Category: Machine Learning

MIL-OSI Africa: African health ministers, delegates adopt declaration on climate change and health

Source: Africa Press Organisation – English (2) – Report:

HARARE, Zimbabwe, October 31, 2024/APO Group/ —

Health ministers and delegates from 20 African countries today adopted a landmark declaration to enhance climate resilience within health systems and address the profound health impacts of climate change on the continent.

The Harare Declaration, endorsed during the first Climate and Health Africa Conference (CHAC), calls for immediate and collaborative action from a wide array of stakeholders—including governments, academic institutions, funding agencies and civil society—to combat the detrimental health effects of climate change and improve the well-being of African populations.

Speaking at the official opening of the conference, President Emmerson Mnangagwa of Zimbabwe said, “Climate change is not merely an environmental disaster. It is a public health emergency and I firmly believe the recommendations from this conference will pave the way for a healthier and more sustainable continent, where no one and no place is left behind”.

The declaration which aligns with the newly WHO adopted framework for building climate-resilient and sustainable health systems in the African region, was endorsed by health ministers and representatives from countries engaged in the WHO-led Alliance for Transformative Action on Climate and Health Initiative (ATACH) and over 500 participants at CHAC.

“Our region deals with multiple climate-induced emergencies every year. Ensuring health systems resilience is key. I applaud the commitments taken by health policy makers to build climate-resilient health systems that can adapt to and mitigate the impacts of climate change,” said Dr Matshidiso Moeti, WHO Regional Director for Africa.

Africa faces an escalating burden of climate-sensitive diseases, with increasing transmission of vector- and waterborne illnesses. Recent statistics reveal a 14% rise in malaria transmissions in 2023, potentially putting an additional 147-171 million people at risk by 2030. Additionally, 18 African countries reported cholera outbreaks linked to natural disasters, contributing to a staggering 836 600 cases between January 2023 and March 2024, alongside widespread malnutrition and population displacement.

Recognizing the disproportionate burden of climate-related health risks faced by African populations, the declaration presents a comprehensive strategy to address these challenges. It emphasizes the need to strengthen research and knowledge generation by investing in studies that assess the specific impacts of climate change on health in Africa and identify effective interventions. Enhancing policy and decision-making is also crucial by integrating climate change considerations into national health policies and strategies to ensure that health is prioritized in climate action plans.

The declaration also highlights the importance of improving surveillance and early warning systems to track climate-related health risks, enabling timely and effective responses.

Additionally, it calls for building climate-resilient health systems by enhancing the capacity of health infrastructures to adapt to and mitigate the impacts of climate change, including through necessary upgrades and workforce training.

During CHAC, the WHO Regional Office for Africa, in collaboration with the Wellcome Trust, hosted a high-level meeting to promote collaboration among health and climate stakeholders. The meeting was an opportunity to evaluate countries implementation of past Conference of the Parties (COP) commitments and define a roadmap for climate and health in Africa.

With support from WHO, 29 African countries have joined ATACH, signaling dedication to safeguarding the health and well-being of their population. The WHO-Wellcome Trust side event provided delegates with a platform to discuss actionable strategies for integrating health priorities into global climate frameworks and strengthening inter-ministerial collaboration.

The Climate and Health Africa conference is hosted by the Centre for Sexual Health, HIV and AIDS Research (CeSHHAR) Zimbabwe in collaboration with the Zimbabwean Ministry of Environment, Climate and Wildlife, the Ministry of Health and Child Care and the WHO Regional Office for Africa amongst other partners.

MIL OSI Africa –

January 25, 2025

MIL-OSI: Asure Announces Third Quarter 2024 Results

Source: GlobeNewswire (MIL-OSI)

Reports Third Quarter Revenues of $29.3 Million

Recurring Revenues Grew 20% Versus Prior Year Third Quarter

AUSTIN, Texas, Oct. 31, 2024 (GLOBE NEWSWIRE) — Asure Software, Inc. (“we”, “us”, “our”, “Asure” or the “Company”) (Nasdaq: ASUR), a leading provider of cloud-based Human Capital Management (“HCM”) software solutions, today reported results for the third quarter ended September 30, 2024.

Third Quarter 2024 Financial Highlights

Revenue of $29.3 million, nearly unchanged versus the same period of the prior year
Revenue (excluding ERTC revenue) of $29.2 million, up 20% from $24.4 million versus the same period of the prior year
Recurring revenue of $28.6 million, up 20% year over year. Recurring revenue was 98% of total revenue versus 81% the same period of the prior year
Net loss of $3.9 million versus a net loss of $2.2 million during the same period of the prior year
EBITDA⁽¹⁾ of $2.2 million versus $3.0 million during the same period of the prior year
Adjusted EBITDA⁽¹⁾ of $5.4 million versus $6.2 million during the same period of the prior year
Gross profit of $19.7 million versus $21.3 million during the same period of the prior year
Non-GAAP gross profit⁽¹⁾ of $21.4 million (Non-GAAP gross margin⁽¹⁾ of 73%) versus $22.4 million (and 76% during the same period of the prior year)

Nine Months 2024 Financial Highlights

Revenue of $89.0 million down 4% versus the first nine months of prior year
Revenue (excluding ERTC revenue) of $87.4 million up 15% from $75.7 million in the first nine months of prior year
Recurring revenue (excluding ERTC revenue) of $86.0 million up 16% from $74.4 million in the first nine months of prior year
Net loss of $8.6 million versus a net loss of $5.6 million the first nine months of prior year
EBITDA⁽¹⁾ of $8.0 million versus $13.2 million the first nine months of prior year
Adjusted EBITDA⁽¹⁾ of $16.3 million versus $20.5 million the first nine months of prior year
Gross profit of $61.2 million versus $67.7 million during the first nine months of the prior year
Non-GAAP gross profit⁽¹⁾ of $65.6 million (Non-GAAP gross margin⁽¹⁾ of 74%) versus $71.5 million (and 77% during the first nine months of the prior year)

_______________
(1)This financial measure is not calculated in accordance with GAAP and is defined on page 4 of this press release. A reconciliation of this non-GAAP measure to the most applicable GAAP measure begins on page 11 of this release.

Recent Business Highlights

Payroll Tax Management Expansion: Asure’s Payroll Tax Management product gained significant momentum, going live with additional Workday and SAP clients during the third quarter. Key sales wins include one of America’s largest grocery chains and a nationally known HCM system integrator who assists large enterprises with Workday, SAP, and Oracle HCM implementations. These enterprise bookings have grown our backlog and still represent additional product and professional services opportunities.
HCM Architectural Milestone: Employee self-service capabilities have been decoupled from disparate payroll platforms and modularized as a single API-based service. This enhancement improves scalability and stability of the end-to-end HCM suite and further consolidates our technical footprint to a more flexible service-oriented architecture.
Entering Beta of New AI Agent: More than a chatbot, this new Generative-AI Agent handles inquiries related to payroll and payroll taxes takes secure action on behalf of the user. Through dynamic, interactive sessions, the AI Agent will answer questions and take actions on HR requests including time off requests, demographic changes, or changes to W-4 allowances.
Leadership Recognition: Asure Chairman and CEO, Pat Goepel, was named Austin Business Journal’s Best CEO of a Public Company for 2024, recognizing his leadership and commitment to Asure’s growth and success.
New financial services product to launch November 2024: Asure is introducing AsurePay™, an innovative financial solution offering working Americans a comprehensive online banking alternative. AsurePay™ combines features such as debit card access, fee-free ATM withdrawals, and paycheck advances through a unique interest-bearing banking solution, designed to improve employee engagement, while also improving overall employer efficiency. This solution is easily accessible through an intuitive mobile app.

Management Commentary

Asure Chairman and CEO, Pat Goepel, stated, “Our third quarter performance reflects strong, continued growth, with recurring revenue up 20% year-over-year. We’ve made great strides in transitioning to a more valuable revenue model, with 98% of our revenues now recurring, compared to 81% in the same quarter last year. Additionally, new bookings were up 141% year-over-year. Our backlog has grown significantly — over 35% from Q2 2024 and over 250% from Q3 2023. While large enterprise tax product deals have contributed to our success, their pace of implementation can vary. That said, we remain confident in our ability to maintain this positive trajectory.”

Goepel continued, “We’re seeing strong demand for our Payroll Tax Management product, we’re introducing new solutions, upgrading our technology, and making strategic acquisitions. Earlier in the year, we faced the challenge of replacing ERTC revenue, but those headwinds have now dissipated as we close out 2024 and this change in the composition of our revenues offers us strong momentum going into 2025. We are optimistic about the opportunities ahead for both the remainder of this year and into next year.”

Fourth Quarter 2024 and Full Year 2025 Revenue Guidance Ranges

The Company is providing the following guidance for the fourth quarter 2024 based on the Company’s year-to-date results and recent business trends. Management is initiating full year 2025 guidance to a range of $134M-$138M which does not include revenue from potential future acquisitions.

Guidance for 2024

Guidance Range		Q4-2024		FY-2024
Revenue	$	30M – 32M	$	119M -121M
Adjusted EBITDA⁽¹⁾	$	6M -7M		18% -19%

Guidance for 2025

Guidance Range		FY-2025
Revenue	$	134M – 138M
Adjusted EBITDA⁽¹⁾		23% – 24%

Management uses GAAP, non-GAAP and adjusted measures when planning, monitoring, and evaluating the Company’s performance. The primary purpose of using non-GAAP and adjusted measures is to provide supplemental information that may prove useful to investors and to enable investors to evaluate the Company’s results in the same way that management does.

Management believes that supplementing GAAP disclosures with non-GAAP and adjusted disclosures provides investors with a more complete view of the Company’s operational performance and allows for meaningful period-to-period comparisons and analysis of trends in the Company’s business. Further, to the extent that other companies use similar methods in calculating adjusted financial measures, the provision of supplemental non-GAAP and adjusted information can allow for a comparison of the Company’s relative performance against other companies that also report non-GAAP and adjusted operating results.

Management has not provided a reconciliation of guidance of GAAP to non-GAAP or adjusted disclosures because management is unable to predict the nature and materiality of non-recurring expenses without unreasonable effort.

Management’s projections are based on management’s current beliefs and assumptions about the Company’s business, and the industry and markets in which it operates; there are known and unknown risks and uncertainties associated with these projections. There can be no assurance that our actual results will not differ from the guidance set forth above. The Company assumes no obligation to update publicly any forward-looking statements, including its 2024 and 2025 earnings guidance, whether as a result of new information, future events or otherwise. Please refer to the “Use of Forward-Looking Statements” disclosures on page 6 of this press release as well as the risk factors in our quarterly and annual reports on file with the Securities and Exchange Commission for more information about risk that affect our business and industry.

Conference Call Details

Asure management will host a conference call on Thursday, October 31, 2024, at 3:30 pm Central (4:30 pm Eastern). Asure Chairman and CEO Pat Goepel and CFO John Pence will participate in the conference call followed by a question-and-answer session. The conference call will be broadcast live and available for replay via the investor relations section of the Company’s website. Analysts may participate on the conference call by dialing 877-407-9219 or 201-689-8852.

About Asure Software, Inc.

Asure Software (Nasdaq: ASUR) is a leading provider of Human Capital Management (“HCM”) software solutions. We help small and mid-sized companies grow by assisting them in building better teams with skills to stay compliant with ever-changing federal, state, and local tax jurisdictions and labor laws, and better allocate cash so they can spend their financial capital on growing their business rather than back-office overhead expenses. Asure’s Human Capital Management suite, named AsureHCM®, includes cloud-based Payroll, Tax Services, and Time & Attendance software and Asure Marketplace™ as well as human resources (“HR”) services ranging from HR projects to completely outsourcing payroll and HR staff. We also offer these products and services through our network of reseller partners. Visit us at asuresoftware.com.

Non-GAAP and Adjusted Financial Measures

This press release includes information about non-GAAP gross profit, non-GAAP sales and marketing expense, non-GAAP general and administrative expense, non-GAAP research and development expense, EBITDA, EBITDA margin, adjusted EBITDA, and adjusted EBITDA margin. These non-GAAP and adjusted financial measures are measurements of financial performance that are not prepared in accordance with U.S. generally accepted accounting principles and computational methods may differ from those used by other companies. Non-GAAP and adjusted financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with the Company’s Condensed Consolidated Financial Statements prepared in accordance with GAAP. Non-GAAP and adjusted financial measures are reconciled to GAAP in the tables set forth in this release and are subject to reclassifications to conform to current period presentations.

Non-GAAP gross profit differs from gross profit in that it excludes amortization, share-based compensation, and one-time items.

Non-GAAP sales and marketing expense differs from sales and marketing expense in that it excludes share-based compensation and one-time items.

Non-GAAP general and administrative expense differs from general and administrative expense in that it excludes share-based compensation and one-time items.

Non-GAAP research and development expense differs from research and development expense in that it excludes share-based compensation and one-time items.

EBITDA differs from net income (loss) in that it excludes items such as interest, income taxes, depreciation, and amortization. Asure is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort.

Adjusted EBITDA differs from EBITDA in that it excludes share-based compensation, other income (expense), net and one-time expenses. Asure is unable to predict with reasonable certainty the ultimate outcome of these exclusions without unreasonable effort.

All adjusted and non-GAAP measures presented as “margin” are computed by dividing the applicable adjusted financial measure by total revenue.

Specifically, as applicable to the respective financial measure, management is adjusting for the following items when calculating non-GAAP and adjusted financial measures as applicable for the periods presented. No additional adjustments have been made for potential income tax effects of the adjustments based on the Company’s current and anticipated de minimis effective federal tax rate, resulting from the Company’s continued losses for federal tax purposes and its tax net operating loss balances.

Share-Based Compensation Expenses. The Company’s compensation strategy includes the use of share-based compensation to attract and retain employees and executives. It is principally aimed at aligning their interests with those of our stockholders and at long-term employee retention, rather than motivating or rewarding operational performance for any particular period. Thus, share-based compensation expense varies for reasons that are generally unrelated to operational decisions and performance in any particular period.

Depreciation. The Company excludes depreciation of fixed assets. Also included in the expense is the depreciation of capitalized software costs.

Amortization of Purchased Intangibles. The Company views amortization of acquisition-related intangible assets, such as the amortization of the cost associated with an acquired company’s research and development efforts, trade names, customer lists and customer relationships, and acquired lease intangibles, as items arising from pre-acquisition activities determined at the time of an acquisition. While these intangible assets are continually evaluated for impairment, amortization of the cost of purchased intangibles is a static expense, one that is not typically affected by operations during any particular period.

Interest Expense, Net. The Company excludes accrued interest expense, the amortization of debt discounts and deferred financing costs.

Income Taxes. The Company excludes income taxes, both at the federal and state levels.

One-Time Expenses. The Company’s adjusted financial measures exclude the following costs to normalize comparable reporting periods, as these are generally non-recurring expenses that do not reflect the ongoing operational results. These items are typically not budgeted and are infrequent and unusual in nature.

Settlements, Penalties and Interest. The Company excludes legal settlements, including separation agreements, penalties and interest that are generally one-time in nature and not reflective of the operational results of the business.

Acquisition and Transaction Related Costs. The Company excludes these expenses as they are transaction costs and expenses that are generally one-time in nature and not reflective of the underlying operational results of our business. Examples of these types of expenses include legal, accounting, regulatory, other consulting services, severance and other employee costs.

Other non-recurring Expenses. The Company excludes these as they are generally non-recurring items that are not reflective of the underlying operational results of the business and are generally not anticipated to recur. Some examples of these types of expenses, historically, have included write-offs or impairments of assets, demolition of office space and cybersecurity consultants.

Other (Expense) Income, Net. The Company’s adjusted financial measures exclude Other (Expense) Income, Net because it includes items that are not reflective of the underlying operational results of the business, such as loan forgiveness, adjustments to contingent liabilities and credits earned as part of the CARES Act, passed by Congress in the wake of the coronavirus pandemic.

Use of Forward-Looking Statements

This press release contains certain statements made by management that may constitute “forward-looking” statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements about our financial results may include expected or projected U.S GAAP and other operating and non-operating results. The words “believe,” “may,” “will,” “estimate,” “projects,” “anticipate,” “intend,” “expect,” “should,” “plan,” and similar expressions are intended to identify forward-looking statements. Examples of “forward-looking statements” include statements we make regarding our operating performance, future results of operations and financial position, revenue growth, earnings or other projections. We have based these forward-looking statements largely on our current expectations and projections about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations and objectives, and financial needs. The achievement or success of the matters covered by such forward-looking statements involves risks, uncertainties and assumptions, over many of which we have no control. If any such risks or uncertainties materialize or if any of the assumptions prove incorrect, our results could differ materially from the results expressed or implied by the forward-looking statements we make.

The risks and uncertainties referred to above include—but are not limited to—the expiration of major revenue streams such as Employee Retention Tax Credits (“ERTC”) and the impact of the Internal Revenue Service recent measures regarding ERTC claims; risks associated with breaches of the Company’s security measures; risks associated with the Company’s rate of growth and anticipated revenue run rate, including impact of the current economic environment; the Company’s ability to convert deferred revenue and unbilled deferred revenue into revenue and cash flow, and ability to maintain continued growth of deferred revenue and unbilled deferred revenue; privacy concerns and laws and other regulations may limit the effectiveness of our applications; the financial and other impact of any previous and future acquisitions; the Company’s ability to continue to release, gain customer acceptance of and provide support for new and improved versions of the Company’s services; successful customer deployment and utilization of the Company’s existing and future services; interruptions to supply chains and extended shut down of businesses; issues in the use of artificial intelligence in our HCM products and services; political unrest, including the current conflict between Russia and Ukraine and the ongoing conflict involving Israel in the Middle East; reductions in employment and an increase in business failures, specifically among our clients; possible fluctuations in the Company’s financial and operating results; regulatory pressures on economic relief enacted as a result of the COVID-19 pandemic that change or cause different interpretations with respect to eligibility for such programs; domestic and international regulatory developments, including changes to or applicability to our business of privacy and data securities laws, money transmitter laws and anti-money laundering laws; technological developments; the nature of the Company’s business model; interest rates; competition; various financial aspects of the Company’s subscription model; impairment of intangible assets; interruptions or delays in the Company’s services or the Company’s Web hosting; access to additional capital; the Company’s ability to hire, retain and motivate employees and manage the Company’s growth; litigation and any related claims, negotiations and settlements, including with respect to intellectual property matters or industry-specific regulations; volatility and weakness in bank and capital markets; factors affecting the Company’s deferred tax assets and ability to value and utilize them; volatility and low trading volume of our common stock; collection of receivables; and general developments in the economy, financial markets, credit markets and the impact of current and future accounting pronouncements and other financial reporting standards. Please review the Company’s risk factors in its annual report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2024, and its quarterly reports on Form 10-Q filed with the SEC on August 1, 2024, and October 31, 2024.

The forward-looking statements, including the financial guidance 2024 and 2025 outlooks, contained in this press release represent the judgment of the Company as of the date of this press release, and the Company expressly disclaims any intent, obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in the Company’s expectations with regard to these forward looking statements or any change in events, conditions or circumstances on which any such statements are based.

ASURE SOFTWARE, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) (Unaudited)

	September 30, 2024			December 31, 2023

ASSETS
Current assets:
Cash and cash equivalents	$	11,248		$	30,317
Accounts receivable, net of allowance for credit losses of $6,150 and $4,787 at September 30, 2024 and December 31, 2023, respectively		17,233			14,202
Inventory		233			155
Prepaid expenses and other current assets		4,586			3,471
Total current assets before funds held for clients		33,300			48,145
Funds held for clients		193,589			219,075
Total current assets		226,889			267,220
Property and equipment, net		18,490			14,517
Goodwill		94,724			86,011
Intangible assets, net		73,429			62,082
Operating lease assets, net		4,401			4,991
Other assets, net		10,176			9,047
Total assets	$	428,109		$	443,868
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of notes payable	$	—		$	27
Accounts payable		1,317			2,570
Accrued compensation and benefits		4,277			6,519
Operating lease liabilities, current		1,600			1,490
Other accrued liabilities		8,287			3,862
Deferred revenue		3,029			6,853
Total current liabilities before client fund obligations		18,510			21,321
Client fund obligations		193,951			220,019
Total current liabilities		212,461			241,340
Long-term liabilities:
Deferred revenue		2,276			16
Deferred tax liability		2,116			1,728
Notes payable, net of current portion		7,506			4,282
Operating lease liabilities, noncurrent		3,832			4,638
Other liabilities		765			209
Total long-term liabilities		16,495			10,873
Total liabilities		228,956			252,213
Stockholders’ equity:
Preferred stock, $0.01 par value; 1,500 shares authorized; none issued or outstanding		—			—
Common stock, $0.01 par value; 44,000 shares authorized; 26,540 and 25,382 shares issued, 26,540 and 24,998 shares outstanding at September 30, 2024 and December 31, 2023, respectively		265			254
Treasury stock at cost, zero(1) and 384 shares at September 30, 2024 and December 31, 2023, respectively		—			(5,017	)
Additional paid-in capital		502,920			487,973
Accumulated deficit		(304,022	)		(290,440	)
Accumulated other comprehensive loss		(10	)		(1,115	)
Total stockholders’ equity		199,153			191,655
Total liabilities and stockholders’ equity	$	428,109		$	443,868
(1) The aggregate Treasury stock of prior repurchases of the Company’s own common stock was retired and subsequently issued effective January 1, 2024. See the Condensed Consolidated Statement of Changes in Stockholders’ Equity for the impact of this transaction.

ASURE SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (in thousands, except per share amounts) (Unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
		2024			2023			2024			2023

Revenue:
Recurring	$	28,626		$	23,833		$	85,950		$	74,749
Professional services, hardware and other		678			5,501			3,050			18,069
Total revenue		29,304			29,334			89,000			92,818
Cost of sales		9,600			8,054			27,821			25,120
Gross profit		19,704			21,280			61,179			67,698
Operating expenses:
Sales and marketing		6,680			6,597			21,371			22,312
General and administrative		10,378			9,294			30,559			29,586
Research and development		1,973			1,803			5,704			5,107
Amortization of intangible assets		4,295			3,333			11,790			9,929
Total operating expenses		23,326			21,027			69,424			66,934
(Loss) income from operations		(3,622	)		253			(8,245	)		764
Interest income		165			437			762			1,015
Interest expense		(274	)		(1,219	)		(662	)		(5,336	)
Loss on extinguishment of debt		—			(1,517	)		—			(1,517	)
Other (expense) income, net		—			(283	)		10			(291	)
Loss from operations before income taxes		(3,731	)		(2,329	)		(8,135	)		(5,365	)
Income tax expense (benefit)		170			(123	)		434			267
Net loss		(3,901	)		(2,206	)		(8,569	)		(5,632	)
Other comprehensive loss:
Unrealized income (loss) on marketable securities		1,340			(201	)		1,105			(213	)
Comprehensive loss	$	(2,561	)	$	(2,407	)	$	(7,464	)	$	(5,845	)

Basic and diluted loss per share
Basic	$	(0.15	)	$	(0.10	)	$	(0.33	)	$	(0.27	)
Diluted	$	(0.15	)	$	(0.10	)	$	(0.33	)	$	(0.27	)

Weighted average basic and diluted shares
Basic		26,429			22,591			25,870			21,204
Diluted		26,429			22,591			25,870			21,204

ASURE SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)

	Nine Months Ended September 30,
		2024			2023

Cash flows from operating activities:
Net loss	$	(8,569	)	$	(5,632	)
Adjustments to reconcile loss to net cash (used) in provided by operations:
Depreciation and amortization		16,200			14,243
Amortization of operating lease assets		1,025			1,129
Amortization of debt financing costs and discount		531			548
Non-cash interest expense		—			1,471
Net accretion of discounts on available-for-sale securities		(273	)		(63	)
Provision for expected losses		111			2,004
Provision for deferred income taxes		388			111
Loss on extinguishment of debt		—			1,208
Net realized gains on sales of available-for-sale securities		(1,929	)		(1,645	)
Share-based compensation		4,981			4,170
Loss on disposals of long-term assets		—			132
Change in fair value of contingent purchase consideration		—			175
Changes in operating assets and liabilities:
Accounts receivable		(3,142	)		(5,014	)
Inventory		(78	)		159
Prepaid expenses and other assets		(1,656	)		4,031
Operating lease right-of-use assets		—			473
Accounts payable		(1,253	)		(498	)
Accrued expenses and other long-term obligations		(1,052	)		918
Operating lease liabilities		(1,139	)		(895	)
Deferred revenue		(4,539	)		(5,190	)
Net cash (used) in provided by operating activities		(394	)		11,835
Cash flows from investing activities:
Acquisition of intangible asset		(12,397	)		(697	)
Purchases of property and equipment		(546	)		(1,365	)
Software capitalization costs		(7,677	)		(5,029	)
Purchases of available-for-sale securities		(10,914	)		(21,513	)
Proceeds from sales and maturities of available-for-sale securities		13,325			10,428
Net cash used in investing activities		(18,209	)		(18,176	)
Cash flows from financing activities:
Payments of notes payable		(420	)		(35,627	)
Debt extinguishment costs		—			(468	)
Payments made on amounts due for the acquisition of intangible assets		(658	)		—
Net proceeds from issuance of common stock		902			45,986
Capital raise fees		(47	)		(258	)
Net change in client fund obligations		(26,068	)		(31,033	)
Net cash used in financing activities		(26,291	)		(21,400	)
Net decrease in cash and cash equivalents		(44,894	)		(27,741	)
Cash and cash equivalents, beginning of period		177,622			164,042
Cash and cash equivalents, end of period	$	132,728		$	136,301

ASURE SOFTWARE, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (in thousands) (Unaudited)

	Nine Months Ended September 30,
		2024		2023

Reconciliation of cash and cash equivalents to the Condensed Consolidated Balance Sheets
Cash and cash equivalents	$	11,248	$	32,787
Cash and cash equivalents included in funds held for clients		121,480		103,514
Total cash and cash equivalents	$	132,728	$	136,301

Supplemental information:
Cash paid for interest	$	—	$	3,140
Cash paid for income taxes	$	15	$	532

Non-cash investing and financing activities:
Acquisition of intangible assets	$	6,918	$	332
Notes payable issued for acquisitions	$	3,138	$	—
Shares issued for acquisitions	$	9,125	$	2,543

ASURE SOFTWARE, INC. RECONCILIATION OF NON-GAAP AND ADJUSTED FINANCIAL MEASURES (unaudited)

(in thousands)	Q3-24			Q2-24			Q1-24			Q4-23			Q3-23			Q2-23			Q1-23			Q4-22
Revenue⁽¹⁾	$	29,304		$	28,044		$	31,652		$	26,264		$	29,334		$	30,420		$	33,064		$	29,292

Gross Profit to non-GAAP Gross Profit
Gross Profit	$	19,704		$	18,868		$	22,607		$	17,839		$	21,280		$	22,018		$	24,400		$	21,139
Gross Margin		67.2	%		67.3	%		71.4	%		67.9	%		72.5	%		72.4	%		73.8	%		72.2	%

Share-based Compensation		44			43			40			32			28			46			31			34
Depreciation		1,232			1,145			1,110			921			984			1,309			1,009			871
Amortization – intangibles		50			50			50			50			50			50			268			298
One-time expenses
Settlements, penalties & interest		2			3			—			(6	)		8			—			4			3
Acquisition and transaction costs		367			264			39			—			—			—			—			—
Non-GAAP Gross Profit	$	21,399		$	20,373		$	23,846		$	18,836		$	22,350		$	23,423		$	25,712		$	22,345
Non-GAAP Gross Margin		73.0	%		72.6	%		75.3	%		71.7	%		76.2	%		77.0	%		77.8	%		76.3	%

Sales and Marketing Expense to non-GAAP Sales and Marketing Expense
Sales and Marketing Expense	$	6,680		$	6,924		$	7,767		$	6,422		$	6,597		$	8,515		$	7,200		$	6,022

Share-based Compensation		269			237			243			180			210			149			124			93
Depreciation		1			—			1			1			—			—			—			—
One-time expenses
Settlements, penalties & interest		(5	)		5			18			6			30			4			11			—
Acquisition and transaction costs		68			37			11			—			—			—			—			—
Other non-recurring expenses		—			—			—			—			—			180			—			—
Non-GAAP Sales and Marketing Expense	$	6,347		$	6,645		$	7,494		$	6,235		$	6,357		$	8,182		$	7,065		$	5,929

General and Administrative Expense to non-GAAP General and Administrative Expense
General and Administrative Expense	$	10,378		$	10,118		$	10,063		$	9,747		$	9,294		$	10,336		$	9,956		$	9,720

Share-based Compensation		1,187			1,122			1,535			980			936			1,298			1,142			641
Depreciation		264			256			251			225			200			234			210			168
One-time expenses
Settlements, penalties & interest		377			304			98			284			101			432			102			34
Acquisition and transaction costs		371			245			57			51			—			—			—			—
Other non-recurring expenses		253			—			86			53			—			453			—			—
Non-GAAP General and Administrative Expense	$	7,926		$	8,191		$	8,036		$	8,154		$	8,057		$	7,919		$	8,502		$	8,877

Research and Development Expense to non-GAAP Research and Development Expense
Research and Development Expense	$	1,973		$	1,962		$	1,769		$	1,739		$	1,803		$	1,325		$	1,979		$	1,627

Share-based Compensation		90			86			85			69			76			89			40			70
One-time expenses
Settlements, penalties & interest		—			27			31			—			—			—			—			25
Acquisition and transaction costs		195			369			147			—			—			—			—			—
Non-GAAP Research and Development Expense	$	1,688		$	1,480		$	1,506		$	1,670		$	1,727		$	1,236		$	1,939		$	1,532

⁽¹⁾Note that first quarters are seasonally strong as recurring year-end W2/ACA revenue is recognized in this period.

ASURE SOFTWARE, INC. RECONCILIATION OF NON-GAAP AND ADJUSTED FINANCIAL MEASURES (cont.) (unaudited)

(in thousands)	Q3-24			Q2-24			Q1-24			Q4-23			Q3-23			Q2-23			Q1-23			Q4-22
Revenue⁽¹⁾	$	29,304		$	28,044		$	31,652		$	26,264		$	29,334		$	30,420		$	33,064		$	29,292

GAAP Net (Loss) Income to Adjusted EBITDA
GAAP Net (Loss) Income	$	(3,901	)	$	(4,360	)	$	(308	)	$	(3,582	)	$	(2,206	)	$	(3,765	)	$	339		$	(1,056	)

Interest expense, net		109			(53	)		(156	)		(24	)		782			1,593			1,944			1,429
Income taxes		170			231			33			(158	)		(123	)		627			(237	)		(94	)
Depreciation		1,497			1,402			1,361			1,148			1,185			1,542			1,219			1,039
Amortization – intangibles		4,345			4,096			3,499			3,743			3,384			3,343			3,570			3,648
EBITDA	$	2,220		$	1,316		$	4,429		$	1,127		$	3,022		$	3,340		$	6,835		$	4,966
EBITDA Margin		7.6	%		4.7	%		14.0	%		4.3	%		10.3	%		11.0	%		20.7	%		17.0	%

Share-based Compensation		1,591			1,488			1,902			1,260			1,251			1,582			1,337			838
One Time Expenses
Settlements, penalties & interest		375			339			147			283			140			436			117			62
Acquisition and transaction costs		1,001			914			254			51			—			—			—			—
Other non-recurring expenses		253			—			86			53			—			633			—			—
Other (expense) income, net		—			—			(10	)		1			1,800			93			(83	)		139
Adjusted EBITDA	$	5,440		$	4,057		$	6,808		$	2,775		$	6,213		$	6,084		$	8,206		$	6,005
Adjusted EBITDA Margin		18.6	%		14.5	%		21.5	%		10.6	%		21.2	%		20.0	%		24.8	%		20.5	%

⁽¹⁾Note that first quarters are seasonally strong as recurring year-end W2/ACA revenue is recognized in this period.

Investor Relations Contact
Patrick McKillop
Vice President, Investor Relations
617-335-5058
patrick.mckillop@asuresoftware.com

The MIL Network –

January 25, 2025

MIL-OSI: Inuvo to Host Third Quarter 2024 Financial Results Conference Call on Friday, November 8th at 8:30 A.M. EST

Source: GlobeNewswire (MIL-OSI)

LITTLE ROCK, Ark., Oct. 31, 2024 (GLOBE NEWSWIRE) — Inuvo, Inc. (NYSE American: INUV), provider of the first generative artificial intelligence (AI) advertiser solution made specifically for brands and agencies, will host a conference call on Friday, November 8, 2024, at 8:30 AM Eastern Standard Time to discuss its financial results and provide a business update for the for the third quarter ended September 30, 2024.

Conference Call Details:
Date: Friday, November 8, 2024
Time: 8:30 a.m. Eastern Standard Time
Toll-free Dial-in Number: 1-800-717-1738
International Dial-in Number: 1- 646-307-1865
Conference ID: 1131160
Webcast Link: HERE

A telephone replay will be available through Friday, November 22, 2024. To access the replay, please dial 1- 844-512-2921 (domestic) or 1- 412-317-6671 (international). At the system prompt, please enter the code 1131160 followed by the # sign. You will then be prompted for your name, company, and phone number. Playback will then automatically begin.

About Inuvo

Inuvo®, Inc. (NYSE American: INUV) is a market leader in Artificial Intelligence built for advertising. Its IntentKey AI solution is a first-of-its-kind proprietary and patented technology capable of identifying and actioning to the reasons why consumers are interested in products, services, or brands, not who those consumers are. To learn more, visit www.inuvo.com.

Safe Harbor / Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding Inuvo’s quarter-end financial close process and preparation of financial statements for the quarter that are subject to risks and uncertainties that could cause results to be materially different than expectations. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including, without limitation risks detailed from time to time in our filings with the Securities and Exchange Commission (the “SEC”), and represent our views only as of the date they are made and should not be relied upon as representing our views as of any subsequent date. You are urged to carefully review and consider any cautionary statements and other disclosures, including the statements made under the heading “Risk Factors” in Inuvo, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 as filed on February 29, 2024, and our other filings with the SEC. Additionally, forward looking statements are subject to certain risks, trends, and uncertainties including the continued impact of Covid-19 on Inuvo’s business and operations. Inuvo cannot provide assurances that the assumptions upon which these forward-looking statements are based will prove to have been correct. Should one of these risks materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those expressed or implied in any forward-looking statements, and investors are cautioned not to place undue reliance on these forward-looking statements, which are current only as of this date. Inuvo does not intend to update or revise any forward-looking statements made herein or any other forward-looking statements as a result of new information, future events or otherwise. Inuvo further expressly disclaims any written or oral statements made by a third party regarding the subject matter of this press release. The information which appears on our websites and our social media platforms is not part of this press release.

Inuvo Company Contact:
Wally Ruiz
Chief Financial Officer
Tel (501) 205-8397
wallace.ruiz@inuvo.com

Investor Relations :
David Waldman / Natalya Rudman
Crescendo Communications, LLC
Tel: (212) 671-1020
inuv@crescendo-ir.com

The MIL Network –

January 25, 2025
MIL-OSI: Progress Completes Acquisition of ShareFile

Source: GlobeNewswire (MIL-OSI)

ShareFile’s AI-powered, document-centric collaboration platform expands Progress’ industry-leading product portfolio and marks a major milestone in the company’s Total Growth Strategy

BURLINGTON, Mass., Oct. 31, 2024 (GLOBE NEWSWIRE) — Progress (Nasdaq: PRGS), the trusted provider of AI-powered infrastructure software, today announced the completion of the acquisition of ShareFile, a business unit of Cloud Software Group, Inc., providing a SaaS-native, AI-powered, document-centric collaboration platform, focusing on industry segments including business and professional services, financial services, industrial and healthcare.

“This acquisition marks the latest major milestone in Progress’ Total Growth Strategy, which is built on three pillars: Invest and Innovate, Acquire and Integrate and Drive Customer Success. The addition of ShareFile significantly enhances our product capabilities, benefiting our customers and meaningfully expanding the customer base we serve,” said Yogesh Gupta, CEO of Progress. “We are thrilled to welcome ShareFile customers and employees to the Progress community and look forward to a bright future with ShareFile now part of Progress.”

Progress products help organizations to develop, deploy and manage responsible AI-powered applications and experiences. ShareFile fits strategically with Progress’ Digital Experience portfolio to enable customers to deliver more efficient and effective client and team collaboration, while simplifying the sharing of documents and prioritizing security.

As previously announced, Progress acquired ShareFile for a purchase price of $875 million, funded with a combination of cash and Progress’ existing revolving credit facility. ShareFile is expected to add more than $240M in annual revenue and more than 86,000 customers to Progress.

About Progress
Progress (Nasdaq: PRGS) empowers organizations to achieve transformational success in the face of disruptive change. Our software enables our customers to develop, deploy and manage responsible AI-powered applications and experiences with agility and ease. Customers get a trusted provider in Progress, with the products, expertise and vision they need to succeed. Over 4 million developers and technologists at hundreds of thousands of enterprises depend on Progress. Learn more at www.progress.com.

Note Regarding Forward-Looking Statements
This press release contains statements that are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Progress has identified some of these forward-looking statements with words like “believe,” “may,” “could,” “would,” “might,” “should,” “expect,” “intend,” “plan,” “target,” “anticipate” and “continue,” the negative of these words, other terms of similar meaning or the use of future dates. Risks, uncertainties and other important factors that could cause actual results to differ from those expressed or implied in the forward-looking statements include: uncertainties as to the effects of disruption from the acquisition of ShareFile (i.e., making it more difficult to maintain relationships with employees, licensees, other business partners or governmental entities); other business effects, including the effects of industry, economic or political conditions outside of Progress’ or ShareFile’s control; transaction costs; actual or contingent liabilities; uncertainties as to whether anticipated synergies will be realized; and uncertainties as to whether ShareFile’s business will be successfully integrated with Progress’ business. For further information regarding risks and uncertainties associated with Progress’ business, please refer to Progress’ filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the fiscal year ended November 30, 2023. Progress undertakes no obligation to update any forward-looking statements, which speak only as of the date of this press release.

The MIL Network –

January 25, 2025
MIL-OSI Security: 56th Security Consultative Meeting Joint Communique

Source: United States INDO PACIFIC COMMAND

1. The 56th United States (U.S.)-Republic of Korea (ROK) Security Consultative Meeting (SCM) was held in Washington, D.C., on October 30, 2024. U.S. Secretary of Defense Lloyd J. Austin III and ROK Minister of National Defense Kim Yong Hyun led their respective delegations, which included senior defense and foreign affairs officials. On October 17, 2024, the U.S. Chairman of the Joint Chiefs of Staff, General Charles Q. Brown Jr., and ROK Chairman of the Joint Chiefs of Staff, Admiral Kim Myung-soo, presided over the 49th ROK-U.S. Military Committee Meeting (MCM).

2. The Secretary and the Minister reaffirmed that the U.S.-ROK Alliance is the linchpin of peace, stability, and prosperity on the Korean Peninsula and beyond based on our shared values, including freedom, human rights, and the rule of law. The two leaders reviewed progress taken during 2024 to implement the “Defense Vision of the U.S.-ROK Alliance,” including enhancing extended deterrence against the Democratic People’s Republic of Korea (DPRK), modernizing Alliance capabilities based on science and technology cooperation, and strengthening solidarity and regional security cooperation with like-minded partners. They noted that the SCM has played a pivotal role in developing the ROK-U.S. Alliance into a Global Comprehensive Strategic Alliance and would continue maintaining its role as a core consultative mechanism to discuss the future development of the Alliance and provide strategic direction. The two leaders also provided direction and guidance for continued progress in 2025 through a newly endorsed framework of U.S.-ROK bilateral defense consultative mechanisms that effectively and efficiently support Alliance objectives. Both concurred that the current U.S.-ROK Alliance is stronger than ever and reaffirmed the two nations’ unwavering mutual commitment to a combined defense posture to defend the ROK as stated in the U.S-ROK Mutual Defense Treaty, and as reflected in the Washington Declaration. The two leaders also resolved to continue to strengthen the Alliances’ deterrence and defense posture against DPRK aggression and promote stability on the Korean Peninsula and throughout the region.

3. The Secretary and the Minister reviewed the current security environment in and around the Korean Peninsula and discussed cooperative measures between the two nations. The Secretary and Minister expressed grave concern that the DPRK continues to modernize and diversify its nuclear and ballistic missile capabilities. The two sides condemned the DPRK’s multiple missile launches, including ballistic missiles, its attempted launches of a space launch vehicle, and Russian-DPRK arms trade as clear violations of existing UN Security Council resolutions (UNSCRs). They noted that these actions present profound security challenges to the international community and pose an increasingly serious threat to peace and stability on the Korean Peninsula and throughout the Indo-Pacific region, as well as in the Euro-Atlantic region.

4. Secretary Austin reiterated the firm U.S. commitment to provide extended deterrence to the ROK, utilizing the full range of U.S. defense capabilities, including nuclear, conventional, missile defense, and advanced non-nuclear capabilities. He noted that any nuclear attack by the DPRK against the United States or its Allies and partners is unacceptable and would result in the end of the Kim regime in line with the 2022 U.S. Nuclear Posture Review. He highlighted the increased frequency and routinization of U.S. strategic asset deployments as committed to by President Biden in the Washington Declaration, and noted that these were tangible evidence of the U.S. commitment to defend the ROK.

5. The two leaders highly appreciated the work of the Nuclear Consultative Group (NCG) inaugurated following the Washington Declaration. Both applauded the completion on July 11, 2024, of “United States and Republic of Korea Guidelines for Nuclear Deterrence and Nuclear Operations on the Korean Peninsula,” which represents tremendous progress of the NCG commended and endorsed by President Biden and President Yoon. The two leaders affirmed that the completion of the Guidelines established the foundation for enhancing ROK-U.S. extended deterrence in an integrated manner. Minister Kim noted that, through such progress, the ROK-U.S. Alliance was elevated to a nuclear-based alliance. The two leaders stressed that the principles and procedures contained in the Guidelines enable Alliance policy and military authorities to maintain an effective nuclear deterrence policy and posture. The Secretary and Minister also welcomed the successful execution of the ROK-U.S. NCG table-top simulations and table-top exercises to enhance decision-making about nuclear deterrence and operations, and planning for potential nuclear contingencies on the Korean Peninsula. Both sides affirmed that the full capabilities of the two countries would contribute to the Alliance’s combined deterrence and defense posture, and in this regard the Secretary welcomed the recent establishment of the ROK Strategic Command. The Secretary and Minister directed the NCG to continue swift progress on NCG workstreams, including security protocols and expansion of information sharing; nuclear consultation processes in crises and contingencies; nuclear and strategic planning; ROK conventional support to U.S. nuclear operations in a contingency through conventional-nuclear integration (CNI); strategic communications; exercises, simulations, training, and investment activities; and risk reduction practices. They noted that such efforts would be coordinated to strengthen capabilities of the ROK and United States to enhance U.S.-ROK extended deterrence cooperation in an integrated manner, and looked forward to receiving regular updates on NCG progress activities at future SCMs.

6. The two sides pledged to continue coordinating efforts to deter DPRK’s nuclear threat with the Alliance’s overwhelming strength, while continuing to pursue efforts through sanctions and pressure to dissuade and delay DPRK’s nuclear development. Both leaders stressed the importance of full implementation of UNSCRs by the entire international community, including the People’s Republic of China (PRC) and Russia, both permanent members of the UN Security Council. The two leaders urged the international community to prevent and respond to DPRK’s sanctions evasion so that it abandons its illegal nuclear and ballistic missile development. To this end, they decided to work closely with each other and the international community to combat the DPRK’s illegal and malicious cyber activities, cryptocurrency theft, overseas laborer dispatches, and ship-to-ship transfers. The Secretary and Minister expressed concern that Russia-DPRK military cooperation, which has been intensified since the signing of a Comprehensive Strategic Partnership Treaty between the two, is deepening regional instability. The two leaders made clear that military cooperation, including illegal arms trade and high-technology transfers between Russia and the DPRK, constitute a clear violation of UNSCRs, and called on Russia to uphold its commitments. The two leaders also strongly condemned in the strongest terms with one voice that the military cooperation between Russia and the DPRK has expanded beyond transfers of military supplies to actual deployment of forces, and pledged to closely coordinate with the international community regarding this issue.

7. Both leaders reiterated the willingness of their Presidents to pursue dialogue and diplomacy, backed by a robust and credible deterrence and defense posture. In this regard, Secretary Austin expressed support for the goals of the ROK’s Audacious Initiative and President Yoon’s vision of a free, peaceful, and prosperous unified Korean Peninsula, and welcomed President Yoon’s desire to open a path for serious and sustained diplomacy with the DPRK. Both sides reaffirmed that they remain open to dialogue with the DPRK without preconditions and pledged to continue close coordination.

8. The Minister and the Secretary noted concerns that the DPRK’s claims of “two hostile countries,” and activities near the Military Demarcation Line (MDL) could threaten peace and the Armistice on the Korean Peninsula. The two leaders strongly condemned DPRK’s activities that raise tension on the Korean Peninsula, such as multiple unmanned aerial vehicle (UAV) infiltrations in the past, as well as the recent unilateral detonation of sections of inter-Korean roads and ongoing launches of “filth and trash balloons,” and urged the DPRK to immediately cease such activities. The Secretary and the Minister concurred that the Armistice Agreement remains in effect as an international norm guaranteeing the stable security order on the Korean Peninsula, and that all parties of the Korean War should abide by it while it remains in force. Both sides noted that the Northern Limit Line (NLL) has been an effective means of separating military forces and preventing military tension over the past 70 years, and urged the DPRK to respect the NLL.

9. Secretary Austin and Minister Kim reaffirmed the role of the United Nations Command (UNC) in implementing, managing, and enforcing the Korean Armistice Agreement, deterring DPRK aggression, and coordinating a multinational, united response in case of contingencies on the Korean Peninsula. They reaffirmed that UNC has successfully contributed to those aims for more than 70 years and continues to carry out its mission with the utmost respect for the sovereignty of ROK, the primary host nation. Both sides welcomed the successful organization of the second ROK-UNC Member States Defense Ministerial Meeting and expressed their appreciation for UNC Member State contributions. They welcomed the addition of Germany to UNC, and noted that peace and prosperity in the Indo-Pacific, including the Korean Peninsula, and Euro-Atlantic regions are increasingly connected. The two leaders are determined to continue seeking the expanded participation in UNC by like-minded countries that share the values of the 1953 Washington Declaration, anchored in the principles of the UN Charter and mandates of relevant UNSCRs. Secretary Austin thanked Minister Kim for the ROK’s efforts to support the UNC’s role to maintain and enforce the Armistice Agreement, and to support the defense of the ROK against DPRK aggression. In this regard, the Secretary and Minister both highlighted their desire to expand combined exercises, information sharing, and interoperability between the ROK, the Combined Forces Command, and UNC Member States.

