
Interest Earning Assets:
Loans	$	36,663	5.77	%	$	36,039	5.67	%	$	624		0.10	%	$	34,493	5.41	%	$	33,769	5.29	%	$	724		0.12	%
Taxable investment securities	2,554		2.27	%	2,554		2.27	%	–			0.00	%	1,660		1.72	%	1,660		1.72	%	–			0.00	%
Tax-exempt investment securities	79		2.15	%	79		2.15	%	–			0.00	%	89		1.87	%	89		1.87	%	–			0.00	%
Fed funds sold & other	2,555		4.88	%	2,555		4.88	%	–			0.00	%	2,028		5.69	%	2,028		5.69	%	–			0.00	%
Total Interest Earning Assets	41,851		5.20	%	41,227		5.12	%	624			0.08	%	38,270		4.93	%	37,546		4.84	%	724			0.09	%

Interest Bearing Liabilities:
Savings deposits	$	9,459	2.44	%	$	9,459	2.44	%	$ –			0.00	%	$	8,570	2.46	%	$	8,570	2.46	%	$ –			0.00	%
Other time deposits	6,290		3.77	%	6,290		3.77	%	–			0.00	%	6,445		3.68	%	6,381		3.64	%	64			0.04	%
Other borrowed money	2,713		4.25	%	2,710		4.24	%	3			0.01	%	2,742		4.12	%	2,760		4.15	%	(18		)	-0.03	%
Federal funds purchased and
securities sold under agreement to
repurchase	274		4.01	%	274		4.01	%	–			0.00	%	293		4.08	%	293		4.08	%	–			0.00	%
Subordinated notes	285		3.28	%	285		3.28	%	–			0.00	%	285		3.29	%	285		3.29	%	–			0.00	%
Total Interest Bearing Liabilities	19,021		3.01	%	19,018		3.00	%	3			0.01	%	18,335		3.02	%	18,289		3.02	%	46			0.00	%

Interest/Dividend income/yield	41,851		5.20	%	41,227		5.12	%	624			0.08	%	38,270		4.93	%	37,546		4.84	%	724			0.09	%
Interest Expense / yield	19,021		3.01	%	19,018		3.00	%	3			0.01	%	18,335		3.02	%	18,289		3.02	%	46			0.00	%
Net Interest Spread	22,830		2.19	%	22,209		2.12	%	621			0.07	%	19,935		1.91	%	19,257		1.82	%	678			0.09	%
Net Interest Margin			2.84	%			2.76	%				0.08	%			2.57	%			2.48	%				0.09	%

	For the Twelve Months Ended December 31, 2024													For the Twelve Months Ended December 31, 2023
	As Reported				Excluding Acc/Amort				Difference					As Reported				Excluding Acc/Amort				Difference
	$		Yield		$		Yield		$			Yield		$		Yield		$		Yield		$			Yield
Interest Earning Assets:
Loans	$	145,329	5.68	%	$	142,627	5.58	%	$	2,702		0.10	%	$	129,344	5.19	%	$	126,133	5.06	%	$	3,211		0.13	%
Taxable investment securities	8,129		1.98	%	8,129		1.98	%	–			0.00	%	6,204		1.57	%	6,204		1.57	%	–			0.00	%
Tax-exempt investment securities	328		2.06	%	328		2.06	%	–			0.00	%	366		1.88	%	366		1.88	%	–			0.00	%
Fed funds sold & other	9,786		5.55	%	9,786		5.55	%	–			0.00	%	3,894		4.58	%	3,894		4.58	%	–			0.00	%
Total Interest Earning Assets	163,572		5.17	%	160,870		5.09	%	2,702			0.08	%	139,808		4.67	%	136,597		4.57	%	3,211			0.10	%

Interest Bearing Liabilities:
Savings deposits	$	39,750	2.65	%	$	39,750	2.65	%	$ –			0.00	%	$	27,424	1.99	%	$	27,424	1.99	%	$ –			0.00	%
Other time deposits	24,713		3.73	%	24,713		3.73	%	–			0.00	%	19,499		3.04	%	19,839		3.10	%	(340		)	-0.06	%
Other borrowed money	10,948		4.18	%	10,964		4.18	%	(16		)	0.00	%	8,876		4.03	%	8,947		4.06	%	(71		)	-0.03	%
Federal funds purchased and
securities sold under agreement to
repurchase	1,111		4.00	%	1,111		4.00	%	–			0.00	%	1,474		4.16	%	1,474		4.16	%	–			0.00	%
Subordinated notes	1,138		3.27	%	1,138		3.27	%	–			0.00	%	1,138		3.29	%	1,138		3.29	%	–			0.00	%
Total Interest Bearing Liabilities	77,660		3.12	%	77,676		3.12	%	(16		)	0.00	%	58,411		2.53	%	58,822		2.55	%	(411		)	-0.02	%

Interest/Dividend income/yield	163,572		5.17	%	160,870		5.09	%	2,702			0.08	%	139,808		4.67	%	136,597		4.57	%	3,211			0.10	%
Interest Expense / yield	77,660		3.12	%	77,676		3.12	%	(16		)	0.00	%	58,411		2.53	%	58,822		2.55	%	(411		)	-0.02	%
Net Interest Spread	85,912		2.05	%	83,194		1.97	%	2,718			0.08	%	81,397		2.14	%	77,775		2.02	%	3,622			0.12	%
Net Interest Margin			2.72	%			2.63	%				0.09	%			2.72	%			2.60	%				0.12	%

Company Contact:	Investor and Media Contact:
Lars B. Eller President and Chief Executive Officer Farmers & Merchants Bancorp, Inc. (419) 446-2501 leller@fm.bank	Andrew M. Berger Managing Director SM Berger & Company, Inc. (216) 464-6400 andrew@smberger.com

The MIL Network –

February 13, 2025

MIL-OSI: MKS Instruments Reports Fourth Quarter and Full-Year 2024 Financial Results

Source: GlobeNewswire (MIL-OSI)

Quarterly revenue of $935 million, above the midpoint of guidance
Quarterly GAAP net income of $90 million and net income per diluted share of $1.33
Quarterly Adjusted EBITDA of $237 million and Non-GAAP net earnings per diluted share of $2.15, above the midpoint of guidance

ANDOVER, Mass., Feb. 12, 2025 (GLOBE NEWSWIRE) — MKS Instruments, Inc. (NASDAQ: MKSI), a global provider of enabling technologies that transform our world, today reported fourth quarter and full year 2024 financial results.

“MKS delivered revenue and adjusted EBITDA above the midpoint of our outlook, closing out 2024 on an impressive note against a mixed demand backdrop,” said John T.C. Lee, President and Chief Executive Officer. “Our broad and deep technology portfolio serving an array of semiconductor, electronics and industrial applications enables us to address key demand opportunities as broader end market recovery begins to develop.”

Mr. Lee added, “We enter 2025 in a strong position, highlighted by increasing customer engagement with our World Class Optics solutions, as well as solid trends in our chemistry business as we demonstrate the pivotal role we play in advanced electronics.”

“Our revenue and profitability remained robust in the fourth quarter as our team executed well,” said Ram Mayampurath, Executive Vice President, Chief Financial Officer and Treasurer.

Mr. Mayampurath added, “We delivered continued healthy gross margin, earnings per share growth and increased operating cash flow in 2024. This underscores the value customers see in our technology portfolio as well as our strong focus on both cost management and cash generation. We also continue to make good progress proactively managing our leverage, completing another repricing of our term loan B and making a voluntary principal prepayment of $100 million in January.”

First Quarter 2025 Guidance

For the first quarter of 2025, the Company expects revenue of $910 million, plus or minus $40 million, GAAP net income of $43 million, plus or minus $19 million, Adjusted EBITDA of $217 million, plus or minus $23 million, GAAP net income per diluted share of $0.63, plus or minus $0.28, and Non-GAAP net earnings per diluted share of $1.40, plus or minus $0.27. The guidance for the first quarter is based on the current business environment, including the immaterial impact of the recently announced U.S. import tariffs up through but not including the date of this release. This guidance does not reflect the imposition of any other import tariffs by the United States or potential retaliatory actions taken by other countries. The Company will continue to monitor and adapt to changes in the business environment as needed.

Conference Call Details

A conference call with management will be held on Thursday, February 13, 2025 at 8:30 a.m. (Eastern Time). To participate in the call by phone, participants should visit the Investor Relations section of MKS’ website at investor.mks.com and click on Events & Presentations, where you will be able to register online and receive dial-in details. We encourage participants to register and dial in to the conference call at least 15 minutes before the start of the call to ensure a timely connection. A live and archived webcast and related presentation materials will be available on the Investor Relations section of the MKS website.

About MKS Instruments

MKS Instruments enables technologies that transform our world. We deliver foundational technology solutions to leading edge semiconductor manufacturing, electronics and packaging, and specialty industrial applications. We apply our broad science and engineering capabilities to create instruments, subsystems, systems, process control solutions and specialty chemicals technology that improve process performance, optimize productivity and enable unique innovations for many of the world’s leading technology and industrial companies. Our solutions are critical to addressing the challenges of miniaturization and complexity in advanced device manufacturing by enabling increased power, speed, feature enhancement, and optimized connectivity. Our solutions are also critical to addressing ever-increasing performance requirements across a wide array of specialty industrial applications. Additional information can be found at www.mks.com.

Use of Non-GAAP Financial Results

This press release includes financial measures that are not in accordance with U.S. generally accepted accounting principles (“Non-GAAP financial measures”). These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS’ reported results under U.S. generally accepted accounting principles (“GAAP”), and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. For further information regarding these Non-GAAP financial measures, please refer to the tables presenting reconciliations of our Non-GAAP results to our GAAP results and the “Notes on Our Non-GAAP Financial Information” at the end of this press release.

Selected GAAP and Non-GAAP Financial Measures
(In millions, except per share data)

	Quarter									Full Year
	Q4 2024			Q3 2024			Q4 2023				2024			2023
Net Revenues
Semiconductor	$	400		$	378		$	362		$	1,498		$	1,479
Electronics & Packaging		254			231			226		$	922		$	916
Specialty Industrial		281			287			305		$	1,166		$	1,227
Total net revenues	$	935		$	896		$	893		$	3,586		$	3,622
GAAP Financial Measures
Gross margin		47.2	%		48.2	%		46.0	%		47.6	%		45.3	%
Operating margin		14.5	%		14.3	%		2.7	%		13.9	%		(42.9	%)
Net income (loss)	$	90		$	62		$	(68	)	$	190		$	(1,841	)
Diluted income (loss) per share	$	1.33		$	0.92			(1.02	)	$	2.81		$	(27.54	)
Non-GAAP Financial Measures
Gross margin		47.2	%		48.2	%		46.0	%		47.6	%		45.7	%
Operating margin		21.3	%		21.8	%		20.3	%		21.3	%		19.5	%
Net earnings	$	146		$	116		$	78		$	444		$	297
Diluted earnings per share	$	2.15		$	1.72		$	1.17		$	6.58		$	4.43

Additional Financial Information

At December 31, 2024, the Company had $714 million in cash and cash equivalents, $3.2 billion of secured term loan principal outstanding, $1.4 billion of convertible senior notes outstanding and up to $675 million of additional borrowing capacity under a revolving credit facility, subject to certain leverage ratio requirements. During the fourth quarter of 2024, the Company paid a cash dividend of $15 million or $0.22 per diluted share and made a voluntary principal prepayment of €200 million, which equated to $216 million, on its EUR term loan B.

In January 2025, the Company completed the repricing of its USD term loan B and EUR term loan B and made a voluntary principal prepayment of $100 million on its USD term loan B.

SAFE HARBOR FOR FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 regarding the future financial performance, business prospects and growth of MKS Instruments, Inc. (“MKS,” the “Company,” “our,” or “we”). These statements are only predictions based on current assumptions and expectations. Any statements that are not statements of historical fact (including statements containing the words “will,” “projects,” “intends,” “believes,” “plans,” “anticipates,” “expects,” “estimates,” “forecasts,” “continues” and similar expressions) should be considered to be forward-looking statements. Actual events or results may differ materially from those in the forward-looking statements set forth herein. Among the important factors that could cause actual events to differ materially from those in the forward-looking statements that we make are the level and terms of our substantial indebtedness and our ability to service such debt; our entry into the chemicals technology business through our acquisition of Atotech Limited (“Atotech”) in August 2022 (the “Atotech Acquisition”), which has exposed us to significant additional liabilities; the risk that we are unable to realize the anticipated benefits of the Atotech Acquisition; legal, reputational, financial and contractual risks resulting from the ransomware incident we identified in February 2023, and other risks related to cybersecurity, data privacy and intellectual property; competition from larger, more advanced or more established companies in our markets; the ability to successfully grow our business, including through growth of the Atotech business and growth of the Electro Scientific Industries, Inc. business, which we acquired in February 2019, and financial risks associated with those and potential future acquisitions, including goodwill and intangible asset impairments; manufacturing and sourcing risks, including those associated with limited and sole source suppliers and the impact and duration of supply chain disruptions, component shortages, and price increases; changes in global demand; the impact of a pandemic or other widespread health crisis; risks associated with doing business internationally, including geopolitical conflicts, such as the conflict in the Middle East, trade compliance, trade protection measures, such as import tariffs by the United States or retaliatory actions taken by other countries, regulatory restrictions on our products, components or markets, particularly the semiconductor market, and unfavorable currency exchange and tax rate fluctuations, which risks become more significant as we grow our business internationally and in China specifically; conditions affecting the markets in which we operate, including fluctuations in capital spending in the semiconductor, electronics manufacturing and automotive industries, and fluctuations in sales to our major customers; disruptions or delays from third-party service providers upon which our operations may rely; the ability to anticipate and meet customer demand; the challenges, risks and costs involved with integrating or transitioning global operations of the companies we have acquired; risks associated with the attraction and retention of key personnel; potential fluctuations in quarterly results; dependence on new product development; rapid technological and market change; acquisition strategy; volatility of stock price; risks associated with chemical manufacturing and environmental regulation compliance; risks related to defective products; financial and legal risk management; and the other important factors described under the heading “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2023 and any subsequent Quarterly Reports on Form 10-Q, each as filed with the U.S. Securities and Exchange Commission. MKS is under no obligation to, and expressly disclaims any obligation to, update or alter these forward-looking statements, whether as a result of new information, future events or otherwise, even if subsequent events cause our views to change, after the date of this press release. Amounts reported in this press release are preliminary and subject to finalization prior to the filing of our Annual Report on Form 10-K for the year ended December 31, 2024.

Company Contact:
Paretosh Misra
Vice President, Investor Relations
Telephone: (978) 284-4705
Email: paretosh.misra@mks.com

MKS Instruments, Inc.
Unaudited Consolidated Statements of Operations
(In millions, except per share data)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
		2024			2024			2023			2024			2023
Net revenues:
Products	$	824		$	776		$	785		$	3,124		$	3,200
Services		111			120			108			462			422
Total net revenues		935			896			893			3,586			3,622
Cost of revenues:
Products		443			410			423			1,662			1,748
Services		51			54			59			216			232
Total cost of revenues (exclusive of amortization shown separately below)		494			464			482			1,878			1,980
Gross profit		441			432			411			1,708			1,642
Research and development		65			70			70			271			288
Selling, general and administrative		176			167			160			674			675
Acquisition and integration costs		3			3			3			9			16
Restructuring and other		1			1			7			6			20
Fees and expenses related to the repricing of Term Loan Facility		—			2			2			5			2
Amortization of intangible assets		61			61			70			245			295
Goodwill and intangible asset impairment		—			—			75			—			1,902
Gain on sale of long-lived assets		—			—			—			—			(2	)
Income (loss) from operations		135			128			24			498			(1,554	)
Interest income		(5	)		(6	)		(7	)		(21	)		(17	)
Interest expense		54			64			90			284			356
Loss on extinguishment of debt		4			5			8			57			8
Other expense (income), net		3			5			12			(2	)		27
Income (loss) before income taxes		79			60			(79	)		180			(1,928	)
(Benefit) provision for income taxes		(11	)		(2	)		(11	)		(10	)		(87	)
Net income (loss)	$	90		$	62		$	(68	)	$	190		$	(1,841	)
Net income (loss) per share:
Basic	$	1.34		$	0.92		$	(1.02	)	$	2.82		$	(27.54	)
Diluted	$	1.33		$	0.92		$	(1.02	)	$	2.81		$	(27.54	)
Cash dividends per common share	$	0.22		$	0.22		$	0.22		$	0.88		$	0.88
Weighted average shares outstanding:
Basic		67.4			67.4			66.9			67.3			66.8
Diluted		67.7			67.6			66.9			67.6			66.8

MKS Instruments, Inc.
Unaudited Consolidated Balance Sheets
(In millions)


	December 31,			December 31,
		2024			2023
ASSETS
Cash and cash equivalents	$	714		$	875
Trade accounts receivable, net		615			603
Inventories		893			991
Other current assets		252			227
Total current assets		2,474			2,696
Property, plant and equipment, net		771			784
Right-of-use assets		238			225
Goodwill		2,479			2,554
Intangible assets, net		2,272			2,619
Other assets		356			240
Total assets	$	8,590		$	9,118
LIABILITIES AND STOCKHOLDERS’ EQUITY
Short-term debt	$	50		$	93
Accounts payable		341			327
Other current liabilities		384			428
Total current liabilities		775			848
Long-term debt, net		4,488			4,696
Non-current deferred taxes		504			640
Non-current accrued compensation		141			151
Non-current lease liabilities		211			205
Other non-current liabilities		149			106
Total liabilities		6,268			6,646
Stockholders’ equity:
Common stock		—			—
Additional paid-in capital		2,067			2,195
Retained earnings		503			373
Accumulated other comprehensive loss		(248	)		(96	)
Total stockholders’ equity		2,322			2,472
Total liabilities and stockholders’ equity	$	8,590		$	9,118

MKS Instruments, Inc.
Unaudited Consolidated Statements of Cash Flows
(In millions)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
		2024			2024			2023			2024			2023
Cash flows from operating activities:
Net income (loss)	$	90		$	62		$	(68	)	$	190		$	(1,841	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		87			87			95			348			397
Goodwill and intangible asset impairments		—			—			75			—			1,902
Unrealized loss (gain) on derivatives not designated as hedging instruments		11			2			10			13			32
Amortization of debt issuance costs and original issue discount		7			7			10			30			33
Loss on extinguishment of debt		4			5			8			57			8
Gain on sale of long-lived assets		—			—			—			—			(2	)
Stock-based compensation		11			11			11			48			54
Provision for excess and obsolete inventory		15			16			10			56			64
Deferred income taxes		(58	)		(72	)		(61	)		(226	)		(234	)
Other		2			2			—			8			5
Changes in operating assets and liabilities, net of acquired assets and liabilities		7			43			90			4			(99	)
Net cash provided by operating activities		176			163			180			528			319
Cash flows from investing activities:
Proceeds from sale of long-lived assets		—			1			—			1			3
Purchases of property, plant and equipment		(51	)		(22	)		(34	)		(118	)		(87	)
Net cash used in investing activities		(51	)		(21	)		(34	)		(117	)		(84	)
Cash flows from financing activities:
Proceeds from borrowings		—			—			214			2,161			216
Payments of borrowings		(229	)		(123	)		(336	)		(2,427	)		(403	)
Purchase of capped calls related to Convertible Notes		—			—			—			(167	)		—
Payments of deferred financing fees		—			—			(9	)		(33	)		(9	)
Dividend payments		(15	)		(15	)		(15	)		(59	)		(59	)
Net proceeds (payments) related to employee stock awards		3			(1	)		4			(9	)		(1	)
Other financing activities		(5	)		(5	)		(1	)		(15	)		(3	)
Net cash used in financing activities		(246	)		(144	)		(143	)		(549	)		(259	)
Effect of exchange rate changes on cash and cash equivalents		(26	)		13			13			(23	)		(10	)
(Decrease) increase in cash and cash equivalents		(147	)		11			16			(161	)		(34	)
Cash and cash equivalents at beginning of period		861			850			859			875			909
Cash and cash equivalents at end of period	$	714		$	861			875		$	714		$	875

The following supplemental Non-GAAP earnings information is presented to aid in understanding MKS’ operating results:

MKS Instruments, Inc.
Schedule Reconciling Selected Non-GAAP Financial Measures
(In millions, except per share data)


	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
		2024			2024			2023			2024			2023
Net income (loss)	$	90		$	62		$	(68	)	$	190		$	(1,841	)
Acquisition and integration costs (Note 1)		3			3			3			9			16
Restructuring and other (Note 2)		1			1			7			6			20
Amortization of intangible assets		61			61			70			245			295
Loss on debt extinguishment (Note 3)		4			5			8			57			8
Amortization of debt issuance costs (Note 4)		5			5			7			21			24
Fees and expenses related to repricing of Term Loan Facility (Note 5)		—			2			2			5			2
Goodwill and intangible asset impairment (Note 6)		—			—			75			—			1,902
Gain on sale of long-lived assets (Note 7)		—			—			—			—			(2	)
Ransomware incident (Note 8)		—			—			1			—			15
Excess and obsolete charge from discontinued product line (Note 9)		—			—			—			—			13
Tax effect of Non-GAAP adjustments (Note 10)		(18	)		(23	)		(26	)		(89	)		(156	)
Non-GAAP net earnings	$	146		$	116		$	78		$	444		$	297
Non-GAAP net earnings per diluted share	$	2.15		$	1.72		$	1.17		$	6.58		$	4.43
Weighted average diluted shares outstanding		67.7			67.6			67.1			67.6			67.0

Net cash provided by operating activities	$	176		$	163		$	180		$	528		$	319
Purchases of property, plant and equipment		(51	)		(22	)		(34	)		(118	)		(87	)
Free cash flow	$	125		$	141		$	146		$	410		$	232

MKS Instruments, Inc.
Schedule Reconciling Selected Non-GAAP Financial Measures
(In millions)

	Three Months Ended									Twelve Months Ended
	December 31,			September 30,			December 31,			December 31,			December 31,
		2024			2024			2023			2024			2023
Gross profit	$	441		$	432		$	411		$	1,708		$	1,642
Gross margin		47.2	%		48.2	%		46.0	%		47.6	%		45.3	%
Excess and obsolete charge from discontinued product line (Note 9)		—			—			—			—			13
Non-GAAP gross profit	$	441		$	432		$	411		$	1,708		$	1,655
Non-GAAP gross margin		47.2	%		48.2	%		46.0	%		47.6	%		45.7	%
Operating expenses	$	306		$	304		$	387		$	1,210		$	3,196
Acquisition and integration costs (Note 1)		3			3			3			9			16
Restructuring and other (Note 2)		1			1			7			6			20
Amortization of intangible assets		61			61			70			245			295
Fees and expenses related to repricing of Term Loan Facility (Note 5)		—			2			2			5			2
Goodwill and intangible asset impairment (Note 6)		—			—			75			—			1,902
Gain on sale of long-lived assets (Note 7)		—			—			—			—			(2	)
Ransomware incident (Note 8)		—			—			1			—			15
Non-GAAP operating expenses	$	242		$	237		$	229		$	945		$	948
Income (loss) from operations	$	135		$	128		$	24		$	498		$	(1,554	)
Operating margin		14.5	%		14.3	%		2.7	%		13.9	%		(42.9	%)
Acquisition and integration costs (Note 1)		3			3			3			9			16
Restructuring and other (Note 2)		1			1			7			6			20
Amortization of intangible assets		61			61			70			245			295
Fees and expenses related to repricing of Term Loan Facility (Note 5)		—			2			2			5			2
Goodwill and intangible asset impairment (Note 6)		—			—			75			—			1,902
Gain on sale of long-lived assets (Note 7)		—			—			—			—			(2	)
Ransomware incident (Note 8)		—			—			1			—			15
Excess and obsolete charge from discontinued product line (Note 9)		—			—			—			—			13
Non-GAAP income from operations	$	199		$	195		$	182		$	763		$	707
Non-GAAP operating margin		21.3	%		21.8	%		20.3	%		21.3	%		19.5	%
Interest expense, net	$	49		$	58		$	83		$	263		$	339
Amortization of debt issuance costs (Note 4)		5			5			7			21			24
Non-GAAP interest expense, net	$	45		$	53		$	76		$	242		$	315
Net income (loss)	$	90		$	62		$	(68	)	$	190		$	(1,841	)
Interest expense, net		49			58			83			263			339
Other expense (income), net		3			5			12			(2	)		27
(Benefit) provision for income taxes		(11	)		(2	)		(11	)		(10	)		(87	)
Depreciation		26			26			25			103			102
Amortization		61			61			70			245			295
Stock-based compensation		11			11			11			48			54
Acquisition and integration costs (Note 1)		3			3			3			9			16
Restructuring and other (Note 2)		1			1			7			6			20
Loss on debt extinguishment (Note 3)		4			5			8			57			8
Fees and expenses related to repricing of Term Loan Facility (Note 5)		—			2			2			5			2
Goodwill and intangible asset impairment (Note 6)		—			—			75			—			1,902
Gain on sale of long-lived assets (Note 7)		—			—			—			—			(2	)
Ransomware incident (Note 8)		—			—			1			—			15
Excess and obsolete charge from discontinued product line (Note 9)		—			—			—			—			13
Adjusted EBITDA	$	237		$	232		$	218		$	914		$	863
Adjusted EBITDA margin		25.3	%		25.9	%		24.4	%		25.5	%		23.8	%

MKS Instruments, Inc.
Reconciliation of GAAP Income Tax Rate to Non-GAAP Income Tax Rate
(In millions)


	Three Months Ended December 31, 2024							Three Months Ended December 31, 2023
	Income Before		(Benefit) Provision			Effective		(Loss) Income Before			(Benefit) Provision			Effective
	Income Taxes		for Income Taxes			Tax Rate		Income Taxes			for Income Taxes			Tax Rate

GAAP	$	79	$	(11	)	(14.5	%)	$	(79	)	$	(11	)	14.2	%
Acquisition and integration costs (Note 1)		3		—					3			—
Restructuring and other (Note 2)		1		—					7			—
Amortization of intangible assets		61		—					70			—
Loss on debt extinguishment (Note 3)		4		—					8			—
Amortization of debt issuance costs (Note 4)		5		—					7			—
Fees and expenses related to repricing of Term Loan Facility (Note 5)		—		—					2			—
Goodwill and intangible asset impairment (Note 6)		—		—					75			—
Ransomware incident (Note 8)		—		—					1			—
Tax effect of Non-GAAP adjustments (Note 10)		—		18					—			26
Non-GAAP	$	153	$	7		4.0	%	$	94		$	15		15.6	%

	Three Months Ended September 30, 2024
	Income Before		(Benefit) Provision			Effective
	Income Taxes		for Income Taxes			Tax Rate
GAAP	$	60	$	(2	)	(4.0	%)
Acquisition and integration costs (Note 1)		3		—
Restructuring and other (Note 2)		1		—
Amortization of intangible assets		61		—
Loss on debt extinguishment (Note 3)		5		—
Amortization of debt issuance costs (Note 4)		5		—
Fees and expenses related to repricing of Term Loan Facility (Note 5)		2		—
Tax effect of Non-GAAP adjustments (Note 10)		—		23
Non-GAAP	$	137	$	21		15.1	%

	Twelve Months Ended December 31, 2024							Twelve Months Ended December 31, 2023
	Income Before		(Benefit) Provision			Effective		(Loss) Income Before			(Benefit) Provision			Effective
	Income Taxes		for Income Taxes			Tax Rate		Income Taxes			for Income Taxes			Tax Rate
GAAP	$	180	$	(10	)	(5.7	%)	$	(1,928	)	$	(87	)	4.5	%
Acquisition and integration costs (Note 1)		9		—					16			—
Restructuring and other (Note 2)		6		—					20			—
Amortization of intangible assets		245		—					295			—
Loss on debt extinguishment (Note 3)		57		—					8			—
Amortization of debt issuance costs (Note 4)		21		—					24			—
Fees and expenses related to repricing of Term Loan Facility (Note 5)		5		—					2			—
Goodwill and intangible asset impairment (Note 6)		—		—					1,902			—
Gain on sale of long-lived assets (Note 7)		—		—					(2	)		—
Ransomware incident (Note 8)		—		—					15			—
Excess and obsolete charge from discontinued product line (Note 9)		—		—					13			—
Tax effect of Non-GAAP adjustments (Note 10)		—		89					—			156
Non-GAAP	$	523	$	78		14.8	%	$	366		$	69		18.9	%

MKS Instruments, Inc.
Schedule Reconciling Selected Non-GAAP Financial Measures – Q1’25 Guidance
(In millions, except per share data)


	Three Months Ending March 31, 2025
	$ Amount			Per Share
GAAP net income and net income per share	$	43		$	0.63
Amortization of intangible assets		60
Loss on debt extinguishment		3
Amortization of debt issuance costs		4
Fees and expenses related to repricing of Term Loan Facility		2
Tax effect of Non-GAAP adjustments		(17	)
Non-GAAP net earnings and net earnings per share	$	95		$	1.40
Estimated weighted average diluted shares		67.8

GAAP operating expenses	$	317
Amortization of intangible assets		(60	)
Fees and expenses related to repricing of Term Loan Facility		(2	)
Non-GAAP operating expenses	$	255

GAAP net income		43
Interest expense, net		50
Provision for income taxes		10
Depreciation		26
Amortization of intangible assets		60
Stock-based compensation		23
Loss on debt extinguishment		3
Fees and expenses related to repricing of Term Loan Facility		2
Adjusted EBITDA	$	217

MKS Instruments, Inc.
Notes on Our Non-GAAP Financial Information

Non-GAAP financial measures adjust GAAP financial measures for the items listed below. These Non-GAAP financial measures should be viewed in addition to, and not as a substitute for, MKS’ reported GAAP results, and may be different from Non-GAAP financial measures used by other companies. In addition, these Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles. MKS management believes the presentation of these Non-GAAP financial measures is useful to investors for comparing prior periods and analyzing ongoing business trends and operating results. Totals presented may not sum and percentages may not recalculate using figures presented due to rounding.

Note 1: Acquisition and integration costs related to the Atotech Acquisition.

Note 2: Restructuring costs primarily related to severance costs due to global cost-saving initiatives. Other costs related to certain legal matters.

Note 3: During the three and twelve months ended December 31, 2024, we recorded charges to write-off deferred financing fees and original issue discount costs related to voluntary principal prepayments on our USD term loan B. During the three months ended September 30, 2024 and the twelve months ended December 31, 2024, we recorded charges to write-off deferred financing fees and original issue discount costs related to the repricing of our USD term loan B and EUR term loan B. Additionally, during the twelve months ended December 31, 2024, we recorded charges to (i) write-off deferred financing fees and original issue discount costs related to voluntary principal prepayments on our EUR term loan B and (ii) write-off deferred financing fees related to the extinguishment of our term loan A. During the three and twelve months ended December 31, 2023, we recorded a charge to write-off deferred financing fees and original issue discount costs related to the repricing of our USD term loan B and the voluntary prepayment on our USD Tranche A loan.

Note 4: We recorded additional interest expense related to the amortization of deferred financing costs associated with our term loan facility.

