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Category: Politics

  • MIL-OSI Economics: Farewell Address to Staff – Masatsugu Asakawa

    Source: Asia Development Bank

    Speech by Masatsugu Asakawa, President, Asian Development Bank, 19 February 2025, ADB headquarters, Manila, Philippines

    My very dear colleagues, here we are, together again in this room, where I stood before you five years ago to say, “hello,” and “call me Masa.” What a journey it has been!

    I don’t think any of us could have predicted what was in store for us on that February day back in 2020. Within just a few weeks, we were in the grip of a pandemic that drove us into lockdown, causing tremendous hardship and drastically changing how we work.

    My friends, our journey as an ADB family is forever connected to the journey of this region. And I believe we have shaped that journey, for the better.

    We have done our part to help our developing member countries to get through the pandemic and on a path to recovery; to be ready to tackle emerging crises and urgent threats, including the climate crisis; and to maintain focus on long-term development.

    I was so pleased to see highlights of this good work in the video you showed and to hear perspectives from Bruce, Nelly, and Bruno. Thank you very much for your kind words.

    I am deeply humbled that you credit our achievements to my contributions as President. But even more important, these achievements tell a story about what all of us can do when a challenge comes our way, and we face it together.

    So let me take a few moments to share a few reflections on how you have shaped me during this journey.

    I. Meeting unprecedented development challenges with quick and decisive action

    First, we needed quick, decisive, and bold action, at every step: as the pandemic struck, as the climate crisis mounted, and as there were calls to evolve to deliver better and faster.

    I remember coming to my office upstairs almost every day during lockdown. I held videoconferences with ministers and heads of state to see what assistance they needed. I knew ADB needed to respond without delay. And we did, thanks to you.

    I truly believe that our assistance helped to prevent grave suffering for millions, and fiscal collapse across our region. Our response, including budget and vaccine support, were spectacular achievements.

    The same is true for our climate action. I remember the intense discussions we had before going to Glasgow in 2021 for COP26. These paved the way for our $100 billion climate finance ambition, Energy Transition Mechanism, IF-CAP, and a just transition commitment across our climate operations. This was a real turning point that positioned us as the Climate Bank for Asia and the Pacific.

    II. Reforming and innovating to adapt to changing circumstances

    And then, we forged ahead with reforms, to unlock an additional $100 billion in lending capacity through CAF; to take stock, and make key shifts, through the NOM and midterm review of Strategy 2030; and to elevate critical agendas including private sector development, domestic resource mobilization, food security, digitalization, and gender equality.

    You also made sure that the poorest and most vulnerable in our region were not left behind. The ADF replenishment, including the novel financing you prepared, is helping people in places like Afghanistan and Myanmar, and small island developing states.

    All of this was made possible by thinking outside the box. The unprecedented circumstances we faced over the past five years demanded that ADB change quickly and do things differently. You did not hesitate to meet the demands of the moment.

    The circumstances also required ADB to balance many needs. Our operations shifted appropriately during the pandemic, to support response and recovery. It took some time for our climate financing to ramp back up, but it did. I know we will also continue to expand our contributions in areas like education and RCI.

    III. The priority of wellbeing

    As you can see, my friends, there was a lot on my mind over the past five years. A lot of things kept me up at night. But if I may, I’d like to emphasize my most important concern. It was to ensure the safety and wellbeing of staff.

    I spoke to you often during the pandemic. I even sent you a musical greeting on my flute! I hope that it brought you some comfort to know that you were not alone.

    Another experience that I have not talked about as much is the evacuation of our local staff from Afghanistan when the government fell in 2021. It was such a dangerous and unpredictable situation, and we had very few options. But we had to find a way to get our staff to safety. After consulting with heads of state and coming up with a complex plan, we managed to get everyone out, just in time.

    That experience reminded me that staff wellbeing must remain ADB’s highest priority. And the reason is clear: ADB’s most valuable asset is its staff. Even more simply, we are family. And I am so touched by the way you treated me like family.

    Colleagues in our field offices, you were always so warm and welcoming when I visited the countries where you live and work. The memories of our beneficiaries, the historical sites, and the delicious local cuisine—and the selfies I took with you!—will stay with me forever.

    IV. In praise of staff

    Ever since I announced my intention to step down, I have been flooded with good wishes and praise for what ADB has done for the region during my Presidency. But I firmly believe that these successes are not coming from me. They are coming from you.

    You have been so innovative, so responsible, and so loyal to our mission. I always knew that whenever we faced a problem, I could consult staff, and you would come up with quick and relevant solutions. That is why, from Day 1, I felt nothing but optimism that we would achieve our mission. And I was never disappointed.