10. The Secretary and the Minister also noted the critical role that U.S. forces in the ROK have played for more than 70 years and reaffirmed that U.S. Forces Korea (USFK) continues to play a decisive role in preventing armed conflict on the Korean Peninsula, and in promoting peace and stability in Northeast Asia. Secretary Austin reiterated the U.S. commitment to maintain current USFK force levels to defend the ROK.

11. The Secretary and Minister also reviewed the work of the various bilateral mechanisms such as the U.S.-Korea Integrated Defense Dialogue (KIDD). They welcomed efforts to enhance information sharing through the U.S. Shared Early Warning System (SEWS) for strengthening the Alliance’s detection capabilities in response to advancing DPRK missile threats. They also commended the work of the Counter-Missile Working Group (CMWG) and reviewed “the Joint Study on Alliance Comprehensive Counter-Missile Strategy” aimed at informing recommendations for counter-missile capabilities and posture of ROK and United States. The Secretary and Minister also discussed concrete efforts to strengthen cooperation in space and cyber to robustly deter and defend against growing threats. They endorsed efforts by the Space Cooperation Working Group (SCWG) to improve space situational awareness information sharing and interoperability, and acknowledged the need to expand ROK participation in exercises and training that can strengthen Alliance space capability and improve resilience against growing space threats. In particular, the Secretary also welcomed ROK participation in the Joint Commercial Operations (JCO) cell to leverage space industry and strengthen allied space capabilities. The Secretary and Minister also pledged to deepen cyber cooperation through the Cyber Cooperation Working Group and improve coordination through cyber defense exercises, such as Cyber Alliance and Cyber Flag. Overall, both leaders expressed appreciation for the continuing cooperation to ensure the Alliance’s space, cyber, and counter-missile efforts to keep pace with the evolving threats posed by the DPRK.

12. Noting the importance of science and technology (S&T) cooperation, the Secretary and Minister decided to establish the Defense Science and Technology Executive Committee (DSTEC) at the Vice-Minister-Under Secretary level within this year, to guide and prioritize Alliance defense S&T cooperation. They noted priority areas for cooperation including autonomy, artificial intelligence, and crewed-uncrewed teaming are particularly vital to ensure the ROK is able to achieve the goals of Defense Innovation 4.0 and modernize Alliance capabilities. Both leaders also welcomed future S&T cooperation related to quantum technologies, future-generation wireless communication technologies, and directed energy to ensure that S&T advancements enhance the combined capabilities of the Alliance. This included efforts to identify potential areas of collaboration on AUKUS Pillar II. The Secretary welcomed the Minister’s proposal to host a Defense Science and Technology conference in 2025, and concurred that the DSTEC should leverage this conference to baseline and prioritize Alliance defense S&T collaboration.

13. The Secretary and Minister also reviewed efforts to improve the interoperability, interchangeability, and resilience of the U.S. and ROK defense industrial base. They underscored the need to improve efficient and effective collaboration in the development, acquisition, fielding, logistics, sustainment, and maintenance of defense capabilities, and to ensure that S&T advancements are swiftly and seamlessly transitioned into acquisition and sustainment efforts. Both leaders welcomed progress under the U.S. Regional Sustainment Framework (RSF) and welcomed ROK participation in a Maintenance, Repair, and Overhaul (MRO) pilot project on Air Force aviation maintenance. The two leaders noted that this pilot project could lead to more bilateral co-sustainment opportunities, and also expand defense industrial collaboration with like-minded partners in the region in light of the ROK’s key role in the Partnership for Indo-Pacific Industrial Resilience (PIPIR) contact group. The Secretary and Minister also noted with satisfaction the recent U.S. Navy contract with ROK shipyards to conduct MRO services for U.S. vessels, and underscored the potential to expand such work to improve the resilience of the Alliance’s posture in the Indo-Pacific Region. The Secretary and Minister also recognized the need to improve reciprocal market access to deepen defense industrial cooperation and enhance supply chain resiliency, and are committed to accelerate cooperation with the goal of signing the Reciprocal Defense Procurement Agreement next year based on guidance from both Presidents.

14. The Secretary and the Minister received and endorsed the MCM Report to the SCM presented by the U.S. Chairman of the Joint Chiefs of Staff, General Charles Q. Brown. They welcomed the efforts of General Brown, Admiral Kim, and the MCM to enhance military plans, posture, training, exercises, and efforts to coordinate U.S.-ROK Combined Forces Command (CFC) activities and enhance military strength of the Alliance. The Secretary and Minister concurred that the Freedom Shield 24 (FS 24) and Ulchi Freedom Shield 24 (UFS 24) exercises, which included realistic threats from the DPRK advancing nuclear, missile, space, and cyber threats, enhanced the Alliance’s crisis management and strengthened deterrence and defense capabilities. In addition, they assessed that combined field training exercises (FTX), which were more extensive than the past year and conducted in land, maritime and air domains, enhanced interoperability and combined operations execution capabilities. Based on such outcomes, both leaders decided to continue strengthening combined exercises and training in line with the rapidly changing security environment of the Korean Peninsula, and further decided that future combined exercises should include appropriate and realistic scenarios including responses to DPRK nuclear use. The Secretary and the Minister also emphasized that ensuring consistent training opportunities for USFK is critical to maintaining a strong combined defense posture. Secretary Austin noted the efforts of ROK Ministry of National Defense (MND) to improve the training conditions for U.S. and ROK forces and stressed the importance of maintaining close cooperation between USFK and MND for the joint use of ROK facilities and airspace for training.

15. Given the growth and diversification of the DPRK’s chemical, biological, radiological, and nuclear (CBRN) weapons and delivery systems, both leaders assessed efforts and works to ensure execution of Alliance missions under a CBRN-challenged environment. In particular, they welcomed progress by the Countering Weapons of Mass Destruction Committee (CWMDC), including the expansion of information sharing required for nuclear elimination operations consistent with the Nuclear Weapons Non-proliferation Treaty (NPT), and the strengthening of cooperation to prevent proliferation of WMD in the Indo-Pacific region. Both leaders welcomed continued multinational counter-proliferation activities in the region amidst advancements of DPRK nuclear and missile program and intensification of arms trade between Russia and the DPRK following the Comprehensive Strategic Partnership Treaty. Secretary Austin expressed appreciation for ROK contributions to various global security efforts such as Proliferation Security Initiative (PSI), and the Minister and the Secretary concurred on the importance of maintaining cooperative efforts to enforce relevant counter-proliferation UNSCRs.

16. The Secretary and Minister also reviewed the progress and works to fulfill the Conditions-based Wartime Operational Control (OPCON) Transition Plan (COTP). Both leaders reaffirmed that the conditions stated in the bilaterally approved COTP must be met before wartime OPCON is transitioned in a stable and systematic manner. They received the results of the annual U.S.-ROK bilateral evaluation on the capabilities and systems for conditions #1 and #2 based on the bilaterally-approved assessment criteria and standards. Both leaders affirmed that there was a significant progress of this year’s bilateral evaluation on readiness posture and capabilities, and pledged to continue close consultations between the ROK and the United States. for the establishment of the Future-CFC. The Secretary and the Minister also reaffirmed that Future-CFC Full Operational Capability (FOC) Certification would be pursued when the results of the bilateral evaluation on the capabilities and systems of conditions #1 and #2 meet the mutually approved levels. Regarding condition #3, the Secretary and the Minister decided to remain in close consultation for the assessment of the security environment. Both sides pledged to support continued evaluation and progress in wartime OPCON transition implementation through annual MCMs and SCMs, and affirmed that the wartime OPCON transition would strengthen ROK and Alliance capabilities and the combined defense posture.

17. The Secretary and the Minister reviewed the regional security environment, and plans to expand U.S.-ROK security cooperation throughout the Indo-Pacific region to support maintaining a free and open Indo-Pacific that is connected, prosperous, secure, and resilient. They also reaffirmed support for Association of Southeast Asian Nation (ASEAN) centrality and the ASEAN-led regional architecture as well as regional efforts of the Pacific Islands Forum. In particular, the two leaders noted the importance of enhancing cooperation during the implementation of both the ROK and U.S. respective strategies for the Indo-Pacific region. To this end, the Secretary and the Minister endorsed the “Regional Cooperation Framework for U.S.-ROK Alliance Contributions to Security in the Indo-Pacific,” and discussed priorities areas and partners to better respond to the complex regional and global security situation. After reviewing the work of the ROK-U.S. Regional Cooperation Working Group (RCWG), both leaders reaffirmed their commitment to strengthen defense cooperation with ASEAN members and work together with the Pacific Island Countries to contribute to regional security. The Secretary and the Minister also acknowledged the importance of preserving peace and stability in the Taiwan Strait as reflected in the April 2023 “Joint Statement in Commemoration of the 70th Anniversary of the Alliance between the United States of America and the Republic of Korea.”

18. The Secretary and the Minister reflected on the remarkable progress made during 2024 to fulfill the historic understandings at the Camp David Summit. They welcomed the Memorandum of Cooperation on the Trilateral Security Cooperation Framework (TSCF), signed by the Ministers and the Secretary of the United States, ROK, and Japan in July, along with enhanced sharing of missile warning information and efforts to systematically conduct trilateral exercises, including the first execution of the multi-domain trilateral exercise FREEDOM EDGE. The Secretary and the Minister reaffirmed their commitment to continuing to promote and expand trilateral security cooperation including senior-level policy consultations, trilateral exercises, information sharing, and defense exchange cooperation.

19. The two sides also took the opportunity to reaffirm that expediting the relocation and return of U.S. military bases in the ROK is in the interests of both countries, and decided to work closely to ensure the timely return of the bases in accordance with the Status of Forces Agreement (SOFA) and related agreements. The two leaders noted the significance of the complete construction of Yongsan Park, and pledged to expedite the remaining return of Yongsan Garrison. The Minister and the Secretary also reaffirmed their mutual commitment to discuss the return of other U.S. military bases through regular consultations through SOFA channels to reach mutually acceptable outcomes in the future.

20. Secretary Austin expressed his gratitude that the ROK is contributing toward ensuring a stable environment for U.S. Forces Korea. The Secretary and Minister also welcomed the recent conclusion of consultations related to a 12th Special Measures Agreement (SMA), and concurred that it would greatly contribute to the strengthening of the U.S.-ROK combined defense posture.

21. Secretary Austin and Minister Kim affirmed that the discussions during the 56th SCM and the 49th MCM contributed to strengthening the U.S.-ROK Alliance with a vision toward the further development of a truly global alliance. The two leaders commended the U.S. and ROK military and civilian personnel that worked to strengthen the bond of the Alliance, and expressed appreciation for their shared commitment and sacrifice. Both sides expect to hold the 57th SCM and 50th MCM in Seoul at a mutually convenient time in 2025.

MIL Security OSI –

January 25, 2025
MIL-OSI Security: Rapid City Man Arraigned on Federal Charges Following Arrest for Large Scale Distribution and Possession of Child Pornography

Source: Office of United States Attorneys

RAPID CITY – United States Attorney Alison J. Ramsdell announced that the United States has brought federal charges against a Rapid City, South Dakota, man for Distribution of Child Pornography and Possession of Child Pornography.

Lewis Patterson III, age 39, was arraigned before U.S. Magistrate Judge Daneta Wollmann on October 30, 2024. Patterson pleaded not guilty to the Criminal Complaint.

If convicted of distributing child pornography, Patterson faces a mandatory minimum of five years up to 20 years in prison, and a fine of up $250,000. He faces a mandatory minimum of five years up to life of supervised release. Restitution is mandatory. Patterson also faces up to 10 years in prison if convicted of possessing child pornography.

The charges are merely accusations and Patterson is presumed innocent until and unless proven guilty.

Law enforcement’s initial investigation has established that since at least March of 2024, Patterson personally distributed hundreds of thousands of images and videos of children being sexually abused across multiple internet-based applications, platforms, and encrypted messaging services. Patterson also utilized artificial intelligence and cryptocurrency to profit from his child pornography distribution scheme.

“The frequency with which criminals target and sexually exploit children is terrifying,” said U.S. Attorney Alison J. Ramsdell. “We are fortunate to have federal, state, and local law enforcement agencies that regularly collaborate through the Internet Crimes Against Children Taskforce to expose this nefarious activity. The U.S. Attorney’s Office will continue to prioritize the federal prosecution of anyone looking to use the Internet to exploit children.”

In response to the arrest, South Dakota Attorney General Marty Jackley stated, “Cooperation by law enforcement resulted in this successful investigation. As Attorney General, I will continue to use every tool available to protect children and hold accountable those harming children.”

The investigation is being led by the South Dakota Internet Crimes Against Children Task Force, consisting of members of the South Dakota Division of Criminal Investigation, Rapid City Police Department, and the Pennington County Sheriff’s office, partnered with Homeland Security Investigations. Assistant U.S. Attorney Heather Knox is prosecuting the case.

Patterson was detained following his arraignment and is in the custody of the U.S. Marshals Service. A detention hearing is scheduled for November 1, 2024, at 10:00 a.m.

MIL Security OSI –

January 25, 2025
MIL-OSI Security: U.S.-Republic of Korea Security Consultative Meeting and 2+2 Ministerial Dialogue Fact Sheet
Source: United States INDO PACIFIC COMMAND

During the 56th U.S.-Republic of Korea (ROK) Security Consultative Meeting (SCM) on October 30, 2024, U.S. Secretary of Defense Lloyd J. Austin III and ROK Minister of National Defense Kim Yong Hyun advanced numerous initiatives that deepen our extended deterrence cooperation, modernize our alliance capabilities, and strengthen our contributions to regional security.

On October 31, Secretary Austin and Minister Kim will join U.S. Secretary of State Antony Blinken and ROK Minister of Foreign Affairs Cho Tae-yul for a Foreign and Defense Ministers’ Meeting (2+2 Meeting) to align our diplomatic and defense efforts, ensuring that bilateral activities are synchronized to advance our Alliance’s shared values and interests.

ENHANCING EXTENDED DETERRENCE

The United States reaffirmed that its extended deterrence commitment to the ROK is ironclad. The United States and the ROK are enhancing our combined deterrence and response posture by:
- Enhancing extended deterrence cooperation through Nuclear Consultative Group (NCG) workstreams that enable integrated planning, decision-making, and execution of conventional-nuclear operations, as laid out in the “Guidelines for Nuclear Deterrence and Nuclear Operations on the Korean Peninsula.”
- Conducting large-scale field training exercises to maintain a strong combined defense posture, such as Freedom Shield and Ulchi Freedom Shield, and enhance the Alliance’s crisis management capabilities and strengthen deterrence.
MODERNIZING ALLIANCE CAPABILITIES

The United States and the ROK are modernizing our capabilities to strengthen the combined defense architecture of the Alliance, empowering us to work together more seamlessly by:
- Enhancing combined abilities to deter and respond to DPRK missiles by upgrading Shared Early Warning Systems and missile defense capabilities against advanced and novel threats.
- Expanding science and technology cooperation through the new Defense Science and Technology Executive Committee (DSTEC) to guide defense innovation and accelerate the incorporation of cutting-edge technologies in areas such as autonomous systems, artificial intelligence, and quantum technologies.
- Deepening industrial collaboration and supply chain resiliency by strengthening and connecting our defense industrial bases through our participation in the Partnership for Indo-Pacific Industrial Resilience (PIPIR) and maintenance, repair, and overhaul (MRO) activities, allowing our forces to field the most modern, interoperable weapons systems.
STRENGTHENING REGIONAL SECURITY COOPERATION

The United States and the ROK resolved to jointly strengthen activities with allies and partners in the Indo-Pacific by:
- Launching a new Regional Cooperation Framework to better coordinate efforts to advance our shared vision for a free and open Indo-Pacific. Areas of focus under this framework include maritime security, multilateral exercises, capacity building, defense industrial cooperation, technical cooperation, and information sharing.
- Deepening U.S.-ROK-Japan trilateral security cooperation through a Trilateral Security Cooperation Framework that institutionalizes high-level dialogues, missile warning data sharing, and an increased scope, scale, and frequency of trilateral multi-domain exercises.
MIL Security OSI –
January 25, 2025
MIL-OSI Europe: Minister Calleary announces key milestone in the implementation of the EU regulation on AI
Source: Government of Ireland – Department of Jobs Enterprise and Innovation

31st October 2024

Minister of State for Trade Promotion, Digital and Company Regulation, Dara Calleary TD, today published a list of nine national public authorities responsible for protecting fundamental rights under the EU Artificial Intelligence (AI) Act.

These authorities will get additional powers under the AI Act to facilitate them in carrying out their current responsibilities for protecting fundamental rights in circumstances where use of AI poses a high risk to those rights. For example, the authorities will have the power to access documentation that developers and deployers of AI systems are required to hold under the AI Act.

This action fulfils Ireland’s first obligation for the national implementation of the AI Act.

The list of authorities is as follows:
- An Coimisiún Toghcháin
- Coimisiún na Meán
- Data Protection Commission
- Environmental Protection Agency
- Financial Services & Pensions Ombudsman
- Irish Human Rights & Equality Commission
- Ombudsman
- Ombudsman for Children
- Ombudsman for the Defence Forces
Minister Calleary commented,

“AI can provide many benefits for our society and our economy. However, AI also comes with certain risks. The EU AI Act will have a critical role in addressing these risks and in promoting human-centric, trustworthy AI. It will establish a regulatory framework for the development and use of AI systems to provide a high level of protection to people’s health, safety, and fundamental rights.

“The government is committed to comprehensive and effective implementation of the AI Act and the publication of this list is an important first step in this regard. The additional powers these authorities will acquire under the AI Act will support them in protecting fundamental rights in circumstances where certain high-risk AI systems are used.”

This list will be notified to the European Commission. It will be kept under review by the Minister and can be updated at any time to reflect future changes in the national authorities.

Note to Editors

The pioneering EU Artificial Intelligence (AI) Act, which entered into force on 2nd August 2024, provides a harmonised regulatory framework for AI systems developed or deployed in the EU. It is the most comprehensive such framework in the world. It is designed to provide a high level of protection to people’s health, safety, and fundamental rights and to promote the adoption of human-centric, trustworthy AI. The Act adopts a risk-based approach to regulation and focuses on applications of AI systems to ensure that its regulatory provisions are targeted and proportionate. Its provisions will apply, in a phased manner, over the 36-month period from entry into force.

The AI Act is an EU Regulation and consequently has direct effect in all Member States, however, it places obligations on Member States to provide for implementation and enforcement at national level.

The first obligation on Member States under the Act is to identify national public authorities which supervise or enforce the respect of obligations under Union law protecting fundamental rights, including the right to non-discrimination, in relation to certain high-risk uses of AI systems, specified the Act. Under the Act, fundamental rights are those enshrined in the EU Charter of Fundamental Rights, including democracy, the rule of law and environmental protection. This list of authorities must be published, and notified to the European Commission, by 2 November 2024.

The identified authorities will not be competent authorities for the Act, nor will any obligations, responsibilities or tasks be assigned to them. Rather, identified authorities will get additional powers to facilitate them in carrying out their current mandates in circumstances involving the use of AI systems. These powers will apply from 2 August 2026.

ENDS

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MIL OSI Europe News –
January 25, 2025

MIL-OSI: Sound Financial Bancorp, Inc. Q3 2024 Results

Source: GlobeNewswire (MIL-OSI)

SEATTLE, Oct. 30, 2024 (GLOBE NEWSWIRE) — Sound Financial Bancorp, Inc. (the “Company”) (Nasdaq: SFBC), the holding company for Sound Community Bank (the “Bank”), today reported net income of $1.2 million for the quarter ended September 30, 2024, or $0.45 diluted earnings per share, as compared to net income of $795 thousand, or $0.31 diluted earnings per share, for the quarter ended June 30, 2024, and $1.2 million, or $0.45 diluted earnings per share, for the quarter ended September 30, 2023. The Company also announced today that its Board of Directors declared a cash dividend on common stock of $0.19 per share, payable on November 26, 2024 to stockholders of record as of the close of business on November 12, 2024.

Comments from the President and Chief Executive Officer

“For the first time in our history, loans surpassed $900 million, and we continued to grow deposits. These production improvements came as we held operating expenses steady, demonstrating our ability to grow the Bank efficiently,” remarked Laurie Stewart, President and Chief Executive Officer. “We also completed a major upgrade to our online banking services and have received positive feedback on this from our clients,” concluded Ms. Stewart.

“Net income increased 45% from the prior quarter primarily due to the improvement in our net interest margin, which was driven by the repricing and origination of new loans at higher market rates. At the same time, funding costs increased at a slower pace, as the majority of our deposits had already been repriced. We also made progress in transitioning time deposits to savings and money market accounts, which typically carry lower rates and provide more flexibility for future repricing,” explained Wes Ochs, Executive Vice President and Chief Financial Officer.

Mr. Ochs continued, “As always, we remain focused on maintaining strong asset quality. Non-performing loans decreased from the prior quarter-end and we are actively utilizing available remedies to address the remaining problem loans.”

Q3 2024 Financial Performance
Total assets increased $26.1 million or 2.4% to $1.10 billion at September 30, 2024, from $1.07 billion at June 30, 2024, and increased $70.8 million or 6.9% from $1.03 billion at September 30, 2023.				Net interest income increased $425 thousand or 5.7% to $7.9 million for the quarter ended September 30, 2024, from $7.4 million for the quarter ended June 30, 2024, and decreased $295 thousand or 3.6% from $8.2 million for the quarter ended September 30, 2023.

				Net interest margin (“NIM”), annualized, was 2.98% for the quarter ended September 30, 2024, compared to 2.92% for the quarter ended June 30, 2024 and 3.38% for the quarter ended September 30, 2023.
Loans held-for-portfolio increased $12.5 million or 1.4% to $901.7 million at September 30, 2024, compared to $889.3 million at June 30, 2024, and increased $26.3 million or 3.0% from $875.4 million at September 30, 2023.
				An $8 thousand provision for credit losses was recorded for the quarter ended September 30, 2024, compared to a $109 thousand and a $75 thousand release of provision for credit losses for the quarters ended June 30, 2024 and September 30, 2023, respectively. At September 30, 2024, the allowance for credit losses on loans to total loans outstanding was 0.95%, compared to 0.96% at both June 30, 2024 and September 30, 2023.
Total deposits increased $23.4 million or 2.6% to $930.2 million at September 30, 2024, from $906.8 million at June 30, 2024, and increased $69.3 million or 8.1% from $860.9 million at September 30, 2023. Noninterest-bearing deposits increased $4.8 million or 3.8% to $129.7 million at September 30, 2024 compared to $124.9 million at June 30, 2024, and decreased $24.2 million or 15.7% compared to $153.9 million at September 30, 2023.
				Total noninterest income increased $73 thousand or 6.3% to $1.2 million for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, and increased $154 thousand or 14.2% compared to the quarter ended September 30, 2023.
The loans-to-deposits ratio was 97% at September 30, 2024, compared to 98% at June 30, 2024 and 102% at September 30, 2023.
				Total noninterest expense decreased $58 thousand or 0.7% to $7.7 million for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, and decreased $31 thousand or 0.4% from compared to the quarter ended September 30, 2023.
Total nonperforming loans decreased $420 thousand or 4.7% to $8.5 million at September 30, 2024, from $8.9 million at June 30, 2024, and increased $6.7 million or 381.8% from $1.8 million at September 30, 2023. Nonperforming loans to total loans was 0.94% and the allowance for credit losses on loans to total nonperforming loans was 101.13% at September 30, 2024.
				The Bank continued to maintain capital levels in excess of regulatory requirements and was categorized as “well-capitalized” at September 30, 2024.

Operating Results

Net interest income increased $425 thousand, or 5.7%, to $7.9 million for the quarter ended September 30, 2024, compared to $7.4 million for the quarter ended June 30, 2024, and decreased $295 thousand, or 3.6%, from $8.2 million for the quarter ended September 30, 2023.The increase from the prior quarter was primarily due to a higher average yield on interest-earning assets, particularly loans receivable, and an increase in the average balances of both loans receivable and interest-earning cash. This was partially offset by a more modest rise in the cost of funds, as higher cost earnings interest-bearing deposits decreased by the end of the third quarter of 2024, limiting the growth in funding costs compared to the prior quarter. The decrease in net interest income compared to the same quarter one year ago was primarily due to higher funding costs, specifically, increased rates on and balances of money market and certificate accounts, partially offset by an increase in the average yield earned on interest-earning assets.

Interest income increased $799 thousand, or 5.7%, to $14.8 million for the quarter ended September 30, 2024, compared to $14.0 million for the quarter ended June 30, 2024, and increased $2.2 million, or 17.0%, from $12.7 million for the quarter ended September 30, 2023. The increase from the prior quarter was primarily due to a higher average balance of loans and interest-bearing cash, along with a 14 basis point increase in the average loan yield, reflecting higher rates on newly originated loans and upward adjustments to rates on existing variable rate loans. The increase in interest income compared to the same quarter last year was due primarily to higher average balances of loans and interest-bearing cash, a 41 basis point increase in the average yield on loans, a 20 basis point increase in the average yield on interest-bearing cash, and a seven basis point increase in the average yield on investments, partially offset by a decline in the average balance of investments.

Interest income on loans increased $556 thousand, or 4.5%, to $12.9 million for the quarter ended September 30, 2024, compared to $12.3 million for the quarter ended June 30, 2024, and increased $1.4 million, or 11.9%, from $11.5 million for the quarter ended September 30, 2023. The average balance of total loans was $898.6 million for the quarter ended September 30, 2024, up from $891.9 million for the quarter ended June 30, 2024 and $862.4 million for the quarter ended September 30, 2023. The average yield on total loans was 5.70% for the quarter ended September 30, 2024, up from 5.56% for the quarter ended June 30, 2024 and 5.29% for the quarter ended September 30, 2023. The increase in the average loan yield during the current quarter, compared to both the prior quarter and the third quarter of 2023, was primarily due to the origination of new loans at higher interest rates. Additionally, variable-rate loans resetting to higher rates contributed to the increase in average yield compared to the third quarter of 2023. The increase in the average balance during the current quarter compared to the prior quarter was primarily due to growth in commercial and multifamily loans, manufactured housing loans and consumer loans, with the growth in consumer loans coming primarily from floating home loans. This was partially offset by a decline in construction and land loans. The average balances for commercial business loans and one-to-four family loans remained relatively flat from the second quarter of 2024. The increase in the average balance of loans during the current quarter compared to the third quarter of 2023 was primarily due to loan growth across all categories, except for one-to-four family loans, construction and land loans, and commercial business loans, with the largest decrease being in construction and land loans.

Interest income on investments was $132 thousand for the quarter ended September 30, 2024, compared to $133 thousand for the quarter ended June 30, 2024, and $139 thousand for the quarter ended September 30, 2023. Interest income on interest-bearing cash increased $244 thousand to $1.8 million for the quarter ended September 30, 2024, compared to $1.6 million for the quarter ended June 30, 2024, and increased $788 thousand from $1.0 million for the quarter ended September 30, 2023. These increases were due to higher average balances of interest-bearing cash, with the increase from the same quarter in the prior year also resulting from a higher average yield.

Interest expense increased $374 thousand, or 5.7%, to $7.0 million for the quarter ended September 30, 2024, from $6.6 million for the quarter ended June 30, 2024, and increased $2.4 million, or 54.2%, from $4.5 million for the quarter ended September 30, 2023. The increase in interest expense during the current quarter from the prior quarter was primarily the result of a $38.8 million increase in the average balance of savings and money market accounts, as well as higher average rates paid on these accounts, partially offset by a $13.9 million decrease in the average balance of certificate accounts. The increase in interest expense during the current quarter from the comparable period a year ago was primarily the result of a $9.8 million increase in the average balance of certificate accounts and a $148.1 million increase in the average balance of savings and money market accounts, as well as higher average rates paid on all interest-bearing deposits. This was partially offset by a $46.3 million decrease in the average balance of demand and NOW accounts and a $2.8 million decrease in the average balance of FHLB advances. The average cost of deposits was 2.74% for the quarter ended September 30, 2024, up from 2.67% for the quarter ended June 30, 2024 and 1.85% for the quarter ended September 30, 2023. The average cost of FHLB advances was 4.32% for both the quarters ended September 30, 2024 and June 30, 2024, and down from 4.38% for the quarter ended September 30, 2023.

NIM (annualized) was 2.98% for the quarter ended September 30, 2024, up from 2.92% for the quarter ended June 30, 2024 and down from 3.38% for the quarter ended September 30, 2023. The increase in NIM from the prior quarter was result of an increase in interest income on interest-earning assets, partially offset by an increase in the cost of funding. The decrease in NIM from the quarter one year ago was primarily due to the cost of funding increasing at a faster pace than the yield earned on interest-earning assets, driven by the higher average balance of higher costing money market and certificate accounts.

A provision for credit losses of $8 thousand was recorded for the quarter ended September 30, 2024, consisting of a provision for credit losses on loans of $106 thousand and a release of provision for credit losses on unfunded loan commitments of $98 thousand. This compared to a release of provision for credit losses of $109 thousand for the quarter ended June 30, 2024, consisting of a release of provision for credit losses on loans of $88 thousand and a release of provision for credit losses on unfunded loan commitments of $21 thousand, and a provision for credit losses of $75 thousand for the quarter ended September 30, 2023, consisting of a provision for credit losses on loans of $224 thousand and a release of the provision for credit losses on unfunded loan commitments of$149 thousand. The increase in the provision for credit losses for the quarter ended September 30, 2024 compared to the quarter ended June 30, 2024 resulted primarily from growth in the loan portfolio and higher quantitative loss rates, which were influenced by a forecast of higher unemployment, and enhancements to the loss model, including an additional qualitative adjustment related to loan review. These adjustments were partially offset by decline in the balance of the construction loan portfolio, which typically has higher loss rates, and a decrease in the qualitative risk adjustment for construction loans as projects were completed and market conditions improved. Expected loss estimates consider various factors, such as market conditions, borrower -specific information, projected delinquencies, and the impact of economic conditions on borrowers’ ability to repay.

Noninterest income increased $73 thousand, or 6.3%, to $1.2 million for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, and increased $154 thousand, or 14.2%, compared to the quarter ended September 30, 2023. The increase from the prior quarter was primarily related to a $217 thousand upward adjustment in fair value of mortgage servicing rights and a $52 thousand increase in earnings from bank-owned life insurance (“BOLI”), both influenced by fluctuating market interest rates. These gains were partially offset by a $133 thousand decrease in service charges and fee income, which was elevated in the prior quarter due to the recovery of potential future lost fee income due to vendor error. Additionally, there was a $34 thousand decrease in net gain on sale of loans, due to lower sales volume, and a $30 thousand decrease in gain on disposal of assets due to insurance claims on the loss of fully depreciated assets in second quarter of 2024. The increase in noninterest income from the comparable period in 2023 was primarily due to an $98 thousand increase in earnings on BOLI due to market rate fluctuations, and an $179 thousand increase in the fair value adjustment on mortgage servicing rights due to changes in prepayment speeds, servicing costs, and discount rate. These increases were partially offset by a $72 thousand decrease in service charges and fee income primarily due to a volume incentive paid by Mastercard in 2023, a $36 thousand decrease in net gain on sale of loans for reason similar to those noted above, and a decrease in mortgage servicing income as a result of the portfolio paying down at a faster rate than we are replacing the loans. Additionally, mortgage servicing income decreased by $15 thousand compared to the third quarter of 2023. Loans sold during the quarter ended September 30, 2024, totaled $2.4 million, compared to $4.0 million and $4.4 million of loans sold during the quarters ended June 30, 2024 and September 30, 2023, respectively.

Noninterest expense decreased $58 thousand, or 0.7%, to $7.7 million for the quarter ended September 30, 2024, compared to the quarter ended June 30, 2024, and decreased $31 thousand, or 0.4%, from the quarter ended September 30, 2023. The decrease from the quarter ended June 30, 2024 was primarily a result of lower a $189 thousand decrease in salaries and benefits, primarily due to lower incentive compensation accruals. This was partially offset by an $157 thousand increase in data processing expenses, largely due to a vendor reimbursement received in the previous quarter for software implementation costs. Additionally, regulatory assessments declined $31 thousand due to a lower accrual for exam costs. Compared to same quarter in 2023, the decrease in noninterest expense was primarily due to lower operations, data processing, and occupancy expenses, which were partially offset by a $321 thousand increase in salaries and benefits. Operations expenses decreased due to reduction in loan originations costs, office expenses, marketing costs, legal fees, and charitable contributions, partially offset by an operational loss from a fraudulently obtained loan charged off in the third quarter of 2024. Data processing expenses decreased due to one-time costs related to new technology implemented in 2023, while occupancy expenses decreased primarily due fully amortized leasehold improvements. The increase in salaries and benefits compared to the third quarter of 2023 reflected higher incentive compensation, medical expenses, retirement plan costs, and directors’ fees (due to the addition of a new director), partially offset by lower salaries from a restructuring of positions at the end of 2023.

Balance Sheet Review, Capital Management and Credit Quality

Assets at September 30, 2024 totaled $1.10 billion, an increase from $1.07 billion at June 30, 2024 and $1.03 billion at September 30, 2023. The increase in total assets from June 30, 2024 and one year ago was primarily due to an increase in cash and cash equivalents and in loans held-for-portfolio.

Cash and cash equivalents increased $13.8 million, or 10.2%, to $148.9 million at September 30, 2024, compared to $135.1 million at June 30, 2024, and increased $47.0 million, or 46.2%, from $101.9 million at September 30, 2023. The increase from the prior quarter and from one year ago was primarily due to the increase in deposits exceeding the increase in loans held-for-portfolio.

Investment securities increased $28 thousand, or 0.3%, to $10.2 million at September 30, 2024, compared to $10.1 million at June 30, 2024, and increased $17 thousand, or 0.2%, from $10.2 million at September 30, 2023. Held-to-maturity securities totaled $2.1 million at both September 30, 2024 and June 30, 2024, and totaled $2.2 million at September 30, 2023. Available-for-sale securities totaled $8.0 million at September 30, 2024, June 30, 2024 and September 30, 2023.

Loans held-for-portfolio were $901.7 million at September 30, 2024, compared to $889.3 million at June 30, 2024 and $875.4 million at September 30, 2023. The increase from to June 30, 2024, primarily resulted from growth in one-to-four family home loans, commercial and multifamily loans, as well as manufactured home and floating home loans, partially offset by decreases in construction and land loans and home equity loans. The increase in one-to-four family home loans was primarily due to new originations exceeding prepayments during the quarter, while the increase in commercial and multifamily loans primarily resulted from conversion of construction projects to permanent financing. The increase in manufactured home loans and floating home loans relates to continued strong demand for this type of financing in our market. The decrease in construction and land loans was primarily due to project completions and reduced demand caused by higher interest rates, which limited new financing opportunities. The decrease in home equity loans reflected normal payment fluctuations. Compared to September 30, 2024, the overall increase in loans held-for-portfolio was due to sustained strong loan demand and slower prepayment activity, with increases primarily related to commercial and multifamily loans, home equity loans, manufactured home loans and floating home loans.

Nonperforming assets (“NPAs”), which are comprised of nonaccrual loans (including nonperforming modified loans), other real estate owned (“OREO”) and other repossessed assets, decreased $420 thousand, or 4.7%, to $8.6 million at September 30, 2024, from $9.0 million at June 30, 2024 and increased $6.3 million, or 268.2%, from $2.3 million at September 30, 2023. The decrease in NPAs from June 30, 2024 was primarily due to the payoff of three loans totaling $175 thousand and one loan totaling $421 thousand returning to accrual status, partially offset by the addition of eight loans totaling $260 thousand to nonaccrual. The increase in NPAs from one year ago was primarily due to the placement of an additional $7.7 million of loans on nonaccrual status, which included a $3.7 million matured commercial real estate loan where the borrower is in the process of securing financing from another lender, a $2.4 million floating home loan, and a $985 thousand commercial real estate loan, all of which are well secured, and one manufactured home loan of $115 thousand that was repossessed in the first quarter of 2024. These additions were partially offset by the payoff of seven loans totaling $877 thousand, and normal payment amortization.

NPAs to total assets were 0.78%, 0.84% and 0.23% at September 30, 2024, June 30, 2024 and September 30, 2023, respectively. The allowance for credit losses on loans to total loans outstanding was 0.95% at September 30, 2024, compared to 0.96% at both June 30, 2024 and September 30, 2023. Net loan charge-offs for the third quarter of 2024 totaled $14 thousand, compared to $17 thousand for the second quarter of 2023, and $3 thousand for the third quarter of 2023.

The following table summarizes our NPAs at the dates indicated (dollars in thousands):

	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Nonperforming Loans:
One-to-four family	$	745		$	822		$	835		$	1,108		$	1,137
Home equity loans		338			342			83			84			86
Commercial and multifamily		4,719			5,161			4,747			—			306
Construction and land		25			28			29			—			78
Manufactured homes		230			136			166			228			151
Floating homes		2,377			2,417			3,192			—			—
Commercial business		23			—			—			2,135			—
Other consumer		32			3			1			1			4
Total nonperforming loans		8,489			8,909			9,053			3,556			1,762
OREO and Other Repossessed Assets:
Commercial and multifamily		—			—			575			575			575
Manufactured homes		115			115			115			—			—
Total OREO and repossessed assets		115			115			690			575			575
Total NPAs	$	8,604		$	9,024		$	9,743		$	4,131		$	2,337

Percentage of Nonperforming Loans:
One-to-four family		8.7	%		9.1	%		8.5	%		26.9	%		48.7	%
Home equity loans		3.9			3.8			0.9			2.0			3.7
Commercial and multifamily		54.8			57.2			48.7			—			13.1
Construction and land		0.3			0.3			0.3			—			3.3
Manufactured homes		2.7			1.5			1.7			5.5			6.4
Floating homes		27.6			26.8			32.8			—			—
Commercial business		0.3			—			—			51.7			—
Other consumer		0.4			—			—			—			0.2
Total nonperforming loans		98.7			98.7			92.9			86.1			75.4
Percentage of OREO and Other Repossessed Assets:
Commercial and multifamily		—			—			5.9			13.9			24.6
Manufactured homes		1.3			1.3			1.2			—			—
Total OREO and repossessed assets		1.3			1.3			7.1			13.9			24.6
Total NPAs		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

The following table summarizes the allowance for credit losses at the dates and for the periods indicated (dollars in thousands, unaudited):

	At or For the Quarter Ended:
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Allowance for Credit Losses on Loans
Balance at beginning of period	$	8,493		$	8,598		$	8,760		$	8,438		$	8,217
(Release of) Provision for credit losses during the period		106			(88	)		(106	)		337			224
Net charge-offs during the period		(14	)		(17	)		(56	)		(15	)		(3	)
Balance at end of period	$	8,585		$	8,493		$	8,598		$	8,760		$	8,438
Allowance for Credit Losses on Unfunded Loan Commitments
Balance at beginning of period	$	245		$	266		$	193		$	557		$	706
(Release of) Provision for credit		(98	)		(21	)		73			(364	)		(149	)
Balance at end of period		147			245			266			193			557
Allowance for Credit Losses	$	8,732		$	8,738		$	8,864		$	8,953		$	8,995
Allowance for credit losses on loans to total loans		0.95	%		0.96	%		0.96	%		0.98	%		0.96	%
Allowance for credit losses to total loans		0.97	%		0.98	%		0.99	%		1.00	%		1.03	%
Allowance for credit losses on loans to total nonperforming loans		101.13	%		95.33	%		94.97	%		246.34	%		478.89	%
Allowance for credit losses to total nonperforming loans		102.86	%		98.08	%		97.91	%		251.77	%		510.50	%

Deposits increased $23.4 million, or 2.6%, to $930.2 million at September 30, 2024, from $906.8 million at June 30, 2024 and increased $69.3 million, or 8.1%, from $860.9 million at September 30, 2023. The increase in deposits compared to the prior quarter-end was primarily a result of an increase of $17.0 million related to one new depositor relationship, as well as a $5.3 million increase in related party money market deposits. Compared to a year ago, the increase was primarily a result of an increase in certificate accounts and money market accounts, including $50.2 million of related party deposits, which helped fund organic loan growth. These increases were partially offset by decreases in noninterest-bearing and interest-bearing demand accounts and savings accounts, as interest rate sensitive clients shifted funds from lower-cost deposits, such as noninterest-bearing deposits, into higher rate money market and time deposits. Noninterest-bearing deposits increased $4.8 million, or 3.8%, to $129.7 million at September 30, 2024, compared to $124.9 million at June 30, 2024 and decreased $24.2 million, or 15.7%, from $153.9 million at September 30, 2023. Noninterest-bearing deposits represented 14.0%, 13.8% and 17.9% of total deposits at September 30, 2024, June 30, 2024 and September 30, 2023, respectively.

FHLB advances totaled $40.0 million at each of September 30, 2024, June 30, 2024, and September 30, 2023. FHLB advances are primarily used to support organic loan growth and to maintain liquidity ratios in line with our asset/liability objectives. FHLB advances outstanding at September 30, 2024 had maturities ranging from late 2024 through early 2028. Subordinated notes, net totaled $11.7 million at each of September 30, 2024, June 30, 2024 and September 30, 2023.

Stockholders’ equity totaled $102.2 million at September 30, 2024, an increase of $892 thousand, or 0.9%, from $101.3 million at June 30, 2024, and an increase of $2.0 million, or 2.0%, from $100.2 million at September 30, 2023. The increase in stockholders’ equity from June 30, 2024 was primarily the result of $1.2 million of net income earned during the current quarter and a $127 thousand decrease in accumulated other comprehensive loss, net of tax, partially offset by the payment of $487 thousand in cash dividends to the Company’s stockholders.

Sound Financial Bancorp, Inc., a bank holding company, is the parent company of Sound Community Bank, which is headquartered in Seattle, Washington and has full-service branches in Seattle, Tacoma, Mountlake Terrace, Sequim, Port Angeles, Port Ludlow and University Place. Sound Community Bank is a Fannie Mae Approved Lender and Seller/Servicer with one loan production office located in the Madison Park neighborhood of Seattle. For more information, please visit www.soundcb.com.

Forward-Looking Statements Disclaimer

When used in this press release and in documents filed or furnished by Sound Financial Bancorp, Inc. (the “Company”) with the Securities and Exchange Commission (the “SEC”), in the Company’s other press releases or other public or stockholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project,” “intends” or similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, which are based on various underlying assumptions and expectations and are subject to risks, uncertainties and other unknown factors, may include projections of our future financial performance based on our growth strategies and anticipated trends in our business. These statements are only predictions based on our current expectations and projections about future events and may turn out to be wrong because of inaccurate assumptions we might make, because of the factors listed below or because of other factors that we cannot foresee that could cause our actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date made.

Factors which could cause actual results to differ materially, include, but are not limited to: adverse impacts to economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation or deflation, a recession or slowed economic growth, as well as supply chain disruptions; changes in the interest rate environment, including increases and decreases in the Board of Governors of the Federal Reserve System (the Federal Reserve) benchmark rate and the duration at which such interest rate levels are maintained, which could adversely affect our revenues and expenses, the values of our assets and obligations, and the availability and cost of capital and liquidity; the impact of inflation and the current and future monetary policies of the Federal Reserve in response thereto; the effects of any federal government shutdown; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; changes in consumer spending, borrowing and savings habits; fluctuations in interest rates; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; the Company’s ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in the Company’s market area; secondary market conditions for loans; expectations regarding key growth initiatives and strategic priorities; environmental, social and governance goals and targets; results of examinations of the Company or the Bank by their regulators; increased competition; changes in management’s business strategies; legislative changes; changes in the regulatory and tax environments in which the Company operates; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on our third-party vendors; the effects of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; and other factors described in the Company’s latest Annual Report on Form 10-K and subsequent Quarterly Reports on Form 10-Q and other documents filed with or furnished to the SEC, which are available at www.soundcb.com and on the SEC’s website at www.sec.gov. The risks inherent in these factors could cause the Company’s actual results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Company and could negatively affect the Company’s operating and stock performance.

The Company does not undertake—and specifically disclaims any obligation—to revise any forward-looking statement to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statement.