Note 5: During the twelve months ended December 31, 2024 and the three months ended September 30, 2024, we recorded fees and expenses related to the repricing of our USD term loan B and EUR term loan B. During the twelve months ended December 31, 2024, we also recorded fees and expenses related to an amendment to our term loan facility where we borrowed additional amounts under our USD term loan B and EUR term loan B and fully repaid our term loan A. During the three and twelve months ended December 31, 2023, we recorded fees and expenses related to the repricing of our USD term loan B.

Note 6: During the twelve months ended December 31, 2023, we noted softer industry demand, particularly in the personal computer and smartphone markets and concluded there was a triggering event at our Materials Solutions Division, which represents the former Atotech business, and Equipment Solutions Business, which represents the former Electro Scientific Industries business and is a reporting unit of our Photonics Solutions Division. We performed a quantitative assessment which resulted in an impairment of $1.3 billion for our Materials Solutions Division and $0.5 billion for our Equipment Solutions Business. In addition, during the three months ended December 31, 2023, as part of our annual goodwill and intangible asset impairment analysis, we recorded additional impairment charges of $62 million for our Materials Solutions Division and $13 million for our Equipment Solutions Business.

Note 7: We recorded a gain on the sale of a minority interest investment in a private company.

Note 8: We recorded costs, net of recoveries, associated with the ransomware incident we identified on February 3, 2023. These costs were primarily comprised of various third-party consulting services, including forensic experts, restoration experts, legal counsel, and other information technology and accounting professional expenses, enhancements to our cybersecurity measures, and costs to restore our systems and access our data.

Note 9: We recorded an excess and obsolescence inventory charge related to a product line that was discontinued.

Note 10: Non-GAAP adjustments are tax effected at applicable statutory rates resulting in a difference between the GAAP and Non-GAAP tax rates.

The MIL Network –

February 13, 2025

MIL-OSI Economics: An Inside Look at ISE 2025: Samsung Presents Color E-Paper and the Future of Commercial Displays

Source: Samsung

Integrated Systems Europe (ISE) 2025 kicked off on February 4 in Barcelona, highlighting the latest advancements in commercial display technology.
Samsung Electronics welcomed guests with a striking 462” The Wall media facade at the entrance to its booth — while inside, the company showcased its energy-efficient Color E-Paper display alongside AI-powered upgrades to the SmartThings Pro platform. The supersized 115” 4K Smart Signage display captivated visitors with its immersive visuals as well.
Samsung Newsroom explored the booth firsthand and captured these innovations leading the future of commercial displays.
▲ Visitors marvel at The Wall’s stunning visuals powered by MICRO LED technology.
▲ (From left) Hoon Chung, Executive Vice President; SW Yong, President and Head of Visual Display (VD) Business; and Seong Cho, Executive Vice President of Europe Office, from Samsung Electronics admire The Wall.
▲ The ultra-low power Samsung Color E-Paper boasts a slim, lightweight design.
▲ Visitors examine Samsung VXT, a comprehensive cloud-based content management solution (CMS) platform.

▲ Visitors crowd around the SmartThings Pro wall to see how the B2B management platform has expanded to include enterprise-grade IoT devices.
▲ Visitors crowd around the SmartThings Pro wall to see how the B2B management platform has expanded to include enterprise-grade IoT devices.
▲ SW Yong, President and Head of Visual Display (VD) Business at Samsung Electronics, tries out the 2025 Interactive Display equipped with Samsung AI Assistant.
▲ The 115” (16:9) 4K Smart Signage display boasts an ultra-large screen optimized for office spaces, retail stores and other business environments.
▲ The 115” (16:9) 4K Smart Signage display boasts an ultra-large screen optimized for office spaces, retail stores and other business environments.

MIL OSI Economics –

February 13, 2025

MIL-OSI Submissions: Japan’s Expertise in International Assistance: Leveraging Experiences Gained in Southeast Asia to Aid Ukraine -The Shared Future of Asia and Japan

Source: Japan Connect

Diplomacy / InternationalAsia & Pacific

In 2022, Russia invaded Ukraine. The Russian military has continuously been launching missiles and artillery attacks on civilian facilities, causing great damage to the lives of the Ukrainian people. Japan is offering various assistance through public and private endeavors to rebuild lives, drawing on experiences gained through providing aid to countries in Southeast Asia.

One such example is a water supply aid project. As part of the government’s gratuitous recovery assistance, Japan is sending mobile water purification systems and ready-to-assemble water supply tanks to Ukraine’s cities where water supply networks were destroyed.

As part of this initiative, Nihon Genryo Co., Ltd., a manufacturer of water treatment systems headquartered in Kawasaki, Kanagawa Prefecture, delivered four Mobile Siphon Tanks, a mobile water purification system, to Ukraine’s capital Kyiv and the southern port city Odesa. The system, developed by Nihon Genryo, does not require filter replacements, which were necessary in previous water purification systems. The company also invited water supply technicians in Kyiv to Japan and conducted training on water purification technology.

Nihon Genryo has been deeply involved in Southeast Asia. In 1982, it delivered fully automatic dust scrapers to the Bangkhen Water Treatment Plant in Bangkok, Thailand, to help remove impurities and provide safe, treated water. It also delivered Mobile Siphon Tanks to cities in Laos and Vietnam as part of Japan’s Official Development Assistance (ODA) and is training local staff on how to use them. In Laos, the company carried out emergency water supply operations during flood disasters in 2013 and 2020. In the Philippines, it provided drinking water to regions without access to a water supply by using river water. It also carried out emergency water supply operations at the request of the Japanese government in the wake of disasters such as Super Typhoon Haiyan in 2013 and Super Typhoon Rai in 2021. In this way, the company gained extensive experience assisting the lives and lifestyles of people in Southeast Asia, which is now being leveraged to help Ukraine, halfway across the globe in Europe.

In addition to water supply assistance, Japan also has international experience in providing aid to people with disabilities. Since Russia’s invasion, over 300,000 Ukrainian troops and civilians have become disabled as a result of injuries. However, medical equipment is growing outdated due to a shortage of funds, and providing assistance is an urgent matter. Japan provided rehabilitation equipment and welfare vehicles to 11 facilities in Kyiv Oblast through the Japan International Cooperation Agency (JICA). In December 2024, a commemorative ceremony was held in Kyiv. Ruslan Kravchenko, the governor of Kyiv Oblast, expressed his gratitude, saying, “We thank the Japanese government and its people for their extensive support. This will allow us to greatly improve the conditions for people with disabilities.”

Japan has also been committed to providing aid to people with disabilities in Southeast Asia. Gratuitous financial assistance was offered to Indonesia, for example, by providing mobile rehabilitation equipment in 1989 and taking part in a project to construct a vocational rehabilitation center for people with disabilities in 1995. In addition to dispatching Japanese specialists and Japan Overseas Cooperation Volunteers (JOCVs) to countries like Thailand and the Philippines, Japan also invites trainees from various countries to Japan through JICA initiatives to help raise rehabilitation standards for people with disabilities.

Removing landmines is another urgent issue that must be addressed in Ukraine. It is believed that the Russian military may have planted mines in an area of up to 150,000 square kilometers, which amounts to over a fourth of the country’s land. The Japanese government has been engaged in mine clearance efforts in Cambodia for many years. Drawing on this experience, it is offering comprehensive support to Ukraine by providing resources developed by Japanese companies, such as mine detectors, mine removers and systems using artificial intelligence (AI) to identify areas where mines have been planted, in addition to training on how to prevent injuries and offering aid to victims.

Japan is also working on assisting Ukrainian soldiers and civilians who survived mines but lost their limbs.

Instalimb, Inc. is a startup company headquartered in Tokyo that utilizes digital technology to create prosthetic legs. The company uses a special scanner to capture the shape of a patient’s leg and creates a 3D-printed prosthetic based on data designed by a prosthetist using software.

The CEO of the company, Yutaka Tokushima, said in an interview with the Japanese broadcasting network TBS Television, “One (of the merits) is that we can create prosthetics very quickly. Where it usually takes a month, we can do it in a day (at the quickest) and significantly lower the cost. Another merit is that one professional prosthetist can make many prosthetics.”

Prosthetic legs cost around 400,000 yen in Japan, but Tokushima says the company can reduce it to one-tenth of that amount.

Instalimb has its roots in the Philippines. After working at a computer-related company and as a designer of industrial products, Tokushima joined the JOCV program under JICA and was posted to the Philippines in 2012.

Later, with support from JICA and the Philippine government, he established a laboratory equipped with a 3D printer and laser cutter for industrial development. After he learned that many people in the Philippines needed prosthetic legs as a result of diabetes, he took on the challenge of developing high-performance yet affordable prosthetics. Over the course of four years, he developed a technology that specialized in creating prosthetic legs using 3D printing. These prosthetics are now available to people in the Philippines who cannot afford conventional ones.

As he works on creating prosthetics in Ukraine, Tokushima says, “Many people want to recover and rebuild their lives, but they can’t work because they don’t have access to prosthetic legs. So I want to give them hope, first and foremost. Our current mission is to provide prosthetics to each and every person who needs them as we aim for the ultimate goal of helping all the people of Ukraine regain their bright future.” A Japanese company, born in the Philippines, is now striving to help the wounded people of Ukraine.

Japan is offering aid to Ukraine in a diverse range of fields including infrastructure, education, agriculture, economy, machinery and culture—and much of this expertise comes from the experience Japan gained in Southeast Asia.

By Akio Yaita
Journalist. Graduated from the Faculty of Letters at Keio University. After completing his doctorate at the Chinese Academy of Social Sciences, he worked as a correspondent for the Sankei Shimbun in Beijing and as Taipei bureau chief. Author or co-author of many books.

*The stories and materials above are provided by JIJI.com or AFPBBNews. Feel free to feature these stories in your own media.

About “Japan Connect”
Bringing you the latest stories about Japan.
This new service is provided by AFPBB News, which AFP launched in 2007.

MIL OSI – Submitted News –

February 13, 2025

MIL-OSI USA: Cortez Masto, Risch Renew Push for Bipartisan Legislation to Protect Critical Mineral Production in the West

US Senate News:

Source: United States Senator for Nevada Cortez Masto
Washington, D.C. – Today, U.S. Senator Catherine Cortez Masto (D-Nev.) and Jim Risch (R-Idaho) reintroduced the Mining Regulatory Clarity Act to allow critical mineral production to continue in the West. This bill is led in the U.S. House of Representatives by Congressman Mark Amodei (R-Nev.-02).
“We need to streamline our federal permitting process to unleash the full potential of Nevada’s critical mineral economy,” said Senator Cortez Masto. “I’m continuing my bipartisan push to pass this commonsense bill that will cut red tape, protect mining jobs in Nevada, help support clean energy projects nationwide.”
“Domestic mineral production is critical to everyday energy, technology, and national security needs,” said Senator Risch. “For too long, Idaho’s minerals have been tied up in red tape, preventing responsible use of our natural resources. The Mining Regulatory Clarity Act ensures mining projects in Idaho and across the West can proceed and provide invaluable support to our communities and country.”
“The Rosemont Decision overturned decades of established precedent that allowed our domestic mining operations to flourish, and instead blocked production efforts with excessive red tape,” said Representative Mark Amodei. “Out West, we have an abundance of natural resources that we can responsibly utilize to reduce our reliance on adversaries and strengthen our national security. This bill reverses the damage caused by the misguided Rosemont Decision and restores clarity for critical mining projects to move forward.”
“The Nevada Mining Association applauds and supports the bipartisan Mining Regulatory Clarity Act,” said Amanda Hilton, President of Nevada Mining Association. “Nevada is a leading producer of critical minerals like copper, lithium, and magnesium, along with more than 20 other materials essential to daily life. This legislation provides necessary stability for Nevada’s modern mining industry, ensuring it can operate efficiently and sustain the high-paying jobs that tens of thousands of Nevada families depend on. We appreciate Senator Cortez Masto’s ongoing leadership in advocating for Nevada’s mining community.”
“The bipartisan Mining Regulatory Clarity Act is KEY to ensuring the U.S. can use our vast domestic resources to build the essential mineral supply chains we know we must have,” said Rich Nolan, National Mining Association president and CEO. “China’s recent actions to cut off VITAL mineral supply chains underscores the need to strengthen domestic mineral supply chains for manufacturing, energy, national security and other priorities. This legislation ensures the fundamental ability to conduct responsible mining activities on federal lands. Regulatory certainty, or the lack thereof, will either underpin or undermine efforts to meet the extraordinary mineral demand now at our doorstep.”
“BPC Action is pleased to see Sens. James Risch (R-ID) and Catherine Cortez Masto (D-NV) working together to tackle barriers to expand America’s critical mineral supply. The bipartisan Mining Regulatory Clarity Act provides much needed regulatory certainty for mining projects, strengthening critical mineral supply chains while driving job creation in the sector,” said Michele Stockwell, President of Bipartisan Policy Center Action.
“If we’re going to achieve U.S. energy dominance, spur innovation, and support American manufacturing, we need to expand the domestic production of critical minerals. We can do so while supporting workers, communities, and our natural resources through sensible, transparent, and efficient regulations. Advanced Energy United is encouraged to see the “Mining Regulatory Clarity Act,” which should enhance business certainty around our mining rules and regulations,” said Harry Godfrey, Managing Director for Federal Affairs at Advanced Energy United.
“As demand for electric vehicles continues to grow at home and abroad, the need for mineral commodities, including lithium, cobalt, graphite, and copper will likewise rise dramatically. Mining is essential for the United States to fulfill demand in the electric vehicle and clean energy sectors, not to mention other mineral applications in defense, consumer electronics, and advanced computing. The Mining Regulatory Clarity Act is the result of a years-long, bipartisan effort to reestablish certainty for mineral producers in the United States. ZETA applauds Senators Cortez Masto and Risch for their tireless efforts to advance this critical legislation,” said Albert Gore, Zero Emission Transportation Association (ZETA).
The Mining Regulatory Clarity Act provides regulatory certainty for mining projects and reaffirms long-held practice that some public land use under a mining claim inherently accompanies exploration and extraction activities for other mining-support activities. This bill creates an optional and voluntary pathway to allow use of public lands for ancillary purposes connected to a mining project that can only be used within an agency-approved Plan of Operations. The bill also creates a new revenue stream from new mill site claims to be dedicated to abandoned mine clean-up efforts. This legislation is cosponsored by Senators Jacky Rosen (D-Nev.), Mike Crapo (R-Idaho), and Lisa Murkowski (R-Alaska).
Senator Cortez Masto has led efforts in Congress to support Nevada’s mining industry, protecting more than 83,000 local jobs and paving the way for Nevada to power the clean energy economy. She has consistently blocked burdensome taxes on mining and wrote important provisions of the Bipartisan Infrastructure Law to bolster Nevada’s critical mineral supply chain and fund battery recycling programs in the state. She’s also introduced bipartisan legislation to strengthen the domestic supply chain for rare-earth magnets.

MIL OSI USA News –

February 13, 2025

MIL-OSI USA: Cassidy Honored by Louisiana Sheriffs’ Association for Repealing WEP, GPO

US Senate News:

Source: United States Senator for Louisiana Bill Cassidy

WASHINGTON – Last week, U.S. Senator Bill Cassidy, M.D. (R-LA) was awarded the Fraternal Order of Police National President’s Advocacy Award for his instrumental role in passing the Social Security Fairness Act, which fully repeals two unfair Social Security provisions known as the Windfall Elimination Provision (WEP) and Government Pension Offset (GPO). It was signed into law on January 5, 2024 after Cassidy successfully secured a vote on the Senate floor. Prior to the passage of the Social Security Fairness Act, WEP and GPO unfairly penalized 94,000 state and local public servants in Louisiana, including Louisiana sheriffs.
“No one should be penalized for serving their communities. For years, I have worked to make sure our police officers and all public servants receive the full Social Security benefits they have earned,” said Dr. Cassidy. “I stand committed to those who protect and serve Louisiana every day. Thank you to the Louisiana Sheriffs’ Association for this honor.”
Background
Last week, Cassidy led his colleagues in sending a letter to acting Social Security Commissioner Michelle King calling for the immediate implementation of the Social Security Fairness Act to provide full Social Security benefits for millions of public servants impacted by WEP and GPO.
Cassidy played a pivotal role in getting the Social Security Fairness Act signed into law on January 5, 2025. Cassidy successfully demanded a vote on the Social Security Fairness Act. In July 2024 and again in December, Cassidy spoke on the U.S. Senate floor urging Congress to repeal WEP and GPO as part of his “Big Idea” to save, strengthen, and secure America’s retirement system. In June, Cassidy entered a statement into the record urging the repeal of WEP and GPO ahead of the U.S. Senate Finance Subcommittee field hearing on Social Security.
Cassidy is a long-time cosponsor of the Social Security Fairness Act in the Senate, being an original cosponsor since he became a Member of Congress in 2009. He led the introduction of the legislation in the 117th and 116th Congress.
Cassidy led a bipartisan working group to preserve and protect Social Security. He released the inaugural Bill on the Hill video where he asked Capitol Hill visitors from across the country their thoughts on the looming benefit cuts to Social Security and presented his “Big Idea.”
Last March, Cassidy grilled U.S. Treasury Secretary Janet Yellen on President Biden’s plan to address Social Security, to which Secretary Yellen admitted “the president doesn’t have a plan,” to save Social Security.
Cassidy has discussed the “Big Idea” at a public forum with AARP on the future of Social Security, outlined his Social Security plan in a fireside chat with the Bipartisan Policy Committee, and authored op-eds in the Washington Examiner in July, the Wall Street Journal in March, and State Affairs and Washington Post in May.

MIL OSI USA News –

February 13, 2025

MIL-OSI New Zealand: $14 million boost for sports facilities across Tāmaki Makaurau from Auckland Council

Source: Auckland Council

A top-of-the-line climbing structure for Auckland tamariki and rangatahi to use and enjoy is one step closer thanks to Auckland Council’s Sport and Recreation Facilities Investment Fund.

Six sports organisations across Tāmaki Makaurau will receive a slice of more than $14.3 million from the council to help develop their facilities to meet the sport and recreation needs of Aucklanders now and in the future.

Councillor Angela Dalton, chair of the Community Committee, says she’s pleased the council is able to help sports organisations build for the future.

“Auckland Council has allocated substantial funding to a variety of sporting organisations across the region, so they can grow and enhance their facilities.

“Having quality, fit for purpose facilities will ultimately allow Aucklanders from all walks of life to participate in sport and recreation, stay active and connect.

“Non-council owned facilities are crucial to the Tāmaki Makaurau sport and recreation facility network as they meet the region’s evolving demands for sporting opportunities.”

Waka Pacific Trust was allocated $250,000 for shading and lighting of the climbing frame to be built at Vector Wero Whitewater Park in Manukau. The galvanised steel structure will rise 16 metres, comprise 78 climbing elements ranging in difficulty levels. It will host up to 100 participants at once, offering a fun and active challenge. The Trust’s school programme which supported 90,000 children free of charge in 2024 – 80 per cent from low-decile schools – aims to provide free access to 15,000 local children in Wero Climb’s first year, with 9,000 already registered to have a go.

The council has previously contributed $250,000 to this $3.1 million project through the same fund.

The other organisations allocated funding include Auckland Hockey Association, Highbrook Regional Watersports Centre Trust, Ngāti Whātua Ōrakei Whai Maia, Pakuranga United Rugby Club (to expand their community sports centre), Waka Pacific Trust and West Auckland Riding for the Disabled.

“It’s fantastic to have these investment decisions made by our elected members,” says Kenneth Aiolupotea, General Manager Community Wellbeing.

“The next step involves our team working closely with successful grant applicants to build their sports and recreational infrastructure that will benefit our communities across Tāmaki Makaurau. This is very exciting.”

How funding is allocated

Six organisations were invited to submit updated information regarding their on-going projects. These projects were identified based on their alignment to the priority criteria for the fund and progress through the project lifecycle.

Auckland Council staff and an independent review panel considered the submissions and assessed the capability of the organisations, achievability of the project, current project status, and funding status.

All six of the targeted process projects were recommended to receive grants for a total of $14,348,920. The funding was approved by the council’s Community Committee on 11 February 2025.

More information on the council’s grants programme that supports Aucklanders’ aspirations for a great city, including the Sport and Recreation Facilities Investment Fund can be found on the Auckland Council website.

Next funding round

Applications for the Sport and Recreational Facilities Investment Fund, contestable process opens on 18 February 2025 and closes on 18 March 2025.

Sport and Recreation Facilities Investment Fund, targeted process 2025/2026
Recipient	Project title	Funding up to:
Auckland Hockey Association Incorporated	Lloyd Elsmore Park Hockey Stadium – Turf 2 renewal and LED Flood-light upgrade	$215,000
Highbrook Regional Watersport Centre Trust	Highbrook Watersports Centre Clubhouse building	$2,200,000
Ngāti Whātua Ōrakei Whai Maia Limited acting on behalf of Whai Maia Charitable Trust 1	Ngāti Whātua Ōrakei Sports, Recreation and Hauora Centre	$5,000,000
Pakuranga United Rugby Club Incorporated	Howick Pakuranga Community Sports Centre Facility Expansion	$5,571,061
Waka Pacific Trust	Wero Climb	$250,000
West Auckland Riding for the Disabled Association Incorporated	Covered Riding Facility	$512,859
Total		$14,348, 920

MIL OSI New Zealand News –

February 13, 2025

MIL-OSI New Zealand: Finance – Mortgage advisers alarmed at ComCom proposal that will be “shocking for consumers”

Source: Finance and Mortgage Advisers Association of New Zealand (FAMNZ)

The Finance and Mortgage Advisers Association of New Zealand (FAMNZ) has revealed recommendations by the Commerce Commission to supposedly “promote price competition and choice for home loans” would in fact be disastrous for consumers.

FAMNZ country manager Leigh Hodgetts revealed the commission has requested mortgage advisers to provide clients with a least three “actual offers” to consider and “to submit multiple applications on behalf of their clients”, or face “government intervention.”

Calling the recommendations a solution looking for a problem, she said any such move would hurt consumers by driving up costs, blowing out application times, and affecting their credit ratings.

“Let me be clear. They are not requesting three quotes, but three actual applications and offers, something unheard of anywhere in the world that I’m aware of.”

“Three lenders all processing applications for the same applicant means they will be spending time and resources for loans they know they will likely never get, while other borrowers will be forced to wait and may even miss out on properties,” she explained.

FAMNZ managing director Peter White AM said it was “bureaucracy gone mad”, and has called on commerce and consumer affairs minister Andrew Bayly to immediately intervene.

“The crazy thing is that nothing is broken.

“Mortgage advisers already promote competition, consumers are increasingly choosing to use advisers, and complaints are almost non-existent.”

He said despite FAMNZ attempting to educate the commission on the way advisers worked for the past year, “they clearly still have no idea and now want to make things worse.

“Furthermore, this requirement puts at risk clients’ credit records, which is simply unacceptable and I believe unethical.”

Ms Hodgetts said while advisers could provide multiple choices of lender where possible, only one application should be submitted at once according to the customer’s needs.

“And in some circumstances, for example with self-employed people, there may only be one option,” she explained.

MIL OSI New Zealand News –

February 13, 2025

MIL-OSI Security: Two Pharmacists Convicted for Illegal Distribution of Oxycodone

Source: Office of United States Attorneys

Defendants Conspired to Fill Fake Prescriptions for Oxycodone Pills Written by a Doctor’s Receptionist and Distributed to Street Drug Dealers for Cash

Earlier today, a federal jury in Brooklyn returned guilty verdicts against licensed pharmacists Yousef Ennab and Mohamed Hassan on all counts of a superseding indictment charging them with conspiracies to dispense and distribute oxycodone, as well as distribution and possession with intent to distribute oxycodone. The verdict followed a three-week trial before United States District Judge Ann M. Donnelly. When sentenced, the defendants each face up to 60 years in prison.

John J. Durham, United States Attorney for the Eastern District of New York; Frank A. Tarentino III, Special Agent in Charge, Drug Enforcement Administration, New York Division (DEA); Naomi Gruchacz, Assistant Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General (HHS-OIG); Harry T. Chavis, Jr., Special Agent in Charge, Internal Revenue Service Criminal Investigation, New York (IRS-CI); Jessica S. Tisch, Commissioner, New York City Police Department (NYPD); Jocelyn E. Strauber, Commissioner, New York City Department of Investigation (DOI); and Dr. James V. McDonald, Commissioner, New York State Department of Health, announced the verdicts.

“The defendants abused their access to oxycodone and violated the trust placed in them as pharmacists by illegally agreeing to supply drug dealers with tens of thousands of pills to sell on the streets of our district with zero regard for the immense harm this dangerously addictive narcotic has caused,” stated United States Attorney Durham. “Pharmacists have a responsibility to prevent the illegal flow of drugs from their businesses, but these defendants only cared about lining their pockets with cash. With today’s verdict they will soon learn there is a reckoning for their criminal conduct that has contributed to the opioid epidemic.”

United States Attorney Durham expressed sincere thanks to his team of prosecutors and paralegals and all of the law enforcement partners whose tireless efforts contributed to the convictions of these defendants and their co-conspirators. They include the Federal Bureau of Investigation, the Office of the New York State Comptroller, the New York Attorney General’s Medicaid Fraud Control Unit and the New York National Guard.

“Today’s verdict against Yousef Ennab and Mohamed Hassan sends a strong message to anyone in the medical profession willing to betray their patients’ trust,” stated DEA New York Special Agent in Charge Tarentino. “Pharmacists who abuse their license, a license to help and promote the health and safety of others, will be prosecuted to the fullest extent of the law. This abuse is a breach of trust that not only undermines public confidence but also causes irreputable harm and erodes the foundation of integrity which the public relies on. The DEA and our partners will continue to target those individuals who abuse their authority and profit from fueling the national opioid crisis.”

“The pharmacists convicted in this case chose to dispense illegally prescribed controlled substances to patients and accept cash kickbacks to do so, which is especially egregious given the ongoing opioid epidemic,” stated HHS-OIG Special Agent in Charge Gruchacz. “HHS-OIG will continue to work with our law enforcement partners to ensure health care providers involved in schemes that threaten patient safety are held accountable.”

“These two men used their positions as pharmacists to scheme and cheat the system, filling their pockets with the money of the vulnerable and addicted. Yousef Ennab and Mohamed Hassan had little regard for the safety and well-being of their clients, and today a jury of their peers found them guilty of their criminal behavior. This conviction was made possible with the collaborative efforts of our federal and local partners, and now both defendants will soon be faced with sentencing,” stated IRS-CI Special Agent in Charge Chavis.

“Whether illegal drug transactions occur on a street corner or in brick-and-mortar pharmacies masquerading as legitimate businesses, the pushers are fueling addiction,” stated NYPD Commissioner Tisch. “The numbers here are staggering—over 1.2 million pills exchanged with a street value of approximately $24 million. While the full extent of the harm is unquantifiable, the guilty verdicts send a clear message that wherever you illegally distribute drugs, your operation will be shut down and you will go to jail. I thank the investigators in the NYPD, in the U.S. Attorney’s Office, and across numerous law enforcement agencies for their joint effort to eradicate poison from our streets.”

“The defendants’ criminal conduct, and that of their co-conspirators, flooded our city with 1.2 million pills of highly addictive oxycodone. Their convictions make clear that DOI, the U.S. Attorney’s Office for the Eastern District of New York, and all of our partner law enforcement agencies involved in this investigation are committed to bringing to justice those responsible for the distribution of dangerous drugs.” stated DOI Commissioner Strauber.

“The Department takes professional and medical misconduct very seriously, with the health and safety of New Yorkers and our communities being of utmost concern,” stated New York State Department of Health Commissioner McDonald. “The State Department of Health’s Bureau of Narcotic Enforcement will continue to remain vigilant and collaborate with law enforcement agencies to protect the public health by combatting diversion and safeguarding the legitimate use of controlled substances in health care.”

As proven at trial, Hassan and Ennab were licensed pharmacists who participated in a large-scale scheme using illegal medical prescriptions to obtain oxycodone for distribution on the streets of New York City. Hassan held ownership stakes in more than a dozen pharmacies, where were located in Brooklyn, Queens and Staten Island and did business under the names Nile RX, Nile Ridge, Nile City, Sunset Corner, Prospect Care, Downtown RX and Forest Care, among others. Ennab was the supervising pharmacist at Forest Care, one of Hassan’s pharmacies in Staten Island.

The scheme relied on filling illegally issued prescriptions for 30-day supplies of oxycodone 30 mg that were written out of a Brooklyn medical practice operating as a pill mill, often for patients that the resident doctor at the practice had never examined. Oxycodone 30 pills are high in strength and are prescribed to cancer patients, for instance. In some cases, the prescriptions were for individuals whose identities had been stolen and were not patients of the practice. The prescriptions were then filled at pharmacies controlled by Hassan, including the pharmacy where Ennab worked. Hassan and Ennab conspired with other drug dealers to effect the distribution of the illegally obtained oxycodone. One of the drug dealers picked up the oxycodone from the pharmacies in exchange for cash payments to Hassan and Ennab. Hassan and other pharmacist co-conspirators also billed insurance companies for the pills even though they had no legitimate medical purpose. The trial evidence included video footage of Ennab taking a cash payment from one of the drug dealers, Michael Kent, while handing over multiple prescriptions for oxycodone for sham patients. In total, the scheme resulted in the illegal distribution of more than 1.2 million pills of oxycodone worth more than $36 million in retail street value.

Six co-defendants, including Dr. Somsri Ratanaprasatporn, her receptionist Leticia Smith and pharmacists Bassam Amin and Omar Elsayed, previously pleaded guilty based on their involvement in the scheme and are awaiting sentencing. A seventh co-defendant, Michael Kent, previously pleaded guilty and was sentenced to nine years’ incarceration.

These convictions are part of an Organized Crime Drug Enforcement Task Forces (OCDETF) operation led by the U.S. Attorney’s Office and the DEA. OCDETF identifies, disrupts, and dismantles the highest-level criminal organizations that threaten the United States using a prosecutor-led, intelligence-driven, multi-agency approach. Additional information about the OCDETF Program can be found at https://www.justice.gov/OCDETF.

Assistant United States Attorneys Laura Zuckerwise, Victor Zapana and Gilbert M. Rein are in charge of the prosecution with assistance from Paralegal Specialists Rachel Friedman and Nadya Osman. Assistant United States Attorney Claire Kedeshian is handing forfeiture matters.

The Defendants:

YOUSEF ENNAB
Age: 27
Brooklyn, New York

MOHAMED HASSAN
Age: 34
Brooklyn, New York

Co-Defendants Who Pleaded Guilty:

LETICIA SMITH
Age: 54
Brooklyn, New York

BASSAM AMIN
Age: 69
Brooklyn, New York

OMAR ELSAYED
Age: 28
Hackensack, New Jersey

YOUSEF ENNAB
Age: 25
Brooklyn, New York

MICHAEL KENT
Age: 49
Brooklyn, New York

ANTHONY MATHIS
Age: 55
New Windsor, New York

Dr. SOMSRI RATANAPRASATPORN
Age: 75
Staten Island, New York

RAYMOND WALKER
Age: 70
Brooklyn, New York

E.D.N.Y. Docket No. 22-CR-464 (AMD)

MIL Security OSI –

February 13, 2025

MIL-OSI Security: 2020 Census Contractor Agrees to Pay $8,000,000 to Settle Fraud Allegations

Source: Office of United States Attorneys

Maximus, Inc., a government services contractor based in Virginia, has agreed to pay the United States $8 million to resolve allegations that it misled the United States Census Bureau about the quality of its call handling as a contractor for the 2020 Census. The settlement resolves allegations brought by whistleblowers under the federal False Claims Act.