    Closing

    Your work over the last five years has put our region on the strongest possible foundation to build lasting prosperity, to stay resilient through crises and disasters, and to ensure that growth is inclusive and sustainable.

    Asia and the Pacific will indeed remain an engine for global growth for decades to come. And you helped make that possible. I am honored by the ways you stepped up to accomplish everything that I asked of you—and everything the region needed from us. I am in awe of what you have achieved. And my trust in you will never fade.

    I will step away now, but I know that the course we have navigated these past five years will take us to an even brighter future. I will be cheering for you every step of the way.

    And so, my dearest colleagues, my beloved friends and ADB family, thank you for a job well done. I wish you health, happiness, and good fortune on this unforgettable journey.

    Thank you.

    MIL OSI Economics –

    February 20, 2025

  • MIL-OSI USA: Tuberville, Scott Lead Legislation to Restore Merit-Based Hiring

    US Senate News:

    Source: United States Senator for Alabama Tommy Tuberville

    WASHINGTON – Yesterday, U.S. Senator Tommy Tuberville (R-AL) joined U.S. Senator Rick Scott (R-FL) in introducing the Restore Merit to Government Service Act, to bring merit-based hiring back to the federal government and ensure the best-qualified candidates are working in the federal government. This legislation codifies President Trump’s Executive Order last month to end discriminatory hiring practices in the federal government and restore merit-based hiring requirements at all federal agencies.

    “We must wash our hands of DEI,” said Senator Tuberville. “Joe Biden and Kamala Harris nearly destroyed the fabric of our country with this woke, racist ideology. We need to focus on hiring the best and brightest, not dividing people based on skin color. Thank God President Trump is restoring merit-based hiring practices to our government, and prioritizing the recruitment of individuals who uphold the ideals of our nation. Now Congress must do our job to ensure that this poisonous ideology has no place in our government.”

    “For years, Democrats have pushed radicalized policies into the innermost workings of our government, spending tax dollars against Americans’ own best interests. President Trump is right — in order to make the federal government work best for the American people, the federal workforce must hire based on merit above all else. Just like in any business and any job outside of the federal government, our federal agencies should be choosing the best-qualified candidate to show up and get to work for the American people. I encourage my colleagues to pass this good bill that codifies the President’s action so we can make Washington work better for American families,” said Senator Scott.

    BACKGROUND:

    On January 21, 2025, President Trump signed executive actions to reform the federal hiring process and end illegal discrimination in hiring to restore merit-based opportunity at all federal agencies. 

    • The Restore Merit to Government Service Act of 2025:
      • Restores Merit to the Hiring Process: Prioritizes the recruitment of individuals who are committed to improving the efficiency of the federal government, upholding the rule of law and the Constitution of the United States and are passionate about the ideals of our nation.
      • Eliminates DEI Hiring: Prevents the appointment of any individual based on race, sex or religion.
      • Updates Hiring Procedures: Improves the overall hiring process for individuals by establishing a hiring timeline of no more than 80 days, offers a more streamlined communications process with candidates and integrates modern technology to support agencies with the recruitment and selection process. This legislation ensures that the heads, or designees, of agencies are active participants in the new processes. 
      • Holds Agencies Accountable: The Director of the Office of Personnel Management shall establish performance metrics to evaluate the success of the new hiring procedures.

    MORE:
    Tuberville, Schmitt Introduce Legislation To Dismantle DEI
    Tuberville Supporting Elimination of DEI, Restoration of Lethality in Armed Forces
    Tuberville Introduces Bill to Boost American Manufacturing, Remove Woke DEI Requirements from CHIPS Act
    Tuberville Urges Senate to Confirm Hegseth and Rollins, Secure American Farmland with the FARM Act
    Tuberville: “It’s a New Day in America, Greatness Awaits Us if We Answer the Call of the American People”
    Tuberville Questions Hegseth, Encourages Him to Represent War Fighters, Not Warmongers as Secretary of Defense
    Sen. Tuberville Delivers Wins for Alabama in 118th Congress, Will be Sledgehammer for President Trump in Next Congress
    Tuberville Secures Major Wins for Alabama and Military
    Tuberville: “We need a military that is 100% focused on protecting our country and enhancing national security.”
    ICYMI: Tuberville Op-ed: Pete Hegseth, the Change Agent America Needs to Clean up the DOD
    ICYMI: Tuberville Joins Kudlow to Discuss Meeting with SecDef Nominee
    ICYMI: Tuberville in the Daily Caller: The Dangerous Biden-Harris Plan to Leave Our Veterans Behind
    ICYMI: Tuberville Joins Fox Business to Discuss Biden-Harris Administration’s Slow FEMA Response
    ICYMI: Tuberville Joins “Mornings with Maria” to Discuss Secret Service Leadership Failures, Kamala Harris’ Bad Economic Policies

    Senator Tommy Tuberville represents Alabama in the United States Senate and is a member of the Senate Armed Services, Agriculture, Veterans’ Affairs, HELP, and Aging Committees.