CONSOLIDATED INCOME STATEMENTS
(Dollars in thousands, unaudited)

	For the Quarter Ended
	September 30, 2024		June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Interest income	$	14,838	$	14,039		$	13,760		$	13,337		$	12,686
Interest expense		6,965		6,591			6,300			5,770			4,518
Net interest income		7,873		7,448			7,460			7,567			8,168
Provision for (release of) credit losses		8		(109	)		(33	)		(27	)		75
Net interest income after provision for (release of) credit losses		7,865		7,557			7,493			7,594			8,093
Noninterest income:
Service charges and fee income		628		761			612			576			700
Earnings on bank-owned life insurance		186		134			177			222			88
Mortgage servicing income		280		279			282			288			295
Fair value adjustment on mortgage servicing rights		101		(116	)		(65	)		(96	)		(78	)
Net gain on sale of loans		40		74			90			76			76
Other income		—		30			—			—			—
Total noninterest income		1,235		1,162			1,096			1,066			1,081
Noninterest expense:
Salaries and benefits		4,469		4,658			4,543			3,802			4,148
Operations		1,540		1,569			1,457			1,537			1,625
Regulatory assessments		189		220			189			198			183
Occupancy		414		397			444			458			458
Data processing		1,067		910			1,017			1,311			1,296
Net (gain) loss on OREO and repossessed assets		—		(17	)		6			—			—
Total noninterest expense		7,679		7,737			7,656			7,306			7,710
Income before provision for income taxes		1,421		982			933			1,354			1,464
Provision for income taxes		267		187			163			143			295
Net income	$	1,154	$	795		$	770		$	1,211		$	1,169

CONSOLIDATED INCOME STATEMENTS
(Dollars in thousands, unaudited)

	For the Nine Months Ended September 30
		2024			2023
Interest income	$	42,638		$	37,273
Interest expense		19,856			10,990
Net interest income		22,782			26,283
(Release of) provision for credit losses		(134	)		(246	)
Net interest income after (release of) provision for credit losses		22,916			26,529
Noninterest income:
Service charges and fee income		2,001			1,951
Earnings on bank-owned life insurance		498			957
Mortgage servicing income		841			891
Fair value adjustment on mortgage servicing rights		(81	)		(123	)
Net gain on sale of loans		205			264
Other income		30			—
Total noninterest income		3,494			3,940
Noninterest expense:
Salaries and benefits		13,670			13,333
Operations		4,566			4,557
Regulatory assessments		598			490
Occupancy		1,255			1,352
Data processing		2,995			3,077
Net (gain) loss on OREO and repossessed assets		(10	)		13
Total noninterest expense		23,074			22,822
Income before provision for income taxes		3,336			7,647
Provision for income taxes		617			1,419
Net income	$	2,719		$	6,228

CONSOLIDATED BALANCE SHEETS
(Dollars in thousands, unaudited)

	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
ASSETS
Cash and cash equivalents	$	148,930		$	135,111		$	137,977		$	49,690		$	101,890
Available-for-sale securities, at fair value		8,032			7,996			8,115			8,287			7,980
Held-to-maturity securities, at amortized cost		2,139			2,147			2,157			2,166			2,174
Loans held-for-sale		65			257			351			603			1,153
Loans held-for-portfolio		901,733			889,274			897,877			894,478			875,434
Allowance for credit losses – loans		(8,585	)		(8,493	)		(8,598	)		(8,760	)		(8,438	)
Total loans held-for-portfolio, net		893,148			880,781			889,279			885,718			866,996
Accrued interest receivable		3,705			3,413			3,617			3,452			3,415
Bank-owned life insurance, net		22,363			22,172			22,037			21,860			21,638
Other real estate owned (“OREO”) and other repossessed assets, net		115			115			690			575			575
Mortgage servicing rights, at fair value		4,665			4,540			4,612			4,632			4,681
Federal Home Loan Bank (“FHLB”) stock, at cost		2,405			2,406			2,406			2,396			2,783
Premises and equipment, net		4,807			4,906			6,685			5,240			5,204
Right-of-use assets		3,779			4,020			4,259			4,496			4,732
Other assets		6,777			6,995			4,500			6,106			6,955
TOTAL ASSETS	$	1,100,930		$	1,074,859		$	1,086,685		$	995,221		$	1,030,176
LIABILITIES
Interest-bearing deposits	$	800,480		$	781,854		$	788,217		$	699,813		$	706,954
Noninterest-bearing deposits		129,717			124,915			128,666			126,726			153,921
Total deposits		930,197			906,769			916,883			826,539			860,875
Borrowings		40,000			40,000			40,000			40,000			40,000
Accrued interest payable		908			760			719			817			588
Lease liabilities		4,079			4,328			4,576			4,821			5,065
Other liabilities		9,711			9,105			9,578			9,563			9,794
Advance payments from borrowers for taxes and insurance		2,047			812			2,209			1,110			1,909
Subordinated notes, net		11,749			11,738			11,728			11,717			11,707
TOTAL LIABILITIES		998,691			973,512			985,693			894,567			929,938
STOCKHOLDERS’ EQUITY:
Common stock		25			25			25			25			25
Additional paid-in capital		28,296			28,198			28,110			27,990			28,112
Retained earnings		74,840			74,173			73,907			73,627			73,438
Accumulated other comprehensive loss, net of tax		(922	)		(1,049	)		(1,050	)		(988	)		(1,337	)
TOTAL STOCKHOLDERS’ EQUITY		102,239			101,347			100,992			100,654			100,238
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	1,100,930		$	1,074,859		$	1,086,685		$	995,221		$	1,030,176

KEY FINANCIAL RATIOS
(unaudited)

	For the Quarter Ended
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Annualized return on average assets		0.42	%		0.30	%		0.29	%		0.46	%		0.46	%
Annualized return on average equity		4.50	%		3.17	%		3.06	%		4.78	%		4.60	%
Annualized net interest margin⁽¹⁾		2.98	%		2.92	%		2.95	%		3.04	%		3.38	%
Annualized efficiency ratio⁽²⁾		84.31	%		89.86	%		89.48	%		84.63	%		83.36	%
_{(1) Net interest income divided by average interest earning assets.}
_{(2) Noninterest expense divided by total revenue (net interest income and noninterest income).}

PER COMMON SHARE DATA
(unaudited)

	At or For the Quarter Ended
	September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023
Basic earnings per share	$	0.45	$	0.31	$	0.30	$	0.47	$	0.45
Diluted earnings per share	$	0.45	$	0.31	$	0.30	$	0.47	$	0.45
Weighted-average basic shares outstanding		2,544,233		2,540,538		2,539,213		2,542,175		2,553,773
Weighted-average diluted shares outstanding		2,569,368		2,559,015		2,556,958		2,560,656		2,571,808
Common shares outstanding at period-end		2,564,095		2,557,284		2,558,546		2,549,427		2,568,054
Book value per share	$	39.87	$	39.63	$	39.47	$	39.48	$	39.03

AVERAGE BALANCE, AVERAGE YIELD EARNED, AND AVERAGE RATE PAID
(Dollars in thousands, unaudited)

The following tables present, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resultant yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates. Income and yields on tax-exempt obligations have not been computed on a tax equivalent basis. All average balances are daily average balances. Nonaccrual loans have been included in the table as loans carrying a zero yield for the period they have been on nonaccrual (dollars in thousands).

	Three Months Ended
	September 30, 2024							June 30, 2024							September 30, 2023
	Average Outstanding Balance			Interest Earned/ Paid		Yield/Rate		Average Outstanding Balance			Interest Earned/ Paid		Yield/Rate		Average Outstanding Balance			Interest Earned/ Paid		Yield/Rate
Interest-Earning Assets:
Loans receivable	$	898,570		$	12,876	5.70	%	$	891,863		$	12,320	5.56	%	$	862,397		$	11,505	5.29	%
Interest-earning cash		138,240			1,830	5.27	%		120,804			1,586	5.28	%		81,616			1,042	5.07	%
Investments		13,806			132	3.80	%		13,935			133	3.84	%		14,793			139	3.73	%
Total interest-earning assets	$	1,050,616			14,838	5.62	%		1,026,602		$	14,039	5.50	%	$	958,806			12,686	5.25	%
Interest-Bearing Liabilities:
Savings and money market accounts	$	340,281			2,688	3.14	%	$	301,454			2,115	2.82	%	$	192,214			720	1.49	%
Demand and NOW accounts		148,252			151	0.41	%		153,739			148	0.39	%		194,561			173	0.35	%
Certificate accounts		303,632			3,524	4.62	%		317,496			3,731	4.73	%		293,820			2,984	4.03	%
Subordinated notes		11,745			168	5.69	%		11,735			168	5.76	%		11,703			168	5.70	%
Borrowings		40,000			434	4.32	%		40,000			429	4.31	%		42,815			473	4.38	%
Total interest-bearing liabilities	$	843,910			6,965	3.28	%	$	824,424			6,591	3.22	%	$	735,113			4,518	2.44	%
Net interest income/spread				$	7,873	2.34	%				$	7,448	2.28	%				$	8,168	2.81	%
Net interest margin						2.98	%						2.92	%						3.38	%

Ratio of interest-earning assets to interest-bearing liabilities		124	%						125	%						130	%
Noninterest-bearing deposits	$	132,762						$	128,878						$	151,298
Total deposits		924,927		$	6,363	2.74	%		901,567		$	5,994	2.67	%		831,893		$	3,877	1.85	%
Total funding ⁽¹⁾		976,672			6,965	2.84	%		953,302			6,591	2.78	%		886,411			4,518	2.02	%
_{(1) Total funding is the sum of average interest-bearing liabilities and average noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.}

	Nine Months Ended
	September 30, 2024							September 30, 2023
	Average Outstanding Balance			Interest Earned/ Paid		Yield/Rate		Average Outstanding Balance			Interest Earned/ Paid		Yield/Rate
Interest-Earning Assets:
Loans receivable	$	895,300		$	37,429	5.58	%	$	865,357		$	34,437	5.32	%
Interest-earning cash		122,194			4,832	5.28	%		70,094			2,447	4.67	%
Investments		12,607			377	3.99	%		13,962			389	3.73	%
Total interest-earning assets	$	1,030,101			42,638	5.53	%	$	949,413			37,273	5.25	%
Interest-Bearing Liabilities:
Savings and money market accounts	$	308,845			6,669	2.88	%	$	173,319			1,197	0.92	%
Demand and NOW accounts		153,897			440	0.38	%		216,753			587	0.36	%
Certificate accounts		312,176			10,950	4.69	%		273,564			7,182	3.51	%
Subordinated notes		11,735			504	5.74	%		11,693			504	5.76	%
Borrowings		40,000			1,293	4.32	%		45,280			1,520	4.49	%
Total interest-bearing liabilities	$	826,653			19,856	3.21	%	$	720,609			10,990	2.04	%
Net interest income/spread				$	22,782	2.32	%				$	26,283	3.21	%
Net interest margin						2.95	%						3.70	%

Ratio of interest-earning assets to interest-bearing liabilities		125	%						132	%
Noninterest-bearing deposits	$	131,365						$	161,051
Total deposits		906,283		$	18,059	2.66	%		824,687		$	8,966	1.45	%
Total funding ⁽¹⁾		958,018			19,856	2.77	%		881,660			10,990	1.67	%
_{(1) Total funding is the sum of average interest-bearing liabilities and average noninterest-bearing deposits. The cost of total funding is calculated as annualized total interest expense divided by average total funding.}

LOANS
(Dollars in thousands, unaudited)

	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Real estate loans:
One-to-four family	$	271,702		$	268,488		$	279,213		$	279,448		$	280,556
Home equity		25,199			26,185			24,380			23,073			21,313
Commercial and multifamily		358,587			342,632			324,483			315,280			304,252
Construction and land		85,724			96,962			111,726			126,758			118,619
Total real estate loans		741,212			734,267			739,802			744,559			724,740
Consumer Loans:
Manufactured homes		40,371			38,953			37,583			36,193			34,652
Floating homes		86,155			81,622			84,237			75,108			73,716
Other consumer		18,266			18,422			18,847			19,612			18,710
Total consumer loans		144,792			138,997			140,667			130,913			127,078
Commercial business loans		17,481			17,860			19,075			20,688			25,033
Total loans		903,485			891,124			899,544			896,160			876,851
Less:
Premiums		736			754			808			829			850
Deferred fees, net		(2,488	)		(2,604	)		(2,475	)		(2,511	)		(2,267	)
Allowance for credit losses – loans		(8,585	)		(8,493	)		(8,598	)		(8,760	)		(8,438	)
Total loans held-for-portfolio, net	$	893,148		$	880,781		$	889,279		$	885,718		$	866,996

DEPOSITS
(Dollars in thousands, unaudited)

	September 30, 2024		June 30, 2024		March 31, 2024		December 31, 2023		September 30, 2023
Noninterest-bearing demand	$	129,717	$	124,915	$	128,666	$	126,726	$	153,921
Interest-bearing demand		148,740		152,829		159,178		168,346		185,441
Savings		61,455		63,368		65,723		69,461		76,729
Money market⁽¹⁾		285,655		253,873		241,976		154,044		143,558
Certificates		304,630		311,784		321,340		307,962		301,226
Total deposits	$	930,197	$	906,769	$	916,883	$	826,539	$	860,875
_{(1) Includes $5.0 million of brokered deposits at December 31, 2023.}

CREDIT QUALITY DATA
(Dollars in thousands, unaudited)

	At or For the Quarter Ended
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023
Total nonperforming loans	$	8,489		$	8,909		$	9,053		$	3,556		$	1,762
OREO and other repossessed assets		115			115			690			575			575
Total nonperforming assets	$	8,604		$	9,024		$	9,743		$	4,131		$	2,337
Net charge-offs during the quarter	$	(14	)	$	(17	)	$	(56	)	$	(15	)	$	(3	)
Provision for (release of) credit losses during the quarter		8			(109	)		(33	)		(27	)		75
Allowance for credit losses – loans		8,585			8,493			8,598			8,760			8,438
Allowance for credit losses – loans to total loans		0.95	%		0.96	%		0.96	%		0.98	%		0.96	%
Allowance for credit losses – loans to total nonperforming loans		101.13	%		95.33	%		94.97	%		246.34	%		478.89	%
Nonperforming loans to total loans		0.94	%		1.00	%		1.01	%		0.40	%		0.20	%
Nonperforming assets to total assets		0.78	%		0.84	%		0.90	%		0.42	%		0.23	%

OTHER STATISTICS
(Dollars in thousands, unaudited)

	At or For the Quarter Ended
	September 30, 2024			June 30, 2024			March 31, 2024			December 31, 2023			September 30, 2023

Total loans to total deposits		97.13	%		98.27	%		98.11	%		108.42	%		101.86	%
Noninterest-bearing deposits to total deposits		13.95	%		13.78	%		14.03	%		15.33	%		17.88	%

Average total assets for the quarter	$	1,095,404		$	1,070,579		$	1,062,036		$	1,033,985		$	1,005,223
Average total equity for the quarter	$	102,059		$	100,961		$	101,292		$	100,612		$	100,927

Contact

Financial:
Wes Ochs
Executive Vice President/CFO
(206) 436-8587

Media:
Laurie Stewart
President/CEO
(206) 436-1495

The MIL Network –

January 25, 2025

MIL-OSI: Athabasca Oil Announces 2024 Third Quarter Results Highlighted by Strong Free Cash Flow and Continued Execution on Share Buybacks

Source: GlobeNewswire (MIL-OSI)

CALGARY, Alberta, Oct. 30, 2024 (GLOBE NEWSWIRE) — Athabasca Oil Corporation (TSX: ATH) (“Athabasca” or the “Company”) is pleased to report its third quarter results highlighting strong free cash flow underpinned by operational momentum at all assets and continued execution on its return of capital commitment through share buybacks.

Corporate Consolidated Third Quarter Highlights

Production: Average production of 38,909 boe/d (98% Liquids), representing 8% growth year over year (16% on a per share basis). Annual production remains on track with previously increased 2024 guidance of 36,000 – 37,000 boe/d.
Cash Flow Growth: Adjusted Funds Flow of $164 million (cash flow from operating activities of $187 million) or $0.30 per share, representing 25% growth on a per share basis year over year. In 2024, the Company forecasts Adjusted Funds Flow of ~$555 million¹, supported by increased operating scale and constructive Canadian heavy oil pricing. Athabasca forecasts ~100% growth in 2024 forecasted funds flow per share relative to 2022 when growth to 28,000 bbl/d at Leismer was sanctioned.
Differentiated Balance Sheet: Proactively refinanced the Company’s senior secured second lien Notes with $200 million of senior unsecured notes at a 6.75% coupon with a 2029 maturity. Consolidated Net Cash position of $135 million with Liquidity of $456 million, including $335 million in cash.
Resilient Producer: Competitively positioned with Thermal Oil sustaining capital to hold production flat funded within cash flow at ~US$50/bbl WTI¹ and growth initiatives fully funded within cash flow at ~US$60/bbl WTI¹.
Robust Free Cash Flow: Capital flexibility and balance sheet strength supports durable asset growth and return of capital initiatives for shareholders, resulting in continued top tier cash flow per share growth into the future. Athabasca expects to generate in excess of $1 billion of Free Cash Flow at US$70/bbl WTI¹ after fully funding its growth program during the timeframe of 2024-27. The Company intends to release its 2025 capital budget in December.

Return of Capital

Cumulative Return of Capital of ~$800 million. Commencing in the Fall of 2021 a deliberate strategy prioritized $385 million of debt reduction. Share buybacks commenced in 2023 and have totaled $415 million to date.
2024 Return of Capital Commitment: Athabasca (Thermal Oil) is allocating 100% of Free Cash Flow to share buybacks in 2024. Year to date the Company has completed $257 million in share buybacks and forecasts 2024 Free Cash Flow of ~$315 million¹.
Focus on Per Share Metrics: A steadfast commitment to return of capital has driven an ~104 million share reduction (~16%) in the Company’s fully diluted share count since March 31, 2023.

Athabasca (Thermal Oil) Third Quarter Highlights

Production: ~34,900 bbl/d supported by growth at Leismer (record quarter at ~27,500 bbl/d) and stability at Hangingstone (~7,400 bbl/d).
Cash Flow: Adjusted Funds Flow of $150 million with an Operating Netback of $49.68/bbl.
Capital Program: $44 million of capital focused on sustaining operations at Leismer and Hangingstone. 2024 capital program forecast of ~$195 million including the commencement of progressive growth to 40,000 bbl/d at Leismer. The Company is currently drilling four new well pairs and six redrill opportunities at Leismer with production expected in early 2025. Two new well pairs at Hangingstone (1,400 meter laterals) will begin steaming in late November with production expected in early 2025.
Free Cash Flow: $106 million of Free Cash Flow supporting return of capital commitments.

Duvernay Energy Corporation (“DEC”) Third Quarter Highlights

Production: ~4,100 boe/d (77% Liquids) supported by production from two new pads placed on production in the spring. Results continue to support management’s type curve expectations with restricted IP180s/well averaging ~840 boe/d (82% Liquids) on the 2-well 100% working interest (“WI”) pad and IP120s/well averaging ~835 boe/d (85% Liquids) on the 3-well 30% WI pad.
Cash Flow: Adjusted Funds Flow of $14 million with an Operating Netback of $44.20/boe.
Capital Program: $6 million focused on commencing a 3-well 100% WI pad at 04-18-64-16W5 which spud in early September. The first two wells have been cased with lateral lengths averaging ~4,000 meters per well. The pad is expected to be completed in 2025. The 2024 capital program forecast is ~$75 million, fully funded within cash flow and cash on hand in DEC.

Corporate Consolidated Strategy

Value Creation: The Company’s Thermal Oil division provides a differentiated liquids weighted growth platform supported by financial resiliency to execute on return of capital initiatives. Athabasca’s subsidiary company, Duvernay Energy Corporation, is designed to enhance value for Athabasca’s shareholders by providing a clear path for self-funded production and cash flow growth in the Kaybob Duvernay resource play. Athabasca (Thermal Oil) and Duvernay Energy have independent strategies and capital allocation frameworks.
Consolidated Free Cash Flow Growth: Athabasca’s capital allocation framework is designed to unlock shareholder value by prioritizing multi‐year cash flow per share growth. In 2024, Athabasca forecasts Corporate Consolidated Adjusted Funds Flow of ~$555 million or ~$1 per share, representing ~100% per share growth over 2022 when the Company sanctioned growth to 28,000 bbl/d at Leismer. The Company’s outlook targets ~20% net Adjusted Funds Flow per share compound annual growth rate during the three-year time to 2027².

Athabasca (Thermal Oil) Strategy

Large Resource Base: Athabasca’s top-tier assets underpin a strong Free Cash Flow outlook with low sustaining capital requirements. The long life, low decline asset base includes ~1.2 billion barrels of Proved plus Probable reserves and ~1 billion barrels of Contingent Resource.
Strong Financial Position: Prudent balance sheet management is a core tenet of Athabasca’s strategy. During the quarter, Athabasca issued $200 million 6.75% senior unsecured notes due in 2029 and redeemed US$157 million 9.75% senior secured second lien notes due in 2026. The Company proactively refinanced its debt on attractive terms and maintains strategic flexibility with a Net Cash position.
Capital Efficient Leismer Expansions: As previously announced, the Company has sanctioned expansion plans at Leismer for growth to 40,000 bbl/d. This will be completed utilizing a progressive build strategy that adds incremental production in the coming years with the full capacity to be achieved in 2028. The capital for this project is estimated at $300 million for a capital efficiency of ~$25,000/bbl/d. The Company can maintain 40,000 bbl/d for approximately fifty years (Proved plus Probable Reserves).
Sustaining Hangingstone: Steaming on two new sustaining well pairs will occur later this year with first production expected in early 2025. These wells will support base production with the objective of ensuring Hangingstone continues to deliver meaningful cash flow contributions to the Company and maintaining competitive netbacks ($48.39/bbl Q3 2024 Operating Netback).
Corner – Future Optionality: The Company’s Corner asset is a large de-risked oil sands asset adjacent to Leismer with 351 million barrels of Proved plus Probable reserves and 520 million barrels Contingent Resource (Best Estimate Unrisked). There are over 300 delineation wells and ~80% seismic coverage, with reservoir qualities similar or better than Leismer. The asset has a 40,000 bbl/d regulatory approval for development with the existing pipeline corridor passing through the Corner lease. The Company has updated its development plans and is finalizing facility cost estimates. Athabasca intends to explore external funding options and does not plan to fund an expansion utilizing existing cash flow or balance sheet resources.
Exposure to Improving Heavy Oil Pricing: With the start-up of the Trans Mountain pipeline expansion (590,000 bbl/d) in early May, spare pipeline capacity is driving tighter and less volatile WCS heavy differentials. Regional liquids pricing benchmarks have also been supported by a depreciating Canadian currency relative to the United States. Every US$5/bbl WCS change impacts Athabasca (Thermal Oil) Adjusted Funds Flow by ~$85 million annually.
Significant Multi-Year Free Cash Flow: Inclusive of the progressive growth at Leismer, Athabasca (Thermal Oil) expects to generate in excess of $1 billion of Free Cash Flow at US$70 WTI¹ during the timeframe of 2024-27. Free Cash Flow will continue to support the Company’s return of capital initiatives.
Thermal Oil Royalty Advantage: Athabasca has significant unrecovered capital balances on its Thermal Oil Assets that ensure a low Crown royalty framework (~6%¹). Leismer is forecasted to remain pre-payout until late 2027¹ and Hangingstone is forecasted to remain pre-payout beyond 2030¹.
Tax Free Horizon Advantage: Athabasca (Thermal Oil) has $2.4 billion of valuable tax pools and does not forecast paying cash taxes this decade.

Duvernay Energy Strategy

Accelerating Value: DEC is an operated, private subsidiary of Athabasca (owned 70% by Athabasca and 30% by Cenovus Energy). DEC accelerates value realization for Athabasca’s shareholders by providing a clear path for self-funded production and cash flow growth without compromising Athabasca’s capacity to fund its Thermal Oil assets or its return of capital strategy.
Kaybob Duvernay Focused: Exposure to ~200,000 gross acres in the liquids rich and oil windows with ~500 gross future well locations, including ~46,000 gross acres with 100% working interest.
Self-Funded Growth: Current activity is being funded within cash flow and cash on hand. The 2024 program includes drilling and completions of a two-well 100% WI pad and a three-well 30% WI pad along with the spudding an additional multi-well pad in September 2024. The Company has self-funded growth potential to in excess of ~20,000 boe/d (75% Liquids) by the late 2020s¹.

Footnote: Refer to the “Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measures (e.g. Adjusted Funds Flow, Free Cash Flow, Sustaining Capital, Net Cash, Liquidity) and production disclosure.

¹Pricing Assumptions: realized prices January – October and flat pricing of US$70 WTI, US$12.50 WCS heavy differential, C$2 AECO, and 0.73 C$/US$ FX for the balance of 2024. 2025-27 US$70 WTI, US$12.50 WCS heavy differential, C$3.00 AECO, and 0.75 C$/US$ FX.
²The Company’s illustrative multi-year outlook assumes a 10% annual share buyback program at an implied share price of 4.5x EV/Debt Adjusted Cash flow in 2025 and beyond.

Financial and Operational Highlights

	Three months ended September 30,						Nine months ended September 30,
($ Thousands, unless otherwise noted)	2024			2023			2024			2023
CORPORATE CONSOLIDATED⁽¹⁾
Petroleum and natural gas production (boe/d)⁽²⁾		38,909			36,176			36,675			34,950
Petroleum, natural gas and midstream sales	$	376,781		$	379,241		$	1,089,635		$	952,596
Operating Income⁽²⁾	$	180,184		$	168,410		$	465,070		$	320,063
Operating Income Net of Realized Hedging⁽²⁾⁽³⁾	$	175,755		$	164,643		$	460,511		$	289,645
Operating Netback ($/boe)⁽²⁾	$	49.12		$	50.84		$	46.36		$	33.27
Operating Netback Net of Realized Hedging ($/boe)⁽²⁾⁽³⁾	$	47.91		$	49.70		$	45.91		$	30.11
Capital expenditures	$	50,634		$	33,286		$	175,098		$	101,080
Cash flow from operating activities	$	187,143		$	134,879		$	398,864		$	202,330
per share – basic	$	0.35		$	0.23		$	0.72		$	0.34
Adjusted Funds Flow⁽²⁾	$	163,680		$	141,138		$	417,198		$	213,406
per share – basic	$	0.30		$	0.24		$	0.75		$	0.36
ATHABASCA (THERMAL OIL)
Bitumen production (bbl/d)⁽²⁾		34,853			31,691			33,390			29,972
Petroleum, natural gas and midstream sales	$	372,634		$	360,761		$	1,072,954		$	895,167
Operating Income⁽²⁾	$	163,694		$	155,415		$	425,837		$	278,533
Operating Netback ($/bbl)⁽²⁾	$	49.68		$	53.59		$	46.64		$	33.72
Capital expenditures	$	44,431		$	34,439		$	120,634		$	89,604
Adjusted Funds Flow⁽²⁾	$	150,088					$	383,214
Free Cash Flow⁽²⁾	$	105,657					$	262,580
DUVERNAY ENERGY⁽¹⁾
Petroleum and natural gas production (boe/d)⁽²⁾		4,056			4,485			3,285			4,978
Percentage Liquids (%)⁽²⁾	77		%	55		%	77		%	56		%
Petroleum, natural gas and midstream sales	$	24,728		$	24,508		$	63,015		$	78,403
Operating Income⁽²⁾	$	16,490		$	12,995		$	39,233		$	41,530
Operating Netback ($/boe)⁽²⁾	$	44.20		$	31.50		$	43.59		$	30.56
Capital expenditures	$	6,203		$	(1,153	)	$	54,464		$	11,476
Adjusted Funds Flow⁽²⁾	$	13,592					$	33,984
Free Cash Flow⁽²⁾	$	7,389					$	(20,480	)
NET INCOME AND COMPREHENSIVE INCOME
Net income and comprehensive income⁽⁴⁾	$	68,722		$	(79,212	)	$	203,407		$	(78,726	)
per share – basic⁽⁴⁾	$	0.13		$	(0.14	)	$	0.37		$	(0.13	)
per share – diluted⁽⁴⁾	$	0.12		$	(0.14	)	$	0.36		$	(0.13	)
COMMON SHARES OUTSTANDING
Weighted average shares outstanding – basic		540,884,257			581,917,255			555,035,218			586,906,810
Weighted average shares outstanding – diluted		550,712,443			581,917,255			559,203,568			586,906,810

	September 30		December 31
As at ($ Thousands)	2024		2023
LIQUIDITY AND BALANCE SHEET
Cash and cash equivalents	$	334,851	$	343,309
Available credit facilities⁽⁵⁾	$	121,316	$	85,488
Face value of term debt⁽⁶⁾	$	200,000	$	207,648

(1) Corporate Consolidated and Duvernay Energy reflect gross production and financial metrics before taking into consideration Athabasca’s 70% equity interest in Duvernay Energy.
(2) Refer to the “Reader Advisory” section within this News Release for additional information on Non-GAAP Financial Measures and production disclosure.
(3) Includes realized commodity risk management loss of $4.4 million and $4.6 million for the three and nine months ended September 30, 2024 (three and nine months ended September 30, 2023 – loss of $3.8 million and $30.4 million).
(4) Net income (loss) and comprehensive income (loss) per share amounts are based on net income (loss) and comprehensive income (loss) attributable to shareholders of the Parent Company. In the calculation of diluted net income (loss) per share for the three months ended September 30, 2024 net income (loss) was reduced by $2.6 million to account for the impact to net income (loss) had the outstanding warrants been converted to equity.
(5) Includes available credit under Athabasca’s and Duvernay Energy’s Credit Facilities and Athabasca’s Unsecured Letter of Credit Facility.
(6) The face value of the term debt at December 31, 2023 was US$157.0 million translated into Canadian dollars at the December 31, 2023 exchange rate of US$1.00 = C$1.3226.

Operations Update

Athabasca (Thermal Oil)

Production for the third quarter of 2024 averaged 34,853 bbl/d. The Thermal Oil division generated Operating Income of $164 million (Operating Netbacks – $50.05/bbl at the Leismer and $48.39/bbl at Hangingstone) during the period with capital expenditures of $44 million, primarily related to drilling and completions, and progressing future growth initiatives at Leismer.

Leismer

Leismer produced a record 27,485 bbl/d during the quarter following the completion of the facility expansion. The Company is continuing with progressive growth to increase Leismer production to 40,000 bbl/d (regulatory approved capacity) over the next three years. These capital projects are flexible and highly economic (~$25,000/bbl/d capital efficiency) and will maximize value creation when executed alongside the Company’s return of capital initiatives. Activity over the next three years will include drilling ~20 well pairs (sustaining and growth wells), expanding steam capacity to ~130,000 bbl/d and adding oil processing capacity at the central processing facility. The project will benefit from installing opportunistically pre-purchased steam generators which reduce the timelines and costs for the project.

Activity in H2 2024 includes drilling four sustaining well pairs at Pad L10 and six extended redrills on Pad L1, with production expected in early 2025.

Hangingstone

Production during the quarter averaged 7,368 bbl/d. Non-condensable gas co-injection continues to assist in pressure support, reduced energy usage and an improved SOR averaging ~3.4x year to date. During the quarter the Company rig released two ~1,400 meter well pairs with first steam planned for later this year and production in early 2025. Well design with extended reach laterals is expected to drive project capital efficiencies of ~$15,000/bbl/d and will leverage off available plant and infrastructure capacity. These sustaining well pairs will support base production with the objective of ensuring Hangingstone continues to deliver meaningful cash flow contributions to the Company and maintaining competitive netbacks.

Duvernay Energy

Production for the third quarter of 2024 averaged 4,056 boe/d (77% Liquids). Duvernay Energy generated Operating Income of $16 million (Operating Netback – $44.20/boe) during the period.

Duvernay Energy brought its two-well 100% working interest pad at 03-18-64-17W5 on production in late April. The pad generated an average restricted 180-day rate of ~840 boe/d per well (82% liquids). A three well pad (30% working interest) at 02-03-65-20W5 was brought on production in late May, with an approximate 120-day rate of ~835 boe/d per well (85% liquids). Both pads are performing in-line with management’s expectations and are exhibiting strong extended results with high liquids content. The Company spud a three-well 100% working interest pad at 4-18-64-16W5 in September. Two wells have been cased on this pad with average laterals of ~4,000 meters per well. The operated pad of wells is expected to be completed in 2025.

About Athabasca Oil Corporation

Athabasca Oil Corporation is a Canadian energy company with a focused strategy on the development of thermal and light oil assets. Situated in Alberta’s Western Canadian Sedimentary Basin, the Company has amassed a significant land base of extensive, high quality resources. Athabasca’s light oil assets are held in a private subsidiary (Duvernay Energy Corporation) in which Athabasca owns a 70% equity interest. Athabasca’s common shares trade on the TSX under the symbol “ATH”. For more information, visit www.atha.com.

For more information, please contact:

Reader Advisory:

This News Release contains forward-looking information that involves various risks, uncertainties and other factors. All information other than statements of historical fact is forward-looking information. The use of any of the words “anticipate”, “plan”, “project”, “continue”, “maintain”, “may”, “estimate”, “expect”, “will”, “target”, “forecast”, “could”, “intend”, “potential”, “guidance”, “outlook” and similar expressions suggesting future outcome are intended to identify forward-looking information. The forward-looking information is not historical fact, but rather is based on the Company’s current plans, objectives, goals, strategies, estimates, assumptions and projections about the Company’s industry, business and future operating and financial results. This information involves 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 information. No assurance can be given that these expectations will prove to be correct and such forward-looking information included in this News Release should not be unduly relied upon. This information speaks only as of the date of this News Release. In particular, this News Release contains forward-looking information pertaining to, but not limited to, the following: our strategic plans; the allocation of future capital; timing and quantum for shareholder returns including share buybacks; the terms of our NCIB program; our drilling plans and capital efficiencies; production growth to expected production rates and estimated sustaining capital amounts; timing of Leismer’s and Hangingstone’s pre-payout royalty status; applicability of tax pools and the timing of tax payments; expected operating results at Hangingstone; Adjusted Funds Flow and Free Cash Flow in 2024 and 2025 to 2027; type well economic metrics; number of drilling locations; forecasted daily production and the composition of production; our outlook in respect of the Company’s business environment, including in respect of the Trans Mountain pipeline expansion and heavy oil pricing; and other matters.

In addition, information and statements in this News Release relating to “Reserves” and “Resources” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions, that the reserves and resources described exist in the quantities predicted or estimated, and that the reserves and resources described can be profitably produced in the future. With respect to forward-looking information contained in this News Release, assumptions have been made regarding, among other things: commodity prices; the regulatory framework governing royalties, taxes and environmental matters in the jurisdictions in which the Company conducts and will conduct business and the effects that such regulatory framework will have on the Company, including on the Company’s financial condition and results of operations; the Company’s financial and operational flexibility; the Company’s financial sustainability; Athabasca’s cash flow break-even commodity price; the Company’s ability to obtain qualified staff and equipment in a timely and cost-efficient manner; the applicability of technologies for the recovery and production of the Company’s reserves and resources; future capital expenditures to be made by the Company; future sources of funding for the Company’s capital programs; the Company’s future debt levels; future production levels; the Company’s ability to obtain financing and/or enter into joint venture arrangements, on acceptable terms; operating costs; compliance of counterparties with the terms of contractual arrangements; impact of increasing competition globally; collection risk of outstanding accounts receivable from third parties; geological and engineering estimates in respect of the Company’s reserves and resources; recoverability of reserves and resources; the geography of the areas in which the Company is conducting exploration and development activities and the quality of its assets. Certain other assumptions related to the Company’s Reserves and Resources are contained in the report of McDaniel & Associates Consultants Ltd. (“McDaniel”) evaluating Athabasca’s Proved Reserves, Probable Reserves and Contingent Resources as at December 31, 2023 (which is respectively referred to herein as the “McDaniel Report”).

Actual results could differ materially from those anticipated in this forward-looking information as a result of the risk factors set forth in the Company’s Annual Information Form (“AIF”) dated February 29, 2024 available on SEDAR at www.sedarplus.ca, including, but not limited to: weakness in the oil and gas industry; exploration, development and production risks; prices, markets and marketing; market conditions; climate change and carbon pricing risk; statutes and regulations regarding the environment including deceptive marketing provisions; regulatory environment and changes in applicable law; gathering and processing facilities, pipeline systems and rail; reputation and public perception of the oil and gas sector; environment, social and governance goals; political uncertainty; state of capital markets; ability to finance capital requirements; access to capital and insurance; abandonment and reclamation costs; changing demand for oil and natural gas products; anticipated benefits of acquisitions and dispositions; royalty regimes; foreign exchange rates and interest rates; reserves; hedging; operational dependence; operating costs; project risks; supply chain disruption; financial assurances; diluent supply; third party credit risk; indigenous claims; reliance on key personnel and operators; income tax; cybersecurity; advanced technologies; hydraulic fracturing; liability management; seasonality and weather conditions; unexpected events; internal controls; limitations and insurance; litigation; natural gas overlying bitumen resources; competition; chain of title and expiration of licenses and leases; breaches of confidentiality; new industry related activities or new geographical areas; water use restrictions and/or limited access to water; relationship with Duvernay Energy Corporation; management estimates and assumptions; third-party claims; conflicts of interest; inflation and cost management; credit ratings; growth management; impact of pandemics; ability of investors resident in the United States to enforce civil remedies in Canada; and risks related to our debt and securities. All subsequent forward-looking information, whether written or oral, attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these cautionary statements.

Also included in this News Release are estimates of Athabasca’s 2024 outlook which are based on the various assumptions as to production levels, commodity prices, currency exchange rates and other assumptions disclosed in this News Release. To the extent any such estimate constitutes a financial outlook, it was approved by management and the Board of Directors of Athabasca and is included to provide readers with an understanding of the Company’s outlook. Management does not have firm commitments for all of the costs, expenditures, prices or other financial assumptions used to prepare the financial outlook or assurance that such operating results will be achieved and, accordingly, the complete financial effects of all of those costs, expenditures, prices and operating results are not objectively determinable. The actual results of operations of the Company and the resulting financial results may vary from the amounts set forth herein, and such variations may be material. The outlook and forward-looking information contained in this New Release was made as of the date of this News release and the Company disclaims any intention or obligations to update or revise such outlook and/or forward-looking information, whether as a result of new information, future events or otherwise, unless required pursuant to applicable law.

Oil and Gas Information

“BOEs” may be misleading, particularly if used in isolation. A BOE conversion ratio of six thousand cubic feet of natural gas to one barrel of oil equivalent (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. As the value ratio between natural gas and crude oil based on the current prices of natural gas and crude oil 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.

Initial Production Rates

Test Results and Initial Production Rates: The well test results and initial production rates provided herein should be considered to be preliminary, except as otherwise indicated. Test results and initial production rates disclosed herein may not necessarily be indicative of long-term performance or of ultimate recovery.

Reserves Information

The McDaniel Report was prepared using the assumptions and methodology guidelines outlined in the COGE Handbook and in accordance with National Instrument 51-101 Standards of Disclosure for Oil and Gas Activities, effective December 31, 2023. There are numerous uncertainties inherent in estimating quantities of bitumen, light crude oil and medium crude oil, tight oil, conventional natural gas, shale gas and natural gas liquids reserves and the future cash flows attributed to such reserves. The reserve and associated cash flow information set forth above are estimates only. In general, estimates of economically recoverable reserves and the future net cash flows therefrom are based upon a number of variable factors and assumptions, such as historical production from the properties, production rates, ultimate reserve recovery, timing and amount of capital expenditures, marketability of oil and natural gas, royalty rates, the assumed effects of regulation by governmental agencies and future operating costs, all of which may vary materially. For those reasons, estimates of the economically recoverable reserves attributable to any particular group of properties, classification of such reserves based on risk of recovery and estimates of future net revenues associated with reserves prepared by different engineers, or by the same engineers at different times, may vary. The Company’s actual production, revenues, taxes and development and operating expenditures with respect to its reserves will vary from estimates thereof and such variations could be material. Reserves figures described herein have been rounded to the nearest MMbbl or MMboe. For additional information regarding the consolidated reserves and information concerning the resources of the Company as evaluated by McDaniel in the McDaniel Report, please refer to the Company’s AIF.

Reserve Values (i.e. Net Asset Value) is calculated using the estimated net present value of all future net revenue from our reserves, before income taxes discounted at 10%, as estimated by McDaniel effective December 31, 2023 and based on average pricing of McDaniel, Sproule and GLJ as of January 1, 2024.

The 500 gross Duvernay drilling locations referenced include: 37 proved undeveloped locations and 76 probable undeveloped locations for a total of 113 booked locations with the balance being unbooked locations. Proved undeveloped locations and probable undeveloped locations are booked and derived from the Company’s most recent independent reserves evaluation as prepared by McDaniel as of December 31, 2023 and account for drilling locations that have associated proved and/or probable reserves, as applicable. Unbooked locations are internal management estimates. Unbooked locations do not have attributed reserves or resources (including contingent or prospective). Unbooked locations have been identified by management as an estimation of Athabasca’s multi-year drilling activities expected to occur over the next two decades based on evaluation of applicable geologic, seismic, engineering, production and reserves information. There is no certainty that the Company will drill all unbooked drilling locations and if drilled there is no certainty that such locations will result in additional oil and gas reserves, resources or production. The drilling locations on which the Company will actually drill wells, including the number and timing thereof is ultimately dependent upon the availability of funding, commodity prices, provincial fiscal and royalty policies, costs, actual drilling results, additional reservoir information that is obtained and other factors.

Non-GAAP and Other Financial Measures, and Production Disclosure

The “Corporate Consolidated Adjusted Funds Flow”, “Corporate Consolidated Adjusted Funds Flow per Share”, “Athabasca (Thermal Oil) Adjusted Funds Flow”, “Duvernay Energy Adjusted Funds Flow”, “Corporate Consolidated Free Cash Flow”, “Athabasca (Thermal Oil) Free Cash Flow”, “Duvernay Energy Free Cash Flow”, “Corporate Consolidated Operating Income”, “Corporate Consolidated Operating Income Net of Realized Hedging”, “Athabasca (Thermal Oil) Operating Income”, “Duvernay Energy Operating Income”, “Corporate Consolidated Operating Netback”, “Corporate Consolidated Operating Netback Net of Realized Hedging”, “Athabasca (Thermal Oil) Operating Netback”, “Duvernay Energy Operating Netback” and “Cash Transportation and Marketing Expense” financial measures contained in this News Release do not have standardized meanings which are prescribed by IFRS and they are considered to be non-GAAP financial measures or ratios. These measures may not be comparable to similar measures presented by other issuers and should not be considered in isolation with measures that are prepared in accordance with IFRS. Sustaining Capital, Net Cash and Liquidity are supplementary financial measures. The Leismer and Hangingstone operating results are supplementary financial measures that when aggregated, combine to the Athabasca (Thermal Oil) segment results.

Adjusted Funds Flow, Adjusted Funds Flow Per Share and Free Cash Flow

Adjusted Funds Flow and Free Cash Flow are non-GAAP financial measures and are not intended to represent cash flow from operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. The Adjusted Funds Flow and Free Cash Flow measures allow management and others to evaluate the Company’s ability to fund its capital programs and meet its ongoing financial obligations using cash flow internally generated from ongoing operating related activities. Adjusted Funds Flow per share is a non-GAAP financial ratio calculated as Adjusted Funds Flow divided by the applicable number of weighted average shares outstanding. Adjusted Funds Flow and Free Cash Flow are calculated as follows:

	Three months ended September 30, 2024									Three months ended September 30, 2023
($ Thousands)	Athabasca (Thermal Oil)			Duvernay Energy⁽¹⁾			Corporate Consolidated⁽¹⁾			Corporate Consolidated
Cash flow from operating activities	$	169,950		$	17,193		$	187,143		$	134,879
Changes in non-cash working capital		(20,201	)		(3,401	)		(23,602	)		5,898
Settlement of provisions		339			(200	)		139			361
ADJUSTED FUNDS FLOW		150,088			13,592			163,680			141,138
Capital expenditures		(44,431	)		(6,203	)		(50,634	)		(33,286	)
FREE CASH FLOW	$	105,657		$	7,389		$	113,046		$	107,852

(1) Duvernay Energy and Corporate Consolidated reflect gross financial metrics before taking into consideration Athabasca’s 70% equity interest in Duvernay Energy.

	Nine months ended September 30, 2024									Nine months ended September 30, 2023
($ Thousands)	Athabasca (Thermal Oil)			Duvernay Energy⁽¹⁾			Corporate Consolidated⁽¹⁾			Corporate Consolidated
Cash flow from operating activities	$	367,018		$	31,846		$	398,864		$	202,330
Changes in non-cash working capital		14,560			2,134			16,694			22,498
Settlement of provisions		1,636			4			1,640			1,155
Long-term deposit		—			—			—			(12,577	)
ADJUSTED FUNDS FLOW		383,214			33,984			417,198			213,406
Capital expenditures		(120,634	)		(54,464	)		(175,098	)		(101,080	)
FREE CASH FLOW	$	262,580		$	(20,480	)	$	242,100		$	112,326

(1) Duvernay Energy and Corporate Consolidated reflect gross financial metrics before taking into consideration Athabasca’s 70% equity interest in Duvernay Energy.

Duvernay Energy Operating Income and Operating Netback

The non-GAAP measure Duvernay Energy Operating Income in this News Release is calculated by subtracting the Duvernay Energy royalties, operating expenses and transportation & marketing expenses from petroleum and natural gas sales which is the most directly comparable GAAP measure. The Duvernay Energy Operating Netback per boe is a non-GAAP financial ratio calculated by dividing the Duvernay Energy Operating Income by the Duvernay Energy production. The Duvernay Energy Operating Income and the Duvernay Energy Operating Netback measures allow management and others to evaluate the production results from the Company’s Duvernay Energy assets.

The Duvernay Energy Operating Income is calculated using the Duvernay Energy Segments GAAP results, as follows:

	Three months ended September 30,						Nine months ended September 30,
($ Thousands, unless otherwise noted)	2024			2023			2024			2023
Petroleum and natural gas sales	$	24,728		$	24,508		$	63,015		$	78,403
Royalties		(2,470	)		(3,510	)		(8,282	)		(10,403	)
Operating expenses		(4,684	)		(5,964	)		(12,387	)		(19,988	)
Transportation and marketing		(1,084	)		(2,039	)		(3,113	)		(6,482	)
DUVERNAY ENERGY OPERATING INCOME	$	16,490		$	12,995		$	39,233		$	41,530

Athabasca (Thermal Oil) Operating Income and Operating Netback

The non-GAAP measure Athabasca (Thermal Oil) Operating Income in this News Release is calculated by subtracting the Athabasca (Thermal Oil) segments cost of diluent blending, royalties, operating expenses and cash transportation & marketing expenses from heavy oil (blended bitumen) and midstream sales which is the most directly comparable GAAP measure. The Athabasca (Thermal Oil) Operating Netback per bbl is a non-GAAP financial ratio calculated by dividing the respective projects Operating Income by its respective bitumen sales volumes. The Athabasca (Thermal Oil) Operating Income and the Athabasca (Thermal Oil) Operating Netback measures allow management and others to evaluate the production results from the Athabasca (Thermal Oil) assets. The Athabasca (Thermal Oil) Operating Income is calculated using the Athabasca (Thermal Oil) Segments GAAP results, as follows:

	Three months ended September 30,						Nine months ended September 30,
($ Thousands)	2024			2023			2024			2023
Heavy oil (blended bitumen) and midstream sales	$	372,634		$	360,761		$	1,072,954		$	895,167
Cost of diluent		(129,965	)		(117,418	)		(411,991	)		(380,781	)
Total bitumen and midstream sales		242,669			243,343			660,963			514,386
Royalties		(22,291	)		(27,613	)		(62,651	)		(45,170	)
Operating expenses – non-energy		(24,903	)		(19,521	)		(72,445	)		(63,349	)
Operating expenses – energy		(9,994	)		(20,572	)		(38,187	)		(64,118	)
Transportation and marketing⁽¹⁾		(21,787	)		(20,222	)		(61,843	)		(63,216	)
ATHABASCA (THERMAL OIL) OPERATING INCOME	$	163,694		$	155,415		$	425,837		$	278,533

(1) Transportation and marketing excludes non-cash costs of $0.6 million and $1.7 million for the three and nine months ended September 30, 2024 (three and nine months ended September 30, 2023 – $0.6 million and $1.7 million).

Corporate Consolidated Operating Income and Corporate Consolidated Operating Income Net of Realized Hedging and Operating Netbacks

The non-GAAP measures of Corporate Consolidated Operating Income including or excluding realized hedging in this News Release are calculated by adding or subtracting realized gains (losses) on commodity risk management contracts (as applicable), royalties, the cost of diluent blending, operating expenses and cash transportation & marketing expenses from petroleum, natural gas and midstream sales which is the most directly comparable GAAP measure. The Corporate Consolidated Operating Netbacks including or excluding realized hedging per boe are non-GAAP ratios calculated by dividing Corporate Consolidated Operating Income including or excluding hedging by the total sales volumes and are presented on a per boe basis. The Corporate Consolidated Operating Income and Corporate Consolidated Operating Netbacks including or excluding realized hedging measures allow management and others to evaluate the production results from the Company’s Duvernay Energy and Athabasca (Thermal Oil) assets combined together including the impact of realized commodity risk management gains or losses (as applicable).