Maximus operated several multi-lingual call centers throughout the United States that took incoming calls from individuals with questions about Census operations and made outgoing calls to assist individuals in responding to the Census. Its contract with the United States Census Bureau also required Maximus to perform services to assess the quality and data accuracy of its call center operations. Maximus employed quality monitors to score calls for the accuracy of the call taker’s data input and adherence to standards of professionalism and decorum, based on a set of scoring standards agreed on between Maximus and the Census Bureau. In addition to compensation for its costs incurred, the contract provided that Maximus would receive an “award fee.” An “award fee” is a contract incentive paid to encourage contractors to meet certain contract goals. The Census Bureau used the call quality scores Maximus reported to help determine an appropriate “award fee” to pay Maximus.

The United States alleges that Maximus provided the Census Bureau inaccurate or misleading score information to improve the Census Bureau’s impression of the quality of Maximus’s work. While the contract required Maximus

to score a random sample of calls, the United States alleges that Maximus encouraged its quality monitors to choose which calls to score in a way designed to
improve the quality scores reported to the Census Bureau. The United States contends that Maximus did not tell the Census Bureau about these practices, which artificially increased the quality scores and permitted Maximus to receive greater award fees than it would have received with accurate reporting.

Maximus cooperated with the investigation. The claims asserted against Maximus are allegations only; there was no determination or admission of liability. The lawsuit does not allege that Maximus manipulated any census enumeration data it helped collect.

The lawsuit arose under the qui tam, or whistleblower, provisions of the False Claims Act. The False Claims Act permits private citizens with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and share in the recovery. The whistleblowers will receive a $1.2 million share of the settlement.

“Government contractors must be honest and accurate in their reporting to their government partners. This is particularly true when the information they report affects the amount the government pays them. Our office is committed to holding accountable contractors that enrich themselves by misleading American taxpayers,” said United States Attorney Timothy T. Duax.

“The U.S. Department of Commerce, Office of Inspector General is dedicated to investigating schemes to defraud U.S. Census Bureau contracts and programs,” said Special Agent-in-Charge Eric Arcand with the United States Department of Commerce Office of Inspector General (Commerce-OIG). “Census data informs policy and decision-making at all levels of government, and fraud affecting any aspect of the Census Bureau’s programs must not be tolerated. We are committed to protecting the Census Bureau’s funding and programs from fraud, waste, and abuse. We also appreciate the Department of Justice and the U.S. Attorney’s Office for the Northern District of Iowa’s efforts toward resolving this matter.”

The case was handled by Assistant United States Attorneys

Brandon J. Gray and Brian J. Keogh and investigated by the Department of Commerce-OIG, particularly Assistant Special Agent-in-Charge Judd Leinum.

Follow us on X @USAO_NDIA.

MIL Security OSI –

February 13, 2025

MIL-OSI Security: Indiana Real Estate Developer and Property Manager Sentenced to 41 Months in Prison for Multimillion-Dollar Ponzi Scheme

Source: Federal Bureau of Investigation (FBI) State Crime Alerts (c)

NEWARK, N.J. – An Indianapolis man was sentenced today to 41 months in prison today for his role in a scheme to defraud real estate investors, Acting U.S. Attorney Vikas Khanna announced.

Herbert Whalen, a/k/a “Bert Whalen,” 50, of Indianapolis, Indiana, previously pleaded guilty in Newark federal court to conspiracy to commit wire fraud for his role in a multi-million dollar real estate investment scheme that took place in Indiana and New Jersey. Judge Madeline Cox Arleo imposed the sentence today in Newark federal court.

According to documents filed in this case and statements made in court:

From August 2016 to July 2018, Whalen, who operated Oceanpointe Property Management in Indianapolis, engaged in a scheme to obtain money from real estate investors by misrepresenting and concealing the poor condition of properties managed by Oceanpointe and by creating fake leases for unoccupied Oceanpointe properties. Investors were promised that, after repairs and rehabilitations were completed, and tenants rented the properties, investors would receive copies of the leases and begin to receive rent payments as their return on investment. In reality, many Oceanpointe properties were not repaired and rehabilitated, and were not ready for occupancy. To conceal these facts from victim investors, Whalen and a conspirator directed Oceanpointe employees to draft fake leases, making it appear to investors that Oceanpointe properties were rented, when, in fact, the properties remained vacant. Whalen instructed Oceanpointe employees to place fake tenant names on leases to send to Oceanpointe investors.

Whalen and others commingled tenant rent payments and selected which investors would be paid from the pool of funds in order to silence investors who voiced concerns and evade detection of the fraud. In order to prevent investors from leaving Oceanpointe and exposing his fraudulent conduct, Whalen directed an Oceanpointe employee to create a false identity and falsely claim, on an online real estate message forum, that the Oceanpointe employee was an investor with Oceanpointe and another company, and that Oceanpointe had addressed all of the concerns regarding the investment property. These misrepresentations and others led to millions of dollars in losses to investors, which Whalen used to, among other things, fund his lifestyle.

In addition to the prison term, Judge Arleo sentenced Whalen to three years of supervised release.

Acting U.S. Attorney Khanna credited special agents of the FBI, under the direction of Acting Special Agent in Charge Terence G. Reilly in Newark, with the investigation leading to the charge.

The government is represented by Assistant U.S. Attorneys Caroline Silane of the Economic Crimes Unit and Ari B. Fontecchio, Chief of the Opioid Abuse Prevention and Enforcement Unit.

###

Defense counsel: John L. Tompkins, Tompkins Law, Indianapolis, IN

MIL Security OSI –

February 13, 2025

MIL-OSI: Palomar Holdings, Inc. Reports Fourth Quarter & Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

LA JOLLA, Calif., Feb. 12, 2025 (GLOBE NEWSWIRE) — Palomar Holdings, Inc. (NASDAQ:PLMR) (“Palomar” or “Company”) reported net income of $35.0 million, or $1.29 per diluted share, for the fourth quarter of 2024 compared to net income of $25.9 million, or $1.02 per diluted share, for the fourth quarter of 2023. Adjusted net income⁽¹⁾ was $41.3 million, or $1.52 per diluted share, for the fourth quarter of 2024 as compared to $28.0 million, or $1.11 per diluted share, for the fourth quarter of 2023.

Fourth Quarter 2024 Highlights

Gross written premiums increased by 23.3% to $373.7 million compared to $303.2 million in the fourth quarter of 2023
Net income increased 35.0% to $35.0 million compared to $25.9 million in the fourth quarter of 2023
Adjusted net income⁽¹⁾ increased 47.5% to $41.3 million compared to $28.0 million in the fourth quarter of 2023
Total loss ratio of 25.7% compared to 19.1% in the fourth quarter of 2023
Combined ratio of 75.9% compared to 74.2% in the fourth quarter of 2023
Adjusted combined ratio⁽¹⁾ of 71.7% compared to 68.8%, in the fourth quarter of 2023
Annualized return on equity of 19.5% compared to 23.2% in the fourth quarter of 2023
Annualized adjusted return on equity⁽¹⁾ of 23.1% compared to 25.1% in the fourth quarter of 2023

Full Year 2024 Highlights

Gross written premiums increased by 35.1% to $1.5 billion compared to $1.1 billion in 2023
Net income increased 48.4% to $117.6 million compared to $79.2 million in 2023
Adjusted net income⁽¹⁾ increased 42.8% to $133.5 million compared to $93.5 million in 2023
Total loss ratio of 26.4% compared to 21.0% in 2023
Combined ratio of 78.1% compared to 76.6% in 2023
Adjusted combined ratio⁽¹⁾ of 73.7% compared to 71.2% in 2023
Return on equity of 19.6% compared to 18.5% in 2023
Adjusted return on equity⁽¹⁾ of 22.2% compared to 21.9% in 2023

(1) See discussion of “Non-GAAP and Key Performance Indicators” below.

Mac Armstrong, Chairman and Chief Executive Officer, commented, “Palomar’s stellar 2024 was capped off by an exceptional fourth quarter. During the quarter, we generated gross written premiums growth of 23%, 39% when excluding run-off business from our results, adjusted net income growth of 48%, inclusive of $8.1 million of catastrophe losses, and, importantly, an adjusted return on equity of 23%. When looking at the full year we not only generated record gross written premiums and adjusted net income, but we grew our top and bottom-line 35% and 43%, respectively. Additionally, throughout 2024 we made significant investments across the organization that we believe will sustain our earnings base and profitable growth trajectory.” 

Mr. Armstrong continued, “Beyond the strong financial results of the fourth quarter and 2024, Palomar’s accomplishments were several and notable, highlighted by our AM Best upgrade and the acquisition of First Indemnity of America, our surety operation. Furthermore, we accomplished a Palomar 2X fundamental strategic objective by doubling our adjusted underwriting income for the 2021 period in a three-year timeframe. We are energized by our prospects to continue this profitable growth in 2025 and thereafter.” 

Underwriting Results

Gross written premiums increased 23.3% to $373.7 million compared to $303.2 million in the fourth quarter of 2023, additionally net earned premiums increased 54.6% compared to the prior year’s fourth quarter.

Losses and loss adjustment expenses for the fourth quarter were $37.2 million, comprised of $29.1 million of attritional losses and $8.1 million of catastrophe losses primarily related to Hurricane Milton. The loss ratio for the quarter was 25.7%, comprised of an attritional loss ratio of 20.1% and a catastrophe loss ratio of 5.6%, compared to a loss ratio of 19.1% during the same period last year, all comprised of attritional losses.

Underwriting income⁽¹⁾ for the fourth quarter was $34.9 million resulting in a combined ratio of 75.9% compared to underwriting income of $24.2 million resulting in a combined ratio of 74.2% during the same period last year. The Company’s adjusted underwriting income⁽¹⁾ was $41.0 million resulting in an adjusted combined ratio⁽¹⁾ of 71.7% in the fourth quarter compared to adjusted underwriting income⁽¹⁾ of $29.3 million and an adjusted combined ratio⁽¹⁾ of 68.8% during the same period last year.

Investment Results
Net investment income increased by 61.3% to $11.3 million compared to $7.0 million in the prior year’s fourth quarter. The increase was primarily due to higher yields on invested assets and a higher average balance of investments held during the three months ended December 31, 2024 due to cash generated from operations and proceeds from our August 2024 stock offering. The weighted average duration of the fixed-maturity investment portfolio, including cash equivalents, was 4.04 years at December 31, 2024. Cash and invested assets totaled $1.1 billion at December 31, 2024. During the fourth quarter, the Company recorded net realized and unrealized losses of $1.2 million related to its investment portfolio as compared to net realized and unrealized gains of $3.0 million in last year’s fourth quarter.

Tax Rate
The effective tax rate for the three months ended December 31, 2024 was 22.2% compared to 22.6% for the three months ended December 31, 2023. For the current quarter, the Company’s income tax rate differed from the statutory rate due primarily to the non-deductible executive compensation expense, offset by the permanent component of employee stock option exercises.

Stockholders’ Equity and Returns
Stockholders’ equity was $729.0 million at December 31, 2024, compared to $471.3 million at December 31, 2023. For the three months ended December 31, 2024, the Company’s annualized return on equity was 19.5% compared to 23.2% for the same period in the prior year while adjusted return on equity⁽¹⁾ was 23.1% compared to 25.1% for the same period in the prior year.

Full Year 2025 Outlook
For the full year 2025, the Company expects to achieve adjusted net income of $180 million to $192 million. This includes an estimate of $8 million to $12 million of catastrophe losses for the year.

Conference Call
As previously announced, Palomar will host a conference call Thursday, February 13, 2025, to discuss its fourth quarter 2024 results at 12:00 p.m. (Eastern Time). The conference call can be accessed live by dialing 1-877-423-9813 or for international callers, 1-201-689-8573, and requesting to be joined to the Palomar Fourth Quarter 2024 Earnings Conference Call. A replay will be available starting at 4:00 p.m. (Eastern Time) on February 13, 2025, and can be accessed by dialing 1-844-512-2921, or for international callers, 1-412-317-6671. The passcode for the replay is 13743970. The replay will be available until 11:59 p.m. (Eastern Time) on February 20, 2025.

Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the investor relations section of the Company’s website at http://ir.palomarspecialty.com/. The online replay will remain available for a limited time beginning immediately following the call.

About Palomar Holdings, Inc.
Palomar Holdings, Inc. is the holding company of subsidiaries Palomar Specialty Insurance Company (“PSIC”), Palomar Specialty Reinsurance Company Bermuda Ltd. (“PSRE”), Palomar Insurance Agency, Inc. (“PIA”), Palomar Excess and Surplus Insurance Company (“PESIC”), Palomar Underwriters Exchange Organization, Inc (“PUEO”), Palomar Crop Insurance Services, Inc, and First Indemnity of America Insurance Company (acquired 1/1/2025). Palomar’s consolidated results also include Laulima Reciprocal Exchange, a variable interest entity for which the Company is the primary beneficiary. Palomar is an innovative specialty insurer serving residential and commercial clients in five product categories: Earthquake, Inland Marine and Other Property, Casualty, Fronting, and Crop. Palomar’s insurance subsidiaries, Palomar Specialty Insurance Company, Palomar Specialty Reinsurance Company Bermuda Ltd., and Palomar Excess and Surplus Insurance Company, have a financial strength rating of “A” (Excellent) from A.M. Best.

Non-GAAP and Key Performance Indicators

Palomar discusses certain key performance indicators, described below, which provide useful information about the Company’s business and the operational factors underlying the Company’s financial performance.

Underwriting revenue is a non-GAAP financial measure defined as total revenue, excluding net investment income and net realized and unrealized gains and losses on investments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of total revenue calculated in accordance with GAAP to underwriting revenue.

Underwriting income is a non-GAAP financial measure defined as income before income taxes excluding net investment income, net realized and unrealized gains and losses on investments, and interest expense. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to underwriting income.

Adjusted net income is a non-GAAP financial measure defined as net income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook, net of tax impact. The Company calculates the tax impact only on adjustments which would be included in calculating its income tax expense using the estimated tax rate at which the company received a deduction for these adjustments. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of net income calculated in accordance with GAAP to adjusted net income.

Annualized Return on equity is net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period.

Annualized adjusted return on equity is a non-GAAP financial measure defined as adjusted net income expressed on an annualized basis as a percentage of average beginning and ending stockholders’ equity during the period. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of return on equity calculated using unadjusted GAAP numbers to adjusted return on equity.

Loss ratio, expressed as a percentage, is the ratio of losses and loss adjustment expenses, to net earned premiums.

Expense ratio, expressed as a percentage, is the ratio of acquisition and other underwriting expenses, net of commission and other income to net earned premiums.

Combined ratio is defined as the sum of the loss ratio and the expense ratio. A combined ratio under 100% generally indicates an underwriting profit. A combined ratio over 100% generally indicates an underwriting loss.

Adjusted combined ratio is a non-GAAP financial measure defined as the sum of the loss ratio and the expense ratio calculated excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio.

Diluted adjusted earnings per share is a non-GAAP financial measure defined as adjusted net income divided by the weighted-average common shares outstanding for the period, reflecting the dilution which could occur if equity-based awards are converted into common share equivalents as calculated using the treasury stock method. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of diluted earnings per share calculated in accordance with GAAP to diluted adjusted earnings per share.

Catastrophe loss ratio is a non-GAAP financial measure defined as the ratio of catastrophe losses to net earned premiums. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of loss ratio calculated using unadjusted GAAP numbers to catastrophe loss ratio.

Adjusted combined ratio excluding catastrophe losses is a non-GAAP financial measure defined as adjusted combined ratio excluding the impact of catastrophe losses. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of combined ratio calculated using unadjusted GAAP numbers to adjusted combined ratio excluding catastrophe losses.

Adjusted underwriting income is a non-GAAP financial measure defined as underwriting income excluding the impact of certain items that may not be indicative of underlying business trends, operating results, or future outlook. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of income before income taxes calculated in accordance with GAAP to adjusted underwriting income.

Tangible stockholders’ equity is a non-GAAP financial measure defined as stockholders’ equity less goodwill and intangible assets. See “Reconciliation of Non-GAAP Financial Measures” for a reconciliation of stockholders’ equity calculated in accordance with GAAP to tangible stockholders’ equity.

Safe Harbor Statement
Palomar cautions you that statements contained in this press release may regard matters that are not historical facts but are forward-looking statements. These statements are based on the company’s current beliefs and expectations. The inclusion of forward-looking statements should not be regarded as a representation by Palomar that any of its plans will be achieved. Actual results may differ from those set forth in this press release due to the risks and uncertainties inherent in the Company’s business. The forward-looking statements are typically, but not always, identified through use of the words “believe,” “expect,” “enable,” “may,” “will,” “could,” “intends,” “estimate,” “anticipate,” “plan,” “predict,” “probable,” “potential,” “possible,” “should,” “continue,” and other words of similar meaning. Actual results could differ materially from the expectations contained in forward-looking statements as a result of several factors, including unexpected expenditures and costs, unexpected results or delays in development and regulatory review, regulatory approval requirements, the frequency and severity of adverse events and competitive conditions. These and other factors that may result in differences are discussed in greater detail in the Company’s filings with the Securities and Exchange Commission. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and the Company undertakes no obligation to update such statements to reflect events that occur or circumstances that exist after the date hereof. All forward-looking statements are qualified in their entirety by this cautionary statement, which is made under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.

Contact
Media Inquiries
Lindsay Conner
1-551-206-6217
lconner@plmr.com

Investor Relations
Jamie Lillis
1-203-428-3223
investors@plmr.com
Source: Palomar Holdings, Inc.

Summary of Operating Results:

The following tables summarize the Company’s results for the three months and year ended December 31, 2024 and 2023:

	Three Months Ended
	December 31,
	2024			2023			Change			% Change
	($ in thousands, except per share data)
Gross written premiums	$	373,723		$	303,152		$	70,571			23.3	%
Ceded written premiums		(204,492	)		(188,742	)		(15,750	)		8.3	%
Net written premiums		169,231			114,410			54,821			47.9	%
Net earned premiums		144,890			93,748			51,142			54.6	%
Commission and other income		750			1,586			(836	)		(52.7	)%
Total underwriting revenue ⁽¹⁾		145,640			95,334			50,306			52.8	%
Losses and loss adjustment expenses		37,176			17,896			19,280			107.7	%
Acquisition expenses, net of ceding commissions and fronting fees		40,585			29,005			11,580			39.9	%
Other underwriting expenses		32,947			24,210			8,737			36.1	%
Underwriting income ⁽¹⁾		34,932			24,223			10,709			44.2	%
Interest expense		(87	)		(824	)		737			(89.4	)%
Net investment income		11,318			7,015			4,303			61.3	%
Net realized and unrealized (losses) gains on investments		(1,201	)		3,044			(4,245	)		(139.5	)%
Income before income taxes		44,962			33,458			11,504			34.4	%
Income tax expense		9,997			7,564			2,433			32.2	%
Net income	$	34,965		$	25,894		$	9,071			35.0	%
Adjustments:
Net realized and unrealized losses (gains) on investments		1,201			(3,044	)		4,245			(139.5	)%
Expenses associated with transactions		922			478			444			92.9	%
Stock-based compensation expense		4,779			4,176			603			14.4	%
Amortization of intangibles		389			389			—			—	%
Tax impact		(964	)		103			(1,067	)		NM
Adjusted net income ⁽¹⁾	$	41,292		$	27,996		$	13,296			47.5	%
Key Financial and Operating Metrics
Annualized return on equity		19.5	%		23.2	%
Annualized adjusted return on equity ⁽¹⁾		23.1	%		25.1	%
Loss ratio		25.7	%		19.1	%
Expense ratio		50.2	%		55.1	%
Combined ratio		75.9	%		74.2	%
Adjusted combined ratio ⁽¹⁾		71.7	%		68.8	%
Diluted earnings per share	$	1.29		$	1.02
Diluted adjusted earnings per share ⁽¹⁾	$	1.52		$	1.11
Catastrophe losses	$	8,122		$	10
Catastrophe loss ratio ⁽¹⁾		5.6	%		—	%
Adjusted combined ratio excluding catastrophe losses ⁽¹⁾		66.1	%		68.8	%
Adjusted underwriting income ⁽¹⁾	$	41,022		$	29,266		$	11,756			40.2	%
NM – not meaningful

(1)- Indicates Non-GAAP financial measure- see above for definition of Non-GAAP financial measures and see below for reconciliation of Non-GAAP financial measures to their most directly comparable measures prepared in accordance with GAAP.


	Year Ended
	December 31,
	2024			2023			Change			% Change
	($ in thousands, except per share data)
Gross written premiums	$	1,541,962		$	1,141,558		$	400,404			35.1	%
Ceded written premiums		(897,111	)		(731,531	)		(165,580	)		22.6	%
Net written premiums		644,851			410,027			234,824			57.3	%
Net earned premiums		510,687			345,913			164,774			47.6	%
Commission and other income		2,784			3,367			(583	)		(17.3	)%
Total underwriting revenue ⁽¹⁾		513,471			349,280			164,191			47.0	%
Losses and loss adjustment expenses		134,759			72,592			62,167			85.6	%
Acquisition expenses, net of ceding commissions and fronting fees		149,657			107,745			41,912			38.9	%
Other underwriting expenses		117,113			88,172			28,941			32.8	%
Underwriting income ⁽¹⁾		111,942			80,771			31,171			38.6	%
Interest expense		(1,138	)		(3,775	)		2,637			(69.9	)%
Net investment income		35,824			23,705			12,119			51.1	%
Net realized and unrealized gains on investments		4,568			2,941			1,627			55.3	%
Income before income taxes		151,196			103,642			47,554			45.9	%
Income tax expense		33,623			24,441			9,182			37.6	%
Net income	$	117,573		$	79,201		$	38,372			48.4	%
Adjustments:
Net realized and unrealized gains on investments		(4,568	)		(2,941	)		(1,627	)		55.3	%
Expenses associated with transactions		1,479			706			773			109.5	%
Stock-based compensation expense		16,685			14,913			1,772			11.9	%
Amortization of intangibles		1,558			1,481			77			5.2	%
Expenses associated with catastrophe bond		2,483			1,640			843			51.4	%
Tax impact		(1,699	)		(1,480	)		(219	)		14.8	%
Adjusted net income ⁽¹⁾	$	133,511		$	93,520		$	39,991			42.8	%
Key Financial and Operating Metrics
Annualized return on equity		19.6	%		18.5	%
Annualized adjusted return on equity ⁽¹⁾		22.2	%		21.9	%
Loss ratio		26.4	%		21.0	%
Expense ratio		51.7	%		55.7	%
Combined ratio		78.1	%		76.6	%
Adjusted combined ratio ⁽¹⁾		73.7	%		71.2	%
Diluted earnings per share	$	4.48		$	3.13
Diluted adjusted earnings per share ⁽¹⁾	$	5.09		$	3.69
Catastrophe losses	$	27,846		$	3,442
Catastrophe loss ratio ⁽¹⁾		5.5	%		1.0	%
Adjusted combined ratio excluding catastrophe losses ⁽¹⁾		68.3	%		70.2	%
Adjusted underwriting income ⁽¹⁾	$	134,147		$	99,511		$	34,636			34.8	%

Condensed Consolidated Balance sheets

Palomar Holdings, Inc. and Subsidiaries Condensed Consolidated Balance Sheets (unaudited) (in thousands, except shares and par value data)

	December 31, 2024			December 31, 2023
Assets
Investments:
Fixed maturity securities available for sale, at fair value (amortized cost: $973,330 in 2024; $675,130 in 2023)	$	939,046		$	643,799
Equity securities, at fair value (cost: $32,987 in 2024; $43,003 in 2023)		40,529			43,160
Equity method investment		2,277			2,617
Other investments		5,863			—
Total investments		987,715			689,576
Cash and cash equivalents		80,438			51,546
Restricted cash		101			306
Accrued investment income		8,440			5,282
Premium receivable		305,724			261,972
Deferred policy acquisition costs, net of ceding commissions and fronting fees		94,881			60,990
Reinsurance recoverable on paid losses and loss adjustment expenses		47,076			32,172
Reinsurance recoverable on unpaid losses and loss adjustment expenses		348,083			244,622
Ceded unearned premiums		276,237			265,808
Prepaid expenses and other assets		91,086			72,941
Deferred tax assets, net		8,768			10,119
Property and equipment, net		429			373
Goodwill and intangible assets, net		13,242			12,315
Total assets	$	2,262,220		$	1,708,022
Liabilities and stockholders’ equity
Liabilities:
Accounts payable and other accrued liabilities	$	70,079		$	42,376
Reserve for losses and loss adjustment expenses		503,382			342,275
Unearned premiums		741,692			597,103
Ceded premium payable		190,168			181,742
Funds held under reinsurance treaty		27,869			13,419
Income taxes payable		—			7,255
Borrowings from credit agreements		—			52,600
Total liabilities		1,533,190			1,236,770
Stockholders’ equity:
Preferred stock, $0.0001 par value, 5,000,000 shares authorized as of December 31, 2024 and December 31, 2023, 0 shares issued and outstanding as of December 31, 2024 and December 31, 2023		—			—
Common stock, $0.0001 par value, 500,000,000 shares authorized, 26,529,402 and 24,772,987 shares issued and outstanding as of December 31, 2024 and December 31, 2023, respectively		3			3
Additional paid-in capital		493,656			350,597
Accumulated other comprehensive loss		(26,845	)		(23,991	)
Retained earnings		262,216			144,643
Total stockholders’ equity		729,030			471,252
Total liabilities and stockholders’ equity	$	2,262,220		$	1,708,022

Condensed Consolidated Income Statement

Palomar Holdings, Inc. and Subsidiaries Condensed Consolidated Statements of Income and Comprehensive Income (loss) (Unaudited) (in thousands, except shares and per share data)

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
Revenues:
Gross written premiums	$	373,723		$	303,152		$	1,541,962		$	1,141,558
Ceded written premiums		(204,492	)		(188,742	)		(897,111	)		(731,531	)
Net written premiums		169,231			114,410			644,851			410,027
Change in unearned premiums		(24,341	)		(20,662	)		(134,164	)		(64,114	)
Net earned premiums		144,890			93,748			510,687			345,913
Net investment income		11,318			7,015			35,824			23,705
Net realized and unrealized (losses) gains on investments		(1,201	)		3,044			4,568			2,941
Commission and other income		750			1,586			2,784			3,367
Total revenues		155,757			105,393			553,863			375,926
Expenses:
Losses and loss adjustment expenses		37,176			17,896			134,759			72,592
Acquisition expenses, net of ceding commissions and fronting fees		40,585			29,005			149,657			107,745
Other underwriting expenses		32,947			24,210			117,113			88,172
Interest expense		87			824			1,138			3,775
Total expenses		110,795			71,935			402,667			272,284
Income before income taxes		44,962			33,458			151,196			103,642
Income tax expense		9,997			7,564			33,623			24,441
Net income	$	34,965		$	25,894		$	117,573		$	79,201
Other comprehensive income, net:
Net unrealized (losses) gains on securities available for sale		(16,707	)		19,229			(2,854	)		12,524
Net comprehensive income	$	18,258		$	45,123		$	114,719		$	91,725
Per Share Data:
Basic earnings per share	$	1.32		$	1.05		$	4.61		$	3.19
Diluted earnings per share	$	1.29		$	1.02		$	4.48		$	3.13

Weighted-average common shares outstanding:
Basic		26,491,939			24,747,347			25,520,343			24,822,004
Diluted		27,206,225			25,272,149			26,223,842			25,327,091

Underwriting Segment Data

The Company has a single reportable segment and offers specialty insurance products. Gross written premiums (GWP) by product, location and company are presented below:

	Three Months Ended December 31,
	2024					2023
	($ in thousands)
			% of						% of						%
	Amount		GWP			Amount			GWP			Change			Change
Product (1)
Earthquake	$	146,757		39.3	%	$	122,087			40.3	%	$	24,670			20.2	%
Inland Marine and other Property		85,396		22.9	%		63,039			20.8	%		22,357			35.5	%
Casualty		68,484		18.3	%		32,323			10.7	%		36,161			111.9	%
Fronting		57,418		15.4	%		85,708			28.3	%		(28,290	)		(33.0	)%
Crop		15,668		4.2	%		(5	)		(0.0	)%		15,673			NM
Total Gross Written Premiums	$	373,723		100.0	%	$	303,152			100.0	%	$	70,571			23.3	%

NM- Not meaningful

	Year Ended December 31,
	2024					2023
	($ in thousands)
			% of					% of						%
	Amount		GWP			Amount		GWP			Change			Change
Product (1)
Earthquake	$	522,864		33.9	%	$	436,896		38.3	%	$	85,968			19.7	%
Inland Marine and Other Property		334,079		21.7	%		250,023		21.9	%		84,056			33.6	%
Fronting		333,188		21.6	%		352,141		30.8	%		(18,953	)		(5.4	)%
Casualty		235,592		15.3	%		90,388		7.9	%		145,204			160.6	%
Crop		116,239		7.5	%		12,110		1.1	%		104,129			859.9	%
Total Gross Written Premiums	$	1,541,962		100.0	%	$	1,141,558		100.0	%	$	400,404			35.1	%

(1) – Beginning in 2024, the Company has updated the categorization of its products to align with management’s current strategy and view of the business. Prior year amounts have been reclassified for comparability purposes. The recategorization is for presentation purposes only and does not impact overall gross written premiums.