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI USA: Tuberville, Budd Call for Inquiry Into Chinese AI Application on Pentagon Devices

    US Senate News:

    Source: United States Senator for Alabama Tommy Tuberville

    DNI’s 2024 Annual Threat Assessment rates China as “most active and persistent threat” to U.S. government

    WASHINGTON – U.S. Senator Tommy Tuberville (R-AL) joined U.S. Senator Ted Budd (R-NC) in requesting information from the Pentagon about how many of its employees have used their government devices to access DeepSeek, a Chinese AI application. In a letter to Acting Chief Information Officer at the Department of Defense (DOD), Leslie A. Beavers, the senators also pressed for information surrounding potential cyber threats from the use of DeepSeek, and what practices are being implemented to prevent future cyber security risks.

    “We write to express our concern that Department of Defense (DOD) employees accessed the Chinese artificial intelligence application DeepSeek on their work devices and, as a result, Chinese servers,” wrote the senators.

    “It is also our understanding, based on the DoD’s Use of Mobile Applications 2023 report, that misuse of mobile applications on DoD personnel devices may not be simply a series of isolated incidents. While our immediate concern is to understand the impact of DoD employees’ access to DeepSeek on national security, we are also interested in understanding the DoD’s policy regarding mobile device applications to the end of ensuring we are diminishing cybersecurity risks associated with certain platforms,” they continued.

    Joining U.S. Senators Tuberville and Budd in sending the letter are U.S. Senators Eric Schmitt (R-MO) and Mark Kelly (D-AZ).

    Read full text of the letter below or here.

    “Dear Ms. Beavers,

    We write to express our concern that Department of Defense (DOD) employees accessed the Chinese artificial intelligence application DeepSeek on their work devices and, as a result, Chinese servers.

    We understand that the National Security Council (NSC) is currently reviewing the national security implications of DeepSeek and expect this will be an ongoing conversation between Congress, the NSC, and relevant agencies. However, in the immediate term, we request that the Department provide information regarding potential impacts to the Defense Information Systems Network (DISN) and the Department of Defense Information Network (DODIN) of the recent incident.

    The office of the Director of National Intelligence’s 2024 Annual Threat Assessment states that “China remains the most active and persistent cyber threat to the U.S. Government, private-sector and critical infrastructure networks”. This is evidenced by the recent Salt Typhoon Hack, a breach of at least eight U.S. telecommunications providers, among many other reports of cyberattacks originating from China.

    It is also our understanding, based on the DoD’s Use of Mobile Applications 2023 report, that misuse of mobile applications on DoD personnel devices may not be simply a series of isolated incidents. While our immediate concern is to understand the impact of DoD employees’ access to DeepSeek on national security, we are also interested in understanding the DoD’s policy regarding mobile device applications to the end of ensuring we are diminishing cybersecurity risks associated with certain platforms.

    Therefore, we request answers to the following questions by no later than March 4, 2025.

    • How many Department employees connected their work computers and/or mobile devices to Chinese servers via the DeepSeek Application?
    • Has the DeepSeek app now been deleted from all DoD devices? If not, what steps will you take to ensure the DeepSeek app is removed from all DoD devices?
    • What steps have been made to limit access on DoD devices to only those applications with a justified and approved need?
    • What is the Defense Information Systems Agency’s (DISA’s) initial assessment about whether Chinese servers were able to access and exfiltrate sensitive information due to Department personnel use of DeepSeek?
    • How has the use of the DeepSeek app by Department personnel impacted the operational and cybersecurity risks to the DISN as well as the DODIN?
    • What guidance or training has DISA shared with Department employees regarding accessing Chinese AI app DeepSeek or any other Chinese-affiliated app?
    • We understand that the Navy issued guidance against using open-source AI systems for official work. What guidance (if any) are the other services and/or the Department issuing to employees?
    • What is DISA’s process for assessing which networks, websites and or applications have a connection to the People’s Republic of China and what are DISA’s standard operating procedures when made aware of such a connection?
    • What action (if any) has been taken regarding the DoD employees who connected their work computers and/or mobile devices to Chinese servers via the DeepSeek Application?
    • Have all of the recommendations from Management Advisory: The DoD’s Use of Mobile Applications (Report No. DODIG-2023-041) been implemented? If not, why not?