	Three months ended September 30,						Nine months ended September 30,
($ Thousands)	2024			2023			2024			2023
Petroleum, natural gas and midstream sales⁽¹⁾	$	397,362		$	385,269		$	1,135,969		$	973,570
Royalties		(24,761	)		(31,123	)		(70,933	)		(55,573	)
Cost of diluent⁽¹⁾		(129,965	)		(117,418	)		(411,991	)		(380,781	)
Operating expenses		(39,581	)		(46,057	)		(123,019	)		(147,455	)
Transportation and marketing⁽²⁾		(22,871	)		(22,261	)		(64,956	)		(69,698	)
Operating Income		180,184			168,410			465,070			320,063
Realized loss on commodity risk mgmt. contracts		(4,429	)		(3,767	)		(4,559	)		(30,418	)
OPERATING INCOME NET OF REALIZED HEDGING	$	175,755		$	164,643		$	460,511		$	289,645

(1) Non-GAAP measure includes intercompany NGLs (i.e. condensate) sold by the Duvernay Energy segment to the Athabasca (Thermal Oil) segment for use as diluent that is eliminated on consolidation.
(2) Transportation and marketing excludes non-cash costs of $0.6 million and $1.7 million for the three and nine months ended September 30, 2024 (three and nine months ended September 30, 2023 – $0.6 million and $1.7 million).

Cash Transportation and Marketing Expense

The Cash Transportation and Marketing Expense financial measures contained in this News Release are calculated by subtracting the non-cash transportation and marketing expense as reported in the Consolidated Statement of Cash Flows from the transportation and marketing expense as reported in the Consolidated Statement of Income (Loss) and are considered to be non-GAAP financial measures.

Sustaining Capital

Sustaining Capital is managements’ assumption of the required capital to maintain the Company’s production base.

Net Cash

Net Cash is defined as the face value of term debt, plus accounts payable and accrued liabilities, plus current portion of provisions and other liabilities plus income tax payable less current assets, excluding risk management contracts.

Liquidity

Liquidity is defined as cash and cash equivalents plus available credit capacity.

Production volumes details

	Three months ended September 30,				Nine months ended September 30,
Production	2024		2023		2024		2023
Duvernay Energy:
Oil⁽¹⁾	bbl/d	2,688		1,398		2,235		1,461
Condensate NGLs	bbl/d	—		581		—		705
Oil and condensate NGLs	bbl/d	2,688		1,979		2,235		2,166
Other NGLs	bbl/d	447		528		298		615
Natural gas⁽²⁾	mcf/d	5,526		11,869		4,511		13,181
Total Duvernay Energy	boe/d	4,056		4,485		3,285		4,978
Total Thermal Oil bitumen	bbl/d	34,853		31,691		33,390		29,972
Total Company production	boe/d	38,909		36,176		36,675		34,950

(1) Comprised of 99% or greater of tight oil, with the remaining being light and medium crude oil.
(2) Comprised of 99% or greater of shale gas, with the remaining being conventional natural gas.

This News Release also makes reference to Athabasca’s forecasted average daily Thermal Oil production of 33,000 – 34,000 bbl/d for 2024. Athabasca expects that 100% of that production will be comprised of bitumen. Duvernay Energy’s forecasted total average daily production of ~3,000 boe/d for 2024 is expected to be comprised of approximately 67% tight oil, 23% shale gas and 10% NGLs.

Liquids is defined as bitumen, light crude oil, medium crude oil and natural gas liquids.

Footnote: Refer to the “Reader Advisory” section within this news release for additional information on Non‐GAAP Financial Measures (e.g. Adjusted Funds Flow, Free Cash Flow, Sustaining Capital, Net Cash, Liquidity) and production disclosure.

¹ Pricing Assumptions: realized prices January – October and flat pricing of US$70 WTI, US$12.50 WCS heavy differential, C$2 AECO, and 0.73 C$/US$ FX for the balance of 2024. 2025-27 US$70 WTI, US$12.50 WCS heavy differential, C$3.00 AECO, and 0.75 C$/US$ FX.
² The Company’s illustrative multi-year outlook assumes a 10% annual share buyback program at an implied share price of 4.5x EV/Debt Adjusted Cash flow in 2025 and beyond.

The MIL Network –

January 25, 2025

MIL-OSI China: Meta reports Q3 results with net income, revenue increase

Source: China State Council Information Office

U.S. social media giant Meta Platforms, Inc. on Wednesday reported financial results for the third quarter ending Sept. 30, with a total quarterly revenue of 40.59 billion U.S. dollars, a 19 percent increase year on year.

The company’s quarterly net income increased to 15.69 billion dollars, up 35 percent from 11.58 billion dollars year on year. The diluted earnings per share for the quarter increased to 6.03 dollars from 4.39 dollars in the same period of 2023, said Meta, which is based in Menlo Park, California.

The company’s family daily active people (DAP) was 3.29 billion on average for September 2024, an increase of 5 percent year over year.

Its cash, cash equivalents and marketable securities were 70.90 billion dollars as of Sept. 30, 2024. Free cash flow was 15.52 billion dollars, according to the company.

“We had a good quarter driven by AI progress across our apps and business,” said Mark Zuckerberg, Meta founder and CEO. “We also have strong momentum with Meta AI, Llama adoption, and AI-powered glasses.”

The company expects fourth quarter 2024 total revenue to be in the range of 45 billion to 48 billion dollars, and the full-year 2024 total expenses to be in the range of 96 billion to 98 billion dollars, updated from its prior range of 96 billion to 99 billion dollars.

Meta anticipates the full-year 2024 capital expenditures will be in the range of 38 billion to 40 billion dollars, and expects significant capital expenditures growth in 2025.

According to Meta, the increasing legal and regulatory headwinds in the European Union and the United States could significantly impact its business and financial results, and the company will continue to monitor the active regulatory landscape.

MIL OSI China News –

January 25, 2025
MIL-OSI China: EU tariffs on Chinese EVs spark widespread opposition

Source: China State Council Information Office

The European Union’s (EU) decision to impose definitive countervailing duties on Chinese-made electric vehicles (EVs) for a period of five years has sparked strong opposition, with China calling the move “unfair, unreasonable and unobjective.”

In a statement on Wednesday, the China Chamber of Commerce for Import and Export of Machinery and Electronic Products (CCCME), on behalf of the Chinese automotive industry, expressed “great regret” over the decision to impose anti-subsidy tariffs on electric vehicles originating in China.

Starting Wednesday, these tariffs will apply with varying rates for different companies: 17 percent for BYD, 18.8 percent for Geely, and 35.3 percent for SAIC. Other cooperating firms will be subject to a 20.7 percent duty, while non-cooperating companies will have a duty rate of 35.3 percent, according to the European Commission.

Following a substantiated request for an individual review, U.S. EV maker Tesla, which also manufactures vehicles in China, will face a duty of 7.8 percent, the commission noted.

The CCCME said the European Commission failed to rectify its “incorrect findings” in the final ruling on the imposition of definitive duties against Chinese EVs, and there was a serious lack of transparency in the procedure, adding that the move seriously violates relevant World Trade Organization (WTO) and EU anti-subsidy rules.

The China Association of Automobile Manufacturers (CAAM) also expressed disagreement with the decision in a statement on Wednesday. The decision, which is not objective and extremely unfair to China’s auto companies, is deemed unacceptable, the CAAM said.

The CAAM stressed that the imposition of tariffs not only violates the fundamental principles of free trade and fair competition, but also undermines cooperation between the Chinese and European automotive industries, as well as green and low-carbon transition.

Earlier on Wednesday, a Ministry of Commerce (MOC) spokesperson said China does not approve of or accept the European Commission’s decision to impose extra tariffs on Chinese EVs.

China has repeatedly pointed out that the EU’s anti-subsidy investigation into Chinese EVs is irrational, fraught with numerous non-compliance issues, and is a protectionist move under the guise of “fair competition,” the MOC said.

China has already appealed to the WTO’s dispute settlement mechanism over the issue, and will continue to take all necessary measures to safeguard the legitimate rights and interests of Chinese enterprises, the MOC spokesperson noted.

Chinese carmaker SAIC Motor, which has been slapped with a duty rate of 35.3 percent by the European Commission, said that it plans to file a lawsuit at the Court of Justice of the European Union challenging the decision.

According to the carmaker, the European Commission made errors in identifying subsidies during its probe, ignored key facts and arguments presented by SAIC, and inaccurately presumed subsidy rates for several items.

The company said that the extra tariffs will only raise costs for European car buyers and impede the widespread adoption of EVs, adding that it is taking steps to adapt to trade barriers, including intensifying efforts to introduce new car models with various power systems to the European market and expanding its product lineup under the MG brand.

NEW PHASE OF CONSULTATIONS

While announcing the imposition of duties on Tuesday, the European Commission said the EU and China are continuing to work toward finding alternative, WTO-compatible solutions that would be effective in addressing the problems identified by the investigation, adding that it remains open to negotiations on price undertakings.

Noting that the EU remains open to continuing discussions on price commitments for Chinese-made EVs, the MOC spokesperson said that China always advocates for resolving trade disputes through dialogue and consultation, and has made every effort to achieve this.

Currently, technical teams from both sides are engaged in a new phase of consultations. It is hoped that the European side will work constructively with China, follow the principles of “pragmatism and balance” and take into account each other’s core concerns, and strive to reach a mutually acceptable solution as soon as possible to avoid an escalation of trade frictions, according to the MOC.

The CAAM voiced the hope that both sides will continue to engage in dialogue and consultations to maintain the steady operations of global automotive industrial and supply chains.

The CCCME, meanwhile, has expressed the hope that the EU would approach the consultations with the utmost sincerity and reach a balanced solution acceptable to both sides as soon as possible.

MIL OSI China News –

January 25, 2025
MIL-OSI China: EU tariffs on Chinese EVs face backlash

Source: China State Council Information Office

China does not acknowledge or accept the European Union’s final ruling to impose additional tariffs on electric vehicles manufactured in the Chinese market, the Ministry of Commerce said on Wednesday, vowing to take all necessary measures to protect the interests of companies.

The European Commission, the EU’s executive arm, announced on Tuesday the conclusion of its anti-subsidy investigation, resulting in the imposition of definitive countervailing duties on EVs produced in China. The measures will expire at the end of a five-year period unless an expiration review is initiated before that date, the commission said in a news release.

In response, China has filed a complaint under the World Trade Organization’s dispute settlement mechanism.

China has repeatedly pointed out that the EU’s anti-subsidy investigation into EVs manufactured in China is irrational and fraught with numerous noncompliance issues, and is a protectionist move under the guise of “fair competition”, the Ministry of Commerce said in an online statement.

Noting that the EU is still willing to continue talks on price commitments for Chinese-made EVs, the ministry said that China always advocates the resolution of trade disputes through dialogue and consultation.

The EU’s new tariffs will range from 7.8 percent for the Chinese output of United States EV maker Tesla Inc, to 18.8 percent for Zhejiang Geely Holding Group, and up to 35.3 percent for Shanghai-based carmaker SAIC Motor Corp, in addition to the EU’s existing 10 percent duty on imported cars.

Other Chinese EV manufacturers face an average tariff of 20.7 percent, with rates reaching up to 35.3 percent for those classified as “noncooperative”.

SAIC Motor expressed disappointment on Wednesday with the decision and said that it plans to pursue necessary legal action by filing a lawsuit with the Court of Justice of the European Union to ensure its legitimate rights and interests.

The Chinese automaker said that it is implementing a series of measures to strengthen its resilience against the EU’s trade barriers.

These tariffs on Chinese, European and US EV producers operating in China neither enhance the EU’s resilience in EV manufacturing nor promote innovation or job creation. Instead, they represent a politically motivated approach, the Brussels-based China Chamber of Commerce to the EU said on Wednesday.

Market watchers warned that these additional tariffs will likely intensify trade friction between China and the EU, and may trigger a global rise in trade protectionism within the automotive industry.

Zhang Yongjun, secretary-general of the China Center for International Economic Exchanges in Beijing, said that based on the principle of reciprocity, the EU’s decision will inevitably trigger countermeasures, potentially having an impact on competitive EU export industries that trade with China.

“Under such circumstances, European consumers may suffer, facing either increased costs for Chinese EVs or limited options from alternative suppliers,” he added.

Wei Jianguo, former vice-minister of commerce, said that the EU’s move could weaken Chinese investors’ confidence in Europe, especially those in the automobile, power battery, industrial parts and logistics industries.

Erik Solheim, former executive director of the United Nations Environment Program, told China Daily on Wednesday: “Tariffs on superior Chinese electric cars go contrary to all economic wisdom. It will make us all poorer and slow down the green transformation in Europe.

“Green competition is a race to the top, tariffs and protectionism is a race to the bottom. Europe should invite investments from BYD and all the other Chinese car makers to help share technology and help shape competition so that European car makers can catch up.”

Also on Wednesday, Foreign Minister Wang Yi reiterated China’s opposition to the EU’s tariff measure. The move clearly violates WTO rules and contradicts the principles of free trade, Wang said while meeting in Beijing with Finnish Foreign Minister Elina Valtonen.

China has always believed that openness leads to progress while protectionism has no future, and universally beneficial and inclusive economic globalization serves the interests of all parties, Wang added.

Believing that dialogue is the best path forward, Chen Huiqing, head of the legal service branch at the Beijing-based China Chamber of Commerce for Import and Export of Machinery and Electronic Products, said that talks remain the most effective way to prevent the escalation of bilateral economic and trade tensions.

Currently, technical teams from both sides are engaged in a new phase of consultations, according to the Ministry of Commerce.

MIL OSI China News –

January 25, 2025
MIL-OSI China: Complex, reliable methods track wild panda population

Source: China State Council Information Office 2

Giant panda Xian Xian is pictured at the second-phase giant panda wild training fields of Tiantai Mountain in Wolong National Nature Reserve in southwest China’s Sichuan Province, June 24, 2024. [Photo/Xinhua]
China’s successful giant panda conservation efforts have seen the extinction risk of the species downgraded from endangered to vulnerable in 2016, with the population of giant pandas in the wild growing steadily from around 1,100 in the 1980s to nearly 1,900 as of last year.
Against that background, giant panda lovers around the world have cheered the growing tribe of China’s national treasure.
However, an article in The New York Times earlier this month voiced some concerns. Citing comments made by experts in 2006 and 2010, it said the methods used by China to survey the wild panda population were “not ideal” and that “China keeps its methodology a secret”.
Chinese experts have responded by noting that assessing the population of pandas in the wild is by no means easy, although various complex and reliable methods are employed to enhance the accuracy of the count.
Furthermore, there have been four giant panda censuses since the 1970s, with the most recent being completed in 2015 — a full five years after the 2010 comments were made by the sources cited by The New York Times.
“Population assessment is a challenge in wildlife conservation research, especially for forest dwelling animals like giant pandas, which are often difficult to directly observe and count, and can only be assessed through collecting relevant trace information,” said Xu Weihua, vice-president of the Institute for National Parks.
The nation’s protected area for giant panda habitats has expanded from 1.39 million hectares in the 1980s to 2.58 million hectares today.
The establishment of the Giant Panda National Park in 2021, spanning the provinces of Sichuan, Shaanxi and Gansu, ensures the protection of about 70 percent of the pandas’ wild habitat. Thanks to careful monitoring, the number of giant pandas captured on camera and encountered in the wild has increased, according to the National Forestry and Grassland Administration.
In the third national giant panda survey, which began in 1999, and the fourth survey, which began in 2011, researchers set up survey lines every two square kilometers in key areas within the panda distribution range. In areas with fewer pandas, survey lines were set up every six sq km.
“This is high-intensity information gathering. Surveyors collected data on panda feces and bite marks, and used distance and bite mark differentiation methods for a comprehensive analysis to evaluate the population of giant pandas nationwide,” Xu said, noting that both methods are scientifically validated and effective for conducting surveys on wild populations.
The term “bite marks” refers to the undigested bamboo stem fragments found in pandas’ feces.
The distance differentiation method involves calculating the distance between panda trace points obtained during field surveys, such as feces, footprints and fur, to determine if they come from the same panda, thereby confirming the number of pandas in the area.
Regarding the counting method involved, Xu said: “Giant pandas are solitary animals, and except during mating and seasonal migration periods, their movement within a certain time frame is limited and stable. By determining the home range and dispersal ability of giant pandas, we can confirm whether trace points belong to the same panda. If the distance between two trace points exceeds the normal activity range of a giant panda, it is preliminarily determined that there is more than one panda in the area.”
When the distance between two trace points falls within the potential activity range of a single panda, further identification using bite mark differentiation can be applied to enhance the accuracy of the census.
“Ninety-nine percent of a giant panda’s diet consists of bamboo, which they cannot fully digest…. Due to variations in individual digestive capabilities, there can be significant differences in the average number of bite marks in feces,” Xu said.
“By comparing characteristics like bite mark length, we can determine if the feces in an area was left by the same panda,” he added.
In the article in The New York Times, some foreign experts proposed using infrared cameras and DNA analysis to assess the panda population.
However, Chinese experts have argued that due to the similar appearance of pandas, it is challenging to differentiate individual pandas by examining photos from infrared cameras. In addition, DNA analysis requires fresh panda feces, making it impractical for large-scale operations and unsuitable for reflecting the total panda population nationwide.
“The survey methods used by Chinese giant panda experts have a complete process flowchart and calculation method, and are currently the most reliable among existing methods,” Xu said.
“We are also exploring new technologies for giant panda population assessment and individual identification. With advancements in technology, especially the application of artificial intelligence, big data and the emergence of new equipment, future panda surveys will be more efficient, and population assessments will be even more accurate,” he added.

MIL OSI China News –

January 25, 2025
MIL-OSI China: EU’s protectionist tariffs on Chinese EVs face backlash from industry, officials

Source: China State Council Information Office 3

The European Commission on Tuesday announced the imposition of anti-subsidy tariffs on Chinese-made electric vehicles (EVs), a decision that has sparked strong opposition from within the EU and key industry stakeholders.

Starting Wednesday, these tariffs will remain in place for five years with varying rates: 17 percent for BYD, 18.8 percent for Geely, and 35.3 percent for SAIC, among China’s leading automakers.

Additional firms that cooperated in the investigation will be subject to a 20.7-percent duty, while non-cooperative companies will incur the maximum 35.3-percent rate, according to the commission’s statement.

Despite this decision, the European Commission noted that the EU and China are still exploring alternative measures within WTO guidelines to address trade concerns.

The decision has sparked widespread discontent among EU member states and industry stakeholders alike. Critics argue that such tariffs could burden European consumers, strain EU-China trade and investment ties, hinder Europe’s transition to a greener automotive sector, and ultimately undermine global efforts to mitigate climate change.

Germany’s economy ministry reaffirmed its commitment to “open markets,” underscoring the country’s reliance on global trade networks and calling for continued negotiations with China to ease tensions while protecting EU industries.

Slovakia, a dissenting voice in the October vote, opposed the tariff increase. Prime Minister Robert Fico noted that China is “20 years ahead of us when it comes to EVs,” cautioning that heightened trade barriers could ultimately harm Europe more than China.

Industry leaders in the automotive sector echoed these concerns. Hildegard Muller, president of the German Association of the Automotive Industry, criticized the tariffs as a “step backwards for global free trade,” warning of potential job losses, stunted economic growth, and weakened market prosperity, along with further trade disputes.

“The door for negotiations remains open. This is the only positive news today,” she said, urging sustained efforts toward open negotiations.

Major European automakers, including Volkswagen, BMW, and Mercedes-Benz, voiced a unified stance against the tariffs, advocating for open markets that support fair competition.

BMW CEO Oliver Zipse warned that the tariffs could “harm the business model of globally active companies, limit the supply of electric cars to European customers and thus slow down decarbonization in the transport sector.”

Michael Schumann, chairman of the Board of the German Federal Association for Economic Development and Foreign Trade, criticized the tariffs as counterproductive, arguing that they contradict Europe’s objectives of promoting electric mobility and advancing climate protection.

“The transition to electric mobility is a cornerstone of climate protection, and we need to support and advance that transition,” Schumann told Xinhua.

Experts have also weighed in, highlighting broader geopolitical influences. Boyan Chukov, a former foreign policy advisor to Bulgaria’s Prime Minister, argued that the United States is leveraging the EU in its economic competition with China.

“China is one of the countries most compliant with environmental regulations. In this regard, it stands as an example for other countries to follow,” he said, adding that the additional tariffs are driven by “political imperatives.”

Liang Guoyong, a senior economist with the United Nations Conference on Trade and Development, described the EU tariffs as “counterproductive.”

He noted that protective and restrictive trade measures on green products, such as EVs, conflict with global efforts to reduce carbon emissions and could increase costs for European consumers.

“Imposing these tariffs would only undermine the economic interests of both importers and exporters and threaten global climate change progress,” Liang warned.

MIL OSI China News –

January 25, 2025
MIL-OSI China: Microsoft reports Q1 results

Source: China State Council Information Office 3

Microsoft on Wednesday posted a revenue of 65.6 billion U.S. dollars for the first quarter of its 2025 fiscal year ending Sept. 30, 2024, up 16 percent from the same period of the previous year.

The company generated quarterly net profits of 24.7 billion dollars, an increase of 11 percent year on year. Diluted earnings per share were 3.3 dollars, up 10 percent, compared to the same period a year ago.

Its operating income was 30.6 billion dollars, an increase of 14 percent from the same period last year, Microsoft said in its financial report.

The company’s revenue in Productivity and Business Processes was 28.3 billion dollars, an increase of 12 percent; its revenue in Intelligent Cloud was 24.1 billion dollars, up 20 percent; and its revenue in More Personal Computing was 13.2 billion dollars, increasing 17 percent.

Microsoft returned 9.0 billion dollars to shareholders in the form of share repurchases and dividends in the first quarter of fiscal 2025.

“AI-driven transformation is changing work, work artifacts, and workflow across every role, function, and business process,” said Satya Nadella, chairman and chief executive officer of Microsoft. “We are expanding our opportunity and winning new customers as we help them apply our AI platforms and tools to drive new growth and operating leverage.”

“Strong execution by our sales teams and partners delivered a solid start to our fiscal year with Microsoft Cloud revenue of 38.9 billion dollars, up 22 percent year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft.

MIL OSI China News –

January 25, 2025
MIL-OSI Economics: Samsung Electronics Announces Results for Third Quarter of 2024

Source: Samsung

Samsung Electronics today reported financial results for the third quarter ended Sept. 30, 2024.

The Company posted KRW 79.1 trillion in consolidated revenue, an increase of 7% from the previous quarter, on the back of the launch effects of new smartphone models and increased sales of high-end memory products. Operating profit declined to KRW 9.18 trillion, largely due to one-off costs, including the provision of incentives in the Device Solutions (DS) Division.

The strength of the Korean won against the U.S. dollar resulted in a negative impact on company-wide operating profit of about KRW 0.5 trillion compared to the previous quarter.

In the fourth quarter, while memory demand for mobile and PC may encounter softness, growth in AI will keep demand at robust levels. Against this backdrop, the Company will concentrate on driving sales of High Bandwidth Memory (HBM) and high-density products. The Foundry Business aims to increase order volumes by enhancing advanced process technologies. Samsung Display Corporation (SDC) expects the demand of flagship products from major customers to continue, while maintaining a quite conservative outlook on its performance. The Device eXperience (DX) Division will continue to focus on premium products, but sales are expected to decline slightly compared to the previous quarter.

For 2025, the Company will remain focused on enhancing competitiveness in advanced technologies and strengthening leadership in premium products and AI capabilities amid ongoing macroeconomic uncertainties. The DS Division will address demand for differentiated products based on advanced technologies and high value-added products such as HBM and server SSDs. In addition, the Company plans to leverage the mass production on the 2 nanometer (nm) Gate-All-Around (GAA) process to win new clients. SDC will aim to maintain leadership in the high-end product category and broaden its product portfolio. The DX Division will continue to deliver exceptional customer experiences through enhanced AI features and product connectivity.

With over 500 million diverse products being delivered to consumers globally every year, the Company is tailoring its AI technology in each product to help lead the market. By leveraging the SmartThings platform with 360 million users and capabilities in product intelligence, spatial intelligence, and personalization, the Company plans to firmly establish itself in the home of the future, where AI will be widespread. In the AI era for the home, the Company will focus on the security of its products, convenience in device connectivity, intelligent technology to save energy and time, and the health and well-being of users and their families.

Memory Achieves Revenue Growth in Q3
The DS Division posted KRW 29.27 trillion in consolidated revenue and KRW 3.86 trillion in operating profit in the third quarter.

For the Memory Business, demand for AI and conventional servers was strong, as major datacenter and technology companies continued to invest. But mobile demand was relatively soft due to inventory adjustments by some customers, and the supply-demand situation was impacted somewhat by the increasing supply of legacy products in the China market.

The Company focused on actively responding to the demand for AI and server products while depleting aging inventories of legacy products to further improve the inventory level and mix. Therefore, compared to the previous quarter, the Company achieved significant revenue growth in HBM, DDR5 and Server SSD.

However, performance decreased due to a reduced reversal of inventory valuation loss compared to the previous quarter, one-off expenses such as the provision of incentives, and currency effects due to a weak dollar.

For the fourth quarter, the demand trends experienced in the previous quarter are expected to continue. The Company plans to accelerate the conversion of cutting-edge nodes in legacy lines and aims to strengthen its business fundamentals by completing the normalization of the inventory level and mix by the end of the year.

For DRAM, the Company plans to expand sales in line with the increase in HBM capacity, accelerate the transition to 1b nanometer1 for server DDR5 and actively expand the sales portion of high-density modules based on 32Gb DDR5. For NAND, the Company will expand sales of 8th generation (V8) based PCIe Gen5 and plans to mass-produce the 64TB product for the quad-level cell (QLC) market, which has high growth potential.

Looking ahead to 2025, datacenter and enterprise investments are likely to remain strong in association with AI, and build demand for conventional servers, in addition to AI servers, is expected to be steadily strong.

For DRAM, the Company plans to expand the sales of HBM3E and the portion of high-end products such as DDR5 modules with 128GB density or higher for servers and LPDDR5X for mobile, PC, servers, and so on. For NAND, the Company will proactively respond to the high-density trend based on QLC products — including 64TB and 128TB SSDs — and solidify leadership in the PCIe Gen5 market by accelerating the tech migration from V6 to V8.

The System LSI Business posted modest sales growth, but earnings declined due to increased one-off costs. System-on-chip (SoC) shipments increased as flagship products were adopted for new models by a major customer. Sales of image sensors were affected by H1’s inventory accumulation, resulting in some adjustments, while display driver IC (DDI) sales expanded with new model launches by key customers.

In the fourth quarter, supply of the Exynos 2400 will continue to expand with higher customer adoption, but weak demand for image sensors is expected to continue. For DDIs, the System LSI Business is focusing on growth areas, such as the expansion of IT-oriented OLED products.

Looking ahead to 2025, the momentum of on-device AI is expected to remain strong, and the Company will focus on capturing opportunities in areas such as SoCs and cameras. The System LSI Business plans to concentrate on supplying SoCs for flagship products of a major customer while preparing for next-generation 2nm products. Image sensors will aim to maximize new product supply through HDR, low-power and zoom features, while DDIs will seek to develop low-power products using advanced processes.

The Foundry Business saw its overall earnings decline compared to the previous quarter due to the impact of one-off costs. Still, the Foundry Business successfully met its order targets — particularly in sub-5nm technologies — and released the 2nm GAA process design kit (PDK), enabling customers to proceed with their product designs.

While mobile and PC demand may remain weak in the fourth quarter, high performance computing (HPC) and AI-related demand will continue to be robust. The Foundry Business will strive to acquire customers by improving the process maturity of its 2nm GAA technology, and it will continue to develop competitive technology and design infrastructure to expand additional business opportunities.

For 2025, the overall foundry market is expected to show double-digit growth, driven by HPC and AI applications in advanced technology nodes. The Foundry Business aims to expand revenue through ongoing yield improvements in advanced technology while securing major customers through successful 2nm mass production. In addition, integrating advanced process nodes and packaging solutions to further develop the HBM buffer die is expected to help acquire new customers in the AI and HPC sectors.

Mobile Display Records Solid Results; Will Maintain Leadership in the High-End Market
SDC posted KRW 8.0 trillion in consolidated revenue and KRW 1.51 trillion in operating profit for the third quarter.

For the mobile display business, SDC achieved sequential improvements in both sales and profits thanks to the flagship product launches of major customers. For the large display business, SDC reported a slight weakening in operating profit, but sales volume improved from the previous quarter, driven by the stable demand of TV and monitor products.

In the fourth quarter, SDC expects continued demand for flagship products from major customers, and sales growth of IT and automotive products. However, SDC’s performance outlook is quite conservative compared to the previous quarter, due to headwinds from rising competition among panel makers.

For the large display business, SDC will keep striving to expand sales by meeting the fourth quarter demand of major customers through improved production efficiency, and it aims to respond to the demand for new products in 2025 with timely supply.

In 2025, SDC will continue to maintain its leadership in the foldable and high-end smartphone markets, based on innovative OLED technologies optimized for AI devices and accelerate the expansion of IT and automotive products to further diversify its business portfolio.

For the large display business, SDC will continue to leverage the performance advantage of QD-OLED panels to strengthen its position in the premium TV market. And for monitors, SDC will broaden its lineup by adding high-resolution products and diverse refresh rate options, aiming not only to solidify its competitive edge in the gaming monitor market but also to actively enter the B2C monitor market.

MX Business To Achieve Double-Digit Annual Sales Growth in Flagships
The MX and Networks businesses posted KRW 30.52 trillion in consolidated revenue and KRW 2.82 trillion in operating profit for the third quarter.

Overall market demand for smartphones grew modestly as the residual effects of global inflation slowed the recovery in consumer spending.

The MX Business recorded sequential growth in both revenue and operating profit, bolstered by the launch of new smartphone, tablet and wearable products. Sales increased — with a focus on flagship models — and profitability neared double digits, despite rising material costs as product specifications improved to boost competitiveness.

In the fourth quarter, seasonal factors are expected to lead to sequential growth in the smartphone market. At the same time, competition in the mass market segment is expected to increase as a result of rising demand, particularly in emerging markets.

The MX Business will continue to maintain solid sales of its AI smartphones, such as foldables and the S24 series, with various sales promotions in anticipation of the holiday season, aiming for annual flagship sales growth of double digits. In addition, the MX Business will expand sales linked to year-end seasonality for tablets and wearables, especially on new premium products with significantly enhanced performance, to contribute to the MX Business’ sales and profits.

In 2025, the macroeconomic environment is expected to stabilize to a degree as a result of interest rate cuts, leading to slight growth in the smartphone market. The mass market segment is expected to grow, along with demand for ecosystem products, and the smartwatch and true wireless stereo (TWS) markets will expand with broader applications of AI capabilities.

The MX Business will drive sales growth and improve profitability with a focus on flagship products, including smartphones, foldables, tablets and wearables, based on further advancements of Galaxy AI.

Visual Display To Focus on Premium Models and Service Expansion
The Visual Display and Digital Appliances businesses posted KRW 14.14 trillion in consolidated revenue and KRW 0.53 trillion in operating profit in the third quarter.

The Visual Display Business saw improved profitability both from the previous quarter and a year earlier by prioritizing sales of strategic products such as Neo QLEDs, OLEDs, and big TVs. Additionally, service business sales increased.

In the fourth quarter, overall demand in the TV market is expected to recover due to year-end peak seasonality amid intensifying competition. The Visual Display Business plans to capture peak season demand by enhancing sales programs through strategic collaborations with major retail partners, and will focus on expanding sales and securing profitability by emphasizing the competitiveness of TVs in terms of security, design, and content.

In 2025, the overall TV market is expected to post modest growth, with strategic products like QLEDs, OLEDs, and big TVs continuing to gain market share. To solidify its leading position globally, the Visual Display Business will continue to differentiate AI functionalities and innovate its products centering on premium and Lifestyle screens.

By utilizing AI, the Company aims to enhance core TV features such as picture and sound quality, while also improving the overall user experience within the SmartThings ecosystem. The Company plans to drive sales of premium products centered on Neo QLED, OLED and super big TVs, and it will maintain leadership in the Lifestyle screen category by leveraging well-established competitive advantages.

Furthermore, by capitalizing on the extensive installed base that has been established through hardware leadership, the Visual Display Business will continue to expand the service platform business through advertisement and media such as Samsung TV Plus.

1 Refers to Samsung’s fifth-generation 10nm class DRAM

MIL OSI Economics –

January 25, 2025
MIL-OSI Economics: Global MBBF 2024: Accelerating 5.5G and AI Convergence to Lead the Mobile AI Era Oct 30, 2024

Source: Huawei

Headline: Global MBBF 2024: Accelerating 5.5G and AI Convergence to Lead the Mobile AI Era
Oct 30, 2024

[Istanbul, Türkiye, October 30, 2024] The Global Mobile Broadband Forum 2024 (MBBF 2024) has kicked off in Istanbul, Türkiye with the theme “5.5G Leads Mobile AI Era”. More than 1,000 guests from mobile network carriers, ecosystem players, and leaders from vertical industries have gathered to discuss a wide range of topics, from business model innovation to industry development and key technological directions in the Mobile AI era.
This forum was set up to further promote the convergence of 5.5G and intelligent applications to create greater value for the mobile industry. During the forum, Huawei and Türkiye network carriers have jointly provided diverse intelligent 5.5G field experiences. Also, various players in the Mobile AI ecosystem will be displaying their intelligent connectivity applications for people, homes, things, vehicles, and industries.
MBBF 2024 began with the opening remarks from Ken Hu, Huawei’s Rotating Chairman. “In the future, AI will change everything. Everyone will be able to use it, anytime and anywhere. Mobile networks and devices will play an important role to make that happen, just like what we have done to enable telephones and mobile Internet as a universal service,” said Hu.
Ken Hu, Huawei’s Rotating Chairman, delivering the opening remarks

2024 has brought both the commercial launch of 5.5G and the unprecedented expansion of artificial intelligence (AI) into our everyday life and work. Globally, more than 3 million AI-capable applications have been developed, more than the total number of non-AI apps available in the app store. That early commercial 5.5G rollout coincides with the first year of AI adoption in various devices is tremendously significant — it heralds the dawn of the Mobile AI era.
Li Peng, Huawei’s Senior Vice President and President of ICT Sales & Service delivered a keynote on how to maximize new growth opportunities in the mobile AI era. “The mobile AI era is here,” said Li. “We will see new forms of interaction with devices, new intelligent services, and structural changes in traffic models. This will bring huge new opportunities for the mobile industry.”
Li Peng, Huawei’s Senior Vice President and President of ICT Sales & Service, speaking at Global MBB Forum 2024 in Istanbul

Li then detailed how carriers can make the most of these new opportunities and drive new growth by reshaping services, network infrastructure, O&M, and business models. He shared how leading carriers around the world have already verified AI service capabilities on live 5.5G networks across a wide range of scenarios for individuals, homes, travel, and business.
“Moving forward, there are two things we can do to capitalize on new opportunities in the mobile AI era,” said Li. “First, we should prepare our networks to support AI. That means boosting network capabilities, especially uplink, latency, and capacity. Second, we can use AI to support our networks. With more complex networks, we can use AI to help automate O&M, optimize network efficiency, and guarantee a solid user experience.”
This forum features boutique exhibitions of new intelligent connectivity for people, homes, things, industries, and vehicles. Across the indoor booths and outdoor fields, multimodal AI devices and diverse Mobile AI applications are presented, including AI phones, AI glasses, intelligent cockpits, humanoid intelligence, AI-generated content (AIGC), digital human interaction, and AI-powered real-time call translation, thanks to the joint efforts of Huawei, operators, and industry players. Another highlight is the continuous 5.5G coverage across the indoor and outdoor areas of the venues, showcasing the multidimensional capabilities of 5.5G networks and the cutting-edge products and solutions that power them.
The 15th Global Mobile Broadband Forum, with a tagline of ‘5.5G Leads Mobile AI Era’, runs from October 30 to 31 in Istanbul, Türkiye. It will be hosted by Huawei with support from our industry partners GSMA and GTI. Together with operators, vertical industry leaders, and ecosystem partners, we will share the industry’s latest advancements and explore new opportunities. Industry stakeholders will discuss how to achieve 5.5G business success in the Mobile AI era, and leverage the success of 5G to attain even greater achievements with 5.5G. For more information, please visit MBBF2024 at: https://www.huawei.com/en/events/mbbf2024.

MIL OSI Economics –

January 25, 2025
MIL-OSI Economics: Global MBBF 2024: Accelerating 5.5G and AI Convergence to Lead the Mobile AI Era

Source: Huawei

Headline: Global MBBF 2024: Accelerating 5.5G and AI Convergence to Lead the Mobile AI Era

[Istanbul, Türkiye, October 30, 2024] The Global Mobile Broadband Forum 2024 (MBBF 2024) has kicked off in Istanbul, Türkiye with the theme “5.5G Leads Mobile AI Era”. More than 1,000 guests from mobile network carriers, ecosystem players, and leaders from vertical industries have gathered to discuss a wide range of topics, from business model innovation to industry development and key technological directions in the Mobile AI era.
This forum was set up to further promote the convergence of 5.5G and intelligent applications to create greater value for the mobile industry. During the forum, Huawei and Türkiye network carriers have jointly provided diverse intelligent 5.5G field experiences. Also, various players in the Mobile AI ecosystem will be displaying their intelligent connectivity applications for people, homes, things, vehicles, and industries.
MBBF 2024 began with the opening remarks from Ken Hu, Huawei’s Rotating Chairman. “In the future, AI will change everything. Everyone will be able to use it, anytime and anywhere. Mobile networks and devices will play an important role to make that happen, just like what we have done to enable telephones and mobile Internet as a universal service,” said Hu.
Ken Hu, Huawei’s Rotating Chairman, delivering the opening remarks

2024 has brought both the commercial launch of 5.5G and the unprecedented expansion of artificial intelligence (AI) into our everyday life and work. Globally, more than 3 million AI-capable applications have been developed, more than the total number of non-AI apps available in the app store. That early commercial 5.5G rollout coincides with the first year of AI adoption in various devices is tremendously significant — it heralds the dawn of the Mobile AI era.
Li Peng, Huawei’s Senior Vice President and President of ICT Sales & Service delivered a keynote on how to maximize new growth opportunities in the mobile AI era. “The mobile AI era is here,” said Li. “We will see new forms of interaction with devices, new intelligent services, and structural changes in traffic models. This will bring huge new opportunities for the mobile industry.”
Li Peng, Huawei’s Senior Vice President and President of ICT Sales & Service, speaking at Global MBB Forum 2024 in Istanbul

Li then detailed how carriers can make the most of these new opportunities and drive new growth by reshaping services, network infrastructure, O&M, and business models. He shared how leading carriers around the world have already verified AI service capabilities on live 5.5G networks across a wide range of scenarios for individuals, homes, travel, and business.
“Moving forward, there are two things we can do to capitalize on new opportunities in the mobile AI era,” said Li. “First, we should prepare our networks to support AI. That means boosting network capabilities, especially uplink, latency, and capacity. Second, we can use AI to support our networks. With more complex networks, we can use AI to help automate O&M, optimize network efficiency, and guarantee a solid user experience.”
This forum features boutique exhibitions of new intelligent connectivity for people, homes, things, industries, and vehicles. Across the indoor booths and outdoor fields, multimodal AI devices and diverse Mobile AI applications are presented, including AI phones, AI glasses, intelligent cockpits, humanoid intelligence, AI-generated content (AIGC), digital human interaction, and AI-powered real-time call translation, thanks to the joint efforts of Huawei, operators, and industry players. Another highlight is the continuous 5.5G coverage across the indoor and outdoor areas of the venues, showcasing the multidimensional capabilities of 5.5G networks and the cutting-edge products and solutions that power them.
The 15th Global Mobile Broadband Forum, with a tagline of ‘5.5G Leads Mobile AI Era’, runs from October 30 to 31 in Istanbul, Türkiye. It will be hosted by Huawei with support from our industry partners GSMA and GTI. Together with operators, vertical industry leaders, and ecosystem partners, we will share the industry’s latest advancements and explore new opportunities. Industry stakeholders will discuss how to achieve 5.5G business success in the Mobile AI era, and leverage the success of 5G to attain even greater achievements with 5.5G. For more information, please visit MBBF2024 at: https://www.huawei.com/en/events/mbbf2024.

MIL OSI Economics –

January 25, 2025
MIL-OSI China: FAW-Volkswagen executives share industry trends

Source: China State Council Information Office

Executives from FAW-Volkswagen (FAW-VW) discussed automotive industry trends and engaged with students during a forum at Tsinghua University in Beijing on Oct. 25.

Participants gather at Tsinghua University in Beijing during FAW-Volkswagen’s industry vision presentation to students, Oct. 25, 2024. [Photo courtesy of FAW-VW]

A joint venture between FAW Group and Volkswagen Group, FAW-VW plays a crucial role in the Volkswagen Group’s “In China, For China” strategy. Since its establishment in 1991, FAW-VW has created nearly 500,000 jobs and generated more than 700 billion yuan ($98 billion) in tax revenue, contributing greatly to China’s automobile industry.

Dr. Oliver Gruenberg, vice president of technology at FAW-VW, emphasized the company’s commitment to sustainable development and innovation in his speech.

“FAW-VW actively responds to the national ‘dual carbon’ call, implementing full lifecycle carbon reduction through practical actions in green research and development, green supply chain, green production, green logistics, and green product use,” said Gruenberg.

Gruenberg praised China’s rapidly expanding new energy vehicle industry and emphasized the importance of green transformation in driving sustainable growth.

FAW-VW Vice President of Technology Oliver Gruenberg addresses students at Tsinghua University in Beijing, Oct. 25, 2024. [Photo courtesy of FAW-VW]

Gruenberg highlighted research and development (R&D) and innovation as crucial elements of the automotive sector’s future. He detailed FAW-Volkswagen’s achievements in localized R&D, intelligent manufacturing and quality assurance, while forecasting AI-enabled autonomous driving as the industry’s next major advancement.

During the forum, FAW-VW executives answered questions from Tsinghua University students on topics ranging from career opportunities to industry developments.

Cheng Wanli, human resources director at FAW-VW, stressed the company’s people-oriented approach and its commitment to attracting and developing top talent.

Cheng Wanli, human resources director at FAW-VW, addresses students during Times forum at Tsinghua University in Beijing, Oct. 25, 2024. [Photo courtesy of FAW-VW]

MIL OSI China News –

January 25, 2025

MIL-OSI: Fanhua Announces Change of Name to AIX Inc. and the Results of its Extraordinary General Meeting

Source: GlobeNewswire (MIL-OSI)

GUANGZHOU, China, Oct. 31, 2024 (GLOBE NEWSWIRE) — Fanhua Inc. (Nasdaq: AIFU) (the “Company” or “Fanhua”), a leading independent technology-driven financial services provider in China, today announced the results of its extraordinary general meeting of shareholders held in Guangzhou on October 31, 2024 at 9:00am Beijing Time.

At the extraordinary general meeting, each of the following resolutions submitted for shareholder approval was adopted, and after the adoption of the proposed resolutions, all corporate authorizations and actions contemplated thereunder were approved:

(i) THAT the Company’s English name be changed from “Fanhua Inc.” to “AIX Inc.” and dual foreign (Chinese) name be changed from “泛华控股集团” to “智能未来有限公司”, respectively,

(ii) THAT the authorized share capital of the Company, which is currently US$10,000,000 divided into 10,000,000,000 ordinary shares of a nominal or par value of US$0.001 each, and the rights attaching to the issued shares of the Company, be varied and amended as follows (the “Re-Designation and Variation of Rights”):

(a)

by the re-designation of 8,000,000,000 authorized ordinary shares (including all ordinary shares which are currently issued and outstanding) as Class A Ordinary Shares; and

(b)

by the re-designation of 2,000,000,000 authorized ordinary shares (none of which are currently issued and outstanding) as Class B Ordinary Shares,

and that, in each case, the rights attaching to such shares shall be varied so that they shall have the rights, preferences, privileges and restrictions attaching thereto as set out in the Amended and Restated Memorandum and Articles of Association (as defined below),

such that, after and as a consequence of the Re-Designation and Variation of Rights, the authorized share capital will be US$10,000,000 divided into (i) 8,000,000,000 Class A Ordinary Shares of a nominal or par value of US$0.001 each and (ii) 2,000,000,000 Class B Ordinary Shares of a nominal or par value of US$0.001 each, having the rights, preferences, privileges and restrictions attaching thereto as set out in the Amended and Restated Memorandum and Articles of Association (as defined below).

(iii) THAT, concurrently with the Re-Designation and Variation of Rights and conditional upon approval of the same, the memorandum and articles of association of the Company currently in effect be amended and restated by their deletion in their entirety and the substitution in their place of the Amended and Restated Memorandum and Articles of Association in the form annexed as Exhibit A to the notice of the extraordinary general meeting (the “Amended and Restated Memorandum and Articles of Association”).

After the Re-Designation and Variation of Rights, each holder of the Company’s Class A Ordinary Share is entitled to one vote per share, and each holder of the Company’s Class B Ordinary Share is entitled to 100 votes per share on all matters submitted to them for a vote.

The change of name will take effect on or around November 1, 2024. It better reflects the strategic focus of the Company, which is to become a globally leading technology-driven financial service platform dedicated to empowering financial advisors and fostering sustained value creation for our customers.

The Company’s ISIN and CUSIP codes will remain unchanged. Shareholders are not required to take any specific action regarding the above changes.

In connection with changes to the new Company name and the new ticker symbol, the Company will be transitioning to a new domain for its website and corporate email.

New website addresses:

Official website (Chinese version): https://www.aifugroup.com

Official website (English version): https://en.aifugroup.com

Investor relations website (Chinese version): https://www.aifugroup.com/investor_relations.htm;

Investor relations website (English version): https://ir.aifugroup.com

All company email addresses will follow the format of name@aifugroup.com.

The Company’s new websites will launch on November 1, 2024 concurrently with the transition to the new email domain. In order to ensure a smooth transition, our old domain will be automatically redirected to our new one for a period of time.

About Fanhua Inc.

Driven by its digital technologies and professional expertise in the insurance industry, Fanhua Inc. is the leading independent financial service provider in China, focusing on providing insurance-oriented family asset allocation services that covers customers’ full lifecycle and a one-stop service platform for individual sales agents and independent insurance intermediaries.

With strategic focus on long-term life insurance products, we offer a broad range of insurance products, claims adjusting services and various value-added services to meet customers’ diverse needs, through an extensive network of digitally empowered sales agents and professional claims adjustors. We also operate Baowang (www.baoxian.com), an online insurance platform that provides customers with a one-stop insurance shopping experience.

For more information about Fanhua Inc., please visit https://ir.fanhgroup.com

Forward-looking Statements

This press release contains statements of a forward-looking nature. These statements, including the statements relating to the Company’s future financial and operating results, are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. You can identify these forward-looking statements by terminology such as “will”, “expects”, “believes”, “anticipates”, “intends”, “estimates” and similar statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations, assumptions, estimates and projections about Fanhua and the industry. Potential risks and uncertainties include, but are not limited to, those relating to its ability to attract and retain productive agents, especially entrepreneurial agents, its ability to maintain existing and develop new business relationships with insurance companies, its ability to execute its growth strategy, its ability to adapt to the evolving regulatory environment in the Chinese insurance industry, its ability to compete effectively against its competitors, quarterly variations in its operating results caused by factors beyond its control including macroeconomic conditions in China. Except as otherwise indicated, all information provided in this press release speaks as of the date hereof, and Fanhua undertakes no obligation to update any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although Fanhua believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that its expectations will turn out to be correct, and investors are cautioned that actual results may differ materially from the anticipated results. Further information regarding risks and uncertainties faced by Fanhua is included in Fanhua’s filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F.