	Three Months Ended December 31,										Year Ended December 31,
	2024					2023					2024					2023
	($ in thousands)										($ in thousands)
			% of					% of					% of					% of
	Amount		GWP			Amount		GWP			Amount		GWP			Amount		GWP
State
California	$	157,786		42.2	%	$	165,342		54.5	%	$	668,635		43.4	%	$	600,791		52.6	%
Texas		28,002		7.5	%		22,740		7.5	%		124,416		8.1	%		95,517		8.4	%
Hawaii		18,636		5.0	%		11,562		3.8	%		72,558		4.7	%		47,388		4.2	%
Washington		16,007		4.3	%		14,124		4.7	%		57,900		3.8	%		49,494		4.3	%
New York		14,756		3.9	%		6,775		2.2	%		38,919		2.5	%		18,424		1.6	%
Florida		8,855		2.4	%		11,286		3.7	%		67,008		4.3	%		47,595		4.2	%
Oregon		8,298		2.2	%		6,307		2.1	%		29,550		1.9	%		23,220		2.0	%
Illinois		7,176		1.9	%		6,697		2.2	%		20,901		1.4	%		22,340		2.0	%
Other		114,207		30.6	%		58,319		19.2	%		462,075		30.0	%		236,789		20.7	%
Total Gross Written Premiums	$	373,723		100.0	%	$	303,152		100.0	%	$	1,541,962		100.0	%	$	1,141,558		100.0	%

	Three Months Ended December 31,										Year Ended December 31,
	2024					2023					2024					2023
	($ in thousands)										($ in thousands)
			% of					% of					% of					% of
	Amount		GWP			Amount		GWP			Amount		GWP			Amount		GWP
Subsidiary
PSIC	$	170,275		45.6	%	$	156,590		51.7	%	$	823,263		53.4	%	$	653,809		57.3	%
PESIC		188,496		50.4	%		146,562		48.3	%		661,404		42.9	%		487,749		42.7	%
Laulima		14,952		4.0	%		—		—	%		57,295		3.7	%		—		—	%
Total Gross Written Premiums	$	373,723		100.0	%	$	303,152		100.0	%	$	1,541,962		100.0	%	$	1,141,558		100.0	%

Gross and net earned premiums

The table below shows the amount of premiums the Company earned on a gross and net basis and the Company’s net earned premiums as a percentage of gross earned premiums for each period presented:

	Three Months Ended												Year Ended
	December 31,												December 31,
	2024			2023			Change			% Change			2024			2023			Change			% Change
	($ in thousands)												($ in thousands)
Gross earned premiums	$	371,654		$	276,502		$	95,152			34.4	%	$	1,397,369		$	1,015,722		$	381,647			37.6	%
Ceded earned premiums		(226,764	)		(182,754	)		(44,010	)		24.1	%		(886,682	)		(669,809	)		(216,873	)		32.4	%
Net earned premiums	$	144,890		$	93,748		$	51,142			54.6	%	$	510,687		$	345,913		$	164,774			47.6	%

Net earned premium ratio		39.0	%		33.9	%								36.5	%		34.1	%

Loss detail

	Three Months Ended											Year Ended
	December 31,											December 31,
	2024			2023			Change		% Change			2024			2023			Change		% Change
	($ in thousands)											($ in thousands)
Catastrophe losses	$	8,122		$	10		$	8,112		NM		$	27,846		$	3,442		$	24,404		NM
Non-catastrophe losses		29,054			17,886			11,168		62.4	%		106,913			69,150			37,763		54.6	%
Total losses and loss adjustment expenses	$	37,176		$	17,896		$	19,280		107.7	%	$	134,759		$	72,592		$	62,167		85.6	%

Catastrophe loss ratio		5.6	%		0.0	%							5.5	%		1.0	%
Non-catastrophe loss ratio		20.1	%		19.1	%							20.9	%		20.0	%
Total loss ratio		25.7	%		19.1	%							26.4	%		21.0	%
NM-Not meaningful

The following table represents a reconciliation of changes in the ending reserve balances for losses and loss adjustment expenses:

	Three Months Ended December 31,						Year Ended December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Reserve for losses and LAE net of reinsurance recoverables at beginning of period	$	137,274		$	92,178		$	97,653		$	77,520
Add: Incurred losses and LAE, net of reinsurance, related to:
Current year		37,575			19,409			137,798			70,363
Prior years		(399	)		(1,513	)		(3,039	)		2,229
Total incurred		37,176			17,896			134,759			72,592
Deduct: Loss and LAE payments, net of reinsurance, related to:
Current year		15,675			5,417			43,582			19,631
Prior years		3,476			7,004			33,531			32,828
Total payments		19,151			12,421			77,113			52,459
Reserve for losses and LAE net of reinsurance recoverables at end of period		155,299			97,653			155,299			97,653
Add: Reinsurance recoverables on unpaid losses and LAE at end of period		348,083			244,622			348,083			244,622
Reserve for losses and LAE gross of reinsurance recoverables on unpaid losses and LAE at end of period	$	503,382		$	342,275		$	503,382		$	342,275

Reconciliation of Non-GAAP Financial Measures

For the three months and year ended December 31, 2024 and 2023, the Non-GAAP financial measures discussed above reconcile to their most comparable GAAP measures as follows:

Underwriting revenue

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Total revenue	$	155,757		$	105,393		$	553,863		$	375,926
Net investment income		(11,318	)		(7,015	)		(35,824	)		(23,705	)
Net realized and unrealized (gains) losses on investments		1,201			(3,044	)		(4,568	)		(2,941	)
Underwriting revenue	$	145,640		$	95,334		$	513,471		$	349,280

Underwriting income and adjusted underwriting income

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Income before income taxes	$	44,962		$	33,458		$	151,196		$	103,642
Net investment income		(11,318	)		(7,015	)		(35,824	)		(23,705	)
Net realized and unrealized losses (gains) on investments		1,201			(3,044	)		(4,568	)		(2,941	)
Interest expense		87			824			1,138			3,775
Underwriting income	$	34,932		$	24,223		$	111,942		$	80,771
Expenses associated with transactions		922			478			1,479			706
Stock-based compensation expense		4,779			4,176			16,685			14,913
Amortization of intangibles		389			389			1,558			1,481
Expenses associated with catastrophe bond		—			—			2,483			1,640
Adjusted underwriting income	$	41,022		$	29,266		$	134,147		$	99,511

Adjusted net income

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Net income	$	34,965		$	25,894		$	117,573		$	79,201
Adjustments:
Net realized and unrealized losses (gains) on investments		1,201			(3,044	)		(4,568	)		(2,941	)
Expenses associated with transactions		922			478			1,479			706
Stock-based compensation expense		4,779			4,176			16,685			14,913
Amortization of intangibles		389			389			1,558			1,481
Expenses associated with catastrophe bond		—			—			2,483			1,640
Tax impact		(964	)		103			(1,699	)		(1,480	)
Adjusted net income	$	41,292		$	27,996		$	133,511		$	93,520

Annualized adjusted return on equity

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)

Annualized adjusted net income	$	165,168		$	111,984		$	133,511		$	93,520
Average stockholders’ equity	$	716,171		$	446,293		$	600,140		$	428,002
Annualized adjusted return on equity		23.1	%		25.1	%		22.2	%		21.9	%

Adjusted combined ratio

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income	$	109,958		$	69,525		$	398,745		$	265,142
Denominator: Net earned premiums	$	144,890		$	93,748		$	510,687		$	345,913
Combined ratio		75.9	%		74.2	%		78.1	%		76.6	%
Adjustments to numerator:
Expenses associated with transactions	$	(922	)	$	(478	)	$	(1,479	)	$	(706	)
Stock-based compensation expense		(4,779	)		(4,176	)		(16,685	)		(14,913	)
Amortization of intangibles		(389	)		(389	)		(1,558	)		(1,481	)
Expenses associated with catastrophe bond		—			—			(2,483	)		(1,640	)
Adjusted combined ratio		71.7	%		68.8	%		73.7	%		71.2	%

Diluted adjusted earnings per share

	Three Months Ended				Year Ended
	December 31,				December 31,
	2024		2023		2024		2023
	(in thousands, except per share data)				(in thousands, except per share data)

Adjusted net income	$	41,292	$	27,996	$	133,511	$	93,520
Weighted-average common shares outstanding, diluted		27,206,225		25,272,149		26,223,842		25,327,091
Diluted adjusted earnings per share	$	1.52	$	1.11	$	5.09	$	3.69

Catastrophe loss ratio

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Numerator: Losses and loss adjustment expenses	$	37,176		$	17,896		$	134,759		$	72,592
Denominator: Net earned premiums	$	144,890		$	93,748		$	510,687		$	345,913
Loss ratio		25.7	%		19.1	%		26.4	%		21.0	%

Numerator: Catastrophe losses	$	8,122		$	10		$	27,846		$	3,442
Denominator: Net earned premiums	$	144,890		$	93,748		$	510,687		$	345,913
Catastrophe loss ratio		5.6	%		0.0	%		5.5	%		1.0	%

Adjusted combined ratio excluding catastrophe losses

	Three Months Ended						Year Ended
	December 31,						December 31,
	2024			2023			2024			2023
	(in thousands)						(in thousands)
Numerator: Sum of losses and loss adjustment expenses, acquisition expenses, and other underwriting expenses, net of commission and other income	$	109,958		$	69,525		$	398,745		$	265,142
Denominator: Net earned premiums	$	144,890		$	93,748		$	510,687		$	345,913
Combined ratio		75.9	%		74.2	%		78.1	%		76.6	%
Adjustments to numerator:
Expenses associated with transactions	$	(922	)	$	(478	)	$	(1,479	)	$	(706	)
Stock-based compensation expense		(4,779	)		(4,176	)		(16,685	)		(14,913	)
Amortization of intangibles		(389	)		(389	)		(1,558	)		(1,481	)
Expenses associated with catastrophe bond		—			—			(2,483	)		(1,640	)
Catastrophe losses		(8,122	)		(10	)		(27,846	)		(3,442	)
Adjusted combined ratio excluding catastrophe losses		66.1	%		68.8	%		68.3	%		70.2	%

Tangible Stockholders’ equity

	December 31,			December 31,
	2024			2023
	(in thousands)
Stockholders’ equity	$	729,030		$	471,252
Goodwill and intangible assets		(13,242	)		(12,315	)
Tangible stockholders’ equity	$	715,788		$	458,937

The MIL Network –

February 13, 2025

MIL-OSI: QXO Proposes Full Slate of Independent Directors for Election at Beacon Roofing Supply’s 2025 Annual Meeting

Source: GlobeNewswire (MIL-OSI)

GREENWICH, Conn., Feb. 12, 2025 (GLOBE NEWSWIRE) — QXO, Inc. (NYSE: QXO) announced today that it has informed Beacon Roofing Supply, Inc. (Nasdaq: BECN) that it will propose 10 independent director nominees at Beacon’s 2025 Annual Meeting of Shareholders to replace Beacon’s Board of Directors.

The slate of independent nominees includes current and former senior executives and directors of leading global companies who were selected for their deep expertise with large-scale corporate transformations, extensive knowledge of the building products and distribution sectors, and track records of unlocking shareholder value.

“We are proposing a slate of high-caliber, independent director nominees who are astute at delivering value to shareholders of large public companies,” said Brad Jacobs, chairman and chief executive officer of QXO. “If elected, our nominees would give Beacon’s shareholders a direct voice in advocating for an independent evaluation of QXO’s proposal.”

On January 27, 2025, QXO commenced a tender offer to purchase all outstanding shares of Beacon for $124.25 per share in cash for an aggregate enterprise value of approximately $11 billion, representing a 37% premium to Beacon’s 90-day unaffected volume-weighted average price per share as of November 15, 2024, when news of QXO’s offer was first brought to public attention. QXO’s offer price of $124.25 per share is higher than Beacon’s shares have ever traded. QXO’s tender offer will be outstanding until 12:00 midnight (New York City time) at the end of February 24, 2025. QXO has received antitrust clearance for the acquisition in both the U.S. and Canada and is prepared to complete it shortly after the offer expires, subject to the terms of the offer.

QXO intends to solicit proxies from Beacon stockholders by filing a proxy statement and universal WHITE proxy voting card for Beacon’s 2025 Annual Meeting. Beacon stockholders can choose to replace Beacon’s current directors and elect the 10 new directors proposed by QXO by voting “FOR” on the universal WHITE proxy card. Stockholders can cast their vote prior to or at Beacon’s 2025 Annual Meeting, which is expected to be held in May.

Nominees

QXO’s independent nominees for Beacon’s Board of Directors are:

Sheree Bargabos: Sheree Bargabos served as president, roofing and asphalt for over a decade with Owens Corning (NYSE: OC), a global manufacturer of building and composite material systems. During her 37-year tenure with the company, she held a variety of leadership roles, including vice president, customer experience, roofing. More recently, Ms. Bargabos was a non-executive director of the board and member of the governance committee of PGT Innovations, Inc. (formerly NYSE: PGTI), a manufacturer of high-performance windows and doors, until the company was acquired by MITER Brands in 2024. Since 2018, she has served on the board of Steel Dynamics, Inc. (Nasdaq: STLD), a leading steel producer in the U.S., where she sits on the audit and compensation committees.

Paul Camuti: Paul Camuti is the former executive vice president and chief technology and sustainability officer of Trane Technologies plc (NYSE: TT), a global leader in HVAC and refrigeration solutions for residential, commercial, and industrial markets, which separated from Ingersoll Rand, Inc. (NYSE: IR) in 2020. Prior to that, Mr. Camuti served as chief technology officer, corporate sustainability, and senior vice president, innovation, at Ingersoll Rand for nine years. Earlier, he spent 13 years at Siemens AG (OTC: SIEGY), holding various divisional executive leadership roles. Mr. Camuti currently serves on the board of Garrett Motion, Inc. (Nasdaq: GTX) and previously served on the board of The ExOne Company (formerly Nasdaq: XONE).

Karel Czanderna: Karel Czanderna is the former president, chief executive officer and a board director of Flexsteel Industries, Inc. (Nasdaq: FLXS), a global leader in the design and production of residential furniture. Prior to Flexsteel, she was group president of the building materials division of Owens Corning (NYSE: OC) and earlier held divisional executive leadership roles with Whirlpool Corp. (NYSE: WHR). Ms. Czanderna serves on the boards of Cibo Vita, Inc. and Soteria Flexibles, and previously served on the board of BlueLinx Holdings Inc. (NYSE: BXC), a wholesale distributor of building and industrial products.

Jonathan Foster: Jonathan Foster is the founder and a managing director of Current Capital Partners, an independent advisory and merchant banking firm. His 35-year career in financial and investment services includes 10 years with Lazard, Inc. (NYSE: LAZ), where he rose to managing director. He has served on more than 40 corporate boards, including current roles on the boards of Berry Global Group, Inc. (NYSE: BERY), Five Point Holdings, LLC (NYSE: FPH), and Lear Corp. (NYSE: LEA). Previously, he was a director and the audit committee chair of door manufacturer Masonite International Corp. for 15 years and served on the special transaction committee during the company’s sale to Owens Corning (NYSE: OC).

Mauro Gregorio: Mauro Gregorio is the former president of Performance Materials & Coatings at Dow Inc. (NYSE: DOW), a global leader in materials science. He previously served as chief executive officer of Dow Silicones Corp., formerly Dow Corning, and president of Dow Consumer Solutions. Mr. Gregorio serves on the board of Eagle Materials, Inc. (NYSE: EXP), a construction products manufacturer, and sits on the audit and corporate governance, nominating and sustainability committees. Mr. Gregorio also serves on the board of Radius Recycling, Inc. (Nasdaq: RDUS), formerly Schnitzer Steel Industries, Inc., and sits on the audit and compensation and human resources committees.

Michael Lenz: Michael Lenz is the former chief financial officer of FedEx Corp. (NYSE: FDX), overseeing all financial functions within its portfolio of transportation, e-commerce and supply chain management services. He held a variety of senior roles during his 18-year tenure with FedEx, including senior vice president and treasurer. Prior to FedEx, he was with American Airlines Group, Inc. (NYSE: AAL) for 11 years in investor relations, international network, and strategic planning roles. Mr. Lenz serves on the board of Methodist Le Bonheur Healthcare.

Teresa May: Teresa May is the president and owner of H+G Advisory, LLC and an advisor for portfolio operations at private equity firm KPS Capital Partners. Her 25-year career as an international growth and strategic marketing executive includes prior positions as chief marketing officer for American Woodmark Corp. (Nasdaq: AMWD), head of global strategic marketing for Owens Corning (NYSE: OC), and president of healthcare and chief strategy officer of security solutions for Stanley Black & Decker, Inc. (NYSE: SWK). Ms. May is a member of the board of Fluidmaster, Inc., a global leader in water management, and previously served on the boards of American Woodmark and Transcendia, Inc.

Stephen Newlin: Stephen Newlin is the former president, chief executive officer and chairman of the board of Univar Solutions, Inc. (NYSE: UNVR), a global chemicals distributor. Prior to Univar, he was president, chief executive officer and chairman of PolyOne Corp., now Avient Corp. (NYSE: AVNT), a specialty polymer manufacturer and distributor. Mr. Newlin is currently chairman of the board of Oshkosh Corp. (NYSE: OSK), a global equipment manufacturer, where he also sits on the audit, governance, and human resource committees. He previously served on the boards of The Chemours Company (NYSE: CC) and Valspar Corp (NYSE: VAL), prior to its acquisition by Sherwin Williams in 2017.

Joseph Reitmeier: Joseph Reitmeier is the former chief financial officer of Lennox International, Inc. (NYSE: LII), a global manufacturer of residential and commercial climate control solutions and refrigeration systems. Since 2016, he has served on the board of Watts Water Technologies, Inc. (NYSE: WTS), a global leader of water quality solutions. Mr. Reitmeier currently sits on the board’s audit committee, the governance and sustainability committees, and previously served on the nominating and corporate governance committee.

Wendy Whiteash: Wendy Whiteash is the former executive vice president, integration and strategic priorities, for US LBM Holdings, LLC, a leading distributor of roofing, siding, windows, doors, decking, and engineered components. Earlier, she served as US LBM’s chief human resources officer. Ms. Whiteash spent the first 17 years of her career with Ferguson Enterprises, Inc. (NYSE: FERG), the largest U.S. value-added distributor of plumbing, heating, ventilation, air conditioning and MRO solutions, where she held various roles in finance, operations and human resources.

Advisors

Morgan Stanley & Co. LLC is acting as lead financial advisor to QXO, and Paul, Weiss, Rifkind, Wharton & Garrison LLP is acting as legal counsel.

About QXO

QXO provides technology solutions, primarily to clients in the manufacturing, distribution and service sectors. The company provides consulting and professional services, including specialized programming, training and technical support, and develops proprietary software. As a value-added reseller of business application software, QXO offers solutions for accounting, financial reporting, enterprise resource planning, warehouse management systems, customer relationship management, business intelligence and other applications. QXO plans to become a tech-forward leader in the $800 billion building products distribution industry. The company is targeting tens of billions of dollars of annual revenue in the next decade through accretive acquisitions and organic growth. Visit www.qxo.com for more information.

Forward-Looking Statements

This communication contains forward-looking statements. Statements that are not historical facts, including statements about beliefs, expectations, targets, goals, regulatory approval timing and nominating directors are forward-looking statements. These statements are based on plans, estimates, expectations and/or goals at the time the statements are made, and readers should not place undue reliance on them. In some cases, readers can identify forward-looking statements by the use of forward-looking terms such as “may,” “will,” “should,” “expect,” “opportunity,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “target,” “goal,” or “continue,” or the negative of these terms or other comparable terms. Forward-looking statements involve inherent risks and uncertainties and readers are cautioned that a number of important factors could cause actual results to differ materially from those contained in any such forward-looking statements. Such factors include but are not limited to: the ultimate outcome of any possible transaction between QXO, Inc. (“QXO”) and Beacon Roofing Supply, Inc. (“Beacon”), including the possibility that the parties will not agree to pursue a business combination transaction or that the terms of any definitive agreement will be materially different from those proposed; uncertainties as to whether Beacon will cooperate with QXO regarding the proposed transaction; the ultimate result should QXO commence a proxy contest for election of directors to Beacon’s Board of Directors; QXO’s ability to consummate the proposed transaction with Beacon; the conditions to the completion of the proposed transaction, including the receipt of any required shareholder approvals and any required regulatory approvals; QXO’s ability to finance the proposed transaction; the substantial indebtedness QXO expects to incur in connection with the proposed transaction and the need to generate sufficient cash flows to service and repay such debt; that operating costs, customer loss and business disruption (including, without limitation, difficulties in maintaining relationships with employees, customers or suppliers) may be greater than expected following the proposed transaction or the public announcement of the proposed transaction; QXO’s ability to retain certain key employees; and general economic conditions that are less favorable than expected. QXO cautions that forward-looking statements should not be relied on as predictions of future events, and these statements are not guarantees of performance or results. Forward-looking statements herein speak only as of the date each statement is made. QXO does not assume any obligation to update any of these statements in light of new information or future events, except to the extent required by applicable law.

Important Additional Information and Where to Find It

This communication is for informational purposes only and does not constitute a recommendation, an offer to purchase or a solicitation of an offer to sell Beacon securities. QXO and Queen MergerCo, Inc. (the “Purchaser”) filed a Tender Offer Statement on Schedule TO with the Securities and Exchange Commission (the “SEC”) on January 27, 2025, and Beacon filed a Solicitation/Recommendation Statement on Schedule 14D-9 with respect to the tender offer with the SEC on February 6, 2025. Investors and security holders are urged to carefully read the Tender Offer Statement (including the Offer to Purchase, the related Letter of Transmittal and certain other tender offer documents, as each may be amended or supplemented from time to time) and the Solicitation/Recommendation Statement as these materials contain important information that investors and security holders should consider before making any decision regarding tendering their common stock, including the terms and conditions of the tender offer. The Tender Offer Statement, Offer to Purchase, Solicitation/Recommendation Statement and related materials are filed with the SEC, and investors and security holders may obtain a free copy of these materials and other documents filed by QXO and Beacon with the SEC at the website maintained by the SEC at www.sec.gov. In addition, the Tender Offer Statement and other documents that QXO and the Purchaser file with the SEC will be made available to all investors and security holders of Beacon free of charge from the information agent for the tender offer: Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, NY 10022, toll-free telephone: +1 (888) 750-5834.

QXO and the other participants intend to file a preliminary proxy statement and accompanying WHITE universal proxy card with the SEC to be used to solicit proxies for, among other matters, the election of its slate of director nominees at the 2025 Annual Meeting of stockholders of Beacon. QXO strongly advises all stockholders of Beacon to read the preliminary proxy statement, any amendments or supplements to such proxy statement, and other proxy materials filed by QXO with the SEC as they become available because they will contain important information. Such proxy materials will be available at no charge on the SEC’s website at www.sec.gov and at QXO’s website at investors.qxo.com. In addition, the participants in this proxy solicitation will provide copies of the proxy statement, and other relevant documents, without charge, when available, upon request. Requests for copies should be directed to the participants’ proxy solicitor.

Certain Information Concerning the Participants

The participants in the proxy solicitation are anticipated to be QXO, Brad Jacobs, Ihsan Essaid, Matt Fassler, Mark Manduca, Sheree Bargabos, Paul Camuti, Karel Czanderna, Jonathan Foster, Mauro Gregorio, Michael Lenz, Teresa May, Stephen Newlin, Joseph Reitmeier and Wendy Whiteash. As of the date of this communication, QXO owns 100 shares of common stock of Beacon in record name and Ms. Czanderna may be deemed to beneficially own 10 shares of common stock of Beacon held in a trust, for which Ms. Czanderna’s husband serves as trustee. As of the date of this communication, none of the other participants has any direct or indirect interest, by security holdings or otherwise, in Beacon.

Media Contacts

Joe Checkler
joe.checkler@qxo.com
203-609-9650

Steve Lipin / Lauren Odell
Gladstone Place Partners
212-230-5930

Investor Contacts

Mark Manduca
mark.manduca@qxo.com
203-321-3889

Scott Winter / Jonathan Salzberger
Innisfree M&A Incorporated
212-750-5833

The MIL Network –

February 13, 2025

MIL-OSI USA: Senator Wicker Appointed Chairman of the U.S. Helsinki Commission for the 119th Congress

US Senate News:

Source: United States Senator for Mississippi Roger Wicker
WASHINGTON — The Presiding Officer, on behalf of the Vice President, last week announced the appointment of U.S. Senator Roger Wicker, R-Miss., as chairman of the Commission on Security and Cooperation in Europe, also known as the U.S. Helsinki Commission, for the 119th Congress.
“I am honored to be named chairman of the Helsinki Commission. European security is always good for the United States. For nearly fifty years, the Helsinki Commission has protected human rights, advanced democracy, and increased economic cooperation across the globe,” said Senator Wicker. “Today’s challenges are no less urgent. I look forward to working on a bicameral, bipartisan basis to seek a just end to Russia’s war on Ukraine, a stronger NATO alliance, and an international order that serves our national interest.”
Senator Wicker assumes the chairmanship at a pivotal moment for transatlantic security. Russia is waging the largest land war in Europe since World War II, threatening not only Ukraine’s future and independence, but also the security and sovereignty of U.S. allies and partners in Europe. In the South Caucasus, Armenia and Azerbaijan have a generational opportunity to reach a durable peace agreement after decades of violence and upheaval. Meanwhile, the republic of Georgia’s democracy stands at a crossroads as the Georgian Dream party attempts to drag the country towards Russia and away from their chosen path of Euro-Atlantic integration. As we approach the 30th anniversary of the signing of the Dayton Peace Accords, Bosnia and Herzegovina and the broader Western Balkans region must chart a way through the dangers of violent division and toward greater alignment and integration with Western institutions. At this historic juncture, the United States has an opportunity to pursue policies that promote regional stability and strengthen the rules-based international order so that it continues to safeguard American security and prosperity.
Senator Roger Wicker has served on the U.S. Helsinki Commission since 2009, where he has consistently championed democratic values, the rule of law, and peace and security in the OSCE region. He served as a Vice President of the OSCE Parliamentary Assembly (OSCE PA) from 2017 to 2024. From November 2014 to July 2017, Senator Wicker chaired the OSCE PA Committee on Political Affairs and Security, where his work centered on sustaining constructive security dialogue among all participating states and ensuring compliance with international commitments.
Senator Wicker is currently the Chairman of the Senate Armed Services Committee and serves as a member of the U.S. Merchant Marine Academy Congressional Board of Visitors. He has also served as Chairman and Ranking Member of the Senate Committee on Commerce, Science, and Transportation.
Senator Wicker served on active duty in the U.S. Air Force and then joined the Air Force Reserve. He retired from the Reserve in 2004 with the rank of lieutenant colonel.
A native of Pontotoc, Mississippi, Senator Wicker received his B.A. and law degrees from the University of Mississippi. He is married to the former Gayle Long of Tupelo. They have three children and eight grandchildren.

MIL OSI USA News –

February 13, 2025

MIL-OSI New Zealand: Release: Homelessness growing under National

Source: New Zealand Labour Party

Housing is going in the wrong direction under National, despite promises to build more houses and reduce the social housing waitlist.

“The Salvation Army State of the Nation 2025 report shows Labour was making good progress in public housing, but that it has ground to a halt under this Government,” Labour housing spokesperson Kieran McAnulty said.

“The Salvation Army today gave the example of a pregnant woman who sleeps not in a social house or in emergency housing, but in the doorway of the Salvation Army’s Rotorua base – that is a damning indictment of this Government’s housing policies.

“Chris Bishop promised to ‘build enough state and social houses so that there is no social housing waitlist’. Tama Potaka promised to ‘build more social houses than the Labour Government’.

Nicola Willis signed a pledge to increase the number of state houses in Auckland by 1000 a year, which the Prime Minister wrongly said was on track today.

“According to a Letter of Expectation the Housing Minister and Finance Minister sent in August last year, Auckland will lose a net 199 homes in the year to June 2026.

“It is now clear these promises were never intended to be kept. They’re all full of it.

“The Wellington City Mission says this is the worst they have seen things in living memory.

“Frontline providers say people in genuine need are being prevented from accessing Emergency Housing, just to make the numbers look good.

“To make things worse, we have today learnt the Government has cancelled transitional housing contracts, with no additional funding post June 2025. Ten families in Upper Hutt will soon have nowhere to live.

“It is heartless and cruel for Bishop and Potaka to crow about the money they have saved from their changes to Emergency Housing when pregnant women and families are living on the street.

“This isn’t just about those people who are directly affected. When homelessness goes up the whole country suffers – there is more demand on health services, people are forced into unsafe situations, and kids struggle to learn in school,” Kieran McAnulty said.

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MIL OSI New Zealand News –

February 13, 2025

MIL-OSI: Diginex Limited Engages Lambert and SPRG to Drive Global Investor Relations and Shareholder Communications Program

Source: GlobeNewswire (MIL-OSI)

HONG KONG, Feb. 12, 2025 (GLOBE NEWSWIRE) — Diginex Limited (“Diginex” or the “Company”), a Cayman Islands-based impact technology company specializing in environmental, social, and governance (ESG) issues, has engaged international investor relations specialists Lambert by LLYC (Lambert) and its partner—Hong Kong-based Strategic Public Relations Group Ltd. (SPRG)—to lead a global investor relations and financial communications initiative to help broaden Diginex’s shareholder base. This collaboration underscores Diginex’s commitment to enhancing its visibility and investor engagement across key global markets.

Working closely with Diginex’s leadership, Lambert and SPRG will execute an aggressive strategic investor relations program aimed at strengthening the Company’s presence within the global investment community. The initiative will emphasize how Diginex’s innovative, technology-driven solutions empower enterprises with comprehensive tools, empower enterprises with comprehensive tools to navigate the evolving and rapidly expanding sustainability landscape.

Diginex recently completed a $10.61 million initial public offering (IPO), including the full exercise of the underwriters’ over-allotment option. The successful IPO and subsequent healthy market reaction reflect growing investor confidence in sustainability compliance technology and Diginex’s mission to democratize sustainability through innovative technology, dramatically reducing the cost of compliance with their tailored suite of platforms.

Led by Lambert, the IR partnership will provide strategic guidance to Diginex, ensuring global investor outreach, enhanced shareholder engagement, and expanded visibility among institutional and retail investors.

“This is an exciting time for Diginex as we accelerate investor engagement across a broad and diverse range of investor pools globally, strengthening and diversifying the shareholder base while increasing investor and marketplace familiarity with our brand and products” said Miles Pelham, Chairman of Diginex Limited. “Our partnership with Lambert and SPRG strengthens our presence in key financial markets and reinforces our leadership in ESG and sustainability technology. We remain committed to driving innovation and helping enterprises achieve their sustainability goals, ultimately striving to leave the world in a better place.”

“With our successful public offering on the Nasdaq stock exchange, we look forward to working with Lambert and SPRG to speed-up and broaden our investor outreach,” said Mark Blick, Chief Executive Officer of Diginex Limited. “As demand for ESG solutions grows, we are focused on accelerating our global presence and delivering long-term value to our shareholders.”

About Diginex Limited

Diginex Limited is a Cayman Islands exempted company incorporated under the laws of the Cayman Islands in 2024, with subsidiaries located in Hong Kong, United Kingdom and United States of America. Diginex Limited conducts operations through its wholly owned subsidiary Diginex Solutions (HK) Limited, a Hong Kong corporation (“DSL”) and DSL is the sole owner of (i) Diginex Services Limited, a corporation formed in the United Kingdom and (ii) Diginex USA LLC, a limited liability company formed in the State of Delaware. DSL commenced operations in 2020, is headquartered in Hong Kong, and is a software company that empowers businesses and governments to streamline ESG, climate, and supply chain data collection and reporting. DSL is an impact technology business that helps organizations to address the some of the most pressing ESG, climate and sustainability issues, utilizing blockchain, machine learning and data analysis technology to lead change and increase transparency in corporate social responsibility and climate action.

Diginex’s products and services solutions enable companies to collect, evaluate and share sustainability data through easy-to-use software For more information, please visit the Company’s website: https://www.diginex.com/.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s filings with the SEC.

For investor and media inquiries, please contact:

Diginex
Investor Relations
Email:ir@diginex.com

Jackson Lin
Lambert by LLYC
Phone: +1 (646) 717-4593
Email: jian.lin@llyc.global

The MIL Network –

February 13, 2025

MIL-OSI: Birchcliff Energy Ltd. Announces Unaudited 2024 Full-Year and Fourth Quarter Results and 2024 Reserves Highlights

Source: GlobeNewswire (MIL-OSI)

CALGARY, Alberta, Feb. 12, 2025 (GLOBE NEWSWIRE) — Birchcliff Energy Ltd. (“Birchcliff” or the “Corporation”) (TSX: BIR) is pleased to announce its unaudited 2024 full-year and fourth quarter financial and operational results and highlights from its independent reserves evaluation effective December 31, 2024.

“Due to the success of our 2024 capital program and driven by our improved capital efficiencies, we delivered annual average production of 76,695 boe/d and adjusted funds flow⁽¹⁾ of $236.8 million and returned $107.8 million to shareholders through common share dividends in 2024,” commented Chris Carlsen, President and Chief Executive Officer of Birchcliff. “The 27 wells we brought on production as part of the 2024 capital program delivered strong PDP reserves additions of 34.1 MMboe, which highlights the quality of our assets. We believe that there is significant intrinsic shareholder value embedded in Birchcliff’s asset base that is not reflected in our current share price, as demonstrated by our PDP reserves net asset value per common share⁽²⁾ of $6.35 and $13.79 and $18.09 for our proved and proved plus probable reserves, respectively.⁽³⁾ In addition, our Elmworth asset, which is largely unbooked from a reserves basis, provides us with significant inventory and a large potential future development area consisting of approximately 145 net sections of Montney lands.”

“Our strategy for 2025 builds off of the operational momentum from 2024, maintaining our focus on capital efficiency improvements and further driving down costs. Our 2025 capital program has been designed to ensure that our capital is strategically deployed throughout the year, providing us with the flexibility to adjust our capital spending if necessary in response to the commodity price volatility we expect during 2025, including as a result of the potential for U.S. and Canadian tariffs and the start-up of LNG Canada.”

2024 Financial and Operational Highlights

Delivered annual average production of 76,695 boe/d (82% natural gas and 18% liquids) in 2024 and quarterly average production of 77,623 boe/d (82% natural gas and 18% liquids) in Q4 2024.
Generated annual adjusted funds flow of $236.8 million in 2024 and quarterly adjusted funds flow of $71.8 million in Q4 2024. Cash flow from operating activities was $203.7 million in 2024 and $45.6 million in Q4 2024.
Reported annual net income to common shareholders of $56.1 million in 2024 and quarterly net income to common shareholders of $35.2 million in Q4 2024.
F&D capital expenditures were $273.1 million in 2024 and $58.3 million in Q4 2024. Birchcliff drilled 29 (29.0 net) wells and brought 27 (27.0 net) wells on production in 2024.
Returned $107.8 million to shareholders in 2024 through common share dividends.

2024 Reserves Highlights⁽⁴⁾

Birchcliff brought 27 new wells on production as part of its 2024 F&D capital program with strong PDP reserves additions of 34.1 MMboe (1.26 MMboe per well) and delivered PDP F&D costs⁽⁵⁾ of $8.01/boe, resulting in a PDP F&D operating netback recycle ratio⁽²⁾ of 1.4x in 2024 on such additions.
Birchcliff added an aggregate of 23.7 MMboe of PDP reserves on an F&D basis in 2024, after adding back 2024 actual production of 28.1 MMboe⁽⁶⁾ and including all other applicable PDP reserves adjustments in 2024. Birchcliff’s PDP reserves totalled 217.1 MMboe at December 31, 2024.
Birchcliff delivered PDP F&D costs of $11.52/boe and a PDP F&D operating netback recycle ratio of 1.0x on its aggregate 23.7 MMboe of PDP reserves additions, notwithstanding $18.8 million in F&D capital expenditures spent on strategic priorities in Elmworth for which there was no production or reserves assigned at year-end 2024.
At December 31, 2024, the net present value of future net revenue (before income taxes, discounted at 10%) was $2.3 billion for Birchcliff’s PDP reserves, $4.4 billion for its proved reserves and $5.6 billion for its proved plus probable reserves.
The net asset value per common share of Birchcliff’s PDP, proved and proved plus probable reserves at December 31, 2024 was $6.35, $13.79 and $18.09, respectively, which is 9%, 136% and 210% higher than the closing price of its common shares on the TSX on February 10, 2025 of $5.84.
Reserves life index⁽⁵⁾ at December 31, 2024 of 7.7 years on a PDP basis, 23.6 years on a proved basis and 34.3 years on a proved plus probable basis.

Birchcliff anticipates filing its annual information form and audited financial statements and related management’s discussion and analysis for the year ended December 31, 2024 on March 12, 2025.

^{This press release contains forward-looking statements and forward-looking information within the meaning of applicable securities laws. For further information regarding the forward-looking statements and forward-looking information contained herein, see “Advisories – Forward-Looking Statements”. With respect to the disclosure of Birchcliff’s reserves and related reserves metrics contained in this press release, see “2024 Year-End Reserves”, “Presentation of Oil and Gas Reserves” and “Advisories – Oil and Gas Metrics”. With respect to the disclosure of Birchcliff’s production contained in this press release, unless otherwise stated herein, production volumes have been disclosed on a “gross” basis as such term is defined in National Instrument 51-101– Standards of Disclosure for Oil and Gas Activities (“NI 51-101”). For further information regarding the disclosure of Birchcliff’s production contained herein, see “Advisories – Production”. In addition, this press release uses various “non-GAAP financial measures”, “non-GAAP ratios” and “capital management measures” as such terms are defined in National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure (“NI 52-112”). Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under GAAP and might not be comparable to similar financial measures disclosed by other issuers. For further information regarding the non-GAAP and other financial measures used in this press release, see “Non-GAAP and Other Financial Measures”.}

______________________________

^{(1) Non-GAAP financial measure. See “Non-GAAP and Other Financial Measures”.}

^{(2) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures”.}

^{(3) Net asset value per common share is at December 31, 2024 and before income taxes (discounted at 10%). See “2024 Year-End Reserves – Net Asset Value”.}

^{(4) Deloitte LLP (“Deloitte”) prepared an independent evaluation of the Corporation’s reserves effective December 31, 2024 as contained in their report dated February 12, 2025 (the “Deloitte Report”). The forecast commodity prices, inflation and exchange rates utilized in the Deloitte Report were computed using the average of forecasts from Deloitte, McDaniel & Associates Consultants Ltd. (“McDaniel”), GLJ Ltd. (“GLJ”) and Sproule Associates Limited (“Sproule”) effective January 1, 2025 (the “2024 Price Forecast”). See “2024 Year-End Reserves” and “Presentation of Oil and Gas Reserves”.}

^{(5) See “Advisories – Oil and Gas Metrics”.}

^{(6) Consists of 738.2 Mbbls of light oil, 1,619.6 Mbbls of condensate, 2,591.3 Mbbls of NGLs and 138,728.6 MMcf of natural gas.}

2024 UNAUDITED FINANCIAL AND OPERATIONAL SUMMARY

	Three months ended December 31,				Twelve months ended December 31,
	2024		2023		2024		2023
OPERATING
Average production
Light oil (bbls/d)	1,993		1,649		2,017		1,849
Condensate (bbls/d)	4,310		5,145		4,425		5,202
NGLs (bbls/d)	7,748		7,653		7,080		6,306
Natural gas (Mcf/d)	381,433		372,594		379,040		374,052
Total (boe/d)	77,623		76,546		76,695		75,699
Average realized sales prices (CDN$)⁽¹⁾
Light oil (per bbl)	95.18		100.07		98.90		99.07
Condensate (per bbl)	95.79		103.80		99.66		103.76
NGLs (per bbl)	26.20		26.95		26.37		26.92
Natural gas (per Mcf)	2.27		2.92		2.05		3.03
Total (per boe)	21.53		26.02		20.90		26.79

NETBACK AND COST ($/boe)
Petroleum and natural gas revenue⁽¹⁾	21.53		26.03		20.91		26.80
Royalty expense	(1.26	)	(2.75	)	(1.41	)	(2.54	)
Operating expense	(2.91	)	(3.81	)	(3.24	)	(3.83	)
Transportation and other expense⁽²⁾	(5.26	)	(5.53	)	(5.24	)	(5.69	)
Operating netback⁽²⁾	12.10		13.94		11.02		14.74
G&A expense, net	(2.00	)	(1.80	)	(1.45	)	(1.52	)
Interest expense	(1.40	)	(0.95	)	(1.31	)	(0.74	)
Lease interest expense	(0.33	)	–		(0.16	)	–
Realized gain (loss) on financial instruments	1.68		(0.38	)	0.33		(1.35	)
Other cash income (expense)	0.01		0.01		0.01		(0.03	)
Adjusted funds flow⁽²⁾	10.06		10.82		8.44		11.10
Depletion and depreciation expense	(8.96	)	(8.44	)	(8.79	)	(8.20	)
Unrealized gain (loss) on financial instruments	5.95		(1.58	)	3.51		(1.38	)
Other expenses⁽³⁾	(0.75	)	(1.88	)	(0.52	)	(0.95	)
Deferred income tax (expense) recovery	(1.37	)	0.29		(0.64	)	(0.22	)
Net income (loss) to common shareholders	4.93		(0.79	)	2.00		0.35

FINANCIAL
Petroleum and natural gas revenue ($000s)⁽¹⁾	153,741		183,295		586,856		740,359
Cash flow from operating activities ($000s)	45,641		79,006		203,710		320,529
Adjusted funds flow ($000s)⁽⁴⁾	71,838		76,215		236,794		306,827
Per basic common share ($)⁽²⁾	0.27		0.29		0.88		1.15
Free funds flow ($000s)⁽⁴⁾	13,528		18,049		(36,290	)	2,190
Per basic common share ($)⁽²⁾	0.05		0.07		(0.13	)	0.01
Net income (loss) to common shareholders ($000s)	35,216		(5,533	)	56,100		9,780
Per basic common share ($)	0.13		(0.02	)	0.21		0.04
End of period basic common shares (000s)	271,304		267,156		271,304		267,156
Weighted average basic common shares (000s)	270,185		266,667		269,081		266,465
Dividends on common shares ($000s)	27,126		53,390		107,833		213,344
F&D capital expenditures ($000s)⁽⁵⁾	58,310		58,166		273,084		304,637
Total capital expenditures ($000s)⁽⁴⁾	66,673		59,541		282,745		307,916
Revolving term credit facilities ($000s)	566,857		372,097		566,857		372,097
Total debt ($000s)⁽⁶⁾	535,557		382,306		535,557		382,306

^{(1) Excludes the effects of financial instruments but includes the effects of any physical delivery contracts.}

^{(2) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures”.}

^{(3) Includes non-cash items such as compensation, accretion, amortization of deferred financing fees and other gains and losses.}

^{(4) Non-GAAP financial measure. See “Non-GAAP and Other Financial Measures”.}

^{(5) See “Advisories – F&D Capital Expenditures”.}

^{(6) Capital management measure. See “Non-GAAP and Other Financial Measures”.}

FULL-YEAR AND Q4 2024 UNAUDITED FINANCIAL AND OPERATIONAL RESULTS

Production

Birchcliff’s production averaged 76,695 boe/d in 2024, a 1% increase from 2023. Production averaged 77,623 boe/d in Q4 2024, a 1% increase from Q4 2023. Birchcliff’s annual average production for 2024 was at the high-end of its guidance range of 75,000 to 77,000 boe/d.
The increases were primarily due to the strong performance of the Corporation’s capital program and the successful drilling of new Montney/Doig wells brought on production, partially offset by natural production declines. Full-year production in 2023 was negatively impacted by an unplanned system outage on Pembina’s Northern Pipeline system, which reduced the Corporation’s NGLs sales volumes in 2023.
Liquids accounted for 18% of Birchcliff’s total production in both 2024 and 2023, which was in line with Birchcliff’s guidance of 19%. Liquids accounted for 18% of Birchcliff’s total production in Q4 2024 as compared to 19% in Q4 2023.

Adjusted Funds Flow and Cash Flow From Operating Activities

Birchcliff generated adjusted funds flow of $236.8 million in 2024, or $0.88 per basic common share, both of which decreased by 23% from 2023. Adjusted funds flow was $71.8 million in Q4 2024, or $0.27 per basic common share, a 6% and 7% decrease from Q4 2023, respectively. Birchcliff’s full-year adjusted funds flow in 2024 was higher than its guidance of $230 million primarily due to lower than expected royalty and G&A expenses.
Birchcliff’s cash flow from operating activities was $203.7 million in 2024, a 36% decrease from 2023. Cash flow from operating activities was $45.6 million in Q4 2024, a 42% decrease from Q4 2023.
The decreases in adjusted funds flow and cash flow from operating activities were primarily due to lower natural gas revenue, which was largely the result of a 32% and 22% decrease in the average realized sales price Birchcliff received for its natural gas production in the full-year and Q4 2024, respectively, as compared to 2023, and higher interest expenses. Birchcliff’s adjusted funds flow and cash flow from operating activities were positively impacted by lower royalty expenses and realized gains on financial instruments of $9.3 million and $12.0 million in the full-year and Q4 2024, respectively, as compared to realized losses on financial instruments of $37.3 million and $2.6 million in 2023.

Net Income (Loss) to Common Shareholders

Birchcliff earned net income to common shareholders of $56.1 million in 2024, or $0.21 per basic common share, as compared to $9.8 million and $0.04 per basic common share in 2023. The increases were primarily due to an unrealized mark-to-market gain on financial instruments of $98.6 million in 2024 as compared to an unrealized mark-to-market loss on financial instruments of $38.2 million in 2023, partially offset by lower adjusted funds flow in 2024.
Birchcliff earned net income to common shareholders of $35.2 million in Q4 2024, or $0.13 per basic common share, as compared to a net loss to common shareholders of $5.5 million and $0.02 per basic common share in Q4 2023. The change to a net income position was primarily due to an unrealized mark-to-market gain on financial instruments of $42.5 million in Q4 2024 as compared to an unrealized mark-to-market loss on financial instruments of $11.1 million in Q4 2023.

Debt and Credit Facilities

Total debt at December 31, 2024 was $535.6 million, a 40% increase from December 31, 2023. Birchcliff’s 2024 year-end total debt was at the high-end of its guidance range of $515 million to $535 million.
At December 31, 2024, Birchcliff had a balance outstanding under its extendible revolving credit facilities (the “Credit Facilities”) of $570.9 million (December 31, 2023: $374.1 million) from available Credit Facilities of $850.0 million (December 31, 2023: $850.0 million), leaving the Corporation with $279.1 million (33%) of unutilized credit capacity after adjusting for outstanding letters of credit and unamortized deferred financing fees. This unutilized credit capacity provides Birchcliff with significant financial flexibility and available capital resources. The Credit Facilities have a maturity date of May 11, 2027 and do not contain any financial maintenance covenants.

Marketing and Natural Gas Market Diversification

Birchcliff’s physical natural gas sales exposure primarily consists of the AECO, Dawn and Alliance markets. In addition, the Corporation has various financial instruments outstanding that provide it with exposure to NYMEX HH pricing.

The following table sets forth Birchcliff’s effective sales, production and average realized sales price for natural gas and liquids for Q4 2024, after taking into account the Corporation’s financial instruments:

Three months ended December 31, 2024
	Effective sales (CDN$000s)	Percentage of total sales (%)	Effective production (per day)	Percentage of total natural gas production (%)	Percentage of total corporate production (%)	Effective average realized sales price (CDN$)
Market
AECO⁽¹⁾⁽²⁾	11,831	6	82,345 Mcf	21	18	1.56/Mcf
Dawn⁽³⁾	48,281	26	162,555 Mcf	43	35	3.23/Mcf
NYMEX HH⁽¹⁾⁽⁴⁾	53,015	28	136,533 Mcf	36	29	4.22/Mcf
Total natural gas⁽¹⁾	113,127	60	381,433 Mcf	100	82	3.22/Mcf
Light oil	17,450	10	1,993 bbls		3	95.18/bbl
Condensate	37,985	20	4,310 bbls		5	95.79/bbl
NGLs	18,679	10	7,748 bbls		10	26.20/bbl
Total liquids	74,114	40	14,051 bbls		18	57.33/bbl
Total corporate⁽¹⁾	187,241	100	77,623 boe		100	26.22/boe

^{(1) Effective sales and effective average realized sales price on a total natural gas and total corporate basis and for the AECO and NYMEX HH markets are non-GAAP financial measures and non-GAAP ratios, respectively. See “Non-GAAP and Other Financial Measures”.}

^{(2) Birchcliff has short-term physical sales agreements with third-party marketers to sell and deliver into the Alliance pipeline system. All of Birchcliff’s short-term physical Alliance sales and production during Q4 2024 received AECO premium pricing and have therefore been included as effective sales and production in the AECO market.}

^{(3) Birchcliff has agreements for the firm service transportation of an aggregate of 175,000 GJ/d of natural gas on TransCanada PipeLines’ Canadian Mainline, whereby natural gas is transported to the Dawn trading hub in Southern Ontario.}

^{(4) NYMEX HH effective sales and production include financial NYMEX HH/AECO 7A basis swap contracts for an aggregate of 147,500 MMBtu/d at an average contract price of NYMEX HH less US$1.12/MMBtu during Q4 2024.
Birchcliff’s effective average realized sales price for NYMEX HH of CDN$4.22/Mcf (US$2.76/MMBtu) was determined on a gross basis before giving effect to the average NYMEX HH/AECO 7A fixed contract basis differential price of CDN$1.71/Mcf (US$1.12/MMBtu) and includes any realized gains and losses on financial NYMEX HH/AECO 7A basis swap contracts during Q4 2024.
After giving effect to the NYMEX HH/AECO 7A fixed contract basis differential price and including any realized gains and losses on financial NYMEX HH/AECO 7A basis swap contracts during Q4 2024, Birchcliff’s effective average realized net sales price for NYMEX HH was CDN$2.51/Mcf (US$1.64/MMBtu) in Q4 2024.}

The following table sets forth Birchcliff’s physical sales, production, average realized sales price, transportation costs and natural gas sales netback by natural gas market for the periods indicated, before taking into account the Corporation’s financial instruments:

Three months ended December 31, 2024
Natural gas market	Natural gas sales⁽¹⁾ (CDN$000s)	Percentage of natural gas sales (%)	Natural gas production (Mcf/d)	Percentage of natural gas production (%)	Average realized natural gas sales price⁽¹⁾ (CDN$/Mcf)	Natural gas transportation costs⁽²⁾ (CDN$/Mcf)	Natural gas sales netback⁽³⁾ (CDN$/Mcf)
AECO	31,027	39	216,321	57	1.57	0.38	1.19
Dawn	48,281	60	162,555	42	3.23	1.43	1.80
Alliance⁽⁴⁾	307	1	2,557	1	1.30	–	1.30
Total	79,615	100	381,433	100	2.27	0.83	1.44
Three months ended December 31, 2023
Natural gas market	Natural gas sales⁽¹⁾ (CDN$000s)	Percentage of natural gas sales (%)	Natural gas production (Mcf/d)	Percentage of natural gas production (%)	Average realized natural gas sales price⁽¹⁾ (CDN$/Mcf)	Natural gas transportation costs⁽²⁾ (CDN$/Mcf)	Natural gas sales netback⁽³⁾ (CDN$/Mcf)
AECO	50,508	51	203,024	55	2.72	0.38	2.33
Dawn	47,433	47	161,119	43	3.20	1.42	1.78
Alliance⁽⁴⁾	2,016	2	8,451	2	2.59	–	2.59
Total	99,957	100	372,594	100	2.92	0.83	2.09

^{(1) Excludes the effects of financial instruments but includes the effects of any physical delivery contracts.}

^{(2) Reflects costs to transport natural gas from the field receipt point to the delivery sales trading hub.}

^{(3) Natural gas sales netback denotes the average realized natural gas sales price less natural gas transportation costs.}

^{(4) Birchcliff has short-term physical sales agreements with third-party marketers to sell and deliver into the Alliance pipeline system. Alliance sales are recorded net of transportation tolls.}

Capital Activities and Investment

F&D capital expenditures were $273.1 million in 2024, as compared to Birchcliff’s guidance of $250 million to $270 million.
In 2024, the Corporation achieved a significant year-over-year improvement in capital efficiency⁽⁷⁾ for its wells of approximately 24% compared to 2023. The following table sets forth the wells that were drilled and brought on production in 2024:

			Number of wells drilled in 2024⁽¹⁾	Number of wells brought on production in 2024
Pouce Coupe

	04-30 (5-well pad)	Montney D1	0⁽²⁾	5

	16-17 (5-well pad)	BD/UM	1	1
		Montney D1	3	3
		Montney D4	1	1

	16-15 (6-well pad)	Montney D1	6	6

	10-22 (5-well pad)	Montney D1	5	5

	04-05 (5-well pad)	Montney D1	5	0⁽³⁾

Gordondale

	02-27 (2-well pad)	Montney D1	1	1
		Montney D2	1	1

	01-10 (4-well pad)	Montney D1	4	4

Elmworth

	13-09 vertical	Montney	1	0

	01-28 horizontal	Montney	1	0

TOTAL			29	27

^{(1) All wells are natural gas wells, except for the 4-well 01-10 pad, which are light oil wells.}

^{(2) The five wells drilled on the 04-30 pad were drilled in December 2023.}

^{(3) The five wells drilled on the 04-05 pad are scheduled to come on production later in February 2025.}

^{______________________________}

^{(7) See “Advisories – Oil and Gas Metrics”.}

UPDATE ON 2025 CAPITAL PROGRAM

As disclosed in Birchcliff’s press release dated January 22, 2025, the Corporation’s board of directors (the “Board”) approved a disciplined F&D capital budget of $260 million to $300 million for 2025. Benefitting from the learnings gained from the Corporation’s 2024 capital program, the wells in Birchcliff’s 2025 capital program are expected to yield strong production, using the Corporation’s latest field development practices and wellbore design, which incorporates longer lateral lengths, reduced cluster spacing and increased proppant loading where appropriate.
The Corporation successfully completed drilling its 5-well 04-05 pad in Pouce Coupe in December 2024. Completions operations are currently underway on the pad, with the wells scheduled to come on production later in February 2025. The pad was drilled in the Lower Montney targeting high-rate natural gas wells.
The Corporation is currently drilling its 3-well 07-10 pad in Pouce Coupe. The pad is targeting condensate-rich natural gas wells in the Lower Montney. The wells are anticipated to be brought on production at the end of Q1 2025.
The Corporation successfully completed drilling its 4-well 02-27 pad in Gordondale in February 2025, with completions operations scheduled to begin in March 2025. The pad is targeting condensate-rich natural gas wells in the Lower Montney. The wells are anticipated to be brought on production in early Q2 2025.
In Elmworth, the Corporation completed a horizontal land retention well and has commenced a short clean-up test. As disclosed in the Corporation’s press release on January 22, 2025, this well is not currently planned to be tied in.

U.S. AND CANADIAN TARIFFS

While Birchcliff hopes that there will not be a trade dispute between the United States and Canada, the Corporation believes that Canada’s over-reliance on exporting its energy into the U.S. must be addressed through the reduction of red tape and government interference in the construction of critical infrastructure such as oil and gas pipelines to the east and west coasts of Canada, LNG terminals on each coast and an increase in refining capacity within Canada, in order to diversify Canada’s energy export market. The Corporation continues to actively monitor this situation.
Birchcliff believes that its ongoing strategy of maintaining significant natural gas market diversification for 2025 will continue to protect the Corporation from volatility in the North American natural gas pricing environment, including as it relates to potential tariffs. Approximately 41% of Birchcliff’s natural gas production is physically delivered to the Dawn trading hub in Ontario, which is priced in U.S. dollars, and the Corporation also has U.S. denominated financial contracts that expose approximately 35% of its natural gas production to NYMEX HH pricing on a financial basis, without physical delivery into the United States.

2024 YEAR-END RESERVES

The reserves data set forth below at December 31, 2024 is based upon the Deloitte Report, which has been prepared in accordance with the standards contained in the Canadian Oil and Gas Evaluation Handbook (the “COGE Handbook”) and NI 51-101.

The reserves data provided in this press release presents only a portion of the disclosure required under NI 51-101. The disclosure required under NI 51-101 will be contained in Birchcliff’s annual information form for the year ended December 31, 2024, which is expected to be filed on SEDAR+ (www.sedarplus.ca) on March 12, 2025.

In some of the tables below, numbers may not add due to rounding. The estimates of future net revenue contained herein do not represent fair market value. For additional information regarding the presentation of Birchcliff’s reserves disclosure contained herein, see “Presentation of Oil and Gas Reserves” and “Advisories” in this press release.

Reserves Summary

The following table summarizes the estimates of Birchcliff’s gross reserves at December 31, 2024 and December 31, 2023, estimated using the forecast price and cost assumptions in effect as at the effective date of the applicable reserves evaluation:

Reserves Category	December 31, 2024 (Mboe)	December 31, 2023⁽¹⁾ (Mboe)	% Change
Proved Developed Producing	217,076	220,536	(2)
Total Proved	667,390	691,886	(4)
Total Proved Plus Probable	969,636	993,897	(2)

^{(1) Deloitte prepared an independent evaluation of the Corporation’s reserves effective December 31, 2023 as contained in their report dated February 14, 2024 (the “2023 Deloitte Report”). The forecast commodity prices, inflation and exchange rates utilized in the 2023 Deloitte Report were computed using the average of forecasts from Deloitte, McDaniel, GLJ and Sproule effective January 1, 2024 (the “2023 Price Forecast”).}

The following table sets forth Birchcliff’s light crude oil and medium crude oil, conventional natural gas, shale gas and NGLs reserves at December 31, 2024, estimated using the 2024 Price Forecast:

Reserves Category		Light Crude Oil and Medium Crude Oil		Conventional Natural Gas		Shale Gas		NGLs⁽¹⁾		Total Oil Equivalent
Reserves Category		*Gross* (Mbbls)	*Net* (Mbbls)	*Gross* (MMcf)	*Net* (MMcf)	*Gross* (MMcf)	*Net* (MMcf)	*Gross* (Mbbls)	*Net* (Mbbls)	*Gross* (Mboe)	*Net* (Mboe)
Proved
	Developed Producing	4,889	3,946	6,051	5,707	1,053,238	971,102	35,639	29,058	217,076	195,805
	Developed Non-Producing	9	9	0	0	4,840	4,537	239	203	1,054	968
	Undeveloped	7,089	5,747	2,858	2,625	2,320,235	2,094,569	54,988	42,966	449,259	398,246
Total Proved		11,987	9,701	8,909	8,332	3,378,312	3,070,208	90,866	72,227	667,390	595,019
Total Probable		9,083	6,933	5,270	4,911	1,442,846	1,272,820	51,811	39,640	302,246	259,529
Total Proved Plus Probable		21,070	16,635	14,179	13,243	4,821,158	4,343,028	142,676	111,868	969,636	854,547

^{(1) NGLs includes condensate.}

Net Present Values of Future Net Revenue

The following table sets forth the net present values of future net revenue attributable to Birchcliff’s reserves at December 31, 2024, estimated using the 2024 Price Forecast, before deducting future income tax expenses and calculated at various discount rates:

Reserves Category	Before Income Taxes Discounted At (%/year)					Unit Value Discounted at 10%/year ($/boe)⁽¹⁾
Reserves Category	0 ($000s)	5 ($000s)	10 ($000s)	15 ($000s)	20 ($000s)	Unit Value Discounted at 10%/year ($/boe)⁽¹⁾
Proved
Developed Producing	3,670,971	2,851,081	2,277,750	1,892,104	1,621,811	11.63
Developed Non-Producing	13,717	9,900	7,499	5,888	4,750	7.75
Undeveloped	7,083,864	3,707,943	2,073,919	1,199,557	694,944	5.21
Total Proved	10,768,552	6,568,924	4,359,168	3,097,549	2,321,504	7.33
Total Probable	6,210,051	2,553,082	1,204,663	632,630	361,133	4.64
Total Proved Plus Probable	16,978,602	9,122,005	5,563,831	3,730,179	2,682,638	6.51

^{(1) Unit values are based on net reserves volumes.}

Net Asset Value

Net asset value reflects the estimated long-term fair value of Birchcliff’s underlying reserves assets after settling its outstanding financial obligations at a point in time. The net present value of the Corporation’s reserves can vary significantly depending on the oil and natural gas price assumptions used by Deloitte and assumes only the reserves identified in the applicable reserves report, with no further acquisitions or incremental development.

The following table sets forth Birchcliff’s net asset value for its PDP, total proved and total proved plus probable reserves for the periods indicated:

($000s, except per share amounts)	Proved Developed Producing						Total Proved						Total Proved Plus Probable
As at December 31,		2024			2023			2024			2023			2024			2023
Reserves, NPV10%⁽¹⁾		2,277,750			2,620,064			4,359,168			5,405,617			5,563,831			6,835,417
Total debt⁽²⁾		(535,557	)		(382,306	)		(535,557	)		(382,306	)		(535,557	)		(382,306	)
Unexercised securities⁽³⁾		34,961			16,717			34,961			16,717			34,961			16,717
Net asset value⁽⁴⁾⁽⁵⁾		1,777,154			2,254,475			3,858,572			5,040,028			5,063,235			6,469,828
Net asset value (per common share)^(4)(5)(6)	$6.35			$8.22			$13.79			$18.38			$18.09			$23.60

^{(1) Represents the net present value of the future net revenue (before income taxes, discounted at 10%) of Birchcliff’s PDP, total proved and total proved plus probable reserves, as applicable, as estimated by Deloitte effective December 31, 2024 and December 31, 2023, using forecast prices and costs.}

^{(2) Capital management measure. See “Non-GAAP and Other Financial Measures”.}

^{(3) Represents the value of unexercised in-the-money stock options and performance warrants outstanding at the end of the year. The closing trading price on the TSX of Birchcliff’s common shares on December 31, 2024 and December 29, 2023 was $5.42 and $5.78, respectively.}

^{(4) Excludes any value from undeveloped land and seismic.}

^{(5) Net asset value is a non-GAAP financial measure and net asset value per common share is a non-GAAP ratio. See “Non-GAAP and Other Financial Measures”.}

^{(6) For 2024, based on 279.9 million common shares, which includes 271.3 million basic common shares outstanding at December 31, 2024 and 8.6 million dilutive common shares from unexercised in-the-money stock options and performance warrants outstanding at December 31, 2024. For 2023, based on 274.2 million common shares, which includes 267.2 million basic common shares outstanding at December 31, 2023 and 7.0 million dilutive common shares from unexercised in-the-money stock options and performance warrants outstanding at December 31, 2023.}

Net asset value decreased in all categories of reserves in 2024 as compared to 2023 primarily due to lower forecast prices in the 2024 Price Forecast compared to the 2023 Price Forecast, including an AECO price decrease of approximately 20% for 2025 through 2027 and approximately 11% thereafter.