For more information, please contact:

Fanhua Inc.

Investor Relations
Tel: +86 (20) 8388-3191
Email: ir@fanhgroup.com

The MIL Network –

January 25, 2025

MIL-OSI: Societe Generale: Third quarter 2024 earnings

Source: GlobeNewswire (MIL-OSI)

RESULTS AT 30 SEPTEMBER 2024

Press release
Paris, 31 October 2024

SOLID BUSINESS PERFORMANCE IN Q3 24,
GROUP NET INCOME OF EUR 1.4 BILLION

Revenues of EUR 6.8 billion, up +10.5% vs. Q3 23¹, driven notably by the strong rebound in net interest income in France, in line with end of year estimate, and by another solid performance of Global Banking and Investor Solutions, in particular in Equities and Transaction Banking

Strong positive jaws, control of operating expenses, down by -0.8% vs. Q3 23

Cost-to-income ratio at 63.3% in Q3 24, improved by 7.1 points vs. Q3 23

Stable cost of risk at 27 basis points in Q3 24

Profitability (ROTE) at 9.6% vs. 3.8% for Q3 23

9M 24 NET INCOME UP 53% VS. 9M 23 AT EUR 3.2 BILLION,
DRIVEN BY THE IMPROVEMENT IN OPERATING PERFORMANCE

Revenues of EUR 20.2 billion, up +5.3% vs. 9M 23

Stable operating expenses, +0.1% vs. 9M 23

Cost-to-income ratio at 68.8%, improved by 3.6 percentage points vs. 9M 23

Profitability (ROTE) at 7.1% vs. 5.0% for 9M 23

SOLID CAPITAL AND LIQUIDITY RATIOS

CET 1 ratio of 13.2%²at end of Q3 24, around 300 basis points above the regulatory requirement

Liquidity Coverage Ratio at 152% at end of Q3 24

Distribution provision of EUR 1.66³per share at end-September 2024

DECISIVE EXECUTION OF THE STRATEGIC PLAN

Capital build-up ahead of Capital Markets Day trajectory

Continuous improvement in efficiency and profitability

Reshaping of the business portfolio well underway

Slawomir Krupa, the Group’s Chief Executive Officer, commented:
“We are publishing solid quarterly results that continue to show strong improvement. It demonstrates that we are executing our strategic plan which is impacting our results in a positive and tangible way. Our revenues are up thanks to the solid performance of our businesses with a strong rebound of the net interest income in France and another remarkable contribution from Global Banking and Investor Solutions. Operating expenses are stable and cost of risk is contained. We are posting a clear improvement of cost-to-income ratio and profitability, and our capital ratio continues to strengthen.
For the past year we have been working relentlessly. Our teams are mobilized and we have made progress in three fundamental areas: capital build-up, improvement of profitability, and the reshaping of our business portfolio. We continue to implement our various strategic initiatives such as BoursoBank’s development, LeasePlan’s integration within Ayvens and the acceleration of our contribution to the energy transition. Our goal remains unchanged: a sustainable performance that will create long-term value.”

GROUP CONSOLIDATED RESULTS

In EURm	Q3 24	Q3 23	Change		9M 24	9M 23	Change
Net banking income	6,837	6,189	+10.5%	+11.8%*	20,167	19,147	+5.3%	+6.5%*
Operating expenses	(4,327)	(4,360)	-0.8%	-0.3%*	(13,877)	(13,858)	+0.1%	+0.5%*
Gross operating income	2,511	1,829	+37.3%	+41.0%*	6,290	5,289	+18.9%	+22.4%*
Net cost of risk	(406)	(316)	+28.4%	+30.5%*	(1,192)	(664)	+79.6%	+81.0%*
Operating income	2,105	1,513	+39.1%	+43.2%*	5,098	4,625	+10.2%	+13.9%*
Net profits or losses from other assets	21	6	x 3.5	x 3.4*	(67)	(92)	+27.5%	+27.3%*
Income tax	(535)	(624)	-14.3%	-12.7%*	(1,188)	(1,377)	-13.7%	-11.3%*
Net income	1,591	563	x 2.8	x 3.0*	3,856	2,836	+35.9%	+41.3%*
O.w. non-controlling interests	224	268	-16.5%	-16.1%*	696	774	-10.1%	-11.2%*
Reported Group net income	1,367	295	x 4.6	x 5.1*	3,160	2,062	+53.2%	+62.2%*
ROE	8.4%	0.9%			6.2%	3.6%	+0.0%	+0.0%*
ROTE	9.6%	3.8%			7.1%	5.0%	+0.0%	+0.0%*
Cost to income	63.3%	70.4%			68.8%	72.4%	+0.0%	+0.0%*

Societe Generale’s Board of Directors, which met on 30 October 2024 under the chairmanship of Lorenzo Bini Smaghi, examined Societe Generale Group’s results for Q3 24 and for the first nine months of 2024.

Net banking income

Net banking income stood at EUR 6.8 billion, up by +10.5% vs. Q3 23.

Revenues of French Retail, Private Banking and Insurance were up by +18.7% vs. Q3 23 and totalled EUR 2.3 billion in Q3 24. Net interest income continued its rebound in Q3 24 (+43% excluding PEL/CEL provision vs. Q3 23), in line with latest estimates, in the context of a still muted loan environment and the pursuit of increasing interest-bearing deposits. Assets under management in the Private Banking and Insurance businesses continued to rise, respectively recording a growth of +8% and +10% in Q3 24 vs. Q3 23. Last, BoursoBank continued its controlled client acquisition, onboarding once again more than 300,000 new clients over the quarter, reaching close to 6.8 million clients at end-September 2024. Likewise, assets under administration rose by over 14% vs. Q3 23. As in Q2 24, BoursoBank posted a positive contribution to Group net income in Q3 24.

Global Banking and Investor Solutions registered a +4.9% increase in revenues relative to Q3 23. Revenues totalled EUR 2.4 billion over the quarter, still driven by strong dynamics of Global Markets’ and Global Transaction & Payment Services’ activities, with revenues increasing by a respective +7.6% and +9.0% in Q3 24 vs. Q3 23. Within Global Markets, revenues of Equity businesses grew by +10.1%. This is the second best third quarter ever. Fixed income and Currencies also recorded a solid performance, with a +6.1% increase in revenues amid a falling interest rates. Financing and Advisory’s revenues totalled EUR 843 million, stable vs. Q3 23. The commercial momentum in the securitisation businesses remained very solid and the performance of financing activities continued to be good, albeit slower relative to an elevated Q3 23. Likewise, Global Transaction & Payment Services’ activities posted an +9.0% increase in revenues vs. Q3 23, driven by a favourable market environment and sustained commercial development in the cash management and correspondent banking activities.

Mobility, International Retail Banking and Financial Services’ revenues were down by -5.4% vs. Q3 23 mainly owing to base effects at Ayvens. International Retail Banking recorded a +1.4% increase in revenues vs. Q3 23 to EUR 1.1 billion, driven by favourable momentum across all regions. Mobility and Financial Services’ revenues contracted by -11.4% vs. Q3 23 owing to an unfavourable non-recurring base effect on Ayvens.

The Corporate Centre recorded revenues of EUR +54 million in Q3 24. They include the booking of exceptional proceeds of approximately EUR 0.3 billion⁴.

Over 9M 24, net banking income increased by +5.3% vs. 9M 23.

Operating expenses

Operating expenses came to EUR 4,327 million in Q3 24, down -0.8% vs. Q3 23.

The cost-to-income ratio stood at 63.3% in Q3 24, a sharp decrease vs. Q3 23 (70.4%) and Q2 24 (68.4%).

Over 9M 24, operating expenses were stable (+0.1% vs. 9M 23) and the cost-to-income ratio came to 68.8% (vs. 72.4% for 9M 23), which is lower than the 71% target set for FY 2024.

Cost of risk

The cost of risk was stable and contained over the quarter at 27 basis points, i.e., EUR 406 million. This comprises a EUR 400 million provision for doubtful loans (around 27 basis points) and a provision on performing loan outstandings for EUR +6 million.

At end-September 2024, the Group’s provisions on performing loans amounted to EUR 3,122 million, down by a slight EUR -56 million relative to 30 June 2024 notably as per the application of IFRS5 accounting standards on activities under disposal. The EUR -450 million contraction relative to 31 December 2023 is mainly owing to the application of IFRS 5 accounting standards for activities under disposal.

The gross non-performing loan ratio stood at 2.95%⁵^,⁶ at 30 September 2024, down vs. end of June 2024 (3.03%). The net coverage ratio on the Group’s non-performing loans stood at 84%⁷ at 30 September 2024 (after netting of guarantees and collateral).

Net profits from other assets

In Q3 24, the Group booked net profit of EUR 21 million driven, on the one hand, by the sale of the headquarters of KB in the Czech Republic and, on the other hand, by the accounting impacts mainly owing to the current sale of assets.

Group net income

Group net income stood at EUR 1,367 million in Q3 24, equating to a Return on Tangible Equity (ROTE) of 9.6%.

Over 9M 24, Group net income came to EUR 3,160 million, equating to a Return on Tangible Equity (ROTE) of 7.1%.

2. STRATEGIC PLAN FULLY ON TRACK

Since announcing its strategic plan in September 2023, the Group has made significant progress in its implementation, the benefits of which are starting to materialise, including on financials aspects. Fundamental milestones have notably been reached in three major areas: capital build-up, the continuous improvement in efficiency and profitability and the reshaping of the business portfolio.

Regarding the business portfolio, the Group has been proactive in recent months, announcing the disposal of several non-core and non-synergistic assets. These latest divestments not only contribute to simplifying the Group but will also reinforce the capital ratio by around 60 basis points, of which around 15 basis points are expected by year-end.

At the same time, the Group is preparing the future by investing in our core franchises, as demonstrated by the development of BoursoBank, the integration of LeasePlan in Ayvens, the creation of Bernstein, the partnership with Brookfield, the merger of our networks in France and the digitalization of our networks in the Czech Republic.

The rollout of our ESG roadmap is also progressing well, particularly on the alignment of our portfolio. The Group has already reduced by more than 50% its upstream Oil & Gas exposure at Q2 24 compared to 2019⁸.

Last quarter, the Group reached its EUR 300 billion sustainable finance target set between 2022-2025. Societe Generale announces today a new sustainable finance target to facilitate EUR 500 billion over the 2024-2030 period that breaks down as follows:
– EUR 400 billion in financing and EUR 100 billion in sustainable bonds⁹
– EUR 400 billion in environmental activities and EUR 100 billion in social

A major portion of financing will be for dedicated transactions in clean energy, sustainable real estate, low carbon mobility, and other industry and environmental transition topics.

3. THE GROUP’S FINANCIAL STRUCTURE

At 30 September 2024, the Group’s Common Equity Tier 1 ratio stood at 13.2%¹⁰, around 300 basis points above the regulatory requirement. Likewise, the Liquidity Coverage Ratio (LCR) was well ahead of regulatory requirements at 152% at end-September 2024 (156% on average for the quarter), and the Net Stable Funding Ratio (NSFR) stood at 116% at end-September 2024.

All liquidity and solvency ratios are well above the regulatory requirements.

	30.09.2024	31.12.2023	Requirements
CET1⁽¹⁾	13.2%	13.1%	10.22%
CET1 fully loaded	13.2%	13.1%	10.22%
Tier 1 ratio ⁽¹⁾	15.5%	15.6%	12.15%
Total Capital⁽¹⁾	18.2%	18.2%	14.71%
Leverage ratio ⁽¹⁾	4.25%	4.25%	3.60%
TLAC (% RWA)⁽¹⁾	27.8%	31.9%	22.29%
TLAC (% leverage)⁽¹⁾	7.6%	8.7%	6.75%
MREL (% RWA)⁽¹⁾	32.2%	33.7%	27.56%
MREL (% leverage)⁽¹⁾	8.8%	9.2%	6.23%
End of period LCR	152%	160%	>100%
Period average LCR	156%	155%	>100%
NSFR	116%	119%	>100%

In EURbn	30.09.2024	31.12.2023
Total consolidated balance sheet	1,580	1,554
Group shareholders’ equity	67	66
Risk-weighted assets	392	389
O.w. credit risk	331	326
Total funded balance sheet	948	970
Customer loans	453	497
Customer deposits	608	618

At 11 October 2024, the parent company had issued a total of EUR 38.0 billion in medium/long-term debt, of which EUR 17.5 billion in vanilla notes. The 2024 long-term vanilla funding programme is completed. The subsidiaries had issued EUR 4.6 billion. In all, the Group has issued a total of EUR 42.6 billion.

The Group is rated by four rating agencies: (i) FitchRatings – long-term rating “A-”, stable outlook, senior preferred debt rating “A”, short-term rating “F1” (ii) Moody’s – long-term rating (senior preferred debt) “A1”, negative outlook, short-term rating “P-1” (iii) R&I – long-term rating (senior preferred debt) “A”, stable outlook; and (iv) S&P Global Ratings – long-term rating (senior preferred debt) “A”, stable outlook, short-term rating “A-1”.
4. FRENCH RETAIL, PRIVATE BANKING AND INSURANCE

In EURm	Q3 24	Q3 23	Change	9M 24	9M 23	Change
Net banking income	2,254	1,900	+18.7%	6,390	6,090	+4.9%
Net banking income excl. PEL/CEL	2,259	1,895	+19.2%	6,392	6,090	+5.0%
Operating expenses	(1,585)	(1,608)	-1.4%	(4,962)	(5,073)	-2.2%
Gross operating income	669	292	x 2.3	1,428	1,017	+40.5%
Net cost of risk	(178)	(144)	+23.4%	(597)	(342)	+74.7%
Operating income	491	148	x 3.3	831	675	+23.1%
Net profits or losses from other assets	(1)	0	n/s	7	4	x 2.1
Reported Group net income	368	109	x 3.4	631	506	+24.8%
RONE	9.4%	2.8%		5.4%	4.4%
Cost to income	70.3%	84.7%		77.7%	83.3%

Commercial activity

SG Network, Private Banking and Insurance

Average outstanding deposits of the SG Network amounted to EUR 236 billion in Q3 24, up by +0.6% vs. the previous quarter (-1% vs. Q3 23), with a continued rise in interest-bearing deposits and financial savings.

The SG Network’s average loan outstandings contracted by -5% vs. Q3 23 to EUR 195 billion. Outstanding loans to corporate and professional clients were stable vs. Q3 23 (excluding government-guaranteed PGE loans), with the share of medium to long-term loans increasing relative to Q2 24. Home loan production continued its recovery (2.4x vs. Q3 23 and +15% vs. Q2 24).

The average loan to deposit ratio came to 82.5% in Q3 24, down by -3.3 percentage points relative to Q3 23.

Private Banking activities saw their assets under management¹¹ reach a new record of EUR 154 billion in Q3 24, up by +8% vs. Q3 23. Net gathering stood at EUR 5.9 billion in 9M 24, the net asset gathering pace (net new money divided by AuM) has risen by +5.5% since the start of the year. Net banking income stood at EUR 368 million over the quarter, stable vs. Q3 23. Over 9M 24, net banking income came to EUR 1,121 million, a +1% increase vs. 9M 23.

Insurance, which covers activities in and outside France, posted a very strong commercial performance. Life insurance outstandings increased sharply by +10% vs. Q3 23 to reach a record EUR 145 billion at end-September 2024. The share of unit-linked products remained high at 40%. Gross life insurance savings inflows amounted to EUR 3.6 billion in Q3 24, up by +35% vs. Q3 23.

Personal protection and P&C premia were up by +5% vs. Q3 23.

BoursoBank

BoursoBank registered almost 6.8 million clients at end-September 2024, a +27% increase vs. Q3 23 (an increase of around 1.4 million clients year on year). The pace of new client acquisition (around 310,000 new clients in Q3 24) is fully in line with the target of 7 million clients by the end of 2024. BoursoBank can build on an active, loyal and high-quality client base. The brokerage activity registered two million transactions, up by +18% vs. Q3 23. Last, proof of the efficiency of the model and of the very high client satisfaction level, the churn rate has remained low at around 3% and below the market rate.

Average loan outstandings rose by +4,2% compared to Q3 23, at EUR 15 billion in Q3 24.

Average outstanding savings including deposits and financial savings were +13.8% higher vs. Q3 23 at EUR 63 billion. Deposits outstanding totalled EUR 38 billion at Q3 24, posting another sharp increase of +16.2% vs. Q3 23. Life insurance outstandings came to EUR 12 billion in Q3 24 and rose by +7.3% vs. Q3 23 (o/w 47% unit-linked products, a +3.3 percentage points increase vs. Q3 23). The activity continued to register strong gross inflows over the quarter (+55% vs. Q3 23, around 53% unit-linked products).

For the second quarter in a row, BoursoBank recorded a positive contribution to Group net income in Q3 24.

Net banking income

Over the quarter, revenues came to EUR 2,254 million, up +19% vs. Q3 23 and up +6% vs Q2 24. Net interest income grew by +43% vs. Q3 23 (excluding PEL/CEL) and +19% (EUR 169 million) vs. Q2 24. Fee income rose by +5.0% relative to Q3 23.

Over 9M 24 revenues came to EUR 6,390 million, up by +4.9% vs. 9M 23. Net interest income excluding PEL/CEL was up by +15.9% vs. 9M 23. Fee income increased by +1.7% relative to 9M 23.

Operating expenses

Over the quarter, operating expenses came to EUR 1,585 million, down -1.4% vs. Q3 23. Operating expenses for Q3 24 include EUR 12 million in transformation costs. The cost-to-income ratio stood at 70.3% for Q3 24, improving by more than +14 percentage points vs. Q3 23.

Over 9M 24, operating expenses came to EUR 4,962 million (-2.2% vs. 9M 23). The cost-to-income ratio stood at 77.7% and improved by +5.7 percentage points vs. 9M 23.

Cost of risk

In Q3 24, the cost of risk amounted to EUR 178 million or 30 basis points stable on Q2 24
(29 basis points).

Over 9M 24, the cost of risk totalled EUR 597 million or 34 basis points.

Group net income

Over the quarter, Group net income totalled EUR 368 million. RONE stood at 9.4% in Q3 24.

Over 9M 24, Group net income totalled EUR 631 million. RONE stood at 5.4% in 9M 24.
5. GLOBAL BANKING AND INVESTOR SOLUTIONS

In EUR m	Q3 24	Q3 23	Variation		9M 24	9M 23	Change
Net banking income	2,422	2,309	+4.9%	+5.2%*	7,666	7,457	+2.8%	+2.8%*
Operating expenses	(1,494)	(1,478)	+1.1%	+1.3%*	(4,898)	(5,187)	-5.6%	-5.5%*
Gross operating income	928	831	+11.6%	+12.0%*	2,768	2,270	+21.9%	+21.8%*
Net cost of risk	(27)	(14)	+95.3%	x 2.0*	(29)	8	n/s	n/s
Operating income	901	817	+10.2%	+10.5%*	2,739	2,278	+20.2%	+20.0%*
Reported Group net income	699	645	+8.2%	+8.5%*	2,160	1,814	+19.1%	+18.8%*
RONE	18.0%	16.8%	+0.0%	+0.0%*	19.0%	15.6%	+0.0%	+0.0%*
Cost to income	61.7%	64.0%	+0.0%	+0.0%*	63.9%	69.6%	+0.0%	+0.0%*

Net banking income

Global Banking and Investor Solutions continued to deliver very strong performances, posting revenues of EUR 2,422 million, up +4.9% versus Q3 23.

Over 9M 24, revenues climbed by +2.8% vs. 9M 23 (EUR 7,666 million vs. EUR 7,457 million).

Global Markets and Investor Services recorded a rise in revenues over the quarter vs. Q3 23 of +7.6% to EUR 1,579 million. Over 9M 24, revenues totalled EUR 5,063 million, i.e., a +3.1% increase vs. 9M 23. Growth was mainly driven by Global Markets which recorded revenues of EUR 1,410 million in Q3 24, up by +8.6% relative to Q3 23 amid a positive environment that was particularly conducive to Equities. Over 9M 24, revenues totalled EUR 4,553 million, up by +4.5% vs. 9M 23.

The Equities business again delivered a solid performance, recording revenues of EUR 880 million in Q3 24, up by a strong +10.1% vs. Q3 23, notably on the back of a very good performance from derivatives amid favourable market conditions. This is the second best third quarter ever. Over 9M 24, revenues increased sharply by +12.9% relative to 9M 23 to EUR 2,739 million.

Fixed Income and Currencies registered a +6.1% increase in revenues to EUR 530 million in Q3 24, notably owing to robust demand for rates and forex flow activities, particularly from US clients. Over 9M 24, revenues decreased by -6.0% to EUR 1,814 million.

Securities Services’ revenues were up +0.6% versus Q3 23 at EUR 169 million, but increased by +9.9% excluding the impact of equity participations. The business continued to reap the benefit of a positive fee generation trend and robust momentum in private market and fund distribution. Over 9M 24, revenues were down by -8.2%, but rose by +2.1% excluding equity participations. Assets under Custody and Assets under Administration amounted to EUR 4,975 billion and EUR 614 billion, respectively.

The Financing and Advisory business posted revenues of EUR 843 million, stable versus Q3 23. Over 9M 24, revenues totalled EUR 2,602 million, up by +2.3% vs. 9M 23.

The Global Banking and Advisory business posted a -3.2% decline in revenues relative to Q3 23. Securitised products again delivered a solid performance and momentum was strong in the distribution activity. Financing activities posted a good performance, albeit down on the high baseline in Q3 23. Investment banking activities turned in resilient performances. Over 9M 24, revenues dipped slightly by -0.3% relative to 9M 23.

Global Transaction & Payment Services again delivered a very robust performance compared with Q3 23, posting an +9.0% increase in revenues, driven by strong momentum in cash management and the correspondent banking activities. Over 9M 24, revenues grew by +10.1%.

Operating expenses

Operating expenses came to EUR 1,494 million over the quarter and included EUR 21 million in transformation costs. Operating expenses rose by +1.1% compared with Q3 23, equating to a cost-to-income ratio of 61.7% in Q3 24.

Over 9M 24, operating expenses decreased by -5.6% compared with 9M 23 and the cost-to-income ratio came to 63.9%.

Cost of risk

Over the quarter, the cost of risk was low at EUR 27 million, or 7 basis points vs. 3 basis points in Q3 23.

Over 9M 24, the cost of risk was EUR 29 million, or 2 basis points.

Group net income

Group net income increased by +8.2% vs. Q3 23 to EUR 699 million. Over 9M 24, Group net income rose sharply by +19.1% to EUR 2,160 million.

Global Banking and Investor Solutions reported high RONE of 18.0% for the quarter and RONE of 19.0% for 9M 24.

6. MOBILITY, INTERNATIONAL RETAIL BANKING AND FINANCIAL SERVICES

In EURm	Q3 24	Q3 23	Change		9M 24	9M 23	Change
Net banking income	2,108	2,228	-5.4%	-2.8%*	6,403	6,491	-1.4%	+1.8%*
Operating expenses	(1,221)	(1,239)	-1.4%	+0.3%*	(3,832)	(3,479)	+10.2%	+12.7%*
Gross operating income	887	989	-10.4%	-6.6%*	2,570	3,013	-14.7%	-10.9%*
Net cost of risk	(201)	(175)	+14.9%	+18.1%*	(572)	(349)	+63.7%	+65.9%*
Operating income	685	814	-15.8%	-12.0%*	1,998	2,663	-25.0%	-21.2%*
Net profits or losses from other assets	94	1	x 77.0	x 76.7*	98	0	x 375.7	x 304.1
Non-controlling interests	223	237	-6.1%	-3.6%*	623	674	-7.6%	-7.8%*
Reported Group net income	367	377	-2.4%	+3.1%*	956	1,325	-27.8%	-22.1%*
RONE	14.1%	14.9%			12.2%	18.6%
Cost to income	57.9%	55.6%			59.9%	53.6%

⁽¹²2⁾()

Commercial activity

International Retail Banking

International Retail Banking1 posted robust commercial momentum in Q3 24, with an increase in loan outstandings of +4.2%* vs. Q3 23 (+1.8%, outstandings of EUR 68 billion in Q3 24) and growth of +4.1%* vs. Q3 23 (+1.2%, outstandings of EUR 83 billion in Q3 24).

Activity in Europe was solid across client segments for both entities. Loan outstandings increased by +6.0%* vs. Q3 23 (+3.1% at current perimeter and exchange rates, outstandings of EUR 43 billion in Q3 24), driven by home loans and medium and long-term corporate loans in a lower rates environment. Deposit outstandings increased by +4.6%* vs. Q3 23 (+1.9% at current perimeter and exchange rates, outstandings of EUR 55 billion in Q3 24), mainly on interest-bearing products.

In Africa, Mediterranean Basin and French Overseas Territories, loan outstandings totalled EUR 25 billion in Q3 24 (+1.2%* vs. Q3 23, stable at current perimeter and exchange rates) on back of a +5.6%* rise vs. Q3 23 in sub-Saharan Africa (stable vs. Q3 23 at current perimeter and exchange rates). Deposit outstandings totalled EUR 27 billion at Q3 24. They increased by +3.0%* vs. Q3 23 (stable at current perimeter and exchange rates) across all client segments in Africa.

Mobility and Financial Services

Overall, Mobility and Financial Services maintained a good commercial performance.

Ayvens’ earning assets totalled EUR 53.1 billion at end-September 2024, a +5.8% increase vs. end-September 2023.

The Consumer Finance business posted loans outstanding of EUR 23 billion for Q3 24, down -4.5% vs. Q3 23 in a still uncertain environment.

Equipment Finance posted outstandings of EUR 15 billion in Q3 24, the same level as in Q3 23.

Net banking income

Over the quarter, Mobility, International Retail Banking and Financial Services’ revenues totalled EUR 2,108 million, a decrease of -2.8%* vs. Q3 23 (-5.4% at current perimeter and exchange rates).

Over 9M 24, revenues came to EUR 6,403 million, up slightly by +1.8%* vs. 9M 23 (-1.4% at current perimeter and exchange rates).

International Retail Banking recorded a solid performance over the quarter, with a net banking income of EUR 1,058 million, up by +5.1%* vs. Q3 23 (+1.4% at current perimeter and exchange rates). Over 9M 24, revenues totalled EUR 3,131 million, a +4.0%* increase vs. 9M 23 (stable at current perimeter and exchange rates).

Europe recorded revenues of EUR 506 million in Q3 24, an increase for both entities (+3.0%* vs. Q3 23, stable at current perimeter and exchange rates).

The Africa, Mediterranean Basin and French Overseas Territories region continued to post robust commercial momentum with revenues of EUR 552 million in Q3 24. These increased by +7.2%* vs. Q3 23 (+2.8% at current perimeter and exchange rates), driven by a significant rise in net interest income in Africa (+10.5%* vs. Q3 23).

In Q3 24, Mobility and Financial Services’ revenues decreased by -11.4% vs. Q3 23 to EUR 1,049 million. Over the first nine months of 2024, they contracted by -2.9% to EUR 3,271 million.

Ayvens’ net banking income stood at EUR 732 million, a decrease of -14,8% in Q3 24 vs. Q3 23 and of
-4,0% restated from non-recurring items¹³. The amount of underlying margins was stable vs. Q3 23 at around EUR 690 million¹. The average used car sale result per vehicle (UCS) continued to normalise but remained at a high level of EUR 1,420¹ per unit in Q3 24 vs. EUR 1,480¹ in Q2 24.

Consumer Finance activities, down by -3.5% vs. Q3 23, have stabilised since Q2 24 with the business posting net banking income of EUR 218 million in Q3 24. Equipment Finance revenues were also stable vs. Q3 23 (EUR 99 million in Q3 24).

Operating expenses

Over the quarter, operating expenses were stable (+0.3%* vs. Q3 23, -1.4%) at EUR 1,221 million and included EUR 29 million in transformation costs. The cost-to-income ratio came to 57.9% in Q3 24.

Over 9M 24, operating expenses totalled EUR 3,832 million, up +12.7%* vs. 9M 23 (+10.2% at current perimeter and exchange rates). They include around EUR 148 million of transformation charges.

In a context of a strong transformation, International Retail Banking costs rose by +3.4%* vs. Q3 23 (stable at current perimeter and exchange rates, EUR 567 million in Q3 24), notably due to the impact of a new banking tax in Romania which entered into force in January 2024.

The Mobility and Financial Services business recorded a decrease in operating expenses compared to Q3 23 (-2.4% vs. Q3 23, EUR 654 million in Q3 24).

Cost of risk

Over the quarter, the cost of risk normalised at 48 basis points (or EUR 201 million).

Over 9M 24, the cost of risk stood at 45 basis points vs. 32 basis points in 9M 23.

Group net income

Over the quarter, Group net income came to EUR 367 million, down -2.4% vs. Q3 23. RONE stood at 14.1% in Q3 24. RONE was 21.4% for International Retail Banking (positive impact on Group net income of around EUR 40 million related to the sale of KB head office premises), and 9.2% in Mobility and Financial Services in Q3 24.

Over 9M 24, Group net income came to EUR 956 million, down by -27.8% vs. 9M 23. RONE stood at 12.2% for 9M 24. RONE was 16.4% in International Retail Banking, and 9.5% in Mobility and Financial Services in 9M 24.
7. CORPORATE CENTRE

In EURm	Q3 24	Q3 23	Change		9M 24	9M 23	Change
Net banking income	54	(249)	n/s	n/s	(291)	(891)	+67.3%	+67.8%*
Operating expenses	(27)	(35)	-22.8%	-25.8%*	(185)	(119)	+55.2%	+48.2%*
Gross operating income	27	(283)	n/s	n/s	(476)	(1,010)	+52.9%	+54.2%*
Net cost of risk	1	17	+95.9%	+95.9%*	6	19	+70.6%	+70.6%*
Net profits or losses from other assets	(73)	4	n/s	n/s	(172)	(96)	-78.9%	-79.1%*
Income tax	(26)	(214)	-87.7%	-87.5%*	118	(85)	n/s	n/s
Reported Group net income	(67)	(836)	+92.0%	+92.2%*	(587)	(1,582)	+62.9%	+63.7%*

The Corporate Centre includes:

the property management of the Group’s head office,
the Group’s equity portfolio,
the Treasury function for the Group,
certain costs related to cross-functional projects, as well as several costs incurred by the Group that are not re-invoiced to the businesses.

Net banking income

Over the quarter, the Corporate Centre’s net banking income totalled EUR +54 million vs. EUR -249 million in Q3 23. It includes the booking of exceptional proceeds received of approximately EUR 0.3 billion¹⁴.

Operating expenses

Over the quarter, operating expenses totalled EUR 27 million vs. EUR 35 million in Q3 23.

Net losses from other assets

Pursuant notably to the application of IFRS 5, the Group booked in Q3 24 various impacts from ongoing disposals of assets.

Group net income

Over the quarter, the Corporate Centre’s Group net income totalled EUR -67 million vs. EUR -836 million in Q3 23.

8. 2024 AND 2025 FINANCIAL CALENDAR

2024 and 2025 Financial communication calendar

February 6^th, 2025 Fourth quarter and full year 2024 results
April 30^th, 2025 First quarter 2025 results
May 20^th, 2025 2024 Combined General Meeting

The Alternative Performance Measures, notably the notions of net banking income for the pillars, operating expenses, cost of risk in basis points, ROE, ROTE, RONE, net assets and tangible net assets are presented in the methodology notes, as are the principles for the presentation of prudential ratios.

This document contains forward-looking statements relating to the targets and strategies of the Societe Generale Group.

These forward-looking statements are based on a series of assumptions, both general and specific, in particular the application of accounting principles and methods in accordance with IFRS (International Financial Reporting Standards) as adopted in the European Union, as well as the application of existing prudential regulations.

These forward-looking statements have also been developed from scenarios based on a number of economic assumptions in the context of a given competitive and regulatory environment. The Group may be unable to:

– anticipate all the risks, uncertainties or other factors likely to affect its business and to appraise their potential consequences;

– evaluate the extent to which the occurrence of a risk or a combination of risks could cause actual results to differ materially from those provided in this document and the related presentation.

Therefore, although Societe Generale believes that these statements are based on reasonable assumptions, these forward-looking statements are subject to numerous risks and uncertainties, including matters not yet known to it or its management or not currently considered material, and there can be no assurance that anticipated events will occur or that the objectives set out will actually be achieved. Important factors that could cause actual results to differ materially from the results anticipated in the forward-looking statements include, among others, overall trends in general economic activity and in Societe Generale’s markets in particular, regulatory and prudential changes, and the success of Societe Generale’s strategic, operating and financial initiatives.

More detailed information on the potential risks that could affect Societe Generale’s financial results can be found in the section “Risk Factors” in our Universal Registration Document filed with the French Autorité des Marchés Financiers (which is available on https://investors.societegenerale.com/en).

Investors are advised to take into account factors of uncertainty and risk likely to impact the operations of the Group when considering the information contained in such forward-looking statements. Other than as required by applicable law, Societe Generale does not undertake any obligation to update or revise any forward-looking information or statements. Unless otherwise specified, the sources for the business rankings and market positions are internal.

9. APPENDIX 1: FINANCIAL DATA

GROUP NET INCOME BY CORE BUSINESS

In EURm	Q3 24	Q3 23	Variation	9M 24	9M 23	Variation
French Retail, Private Banking and Insurance	368	109	x 3.4	631	506	+24.8%
Global Banking and Investor Solutions	699	645	+8.2%	2,160	1,814	+19.1%
Mobility, International Retail Banking & Financial Services	367	377	-2.4%	956	1,325	-27.8%
Core Businesses	1,434	1,131	+26.7%	3,747	3,644	+2.8%
Corporate Centre	(67)	(836)	+92.0%	(587)	(1,582)	+62.9%
Group	1,367	295	x 4.6	3,160	2,062	+53.2%

MAIN EXCEPTIONAL ITEMS

In EURm	Q3 24	Q3 23	9M 24	9M 23
Net Banking Income – Total exceptional items	287	0	287	(240)
One-off legacy items – Corporate Centre	0	0	0	(240)
Exceptional proceeds received – Corporate Centre	287	0	287	0

Operating expenses – Total one-off items and transformation charges	(62)	(145)	(538)	(662)
Transformation charges	(62)	(145)	(538)	(627)
Of which French Retail, Private Banking and Insurance	(12)	(46)	(139)	(330)
Of which Global Banking & Investor Solutions	(21)	(41)	(204)	(102)
Of which Mobility, International Retail Banking & Financial Services	(29)	(58)	(148)	(195)
Of which Corporate Centre	0	0	(47)	0
One-off items	0	0	0	(35)
Of which French Retail, Private Banking and Insurance	0	0	0	60
Of which Global Banking & Investor Solutions	0	0	0	(95)

Other one-off items – Total	13	(625)	13	(704)
Net profits or losses from other assets	13	(17)	13	(96)
Of which Mobility, International Retail Banking and Financial Services	86	0	86	0
Of which Corporate Centre	(73)	(17)	(73)	(96)
Goodwill impairment – Corporate Centre	0	(338)	0	(338)
Provision of Deferred Tax Assets – Corporate Centre	0	(270)	0	(270)

CONSOLIDATED BALANCE SHEET

In EUR m	30.09.2024	31.12.2023
Cash, due from central banks	199,140	223,048
Financial assets at fair value through profit or loss	528,259	495,882
Hedging derivatives	8,265	10,585
Financial assets at fair value through other comprehensive income	93,795	90,894
Securities at amortised cost	29,908	28,147
Due from banks at amortised cost	87,153	77,879
Customer loans at amortised cost	446,576	485,449
Revaluation differences on portfolios hedged against interest rate risk	(330)	(433)
Insurance and reinsurance contracts assets	438	459
Tax assets	4,535	4,717
Other assets	75,523	69,765
Non-current assets held for sale	39,940	1,763
Investments accounted for using the equity method	384	227
Tangible and intangible fixed assets	60,970	60,714
Goodwill	5,031	4,949
Total	1,579,587	1,554,045

In EUR m	30.09.2024	31.12.2023
Due to central banks	10,134	9,718
Financial liabilities at fair value through profit or loss	391,788	375,584
Hedging derivatives	14,621	18,708
Debt securities issued	162,997	160,506
Due to banks	105,320	117,847
Customer deposits	526,100	541,677
Revaluation differences on portfolios hedged against interest rate risk	(5,074)	(5,857)
Tax liabilities	2,516	2,402
Other liabilities	93,909	93,658
Non-current liabilities held for sale	29,802	1,703
Insurance contracts related liabilities	150,295	141,723
Provisions	3,954	4,235
Subordinated debts	15,985	15,894
Total liabilities	1,502,347	1,477,798
Shareholder’s equity	–	–
Shareholders’ equity, Group share	–	–
Issued common stocks and capital reserves	21,166	21,186
Other equity instruments	8,918	8,924
Retained earnings	34,074	32,891
Net income	3,160	2,493
Sub-total	67,318	65,494
Unrealised or deferred capital gains and losses	128	481
Sub-total equity, Group share	67,446	65,975
Non-controlling interests	9,794	10,272
Total equity	77,240	76,247
Total	1,579,587	1,554,045

10. APPENDIX 2: METHODOLOGY

1 –The financial information presented for the third quarter and nine-month 2024 was examined by the Board of Directors on October 30^th, 2024 and has been prepared in accordance with IFRS as adopted in the European Union and applicable at that date. This information has not been audited.

2 – Net banking income

The pillars’ net banking income is defined on page 42 of Societe Generale’s 2024 Universal Registration Document. The terms “Revenues” or “Net Banking Income” are used interchangeably. They provide a normalised measure of each pillar’s net banking income taking into account the normative capital mobilised for its activity.

3 – Operating expenses

Operating expenses correspond to the “Operating Expenses” as presented in note 5 to the Group’s consolidated financial statements as at December 31^st, 2023. The term “costs” is also used to refer to Operating Expenses. The Cost/Income Ratio is defined on page 42 of Societe Generale’s 2024 Universal Registration Document.

4 – Cost of risk in basis points, coverage ratio for doubtful outstandings

The cost of risk is defined on pages 43 and 770 of Societe Generale’s 2024 Universal Registration Document. This indicator makes it possible to assess the level of risk of each of the pillars as a percentage of balance sheet loan commitments, including operating leases.

In EURm		Q3 24	Q3 23	9M 24	9M 23
French Retail, Private Banking and Insurance	Net Cost Of Risk	178	144	597	342
	Gross loan Outstandings	234,420	243,740	236,286	248,757
	Cost of Risk in bp	30	24	34	18
Global Banking and Investor Solutions	Net Cost Of Risk	27	14	29	(8)
	Gross loan Outstandings	163,160	167,057	163,482	170,165
	Cost of Risk in bp	7	3	2	(1)
Mobility, International Retail Banking & Financial Services	Net Cost Of Risk	201	175	572	349
	Gross loan Outstandings	168,182	162,873	167,680	145,227
	Cost of Risk in bp	48	43	45	32
Corporate Centre	Net Cost Of Risk	(1)	(17)	(6)	(19)
	Gross loan Outstandings	25,121	22,681	24,356	19,364
	Cost of Risk in bp	(1)	(31)	(3)	(13)
Societe Generale Group	Net Cost Of Risk	406	316	1,192	664
	Gross loan Outstandings	590,882	596,350	591,804	583,512
	Cost of Risk in bp	27	21	27	15

The gross coverage ratio for doubtful outstandings is calculated as the ratio of provisions recognised in respect of the credit risk to gross outstandings identified as in default within the meaning of the regulations, without taking account of any guarantees provided. This coverage ratio measures the maximum residual risk associated with outstandings in default (“doubtful”).

5 – ROE, ROTE, RONE

The notions of ROE (Return on Equity) and ROTE (Return on Tangible Equity), as well as their calculation methodology, are specified on pages 43 and 44 of Societe Generale’s 2024 Universal Registration Document. This measure makes it possible to assess Societe Generale’s return on equity and return on tangible equity.
RONE (Return on Normative Equity) determines the return on average normative equity allocated to the Group’s businesses, according to the principles presented on page 44 of Societe Generale’s 2024 Universal Registration Document.
Group net income used for the ratio numerator is the accounting Group net income adjusted for “Interest paid and payable to holders if deeply subordinated notes and undated subordinated notes, issue premium amortisation”. For ROTE, income is also restated for goodwill impairment.
Details of the corrections made to the accounting equity in order to calculate ROE and ROTE for the period are given in the table below:

ROTE calculation: calculation methodology

End of period (in EURm)	Q3 24	Q3 23	9M 24	9M 23
Shareholders’ equity Group share	67,446	68,077	67,446	68,077
Deeply subordinated and undated subordinated notes	(8,955)	(11,054)	(8,955)	(11,054)
Interest payable to holders of deeply & undated subordinated notes, issue premium amortisation⁽¹⁾	(45)	(102)	(45)	(102)
OCI excluding conversion reserves	560	853	560	853
Distribution provision⁽²⁾	(1,319)	(1,059)	(1,319)	(1,059)
Distribution N-1 to be paid	–	–	–	–
ROE equity end-of-period	57,687	56,715	57,687	56,715
Average ROE equity	57,368	56,572	56,896	56,326
Average Goodwill⁽³⁾	(4,160)	(4,279)	(4,079)	(3,991)
Average Intangible Assets	(2,906)	(3,390)	(2,933)	(3,128)
Average ROTE equity	50,302	48,903	49,884	49,207

Group net Income	1,367	295	3,160	2,063
Interest paid and payable to holders of deeply subordinated notes and undated subordinated notes, issue premium amortisation	(165)	(165)	(521)	(544)
Cancellation of goodwill impairment	–	338	–	338
Adjusted Group net Income	1,202	468	2,639	1,858
ROTE	9.6%	3.8%	7.1%	5.0%

¹⁵¹⁶¹⁷

RONE calculation: Average capital allocated to Core Businesses (in EURm)

In EURm	Q3 24	Q3 23	Change	9M 24	9M 23	Change
French Retail , Private Banking and Insurance	15,695	15,564	+0.8%	15,602	15,457	+0.9%
Global Banking and Investor Solutions	15,490	15,324	+1.1%	15,149	15,485	-2.2%
Mobility, International Retail Banking & Financial Services	10,433	10,136	+2.9%	10,425	9,505	+9.7%
Core Businesses	41,618	41,024	+1.4%	41,177	40,448	+1.8%
Corporate Center	15,750	15,548	+1.3%	15,719	15,878	-1.0%
Group	57,368	56,572	+1.4%	56,896	56,326	+1.0%

6 – Net assets and tangible net assets

Net assets and tangible net assets are defined in the methodology, page 45 of the Group’s 2024 Universal Registration Document. The items used to calculate them are presented below:
¹⁸¹⁹

End of period (in EURm)	9M 24	H1 24	2023
Shareholders’ equity Group share	67,446	66,829	65,975
Deeply subordinated and undated subordinated notes	(8,955)	(9,747)	(9,095)
Interest of deeply & undated subordinated notes, issue premium amortisation⁽¹⁾	(45)	(19)	(21)
Book value of own shares in trading portfolio	97	96	36
Net Asset Value	58,543	57,159	56,895
Goodwill⁽²⁾	(4,178)	(4,143)	(4,008)
Intangible Assets	(2,895)	(2,917)	(2,954)
Net Tangible Asset Value	51,471	50,099	49,933

Number of shares used to calculate NAPS⁽³⁾	796,498	787,442	796,244
Net Asset Value per Share	73.5	72.6	71.5
Net Tangible Asset Value per Share	64.6	63.6	62.7

7 – Calculation of Earnings Per Share (EPS)

The EPS published by Societe Generale is calculated according to the rules defined by the IAS 33 standard (see page 44 of Societe Generale’s 2024 Universal Registration Document). The corrections made to Group net income in order to calculate EPS correspond to the restatements carried out for the calculation of ROE and ROTE.
The calculation of Earnings Per Share is described in the following table:

Average number of shares (thousands)	9M 24	H1 24	2023
Existing shares	802,314	802,980	818,008
Deductions
Shares allocated to cover stock option plans and free shares awarded to staff	4,548	4,791	6,802
Other own shares and treasury shares	2,930	3,907	11,891
Number of shares used to calculate EPS⁽⁴⁾	794,836	794,282	799,315
Group net Income (in EUR m)	3,160	1,793	2,493
Interest on deeply subordinated notes and undated subordinated notes (in EUR m)	(521)	(356)	(759)
Adjusted Group net income (in EUR m)	2,638	1,437	1,735
EPS (in EUR)	3.32	1.81	2.17

²⁰
8 – The Societe Generale Group’s Common Equity Tier 1 capital is calculated in accordance with applicable CRR2/CRD5 rules. The fully loaded solvency ratios are presented pro forma for current earnings, net of dividends, for the current financial year, unless specified otherwise. When there is reference to phased-in ratios, these do not include the earnings for the current financial year, unless specified otherwise. The leverage ratio is also calculated according to applicable CRR2/CRD5 rules including the phased-in following the same rationale as solvency ratios.

9 – Funded balance sheet, loan to deposit ratio

The funded balance sheet is based on the Group financial statements. It is obtained in two steps:

A first step aiming at reclassifying the items of the financial statements into aggregates allowing for a more economic reading of the balance sheet. Main reclassifications:

Insurance: grouping of the accounting items related to insurance within a single aggregate in both assets and liabilities.
Customer loans: include outstanding loans with customers (net of provisions and write-downs, including net lease financing outstanding and transactions at fair value through profit and loss); excludes financial assets reclassified under loans and receivables in accordance with the conditions stipulated by IFRS 9 (these positions have been reclassified in their original lines).
Wholesale funding: Includes interbank liabilities and debt securities issued. Financing transactions have been allocated to medium/long-term resources and short-term resources based on the maturity of outstanding, more or less than one year.
Reclassification under customer deposits of the share of issues placed by French Retail Banking networks (recorded in medium/long-term financing), and certain transactions carried out with counterparties equivalent to customer deposits (previously included in short term financing).
Deduction from customer deposits and reintegration into short-term financing of certain transactions equivalent to market resources.

A second step aiming at excluding the contribution of insurance subsidiaries, and netting derivatives, repurchase agreements, securities borrowing/lending, accruals and “due to central banks”.

The Group loan/deposit ratio is determined as the division of the customer loans by customer deposits as presented in the funded balance sheet.

NB (1) The sum of values contained in the tables and analyses may differ slightly from the total reported due to rounding rules.
(2) All the information on the results for the period (notably: press release, downloadable data, presentation slides and supplement) is available on Societe Generale’s website www.societegenerale.com in the “Investor” section.

Societe Generale

Societe Generale is a top tier European Bank with more than 126,000 employees serving about 25 million clients in 65 countries across the world. We have been supporting the development of our economies for nearly 160 years, providing our corporate, institutional, and individual clients with a wide array of value-added advisory and financial solutions. Our long-lasting and trusted relationships with the clients, our cutting-edge expertise, our unique innovation, our ESG capabilities and leading franchises are part of our DNA and serve our most essential objective – to deliver sustainable value creation for all our stakeholders.

The Group runs three complementary sets of businesses, embedding ESG offerings for all its clients:

French Retail, Private Banking and Insurance, with leading retail bank SG and insurance franchise, premium private banking services, and the leading digital bank BoursoBank.
Global Banking and Investor Solutions, a top tier wholesale bank offering tailored-made solutions with distinctive global leadership in equity derivatives, structured finance and ESG.
Mobility, International Retail Banking and Financial Services, comprising well-established universal banks (in Czech Republic, Romania and several African countries), Ayvens (the new ALD I LeasePlan brand), a global player in sustainable mobility, as well as specialized financing activities.

Committed to building together with its clients a better and sustainable future, Societe Generale aims to be a leading partner in the environmental transition and sustainability overall. The Group is included in the principal socially responsible investment indices: DJSI (Europe), FTSE4Good (Global and Europe), Bloomberg Gender-Equality Index, Refinitiv Diversity and Inclusion Index, Euronext Vigeo (Europe and Eurozone), STOXX Global ESG Leaders indexes, and the MSCI Low Carbon Leaders Index (World and Europe).

For more information, you can follow us on Twitter/X @societegenerale or visit our website societegenerale.com. or visit our website societegenerale.com.

Asterisks* in the document refer to data at constant perimeter and exchange rates
1 +5.8% excluding exceptional proceeds recorded in Corporate Centre (~EUR 0.3bn)
2 Including IFRS 9 phasing, proforma including Q3 24 results
3 Based on a pay-out ratio of 50% of the Group net income, at the high-end of the 40%-50% pay-out ratio, as per regulation, restated from non-cash items and after deduction of interest on deeply subordinated notes and undated subordinated notes
4 As stated in Q2 24 results press release
5 Ratio calculated according to European Banking Authority (EBA) methodology published on 16 July 2019
⁶ Ratio excluding loans outstanding of companies currently being disposed of in compliance with IFRS 5
⁷ Ratio of S3 provisions, guarantees and collaterals over gross outstanding non-performing loans
8 Target: -80% upstream exposure reduction by 2030 vs. 2019, with an intermediary step in 2025 at -50% vs. 2019
9 Only the Societe Generale participation is taken into account
10 Including IFRS 9 phasing, proforma including Q3 24 results
11 France and International, including Switzerland and United Kingdom
1 Including entities reported under IFRS 5
1 Excluding non-recurring items on either margins or UCS (mainly linked to fleet revaluation at EUR 114m in Q3 23 vs EUR 0m in Q3 24, the net impact related to prospective depreciation and Purchase Price Allocation for ~EUR 35m vs. Q3 23, hyperinflation in Turkey at EUR 46m in Q3 23 vs. EUR 10m in Q3 24 and MtM of derivatives at EUR -82m in Q3 23 vs. EUR -55m in Q3 24)
14 As stated in Q2 24 results press release
15 Interest net of tax
16 The dividend to be paid is calculated based on a pay-out ratio of 50%, restated from non-cash items and after deduction of interest on deeply subordinated notes and on undated subordinated notes
17 Excluding goodwill arising from non-controlling interests
18 Interest net of tax
19 Excluding goodwill arising from non-controlling interests
20 The number of shares considered is the number of ordinary shares outstanding at end of period, excluding treasury shares and buybacks, but including the trading shares held by the Group (expressed in thousand of shares)
4 The number of shares considered is the average number of ordinary shares outstanding during the period, excluding treasury shares and buybacks, but including the trading shares held by the Group.

Attachment

Societe-Generale-Q3-2024-Financial-Results-Press-release-en

The MIL Network –

January 25, 2025

MIL-OSI: Societe Generale: Managerial changes within the Group

Source: GlobeNewswire (MIL-OSI)

SOCIETE GENERALE: MANAGERIAL CHANGES WITHIN THE GROUP

Press release
Paris, 31 October 2024

Societe Generale announces managerial changes within the Group.

Within General Management:

Following a proposal by Slawomir Krupa, Chief Executive Officer, the Societe Generale Board of Directors, under the chairmanship of Lorenzo Bini Smaghi, approved on 30 October 2024 the reduction of the number of General Management executive officers to two: Slawomir Krupa, Chief Executive Officer, and Pierre Palmieri, Deputy Chief Executive Officer.

Philippe Aymerich, Deputy Chief Executive Officer, will step down from his role on 31 October 2024.

As part of this change, Slawomir Krupa will assume direct supervision of Retail Banking activities in France (SG Network and BoursoBank), Private Banking, and Insurance.

Within Retail Banking and Private Banking:

Bertrand Cozzarolo and Thierry Le Marre are appointed Co-Heads of the SG Retail Banking network in France, effective 1 November 2024. They have been serving Societe Generale and its clients since 2004 and 1998, respectively. Their extensive experience in retail banking activities in France and abroad, as well as their direct contribution to the development of SG Retail Banking, will be essential assets in implementing our ambitious commercial roadmap to deliver sustainable performance.

They replace Marie-Christine Ducholet, who will pursue projects outside the Group, effective 31 October 2024.

Mathieu Vedrenne is appointed Head of Private Banking activities, effective 1 November 2024, replacing Bertrand Cozzarolo. At the service of the Group and its clients since 2001, he is currently Deputy Head of Private Banking, with particular responsibility for Private Banking in France, where he has successfully led its many years of sustainable growth.

Within Financial Management:

Leopoldo Alvear is appointed Chief Financial Officer of the Group, effective 7 January 2025. He will also become a member of the Group Executive Committee. With over 27 years of banking experience, including 12 years as head of financial departments at banking institutions (successively at Bankia and currently at Banco Sabadell), Leopoldo Alvear has demonstrated outstanding professional and leadership qualities.

He will succeed Claire Dumas, who will ensure a seamless transition of the Chief Financial Officer duties until the end of January 2025, before pursuing professional opportunities outside the Group.

The role of the Chief Financial Officer remains a direct report to Slawomir Krupa.

Slawomir Krupa, Chief Executive Officer, comments: “Over the past 18 months, we have initiated numerous transformation, development and efficiency initiatives to strengthen our Group and increase the sustainability of our performance. We are already realizing the tangible benefits in our results. The trajectory of our improvement is clear, and our determination is unwavering.
I would like to warmly thank Philippe and Marie-Christine for their commitment throughout the many years they have served our Group, and I wish them every success in their new projects.
I am proud to promote our internal talents, Bertrand, Thierry and Mathieu, to continue building the new model of our SG Network in France while also developing our Private Banking activities, and strengthening commercial dynamics, synergies, and financial performance of our retail banking activities in France.
I would also like to thank Claire for all the work she has done for Societe Generale over the past two decades, which she will continue during the transition period until the end of January.
I am delighted to welcome Leopoldo to our team starting 7 January. His experience as a chief financial officer of other banking institutions, as well as his professional and personal qualities, will be valuable assets in ensuring the flawless execution of our strategic plan.
Our ambition remains the same: to build a stronger and more profitable bank and create more long-term value for all our stakeholders.”

Press contact:
Jean-Baptiste Froville_+33 1 58 98 68 00_ jean-baptiste.froville@socgen.com

Biographies

	Bertrand Cozzarolo began his career in 2000 in the General Inspection teams of the Ministry of Finance before joining Societe Generale in 2004 as a financial analyst. He subsequently held several management positions within retail banking subsidiaries in Egypt and Bulgaria before returning to France in 2011 as Executive Management Chief of Staff. In 2015, he joined Retail Banking in France, where he held various key positions in commercial management and customer relations before being appointed as the Commercial and Marketing Director in 2021. In December 2022, he was appointed as the Head of Societe Generale Private Banking. He is a graduate of the Paris Institute of Political Studies and a former student of the National School of Administration.
	Thierry Le Marre began his career in 1990 as a consultant at Coopers & Lybrand before joining the Societe Generale Group in 1998 in the Organization department. In 2002, he became the Chief of Staff of the Chairman and Secretary of the Board of Directors. From 2007 to 2014, he held various management positions in international consumer credit activities. In 2014, he joined retail banking in France, where he successively led two regional delegations. In January 2021, he was appointed co-responsible for the “Clients and network organization” project within the merger project between Credit du Nord and Societe Generale. He has been the Regional Director of SG Societe Generale Ile-de-France Sud since 2023. He is a graduate of the Paris Institute of Political Studies.
	Mathieu Vedrenne began his career as a consultant at PriceWaterhouseCoopers in 1998 before joining the General Inspection of Societe Generale in 2001, and then the Strategy Department in 2005. In 2008, he was appointed as Executive Management Chief of Staff. He joined Private Banking in 2011, where he held several positions in Switzerland and France and contributed to the commercial development of the activities. He has been Head of Societe Generale Private Banking France since 2019 and Deputy Head of Private Banking since 2023. He is a graduate of the Swiss Federal Institute of Technology Lausanne (EPFL).
	Leopoldo Alvear has over 27 years of experience in financial services. Since 2021, he has been the General Manager and Chief Financial Officer of Banco Sabadell. Previously, he spent 11 years at Bankia, where he successively held the positions of first Head of Financial Management & Rating, and then, since 2012 Group CFO. He began his career at PWC in Corporate Finance before joining Caja Madrid as head of Equity Capital Markets. He is a graduate of the Complutense University of Madrid.

Societe Generale

Societe Generale is a top tier European Bank with more than 126,000 employees serving about 25 million clients in 65 countries across the world. We have been supporting the development of our economies for 160 years, providing our corporate, institutional, and individual clients with a wide array of value-added advisory and financial solutions. Our long-lasting and trusted relationships with the clients, our cutting-edge expertise, our unique innovation, our ESG capabilities and leading franchises are part of our DNA and serve our most essential objective – to deliver sustainable value creation for all our stakeholders.

The Group runs three complementary sets of businesses, embedding ESG offerings for all its clients:

French Retail, Private Banking and Insurance, with leading retail bank SG and insurance franchise, premium private banking services, and the leading digital bank BoursoBank.
Global Banking and Investor Solutions, a top tier wholesale bank offering tailored-made solutions with distinctive global leadership in equity derivatives, structured finance and ESG.
Mobility, International Retail Banking and Financial Services, comprising well-established universal banks (in Czech Republic, Romania and several African countries), Ayvens (the new ALD I LeasePlan brand), a global player in sustainable mobility, as well as specialized financing activities.

In case of doubt regarding the authenticity of this press release, please go to the end of the Group News page on societegenerale.com website where official Press Releases sent by Societe Generale can be certified using blockchain technology. A link will allow you to check the document’s legitimacy directly on the web page.

For more information, you can follow us on Twitter/X @societegenerale or visit our website societegenerale.com.

Attachment

Societe-Generale-Managerial-changes-within-the-Group

The MIL Network –

January 25, 2025

MIL-OSI Europe: Christine Lagarde: Interview with Le Monde

Source: European Central Bank

Interview with Christine Lagarde, President of the ECB, conducted by Eric Albert, Philippe Escande and Béatrice Madeline on 28 October 2024

31 October 2024

In September, former ECB President Mario Draghi published an alarming report on how the European economy is falling behind. Do you agree with this assessment?

Europe is falling behind. It’s true. And so is France. Mario Draghi’s report highlights the productivity gap, which is largely due to the tech sector. Tech players in Europe and the United States believe that the gap first emerged during the digital revolution that began in the mid-1990s.

The question now is whether the boost that the United States got from the mid-1990s will continue with artificial intelligence, the accumulation of data centres and the exploitation of these data. This is the key issue. In Europe we need to roll up our sleeves and make an effort to keep those companies that start out here and then develop themselves elsewhere. We need to try to make them stay.

So what is the solution? Do you think the gap will remain?

We need to look at why Europe is falling behind. The energy component is key, especially as regards data centres. Labour is also important, with mobility being much greater in the United States. And regulation is a crucial issue, too. In overly simple terms, the United States is developing AI very quickly, and already has a number of major players. In the meantime, not only is Europe lacking such big players, but it has also become a pioneer in AI regulation. This causes players in this sector to say “OK, let’s do this elsewhere. It’ll be easier and we’ll have fewer obstacles and fewer restrictions”.

What about the public funding provided to businesses in the United States?

The fourth factor that is contributing to Europe falling behind is the “light” industrial policy pursued by the United States. It’s not light in terms of money because the Inflation Reduction Act of August 2022 is very large, but there are relatively few criteria to qualify for funding to start a company on US soil. When I ask manufacturers, they pretty much all agree that in Europe, the process is complicated and unwieldy. And on top of the multi-layered European system, you then have those of the Member States.

The final factor is private funding. In the United States there are pension fund plans and other financial instruments that make it possible to channel savings and get savers (employees or retirees) interested in the future of the economy or the evolution of the stock market. In many European countries, these plans are still a long way off of those mechanisms, especially share participation and company profit sharing. Hence the need to develop a capital markets union.

But we have been talking about this project for the past 15 years. And when Mario Draghi’s report was published, Germany immediately opposed common borrowing. Is Europe really capable of reacting?

You’re right. We have been talking about a capital markets union since the time of Jean-Claude Juncker (President of the European Commission from 2014 to 2019), and little progress has been made. The Letta and Draghi reports are a wake-up call for Europeans, a warning. The assessment is severe but fair and provides specific recommendations. It suggests that all Europeans should gear up and be ready to give up a bit of sovereignty to ‘combine the best,’ to paraphrase what Paul Valéry once said. But what gives me hope is the engagement of all European institutions on the capital markets union. The ECB’s Governing Council is firmly engaged as well. We must use this momentum.

In 2020, the plan for a collective European loan of €750 billion was a major step forward. Four years later, less than half of the loan has been allocated. Should we see this as another example of European slowness?

We had exactly the same problem during the Greek crisis. The administrations of the different countries are not always able to quickly manage the incoming funds. The finance ministers of countries receiving a lot of funds tell you that they have of course identified what bridge or railway line should be constructed, but that they need to obtain local authorisations as well as permissions to expropriate property, and that environmental organisations are taking court actions. All of this takes a lot of time.

In this context, what consequences could the US elections on Tuesday 5 November have for Europe?

I do not want to give an opinion on any particular candidate. But US international trade policy will of course have an impact on economic activity in the rest of the world, and primarily on China. Whoever wins, if trade fragmentation worsens, the effect on global GDP will be negative, with losses reaching 9% in a severe scenario of full decoupling according to ECB simulations. But remember: when Joe Biden was elected, everyone thought that he would remove the customs barriers erected by his predecessor (Donald Trump). Nothing came of that.

Between China, which is withdrawing towards Asia, and the United States, which is closing up again, isn’t Europe, as a partner to both powers, the big loser?

That’s why we need to act and roll up our sleeves. Will Europe need to undergo another crisis for it to bring about reforms? It’s always in times of crisis that we are able to make things happen. That may be why Mario Draghi speaks of “agony”, it’s a way of saying “the crisis is here, now, do something!”.

There is talk of a European decoupling. But isn’t there a French decoupling within Europe?

If you compare today’s GDP figures with those of 2019, the United States has grown by 10.7%, the European average by 4.8% and France by 3.7%. France is lagging behind the European average.

What is your view of the surge in the French deficit?

The prospect of returning in line with European standards by applying European fiscal rules should serve as a binding guideline.

And are the French promises to restore public finances credible?

As I said, applying European fiscal rules should serve as a binding guideline.

Will we be heading towards a recession in Europe in 2025?

Based on the information now available and our current assessment, we don’t see a recession in 2024, nor in 2025, nor in 2026.

What will drive this growth, given the weakness in demand?

The two levers are exports and domestic demand, which is set to pick up. Today, with wages rising and inflation falling, disposable income is increasing. For the moment, this benefits savings more than consumption. But we are convinced, and economic history shows us, that this additional disposable income will ultimately flow towards consumption.

How do you explain the fact that it is proving so difficult for consumption to recover?

We can indeed ask why households are choosing to save their money instead of spending it. It could be that people are reluctant to make major purchases owing to geopolitical uncertainty. A second explanation could be related to the return on their savings, which is still fairly high in the euro area. A third could be that people are deciding it’s better to save rather than spend when they expect their taxes or other contributions to go up.

Euro area inflation was at 1.7% in September, below your 2% target. Is it now under control?

The target is in sight but I’m not going to tell you that inflation is defeated yet. Inflation stood at 1.7% in September. Excluding energy and food, it was still at 2.7%. We are pleased about the 1.7% figure, but we also know that inflation is going to rise again in the coming months simply because of base effects. In September energy prices were 6.1% lower than a year earlier, bringing down the cost of the consumption basket. Besides, inflation in the services sector – which is highly dependent on wages – is still at 3.9%. So, prudence is warranted.

How do you respond to those who say the ECB was too late in reacting to the rise in inflation?

I tell them we should look at the facts. Don’t forget that inflation was at 10.6% two years ago. It has fallen back to 1.7%. Perhaps we could have started a few months earlier. But we raised rates at the fastest pace ever and we managed to bring down inflation considerably in a short period of time. I now want to see inflation reach the 2% target on a sustained and durable basis. Unless there is a major shock, this will happen during the course of 2025.

And what do you say to those who now accuse you of cutting rates too late and not quickly enough?

The pace at which interest rates are cut will be determined by the economic data we receive in the coming weeks and months – based on our updated assessment of the inflation outlook, the dynamics of underlying inflation and the strength of monetary policy transmission. And to revitalise growth, urgent action is needed in the area of structural reforms.

The spread between France and Germany has increased from 0.5% to 0.8% since the French National Assembly was dissolved. The ECB has an instrument that it can use to intervene and calm the markets. Are you ready to use it?

We have clearly outlined the conditions under which we will use this instrument. And that is not an issue today.

A number of emerging countries brought together by the BRICS (Brazil, Russia, India, China and South Africa) are thinking about a payments system to circumvent the dollar. Is dedollarisation happening?

That would require another country to be able to take on the role of reserve currency. China is preparing for that, but it isn’t ready yet. I won’t see the renminbi take the place of the dollar in my lifetime.

MIL OSI Europe News –

January 25, 2025
MIL-OSI Asia-Pac: FS explores opportunities in Riyadh

Source: Hong Kong Information Services

Financial Secretary Paul Chan, currently leading a delegation on a visit to Riyadh, Saudi Arabia, yesterday attended the listing ceremony for the first Saudi exchange-traded fund (ETF) that tracks Hong Kong stocks on the Saudi stock exchange.

The fund is the result of collaboration between Albilad Bank of Saudi Arabia and Hong Kong’s CSOP Asset Management.

Mr Chan said that, as the largest of its kind in the Middle East, the ETF will create a win-win situation by attracting more investors to the Hong Kong market, while also fostering the development of the ETF market in Saudi Arabia.

He also highlighted that the fund is Saudi Arabia’s first ETF tracking Hong Kong stocks, after the first ETF invested in the Saudi market was listed in Hong Kong last November.

He added that he believes more products will emerge in the future to give investors from the Middle East convenient access to the Hong Kong and Mainland markets. Such products will enhance the two-way flow of capital between Hong Kong and Saudi Arabia, fostering greater connectivity and stimulating the development of the capital markets in both regions, he said.

The finance chief also attended a breakfast meeting hosted by Hong Kong Exchanges & Clearing to discuss capital market connectivity between Asia and the Middle East.

In a keynote speech, he highlighted that Saudi Arabia’s Vision 2030 has brought major reforms and opportunities, promoting capital investment from Asian markets.

He added that with its unique advantages under “one country, two systems”, Hong Kong has become the premier international financial centre connecting the Middle East and China, particularly in light of its credentials in fund-raising, asset and wealth management, and green and sustainable finance.

He explained that Hong Kong provides diverse offerings for investors and enterprises in the Middle East, and can provide financial support for regional economic development and green transformation.

At noon, Mr Chan called on Ambassador Extraordinary & Plenipotentiary of the People’s Republic of China to the Kingdom of Saudi Arabia Chang Hua, to brief him on developments in Hong Kong. They also discussed China-Saudi co-operation and economic relations.

In the afternoon, Mr Chan co-hosted a roundtable with Saudi Capital Market Authority Chairman Mohammed bin Abdullah Elkuwaiz. Participants discussed developments in the financial markets of Asia and the Middle East and explored further opportunities for co-operation.

Later on, Mr Chan met Saudi Central Bank Governor Ayman Alsayari to discuss connectivity between the financial markets of Hong Kong, Saudi Arabia and the Middle East more broadly, as well as co-operation in digital finance.

In the evening, the Hong Kong Science & Technology Parks Corporation held an event at which 20 startups showcased research products spanning green technology, biotechnology, artificial intelligence, robotics, and more, with a view to connecting with investors and business partners.

MIL OSI Asia Pacific News –

January 25, 2025

MIL-OSI: ING posts 3Q2024 net result of €1,880 million, supported by commercial growth and strong income

Source: GlobeNewswire (MIL-OSI)

ING posts 3Q2024 net result of €1,880 million,
supported by commercial growth and strong income

3Q2024 profit before tax of €2,668 million with a four-quarter rolling average return on equity of 13.8%
•	Resilient net interest income, supported by volume growth in lending and deposits
•	Fee income increasing 11% year-on-year, surpassing €1 billion, with significant growth in both Retail and Wholesale Banking
•	Increase of 189,000 mobile primary customers and strong growth in mortgages
•	€2.5 billion distribution announced as we continue to align our capital to our target level

CEO statement “In the third quarter of 2024, we have again delivered strong results and are executing well on our strategy to accelerate growth, increase impact and deliver value for all stakeholders,” said Steven van Rijswijk, CEO of ING. “We have grown our customer base and taken important steps in our climate action approach. Our good commercial momentum has led to robust income growth, specifically in fee income. We have also seen increased lending and deposit volumes and resilient margins. “Fee income has continued to increase in line with our ambition to diversify our income and surpassed €1 billion for the first time. Fee income from retail investment products has continued to rise, reflecting an increase in assets under management and customer trading activity. Wholesale Banking has in particular benefited from higher deal flow in Global Capital Markets. “In Retail Banking, performance was supported by strong core lending growth of €6 billion, mainly in residential mortgages across all Retail markets. Our market share of new mortgage production has increased significantly in the Netherlands, as our quick processing of digital applications and our flexible operations helped us in a very competitive market. This is a clear example of how we increase impact and deliver value for customers. “Wholesale Banking income was resilient, supported by volume growth in lending and deposits in addition to strong results in Payments & Cash Management and Financial Markets. Our Capital Markets Advisory business continues to grow following investments to further build on our expertise. We aim to optimise our capital efficiency and during this quarter we have significantly reduced our risk-weighted assets (RWA) in Wholesale Banking. “Expenses have risen 2% from the last quarter as we invest in growing our business. Risk costs were €336 million, in line with our through-the-cycle-average. Our four-quarter rolling return on equity came out at 13.8% and our CET1 ratio increased to 14.3%, driven by our strong profitability and lower RWA. “We continue to take steps to converge our CET1 capital ratio to our target level of around 12.5%. The share buyback programme announced in May 2024 has been completed and we today announce a next distribution of €2.5 billion, which will have a pro forma impact of 76 basis points on our CET1 ratio. Operating at the right level of capital is in the best interest of all our stakeholders and allows us to support customers and the economy in the countries we operate in. “In September, we have published our Climate Progress Update 2024, which shares our sharpened approach to client engagement, our updated energy policy and the latest on our Terra approach. We aim to make an impact by working with clients on their transitions to net zero while financing the technologies and solutions needed for a sustainable future. “We are well positioned to continue to execute our strategy and grow our business, and I would like to thank our customers for their loyalty and our employees for their contributions to our excellent third-quarter performance.”

Further information All publications related to ING’s 3Q 2024 results can be found at the quarterly results publications page on ING.com. For more on investor information, go to www.ing.com/investors. A short ING ON AIR video with CEO Steven van Rijswijk discussing our 3Q 2024 results is available on Youtube. For further information on ING, please visit www.ing.com. Frequent news updates can be found in the Newsroom or via the @ING_news X-feed. Photos of ING operations, buildings and its executives are available for download at Flickr.

Investor conference call, Media meeting and webcasts Steven van Rijswijk, Tanate Phutrakul and Ljiljana Čortan will discuss the results in an Investor conference call on 31 October 2024 at 9:00 a.m. CET. Members of the investment community can join the conference call at +31 20 708 5074 (NL), or +44 330 551 0202 (UK) (registration required via invitation) and via live audio webcast at www.ing.com. Steven van Rijswijk, Tanate Phutrakul and Ljiljana Čortan will also discuss the results in a Media conference call on 31 October 2024 at 11:00 a.m. CET. Journalists can dial-in via +31 20 708 5073 (NL), or +44 330 551 0200 (UK) – quote ING Media Call when prompted by the operator. The conference call can also be followed via live audio webcast at www.ing.com.

Investor enquiries E: investor.relations@ing.com Press enquiries T: +31 20 576 5000 E: media.relations@ing.com


ING Profile ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. The purpose of ING Bank is: empowering people to stay a step ahead in life and in business. ING Bank’s more than 60,000 employees offer retail and wholesale banking services to customers in over 40 countries. ING Group shares are listed on the exchanges of Amsterdam (INGA NA, INGA.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N). ING aims to put sustainability at the heart of what we do. Our policies and actions are assessed by independent research and ratings providers, which give updates on them annually. ING’s ESG rating by MSCI was reconfirmed by MSCI as ‘AA’ in August 2024 for the fifth year. As of December 2023, in Sustainalytics’ view, ING’s management of ESG material risk is ‘Strong’. Our current ESG Risk Rating, is 17.2 (Low Risk). ING Group shares are also included in major sustainability and ESG index products of leading providers. Here are some examples: Euronext, STOXX, Morningstar and FTSE Russell. Important legal information Elements of this press release contain or may contain information about ING Groep N.V. and/ or ING Bank N.V. within the meaning of Article 7(1) to (4) of EU Regulation No 596/2014 (‘Market Abuse Regulation’). ING Group’s annual accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (‘IFRS- EU’). In preparing the financial information in this document, except as described otherwise, the same accounting principles are applied as in the 2023 ING Group consolidated annual accounts. All figures in this document are unaudited. Small differences are possible in the tables due to rounding. Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in such statements. Actual results, performance or events may differ materially from those in such statements due to a number of factors, including, without limitation: (1) changes in general economic conditions and customer behaviour, in particular economic conditions in ING’s core markets, including changes affecting currency exchange rates and the regional and global economic impact of the invasion of Russia into Ukraine and related international response measures (2) changes affecting interest rate levels (3) any default of a major market participant and related market disruption (4) changes in performance of financial markets, including in Europe and developing markets (5) fiscal uncertainty in Europe and the United States (6) discontinuation of or changes in ‘benchmark’ indices (7) inflation and deflation in our principal markets (8) changes in conditions in the credit and capital markets generally, including changes in borrower and counterparty creditworthiness (9) failures of banks falling under the scope of state compensation schemes (10) noncompliance with or changes in laws and regulations, including those concerning financial services, financial economic crimes and tax laws, and the interpretation and application thereof (11) geopolitical risks, political instabilities and policies and actions of governmental and regulatory authorities, including in connection with the invasion of Russia into Ukraine and the related international response measures (12) legal and regulatory risks in certain countries with less developed legal and regulatory frameworks (13) prudential supervision and regulations, including in relation to stress tests and regulatory restrictions on dividends and distributions (also among members of the group) (14) ING’s ability to meet minimum capital and other prudential regulatory requirements (15) changes in regulation of US commodities and derivatives businesses of ING and its customers (16) application of bank recovery and resolution regimes, including write down and conversion powers in relation to our securities (17) outcome of current and future litigation, enforcement proceedings, investigations or other regulatory actions, including claims by customers or stakeholders who feel misled or treated unfairly, and other conduct issues (18) changes in tax laws and regulations and risks of non-compliance or investigation in connection with tax laws, including FATCA (19) operational and IT risks, such as system disruptions or failures, breaches of security, cyber-attacks, human error, changes in operational practices or inadequate controls including in respect of third parties with which we do business and including any risks as a result of incomplete, inaccurate, or otherwise flawed outputs from the algorithms and data sets utilized in artificial intelligence (20) risks and challenges related to cybercrime including the effects of cyberattacks and changes in legislation and regulation related to cybersecurity and data privacy, including such risks and challenges as a consequence of the use of emerging technologies, such as advanced forms of artificial intelligence and quantum computing (21) changes in general competitive factors, including ability to increase or maintain market share (22) inability to protect our intellectual property and infringement claims by third parties (23) inability of counterparties to meet financial obligations or ability to enforce rights against such counterparties (24) changes in credit ratings (25) business, operational, regulatory, reputation, transition and other risks and challenges in connection with climate change and ESG-related matters, including data gathering and reporting (26) inability to attract and retain key personnel (27) future liabilities under defined benefit retirement plans (28) failure to manage business risks, including in connection with use of models, use of derivatives, or maintaining appropriate policies and guidelines (29) changes in capital and credit markets, including interbank funding, as well as customer deposits, which provide the liquidity and capital required to fund our operations, and (30) the other risks and uncertainties detailed in the most recent annual report of ING Groep N.V. (including the Risk Factors contained therein) and ING’s more recent disclosures, including press releases, which are available on www.ING.com. This document may contain ESG-related material that has been prepared by ING on the basis of publicly available information, internally developed data and other third-party sources believed to be reliable. ING has not sought to independently verify information obtained from public and third-party sources and makes no representations or warranties as to accuracy, completeness, reasonableness or reliability of such information. Materiality, as used in the context of ESG, is distinct from, and should not be confused with, such term as defined in the Market Abuse Regulation or as defined for Securities and Exchange Commission (‘SEC’) reporting purposes. Any issues identified as material for purposes of ESG in this document are therefore not necessarily material as defined in the Market Abuse Regulation or for SEC reporting purposes. In addition, there is currently no single, globally recognized set of accepted definitions in assessing whether activities are “green” or “sustainable.” Without limiting any of the statements contained herein, we make no representation or warranty as to whether any of our securities constitutes a green or sustainable security or conforms to present or future investor expectations or objectives for green or sustainable investing. For information on characteristics of a security, use of proceeds, a description of applicable project(s) and/or any other relevant information, please reference the offering documents for such security. This document may contain inactive textual addresses to internet websites operated by us and third parties. Reference to such websites is made for information purposes only, and information found at such websites is not incorporated by reference into this document. ING does not make any representation or warranty with respect to the accuracy or completeness of, or take any responsibility for, any information found at any websites operated by third parties. ING specifically disclaims any liability with respect to any information found at websites operated by third parties. ING cannot guarantee that websites operated by third parties remain available following the publication of this document, or that any information found at such websites will not change following the filing of this document. Many of those factors are beyond ING’s control. Any forward-looking statements made by or on behalf of ING speak only as of the date they are made, and ING assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason. This document does not constitute an offer to sell, or a solicitation of an offer to purchase, any securities in the United States or any other jurisdiction.

Attachment

Full ING 3Q2024 results Press Release (PDF)

The MIL Network –

January 25, 2025

MIL-OSI: Vantage Drilling Expands Managed Services Business, Enhancing Shareholder Value Through Strategic Asset Sale to ADES
Source: GlobeNewswire (MIL-OSI)

DUBAI, Oct. 31, 2024 (GLOBE NEWSWIRE) — Vantage Drilling International Ltd. (“Vantage Drilling” or the “Company”) today announced the successful completion of the sale of two contracted premium jackup rigs to ADES Holding Company (“ADES”), further strengthening Vantage’s position as a global leader in managed services while delivering enhanced value to shareholders.

The sale includes the Topaz Driller jackup rig, operating in the Malaysia-Thailand Joint Development Area, and the Soehanah jackup rig, owned by Rig Finance Ltd. (RFL), which operates in Indonesia. The divestment of these high-quality assets underscores Vantage’s strategic focus on expanding its managed services business and maintaining a flexible, asset-light model that optimizes capital allocation.

Ihab Toma, CEO of Vantage Drilling, commented: “This transaction is a significant step in Vantage’s ongoing strategy to enhance shareholder value. By strategically selling these contracted rigs, we have shifted to a net cash position, allowing us to focus on expanding our managed services portfolio, which remains an area of focus for the Company. We are confident this approach will further strengthen our financial position while providing ongoing, high-quality services to our clients.”

“We are pleased to continue our strong partnership with ADES through this transaction. Southeast Asia is a key market, and the transfer of these rigs will enable ADES to further its expansion in the region, while Vantage remains well-positioned to grow its asset-light services business and deliver sustainable value to our shareholders.”

This sale highlights Vantage Drilling’s commitment to maximizing operational efficiency and reinforcing its leadership in the managed services space, aligning with the Company’s strategic priorities of creating value for its shareholders and maintaining a strong, adaptable business model in a competitive market.

About the Company:

Vantage Drilling International Ltd., a Bermuda exempted company, is an offshore drilling contractor, with a current owned fleet of two ultra-deepwater drillships and two premium jackup drilling rigs. Vantage Drilling’s primary business is to contract drilling units, related equipment and work crews primarily on a dayrate basis to drill oil and natural gas wells globally for major, national and independent oil and gas companies. Vantage Drilling also markets, operates and provides management services in respect of drilling units owned by others. For more information about the Company, please refer to the Company’s website, www.vantagedrilling.com.

Contact Info:

Rafael Blattner

Chief Financial Officer

Vantage Drilling International Ltd.

+971 4 449 34 28

Attachment
- Vantage Drilling Expands Managed Services Business, Enhancing Shareholder Value Through Strategic Asset Sale to ADES.pdf
The MIL Network –
January 25, 2025

MIL-OSI: ING announces shareholder distribution of up to €2.5 billion

Source: GlobeNewswire (MIL-OSI)

ING announces shareholder distribution of up to €2.5 billion

ING announced today an additional shareholder distribution of up to €2.5 billion. The distribution consists of a share buyback programme for a maximum total amount of €2 billion and a cash dividend payment of €500 million. The purpose of the additional distribution is to converge our CET1 ratio towards our target of around 12.5%.

ING Group’s CET1 ratio was 14.3% at the end of the third quarter of 2024, which is well above the prevailing CET1 ratio requirement of 10.71%. The additional distribution will have an expected pro-forma impact of approximately 76 bps on our CET1 ratio. The share buyback programme will commence on 31 October 2024 and is expected to end no later than 30 April 2025. The cash dividend will be paid on 16 January 2025.

The ECB has approved the distribution, and the share buyback programme will be executed in compliance with the Market Abuse Regulation and within the limitations of the existing authority to acquire a maximum of 20% of the issued shares as granted by the general meeting of shareholders on 22 April 2024. ING has entered a non-discretionary arrangement with a financial intermediary to conduct the buyback.

ING will provide weekly updates on the progress of the programme via a press release and on the Investor Relations section of the ING website: https://www.ing.com/Investor-relations/Share-information/Share-buyback-programme.htm.

Note for editors

For further information on ING, please visit www.ing.com. Frequent news updates can be found in the Newsroom or via the @ING_news Twitter feed. Photos of ING operations, buildings and its executives are available for download at Flickr. ING presentations are available at SlideShare.

Press enquiries			Investor enquiries
Christoph Linke			ING Group Investor Relations
+31 20 576 5000			+31 20 576 6396
Christoph.Linke@ing.com			Investor.Relations@ing.com

ING PROFILE
ING is a global financial institution with a strong European base, offering banking services through its operating company ING Bank. The purpose of ING Bank is: empowering people to stay a step ahead in life and in business. ING Bank’s more than 60,000 employees offer retail and wholesale banking services to customers in over 40 countries.

ING Group shares are listed on the exchanges of Amsterdam (INGA NA, INGA.AS), Brussels and on the New York Stock Exchange (ADRs: ING US, ING.N).

Sustainability is an integral part of ING’s strategy, evidenced by ING’s leading position in sector benchmarks. ING’s Environmental, Social and Governance (ESG) rating by MSCI was affirmed ‘AA’ in July 2023. As of December 2023, Sustainalytics considers ING’s management of ESG material risk to be ‘strong’. ING Group shares are also included in major sustainability and ESG index products of leading providers Euronext, STOXX, Morningstar and FTSE Russell. Society is transitioning to a low-carbon economy. So are our clients, and so is ING. We finance a lot of sustainable activities, but we still finance more that’s not. Follow our progress on ing.com/climate.

Important legal information

Elements of this press release contain or may contain information about ING Groep N.V. and/ or ING Bank N.V. within the meaning of Article 7(1) to (4) of EU Regulation No 596/2014 (‘Market Abuse Regulation’).

ING Group’s annual accounts are prepared in accordance with International Financial Reporting Standards as adopted by the European Union (‘IFRS- EU’). In preparing the financial information in this document, except as described otherwise, the same accounting principles are applied as in the 2023 ING Group consolidated annual accounts. All figures in this document are unaudited. Small differences are possible in the tables due to rounding.

Certain of the statements contained herein are not historical facts, including, without limitation, certain statements made of future expectations and other forward-looking statements that are based on management’s current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to diﬀer materially from those expressed or implied in such statements. Actual results, performance or events may diﬀer materially from those in such statements due to a number of factors, including, without limitation: (1) changes in general economic conditions and customer behaviour, in particular economic conditions in ING’s core markets, including changes affecting currency exchange rates and the regional and global economic impact of the invasion of Russia into Ukraine and related international response measures (2) changes affecting interest rate levels (3) any default of a major market participant and related market disruption (4) changes in performance of financial markets, including in Europe and developing markets (5) fiscal uncertainty in Europe and the United States (6) discontinuation of or changes in ‘benchmark’ indices (7) inflation and deflation in our principal markets (8) changes in conditions in the credit and capital markets generally, including changes in borrower and counterparty creditworthiness (9) failures of banks falling under the scope of state compensation schemes (10) non-compliance with or changes in laws and regulations, including those concerning financial services, financial economic crimes and tax laws, and the interpretation and application thereof (11) geopolitical risks, political instabilities and policies and actions of governmental and regulatory authorities, including in connection with the invasion of Russia into Ukraine and the related international response measures (12) legal and regulatory risks in certain countries with less developed legal and regulatory frameworks (13) prudential supervision and regulations, including in relation to stress tests and regulatory restrictions on dividends and distributions (also among members of the group) (14) ING’s ability to meet minimum capital and other prudential regulatory requirements (15) changes in regulation of US commodities and derivatives businesses of ING and its customers (16) application of bank recovery and resolution regimes, including write down and conversion powers in relation to our securities (17) outcome of current and future litigation, enforcement proceedings, investigations or other regulatory actions, including claims by customers or stakeholders who feel misled or treated unfairly, and other conduct issues (18) changes in tax laws and regulations and risks of non-compliance or investigation in connection with tax laws, including FATCA (19) operational and IT risks, such as system disruptions or failures, breaches of security, cyber-attacks, human error, changes in operational practices or inadequate controls including in respect of third parties with which we do business and including any risks as a result of incomplete, inaccurate, or otherwise flawed outputs from the algorithms and data sets utilized in artificial intelligence (20) risks and challenges related to cybercrime including the eﬀects of cyberattacks and changes in legislation and regulation related to cybersecurity and data privacy, including such risks and challenges as a consequence of the use of emerging technologies, such as advanced forms of artificial intelligence and quantum computing (21) changes in general competitive factors, including ability to increase or maintain market share (22) inability to protect our intellectual property and infringement claims by third parties (23) inability of counterparties to meet financial obligations or ability to enforce rights against such counterparties (24) changes in credit ratings (25) business, operational, regulatory, reputation, transition and other risks and challenges in connection with climate change and ESG-related matters, including data gathering and reporting (26) inability to attract and retain key personnel (27) future liabilities under defined benefit retirement plans (28) failure to manage business risks, including in connection with use of models, use of derivatives, or maintaining appropriate policies and guidelines (29) changes in capital and credit markets, including interbank funding, as well as customer deposits, which provide the liquidity and capital required to fund our operations, and (30) the other risks and uncertainties detailed in the most recent annual report of ING Groep N.V. (including the Risk Factors contained therein) and ING’s more recent disclosures, including press releases, which are available on www.ING.com.

This document may contain ESG-related material that has been prepared by ING on the basis of publicly available information, internally developed data and other third-party sources believed to be reliable. ING has not sought to independently verify information obtained from public and third-party sources and makes no representations or warranties as to accuracy, completeness, reasonableness or reliability of such information.

Materiality, as used in the context of ESG, is distinct from, and should not be confused with, such term as defined in the Market Abuse Regulation or as defined for Securities and Exchange Commission (‘SEC’) reporting purposes. Any issues identified as material for purposes of ESG in this document are therefore not necessarily material as defined in the Market Abuse Regulation or for SEC reporting purposes. In addition, there is currently no single, globally recognized set of accepted definitions in assessing whether activities are “green” or “sustainable.” Without limiting any of the statements contained herein, we make no representation or warranty as to whether any of our securities constitutes a green or sustainable security or conforms to present or future investor expectations or objectives for green or sustainable investing. For information on characteristics of a security, use of proceeds, a description of applicable project(s) and/or any other relevant information, please reference the offering documents for such security.

This document may contain inactive textual addresses to internet websites operated by us and third parties. Reference to such websites is made for information purposes only, and information found at such websites is not incorporated by reference into this document. ING does not make any representation or warranty with respect to the accuracy or completeness of, or take any responsibility for, any information found at any websites operated by third parties. ING specifically disclaims any liability with respect to any information found at websites operated by third parties. ING cannot guarantee that websites operated by third parties remain available following the publication of this document, or that any information found at such websites will not change following the filing of this document. Many of those factors are beyond ING’s control.

Any forward-looking statements made by or on behalf of ING speak only as of the date they are made, and ING assumes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or for any other reason.

This document does not constitute an oﬀer to sell, or a solicitation of an oﬀer to purchase, any securities in the United States or any other jurisdiction.

Attachment

ING announces shareholder distribution of up to €2.5 billion

The MIL Network –

January 25, 2025

MIL-OSI Russia: Regional customers have made over 33,000 purchases based on their needs on the supplier portal since the beginning of the year

Translation. Region: Russian Federation –

Source: Moscow Government – Government of Moscow –

From January to September 2024, regional customers conducted more than 33.5 thousand purchases on the supplier portal based on their needs. This trading format allowed them to save about 400 million rubles, Maria Bagreeva, Deputy Mayor of Moscow, Head of the City Department of Economic Policy and Development.

“The capital’s supplier portal is a dynamically developing interregional platform for small-volume purchases. It enables state and municipal customers to post information on operational needs for 350 thousand suppliers. Over the first nine months of this year, regions have concluded more than 33.5 thousand contracts on the portal based on the results of purchases based on needs for a total of 5.9 billion rubles. Reducing the initial maximum price based on supplier proposals allowed them to save about 400 million rubles when concluding contracts,” said Maria Bagreeva.

Purchases based on needs allow regional customers to quickly purchase various products on the supplier portal: medical and construction goods, household appliances and equipment, food, office supplies, textbooks, and also to conclude contracts for services and work on the security and maintenance of institutions. As part of the purchase based on needs, the customer publishes a list of necessary goods, works or services. At the same time, he specifies the period during which suppliers can submit their price offers. After the specified time, the customer can conclude a contract with the supplier, the terms of which best meet the stated needs.

“The largest number of purchases based on needs on the supplier portal from January to September were made by customers from the Yamalo-Nenets Autonomous Okrug: they concluded 9.6 thousand contracts worth 1.76 billion rubles. The top five most active regions also included Perm Krai – customers from this region signed 7.6 thousand contracts worth 864 million rubles, Khanty-Mansi Autonomous Okrug – 4.7 thousand contracts worth 781 million rubles, Tyumen Oblast – 3.2 thousand contracts worth 664.4 million rubles and Kemerovo Oblast – 2.3 thousand contracts worth 519.6 million rubles,” added the head of the Moscow City Department for Competition Policy.

Kirill Purtov.

As noted in the capital Department of Information Technology, for the convenience of users, when visiting the supplier portal, the location is automatically determined and relevant purchases by region are displayed. Thus, by default, an entrepreneur sees local purchases, and when changing the location in the filter, he can offer products to state and municipal organizations from other entities and thereby expand his sales market. Regional users have access to all the digital capabilities of the capital’s platform: customers can unite to conduct joint purchases, suppliers can subscribe to notifications about the publication of suitable purchases in the selected region, and also use analytical tools for working with the product catalog.

Suppliers portal was created in 2013 to automate small-volume purchases. The list of goods, works and services offered by entrepreneurs includes more than 2.9 million unique items. The platform’s development is facilitated by a technical support service and an AI assistant for prompt consultations. The training section “Supplier School” helps novice specialists quickly master the principles of working on the platform.

Representative offices are opened in the constituent entities of the Russian Federation to support users of the portal. There, specialists provide training on how to work on the platform, answer questions from customers and suppliers, hold face-to-face meetings, and collect proposals for improving functionality and solving technical problems. In addition, users can contact the support service at a single federal number: 7 800 303-12-34 or leave a request on the website.

The functional customer of the supplier portal is Moscow City Department of Competition Policy, and technical development is supervised by the capital’s Department of Information Technology.

The development of electronic services for business corresponds to the objectives of the national program “Digital Economy of the Russian Federation” and the Moscow regional project “Digital Public Administration”. More information about the national projects implemented in Moscow can be found Here.

More than 35 thousand contracts were concluded by customers on the supplier portal this summer An effective tool for conducting purchases: another region has been connected to the supplier portal

Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

Please note; This information is raw content directly from the information source. It is accurate to what the source is stating and does not reflect the position of MIL-OSI or its clients.

http://vvv.mos.ru/nevs/item/145963073/

MIL OSI Russia News –

January 25, 2025

MIL-OSI: SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Source: GlobeNewswire (MIL-OSI)

SHELL PLC
3rd QUARTER 2024 UNAUDITED RESULTS



SUMMARY OF UNAUDITED RESULTS
Quarters				$ million		Nine months
Q3 2024	Q2 2024	Q3 2023	%¹		Reference	2024	2023	%
4,291	3,517	7,044	+22	Income/(loss) attributable to Shell plc shareholders		15,166	18,887	-20
6,028	6,293	6,224	-4	Adjusted Earnings	A	20,055	20,944	-4
16,005	16,806	16,336	-5	Adjusted EBITDA	A	51,523	52,204	-1
14,684	13,508	12,332	+9	Cash flow from operating activities		41,522	41,622	—
(3,857)	(3,338)	(4,827)		Cash flow from investing activities		(10,723)	(12,080)
10,827	10,170	7,505		Free cash flow	G	30,799	29,542
4,950	4,719	5,649		Cash capital expenditure	C	14,161	17,280
9,570	8,950	10,097	+7	Operating expenses	F	27,517	29,062	-5
8,864	8,651	9,735	+2	Underlying operating expenses	F	26,569	28,635	-7
12.8%	12.8%	13.9%		ROACE2	D	12.8%	13.9%
76,613	75,468	82,147		Total debt	E	76,613	82,147
35,234	38,314	40,470		Net debt	E	35,234	40,470
15.7%	17.0%	17.3%		Gearing	E	15.7%	17.3%
2,801	2,817	2,706	-1	Oil and gas production available for sale (thousand boe/d)		2,843	2,779	+2
0.69	0.55	1.06	+25	Basic earnings per share ($)		2.39	2.78	-14
0.96	0.99	0.93	-3	Adjusted Earnings per share ($)	B	3.16	3.08	+3
0.3440	0.3440	0.3310	—	Dividend per share ($)		1.0320	0.9495	+9

1.Q3 on Q2 change

2.Effective first quarter 2024, the definition has been amended and comparative information has been revised. See Reference D.