Pricing Assumptions

The following table sets forth the 2024 Price Forecast used in the Deloitte Report:

Year	Crude Oil		Natural Gas⁽¹⁾		NGLs					Currency Exchange Rate (US$/CDN$)	Price and Cost Inflation Rates (%)

	WTI at Cushing Oklahoma (US$/bbl)	Edmonton City Gate (CDN$/bbl)	Alberta AECO Average Price (CDN$/Mcf)	Ontario Dawn Reference Point (CDN$/Mcf)	NYMEX Henry Hub (US$/Mcf)	Edmonton Ethane (CDN$/bbl)	Edmonton Propane (CDN$/bbl)	Edmonton Butane (CDN$/bbl)	Edmonton Pentanes + Condensate (CDN$/bbl)
2025	71.19	94.00	2.35	4.28	3.30	7.27	32.05	48.68	98.02	0.714	0.0
2026	73.20	94.84	3.32	4.83	3.76	10.40	31.19	47.43	97.60	0.731	2.0
2027	74.54	95.28	3.52	4.94	3.93	11.04	31.28	47.63	97.43	0.736	2.0
2028	76.28	96.40	3.69	5.05	4.01	11.61	31.70	48.26	98.60	0.758	2.0
2029	77.81	98.33	3.77	5.14	4.10	11.85	32.33	49.22	100.58	0.758	2.0
2030	79.37	100.30	3.84	5.25	4.17	12.08	32.98	50.20	102.57	0.758	2.0
2031	80.96	102.31	3.92	5.34	4.25	12.34	33.64	51.21	104.63	0.758	2.0
2032	82.57	104.36	3.99	5.46	4.34	12.58	34.31	52.24	106.73	0.758	2.0
2033	84.22	106.44	4.08	5.58	4.43	12.85	35.00	53.27	108.86	0.758	2.0
2034	85.91	108.57	4.16	5.68	4.52	13.10	35.69	54.35	111.04	0.758	2.0
2035	87.63	110.74	4.24	5.80	4.61	13.37	36.41	55.43	113.27	0.758	2.0
2036	89.38	112.95	4.33	5.93	4.69	13.64	37.14	56.54	115.52	0.758	2.0
2037	91.17	115.21	4.42	6.03	4.79	13.91	37.88	57.67	117.84	0.758	2.0
2038	92.99	117.51	4.51	6.14	4.88	14.19	38.63	58.83	120.20	0.758	2.0
2039	94.85	119.86	4.59	6.28	4.99	14.47	39.41	60.00	122.60	0.758	2.0
2040	96.75	122.26	4.68	6.41	5.09	14.76	40.20	61.20	125.05	0.758	2.0
2041	98.69	124.71	4.78	6.54	5.19	15.05	41.00	62.43	127.56	0.758	2.0
2042	100.66	127.20	4.87	6.67	5.29	15.35	41.82	63.68	130.10	0.758	2.0
2043	102.67	129.75	4.97	6.81	5.39	15.66	42.66	64.94	132.71	0.758	2.0
2044	104.72	132.34	5.07	6.93	5.51	15.98	43.51	66.24	135.36	0.758	2.0
2044+	2.0%	2.0%	2.0%	2.0%	2.0%	2.0%	2.0%	2.0%	2.0%	0.758	2.0

^{(1) 1 Mcf = 1 MMBtu.}

Reconciliation of Changes in Reserves

The following table sets forth the reconciliation of Birchcliff’s gross reserves at December 31, 2024 as set forth in the Deloitte Report, estimated using the 2024 Price Forecast, to Birchcliff’s gross reserves at December 31, 2023:

Factors	Light Crude Oil and Medium Crude Oil (Mbbls)		Conventional Natural Gas (MMcf)		Shale Gas (MMcf)		NGLs⁽⁸⁾ (Mbbls)		Oil Equivalent (Mboe)
GROSS TOTAL PROVED
Opening balance December 31, 2023	14,460		10,251		3,493,022		93,547		691,886
Extensions and Improved Recovery⁽¹⁾	0		0		58,875		2,287		12,099
Technical Revisions⁽²⁾	(1,724	)	2,244		(37,966	)	(2,022	)	(9,699	)
Discoveries⁽³⁾	0		0		0		0		0
Acquisitions⁽⁴⁾	0		0		18,193		1,633		4,665
Dispositions⁽⁵⁾	0		0		0		0		0
Economic Factors⁽⁶⁾	(12	)	(2,746	)	(15,923	)	(367	)	(3,491	)
Production⁽⁷⁾	(738	)	(840	)	(137,889	)	(4,211	)	(28,070	)
Closing balance December 31, 2024	11,987		8,909		3,378,312		90,866		667,390
GROSS TOTAL PROBABLE
Opening balance December 31, 2023	10,088		5,666		1,438,587		51,213		302,011
Extensions and Improved Recovery⁽¹⁾	0		0		9,320		1,602		3,155
Technical Revisions⁽²⁾	(1,003	)	(2,604	)	(33,104	)	(3,347	)	(10,301	)
Discoveries⁽³⁾	0		0		0		0		0
Acquisitions⁽⁴⁾	0		0		24,508		2,296		6,381
Dispositions⁽⁵⁾	0		0		0		0		0
Economic Factors⁽⁶⁾	(2	)	2,208		3,535		45		1,000
Production⁽⁷⁾	0		0		0		0		0
Closing balance December 31, 2024	9,083		5,270		1,442,846		51,811		302,246
GROSS TOTAL PROVED PLUS PROBABLE
Opening balance December 31, 2023	24,549		15,917		4,931,609		144,760		993,897
Extensions and Improved Recovery⁽¹⁾	0		0		68,195		3,888		15,254
Technical Revisions⁽²⁾	(2,727	)	(361	)	(71,069	)	(5,369	)	(20,000	)
Discoveries⁽³⁾	0		0		0		0		0
Acquisitions⁽⁴⁾	0		0		42,701		3,929		11,046
Dispositions⁽⁵⁾	0		0		0		0		0
Economic Factors⁽⁶⁾	(14	)	(538	)	(12,389	)	(322	)	(2,490	)
Production⁽⁷⁾	(738	)	(840	)	(137,889	)	(4,211	)	(28,070	)
Closing balance December 31, 2024	21,070		14,179		4,821,158		142,676		969,636

^{(1) Additions to volumes resulting from capital expenditures for: (i) step-out drilling in previously discovered reservoirs; (ii) infill drilling in previously discovered reservoirs that were not drilled as part of an enhanced recovery scheme; and (iii) the installation of improved recovery schemes.}

^{(2) Positive or negative volume revisions to an estimate resulting from new technical data or revised interpretations on previously assigned volumes, performance and operating costs. This category also includes revisions resulting from well locations combined or removed as part of an updated development plan.}

^{(3) Additions to volumes in reservoirs where no reserves were previously booked.}

^{(4) Positive additions to volume estimates because of purchasing interests in oil and gas properties.}

^{(5) Reductions in volume estimates because of selling all or a portion of an interest in oil and gas properties.}

^{(6) Changes to volumes resulting from different price forecasts, inflation rates and regulatory changes.}

^{(7) Reductions in the volume estimates due to actual production.}

^{(8) NGLs includes condensate.}

Key highlights include the following:

Extensions and Improved Recovery
- Reserves were added from 27 wells brought on production pursuant to the Corporation’s successful 2024 capital program. The 2024 program was focused in Birchcliff’s core areas in Pouce Coupe and Gordondale, converting proved and probable undeveloped reserves into PDP reserves.

Technical Revisions
- The technical revisions in all reserves categories for light crude oil and medium crude oil were primarily the result of: (i) higher gas-to-oil ratios for existing producing oil wells in the southeast area in Gordondale; and (ii) potential future drilling location adjustments based on offsetting well performance.
- The technical revisions in all reserves categories for conventional natural gas were primarily the result of existing well performance.
- The technical revisions in all reserves categories for shale gas were primarily the result of:

(i) an updated reserves forecast for existing wells based on historical performance, which included a reduction in the reserves attributable to 56 existing high-density producing wells that were drilled from 2019 to 2023. The Corporation does not expect that the technical revisions relating to these wells will negatively impact future reserves booked for other existing or future wells;

(ii) an updated full-field development plan, which included the combining or removal of multiple proved and probable potential future drilling locations, resulting in the removal of 10 proved undeveloped locations and 3 probable locations; and

(iii) an updated reserves forecast for various potential future drilling locations in the Lower Montney in Gordondale as a result of an increase in the reserves attributable to such future locations due to the continued outperformance of existing wells in the area.

The technical revisions in all reserves categories for NGLs were primarily the result of: (i) a reduction in shale gas volumes; and (ii) reduced NGLs recoveries at the Corporation’s owned and/or operated natural gas processing plants in Pouce Coupe and Gordondale. The reduced NGLs recoveries were partially offset by reduced natural gas shrinkage.

Acquisitions
- Changes were the result of various accretive acquisitions completed by Birchcliff in the Pouce Coupe and Gordondale areas in 2024.
Economic Factors
- The forecast prices for each product type were generally lower in the 2024 Price Forecast than the 2023 Price Forecast, which resulted in the economic limit at the end of a well’s life being achieved earlier and therefore a reduction of the reserves volumes in the total proved and total proved plus probable categories.

Future Development Costs

Future development costs (“FDC”) reflect Deloitte’s best estimate of what it will cost to bring the proved and proved plus probable reserves on production. Changes in forecast FDC occur annually as a result of development activities, acquisition and disposition activities and capital cost estimates. The following table sets forth development costs deducted in the estimation of Birchcliff’s future net revenue attributable to the reserves categories noted below, estimated using the 2024 Price Forecast:

Year	Proved ($000s)	Proved Plus Probable ($000s)
2025	198,395	215,960
2026	355,662	374,083
2027	424,921	455,059
2028	895,366	895,366
2029	644,546	645,166
Thereafter	849,599	2,299,368
Total undiscounted	3,368,489	4,885,002

FDC for proved reserves on an FD&A basis decreased to $3.37 billion at December 31, 2024 from $3.46 billion at December 31, 2023. FDC for proved plus probable reserves on an FD&A basis decreased to $4.89 billion at December 31, 2024 from $4.97 billion at December 31, 2023. The FDC to drill, case, complete, equip and tie-in for future locations in Birchcliff’s Pouce Coupe and Gordondale areas ($5.9 million per well) did not change from December 31, 2023 to December 31, 2024.

The FDC for both proved and proved plus probable reserves are primarily the capital costs required to drill, case, complete, equip and tie-in the net undeveloped locations. The estimates of FDC on a proved and proved plus probable basis also include approximately $320 million (unescalated) for the continued expansion of the Pouce Coupe Gas Plant from the existing 340 MMcf/d to 660 MMcf/d of total throughput. The FDC for the expansion of the Pouce Coupe Gas Plant also include the costs of the related gathering pipelines and maintenance capital.

F&D and FD&A Costs

The following table sets forth Birchcliff’s F&D and FD&A costs for its PDP, total proved and total proved plus probable reserves for the three previous financial years, including FDC:

	2024⁽²⁾	2023	2022	3-Year Average
F&D costs ($/boe)⁽¹⁾
Proved Developed Producing	11.52⁽³⁾	13.16	10.24	11.43
Total Proved	n/a⁽⁴⁾	16.02	82.02	29.43
Total Proved Plus Probable	n/a⁽⁴⁾	24.90	n/a⁽⁵⁾	110.72
FD&A costs ($/boe)⁽¹⁾
Proved Developed Producing	11.42⁽⁶⁾	13.06	10.25	11.38
Total Proved	53.86⁽⁷⁾	13.79	78.96	23.24
Total Proved Plus Probable	50.39⁽⁸⁾	20.97	n/a⁽⁵⁾	49.27

^{(1) See “Advisories – Oil and Gas Metrics” for a description of the methodology used to calculate F&D and FD&A costs.}

^{(2) Birchcliff’s F&D and FD&A capital expenditures were $273.1 million and $281.0 million, respectively, in 2024. Birchcliff’s F&D and FD&A capital expenditures included $18.8 million spent on strategics priorities in the Corporation’s Elmworth area for which there was no production or reserves assigned at year-end 2024.}

^{(3) Birchcliff added 23.7 MMboe of PDP reserves in 2024, after adding back 2024 actual production of 28.1 MMboe and including all other PDP reserves adjustments in 2024, excluding acquisitions and dispositions.}

^{(4) Birchcliff’s proved and proved plus probable reserves decreased in 2024, after adding back 2024 actual production of 28.1 MMboe. As a result of the year-over-year decrease in proved and proved plus probable reserves, the calculation for F&D costs for these reserves categories was not applicable in 2024.}

^{(5) Birchcliff’s proved plus probable reserves decreased in 2022, after adding back 2022 actual production of 28.1 MMboe. As a result of the year-over-year decrease in proved plus probable reserves, the calculations for F&D and FD&A costs for this reserves category were not applicable in 2022.}

^{(6) Birchcliff added 24.6 MMboe of PDP reserves in 2024, after adding back 2024 actual production of 28.1 MMboe and including all other PDP reserves adjustments in 2024.}

^{(7) Includes the 2024 decrease in FDC from 2023 of $88.5 million on a proved basis. Birchcliff added 3.6 MMboe of proved reserves in 2024, after adding back 2024 actual production of 28.1 MMboe and including all other proved reserves adjustments in 2024.}

^{(8) Includes the 2024 decrease in FDC from 2023 of $89.0 million on a proved plus probable basis. Birchcliff added 3.8 MMboe of proved plus probable reserves in 2024, after adding back 2024 actual production of 28.1 MMboe and including all other proved plus probable reserves adjustments in 2024.}

Recycle Ratios

The following table sets forth Birchcliff’s F&D and FD&A operating netback recycle ratios for its PDP, total proved and total proved plus probable reserves for the three previous financial years, including FDC:

	2024	2023	2022	3-Year Average
F&D operating netback recycle ratio⁽¹⁾⁽²⁾
Proved Developed Producing	1.0x	1.1x	3.2x	1.7x
Total Proved	n/a⁽³⁾	0.9x	0.4x	0.7x
Total Proved Plus Probable	n/a⁽³⁾	0.6x	n/a⁽⁴⁾	0.2x
FD&A operating netback recycle ratio⁽¹⁾⁽²⁾
Proved Developed Producing	1.0x	1.1x	3.2x	1.7x
Total Proved	0.2x	1.1x	0.4x	0.8x
Total Proved Plus Probable	0.2x	0.7x	n/a⁽⁴⁾	0.4x

^{(1) Non-GAAP ratio. See “Non-GAAP and Other Financial Measures”.}

^{(2) Birchcliff’s operating netback was $11.02/boe in 2024 as compared to $14.74/boe in 2023 and $32.85/boe in 2022. Operating netback is a non-GAAP ratio. See “Non-GAAP and Other Financial Measures”.}

^{(3) As a result of the year-over-year decrease in proved and proved plus probable reserves, the calculation for F&D operating netback recycle ratio for these reserves categories was not applicable in 2024.}

^{(4) As a result of the year-over-year decrease in proved plus probable reserves, the calculations for F&D and FD&A operating netback recycle ratio for this reserves category were not applicable in 2022.}

Reserves Replacement

The following table sets forth Birchcliff’s 2024 reserves replacement on an F&D and FD&A basis for its PDP, total proved and total proved plus probable reserves:

Reserves Category	2024 F&D Reserves Replacement⁽¹⁾		2024 FD&A Reserves Replacement⁽¹⁾
Proved Developed Producing	84	%	88	%
Total Proved	n/a⁽²⁾		13	%
Total Proved Plus Probable	n/a⁽²⁾		14	%

^{(1) See “Advisories – Oil and Gas Metrics” for a description of the methodology used to calculate reserves replacement.}

^{(2) As a result of the 1.1 MMboe and 7.2 MMboe decrease in Birchcliff’s proved and proved plus probable reserves, respectively, in 2024, after adding back 2024 actual production of 28.1 MMboe, the calculation for F&D reserves replacement for theses reserves categories was not applicable in 2024.}

Reserves Life Index

The following table sets forth Birchcliff’s reserves life index for its PDP, total proved and total proved plus probable reserves at December 31, 2024:

Reserves Category	Reserves Life Index⁽¹⁾
Proved Developed Producing	7.7 years
Total Proved	23.6 years
Total Proved Plus Probable	34.3 years

^{(1) See “Advisories – Oil and Gas Metrics” for a description of the methodology used to calculate reserves life index.}

ABBREVIATIONS

AECO	benchmark price for natural gas determined at the AECO ‘C’ hub in southeast Alberta
bbl	barrel
bbls	barrels
bbls/d	barrels per day
BD/UM	Basal Doig/Upper Montney
boe	barrel of oil equivalent
boe/d	barrel of oil equivalent per day
condensate	pentanes plus (C5+)
F&D	finding and development
FD&A	finding, development and acquisition
G&A	general and administrative
GAAP	generally accepted accounting principles for Canadian public companies, which are currently International Financial Reporting Standards as issued by the International Accounting Standards Board
GJ/d	gigajoules per day
HH	Henry Hub
IP	initial production
LNG	liquefied natural gas
Mbbls	thousand barrels
Mboe	thousand barrels of oil equivalent
Mcf	thousand cubic feet
Mcf/d	thousand cubic feet per day
MMboe	million barrels of oil equivalent
MMBtu	million British thermal units
MMBtu/d	million British thermal units per day
MMcf	million cubic feet
MMcf/d	million cubic feet per day
NGLs	natural gas liquids consisting of ethane (C2), propane (C3) and butane (C4) and, except where otherwise noted, excludes condensate
NPV	net present value
NYMEX	New York Mercantile Exchange
OPEC	Organization of the Petroleum Exporting Countries
PDP	proved developed producing
Q	quarter
TSX	Toronto Stock Exchange
WTI	West Texas Intermediate, the reference price paid in U.S. dollars at Cushing, Oklahoma, for crude oil of standard grade
000s	thousands
$000s	thousands of dollars

NON-GAAP AND OTHER FINANCIAL MEASURES

This press release uses various “non-GAAP financial measures”, “non-GAAP ratios” and “capital management measures” (as such terms are defined in NI 52-112), which are described in further detail below.

Non-GAAP Financial Measures

NI 52-112 defines a non-GAAP financial measure as a financial measure that: (i) depicts the historical or expected future financial performance, financial position or cash flow of an entity; (ii) with respect to its composition, excludes an amount that is included in, or includes an amount that is excluded from, the composition of the most directly comparable financial measure disclosed in the primary financial statements of the entity; (iii) is not disclosed in the financial statements of the entity; and (iv) is not a ratio, fraction, percentage or similar representation. The non-GAAP financial measures used in this press release are not standardized financial measures under GAAP and might not be comparable to similar measures presented by other companies. Investors are cautioned that non-GAAP financial measures should not be construed as alternatives to or more meaningful than the most directly comparable GAAP financial measures as indicators of Birchcliff’s performance. Set forth below is a description of the non-GAAP financial measures used in this press release.

Adjusted Funds Flow and Free Funds Flow

Birchcliff defines “adjusted funds flow” as cash flow from operating activities before the effects of decommissioning expenditures, retirement benefit payments and changes in non-cash operating working capital. Birchcliff eliminates settlements of decommissioning expenditures from cash flow from operating activities as the amounts can be discretionary and may vary from period to period depending on its capital programs and the maturity of its operating areas. The settlement of decommissioning expenditures is managed with Birchcliff’s capital budgeting process which considers available adjusted funds flow. Birchcliff eliminates retirement benefit payments from cash flow from operating activities as such payments reflect costs for past service and contributions made by eligible executives under the Corporation’s post-employment benefit plan, which are not indicative of the current period. Changes in non-cash operating working capital are eliminated in the determination of adjusted funds flow as the timing of collection and payment are variable and by excluding them from the calculation, the Corporation believes that it is able to provide a more meaningful measure of its operations and ability to generate cash on a continuing basis. Management believes that adjusted funds flow assists management and investors in assessing Birchcliff’s financial performance after deducting all operating and corporate cash costs, as well as its ability to generate the cash necessary to fund sustaining and/or growth capital expenditures, repay debt, settle decommissioning obligations, buy back common shares and pay dividends.

Birchcliff defines “free funds flow” as adjusted funds flow less F&D capital expenditures. Management believes that free funds flow assists management and investors in assessing Birchcliff’s ability to generate shareholder value and returns through a number of initiatives, including but not limited to, debt repayment, common share buybacks, the payment of common share dividends, acquisitions and other opportunities that would complement or otherwise improve the Corporation’s business and enhance long-term shareholder value.

The most directly comparable GAAP financial measure to adjusted funds flow and free funds flow is cash flow from operating activities. The following table provides a reconciliation of cash flow from operating activities to adjusted funds flow and free funds flow for the periods indicated:

	Three months ended December 31,				Twelve months ended December 31,
($000s)	2024		2023		2024		2023
Cash flow from operating activities	45,641		79,006		203,710		320,529
Change in non-cash operating working capital	25,278		(6,248	)	17,269		(19,477	)
Decommissioning expenditures	919		1,457		1,964		3,775
Retirement benefit payments	–		2,000		13,851		2,000
Adjusted funds flow	71,838		76,215		236,794		306,827
F&D capital expenditures	(58,310	)	(58,166	)	(273,084	)	(304,637	)
Free funds flow	13,528		18,049		(36,290	)	2,190

Transportation and Other Expense

Birchcliff defines “transportation and other expense” as transportation expense plus marketing purchases less marketing revenue. Birchcliff may enter into certain marketing purchase and sales arrangements with the objective of reducing any unused transportation or fractionation fees associated with its take-or-pay commitments and/or increasing the value of its production through value-added downstream initiatives. Management believes that transportation and other expense assists management and investors in assessing Birchcliff’s total cost structure related to transportation and marketing activities.

The most directly comparable GAAP financial measure to transportation and other expense is transportation expense. The following table provides a reconciliation of transportation expense to transportation and other expense for the periods indicated:

	Three months ended December 31,				Twelve months ended December 31,
($000s)	2024		2023		2024		2023
Transportation expense	36,722		38,509		149,534		152,828
Marketing purchases	14,905		8,928		51,496		34,772
Marketing revenue	(14,083	)	(8,532	)	(54,069	)	(30,521	)
Transportation and other expense	37,544		38,905		146,961		157,079

Operating Netback

Birchcliff defines “operating netback” as petroleum and natural gas revenue less royalty expense, operating expense and transportation and other expense. Management believes that operating netback assists management and investors in assessing Birchcliff’s operating profits after deducting the cash costs that are directly associated with the sale of its production, which can then be used to pay other corporate cash costs or satisfy other obligations.

The following table provides a breakdown of Birchcliff’s operating netback for the periods indicated:

	Three months ended				Twelve months ended
	December 31,				December 31,
($000s)	2024		2023		2024		2023		2022
Petroleum and natural gas revenue	153,741		183,295		586,856		740,359		1,340,180
Royalty expense	(9,033	)	(19,400	)	(39,608	)	(70,257	)	(161,226	)
Operating expense	(20,758	)	(26,808	)	(90,890	)	(105,809	)	(101,581	)
Transportation and other expense	(37,544	)	(38,905	)	(146,961	)	(157,079	)	(154,924	)
Operating netback	86,406		98,182		309,397		407,214		922,449

FD&A and Total Capital Expenditures

Birchcliff defines “FD&A capital expenditures” as exploration and development expenditures, less dispositions, plus acquisitions (if any). Birchcliff defines “total capital expenditures” as FD&A capital expenditures plus administrative assets. Management believes that FD&A capital expenditures and total capital expenditures assist management and investors in assessing Birchcliff’s overall capital cost structure associated with its petroleum and natural gas activities.

The most directly comparable GAAP financial measure to FD&A capital expenditures and total capital expenditures is exploration and development expenditures. The following table provides a reconciliation of exploration and development expenditures to FD&A capital expenditures and total capital expenditures for the periods indicated:

	Three months ended				Twelve months ended
	December 31,				December 31,
($000s)	2024		2023		2024		2023
Exploration and development expenditures⁽¹⁾	58,310		58,166		273,084		304,637
Acquisitions	8,076		2		8,169		190
Dispositions	(100	)	(10	)	(258	)	(87	)
FD&A capital expenditures	66,286		58,158		280,995		304,740
Administrative assets	387		1,383		1,750		3,176
Total capital expenditures	66,673		59,541		282,745		307,916

^{(1) Disclosed as F&D capital expenditures elsewhere in this press release. See “Advisories – F&D Capital Expenditures”.}

Net Asset Value

Birchcliff defines “net asset value” as property, plant and equipment, plus reserves premium adjustment (less reserves discount adjustment) for its PDP, total proved and total proved plus probable reserves (as the case may be), less total debt and plus the value of unexercised in-the-money stock options and performance warrants outstanding at the end of the period. Management believes that net asset value assists management and investors in assessing the long-term fair value of Birchcliff’s underlying reserves assets after settling its outstanding financial obligations.

The most directly comparable GAAP financial measure to net asset value is property, plant and equipment. The following table provides a reconciliation of property, plant and equipment to net asset value for the periods indicated:

	Proved Developed Producing				Total Proved				Total Proved Plus Probable
As at December 31, ($000s)	2024		2023		2024		2023		2024		2023
Property, plant and equipment	3,218,506		3,055,958		3,218,506		3,055,958		3,218,506		3,055,958
Reserves premium (discount) adjustment⁽¹⁾	(940,756	)	(435,894	)	1,140,662		2,349,659		2,345,325		3,779,459
Total debt	(535,557	)	(382,306	)	(535,557	)	(382,306	)	(535,557	)	(382,306	)
Unexercised securities	34,961		16,717		34,961		16,717		34,961		16,717
Net asset value	1,777,154		2,254,475		3,858,572		5,040,028		5,063,235		6,469,828

^{(1) Represents the premium or discount, as the case may be, between the net present value of future net revenue (before income taxes, discounted at 10%) of Birchcliff’s PDP, total proved and total proved plus probable reserves, as the case may be, and the property, plant and equipment disclosed on the financial statements.}

Effective Sales – Total Corporate, Total Natural Gas, AECO Market and NYMEX HH Market

Birchcliff defines “effective sales” in the AECO market and NYMEX HH market as the sales amount received from the production of natural gas that is effectively attributed to the AECO and NYMEX HH market pricing, respectively, and does not consider the physical sales delivery point in each case. Effective sales in the NYMEX HH market includes realized gains and losses on financial instruments and excludes the notional fixed basis costs associated with the underlying financial contract in the period. Birchcliff defines “effective total natural gas sales” as the aggregate of the effective sales amount received in each natural gas market. Birchcliff defines “effective total corporate sales” as the aggregate of the effective total natural gas sales and the sales amount received from the production of light oil, condensate and NGLs. Management believes that disclosing the effective sales for each natural gas market assists management and investors in assessing Birchcliff’s natural gas diversification and commodity price exposure to each market.

The most directly comparable GAAP financial measure to effective total natural gas sales and effective total corporate sales is natural gas sales. The following table provides a reconciliation of natural gas sales to effective total natural gas sales and effective total corporate sales for the periods indicated:

	Three months ended
	December 31,
($000s)	2024	2023
Natural gas sales	79,615	99,957
Realized gain (loss) on financial instruments	12,022	(2,583	)
Notional fixed basis costs⁽¹⁾	21,490	20,802
Effective total natural gas sales	113,127	118,176
Light oil sales	17,450	15,180
Condensate sales	37,985	49,135
NGLs sales	18,679	18,977
Effective total corporate sales	187,241	201,468

^{(1) Reflects the aggregate notional fixed basis cost associated with Birchcliff’s financial and physical NYMEX HH/AECO 7A basis swap contracts in the period.}

Non-GAAP Ratios

NI 52-112 defines a non-GAAP ratio as a financial measure that: (i) is in the form of a ratio, fraction, percentage or similar representation; (ii) has a non-GAAP financial measure as one or more of its components; and (iii) is not disclosed in the financial statements of the entity. The non-GAAP ratios used in this press release are not standardized financial measures under GAAP and might not be comparable to similar measures presented by other companies. Set forth below is a description of the non-GAAP ratios used in this press release.

Adjusted Funds Flow Per Boe and Adjusted Funds Flow Per Basic Common Share

Birchcliff calculates “adjusted funds flow per boe” as aggregate adjusted funds flow in the period divided by the production (boe) in the period. Management believes that adjusted funds flow per boe assists management and investors in assessing Birchcliff’s financial profitability and sustainability on a cash basis by isolating the impact of production volumes to better analyze its performance against prior periods on a comparable basis.

Birchcliff calculates “adjusted funds flow per basic common share” as aggregate adjusted funds flow in the period divided by the weighted average basic common shares outstanding at the end of the period. Management believes that adjusted funds flow per basic common share assists management and investors in assessing Birchcliff’s financial strength on a per common share basis.

Free Funds Flow Per Basic Common Share

Birchcliff calculates “free funds flow per basic common share” as aggregate free funds flow in the period divided by the weighted average basic common shares outstanding at the end of the period. Management believes that free funds flow per basic common share assists management and investors in assessing Birchcliff’s financial strength and its ability to deliver shareholder returns on a per common share basis.

Transportation and Other Expense Per Boe

Birchcliff calculates “transportation and other expense per boe” as aggregate transportation and other expense in the period divided by the production (boe) in the period. Management believes that transportation and other expense per boe assists management and investors in assessing Birchcliff’s cost structure as it relates to its transportation and marketing activities by isolating the impact of production volumes to better analyze its performance against prior periods on a comparable basis.

Operating Netback Per Boe

Birchcliff calculates “operating netback per boe” as aggregate operating netback in the period divided by the production (boe) in the period. Operating netback per boe is a key industry performance indicator and one that provides investors with information that is commonly presented by other oil and natural gas producers. Management believes that operating netback per boe assists management and investors in assessing Birchcliff’s operating profitability and sustainability by isolating the impact of production volumes to better analyze its performance against prior periods on a comparable basis.

Operating Netback Recycle Ratio

Birchcliff calculates “operating netback recycle ratio” as operating netback per boe in the period divided by F&D or FD&A costs, as the case may be, for its PDP, proved and proved plus probable reserves, as the case may be, in the period. Management believes that operating netback recycle ratio assists management and investors in assessing Birchcliff’s ability to profitably find and develop its PDP, proved and proved plus probable reserves.

Net Asset Value Per Common Share

Birchcliff calculates “net asset value per common share” as the net asset value in each category of reserves divided by the aggregate of the basic common shares outstanding and in-the-money dilutive common shares attributable to stock options and performance warrants outstanding at the end of the period. Management believes that net asset value per common share assists management and investors in comparing Birchcliff’s common share trading price to the underlying fair market value of its net assets on a per common share basis.

Effective Average Realized Sales Price – Total Corporate, Total Natural Gas, AECO Market and NYMEX HH Market

Birchcliff calculates “effective average realized sales price” as effective sales, in each of total corporate, total natural gas, AECO market and NYMEX HH market, as the case may be, divided by the effective production in each of the markets during the period. Management believes that disclosing the effective average realized sales price for each natural gas market assists management and investors in comparing Birchcliff’s commodity price realizations in each natural gas market on a per unit basis.

Capital Management Measures

NI 52-112 defines a capital management measure as a financial measure that: (i) is intended to enable an individual to evaluate an entity’s objectives, policies and processes for managing the entity’s capital; (ii) is not a component of a line item disclosed in the primary financial statements of the entity; (iii) is disclosed in the notes to the financial statements of the entity; and (iv) is not disclosed in the primary financial statements of the entity. Set forth below is a description of the capital management measure used in this press release.