Quarter Analysis1

Income attributable to Shell plc shareholders, compared with the second quarter 2024, reflected lower refining margins, lower realised oil prices and higher operating expenses partly offset by favourable tax movements, and higher Integrated Gas volumes.

Third quarter 2024 income attributable to Shell plc shareholders also included unfavourable movements relating to an accounting mismatch due to fair value accounting of commodity derivatives, charges related to redundancy and restructuring, and net impairment charges and reversals. These items are included in identified items amounting to a net loss of $1.3 billion in the quarter. This compares with identified items in the second quarter 2024 which amounted to a net loss of $2.7 billion.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for the above identified items and the cost of supplies adjustment of positive $0.5 billion.

Cash flow from operating activities for the third quarter 2024 was $14.7 billion, and primarily driven by Adjusted EBITDA, and working capital inflows of $2.7 billion partly offset by tax payments of $3.0 billion. The working capital inflow mainly reflected inventory movements due to lower oil prices and lower volumes.

Cash flow from investing activities for the quarter was an outflow of $3.9 billion, and included cash capital expenditure of $4.9 billion.

Net debt and Gearing: At the end of the third quarter 2024, net debt was $35.2 billion, compared with $38.3 billion at the end of the second quarter 2024, mainly reflecting free cash flow, partly offset by share buybacks, cash dividends paid to Shell plc shareholders, lease additions and interest payments. Gearing was 15.7% at the end of the third quarter 2024, compared with 17.0% at the end of the second quarter 2024, mainly driven by lower net debt.



SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Shareholder distributions

Total shareholder distributions in the quarter amounted to $5.7 billion comprising repurchases of shares of $3.5 billion and cash dividends paid to Shell plc shareholders of $2.2 billion. Dividends declared to Shell plc shareholders for the third quarter 2024 amount to $0.3440 per share. Shell has now completed $3.5 billion of share buybacks announced in the second quarter 2024 results announcement. Today, Shell announces a share buyback programme of $3.5 billion which is expected to be completed by the fourth quarter 2024 results announcement.

Nine Months Analysis1

Income attributable to Shell plc shareholders, compared with the first nine months 2023, reflected lower refining margins, lower LNG trading and optimisation margins, lower realised LNG and gas prices as well as lower trading and optimisation margins of power and pipeline gas in Renewables and Energy Solutions, partly offset by lower operating expenses, higher Marketing margins and volumes, higher realised Chemicals margins, and higher Integrated Gas and Upstream volumes.

First nine months 2024 income attributable to Shell plc shareholders also included net impairment charges and reversals, reclassifications from equity to profit and loss of cumulative currency translation differences related to funding structures, unfavourable movements relating to an accounting mismatch due to fair value accounting of commodity derivatives, and charges related to redundancy and restructuring, partly offset by favourable differences in exchange rates and inflationary adjustments on deferred tax. These charges, reclassifications and movements are included in identified items amounting to a net loss of $4.6 billion. This compares with identified items in the first nine months 2023 which amounted to a net loss of $2.2 billion.

Adjusted Earnings and Adjusted EBITDA2 for the first nine months 2024 were driven by the same factors as income attributable to Shell plc shareholders and adjusted for identified items and the cost of supplies adjustment of positive $0.3 billion.

Cash flow from operating activities for the first nine months 2024 was $41.5 billion, and primarily driven by Adjusted EBITDA, the timing impact of payments relating to emission certificates and biofuel programmes of $1.2 billion and cash inflows relating to commodity derivatives of $1.2 billion, partly offset by tax payments of $9.1 billion, and working capital outflow of $0.3 billion.

Cash flow from investing activities for the first nine months 2024 was an outflow of $10.7 billion and included cash capital expenditure of $14.2 billion, partly offset by divestment proceeds of $2.0 billion, and interest received of $1.8 billion.

This Unaudited Condensed Interim Financial Report, together with supplementary financial and operational disclosure for this quarter, is available at www.shell.com/investors 3 .

1.All earnings amounts are shown post-tax, unless stated otherwise.

2.Adjusted EBITDA is without taxation.

3.Not incorporated by reference.

THIRD QUARTER 2024 PORTFOLIO DEVELOPMENTS

Integrated Gas

In July 2024, we announced the final investment decision (FID) on the Manatee project, an undeveloped gas field in the East Coast Marine Area (ECMA) in Trinidad and Tobago.

In July 2024, we signed an agreement to invest in the Abu Dhabi National Oil Company’s (ADNOC) Ruwais LNG project in Abu Dhabi through a 10% participating interest. The Ruwais LNG project will consist of two 4.8 mtpa LNG liquefaction trains with a total capacity of 9.6 mtpa.

In August 2024, Arrow Energy, an incorporated joint venture between Shell (50%) and PetroChina (50%), announced plans to develop Phase 2 of Arrow Energy’s Surat Gas Project in Queensland, Australia. The gas from the project will flow to the Shell-operated QCLNG LNG (joint venture between Shell (73.75%), CNOOC (25%) and MidOcean Energy (1.25%)) facility on Curtis Island, near Gladstone.

Upstream

In July 2024, the operator of the Jerun field in Malaysia, SapuraOMV Upstream Sdn Bhd, announced that first gas has been achieved. Jerun is operated by SapuraOMV Upstream (40%) in partnership with Sarawak Shell Berhad (30%) and PETRONAS Carigali Sdn Bhd (30%).

In August 2024, we announced the FID on a ‘waterflood’ project at our Vito asset in the US Gulf of Mexico. Water will be injected into the reservoir formation to displace additional oil.

Page 2



SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Marketing

In July 2024, we announced that we are temporarily pausing on-site construction work at our 820,000 tonnes a year biofuels facility at the Shell Energy and Chemicals Park Rotterdam in the Netherlands to address project delivery and ensure future competitiveness given current market conditions.

Renewables and Energy Solutions

In October 2024, we signed an agreement to acquire a 100% equity stake in RISEC Holdings, LLC (RISEC), which owns a 609-megawatt (MW) two-unit combined-cycle gas turbine power plant in Rhode Island, USA. The transaction is subject to regulatory approvals and is expected to close in the first quarter 2025.

Page 2



SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

PERFORMANCE BY SEGMENT



INTEGRATED GAS
Quarters				$ million		Nine months
Q3 2024	Q2 2024	Q3 2023	%¹		Reference	2024	2023	%
2,631	2,454	2,156	+7	Segment earnings		7,846	5,325	+47
(240)	(220)	(375)		Of which: Identified items	A	(1,379)	(4,625)
2,871	2,675	2,531	+7	Adjusted Earnings	A	9,225	9,951	-7
5,234	5,039	4,874	+4	Adjusted EBITDA	A	16,410	17,189	-5
3,623	4,183	4,009	-13	Cash flow from operating activities	A	12,518	13,923	-10
1,236	1,151	1,099		Cash capital expenditure	C	3,429	3,000
136	137	122	-1	Liquids production available for sale (thousand b/d)		137	134	+2
4,669	4,885	4,517	-4	Natural gas production available for sale (million scf/d)		4,835	4,744	+2
941	980	900	-4	Total production available for sale (thousand boe/d)		971	952	+2
7.50	6.95	6.88	+8	LNG liquefaction volumes (million tonnes)		22.03	21.23	+4
17.04	16.41	16.01	+4	LNG sales volumes (million tonnes)		50.32	49.01	+3

1.Q3 on Q2 change

Integrated Gas includes liquefied natural gas (LNG), conversion of natural gas into gas-to-liquids (GTL) fuels and other products. It includes natural gas and liquids exploration and extraction, and the operation of the upstream and midstream infrastructure necessary to deliver these to market. Integrated Gas also includes the marketing, trading and optimisation of LNG.

Quarter Analysis1

Segment earnings, compared with the second quarter 2024, reflected higher LNG liquefaction volumes (increase of $237 million).

Third quarter 2024 segment earnings also included unfavourable movements of $213 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. These unfavourable movements are part of identified items and compare with the second quarter 2024 which included a charge of $122 million due to unrecoverable indirect tax receivables, and unfavourable movements of $98 million due to the fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, partly offset by tax payments of $814 million, net cash outflows related to derivatives of $373 million and working capital outflows of $247 million.

Total oil and gas production, compared with the second quarter 2024, decreased by 4% mainly due to production-sharing contract effects, and higher maintenance in Trinidad and Tobago. LNG liquefaction volumes increased by 8% mainly due to higher feedgas supply in Nigeria, and Trinidad and Tobago.

Nine Months Analysis1

Segment earnings, compared with the first nine months 2023, reflected the combined effect of lower contributions from trading and optimisation and lower realised prices (decrease of $1,787 million), partly offset by higher volumes (increase of $513 million), lower operating expenses (decrease of $171 million), and favourable deferred tax movements ($168 million).

First nine months 2024 segment earnings also included unfavourable movements of $1,198 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. These unfavourable movements are part of identified items and compare with the first nine months 2023 which included unfavourable movements of $2,821 million due to the fair value accounting of commodity derivatives, and net impairment charges and reversals of $1,700 million. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

Page 3



SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Cash flow from operating activities for the first nine months 2024 was primarily driven by Adjusted EBITDA, partly offset by tax payments of $2,320 million and net cash outflows related to derivatives of $1,586 million.

Total oil and gas production, compared with the first nine months 2023, increased by 2% mainly due to ramp-up of fields in Oman and Australia, and lower maintenance in Australia. LNG liquefaction volumes increased by 4% mainly due to lower unplanned maintenance in Australia.

1.All earnings amounts are shown post-tax, unless stated otherwise.

2.Adjusted EBITDA is without taxation.

Page 4



SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



UPSTREAM
Quarters				$ million		Nine months
Q3 2024	Q2 2024	Q3 2023	%¹		Reference	2024	2023	%
2,289	2,179	1,999	+5	Segment earnings		6,741	6,388	+6
(153)	(157)	(238)		Of which: Identified items	A	28	(357)
2,443	2,336	2,237	+5	Adjusted Earnings	A	6,712	6,746	—
7,871	7,829	7,433	+1	Adjusted EBITDA	A	23,588	22,750	+4
5,268	5,739	5,336	-8	Cash flow from operating activities	A	16,734	15,663	+7
1,974	1,829	2,007		Cash capital expenditure	C	5,813	5,906
1,321	1,297	1,311	+2	Liquids production available for sale (thousand b/d)		1,316	1,313	—
2,844	2,818	2,564	+1	Natural gas production available for sale (million scf/d)		2,933	2,687	+9
1,811	1,783	1,753	+2	Total production available for sale (thousand boe/d)		1,822	1,776	+3

1.Q3 on Q2 change

The Upstream segment includes exploration and extraction of crude oil, natural gas and natural gas liquids. It also markets and transports oil and gas, and operates the infrastructure necessary to deliver them to the market.

Quarter Analysis1

Segment earnings, compared with the second quarter 2024, reflected lower well write-offs (decrease of $139 million), favourable tax movements ($96 million), lower operating expenses (decrease of $63 million), and lower depreciation charges (decrease of $57 million), partly offset by lower realised liquids prices (decrease of $304 million).

Third quarter 2024 segment earnings also included charges of $138 million related to redundancy and restructuring and charges of $104 million related to decommissioning provisions. These charges are part of identified items, and compare with the second quarter 2024 which included a loss of $143 million related to the impact of the weakening Brazilian real on a deferred tax position, and a loss of $122 million related to a tax settlement in Brazil, partly offset by a gain of $139 million related to the impact of inflationary adjustments in Argentina on a deferred tax position.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, partly offset by tax payments of $2,074 million.

Total production, compared with the second quarter 2024, increased mainly due to new oil production.

Nine Months Analysis1

Segment earnings, compared with the first nine months 2023, reflected unfavourable tax movements ($351 million), higher well write-offs (increase of $327 million) and the net impact of lower realised gas and higher realised liquids prices (decrease of $278 million), partly offset by the comparative favourable impact of $910 million mainly relating to gas storage effects.

First nine months 2024 segment earnings also included gains of $676 million related to the impact of inflationary adjustments in Argentina on a deferred tax position, partly offset by charges of $179 million related to redundancy and restructuring, net impairment charges and reversals of $171 million and a loss of $164 million related to the impact of the weakening Brazilian real on a deferred tax position. These gains and charges are part of identified items, and compare with the first nine months 2023 which included charges of $188 million from impairments, legal provisions of $169 million and deferred tax charges of $132 million due to amendments to IAS 12, partly offset by favourable movements of $106 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

Cash flow from operating activities for the first nine months 2024 was primarily driven by Adjusted EBITDA, partly offset by tax payments of $5,832 million.

Total production, compared with the first nine months 2023, increased mainly due to new oil production, partly offset by field decline.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

1.All earnings amounts are shown post-tax, unless stated otherwise.

2.Adjusted EBITDA is without taxation.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



MARKETING
Quarters				$ million		Nine months
Q3 2024	Q2 2024	Q3 2023	%¹		Reference	2024	2023	%
760	257	629	+196	Segment earnings2		1,791	2,832	-37
(422)	(825)	(12)		Of which: Identified items2	A	(1,255)	314
1,182	1,082	641	+9	Adjusted Earnings2	A	3,046	2,518	+21
2,081	1,999	1,453	+4	Adjusted EBITDA2	A	5,767	4,837	+19
2,722	1,958	397	+39	Cash flow from operating activities2	A	5,999	3,794	+58
525	644	959		Cash capital expenditure2	C	1,634	4,406
2,945	2,868	3,138	+3	Marketing sales volumes (thousand b/d)2		2,859	3,062	-7

1.Q3 on Q2 change

2.Wholesale commercial fuels, previously reported in the Chemicals and Products segment, is reported in the Marketing segment (Mobility) with effect from Q1 2024. Comparative information for the Marketing segment and the Chemicals and Products segment has been revised.

The Marketing segment comprises the Mobility, Lubricants, and Sectors and Decarbonisation businesses. The Mobility business operates Shell’s retail network including electric vehicle charging services and the Wholesale commercial fuels business which provides fuels for transport, industry and heating. The Lubricants business produces, markets and sells lubricants for road transport, and machinery used in manufacturing, mining, power generation, agriculture and construction. The Sectors and Decarbonisation business sells fuels, speciality products and services including low-carbon energy solutions to a broad range of commercial customers including the aviation, marine, and agricultural sectors.

Quarter Analysis1

Segment earnings, compared with the second quarter 2024, reflected higher Marketing margins (increase of $139 million) mainly driven by improved Mobility unit margins and impact of seasonally higher volumes partly offset by lower lubricants and Sectors and Decarbonisation margins. Segment earnings also reflected favourable tax movements ($55 million). These were partly offset by higher operating expenses (increase of $63 million).

Third quarter 2024 segment earnings also included impairment charges of $179 million, charges of $98 million related to redundancy and restructuring, and net losses of $84 million related to sale of assets. These charges and unfavourable movements are part of identified items, and compare with the second quarter 2024 impairment charges of $783 million mainly relating to an asset in the Netherlands, and charges of $50 million related to redundancy and restructuring.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

Cash flow from operating activities for the quarter was primarily driven by Adjusted EBITDA, working capital inflows of $792 million, and the timing impact of payments relating to emission certificates and biofuel programmes of $427 million. These inflows were partly offset by non-cash cost of supplies adjustment of $334 million and tax payments of $241 million.

Marketing sales volumes (comprising hydrocarbon sales), compared with the second quarter 2024, increased mainly due to seasonality.

Nine Months Analysis1

Segment earnings, compared with the first nine months 2023, reflected higher Marketing margins (increase of $582 million) including higher unit margins in Mobility, Lubricants and higher Sectors and Decarbonisation margins. Segment earnings also reflected lower operating expenses (decrease of $170 million). These were partly offset by higher depreciation charges (increase of $128 million) mainly due to asset acquisitions, and unfavourable tax movements ($94 million).

First nine months 2024 segment earnings also included impairment charges of $965 million mainly relating to an asset in the Netherlands, charges of $163 million related to redundancy and restructuring, and net losses of $140 million related to the sale of assets. These charges are part of identified items and compare with the first nine months 2023 which included gains of $298 million related to indirect tax credits, and favourable movements of $60 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Cash flow from operating activities for the first nine months 2024 was primarily driven by Adjusted EBITDA, the timing impact of payments relating to emission certificates and biofuel programmes of $966 million, and working capital inflows of $153 million. These inflows were partly offset by tax payments of $432 million, and non-cash cost of supplies adjustment of $256 million.

Marketing sales volumes (comprising hydrocarbon sales), compared with the first nine months 2023, decreased mainly in Mobility including increased focus on value over volume.

1.All earnings amounts are shown post-tax, unless stated otherwise.

2.Adjusted EBITDA is without taxation.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



CHEMICALS AND PRODUCTS
Quarters				$ million		Nine months
Q3 2024	Q2 2024	Q3 2023	%¹		Reference	2024	2023	%
341	587	1,250	-42	Segment earnings2		2,085	3,310	-37
(122)	(499)	(213)		Of which: Identified items2	A	(1,078)	(278)
463	1,085	1,463	-57	Adjusted Earnings2	A	3,163	3,588	-12
1,240	2,242	2,661	-45	Adjusted EBITDA2	A	6,308	6,819	-7
3,321	2,249	2,862	+48	Cash flow from operating activities2	A	5,221	6,364	-18
761	638	837		Cash capital expenditure2	C	1,898	2,027
1,305	1,429	1,334	-9	Refinery processing intake (thousand b/d)		1,388	1,360	+2
3,015	3,052	2,998	-1	Chemicals sales volumes (thousand tonnes)		8,950	8,656	+3

1.Q3 on Q2 change

The Chemicals and Products segment includes chemicals manufacturing plants with their own marketing network, and refineries which turn crude oil and other feedstocks into a range of oil products which are moved and marketed around the world for domestic, industrial and transport use. The segment also includes the pipeline business, trading and optimisation of crude oil, oil products and petrochemicals, and Oil Sands activities (the extraction of bitumen from mined oil sands and its conversion into synthetic crude oil).

Quarter Analysis1

Segment earnings, compared with the second quarter 2024, reflected lower Products margins (decrease of $492 million) mainly driven by lower refining margins and lower margins from trading and optimisation. Segment earnings also reflected lower Chemicals margins (decrease of $189 million) mainly due to lower utilisation and lower realised prices. In addition, the third quarter 2024 reflected higher operating expenses (increase of $88 million). These were partly offset by favourable tax movements ($133 million).

Third quarter 2024 segment earnings also included charges of $101 million related to redundancy and restructuring, and net impairment charges and reversals of $92 million, partly offset by favourable movements of $95 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. These charges and favourable movements are part of identified items, and compare with the second quarter 2024 which included net impairment charges and reversals of $708 million mainly relating to assets in Singapore, partly offset by favourable movements of $156 million due to the fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. In the third quarter 2024, Chemicals had negative Adjusted Earnings of $111 million and Products had positive Adjusted Earnings of $573 million.

Cash flow from operating activities for the quarter was primarily driven by working capital inflows of $2,131 million, Adjusted EBITDA, cash inflows relating to commodity derivatives of $88 million and dividends (net of profits) from joint ventures and associates of $63 million. These inflows were partly offset by non-cash cost of supplies adjustment of $331 million.

Chemicals manufacturing plant utilisation was 76% compared with 80% in the second quarter 2024, due to higher planned and unplanned maintenance.

Refinery utilisation was 81% compared with 92% in the second quarter 2024, due to higher planned and unplanned maintenance.

Nine Months Analysis1

Segment earnings, compared with the first nine months 2023, reflected lower Products margins (decrease of $1,458 million) mainly driven by lower refining margins and lower margins from trading and optimisation. Segment earnings also included unfavourable tax movements ($106 million). These were partly offset by higher Chemicals margins (increase of $516 million) due to higher realised prices and higher utilisation. In addition, the first nine months 2024 reflected lower operating expenses (decrease of $658 million).

First nine months 2024 segment earnings also included net impairment charges and reversals of $952 million mainly relating to assets in Singapore, charges of $139 million related to redundancy and restructuring, and unfavourable

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

movements of $69 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. These charges and unfavourable movements are part of identified items, and compare with the first nine months 2023 which included losses of $227 million from net impairments and reversals, legal provisions of $74 million and favourable movements of $75 million related to the fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. In the first nine months 2024, Chemicals had negative Adjusted Earnings of $174 million and Products had positive Adjusted Earnings of $3,337 million.

Cash flow from operating activities for the first nine months 2024 was primarily driven by Adjusted EBITDA, the timing impact of payments relating to emission certificates and biofuel programmes of $257 million, and dividends (net of profits) from joint ventures and associates of $165 million. These inflows were partly offset by working capital outflows of $869 million, cash outflows relating to legal provisions of $203 million, tax payments of $182 million, and non-cash cost of supplies adjustment of $182 million.

Chemicals manufacturing plant utilisation was 77% compared with 70% in the first nine months 2023, mainly due to economic optimisation in the first nine months 2023. The increase was also driven by ramp-up of Shell Polymers Monaca and lower unplanned maintenance in the first nine months 2024.

Refinery utilisation was 88% compared with 87% in the first nine months 2023.

1.All earnings amounts are shown post-tax, unless stated otherwise.

2.Adjusted EBITDA is without taxation.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



RENEWABLES AND ENERGY SOLUTIONS
Quarters				$ million		Nine months
Q3 2024	Q2 2024	Q3 2023	%¹		Reference	2024	2023	%
(481)	(75)	616	-538	Segment earnings		(3)	3,361	-100
(319)	112	667		Of which: Identified items	A	183	2,778
(162)	(187)	(51)	+13	Adjusted Earnings	A	(186)	583	-132
(75)	(91)	101	+18	Adjusted EBITDA	A	101	1,229	-92
(364)	847	(34)	-143	Cash flow from operating activities	A	2,948	4,249	-31
409	425	659		Cash capital expenditure	C	1,272	1,655
79	74	76	+7	External power sales (terawatt hours)2		230	211	+9
148	148	170	0	Sales of pipeline gas to end-use customers (terawatt hours)3		487	563	-14

1.Q3 on Q2 change

2.Physical power sales to third parties; excluding financial trades and physical trade with brokers, investors, financial institutions, trading platforms, and wholesale traders.

3.Physical natural gas sales to third parties; excluding financial trades and physical trade with brokers, investors, financial institutions, trading platforms, and wholesale traders. Excluding sales of natural gas by other segments and LNG sales.

Renewables and Energy Solutions includes activities such as renewable power generation, the marketing and trading and optimisation of power and pipeline gas, as well as carbon credits, and digitally enabled customer solutions. It also includes the production and marketing of hydrogen, development of commercial carbon capture and storage hubs, investment in nature-based projects that avoid or reduce carbon emissions, and Shell Ventures, which invests in companies that work to accelerate the energy and mobility transformation.

Quarter Analysis1

Segment earnings, compared with the second quarter 2024, reflected lower margins (decrease of $86 million) mainly due to lower trading and optimisation in the Americas, partly offset by slightly higher trading and optimisation in Europe.

Third quarter 2024 segment earnings also included unfavourable movements of $279 million relating to an accounting mismatch due to fair value accounting of commodity derivatives. These unfavourable movements are part of identified items and compare with the second quarter 2024 which included favourable movements of $223 million due to the fair value accounting of commodity derivatives and impairment charges of $155 million. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items.

Cash flow from operating activities for the quarter was primarily driven by working capital outflows of $136 million, net cash outflows related to derivatives of $107 million, and Adjusted EBITDA.

Nine Months Analysis1

Segment earnings, compared with the first nine months 2023, reflected lower margins (decrease of $1,236 million) mainly from trading and optimisation primarily in Europe due to lower volatility and lower prices, partly offset by lower operating expenses (decrease of $427 million).

First nine months 2024 segment earnings also included favourable movements of $250 million relating to an accounting mismatch due to fair value accounting of commodity derivatives, partly offset by net impairment charges and reversals of $89 million. These favourable movements and charges are part of identified items and compare with the first nine months 2023 which included favourable movements of $2,632 million due to the fair value accounting of commodity derivatives. As part of Shell’s normal business, commodity derivative hedge contracts are entered into for mitigation of economic exposures on future purchases, sales and inventory.

Adjusted Earnings and Adjusted EBITDA2 were driven by the same factors as the segment earnings and adjusted for identified items. Most Renewables and Energy Solutions activities were loss-making for the first nine months 2024, which was partly offset by positive Adjusted Earnings from trading and optimisation.

Cash flow from operating activities for the first nine months 2024 was primarily driven by net cash inflows related to derivatives of $2,479 million, working capital inflows of $570 million, and Adjusted EBITDA, partly offset by tax payments of $415 million.

1.All earnings amounts are shown post-tax, unless stated otherwise.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

2.Adjusted EBITDA is without taxation.

Additional Growth Measures


Quarters					Nine months
Q3 2024	Q2 2024	Q3 2023	%¹		2024	2023	%
				Renewable power generation capacity (gigawatt):
3.4	3.3	2.5	+2	– In operation2	3.4	2.5	+37
3.9	3.8	4.9	+3	– Under construction and/or committed for sale3	3.9	4.9	-20

1.Q3 on Q2 change

2.Shell’s equity share of renewable generation capacity post commercial operation date. It excludes Shell’s equity share of associates where information cannot be obtained.

3.Shell’s equity share of renewable generation capacity under construction and/or committed for sale under long-term offtake agreements (PPA). It excludes Shell’s equity share of associates where information cannot be obtained.



CORPORATE
Quarters			$ million		Nine months
Q3 2024	Q2 2024	Q3 2023		Reference	2024	2023
(647)	(1,656)	(497)	Segment earnings1		(2,656)	(2,315)
(3)	(1,080)	22	Of which: Identified items	A	(1,069)	(50)
(643)	(576)	(519)	Adjusted Earnings1	A	(1,588)	(2,266)
(346)	(213)	(186)	Adjusted EBITDA1	A	(650)	(619)
115	(1,468)	(238)	Cash flow from operating activities	A	(1,898)	(2,372)

1.From the first quarter 2024, Shell’s longer-term innovation portfolio is managed centrally and hence reported as part of the Corporate segment (previously all other segments). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact on all the other segments.

The Corporate segment covers the non-operating activities supporting Shell. It comprises Shell’s holdings and treasury organisation, headquarters and central functions, self-insurance activities and centrally managed longer-term innovation portfolio. All finance expense, income and related taxes are included in Corporate segment earnings rather than in the earnings of business segments.

Quarter Analysis1

Segment earnings, compared with the second quarter 2024, reflected unfavourable movements in currency exchange rate effects, partly offset by favourable tax movements.

Second quarter 2024 segment earnings also included reclassifications from equity to profit and loss of cumulative currency translation differences related to funding structures resulting in unfavourable movements of $1,122 million. These currency translation differences were previously recognised in other comprehensive income and accumulated in equity as part of accumulated other comprehensive income. This non-cash reclassification is part of identified items.

Adjusted EBITDA2 was mainly driven by unfavourable currency exchange rate effects and higher operating expenses.

Nine Months Analysis1

Segment earnings, compared with the first nine months 2023, were primarily driven by favourable tax movements and favourable net interest movements.

First nine months 2024 segment earnings also included reclassifications from equity to profit and loss of cumulative currency translation differences related to funding structures resulting in unfavourable movements of $1,122 million. These reclassifications are included in identified items.

Adjusted EBITDA2 was mainly driven by unfavourable currency exchange rate effects.

1.All earnings amounts are shown post-tax, unless stated otherwise.

2.Adjusted EBITDA is without taxation.

OUTLOOK FOR THE FOURTH QUARTER 2024

For Full year 2023 cash capital expenditure was $24 billion. Cash capital expenditure for full year 2024 is expected to be below $22 billion.

Integrated Gas production is expected to be approximately 900 – 960 thousand boe/d. Fourth quarter 2024 outlook reflects scheduled maintenance at Pearl GTL in Qatar. LNG liquefaction volumes are expected to be approximately 6.9 – 7.5 million tonnes.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Upstream production is expected to be approximately 1,750 – 1,950 thousand boe/d.

Marketing sales volumes are expected to be approximately 2,550 – 3,050 thousand b/d.

Refinery utilisation is expected to be approximately 75% – 83%. Chemicals manufacturing plant utilisation is expected to be approximately 72% – 80%.

In the fourth quarter 2023, Corporate Adjusted Earnings were a net expense of $609 million1. Corporate Adjusted Earnings2 are expected to be a net expense of approximately $600 – $800 million in the fourth quarter 2024.

2.For the definition of Adjusted Earnings and the most comparable GAAP measure please see reference A.

FORTHCOMING EVENTS



Date			Event
January 30, 2025			Fourth quarter 2024 results and dividends
March 13, 2025			Publication of Annual Report and Accounts and filing of Form 20-F for the year ended December 31, 2024
May 2, 2025			First quarter 2025 results and dividends
July 31, 2025			Second quarter 2025 results and dividends
October 30, 2025			Third quarter 2025 results and dividends

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS



CONSOLIDATED STATEMENT OF INCOME
Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
71,089	74,463	76,350	Revenue1	218,031	237,888
933	898	747	Share of profit/(loss) of joint ventures and associates	3,150	2,957
440	(305)	913	Interest and other income/(expenses)2	1,042	2,207
72,462	75,057	78,011	Total revenue and other income/(expenses)	222,222	243,052
48,225	49,417	49,144	Purchases	144,509	158,138
6,138	5,593	6,384	Production and manufacturing expenses	17,541	18,433
3,139	3,094	3,447	Selling, distribution and administrative expenses	9,208	9,811
294	263	267	Research and development	768	817
305	496	436	Exploration	1,551	1,283
5,916	7,555	5,911	Depreciation, depletion and amortisation2	19,352	20,069
1,174	1,235	1,131	Interest expense	3,573	3,507
65,190	67,653	66,720	Total expenditure	196,502	212,058
7,270	7,404	11,291	Income/(loss) before taxation	25,717	30,993
2,879	3,754	4,115	Taxation charge/(credit)2	10,237	11,891
4,391	3,650	7,176	Income/(loss) for the period	15,480	19,102
100	133	132	Income/(loss) attributable to non-controlling interest	314	215
4,291	3,517	7,044	Income/(loss) attributable to Shell plc shareholders	15,166	18,887
0.69	0.55	1.06	Basic earnings per share ($)3	2.39	2.78
0.68	0.55	1.05	Diluted earnings per share ($)3	2.36	2.75

1.See Note 2 “Segment information”.

2.See Note 8 “Other notes to the unaudited Condensed Consolidated Interim Financial Statements”.

3.See Note 4 “Earnings per share”.



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
4,391	3,650	7,176	Income/(loss) for the period	15,480	19,102
			Other comprehensive income/(loss) net of tax:
			Items that may be reclassified to income in later periods:
2,947	698	(1,460)	– Currency translation differences1	1,651	(1,174)
35	(12)	1	– Debt instruments remeasurements	16	13
(75)	14	141	– Cash flow hedging gains/(losses)	(7)	61
—	—	—	– Net investment hedging gains/(losses)	—	(44)
(2)	(6)	(39)	– Deferred cost of hedging	(22)	(94)
35	(50)	(72)	– Share of other comprehensive income/(loss) of joint ventures and associates	(27)	(118)
2,940	644	(1,429)	Total	1,610	(1,357)
			Items that are not reclassified to income in later periods:
419	310	180	– Retirement benefits remeasurements	1,169	125
80	(81)	(38)	– Equity instruments remeasurements	77	(15)
(53)	44	17	– Share of other comprehensive income/(loss) of joint ventures and associates	1	(15)
446	273	159	Total	1,247	95
3,386	917	(1,270)	Other comprehensive income/(loss) for the period	2,857	(1,262)
7,777	4,567	5,906	Comprehensive income/(loss) for the period	18,337	17,840
177	123	149	Comprehensive income/(loss) attributable to non-controlling interest	357	217
7,600	4,443	5,757	Comprehensive income/(loss) attributable to Shell plc shareholders	17,981	17,622

1.See Note 8 “Other notes to the unaudited Condensed Consolidated Interim Financial Statements”.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



CONDENSED CONSOLIDATED BALANCE SHEET
$ million
	September 30, 2024	December 31, 2023
Assets
Non-current assets
Goodwill	16,600	16,660
Other intangible assets	8,188	10,253
Property, plant and equipment	191,721	194,835
Joint ventures and associates	25,764	24,457
Investments in securities	3,062	3,246
Deferred tax	6,114	6,454
Retirement benefits1	10,564	9,151
Trade and other receivables	6,883	6,298
Derivative financial instruments²	498	801
	269,394	272,155
Current assets
Inventories	24,143	26,019
Trade and other receivables	46,782	53,273
Derivative financial instruments²	10,233	15,098
Cash and cash equivalents	42,252	38,774
	123,411	133,164
Assets classified as held for sale1	2,144	951
	125,555	134,115
Total assets	394,949	406,270
Liabilities
Non-current liabilities
Debt	64,597	71,610
Trade and other payables	3,864	3,103
Derivative financial instruments²	1,749	2,301
Deferred tax	15,487	15,347
Retirement benefits1	7,110	7,549
Decommissioning and other provisions	22,979	22,531
	115,786	122,441
Current liabilities
Debt	12,015	9,931
Trade and other payables	61,076	68,237
Derivative financial instruments²	6,775	9,529
Income taxes payable	4,289	3,422
Decommissioning and other provisions	4,171	4,041
	88,327	95,160
Liabilities directly associated with assets classified as held for sale1	1,298	307
	89,625	95,467
Total liabilities	205,411	217,908
Equity attributable to Shell plc shareholders	187,673	186,607
Non-controlling interest	1,865	1,755
Total equity	189,538	188,362
Total liabilities and equity	394,949	406,270

1. See Note 8 “Other notes to the unaudited Condensed Consolidated Interim Financial Statements”.

2. See Note 7 “Derivative financial instruments and debt excluding lease liabilities”.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
	Equity attributable to Shell plc shareholders
$ million	Share capital1	Shares held in trust	Other reserves²	Retained earnings	Total	Non-controlling interest	Total equity
At January 1, 2024	544	(997)	21,145	165,915	186,607	1,755	188,362
Comprehensive income/(loss) for the period	—	—	2,815	15,166	17,981	357	18,337
Transfer from other comprehensive income	—	—	166	(166)	—	—	—
Dividends³	—	—	—	(6,556)	(6,556)	(242)	(6,798)
Repurchases of shares4	(25)	—	25	(10,536)	(10,536)	—	(10,536)
Share-based compensation	—	542	(24)	(400)	119	—	119
Other changes	—	—	—	60	60	(5)	55
At September 30, 2024	519	(456)	24,127	163,482	187,673	1,865	189,538
At January 1, 2023	584	(726)	21,132	169,482	190,472	2,125	192,597
Comprehensive income/(loss) for the period	—	—	(1,263)	18,886	17,622	217	17,840
Transfer from other comprehensive income	—	—	(111)	111	—	—	—
Dividends3	—	—	—	(6,193)	(6,193)	(636)	(6,829)
Repurchases of shares4	(30)	—	30	(11,058)	(11,058)	—	(11,058)
Share-based compensation	—	466	(18)	(100)	349	—	349
Other changes	—	—	—	8	8	37	45
At September 30, 2023	555	(261)	19,769	171,136	191,199	1,745	192,943

1. See Note 5 “Share capital”.

2. See Note 6 “Other reserves”.

3. The amount charged to retained earnings is based on prevailing exchange rates on payment date.

4. Includes shares committed to repurchase under an irrevocable contract and repurchases subject to settlement at the end of the quarter.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



CONSOLIDATED STATEMENT OF CASH FLOWS
Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
7,270	7,404	11,291	Income before taxation for the period	25,717	30,993
			Adjustment for:
554	619	513	– Interest expense (net)	1,749	1,789
5,916	7,555	5,911	– Depreciation, depletion and amortisation1	19,352	20,069
150	269	186	– Exploration well write-offs	973	626
154	(143)	74	– Net (gains)/losses on sale and revaluation of non-current assets and businesses	—	(24)
(933)	(898)	(747)	– Share of (profit)/loss of joint ventures and associates	(3,150)	(2,957)
860	792	749	– Dividends received from joint ventures and associates	2,390	2,529
2,705	(954)	(3,151)	– (Increase)/decrease in inventories	1,143	2,237
4,057	1,965	(1,126)	– (Increase)/decrease in current receivables	5,827	13,105
(4,096)	(1,269)	4,498	– Increase/(decrease) in current payables2	(7,314)	(10,881)
735	253	(2,807)	– Derivative financial instruments	2,373	(6,050)
125	(332)	1	– Retirement benefits	(267)	31
359	(332)	282	– Decommissioning and other provisions2	(572)	(210)
(144)	2,027	(150)	– Other1	2,392	474
(3,028)	(3,448)	(3,191)	Tax paid	(9,092)	(10,108)
14,684	13,508	12,332	Cash flow from operating activities	41,522	41,622
(4,690)	(4,445)	(5,259)	Capital expenditure	(13,114)	(16,033)
(222)	(261)	(350)	Investments in joint ventures and associates	(983)	(1,093)
(38)	(13)	(40)	Investments in equity securities	(63)	(154)
(4,950)	(4,719)	(5,649)	Cash capital expenditure	(14,161)	(17,280)
94	710	184	Proceeds from sale of property, plant and equipment and businesses	1,128	2,024
94	57	68	Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans	284	425
6	2	7	Proceeds from sale of equity securities	576	28
593	648	586	Interest received	1,818	1,555
1,074	883	701	Other investing cash inflows	2,814	3,308
(769)	(920)	(724)	Other investing cash outflows	(3,183)	(2,141)
(3,857)	(3,338)	(4,827)	Cash flow from investing activities	(10,723)	(12,080)
(89)	(179)	88	Net increase/(decrease) in debt with maturity period within three months	(375)	(185)
			Other debt:
78	132	187	– New borrowings	377	964
(1,322)	(4,154)	(3,368)	– Repayments	(7,008)	(6,596)
(979)	(1,287)	(1,049)	Interest paid	(3,177)	(3,076)
652	(115)	(26)	Derivative financial instruments	239	22
—	(1)	6	Change in non-controlling interest	(5)	(22)
			Cash dividends paid to:
(2,167)	(2,177)	(2,179)	– Shell plc shareholders	(6,554)	(6,192)
(92)	(82)	(51)	– Non-controlling interest	(242)	(636)
(3,537)	(3,958)	(2,725)	Repurchases of shares	(10,319)	(10,640)
6	(24)	(30)	Shares held in trust: net sales/(purchases) and dividends received	(480)	(176)
(7,452)	(11,846)	(9,147)	Cash flow from financing activities	(27,545)	(26,535)
729	(126)	(421)	Effects of exchange rate changes on cash and cash equivalents	224	(222)
4,105	(1,801)	(2,063)	Increase/(decrease) in cash and cash equivalents	3,478	2,785
38,148	39,949	45,094	Cash and cash equivalents at beginning of period	38,774	40,246
42,252	38,148	43,031	Cash and cash equivalents at end of period	42,252	43,031

1.See Note 8 “Other notes to the unaudited Condensed Consolidated Interim Financial Statements”.

2.To further enhance consistency between working capital and the Balance Sheet and the Statement of Cash Flows, from January 1, 2024, onwards movements in current other provisions are recognised in ‘Decommissioning and other provisions’ instead of ‘Increase/(decrease) in current payables’. Comparatives for the third quarter 2023 and the nine months 2023 have been reclassified accordingly by $212 million and $40 million respectively to conform with current period presentation.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

1. Basis of preparation

These unaudited Condensed Consolidated Interim Financial Statements of Shell plc (“the Company”) and its subsidiaries (collectively referred to as “Shell”) have been prepared in accordance with IAS 34 Interim Financial Reporting as issued by the International Accounting Standards Board (“IASB”) and adopted by the UK, and on the basis of the same accounting principles as those used in the Company’s Annual Report and Accounts (pages 244 to 316) for the year ended December 31, 2023, as filed with the Registrar of Companies for England and Wales and as filed with the Autoriteit Financiële Markten (the Netherlands) and Form 20-F (pages 217 to 290) for the year ended December 31, 2023 as filed with the US Securities and Exchange Commission, and should be read in conjunction with these filings.

The financial information presented in the unaudited Condensed Consolidated Interim Financial Statements does not constitute statutory accounts within the meaning of section 434(3) of the Companies Act 2006 (“the Act”). Statutory accounts for the year ended December 31, 2023, were published in Shell’s Annual Report and Accounts, a copy of which was delivered to the Registrar of Companies for England and Wales, and in Shell’s Form 20-F. The auditor’s report on those accounts was unqualified, did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying the report and did not contain a statement under sections 498(2) or 498(3) of the Act.

2. Segment information

Segment earnings are presented on a current cost of supplies basis (CCS earnings), which is the earnings measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance. On this basis, the purchase price of volumes sold during the period is based on the current cost of supplies during the same period after making allowance for the tax effect. CCS earnings therefore exclude the effect of changes in the oil price on inventory carrying amounts. Sales between segments are based on prices generally equivalent to commercially available prices.

From the first quarter 2024, Wholesale commercial fuels forms part of Mobility with inclusion in the Marketing segment (previously Chemicals and Products segment). The change in segmentation reflects the increasing alignment between the economic characteristics of wholesale commercial fuels and other Mobility businesses, and is consistent with changes in the information provided to the Chief Operating Decision Maker. Prior period comparatives have been revised to conform with current year presentation with an offsetting impact between the Marketing and the Chemicals and Products segment (see below). Also, from the first quarter 2024, Shell’s longer-term innovation portfolio is managed centrally and hence reported as part of the Corporate segment (previously all other segments). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact on all the other segments (see below).

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



REVENUE AND CCS EARNINGS BY SEGMENT
Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
			Third-party revenue
9,748	9,052	8,338	Integrated Gas	27,996	27,208
1,605	1,590	1,617	Upstream	4,954	5,212
30,519	32,005	35,236	Marketing2	92,564	98,799
22,608	24,583	22,119	Chemicals and Products2	70,926	72,121
6,599	7,222	9,032	Renewables and Energy Solutions	21,558	34,517
10	11	7	Corporate	33	31
71,089	74,463	76,350	Total third-party revenue1	218,031	237,888
			Inter-segment revenue
2,131	2,157	2,472	Integrated Gas	6,691	8,946
9,618	10,102	10,277	Upstream	30,008	30,282
1,235	1,363	1,456	Marketing2	3,953	4,056
9,564	9,849	11,942	Chemicals and Products2	29,725	32,653
1,131	957	894	Renewables and Energy Solutions	3,093	3,140
—	—	—	Corporate	—	—
			CCS earnings
2,631	2,454	2,156	Integrated Gas	7,846	5,325
2,289	2,179	1,999	Upstream	6,741	6,388
760	257	629	Marketing2	1,791	2,832
341	587	1,250	Chemicals and Products2	2,085	3,310
(481)	(75)	616	Renewables and Energy Solutions	(3)	3,361
(647)	(1,656)	(497)	Corporate3	(2,656)	(2,315)
4,894	3,747	6,152	Total CCS earnings4	15,804	18,901

1.Includes revenue from sources other than from contracts with customers, which mainly comprises the impact of fair value accounting of commodity derivatives.

2.From January 1, 2024, onwards Wholesale commercial fuels has been reallocated from the Chemicals and Products segment to the Marketing segment. Comparatives for the third quarter 2023 and the nine months 2023 have been reclassified accordingly, by $5,659 million and $16,369 million respectively for Third-party revenue and by $(73) million and $22 million respectively for CCS earnings to conform with current period presentation. For Inter-segment revenue the reallocation and revision of comparative figures for the third quarter 2023 and the nine months 2023 led to an increase in inter-segment revenue in the Marketing segment of $1,302 million and $3,616 million respectively and an increase in the Chemicals and Products segment of $11,373 million and $31,011 million respectively.

3.From January 1, 2024, onwards costs for Shell’s centrally managed longer-term innovation portfolio are reported as part of the Corporate segment. Prior period comparatives for Corporate for the third quarter 2023 and the nine months 2023 have been revised by $37 million and $91 million respectively, with a net offsetting impact in all other segments to conform with current period presentation.

4.See Note 3 “Reconciliation of income for the period to CCS Earnings, Operating expenses and Total Debt”.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Cash capital expenditure is a measure used by the Chief Executive Officer for the purposes of making decisions about allocating resources and assessing performance.