Total Debt

Birchcliff calculates “total debt” at the end of the period as the amount outstanding under the Corporation’s Credit Facilities plus working capital deficit (less working capital surplus) plus the fair value of the current asset portion of financial instruments less the fair value of the current liability portion of financial instruments and less the current portion of other liabilities discounted to the end of the period. The current portion of other liabilities has been excluded from total debt as these amounts have not been incurred and reflect future commitments in the normal course of operations. Management believes that total debt assists management and investors in assessing Birchcliff’s overall liquidity and financial position at the end of the period. The following table provides a reconciliation of the amount outstanding under the Credit Facilities, as determined in accordance with GAAP, to total debt for the periods indicated:

As at December 31, ($000s)	2024		2023
Revolving term credit facilities	566,857		372,097
Working capital deficit (surplus)⁽¹⁾	(88,953	)	10,522
Fair value of financial instruments – asset⁽²⁾	71,038		3,588
Fair value of financial instruments – liability⁽²⁾	–		(1,394	)
Other liabilities⁽²⁾	(13,385	)	(2,507	)
Total debt	535,557		382,306

^{(1) Current liabilities less current assets.}

^{(2) Reflects the current portion only.}

PRESENTATION OF OIL AND GAS RESERVES

Deloitte prepared the Deloitte Report and the 2023 Deloitte Report. In addition, Deloitte prepared a reserves evaluation in respect of Birchcliff’s oil and natural gas properties effective December 31, 2022. Such evaluations were prepared in accordance with the standards contained in NI 51-101 and the COGE Handbook that were in effect at the relevant time. Reserves estimates stated herein are extracted from the relevant evaluation.

There are numerous uncertainties inherent in estimating quantities of oil, natural gas and NGLs (including condensate) reserves and the future net revenue attributed to such reserves. The reserves and associated future net revenue information set forth in this press release are estimates only. In general, estimates of economically recoverable oil, natural gas and NGLs reserves and the future net revenue therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserves recovery, the timing and amount of capital expenditures, marketability of oil, natural gas and NGLs, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially from actual results. For these reasons, estimates of the economically recoverable oil, natural gas and NGLs reserves attributable to any particular group of properties, the classification of such reserves based on risk of recovery and estimates of future net revenue associated with reserves prepared by different engineers, or by the same engineer at different times, may vary. Birchcliff’s actual production, revenue, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material.

It should not be assumed that the undiscounted or discounted net present value of future net revenue attributable to the Corporation’s reserves estimated by the Corporation’s independent qualified reserves evaluator represent the fair market value of those reserves. There is no assurance that the forecast prices and costs assumptions will be attained and variances could be material. Actual oil, natural gas and NGLs reserves may be greater than or less than the estimates provided herein and variances could be material.

In this press release, unless otherwise stated all references to “reserves” are to Birchcliff’s gross company reserves, meaning Birchcliff’s working interest (operating or non-operating) share before the deduction of royalties and without including any royalty interests of Birchcliff.

The information set forth in this press release relating to the reserves, future net revenue and future development costs of Birchcliff constitutes forward-looking statements and is subject to certain risks and uncertainties. See “Advisories – Forward-Looking Statements”.

Certain terms used herein but not defined are defined in NI 51-101, CSA Staff Notice 51-324 – Revised Glossary to NI 51-101 Standards of Disclosure for Oil and Gas Activities (“CSA Staff Notice 51-324”) and/or the COGE Handbook and, unless the context otherwise requires, shall have the same meanings herein as in NI 51-101, CSA Staff Notice 51-324 and the COGE Handbook, as the case may be.

ADVISORIES

Unaudited Information

All financial information contained in this press release for the fourth quarter and year ended December 31, 2024 is based on unaudited estimated financial information which has been disclosed in accordance with GAAP. These estimated results have not been reviewed by the Corporation’s auditor and are subject to change upon completion of the audited financial statements for the year ended December 31, 2024, and changes could be material. Birchcliff anticipates filing its audited financial statements and related management’s discussion and analysis for the year ended December 31, 2024 on SEDAR+ on March 12, 2025.

Currency

Unless otherwise indicated, all dollar amounts are expressed in Canadian dollars, all references to “$” and “CDN$” are to Canadian dollars and all references to “US$” are to United States dollars.

Boe Conversions

Boe amounts have been calculated by using the conversion ratio of 6 Mcf of natural gas to 1 bbl of oil. Boe amounts may be misleading, particularly if used in isolation. A boe conversion ratio of 6 Mcf: 1 bbl is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent a value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil as compared to natural gas is significantly different from the energy equivalency of 6:1, utilizing a conversion on a 6:1 basis may be misleading as an indication of value.

MMBtu Pricing Conversions

$1.00 per MMBtu equals $1.00 per Mcf based on a standard heat value Mcf.

Oil and Gas Metrics

This press release contains metrics commonly used in the oil and natural gas industry, including F&D costs, FD&A costs, reserves replacement, reserves life index, capital efficiency, operating netback, operating netback recycle ratio, net asset value and net asset value per common share, which have been determined by Birchcliff as set out below. These oil and gas metrics do not have any standardized meanings or standard methods of calculation and therefore may not be comparable to similar measures presented by other companies. As such, they should not be used to make comparisons. Management uses these oil and gas metrics for its own performance measurements and to provide investors with measures to compare Birchcliff’s performance over time; however, such measures are not reliable indicators of Birchcliff’s future performance, which may not compare to Birchcliff’s performance in previous periods, and therefore should not be unduly relied upon.

With respect to F&D and FD&A costs:
- F&D costs for PDP, proved or proved plus probable reserves, as the case may be, are calculated by taking the sum of: (i) exploration and development expenditures (F&D capital expenditures) incurred in the period; and (ii) where appropriate, the change during the period in FDC for the reserves category; divided by the applicable additions to the reserves category after adding back production in the period. F&D costs exclude the effects of acquisitions and dispositions.
- FD&A costs for PDP, proved or proved plus probable reserves, as the case may be, are calculated by taking the sum of: (i) FD&A capital expenditures incurred in the period; and (ii) where appropriate, the change during the period in FDC for the reserves category; divided by the applicable additions to the reserves category after adding back production in the period.
- In determining the F&D and FD&A costs for PDP, proved or proved plus probable reserves, as the case may be, the estimated reserves additions during the period and the change during the period in estimated FDC are based upon the evaluations of Birchcliff’s reserves prepared by its independent qualified reserves evaluator effective December 31 of such year.
- The aggregate of the F&D and FD&A capital expenditures incurred in the most recent financial year and the change during that year in estimated FDC generally will not reflect total F&D and FD&A costs related to reserves additions for that year.
- F&D and FD&A costs may be used as a measure of the Corporation’s efficiency with respect to finding and developing its reserves.
Reserves replacement on an F&D basis is calculated by dividing PDP, proved or proved plus probable reserves additions, as the case may be, before production by the total annual production in the applicable period. Reserves replacement on an FD&A basis is calculated in the same manner as F&D reserves replacement, but include the effects of acquisitions and dispositions. Reserves replacement may be used as a measure of the Corporation’s sustainability and its ability to replace its PDP, proved or proved plus probable reserves, as the case may be.
Reserves life index is calculated by dividing PDP, proved or proved plus probable reserves, as the case may be, estimated by Deloitte at December 31, 2024, by 77,500 boe/d (which represents the mid-point of Birchcliff’s annual average production guidance range for 2025) determined on an annualized basis. Reserves life index may be used as a measure of the Corporation’s sustainability.
Capital efficiency is calculated on an average well basis as drill, case, complete and equip capital expenditures divided by the IP365 boe/d for the applicable well(s). Birchcliff defines “IP365 boe/d” as the estimated average daily field production in the first 365 days a well is on-stream. Where field production data is not available for a well, Birchcliff uses the forecasted production data for that well. Capital efficiency is determined at the individual well level and then aggregated and averaged for the year. Management believes that capital efficiency assists management and investors in assessing Birchcliff’s asset performance, execution and ability to generate shareholder value.
For information regarding operating netback, operating netback recycle ratio, net asset value and net asset value per common share and how such metrics are calculated, see “Non-GAAP and Other Financial Measures”.

Production

With respect to the disclosure of Birchcliff’s production contained in this press release: (i) references to “light oil” mean “light crude oil and medium crude oil” as such term is defined in NI 51-101; (ii) references to “liquids” mean “light crude oil and medium crude oil” and “natural gas liquids” (including condensate) as such terms are defined in NI 51-101; and (iii) references to “natural gas” mean “shale gas”, which also includes an immaterial amount of “conventional natural gas”, as such terms are defined in NI 51-101. In addition, NI 51-101 includes condensate within the product type of natural gas liquids. In certain cases, Birchcliff has disclosed condensate separately from other natural gas liquids as the price of condensate as compared to other natural gas liquids is currently significantly higher and Birchcliff believes presenting the two commodities separately provides a more accurate description of its operations and results therefrom.

With respect to the disclosure of Birchcliff’s production contained in this press release, all production volumes have been disclosed on a “gross” basis as such term is defined in NI 51-101, meaning Birchcliff’s working interest (operating or non-operating) share before the deduction of royalties and without including any royalty interests of Birchcliff.

F&D Capital Expenditures

Unless otherwise stated, references in this press release to “F&D capital expenditures” denotes exploration and development expenditures as disclosed in the Corporation’s financial statements in accordance with GAAP, and is primarily comprised of capital for land, seismic, workovers, drilling and completions, well equipment and facilities and capitalized G&A costs and excludes any acquisitions, dispositions, administrative assets and the capitalized portion of cash incentive payments that have not been approved by the Board. Management believes that F&D capital expenditures assists management and investors in assessing Birchcliff’s capital cost outlay associated with its exploration and development activities for the purposes of finding and developing its reserves.

Forward-Looking Statements

Certain statements contained in this press release constitute forward‐looking statements and forward-looking information (collectively referred to as “forward‐looking statements”) within the meaning of applicable Canadian securities laws. The forward-looking statements contained in this press release relate to future events or Birchcliff’s future plans, strategy, operations, performance or financial position and are based on Birchcliff’s current expectations, estimates, projections, beliefs and assumptions. Such forward-looking statements have been made by Birchcliff in light of the information available to it at the time the statements were made and reflect its experience and perception of historical trends. All statements and information other than historical fact may be forward‐looking statements. Such forward‐looking statements are often, but not always, identified by the use of words such as “seek”, “plan”, “focus”, “future”, “outlook”, “position”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “forecast”, “guidance”, “potential”, “proposed”, “predict”, “budget”, “continue”, “targeting”, “may”, “will”, “could”, “might”, “should”, “would”, “on track”, “maintain”, “deliver” and other similar words and expressions.

By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward‐looking statements. Accordingly, readers are cautioned not to place undue reliance on such forward-looking statements. Although Birchcliff believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct and Birchcliff makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking statements.

In particular, this press release contains forward‐looking statements relating to:

Birchcliff’s plans and other aspects of its anticipated future financial performance, results, operations, focus, objectives, strategies, opportunities, priorities and goals, including: Birchcliff’s belief that there is significant intrinsic shareholder value embedded in Birchcliff’s asset base that is not reflected in its current share price, as demonstrated by its PDP reserves net asset value per common share of $6.35 and $13.79 and $18.09 per share for its proved and proved plus probable reserves, respectively; that Birchcliff’s Elmworth asset provides Birchcliff with significant inventory and a large potential future development area; that Birchcliff’s strategy for 2025 builds off of the operational momentum from 2024, maintaining the Corporation’s focus on capital efficiency improvements and further driving down costs; that the Corporation’s 2025 capital program has been designed to ensure that its capital is strategically deployed throughout the year, providing it with the flexibility to adjust its capital spending if necessary in response to the commodity price volatility expected during 2025, including as a result of the potential for U.S. and Canadian tariffs and the start-up of LNG Canada; that the unutilized credit capacity under its Credit Facilities provides Birchcliff with significant financial flexibility and available capital resources; that Birchcliff believes its ongoing strategy of maintaining significant natural gas market diversification for 2025 will continue to protect the Corporation from volatility in the North American natural gas pricing environment, including as it relates to potential tariffs; and estimates of Birchcliff’s 2025 market diversification (including that approximately 41% of Birchcliff’s natural gas production is physically delivered to the Dawn trading hub in Ontario and that Birchcliff has U.S. denominated financial contracts that expose approximately 35% of its natural gas production to NYMEX HH pricing on a financial basis);
the information set forth under the heading “Update on 2025 Capital Program” and elsewhere in this press release regarding Birchcliff’s 2025 capital program and its exploration, production and development activities and the timing thereof, including: estimates of the Corporation’s 2025 F&D capital expenditures; that the wells in Birchcliff’s 2025 capital program are expected to yield strong production, using the Corporation’s latest field development practices and wellbore design, which incorporates longer lateral lengths, reduced stage spacing and increased proppant loading where appropriate; that the land retention well drilled and completed by the Corporation in Elmworth is not currently planned to be tied in; the targeted product types; and the expected timing for wells to be drilled, completed and brought on production;
statements regarding U.S. and Canadian tariffs, including that the Corporation believes that Canada’s over-reliance on exporting its energy into the U.S. must be addressed through the reduction of red tape and government interference in the construction of critical infrastructure such as oil and gas pipelines to the east and west coasts of Canada, LNG terminals on each coast and an increase in refining capacity within Canada, in order to diversify Canada’s energy export market; and that the Corporation continues to actively monitor this situation;
the information set forth under the heading “2024 Year-End Reserves” and elsewhere in this press release regarding the Corporation’s reserves, including: estimates of reserves; estimates of the net present values of future net revenue associated with Birchcliff’s reserves; forecasts of prices, inflation and exchange rates; FDC; reserves life index; and that the Corporation does not expect that the technical revisions relating to the 56 high-density wells drilled from 2019 to 2023 will negatively impact future reserves booked for other existing or future wells;
the performance and other characteristics of Birchcliff’s oil and natural gas properties and expected results from its assets, including statements regarding the potential or prospectivity of Birchcliff’s properties; and
that Birchcliff anticipates filing its annual information form and audited financial statements and related management’s discussion and analysis for the year ended December 31, 2024 on March 12, 2025.

Information relating to reserves is forward-looking as it involves the implied assessment, based on certain estimates and assumptions, that the reserves exist in the quantities predicted or estimated and that the reserves can profitably be produced in the future. See “Presentation of Oil and Gas Reserves”.

With respect to the forward-looking statements contained in this press release, assumptions have been made regarding, among other things: prevailing and future commodity prices and differentials, exchange rates, interest rates, inflation rates, royalty rates and tax rates; the state of the economy, financial markets and the exploration, development and production business; the political environment in which Birchcliff operates; the regulatory framework regarding royalties, taxes, environmental, climate change and other laws; the Corporation’s ability to comply with existing and future laws; future cash flow, debt and dividend levels; future operating, transportation, G&A and other expenses; Birchcliff’s ability to access capital and obtain financing on acceptable terms; the timing and amount of capital expenditures and the sources of funding for capital expenditures and other activities; the sufficiency of budgeted capital expenditures to carry out planned operations; the successful and timely implementation of capital projects and the timing, location and extent of future drilling and other operations; results of operations; Birchcliff’s ability to continue to develop its assets and obtain the anticipated benefits therefrom; the performance of existing and future wells; reserves volumes and Birchcliff’s ability to replace and expand reserves through acquisition, development or exploration; the impact of competition on Birchcliff; the availability of, demand for and cost of labour, services and materials; the approval of the Board of future dividends; the ability to obtain any necessary regulatory or other approvals in a timely manner; the satisfaction by third parties of their obligations to Birchcliff; the ability of Birchcliff to secure adequate processing and transportation for its products; Birchcliff’s ability to successfully market natural gas and liquids; the results of the Corporation’s risk management and market diversification activities; and Birchcliff’s natural gas market exposure. In addition to the foregoing assumptions, Birchcliff has made the following assumptions with respect to certain forward-looking statements contained in this press release:

Birchcliff’s forecast of F&D capital expenditures assumes that the Corporation’s 2025 capital program will be carried out as currently contemplated and excludes any potential acquisitions, dispositions and the capitalized portion of cash incentive payments that have not been approved by the Board. The amount and allocation of capital expenditures for exploration and development activities by area and the number and types of wells to be drilled and brought on production is dependent upon results achieved and is subject to review and modification by management on an ongoing basis throughout the year. Actual spending may vary due to a variety of factors, including commodity prices, economic conditions, results of operations and costs of labour, services and materials.
With respect to estimates of reserves volumes and the net present values of future net revenue associated with Birchcliff’s reserves, the key assumption is the validity of the data used by Deloitte in the Deloitte Report.
With respect to statements regarding future wells to be drilled or brought on production, such statements assume: the continuing validity of the geological and other technical interpretations performed by Birchcliff’s technical staff, which indicate that commercially economic volumes can be recovered from Birchcliff’s lands as a result of drilling future wells; and that commodity prices and general economic conditions will warrant proceeding with the drilling of such wells.

Birchcliff’s actual results, performance or achievements could differ materially from those anticipated in the forward-looking statements as a result of both known and unknown risks and uncertainties including, but not limited to: general economic, market and business conditions which will, among other things, impact the demand for and market prices of Birchcliff’s products and Birchcliff’s access to capital; volatility of crude oil and natural gas prices; risks associated with increasing costs, whether due to high inflation rates, supply chain disruptions or other factors; fluctuations in exchange and interest rates; an inability of Birchcliff to generate sufficient cash flow from operations to meet its current and future obligations; an inability to access sufficient capital from internal and external sources on terms acceptable to the Corporation; risks associated with Birchcliff’s Credit Facilities, including a failure to comply with covenants under the agreement governing the Credit Facilities and the risk that the borrowing base limit may be redetermined; fluctuations in the costs of borrowing; operational risks and liabilities inherent in oil and natural gas operations; the risk that weather events such as wildfires, flooding, droughts or extreme hot or cold temperatures forces the Corporation to shut-in production or otherwise adversely affects the Corporation’s operations; the occurrence of unexpected events such as fires, explosions, blow-outs, equipment failures, transportation incidents and other similar events; an inability to access sufficient water or other fluids needed for operations; the risks associated with supply chain disruptions; uncertainty that development activities in connection with Birchcliff’s assets will be economic; an inability to access or implement some or all of the technology necessary to operate its assets and achieve expected future results; geological, technical, drilling, construction and processing problems; uncertainty of geological and technical data; horizontal drilling and completions techniques and the failure of drilling results to meet expectations for reserves or production; uncertainties related to Birchcliff’s future potential drilling locations; delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of estimates and projections relating to production, revenue, costs and reserves; the accuracy of cost estimates and variances in Birchcliff’s actual costs and economic returns from those anticipated; incorrect assessments of the value of acquisitions and exploration and development programs; the risks posed by pandemics, epidemics and global conflict and their impacts on supply and demand and commodity prices; actions taken by OPEC and other major producers of crude oil and the impact such actions may have on supply and demand and commodity prices; stock market volatility; loss of market demand; changes to the regulatory framework in the locations where the Corporation operates, including changes to tax laws, Crown royalty rates, environmental laws, climate change laws, carbon tax regimes, incentive programs and other regulations that affect the oil and natural gas industry (including uncertainty with respect to the interpretation of Bill C-59 and the related amendments to the Competition Act (Canada)); political uncertainty and uncertainty associated with government policy changes, including the risk of U.S. tariffs on goods exported from Canada and any retaliatory tariffs implemented; actions by government authorities; an inability of the Corporation to comply with existing and future laws and the cost of compliance with such laws; dependence on facilities, gathering lines and pipelines; uncertainties and risks associated with pipeline restrictions and outages to third-party infrastructure that could cause disruptions to production; the lack of available pipeline capacity and an inability to secure adequate and cost-effective processing and transportation for Birchcliff’s products; an inability to satisfy obligations under Birchcliff’s firm marketing and transportation arrangements; shortages in equipment and skilled personnel; the absence or loss of key employees; competition for, among other things, capital, acquisitions of reserves, undeveloped lands, equipment and skilled personnel; management of Birchcliff’s growth; environmental and climate change risks, claims and liabilities; potential litigation; default under or breach of agreements by counterparties and potential enforceability issues in contracts; claims by Indigenous peoples; the reassessment by taxing or regulatory authorities of the Corporation’s prior transactions and filings; unforeseen title defects; third-party claims regarding the Corporation’s right to use technology and equipment; uncertainties associated with the outcome of litigation or other proceedings involving Birchcliff; uncertainties associated with counterparty credit risk; risks associated with Birchcliff’s risk management and market diversification activities; risks associated with the declaration and payment of future dividends, including the discretion of the Board to declare dividends and change the Corporation’s dividend policy and the risk that the amount of dividends may be less than currently forecast; the failure to obtain any required approvals in a timely manner or at all; the failure to complete or realize the anticipated benefits of acquisitions and dispositions and the risk of unforeseen difficulties in integrating acquired assets into Birchcliff’s operations; negative public perception of the oil and natural gas industry and fossil fuels; the Corporation’s reliance on hydraulic fracturing; market competition, including from alternative energy sources; changing demand for petroleum products; the availability of insurance and the risk that certain losses may not be insured; breaches or failure of information systems and security (including risks associated with cyber-attacks); risks associated with the ownership of the Corporation’s securities; the accuracy of the Corporation’s accounting estimates and judgments; and the risk that any of the Corporation’s material assumptions prove to be materially inaccurate.

Readers are cautioned that the foregoing lists of factors are not exhaustive. Additional information on these and other risk factors that could affect Birchcliff’s results of operations, financial performance or financial results are included in Birchcliff’s annual information form and annual management’s discussion and analysis for the financial year ended December 31, 2023 under the heading “Risk Factors” and in other reports filed with Canadian securities regulatory authorities.

This press release contains information that may constitute future-oriented financial information or financial outlook information (collectively, “FOFI”) about Birchcliff’s prospective financial performance, financial position or cash flows, all of which is subject to the same assumptions, risk factors, limitations and qualifications as set forth above. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise or inaccurate and, as such, undue reliance should not be placed on FOFI. Birchcliff’s actual results, performance and achievements could differ materially from those expressed in, or implied by, FOFI. Birchcliff has included FOFI in order to provide readers with a more complete perspective on Birchcliff’s future operations and management’s current expectations relating to Birchcliff’s future performance. Readers are cautioned that such information may not be appropriate for other purposes.

Management has included the above summary of assumptions and risks related to forward-looking statements provided in this press release in order to provide readers with a more complete perspective on Birchcliff’s future operations and management’s current expectations relating to Birchcliff’s future performance. Readers are cautioned that this information may not be appropriate for other purposes.

The forward-looking statements and FOFI contained in this press release are expressly qualified by the foregoing cautionary statements. The forward-looking statements and FOFI contained herein are made as of the date of this press release. Unless required by applicable laws, Birchcliff does not undertake any obligation to publicly update or revise any forward-looking statements or FOFI, whether as a result of new information, future events or otherwise.

ABOUT BIRCHCLIFF:

Birchcliff is an intermediate oil and natural gas company based in Calgary, Alberta with operations focused on the Montney/Doig Resource Play in Alberta. Birchcliff’s common shares are listed for trading on the TSX under the symbol “BIR”.

For further information, please contact:

Birchcliff Energy Ltd.
Suite 1000, 600 – 3^rd Avenue S.W.
Calgary, Alberta T2P 0G5
Telephone: (403) 261-6401
Email: birinfo@birchcliffenergy.com
www.birchcliffenergy.com

Chris Carlsen – President and Chief Executive Officer

Bruno Geremia – Executive Vice President and Chief Financial Officer

The MIL Network –

February 13, 2025

MIL-OSI: ConnectM Raises Q4 ‘24 Revenue Guidance to $9M, Up 102% Year-over-Year, Surpassing Prior Estimates by $2M

Source: GlobeNewswire (MIL-OSI)

~Revised FY2024 revenue guidance is $26.3M instead of previous guidance of $24M

~Company expects to provide Q1 ‘25 guidance in the next two weeks~

MARLBOROUGH, Mass., Feb. 12, 2025 (GLOBE NEWSWIRE) — ConnectM Technology Solutions, Inc. (NASDAQ: CNTM) (“ConnectM” or the “Company”), a technology company focused on the electrification economy, today announced a significant upward revision to its previously announced Q4 2024 preliminary revenue guidance of $7 million. The Company now anticipates Q4 2024 revenue of approximately $9 million, a 102% increase compared to $4.5 million revenue in Q4 2023.

The revised Q4 ’24 guidance elevates ConnectM’s full-year 2024 revenue projection to $26.3 million, reflecting 33% year-over-year growth compared to full-year 2023. This performance underscores the Company’s accelerating momentum in delivering innovative technology solutions and capturing market share across its core verticals.

Strategic Drivers of Growth
ConnectM attributes this exceptional growth to increased demand for its proprietary technology platforms, expanded customer acquisitions, and operational efficiencies. The Company’s ability to exceed previous forecasts highlights the success of its strategic focus on customer-centric solutions.

Bhaskar Panigrahi, Chairman and CEO of ConnectM, stated: “Today’s upward revision is a testament to the relentless execution of our team and the scalability of our solutions in a dynamic market environment. Achieving 102% year-over-year growth in Q4—surpassing our initial expectations—demonstrates the power of our innovation and the trust our customers place in ConnectM. As we close out 2024, we are not only celebrating a record year but also laying the groundwork for sustained growth and value creation for our stockholders in 2025 and beyond.”

About ConnectM Technology Solutions, Inc.
ConnectM is a pioneer in the electrification economy, integrating energy assets with its AI-driven technology platform. Focused on delivering solutions that drive efficiency, affordability, and sustainability, ConnectM serves home, facility, and fleet across three major segments: Building Electrification, Distributed Energy, and Transportation and Logistics. The company’s vertically integrated approach combines technology, service/distribution networks, and strategic partnerships to accelerate the transition to an all-electric energy economy.

For more information, please visit: www.connectm.com. Stockholders looking to receive Company updates directly to their inbox should sign up here.

Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We have based these forward-looking statements on our current expectations and projections about future events. All statements, other than statements of present or historical fact included in this press release, regarding our future financial performance and our strategy, expansion plans, future operations, future operating results, estimated revenues, losses, projected costs, prospects, plans and objectives of management are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “should,” “could,” “would,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “continue,” “project” or the negative of such terms or other similar expressions. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions about us that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this press release. We caution you that the forward-looking statements contained herein are subject to numerous risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. In addition, we caution you that the forward-looking statements regarding the Company contained in this press release are subject to the risks and uncertainties described in the “Cautionary Note Regarding Forward-Looking Statements” section of the Current Report on Form 8-K filed with the Securities and Exchange Commission on July 18, 2024. Such filing identifies and addresses other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and ConnectM is under no obligation to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

Contact:
Investor Relations
Dave Gentry, CEO
RedChip Companies, Inc.
1-407-644-4256
CNTM@redchip.com

The MIL Network –

February 13, 2025

MIL-OSI: Robinhood Reports Fourth Quarter and Full Year 2024 Results

Source: GlobeNewswire (MIL-OSI)

Q4 Revenues up 115% year-over-year to a record $1.01 billion.
Q4 Net Deposits grow to a record $16 billion.
Q4 Gold Subscribers up 86% year-over-year to a record 2.6 million.
Q4 Net Income up over 10X year-over-year to a record $916 million, or Diluted EPS of a record $1.01.
Q4 Adjusted EBITDA up over 300% year-over-year to a record $613 million.

MENLO PARK, Calif., Feb. 12, 2025 (GLOBE NEWSWIRE) — Robinhood Markets, Inc. (“Robinhood”) (NASDAQ: HOOD) today announced financial results for the fourth quarter and full year of 2024, which ended December 31, 2024.

“We hit the gas on product development in 2024 with a new platform for active traders, Gold Card launch, an expanded UK and EU product suite, and much more,” said Vlad Tenev, CEO and Co-Founder of Robinhood. “We see a huge opportunity ahead of us as we work toward enabling anyone, anywhere, to buy, sell, or hold any financial asset and conduct any financial transaction through Robinhood.”

“Q4 was a record-breaking quarter that caps off a record-setting year in 2024,” said Jason Warnick, Chief Financial Officer of Robinhood. “For both the quarter and full year, we reached new highs for Assets Under Custody, Net Deposits, Gold Subscribers, Revenues, Net Income, Adjusted EBITDA, and EPS. We’re entering 2025 with strong momentum as we remain focused on delivering another year of profitable growth.”

Fourth Quarter Results:

Total net revenues increased 115% year-over-year to $1.01 billion.
- Transaction-based revenues increased over 200% year-over-year to $672 million, primarily driven by cryptocurrencies revenue of $358 million, up over 700%, options revenue of $222 million, up 83%, and equities revenue of $61 million, up 144%.
- Net interest revenues increased 25% year-over-year to $296 million, primarily driven by growth in interest-earning assets, partially offset by a lower federal funds rate.
- Other revenues increased 31% year-over-year to $46 million, primarily due to increased Gold subscription revenues.
Net income increased over 10X year-over-year to $916 million, or diluted earnings per share (EPS) of $1.01, compared to $30 million, or diluted EPS of $0.03, in Q4 2023. Q4 2024 net income included:
- a $369 million deferred tax benefit ($0.41 of diluted EPS), primarily from the release of the Company’s valuation allowance on most of its net deferred tax assets.
- a $55 million benefit ($0.06 of diluted EPS) due to a reversal of an accrual as part of a regulatory settlement.
Total operating expenses increased 3% year-over-year to $458 million, including a $55 million benefit due to a reversal of an accrual as part of a regulatory settlement.
- Adjusted Operating Expenses and Share-Based Compensation (SBC) (non-GAAP) increased 14% year-over-year to $508 million, which includes Adjusted Operating Expenses (non-GAAP) of $431 million and SBC of $77 million.
Adjusted EBITDA (non-GAAP) increased over 300% year-over-year to $613 million.
Funded Customers increased 8% year-over-year to 25.2 million.
- Investment Accounts increased by 10% year-over-year to 26.2 million.
Assets Under Custody (AUC) increased 88% year-over-year to $193 billion, driven by continued Net Deposits and higher equity and cryptocurrency valuations.
Net Deposits were $16.1 billion, an annualized growth rate of 42% relative to AUC at the end of Q3 2024. Over the past twelve months, Net Deposits were $50.5 billion, a growth rate of 49% relative to AUC at the end of Q4 2023.
Average Revenue Per User (ARPU) increased by 102% year-over-year to $164.
Gold Subscribers increased by 1.2 million, or 86%, year-over-year to 2.6 million.
Cash and cash equivalents totaled $4.3 billion compared with $4.8 billion at the end of Q4 2023.
Share repurchases were $160 million, representing 5.3 million shares of our Class A common stock at an average price per share of $29.79.

Full Year Results:

Total net revenues increased 58% year-over-year to $2.95 billion.
Net income increased $1.95 billion year-over-year to $1.41 billion, or diluted EPS of $1.56, compared to a net loss of $0.54 billion, or diluted EPS of -$0.61, in 2023.
- 2024 included a deferred tax benefit of $369 million, primarily from the release of the Company’s valuation allowance on most of its net deferred tax assets.
- 2023 included an expense of $485 million from the 2021 Founders Award Cancellation.
Total operating expenses decreased 21% year-over-year to $1.90 billion.
- Adjusted Operating Expenses and SBC decreased 16% year-over-year to $1.94 billion, which includes Adjusted Operating Expenses of $1.63 billion and SBC of $304 million.
- Adjusted Operating Expenses and SBC excluding the 2021 Founders Award Cancellation (non-GAAP) increased 7% year-over-year.
Adjusted EBITDA increased 167% year-over-year to $1.43 billion, compared to $536 million in 2023.
Share repurchases were $257 million, representing 10.4 million shares of our Class A common stock at an average price per share of $24.78 as we make progress on our $1 billion share repurchase program.