CASH CAPITAL EXPENDITURE BY SEGMENT
Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
			Capital expenditure
1,090	1,024	958	Integrated Gas	2,971	2,458
1,998	1,769	2,013	Upstream	5,533	5,701
488	644	935	Marketing1	1,559	4,358
748	601	761	Chemicals and Products1	1,822	1,944
327	377	523	Renewables and Energy Solutions	1,124	1,382
39	30	68	Corporate	104	190
4,690	4,445	5,259	Total capital expenditure	13,114	16,033
			Add: Investments in joint ventures and associates
147	127	141	Integrated Gas	457	543
(37)	60	(6)	Upstream	268	205
37	—	25	Marketing	75	48
13	37	76	Chemicals and Products	76	81
59	35	114	Renewables and Energy Solutions	103	205
3	1	1	Corporate	5	11
222	261	350	Total investments in joint ventures and associates	983	1,093
			Add: Investments in equity securities
—	—	—	Integrated Gas	—	—
12	—	—	Upstream	12	—
—	—	—	Marketing	—	—
—	—	—	Chemicals and Products	—	2
23	13	21	Renewables and Energy Solutions	45	68
3	—	19	Corporate	6	84
38	13	40	Total investments in equity securities	63	154
			Cash capital expenditure
1,236	1,151	1,099	Integrated Gas	3,429	3,000
1,974	1,829	2,007	Upstream	5,813	5,906
525	644	959	Marketing1	1,634	4,406
761	638	837	Chemicals and Products1	1,898	2,027
409	425	659	Renewables and Energy Solutions	1,272	1,655
45	32	87	Corporate	114	285
4,950	4,719	5,649	Total Cash capital expenditure	14,161	17,280

1.From January 1, 2024, onwards Wholesale commercial fuels has been reallocated from the Chemicals and Products segment to the Marketing segment. Comparatives for the third quarter 2023 and the nine months 2023 have been reclassified accordingly by $42 million and $133 million respectively for capital expenditure and cash capital expenditure to conform with current period presentation.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

3. Reconciliation of income for the period to CCS Earnings, Operating expenses and Total Debt



RECONCILIATION OF INCOME FOR THE PERIOD TO CCS EARNINGS
Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
4,291	3,517	7,044	Income/(loss) attributable to Shell plc shareholders	15,166	18,887
100	133	132	Income/(loss) attributable to non-controlling interest	314	215
4,391	3,650	7,176	Income/(loss) for the period	15,480	19,102
			Current cost of supplies adjustment:
668	137	(1,304)	Purchases	473	(275)
(162)	(36)	327	Taxation	(114)	60
(2)	(5)	(47)	Share of profit/(loss) of joint ventures and associates	(35)	14
503	97	(1,024)	Current cost of supplies adjustment	324	(201)
			Of which:
477	89	(969)	Attributable to Shell plc shareholders	302	(162)
26	7	(55)	Attributable to non-controlling interest	22	(39)
4,894	3,747	6,152	CCS earnings	15,804	18,901
			Of which:
4,768	3,606	6,075	CCS earnings attributable to Shell plc shareholders	15,468	18,725
126	140	77	CCS earnings attributable to non-controlling interest	336	176



RECONCILIATION OF OPERATING EXPENSES
Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
6,138	5,593	6,384	Production and manufacturing expenses	17,541	18,433
3,139	3,094	3,447	Selling, distribution and administrative expenses	9,208	9,811
294	263	267	Research and development	768	817
9,570	8,950	10,097	Operating expenses	27,517	29,062

RECONCILIATION OF TOTAL DEBT

Quarters

$ million

Nine months

Q3 2024

Q2 2024

Q3 2023

2024

2023

September 30, 2024

June 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

12,015

10,849

10,119

Current debt

12,015

10,119

64,597

64,619

72,028

Non-current debt

64,597

72,028

76,613

75,468

82,147

Total debt

76,613

82,147

4. Earnings per share



EARNINGS PER SHARE
Quarters				Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
4,291	3,517	7,044	Income/(loss) attributable to Shell plc shareholders ($ million)	15,166	18,887

			Weighted average number of shares used as the basis for determining:
6,256.5	6,355.4	6,668.1	Basic earnings per share (million)	6,350.3	6,792.5
6,320.9	6,417.6	6,736.7	Diluted earnings per share (million)	6,414.0	6,856.7

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

5. Share capital

ISSUED AND FULLY PAID ORDINARY SHARES OF €0.07 EACH

Number of shares

Nominal value
($ million)

At January 1, 2024

6,524,109,049

544

Repurchases of shares

(299,830,201)

(25)

At September 30, 2024

6,224,278,848

519

At January 1, 2023

7,003,503,393

584

Repurchases of shares

(357,368,014)

(30)

At September 30, 2023

6,646,135,379

555

At Shell plc’s Annual General Meeting on May 21, 2024, the Board was authorised to allot ordinary shares in Shell plc, and to grant rights to subscribe for, or to convert, any security into ordinary shares in Shell plc, up to an aggregate nominal amount of approximately €150 million (representing approximately 2,147 million ordinary shares of €0.07 each), and to list such shares or rights on any stock exchange. This authority expires at the earlier of the close of business on August 20, 2025, or the end of the Annual General Meeting to be held in 2025, unless previously renewed, revoked or varied by Shell plc in a general meeting.

6. Other reserves



OTHER RESERVES
$ million	Merger reserve	Share premium reserve	Capital redemption reserve	Share plan reserve	Accumulated other comprehensive income	Total
At January 1, 2024	37,298	154	236	1,308	(17,851)	21,145
Other comprehensive income/(loss) attributable to Shell plc shareholders	—	—	—	—	2,815	2,815
Transfer from other comprehensive income	—	—	—	—	166	166
Repurchases of shares	—	—	25	—	—	25
Share-based compensation	—	—	—	(24)	—	(24)
At September 30, 2024	37,298	154	261	1,284	(14,870)	24,127
At January 1, 2023	37,298	154	196	1,140	(17,656)	21,132
Other comprehensive income/(loss) attributable to Shell plc shareholders	—	—	—	—	(1,263)	(1,263)
Transfer from other comprehensive income	—	—	—	—	(111)	(111)
Repurchases of shares	—	—	30	—	—	30
Share-based compensation	—	—	—	(18)	—	(18)
At September 30, 2023	37,298	154	227	1,121	(19,029)	19,769

The merger reserve and share premium reserve were established as a consequence of Shell plc (formerly Royal Dutch Shell plc) becoming the single parent company of Royal Dutch Petroleum Company and The “Shell” Transport and Trading Company, p.l.c., now The Shell Transport and Trading Company Limited, in 2005. The merger reserve increased in 2016 following the issuance of shares for the acquisition of BG Group plc. The capital redemption reserve was established in connection with repurchases of shares of Shell plc. The share plan reserve is in respect of equity-settled share-based compensation plans.

7. Derivative financial instruments and debt excluding lease liabilities

As disclosed in the Consolidated Financial Statements for the year ended December 31, 2023, presented in the Annual Report and Accounts and Form 20-F for that year, Shell is exposed to the risks of changes in fair value of its financial assets and liabilities. The fair values of the financial assets and liabilities are defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Methods and assumptions used to estimate the fair values at September 30, 2024, are consistent with those used in the year ended December 31, 2023, though the carrying amounts of derivative financial instruments have changed since that

Page 22



SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

date. The movement of the derivative financial instruments between December 31, 2023 and September 30, 2024 is a decrease of $4,865 million for the current assets and a decrease of $2,754 million for the current liabilities.

The table below provides the comparison of the fair value with the carrying amount of debt excluding lease liabilities, disclosed in accordance with IFRS 7 Financial Instruments: Disclosures.



DEBT EXCLUDING LEASE LIABILITIES
$ million	September 30, 2024	December 31, 2023
Carrying amount	51,022	53,832
Fair value¹	48,489	50,866

1. Mainly determined from the prices quoted for these securities.

8. Other notes to the unaudited Condensed Consolidated Interim Financial Statements

Consolidated Statement of Income

Interest and other income



Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
440	(305)	913	Interest and other income/(expenses)	1,042	2,207
			Of which:
619	616	618	Interest income	1,824	1,718
4	30	7	Dividend income (from investments in equity securities)	58	36
(154)	143	(75)	Net gains/(losses) on sales and revaluation of non-current assets and businesses	0	35
(189)	(1,169)	168	Net foreign exchange gains/(losses) on financing activities	(1,292)	(60)
159	74	195	Other	452	478

Net foreign exchange gains/(losses) on financing activities in the second quarter 2024 includes a loss of $1,104 million related to cumulative currency translation differences that were reclassified to profit and loss. The reclassification of these cumulative currency translation differences was principally triggered by changes in the funding structure of some of Shell’s businesses in the United Kingdom. These currency translation differences were previously directly recognised in equity as part of accumulated other comprehensive income.

Depreciation, depletion and amortisation



Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
5,916	7,555	5,911	Depreciation, depletion and amortisation	19,352	20,069
			Of which:
5,578	5,642	5,716	Depreciation	16,874	17,120
340	1,984	359	Impairments	2,706	3,438
(2)	(71)	(163)	Impairment reversals	(228)	(489)

Impairments recognised in the third quarter 2024 of $340 million pre-tax ($290 million post-tax) mainly relate to various assets in Marketing and Chemicals and Products. Impairments recognised in the second quarter 2024 of $1,984 million pre-tax ($1,778 million post-tax) mainly relate to Marketing ($1,055 million), Chemicals and Products ($690 million) and Renewables and Energy Solutions ($141 million). The impairment in Marketing principally relates to a biofuels facility located in the Netherlands, triggered by a temporary pause of on-site construction work. The impairment in Chemicals and Products relates to an Energy and Chemicals Park located in Singapore, due to remeasurement of the fair value less costs of disposal triggered by a sales agreement reached. Impairments recognised in the third quarter 2023 of $359 million pre-tax ($299 million post-tax) mainly relate to various assets in Renewables and Energy Solutions and Chemicals and Products.

Page 23



SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Taxation charge/credit

Quarters

$ million

Nine months

Q3 2024

Q2 2024

Q3 2023

2024

2023

2,879

3,754

4,115

Taxation charge/(credit)

10,237

11,891

Of which:

2,834

3,666

4,115

Income tax excluding Pillar Two income tax

10,026

11,891

—

Income tax related to Pillar Two income tax

212

—

On June 20, 2023, the UK substantively enacted Pillar Two Model Rules, effective as from January 1, 2024.

As required by IAS 12 Income Taxes, Shell has applied the exception to recognising and disclosing information about deferred tax assets and liabilities related to Pillar Two income taxes.

Consolidated Statement of Comprehensive Income

Currency translation differences

Quarters

$ million

Nine months

Q3 2024

Q2 2024

Q3 2023

2024

2023

2,947

698

(1,460)

Currency translation differences

1,651

(1,174)

Of which:

2,912

(406)

(1,469)

Recognised in Other comprehensive income

524

(1,181)

1,104

(Gain)/loss reclassified to profit or loss

1,127

Amounts reclassified to profit and loss in the second quarter 2024 relate to cumulative currency translation differences that were reclassified to income (refer to Interest and other income above).

Condensed Consolidated Balance Sheet

Retirement benefits



$ million
	September 30, 2024	December 31, 2023
Non-current assets
Retirement benefits	10,564	9,151
Non-current liabilities
Retirement benefits	7,110	7,549
Surplus/(deficit)	3,454	1,602

Amounts recognised in the Balance Sheet in relation to defined benefit plans include both plan assets and obligations that are presented on a net basis on a plan-by-plan basis. The change in the net retirement benefit asset as at September 30, 2024, is mainly driven by an increase of the market yield on high-quality corporate bonds in the USA, the UK and Eurozone since December 31, 2023, partly offset by losses on plan assets.

Assets classified as held for sale



$ million
	September 30, 2024	December 31, 2023
Assets classified as held for sale	2,144	951
Liabilities directly associated with assets classified as held for sale	1,298	307

Assets classified as held for sale and associated liabilities at September 30, 2024 relate to an energy and chemicals park asset in Chemicals and Products in Singapore and various smaller assets. The major classes of assets and liabilities classified as held for sale at September 30, 2024, are Inventories ($1,273 million; December 31, 2023: $463 million), Property, plant and equipment ($544 million; December 31, 2023: $250 million), Decommissioning and other provisions ($634 million; December 31, 2023: $75 million) and Debt ($425 million; December 31, 2023: $84 million).

Page 24



SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Consolidated Statement of Cash Flows

Cash flow from operating activities – Other

Quarters

$ million

Nine months

Q3 2024

Q2 2024

Q3 2023

2024

2023

(144)

2,027

(150)

Other

2,392

474

‘Cash flow from operating activities – Other’ for the third quarter 2024 includes $432 million of net inflows (second quarter 2024: $620 million net inflows; third quarter 2023: $630 million net outflows) due to the timing of payments relating to emission certificates and biofuel programmes in Europe and North America and $539 million in relation to reversal of currency exchange gains on Cash and cash equivalents (second quarter 2024: $96 million losses; third quarter 2023: $336 million losses). For the second quarter 2024 ‘Cash flow from operating activities – Other’ also includes $1,104 million inflow representing reversal of the non-cash recycling of currency translation losses from other comprehensive income (refer to Interest and other income above).

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

ALTERNATIVE PERFORMANCE (NON-GAAP) MEASURES

A.Adjusted Earnings, Adjusted earnings before interest, taxes, depreciation and amortisation (“Adjusted EBITDA”) and Cash flow from operating activities

The “Adjusted Earnings” measure aims to facilitate a comparative understanding of Shell’s financial performance from period to period by removing the effects of oil price changes on inventory carrying amounts and removing the effects of identified items. These items are in some cases driven by external factors and may, either individually or collectively, hinder the comparative understanding of Shell’s financial results from period to period. This measure excludes earnings attributable to non-controlling interest.

We define “Adjusted EBITDA” as “Income/(loss) for the period” adjusted for current cost of supplies; identified items; tax charge/(credit); depreciation, amortisation and depletion; exploration well write-offs and net interest expense. All items include the non-controlling interest component. Management uses this measure to evaluate Shell’s performance in the period and over time.



Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
4,291	3,517	7,044	Income/(loss) attributable to Shell plc shareholders	15,166	18,887
100	133	132	Income/(loss) attributable to non-controlling interest	314	215
477	89	(969)	Add: Current cost of supplies adjustment attributable to Shell plc shareholders	302	(162)
26	7	(55)	Add: Current cost of supplies adjustment attributable to non-controlling interest	22	(39)
4,894	3,747	6,152	CCS earnings	15,804	18,901



Q3 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
CCS earnings	4,894	2,631	2,289	760	341	(481)	(647)
Less: Identified items	(1,259)	(240)	(153)	(422)	(122)	(319)	(3)
Less: CCS earnings attributable to non-controlling interest	126
Add: Identified items attributable to non-controlling interest	—
Adjusted Earnings	6,028
Add: Non-controlling interest	126
Adjusted Earnings plus non-controlling interest	6,153	2,871	2,443	1,182	463	(162)	(643)
Add: Taxation charge/(credit) excluding tax impact of identified items	3,571	949	2,413	322	(73)	(1)	(39)
Add: Depreciation, depletion and amortisation excluding impairments	5,578	1,369	2,691	564	862	86	6
Add: Exploration well write-offs	150	2	148
Add: Interest expense excluding identified items	1,173	49	183	13	14	2	912
Less: Interest income	619	5	8	—	25	—	581
Adjusted EBITDA	16,005	5,234	7,871	2,081	1,240	(75)	(346)
Less: Current cost of supplies adjustment before taxation	665			334	331
Joint ventures and associates (dividends received less profit)	(62)	(146)	(90)	51	63	61	—
Derivative financial instruments	133	(373)	47	98	88	(106)	380
Taxation paid	(3,028)	(814)	(2,074)	(241)	23	(33)	112
Other	(365)	(32)	(406)	275	107	(75)	(234)
(Increase)/decrease in working capital	2,665	(247)	(78)	792	2,131	(136)	204
Cash flow from operating activities	14,684	3,623	5,268	2,722	3,321	(364)	115

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



Q2 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
CCS earnings	3,747	2,454	2,179	257	587	(75)	(1,656)
Less: Identified items	(2,669)	(220)	(157)	(825)	(499)	112	(1,080)
Less: CCS earnings attributable to non-controlling interest	140
Add: Identified items attributable to non-controlling interest	18
Adjusted Earnings	6,293
Add: Non-controlling interest	122
Adjusted Earnings plus non-controlling interest	6,415	2,675	2,336	1,082	1,085	(187)	(576)
Add: Taxation charge/(credit) excluding tax impact of identified items	3,947	940	2,312	359	297	(10)	49
Add: Depreciation, depletion and amortisation excluding impairments	5,642	1,375	2,750	548	867	95	6
Add: Exploration well write-offs	269	5	264	—	—	—	—
Add: Interest expense excluding identified items	1,149	44	166	10	23	1	904
Less: Interest income	616	—	(1)	—	30	(9)	595
Adjusted EBITDA	16,806	5,039	7,829	1,999	2,242	(91)	(213)
Less: Current cost of supplies adjustment before taxation	133			74	59
Joint ventures and associates (dividends received less profit)	(135)	96	(288)	(54)	46	64	—
Derivative financial instruments	713	(133)	9	7	304	607	(79)
Taxation paid	(3,448)	(1,039)	(1,955)	(17)	(186)	(138)	(113)
Other	(38)	(104)	(341)	(57)	263	180	20
(Increase)/decrease in working capital	(258)	324	484	153	(361)	225	(1,083)
Cash flow from operating activities	13,508	4,183	5,739	1,958	2,249	847	(1,468)



Q3 2023	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
CCS earnings	6,152	2,156	1,999	629	1,250	616	(497)
Less: Identified items	(149)	(375)	(238)	(12)	(213)	667	22
Less: CCS earnings attributable to non-controlling interest	77
Add: Identified items attributable to non-controlling interest	—
Adjusted Earnings	6,224
Add: Non-controlling interest	77
Adjusted Earnings plus non-controlling interest	6,302	2,531	2,237	641	1,463	(51)	(519)
Add: Taxation charge/(credit) excluding tax impact of identified items	3,621	845	2,160	269	253	70	24
Add: Depreciation, depletion and amortisation excluding impairments	5,716	1,413	2,771	528	918	82	4
Add: Exploration well write-offs	186	35	151	—	—	—	—
Add: Interest expense excluding identified items	1,130	51	119	23	41	1	895
Less: Interest income	618	1	5	8	13	1	590
Adjusted EBITDA	16,336	4,874	7,433	1,453	2,661	101	(186)
Less: Current cost of supplies adjustment before taxation	(1,351)			(624)	(727)
Joint ventures and associates (dividends received less profit)	(13)	(40)	43	(19)	(19)	21	—
Derivative financial instruments	(2,549)	(454)	(20)	10	(375)	(1,407)	(304)
Taxation paid	(3,191)	(679)	(2,090)	(226)	54	(258)	8
Other	177	(44)	(57)	(485)	167	327	269
(Increase)/decrease in working capital	221	352	28	(960)	(354)	1,182	(27)
Cash flow from operating activities	12,332	4,009	5,336	397	2,862	(34)	(238)

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



Nine months 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
CCS earnings	15,804	7,846	6,741	1,791	2,085	(3)	(2,656)
Less: Identified items	(4,569)	(1,379)	28	(1,255)	(1,078)	183	(1,069)
Less: CCS earnings attributable to non-controlling interest	336
Add: Identified items attributable to non-controlling interest	18
Adjusted Earnings	20,055
Add: Non-controlling interest	318
Adjusted Earnings plus non-controlling interest	20,373	9,225	6,712	3,046	3,163	(186)	(1,588)
Add: Taxation charge/(credit) excluding tax impact of identified items	11,642	2,885	7,247	1,039	562	(10)	(81)
Add: Depreciation, depletion and amortisation excluding impairments	16,874	4,154	8,169	1,647	2,599	287	18
Add: Exploration well write-offs	973	14	959
Add: Interest expense excluding identified items	3,485	136	518	35	54	4	2,737
Less: Interest income	1,824	5	17	1	69	(5)	1,736
Adjusted EBITDA	51,523	16,410	23,588	5,767	6,308	101	(650)
Less: Current cost of supplies adjustment before taxation	438			256	182
Joint ventures and associates (dividends received less profit)	(779)	(247)	(924)	89	165	138	—
Derivative financial instruments	1,153	(1,586)	53	66	(10)	2,479	152
Taxation paid	(9,092)	(2,320)	(5,832)	(432)	(182)	(415)	89
Other	(500)	(90)	(978)	612	(8)	75	(111)
(Increase)/decrease in working capital	(344)	352	827	153	(869)	570	(1,377)
Cash flow from operating activities	41,522	12,518	16,734	5,999	5,221	2,948	(1,898)



Nine months 2023	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
CCS earnings	18,901	5,325	6,388	2,832	3,310	3,361	(2,315)
Less: Identified items	(2,219)	(4,625)	(357)	314	(278)	2,778	(50)
Less: CCS earnings attributable to non-controlling interest	176
Add: Identified items attributable to non-controlling interest	—
Adjusted Earnings	20,944
Add: Non-controlling interest	176
Adjusted Earnings plus non-controlling interest	21,120	9,951	6,746	2,518	3,588	583	(2,266)
Add: Taxation charge/(credit) excluding tax impact of identified items	11,553	2,773	6,720	808	558	345	349
Add: Depreciation, depletion and amortisation excluding impairments	17,120	4,300	8,358	1,479	2,667	303	13
Add: Exploration well write-offs	625	59	566	—	—	—	—
Add: Interest expense excluding identified items	3,504	110	372	40	39	3	2,941
Less: Interest income	1,718	2	13	8	33	5	1,657
Adjusted EBITDA	52,204	17,189	22,750	4,837	6,819	1,229	(619)
Less: Current cost of supplies adjustment before taxation	(261)			(94)	(167)
Joint ventures and associates (dividends received less profit)	(167)	32	(443)	85	85	72	2
Derivative financial instruments	(5,112)	(3,071)	—	(18)	225	(1,719)	(528)
Taxation paid	(10,108)	(2,843)	(6,455)	(478)	(197)	(350)	214
Other	82	(84)	(530)	23	284	304	85
(Increase)/decrease in working capital	4,462	2,700	342	(748)	(1,019)	4,713	(1,526)
Cash flow from operating activities	41,622	13,923	15,663	3,794	6,364	4,249	(2,372)

Identified Items

Identified items comprise: divestment gains and losses, impairments, redundancy and restructuring, provisions for onerous contracts, fair value accounting of commodity derivatives and certain gas contracts and the impact of exchange rate movements and inflationary adjustments on certain deferred tax balances, and other items. Identified items in the tables below are presented on a net basis.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



Q3 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Identified items included in Income/(loss) before taxation
Divestment gains/(losses)	(154)	1	(2)	(110)	(19)	(20)	(3)
Impairment reversals/(impairments)	(338)	(6)	(3)	(195)	(120)	(14)	—
Redundancy and restructuring	(552)	(69)	(189)	(136)	(141)	(26)	10
Provisions for onerous contracts	(7)	—	—	(7)	—	—	—
Fair value accounting of commodity derivatives and certain gas contracts	(602)	(252)	(13)	(78)	126	(385)	—
Other	(136)	—	(141)	(1)	(11)	16	—
Total identified items included in Income/(loss) before taxation	(1,789)	(327)	(348)	(526)	(165)	(430)	7
Less: total identified items included in Taxation charge/(credit)	(530)	(87)	(195)	(104)	(43)	(111)	10
Identified items included in Income/(loss) for the period
Divestment gains/(losses)	(129)	1	(6)	(84)	(15)	(23)	(2)
Impairment reversals/(impairments)	(288)	(4)	(2)	(179)	(92)	(10)	—
Redundancy and restructuring	(397)	(48)	(138)	(98)	(101)	(19)	7
Provisions for onerous contracts	(5)	—	—	(5)	—	—	—
Fair value accounting of commodity derivatives and certain gas contracts	(456)	(213)	(3)	(56)	95	(279)	—
Impact of exchange rate movements and inflationary adjustments on tax balances	120	24	104	—	—	—	(8)
Other	(105)	—	(108)	—	(8)	12	—
Impact on CCS earnings	(1,259)	(240)	(153)	(422)	(122)	(319)	(3)
Impact on CCS earnings attributable to non-controlling interest	—	—	—	—	—	—	—
Impact on CCS earnings attributable to Shell plc shareholders	(1,259)	(240)	(153)	(422)	(122)	(319)	(3)

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



Q2 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Identified items included in Income/(loss) before taxation
Divestment gains/(losses)	143	2	131	(60)	(8)	79	—
Impairment reversals/(impairments)	(1,932)	(18)	(80)	(1,055)	(619)	(161)	—
Redundancy and restructuring	(211)	(9)	(56)	(69)	(30)	(45)	(2)
Provisions for onerous contracts	(17)	(3)	(14)	—	—	—	—
Fair value accounting of commodity derivatives and certain gas contracts	461	(102)	(29)	63	211	318	—
Other1	(1,271)	(130)	(168)	10	113	7	(1,103)
Total identified items included in Income/(loss) before taxation	(2,826)	(260)	(215)	(1,111)	(333)	198	(1,105)
Less: total identified items included in Taxation charge/(credit)	(157)	(40)	(58)	(286)	165	87	(25)
Identified items included in Income/(loss) for the period
Divestment gains/(losses)	135	1	114	(45)	(6)	71	—
Impairment reversals/(impairments)	(1,728)	(15)	(67)	(783)	(708)	(155)	—
Redundancy and restructuring	(147)	(6)	(33)	(50)	(23)	(33)	(1)
Provisions for onerous contracts	(14)	(3)	(11)	—	—	—	—
Fair value accounting of commodity derivatives and certain gas contracts	319	(98)	(7)	45	156	223	—
Impact of exchange rate movements and inflationary adjustments on tax balances	49	10	(4)	—	—	—	43
Other1	(1,284)	(111)	(148)	7	83	5	(1,122)
Impact on CCS earnings	(2,669)	(220)	(157)	(825)	(499)	112	(1,080)
Impact on CCS earnings attributable to non-controlling interest	18	—	—	—	18	—	—
Impact on CCS earnings attributable to Shell plc shareholders	(2,687)	(220)	(157)	(825)	(517)	112	(1,080)

1.Corporate includes reclassifications from equity to profit and loss of cumulative currency translation differences related to funding structures resulting in unfavourable movements of $1,122 million. These currency translation differences were previously recognised in other comprehensive income and accumulated in equity as part of accumulated other comprehensive income.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



Q3 2023	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Identified items included in Income/(loss) before taxation
Divestment gains/(losses)	(75)	6	23	(10)	3	(98)	—
Impairment reversals/(impairments)	(196)	—	(15)	(2)	(103)	(76)	—
Redundancy and restructuring	(20)	(3)	(4)	(5)	(4)	(2)	(3)
Provisions for onerous contracts	—	—	—	—	—	—	—
Fair value accounting of commodity derivatives and certain gas contracts	258	(350)	38	(2)	(88)	659	—
Other	50	(25)	(236)	—	(97)	408	—
Total identified items included in Income/(loss) before taxation	17	(371)	(194)	(18)	(288)	891	(3)
Less: total identified items included in Taxation charge/(credit)	166	4	44	(6)	(75)	225	(25)
Identified items included in Income/(loss) for the period
Divestment gains/(losses)	(68)	4	8	(7)	2	(76)	—
Impairment reversals/(impairments)	(167)	—	(12)	(1)	(79)	(75)	—
Redundancy and restructuring	(14)	(2)	(2)	(4)	(3)	(1)	(2)
Provisions for onerous contracts	—	—	—	—	—	—	—
Fair value accounting of commodity derivatives and certain gas contracts	121	(340)	13	—	(59)	506	—
Impact of exchange rate movements and inflationary adjustments on tax balances	(51)	(13)	(62)	—	—	—	24
Other	29	(25)	(184)	—	(74)	312	—
Impact on CCS earnings	(149)	(375)	(238)	(12)	(213)	667	22
Impact on CCS earnings attributable to non-controlling interest	—	—	—	—	—	—	—
Impact on CCS earnings attributable to Shell plc shareholders	(149)	(375)	(238)	(12)	(213)	667	22

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



Nine months 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Identified items included in Income/(loss) before taxation
Divestment gains/(losses)	—	—	155	(185)	(35)	68	(3)
Impairment reversals/(impairments)	(2,498)	(32)	(179)	(1,254)	(917)	(116)	—
Redundancy and restructuring	(837)	(79)	(258)	(226)	(190)	(86)	3
Provisions for onerous contracts	(24)	(3)	(14)	(7)	—	—	—
Fair value accounting of commodity derivatives and certain gas contracts	(1,221)	(1,421)	(44)	(9)	(79)	332	—
Other1	(1,281)	(126)	(271)	32	148	39	(1,103)
Total identified items included in Income/(loss) before taxation	(5,859)	(1,663)	(609)	(1,649)	(1,073)	238	(1,104)
Less: total identified items included in Taxation charge/(credit)	(1,290)	(284)	(638)	(394)	5	55	(35)
Identified items included in Income/(loss) for the period
Divestment gains/(losses)	2	—	118	(140)	(28)	54	(2)
Impairment reversals/(impairments)	(2,201)	(24)	(171)	(965)	(952)	(89)	—
Redundancy and restructuring	(597)	(55)	(179)	(163)	(139)	(63)	2
Provisions for onerous contracts	(19)	(3)	(11)	(5)	—	—	—
Fair value accounting of commodity derivatives and certain gas contracts	(1,032)	(1,198)	(11)	(6)	(69)	250	—
Impact of exchange rate movements and inflationary adjustments on tax balances	573	8	512	—	—	—	53
Other1	(1,293)	(107)	(228)	24	110	30	(1,122)
Impact on CCS earnings	(4,569)	(1,379)	28	(1,255)	(1,078)	183	(1,069)
Impact on CCS earnings attributable to non-controlling interest	18	—	—	—	18	—	—
Impact on CCS earnings attributable to Shell plc shareholders	(4,587)	(1,379)	28	(1,255)	(1,096)	183	(1,069)

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



Nine months 2023	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Identified items included in Income/(loss) before taxation
Divestment gains/(losses)	35	(1)	76	32	(12)	(59)	—
Impairment reversals/(impairments)	(2,952)	(2,274)	(199)	(49)	(300)	(130)	—
Redundancy and restructuring	(54)	—	(10)	(22)	(4)	(1)	(16)
Provisions for onerous contracts	(24)	—	—	—	(24)	—	—
Fair value accounting of commodity derivatives and certain gas contracts	939	(3,047)	387	66	77	3,455	—
Other	116	(25)	(445)	298	(119)	408	—
Total identified items included in Income/(loss) before taxation	(1,941)	(5,347)	(192)	324	(382)	3,672	(16)
Less: total identified items included in Taxation charge/(credit)	278	(722)	165	11	(104)	894	34
Identified items included in Income/(loss) for the period
Divestment gains/(losses)	50	—	80	24	(9)	(45)	—
Impairment reversals/(impairments)	(2,284)	(1,700)	(188)	(50)	(227)	(119)	—
Redundancy and restructuring	(35)	—	(3)	(17)	(3)	(1)	(11)
Provisions for onerous contracts	(18)	—	—	—	(18)	—	—
Fair value accounting of commodity derivatives and certain gas contracts	52	(2,821)	106	60	75	2,632	—
Impact of exchange rate movements and inflationary adjustments on tax balances	8	(31)	78	—	—	—	(39)
Other	7	(74)	(431)	297	(96)	312	—
Impact on CCS earnings	(2,219)	(4,625)	(357)	314	(278)	2,778	(50)
Impact on CCS earnings attributable to non-controlling interest	—	—	—	—	—	—	—
Impact on CCS earnings attributable to Shell plc shareholders	(2,219)	(4,625)	(357)	314	(278)	2,778	(50)

The identified items categories above may include after-tax impacts of identified items of joint ventures and associates which are fully reported within “Share of profit/(loss) of joint ventures and associates” in the Consolidated Statement of Income, and fully reported as identified items included in Income/(loss) before taxation in the table above. Identified items related to subsidiaries are consolidated and reported across appropriate lines of the Consolidated Statement of Income. Only pre-tax identified items reported by subsidiaries are taken into account in the calculation of underlying operating expenses (Reference F).

Provisions for onerous contracts: Provisions for onerous contracts that relate to businesses that Shell has exited or to redundant assets or assets that cannot be used.

Fair value accounting of commodity derivatives and certain gas contracts: In the ordinary course of business, Shell enters into contracts to supply or purchase oil and gas products, as well as power and environmental products. Shell also enters into contracts for tolling, pipeline and storage capacity. Derivative contracts are entered into for mitigation of resulting economic exposures (generally price exposure) and these derivative contracts are carried at period-end market price (fair value), with movements in fair value recognised in income for the period. Supply and purchase contracts entered into for operational purposes, as well as contracts for tolling, pipeline and storage capacity, are, by contrast, recognised when the transaction occurs; furthermore, inventory is carried at historical cost or net realisable value, whichever is lower. As a consequence, accounting mismatches occur because: (a) the supply or purchase transaction is recognised in a different period, or (b) the inventory is measured on a different basis. In addition, certain contracts are, due to pricing or delivery conditions, deemed to contain embedded derivatives or written options and are also required to be carried at fair value even though they are entered into for operational purposes. The accounting impacts are reported as identified items.

Impact of exchange rate movements and inflationary adjustments on tax balances represents the impact on tax balances of exchange rate movements and inflationary adjustments arising on (a) the conversion to dollars of the local currency tax base of non-monetary assets and liabilities, as well as losses (this primarily impacts the Upstream and Integrated Gas segments) and (b) the conversion of dollar-denominated inter-segment loans to local currency, leading to taxable exchange rate gains or losses (this primarily impacts the Corporate segment).

Other identified items represent other credits or charges that based on Shell management’s assessment hinder the comparative understanding of Shell’s financial results from period to period.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

B. Adjusted Earnings per share

Adjusted Earnings per share is calculated as Adjusted Earnings (see Reference A), divided by the weighted average number of shares used as the basis for basic earnings per share (see Note 4).

C. Cash capital expenditure

Cash capital expenditure represents cash spent on maintaining and developing assets as well as on investments in the period. Management regularly monitors this measure as a key lever to delivering sustainable cash flows. Cash capital expenditure is the sum of the following lines from the Consolidated Statement of Cash Flows: Capital expenditure, Investments in joint ventures and associates and Investments in equity securities.

See Note 2 “Segment information” for the reconciliation of cash capital expenditure.

D. Capital employed and Return on average capital employed

Return on average capital employed (“ROACE”) measures the efficiency of Shell’s utilisation of the capital that it employs. Effective first quarter 2024, the definition of capital employed has been amended to reflect the deduction of cash and cash equivalents. In addition, the numerator applied to ROACE on an Adjusted Earnings plus non-controlling interest basis has been amended to remove interest on cash and cash equivalents for consistency with the revised capital employed definition. Comparative information has been revised to reflect the updated definition. Also, the presentation of ROACE on a net income basis has been discontinued, as this measure is not routinely used by management in assessing the efficiency of capital employed.

The measure refers to Capital employed which consists of total equity, current debt, and non-current debt reduced by cash and cash equivalents.

Management believes that the updated methodology better reflects Shell’s approach to managing capital employed, including the management of cash and cash equivalents alongside total debt and equity as part of the financial framework.

In this calculation, the sum of Adjusted Earnings (see Reference A) plus non-controlling interest (NCI) excluding identified items for the current and previous three quarters, adjusted for after-tax interest expense and after-tax interest income, is expressed as a percentage of the average capital employed excluding cash and cash equivalents for the same period.



$ million	Quarters
	Q3 2024	Q2 2024	Q3 2023
Current debt	10,119	12,114	8,046
Non-current debt	72,028	72,252	73,944
Total equity	192,943	192,094	190,237
Less: Cash and cash equivalents	(43,031)	(45,094)	(35,978)
Capital employed – opening	232,059	231,366	236,250
Current debt	12,015	10,849	10,119
Non-current debt	64,597	64,619	72,028
Total equity	189,538	187,190	192,943
Less: Cash and cash equivalents	(42,252)	(38,148)	(43,031)
Capital employed – closing	223,898	224,511	232,059
Capital employed – average	227,979	227,939	234,154

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



$ million	Quarters
	Q3 2024	Q2 2024	Q3 2023
Adjusted Earnings – current and previous three quarters (Reference A)	27,361	27,558	30,758
Add: Income/(loss) attributable to NCI – current and previous three quarters	376	409	275
Add: Current cost of supplies adjustment attributable to NCI – current and previous three quarters	56	(25)	(12)
Less: Identified items attributable to NCI (Reference A) – current and previous three quarters	7	7	13
Adjusted Earnings plus NCI excluding identified items – current and previous three quarters	27,787	27,935	31,008
Add: Interest expense after tax – current and previous three quarters	2,698	2,650	2,685
Less: Interest income after tax on cash and cash equivalents – current and previous three quarters	1,392	1,395	1,179
Adjusted Earnings plus NCI excluding identified items before interest expense and interest income – current and previous three quarters	29,093	29,190	32,514
Capital employed – average	227,979	227,939	234,154
ROACE on an Adjusted Earnings plus NCI basis	12.8%	12.8%	13.9%

E. Net debt and gearing

Net debt is defined as the sum of current and non-current debt, less cash and cash equivalents, adjusted for the fair value of derivative financial instruments used to hedge foreign exchange and interest rate risk relating to debt, and associated collateral balances. Management considers this adjustment useful because it reduces the volatility of net debt caused by fluctuations in foreign exchange and interest rates, and eliminates the potential impact of related collateral payments or receipts. Debt-related derivative financial instruments are a subset of the derivative financial instrument assets and liabilities presented on the balance sheet. Collateral balances are reported under “Trade and other receivables” or “Trade and other payables” as appropriate.

Gearing is a measure of Shell’s capital structure and is defined as net debt (total debt less cash and cash equivalents) as a percentage of total capital (net debt plus total equity).



$ million
	September 30, 2024		June 30, 2024		September 30, 2023
Current debt	12,015		10,849		10,119
Non-current debt	64,597		64,619		72,028
Total debt	76,613		75,468		82,147
Of which lease liabilities	25,590		25,600		27,854
Add: Debt-related derivative financial instruments: net liability/(asset)	1,694		2,460		3,116
Add: Collateral on debt-related derivatives: net liability/(asset)	(821)		(1,466)		(1,762)
Less: Cash and cash equivalents	(42,252)		(38,148)		(43,031)
Net debt	35,234		38,314		40,470
Total equity	189,538		187,190		192,943
Total capital	224,772		225,505		233,414
Gearing	15.7	%	17.0	%	17.3	%

F. Operating expenses and Underlying operating expenses

Operating expenses

Operating expenses is a measure of Shell’s cost management performance, comprising the following items from the Consolidated Statement of Income: production and manufacturing expenses; selling, distribution and administrative expenses; and research and development expenses.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS



Q3 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Production and manufacturing expenses	6,138	1,164	2,394	367	1,766	453	(6)
Selling, distribution and administrative expenses	3,139	(1)	(39)	2,408	453	209	110
Research and development	294	27	75	55	34	22	81
Operating expenses	9,570	1,190	2,430	2,830	2,253	684	185



Q2 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Production and manufacturing expenses	5,593	1,050	2,219	320	1,573	422	10
Selling, distribution and administrative expenses	3,094	64	62	2,295	293	279	101
Research and development	263	32	61	47	37	24	62
Operating expenses	8,950	1,146	2,341	2,662	1,902	725	173



Q3 2023	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Production and manufacturing expenses	6,384	1,125	2,266	335	1,900	760	(1)
Selling, distribution and administrative expenses1	3,447	50	42	2,448	501	286	121
Research and development1	267	30	77	60	44	(26)	81
Operating expenses	10,097	1,204	2,384	2,843	2,444	1,021	201



Nine months 2024	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Production and manufacturing expenses	17,541	3,170	6,881	1,052	4,973	1,454	10
Selling, distribution and administrative expenses	9,208	125	80	6,891	1,166	646	300
Research and development	768	85	194	136	104	58	192
Operating expenses	27,517	3,380	7,156	8,079	6,243	2,158	501



Nine months 2023	$ million
	Total	Integrated Gas	Upstream	Marketing	Chemicals and Products	Renewables and Energy Solutions	Corporate
Production and manufacturing expenses	18,433	3,341	6,591	1,030	5,579	1,878	14
Selling, distribution and administrative expenses1	9,811	114	217	6,906	1,494	787	293
Research and development1	817	84	216	184	129	2	202
Operating expenses	29,062	3,540	7,024	8,120	7,201	2,667	509

1.From the first quarter 2024, Wholesale commercial fuels forms part of Mobility with inclusion in the Marketing segment (previously Chemicals and Products segment). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact between Marketing and Chemicals and Products segments (see Note 2). Also, from the first quarter 2024, Shell’s longer-term innovation portfolio is managed centrally and hence reported as part of the Corporate segment (previously all other segments). Prior period comparatives have been revised to conform with current year presentation with an offsetting impact on all the other segments (see Note 2).

Underlying operating expenses

Underlying operating expenses is a measure aimed at facilitating a comparative understanding of performance from period to period by removing the effects of identified items, which, either individually or collectively, can cause volatility, in some cases driven by external factors.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

Quarters

$ million

Nine months

Q3 2024

Q2 2024

Q3 2023

2024

2023

9,570

8,950

10,097

Operating expenses

27,517

29,062

(552)

(210)

(19)

Redundancy and restructuring (charges)/reversal

(834)

(51)

(154)

(212)

(343)

(Provisions)/reversal

(366)

(376)

—

123

—

Other

252

—

(706)

(299)

(362)

Total identified items

(948)

(426)

8,864

8,651

9,735

Underlying operating expenses

26,569

28,635

G. Free cash flow and Organic free cash flow

Free cash flow is used to evaluate cash available for financing activities, including dividend payments and debt servicing, after investment in maintaining and growing the business. It is defined as the sum of “Cash flow from operating activities” and “Cash flow from investing activities”.

Cash flows from acquisition and divestment activities are removed from Free cash flow to arrive at the Organic free cash flow, a measure used by management to evaluate the generation of free cash flow without these activities.



Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
14,684	13,508	12,332	Cash flow from operating activities	41,522	41,622
(3,857)	(3,338)	(4,827)	Cash flow from investing activities	(10,723)	(12,080)
10,827	10,170	7,505	Free cash flow	30,799	29,542
194	769	259	Less: Divestment proceeds (Reference I)	1,988	2,477
—	—	(3)	Add: Tax paid on divestments (reported under “Other investing cash outflows”)	—	—
—	189	3	Add: Cash outflows related to inorganic capital expenditure1	251	2,316
10,633	9,590	7,246	Organic free cash flow2	29,062	29,381

1.Cash outflows related to inorganic capital expenditure includes portfolio actions which expand Shell’s activities through acquisitions and restructuring activities as reported in capital expenditure lines in the Consolidated Statement of Cash Flows.

2.Free cash flow less divestment proceeds, adding back outflows related to inorganic expenditure.

H. Cash flow from operating activities and cash flow from operating activities excluding working capital movements

Working capital movements are defined as the sum of the following items in the Consolidated Statement of Cash Flows: (i) (increase)/decrease in inventories, (ii) (increase)/decrease in current receivables, and (iii) increase/(decrease) in current payables.

Cash flow from operating activities excluding working capital movements is a measure used by Shell to analyse its operating cash generation over time excluding the timing effects of changes in inventories and operating receivables and payables from period to period.

Quarters

$ million

Nine months

Q3 2024

Q2 2024

Q3 2023

2024

2023

14,684

13,508

12,332

Cash flow from operating activities

41,522

41,622

2,705

(954)

(3,151)

(Increase)/decrease in inventories

1,143

2,237

4,057

1,965

(1,126)

(Increase)/decrease in current receivables

5,827

13,105

(4,096)

(1,269)

4,498

Increase/(decrease) in current payables1

(7,314)

(10,881)

2,665

(258)

221

(Increase)/decrease in working capital

(344)

4,462

12,019

13,766

12,111

Cash flow from operating activities excluding working capital movements

41,867

37,160

1.To further enhance consistency between working capital and the Balance Sheet and the Statement of Cash Flows, from January 1, 2024, onwards movements in current other provisions are recognised in ‘Decommissioning and other provisions’ instead of ‘Increase/(decrease) in current payables’. Comparatives for the third quarter 2023 and the nine months 2023 have been reclassified accordingly by $212 million and $40 million respectively to conform with current period presentation.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

I. Divestment proceeds

Divestment proceeds represent cash received from divestment activities in the period. Management regularly monitors this measure as a key lever to deliver free cash flow.



Quarters			$ million	Nine months
Q3 2024	Q2 2024	Q3 2023		2024	2023
94	710	184	Proceeds from sale of property, plant and equipment and businesses	1,128	2,024
94	57	68	Proceeds from joint ventures and associates from sale, capital reduction and repayment of long-term loans	284	425
6	2	7	Proceeds from sale of equity securities	576	28
194	769	259	Divestment proceeds	1,988	2,477

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

CAUTIONARY STATEMENT

All amounts shown throughout this Unaudited Condensed Interim Financial Report are unaudited. All peak production figures in Portfolio Developments are quoted at 100% expected production. The numbers presented throughout this Unaudited Condensed Interim Financial Report may not sum precisely to the totals provided and percentages may not precisely reflect the absolute figures, due to rounding.

The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this Unaudited Condensed Interim Financial Report, “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this Unaudited Condensed Interim Financial Report, refer to entities over which Shell plc either directly or indirectly has control. The term “joint venture”, “joint operations”, “joint arrangements”, and “associates” may also be used to refer to a commercial arrangement in which Shell has a direct or indirect ownership interest with one or more parties. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

Forward-Looking Statements

This Unaudited Condensed Interim Financial Report contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”; “ambition”; ‘‘anticipate’’; ‘‘believe’’; “commit”; “commitment”; ‘‘could’’; ‘‘estimate’’; ‘‘expect’’; ‘‘goals’’; ‘‘intend’’; ‘‘may’’; “milestones”; ‘‘objectives’’; ‘‘outlook’’; ‘‘plan’’; ‘‘probably’’; ‘‘project’’; ‘‘risks’’; “schedule”; ‘‘seek’’; ‘‘should’’; ‘‘target’’; ‘‘will’’; “would” and similar terms and phrases. There are a number of factors that could affect the future operations of Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this Unaudited Condensed Interim Financial Report, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, judicial, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak, regional conflicts, such as the Russia-Ukraine war, and a significant cybersecurity breach; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this Unaudited Condensed Interim Financial Report are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Shell plc’s Form 20-F for the year ended December 31, 2023 (available at www.shell.com/investors/news-and-filings/sec-filings.html and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this Unaudited Condensed Interim Financial Report and should be considered by the reader. Each forward-looking statement speaks only as of the date of this Unaudited Condensed Interim Financial Report, October 31, 2024. Neither Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this Unaudited Condensed Interim Financial Report.

Shell’s Net Carbon Intensity

Also, in this Unaudited Condensed Interim Financial Report we may refer to Shell’s “Net Carbon Intensity” (NCI), which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell’s NCI also includes the emissions associated with the production and use of energy products produced by others which Shell purchases for resale. Shell only controls its own emissions. The use of the terms Shell’s “Net Carbon Intensity” or NCI are for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.

Shell’s Net-Zero Emissions Target

Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and NCI targets over the next ten years. However, Shell’s operating plans cannot reflect our 2050 net-zero emissions target, as this target is currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.

Forward-Looking Non-GAAP measures

This Unaudited Condensed Interim Financial Report may contain certain forward-looking non-GAAP measures such as cash capital expenditure and divestments. We are unable to provide a reconciliation of these forward-looking non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.

The contents of websites referred to in this Unaudited Condensed Interim Financial Report do not form part of this Unaudited Condensed Interim Financial Report.

We may have used certain terms, such as resources, in this Unaudited Condensed Interim Financial Report that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.

This Unaudited Condensed Interim Financial Report contains inside information.

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SHELL PLC 3rd QUARTER 2024 UNAUDITED RESULTS

October 31, 2024


The information in this Unaudited Condensed Interim Financial Report reflects the unaudited consolidated interim financial position and results of Shell plc. Company No. 4366849, Registered Office: Shell Centre, London, SE1 7NA, England, UK.

Contacts:

– Sean Ashley, Company Secretary

– Media: International +44 (0) 207 934 5550; USA +1 832 337 4355

LEI number of Shell plc: 21380068P1DRHMJ8KU70

Classification: Inside Information

Page 40

The MIL Network –

January 25, 2025

Category: Machine Learning

Note to Editors

Interview with Christine Lagarde, President of the ECB, conducted by Eric Albert, Philippe Escande and Béatrice Madeline on 28 October 2024