Highlights

Strong product momentum drove record growth in 2024 as Robinhood delivers on roadmap

Expanding Access to Crypto Across the U.S. and EU – Crypto notional volumes increased over 400 percent year-over-year, reaching $71 billion in Q4 2024. Since the start of Q4, Robinhood has also added seven crypto assets in the U.S. and launched Ethereum (ETH) staking in the EU. In June 2024, Robinhood entered into an agreement to acquire Bitstamp, the world’s longest running cryptocurrency exchange serving institutional and retail customers internationally. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025.

Establishing Ourselves as the #1 Platform for Active Traders – Last month, Robinhood made index options available to all customers and started to roll out futures trading directly in-app, allowing customers to trade stock indexes, energy, currency, metals and crypto. Additionally, since launching in October 2024, Robinhood Legend – the desktop trading platform built for active traders – has added nearly 30 additional indicators and rolled out crypto trading.

Robinhood Expands Global Ambitions – Robinhood announced plans to expand into the Asia-Pacific region in 2025, with Singapore serving as its local headquarters. Earlier this week, Robinhood also started to offer options trading to its UK customers.

Robinhood Gold Membership Continues to Climb – Robinhood Gold subscribers hit 2.6 million, with an adoption rate of over 10 percent in Q4. In addition, the Robinhood Gold Credit Card reached over 100 thousand cardholders and we have plans to continue expanding the cardholder base in 2025.

Stepping Into the Investment Advisory Space – In November 2024, Robinhood entered into an agreement to acquire TradePMR, a custodial and portfolio management platform for Registered Investment Advisors with over 25 years in the industry and over $40 billion in assets under administration at the time of signing. The acquisition is subject to customary closing conditions, including regulatory approvals, and is expected to close in the first half of 2025.

Additional Q4 2024 Operating Data

Retirement AUC increased over 600% year-over-year to $13.1 billion.
Cash Sweep increased 59% year-over-year to $26.1 billion.
Margin Book increased 126% year-over-year to $7.9 billion.
Equity Notional Trading Volumes increased 154% year-over-year to $423 billion.
Options Contracts Traded increased 61% year-over-year to 477 million.
Crypto Notional Trading Volumes increased over 400% year-over-year to $71.0 billion.

Conference Call and Livestream Information

Robinhood will host a video call to discuss its results at 2 p.m. PT / 5 p.m. ET today, February 12, 2025. The video call can be accessed at investors.robinhood.com, along with the earnings press release and accompanying slide presentation. The event will also be live streamed to YouTube and X.com via Robinhood’s official channels, @RobinhoodApp.

Following the call, a replay and transcript will also be available at investors.robinhood.com.

Financial Outlook

The paragraph below provides information on our 2025 expense plan and outlook. We are not providing a 2025 outlook for total operating expenses and have not reconciled our 2025 outlook for Adjusted Operating Expenses and SBC to the most directly comparable GAAP financial measure, total operating expenses, because we are unable to predict with reasonable certainty the impact of certain items without unreasonable effort. These items include, but are not limited to, provisions for credit losses and significant regulatory expenses which may be material and could have a significant impact on total operating expenses for 2025.

Our 2025 expense plan includes growth investments in new products, features, and international expansion while also getting more efficient in our existing businesses. Our outlook for combined Adjusted Operating Expenses and SBC for full-year 2025 is $2.0 billion to $2.1 billion. This expense outlook does not include provisions for credit losses, costs related to TradePMR or Bitstamp, potential significant regulatory matters, or other significant expenses (such as impairments, restructuring charges, and other business acquisition- or disposition-related expenses) that may arise or accruals we may determine in the future are required, as we are unable to accurately predict the size or timing of such matters, expenses or accruals at this time.

Actual results might differ materially from our outlook due to several factors, including the rate of growth in Funded Customers and our effectiveness to cross-sell products which affects variable marketing costs, the degree to which we are successful in managing credit losses and preventing fraud, and our ability to manage web-hosting expenses efficiently, among other factors. See “Non-GAAP Financial Measures” for more information on Adjusted Operating Expenses and SBC, including significant items that we believe are not indicative of our ongoing expenses that would be adjusted out of total operating expenses (GAAP) to get to Adjusted Operating Expenses and SBC (non-GAAP) should they occur.

About Robinhood

Robinhood Markets, Inc. (NASDAQ: HOOD) transformed financial services by introducing commission-free stock trading and democratizing access to the markets for millions of investors. Today, Robinhood lets you trade stocks, options, futures (which includes options on futures, swaps, and event contracts), and crypto, invest for retirement, and earn with Robinhood Gold. Headquartered in Menlo Park, California, Robinhood puts customers in the driver’s seat, delivering unprecedented value and products intentionally designed for a new generation of investors. Additional information about Robinhood can be found at www.robinhood.com.

Robinhood uses the “Overview” tab of its Investor Relations website (accessible at investors.robinhood.com/overview) and its Newsroom (accessible at newsroom.aboutrobinhood.com), as means of disclosing information to the public in a broad, non-exclusionary manner for purposes of the U.S. Securities and Exchange Commission’s (“SEC”) Regulation Fair Disclosure (Reg. FD). Investors should routinely monitor those web pages, in addition to Robinhood’s press releases, SEC filings, and public conference calls and webcasts, as information posted on them could be deemed to be material information.

“Robinhood” and the Robinhood feather logo are registered trademarks of Robinhood Markets, Inc. All other names are trademarks and/or registered trademarks of their respective owners.

Contacts

Investors:
ir@robinhood.com

Press:
press@robinhood.com


ROBINHOOD MARKETS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

	December 31,
(in millions, except share and per share data)		2023			2024
Assets
Current assets:
Cash and cash equivalents	$	4,835		$	4,332
Cash, cash equivalents, and securities segregated under federal and other regulations		4,448			4,724
Receivables from brokers, dealers, and clearing organizations		89			471
Receivables from users, net		3,495			8,239
Securities borrowed		1,602			3,236
Deposits with clearing organizations		338			489
User-held fractional shares		1,592			2,530
Held-to-maturity investments		413			398
Prepaid expenses		63			75
Deferred customer match incentives		11			100
Other current assets		196			509
Total current assets		17,082			25,103
Property, software, and equipment, net		120			139
Goodwill		175			179
Intangible assets, net		48			38
Non-current held-to-maturity investments		73			—
Non-current deferred customer match incentives		19			195
Other non-current assets, including non-current prepaid expenses of $4 as of December 31, 2023 and $17 as of December 31, 2024		107			533
Total assets	$	17,624		$	26,187
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable and accrued expenses	$	384		$	397
Payables to users		5,097			7,448
Securities loaned		3,547			7,463
Fractional shares repurchase obligation		1,592			2,530
Other current liabilities		217			266
Total current liabilities		10,837			18,104
Other non-current liabilities		91			111
Total liabilities		10,928			18,215
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.0001 par value. 210,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and December 31, 2024.		—			—
Class A common stock, $0.0001 par value. 21,000,000,000 shares authorized, 745,401,862 shares issued and outstanding as of December 31, 2023; 21,000,000,000 shares authorized, 764,903,997 shares issued and outstanding as of December 31, 2024.		—			—
Class B common stock, $0.0001 par value. 700,000,000 shares authorized, 126,760,802 shares issued and outstanding as of December 31, 2023; 700,000,000 shares authorized, 119,588,986 shares issued and outstanding as of December 31, 2024.		—			—
Class C common stock, $0.0001 par value. 7,000,000,000 shares authorized, no shares issued and outstanding as of December 31, 2023 and December 31, 2024.		—			—
Additional paid-in capital		12,145			12,008
Accumulated other comprehensive loss		(3	)		(1	)
Accumulated deficit		(5,446	)		(4,035	)
Total stockholders’ equity		6,696			7,972
Total liabilities and stockholders’ equity	$	17,624		$	26,187


ROBINHOOD MARKETS, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(in millions, except share, per share, and percentage data)	Three Months Ended December 31,						YOY% Change		Three Months Ended September 30,		QOQ% Change
		2023			2024		YOY% Change			2024	QOQ% Change
Revenues:
Transaction-based revenues	$	200		$	672		236	%	$	319	111	%
Net interest revenues		236			296		25	%		274	8	%
Other revenues		35			46		31	%		44	5	%
Total net revenues		471			1,014		115	%		637	59	%

Operating expenses⁽¹⁾⁽²⁾:
Brokerage and transaction		32			50		56	%		39	28	%
Technology and development		197			208		6	%		205	1	%
Operations		26			29		12	%		27	7	%
Provision for credit losses		14			19		36	%		23	(17)%
Marketing		43			82		91	%		59	39	%
General and administrative		133			70		(47)%			133	(47)%
Total operating expenses		445			458		3	%		486	(6)%

Other income, net		3			2		(33)%			2	—	%
Income before income taxes		29			558		NM			153	265	%
Provision for (benefit from) income taxes		(1	)		(358	)	NM			3	NM
Net income	$	30		$	916		NM		$	150	511	%
Net income attributable to common stockholders:
Basic	$	30		$	916				$	150
Diluted	$	30		$	916				$	150
Net income per share attributable to common stockholders:
Basic	$	0.03		$	1.04				$	0.17
Diluted	$	0.03		$	1.01				$	0.17
Weighted-average shares used to compute net income per share attributable to common stockholders:
Basic		867,298,537			883,884,676					884,108,545
Diluted		883,227,967			907,767,796					905,544,750


	Year Ended December 31,						YOY% Change
(in millions, except share, per share, and percentage data)		2023			2024		YOY% Change
Revenues:
Transaction-based revenues	$	785		$	1,647		110	%
Net interest revenues		929			1,109		19	%
Other revenues		151			195		29	%
Total net revenues		1,865			2,951		58	%

Operating expenses⁽¹⁾⁽²⁾:
Brokerage and transaction		146			164		12	%
Technology and development		805			818		2	%
Operations		116			112		(3)%
Provision for credit losses		43			76		77	%
Marketing		122			272		123	%
General and administrative		1,169			455		(61)%
Total operating expenses		2,401			1,897		(21)%

Other income, net		3			10		233	%
Income (loss) before income taxes		(533	)		1,064		NM
Provision for (benefit from) income taxes		8			(347	)	NM
Net income (loss)		(541	)		1,411		NM
Net income (loss) attributable to common stockholders:
Basic	$	(541	)	$	1,411
Diluted	$	(541	)	$	1,411
Net income (loss) per share attributable to common stockholders:
Basic	$	(0.61	)	$	1.60
Diluted	$	(0.61	)	$	1.56
Weighted-average shares used to compute net income (loss) per share attributable to common stockholders:
Basic		890,857,659			881,113,156
Diluted		890,857,659			906,171,504

________________
⁽¹⁾ The following table presents operating expenses as a percent of total net revenues:

	Three Months Ended December 31,				Three Months Ended September 30,		Year Ended December 31,
	2023		2024		2024		2023		2024
Brokerage and transaction	7	%	5	%	6	%	8	%	5	%
Technology and development	42	%	20	%	32	%	43	%	28	%
Operations	6	%	3	%	4	%	6	%	4	%
Provision for credit losses	2	%	2	%	4	%	3	%	3	%
Marketing	9	%	8	%	9	%	7	%	9	%
General and administrative	28	%	7	%	21	%	63	%	15	%
Total operating expenses	94	%	45	%	76	%	130	%	64	%

⁽²⁾ The following table presents the SBC on our unaudited condensed consolidated statements of operations for the periods indicated:

	Three Months Ended December 31,						Three Months Ended September 30,		Year Ended December 31,
(in millions)		2023		2024				2024		2023		2024
Brokerage and transaction	$	1	$	2			$	2	$	7		9
Technology and development		50		48				48		211		192
Operations		2		2				1		8		7
Marketing		2		2				3		5		8
General and administrative		26		23				25		640		88
Total SBC	$	81	$	77	$	—	$	79	$	871	$	304


ROBINHOOD MARKETS, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)

	Three Months Ended December 31,						Year Ended December 31,
(in millions)		2023			2024			2023			2024
Operating activities:
Net income (loss)	$	30		$	916		$	(541	)	$	1,411
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization		17			22			71			77
Impairment of long-lived assets		4			—			5			2
Provision for credit losses		14			19			43			76
Deferred income taxes		—			(369	)		—			(369	)
Share-based compensation		81			77			871			304
Other		1			—			3			(2	)
Changes in operating assets and liabilities:
Securities segregated under federal and other regulations		—			(397	)		—			(397	)
Receivables from brokers, dealers, and clearing organizations		(26	)		(332	)		(13	)		(382	)
Receivables from users, net		204			(2,621	)		(298	)		(4,592	)
Securities borrowed		(398	)		468			(1,085	)		(1,634	)
Deposits with clearing organizations		(63	)		(25	)		(152	)		(151	)
Current and non-current prepaid expenses		11			16			37			(25	)
Current and non-current deferred customer match incentives		(20	)		(63	)		(30	)		(265	)
Other current and non-current assets		(19	)		(404	)		(18	)		(415	)
Accounts payable and accrued expenses		(11	)		(63	)		134			(35	)
Payables to users		772			1,184			396			2,351
Securities loaned		302			157			1,713			3,916
Other current and non-current liabilities		61			15			45			(27	)
Net cash provided by (used in) operating activities		960			(1,400	)		1,181			(157	)
Investing activities:
Purchases of property, software, and equipment		(1	)		(4	)		(2	)		(13	)
Capitalization of internally developed software		(5	)		(11	)		(19	)		(37	)
Business acquisition, net of cash and cash equivalents acquired		(3	)		—			(93	)		(6	)
Asset acquisition, net of cash acquired		—			—			—			(3	)
Purchases of held-to-maturity investments		(108	)		(87	)		(759	)		(556	)
Proceeds from maturities of held-to-maturity investments		115			219			282			658
Purchases of credit card receivables by Credit Card Funding Trust		—			(509	)		—			(748	)
Collections of purchased credit card receivables		—			426			—			556
Proceeds from sales and maturities of available-for-sale investments		—			—			10			—
Other		(1	)		—			(1	)		1
Net cash provided by (used in) investing activities		(3	)		34			(582	)		(148	)
Financing activities:
Proceeds from exercise of stock options, net of repurchases		3			8			5			18
Proceeds from issuance of common stock under the Employee Share Purchase Plan		5			6			14			16
Taxes paid related to net share settlement of equity awards		(3	)		(89	)		(12	)		(244	)
Repurchase of Class A common stock		—			(160	)		(608	)		(257	)
Draws on credit facilities		—			10			20			22
Repayments on credit facilities		—			(10	)		(20	)		(22	)
Borrowings by the Credit Card Funding Trust		—			37			—			132
Repayments on borrowings by the Credit Card Funding Trust		—			—			—			(1	)
Change in principal collected from customers due to Coastal Bank		4			21			1			6
Payments of debt issuance costs		—			(1	)		(10	)		(15	)
Net cash provided by (used in) financing activities		9			(178	)		(610	)		(345	)
Effect of foreign exchange rate changes on cash and cash equivalents		—			(2	)		—			(1	)
Net increase (decrease) in cash, cash equivalents, segregated cash, and restricted cash		966			(1,546	)		(11	)		(651	)
Cash, cash equivalents, segregated cash, and restricted cash, beginning of the period		8,380			10,241			9,357			9,346
Cash, cash equivalents, segregated cash, and restricted cash, end of the period	$	9,346		$	8,695		$	9,346		$	8,695

Reconciliation of cash, cash equivalents, segregated cash and restricted cash, end of the period:
Cash and cash equivalents, end of the period	$	4,835		$	4,332		$	4,835		$	4,332
Segregated cash and cash equivalents, end of the period		4,448			4,327			4,448			4,327
Restricted cash in other current assets, end of the period		46			18			46			18
Restricted cash in other non-current assets, end of the period		17			18			17			18
Cash, cash equivalents, segregated cash and restricted cash, end of the period	$	9,346		$	8,695		$	9,346		$	8,695
Supplemental disclosures:
Cash paid for interest	$	4		$	4		$	12		$	16
Cash paid for income taxes, net of refund received	$	—		$	4		$	9		$	18


Reconciliation of GAAP to Non-GAAP Results (Unaudited)

	Three Months Ended December 31,						Three Months Ended September 30,			Year Ended December 31,
(in millions)		2023			2024			2024			2023			2024
Net income (loss)	$	30		$	916		$	150		$	(541	)	$	1,411
Net margin		6	%		90	%		24	%	(29)%				48	%
Add:
Interest expenses related to credit facilities		6			6			6			23			24
Provision for (benefit from) income taxes		(1	)		(358	)		3			8			(347	)
Depreciation and amortization		17			22			20			71			77
EBITDA (non-GAAP)		52			586			179			(439	)		1,165
Add: SBC
SBC Excluding 2021 Founders Award Cancellation		81			77			79			386			304
2021 Founders Award Cancellation		—			—			—			485			—
Significant legal and tax settlements and reserves⁽¹⁾		—			(50	)		10			104			(40	)
Adjusted EBITDA (non-GAAP)	$	133		$	613		$	268		$	536		$	1,429
Adjusted EBITDA margin (non-GAAP)		28	%		60	%		42	%		29	%		48	%

	Three Months Ended December 31,					Three Months Ended September 30,		Year Ended December 31,
(in millions)		2023		2024			2024		2023		2024
Total operating expenses (GAAP)	$	445	$	458		$	486	$	2,401	$	1,897
Less: SBC
SBC Excluding 2021 Founders Award Cancellation		81		77			79		386		304
2021 Founders Award Cancellation		—		—			—		485		—
Significant legal and tax settlements and reserves⁽¹⁾		—		(50	)		10		104		(40	)
Adjusted Operating Expenses (Non-GAAP)	$	364	$	431		$	397	$	1,426	$	1,633

	Three Months Ended December 31,					Year Ended December 31,
(in millions)		2023		2024			2023		2024
Total operating expenses (GAAP)	$	445	$	458		$	2,401	$	1,897
Less: SBC
SBC Excluding 2021 Founders Award Cancellation		81		77			386		304
2021 Founders Award Cancellation		—		—			485		—
Significant legal and tax settlements and reserves⁽¹⁾		—		(50	)		104		(40	)
Adjusted Operating Expenses (Non-GAAP)		364		431			1,426		1,633
Add: SBC
SBC Excluding 2021 Founders Award Cancellation		81		77			386		304
2021 Founders Award Cancellation		—		—			485		—
Adjusted Operating Expenses and SBC (Non-GAAP)		445		508			2,297		1,937
Less: 2021 Founders Award Cancellation		—		—			485		—
Adjusted Operating Expense and SBC excluding the 2021 Founders Award Cancellation (Non-GAAP)	$	445	$	508		$	1,812	$	1,937

________________

⁽¹⁾ Amounts for the three months and year ended December 31, 2024 included a $55 million benefit due to a reversal of an accrual as part of a regulatory settlement.

Cautionary Note Regarding Forward-Looking Statements

This press release contains forward-looking statements regarding the expected financial performance of Robinhood Markets, Inc. and its consolidated subsidiaries (“we,” “Robinhood,” or the “Company”) and our strategic and operational plans, including (among others) statements regarding that we see a huge opportunity ahead of us as we work toward enabling anyone, anywhere, to buy, sell, or hold any financial asset and conduct any financial transaction through Robinhood; that we’re entering 2025 with strong momentum as we remain focused on delivering another year of profitable growth; that we plan to expand into the Asia-Pacific region in 2025, with Singapore serving as our local headquarters; that we plan to continue expanding the cardholder base for the Robinhood Gold Credit Card in 2025; that the acquisitions of Bitstamp and TradePMR are each expected to close in the first half of 2025; and all statements and information under the headings “Financial Outlook”. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “believe,” “may,” “will” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “estimate,” “predict,” “potential,” or “continue,” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans, or intentions. Our forward-looking statements are subject to a number of known and unknown risks, uncertainties, assumptions, and other factors that may cause our actual future results, performance, or achievements to differ materially from any future results expressed or implied in this press release. Reported results should not be considered an indication of future performance. Factors that contribute to the uncertain nature of our forward-looking statements include, among others: our rapid and continuing expansion, including continuing to introduce new products and services on our platforms as well as geographic expansion; the difficulty of managing our business effectively, including the size of our workforce, and the risk of declining or negative growth; the fluctuations in our financial results and key metrics from quarter to quarter; our reliance on transaction-based revenue, including payment for order flow (“PFOF”), the risk of new regulation or bans on PFOF and similar practices, and the addition of our new fee-based model for cryptocurrency; our exposure to fluctuations in interest rates and rapidly changing interest rate environments; the difficulty of raising additional capital (to provide liquidity needs and support business growth and objectives) on reasonable terms, if at all; the need to maintain capital levels required by regulators and self-regulatory organizations; the risk that we might mishandle the cash, securities, and cryptocurrencies we hold on behalf of customers, and our exposure to liability for processing, operational, or technical errors in clearing functions; the impact of negative publicity on our brand and reputation; the risk that changes in business, economic, or political conditions that impact the global financial markets, or a systemic market event, might harm our business; our dependence on key employees and a skilled workforce; the difficulty of complying with an extensive, complex, and changing regulatory environment and the need to adjust our business model in response to new or modified laws and regulations; the possibility of adverse developments in pending litigation and regulatory investigations; the effects of competition; our need to innovate and acquire or invest in new products, services, technologies, and geographies in order to attract and retain customers and deepen their engagement with us in order to maintain growth; our reliance on third parties to perform some key functions and the risk that processing, operational or technological failures could impair the availability or stability of our platforms; the risk of cybersecurity incidents, theft, data breaches, and other online attacks; the difficulty of processing customer data in compliance with privacy laws; our need as a regulated financial services company to develop and maintain effective compliance and risk management infrastructures; the risks associated with incorporating artificial intelligence technologies into some of our products and processes; the volatility of cryptocurrency prices and trading volumes; the risk that our platforms and services could be exploited to facilitate illegal payments; and the risk that substantial future sales of Class A common stock in the public market, or the perception that they may occur, could cause the price of our stock to fall. Because some of these risks and uncertainties cannot be predicted or quantified and some are beyond our control, you should not rely on our forward-looking statements as predictions of future events. More information about potential risks and uncertainties that could affect our business and financial results can be found in Part II, Item 1A of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, as well as in our other filings with the SEC, all of which are available on the SEC’s web site at www.sec.gov. Moreover, we operate in a very competitive and rapidly changing environment; new risks and uncertainties may emerge from time to time, and it is not possible for us to predict all risks nor identify all uncertainties. The events and circumstances reflected in our forward-looking statements might not be achieved and actual results could differ materially from those projected in the forward-looking statements. Except as otherwise noted, all forward-looking statements in this press release are made as of the date of this press release, February 12, 2025, and are based on information and estimates available to us at this time. Although we believe that the expectations reflected in our forward-looking statements are reasonable, we cannot guarantee future results, performance, or achievements. Except as required by law, Robinhood assumes no obligation to update any of the statements in this press release whether as a result of any new information, future events, changed circumstances, or otherwise. You should read this press release with the understanding that our actual future results, performance, events, and circumstances might be materially different from what we expect. All fourth quarter and full year 2024 financial information in this press release is preliminary, based on our estimates and subject to completion of our financial closing procedures. Final results for the full year, which will be reported in our Annual Report on Form 10-K for the year ended December 31, 2024, may vary from the information in this press release. In particular, until our financial statements are issued in our Annual Report on Form 10-K, we may be required to recognize certain subsequent events (such as in connection with contingencies or the realization of assets) which could affect our final results.

Non-GAAP Financial Measures

We collect and analyze operating and financial data to evaluate the health of our business, allocate our resources and assess our performance. In addition to total net revenues, net income (loss), and other results under GAAP, we utilize non-GAAP calculations of adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”), Adjusted EBITDA Margin, Adjusted Operating Expenses, Adjusted Operating Expenses and SBC, Adjusted Operating Expenses and SBC excluding the 2021 Founders Award Cancellation, and SBC excluding the 2021 Founders Award Cancellation. This non-GAAP financial information is presented for supplemental informational purposes only, should not be considered in isolation or as a substitute for, or superior to, financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP measures used by other companies. Reconciliations of these non-GAAP measures to the most directly comparable financial measures calculated and presented in accordance with GAAP are provided in the financial tables included in this press release.

Adjusted EBITDA

Adjusted EBITDA is defined as net income (loss), excluding (i) interest expenses related to credit facilities, (ii) provision for (benefit from) income taxes, (iii) depreciation and amortization, (iv) SBC, (v) significant legal and tax settlements and reserves, and (vi) other significant gains, losses, and expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that we believe are not indicative of our ongoing results.

The above items are excluded from our Adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods and competitors less meaningful. We believe Adjusted EBITDA provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Moreover, Adjusted EBITDA is a key measurement used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

Adjusted EBITDA Margin

Adjusted EBITDA Margin is calculated as Adjusted EBITDA divided by total net revenues. The most directly comparable GAAP measure is net margin (calculated as net income (loss) divided by total net revenues). We believe Adjusted EBITDA Margin provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our business performance. Adjusted EBITDA Margin is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

Adjusted Operating Expenses

Adjusted Operating Expenses is defined as GAAP total operating expenses minus (i) SBC, (ii) significant legal and tax settlements and reserves, and (iii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses) that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods less meaningful. We believe Adjusted Operating Expenses provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting. Starting in Q1 2025, Adjusted Operating Expenses will no longer include provision for credit losses.

Adjusted Operating Expenses and SBC

Adjusted Operating Expenses and SBC is defined as GAAP total operating expenses minus (i) significant legal and tax settlements and reserves and (ii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses), that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods less meaningful. Unlike Adjusted Operating Expenses, Adjusted Operating Expenses and SBC does not adjust for SBC. We believe Adjusted Operating Expense and SBC provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses and SBC is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

Adjusted Operating Expenses and SBC excluding the 2021 Founders Award Cancellation

Adjusted Operating Expenses and SBC excluding the 2021 Founders Award Cancellation is defined as GAAP total operating expenses minus (i) significant legal and tax settlements and reserves, (ii) other significant expenses (such as impairments, restructuring charges, and business acquisition- or disposition-related expenses), and (iii) the 2021 Founders Award Cancellation, that we believe are not indicative of our ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods less meaningful. We believe Adjusted Operating Expense and SBC excluding the 2021 Founders Award Cancellation provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. Adjusted Operating Expenses and SBC excluding the 2021 Founders Award Cancellation is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

SBC excluding the 2021 Founders Award Cancellation

We define SBC excluding the 2021 Founders Award Cancellation as GAAP SBC minus the impact of the 2021 Founders Award Cancellation, which we do not believe is indicative of our ongoing expenses. The amount and timing of the 2021 Founders Award Cancellation are not driven by core results of operations and renders comparisons with prior periods less meaningful. We believe SBC excluding the 2021 Founders Award Cancellation provides useful information to investors and others in understanding and evaluating our results of operations, as well as providing a useful measure for period-to-period comparisons of our cost structure. SBC excluding the Founders Award Cancellation is used by our management internally to make operating decisions, including those related to operating expenses, evaluate performance, and perform strategic planning and annual budgeting.

Key Performance Metrics

In addition to the measures presented in our unaudited condensed consolidated financial statements, we use the following key performance metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.

Funded Customers

We define a Funded Customer as a unique person who has at least one account with a Robinhood entity and, within the past 45 calendar days (a) had an account balance that was greater than zero (excluding amounts that are deposited into a Funded Customer account by the Company with no action taken by the unique person) or (b) completed a transaction using any such account. Individuals who share a funded joint investing account (which launched in July 2024) are each considered to be a Funded Customer.

Assets Under Custody (“AUC”)

We define AUC as the sum of the fair value of all equities, options, cryptocurrency, futures (including options on futures, swaps, and event contracts), and cash held by users in their accounts, net of receivables from users, as of a stated date or period end on a trade date basis. Net Deposits and net market gains (losses) drive the change in AUC in any given period.

Net Deposits

We define Net Deposits as all cash deposits and asset transfers from customers, as well as dividends, interest, and cash or assets earned in connection with Company promotions (such as account transfer and retirement match incentives and free stock bonuses) received by customers, net of reversals, customer cash withdrawals, margin interest, Gold subscription fees, and assets transferred off of our platforms for a stated period. Prior to the second quarter of 2024, Net Deposits did not include inflows from cash or assets earned in connection with Company promotions and prior to January 2024, Net Deposits did not include inflows from dividends and interest or outflows from Robinhood Gold subscription fees and margin interest, although we have not restated amounts in prior periods as the impact to those figures was immaterial.

Average Revenue Per User (“ARPU”)

We define ARPU as total revenue for a given period divided by the average number of Funded Customers on the last day of that period and the last day of the immediately preceding period. Figures in this press release represent ARPU annualized for each three-month period presented.

Gold Subscribers

We define a Gold Subscriber as a unique person who has at least one account with a Robinhood entity and who, as of the end of the relevant period (a) is subscribed to Robinhood Gold and (b) has made at least one Robinhood Gold subscription fee payment.

Additional Operating Metrics

Retirement AUC

We define Retirement AUC as the total AUC in traditional IRAs and Roth IRAs.

Cash Sweep

We define Cash Sweep as the period-end total amount of participating users’ uninvested brokerage cash that has been automatically “swept” or moved from their brokerage accounts into deposits for their benefit at a network of program banks. This is an off-balance-sheet amount. Robinhood earns a net interest spread on Cash Sweep balances based on the interest rate offered by the banks less the interest rate given to users as stated in our program terms.

Margin Book

We define Margin Book as our period-end aggregate outstanding margin loan balances receivable (i.e., the period-end total amount we are owed by customers on loans made for the purchase of securities, supported by a pledge of assets in their margin-enabled brokerage accounts).

Notional Trading Volume

We define Notional Trading Volume or Notional Volume for any specified asset class as the aggregate dollar value (purchase price or sale price as applicable) of trades executed in that asset class over a specified period of time.

Options Contracts Traded

We define Options Contracts Traded as the total number of options contracts bought or sold over a specified period of time. Each contract generally entitles the holder to trade 100 shares of the underlying stock.

Glossary Terms

2021 Founders Award Cancellation

We define the 2021 Founders Award Cancellation as the cancellation in February 2023 of the 2021 pre-IPO market-based restricted stock units granted to our founders of 35.5 million unvested shares.

Investment Accounts

We define an Investment Account as a funded individual brokerage account, a funded joint investing account, or a funded individual retirement account (“IRA”). As of December 31, 2024, a Funded Customer can have up to four Investment Accounts – individual brokerage account, joint investing account (which launched in July 2024), traditional IRA, and Roth IRA.

Gold Adoption Rate

We define the Gold adoption rate as end of period Gold Subscribers divided by end of period Funded Customers.

Growth Rate and Annualized Growth Rate with respect to Net Deposits

Growth rate is calculated as aggregate Net Deposits over a specified 12 month period, divided by AUC for the fiscal quarter that immediately precedes such 12 month period. Annualized growth rate is calculated as Net Deposits for a specified quarter multiplied by 4 and divided by AUC for the immediately preceding quarter.

The MIL Network –

February 13, 2025

Category: Business

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