    Thank you for your consideration and we look forward to hearing from you and working with the Department of Defense to keep our networks safe from persistent cyber threats.

    Sincerely,”

    Senator Tommy Tuberville represents Alabama in the United States Senate and is a member of the Senate Armed Services, Agriculture, Veterans’ Affairs, HELP, and Aging Committees.

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI USA: Tuberville Speaks with Labor Nominee on Bolstering the American Workforce, Employees’ Right-to-Work

    US Senate News:

    Source: United States Senator for Alabama Tommy Tuberville

    WASHINGTON – Today,U.S. Senator Tommy Tuberville (R-AL) questioned former Congresswoman Lori Chavez-DeRemer, President Trump’s nominee to lead the Department of Labor, during her confirmation hearing before the Senate Health, Education, Labor, and Pensions (HELP) Committee. During the conversation, Sen. Tuberville emphasized the importance of Alabama’s position as a Right-to-Work state. 

    Read Sen. Tuberville’s remarks below or on YouTube or Rumble.

    ON RIGHT TO WORK:

    TUBERVILLE: “Let’s beat a dead horse here. [We’re a] Right-to-Work state—Alabama—my constituents at home wanna know, are you gonna try to change our status as Right-to-Work?”

    CHAVEZ-DeREMER: “I respect the fact that you are from a Right-to-Work state, and I respect the fact that you can continue to be a Right-to-Work state.”

    TUBERVILLE: “Thank you.

    Back when we had the PRO Act [committee markup], I offered an amendment that would require authorization from employees in order for any kind of dues, fees, or assessments to be used towards a political campaign by the union bosses. It failed.

    Are you for that? […] How would you handle that?

    Dues going to from a union, paid in a political contribution from employees that are not asked, ‘Can we use your money?’”

    CHAVEZ-DeREMER: “So you’re saying they pay their dues. It’s used for a political contribution without their knowledge?”

    TUBERVILLE: “Right.”

    CHAVEZ-DeREMER: “Yeah. Well, again, […] I think they should be aware of where their dues are going.”

    TUBERVILLE: “Yeah. Okay. Just asking. You voted for the PRO Act. I was just asking.”

    CHAVEZ-DeREMER: “Senator, if I could correct the record, I did not vote for the PRO Act. I put my name on this. We did not have a vote on the PRO Act. So, I just wanted to correct the record on that.”

    ON PRO-LIFE STANCE:

    TUBERVILLE: “Alright. We had this conversation a couple weeks ago. My constituents wanna know.

    You worked at Planned Parenthood years and years ago. [Are] you pro-life or pro-choice?”

    CHAVEZ-DeREMER: “I am supportive of the President’s agenda. I have a 100% pro-life voting record in Congress, and I will continue to support the America First agenda, which we know includes life.”

    TUBERVILLE: “Good answer. Alright.”

    ON THE AMERICAN WORKFORCE:

    TUBERVILLE: “Talk to me about legal immigration. […] We have the most engineers in the country in the state of Alabama because of NASA and defense contractors and all those things. We’re running short on a lot of engineers, high tech people that are well trained in our country. For some reason, we’re running short because Big Tech is growing.

    Where do you stand on legal immigration? Your thoughts?”

    CHAVEZ-DeREMER: “Well, I’m supportive of legal immigration only. I mean, I don’t see another way around it. […] Are you referring to the H-1B Visa program?”

    TUBERVILLE: “Yeah. Anything to do with high-tech. Anything to do with engineers that eventually, we’re going to have to allow more people to come [into the country]. But not to tear down the structure of young men and women having a chance to make a better living because they spent four or five years at a university and have to pay their bills.”

    CHAVEZ-DeREMER: “I appreciate that so much that you brought this up. You know, certainly we never want to replace the American worker. We want to make sure that we’re investing in the American worker, and they have the skills needed for the high-tech industry as we see moving forward through a lot of our respective states. On the visitor’s Visa, on the H-1B, there’s been conversation about in the immediacy, I’ve heard that from many of the senators—it’s about today. What happens today and tomorrow? I commit to you to working, again, with testing the market. That’s the Department of Labor’s remit. It’s to test the market and see in where we need the guest worker program.  Once we’ve exhausted all other programs and making sure that we’re out there, then work with the Department of Homeland [Security] and certainly the Department of State and if we have to administer more. […] Congress will determine it, and then I’ll work with those inner agencies as well. And I would love to work with your office on that, specifically.”

    ON NIL:

    TUBERVILLE: “Thank you. I’m not gonna put you under the gun on this question. You probably don’t know a lot about it. A lot of people in this room know a lot about it.

    NIL—Name, Image, and Likeness. It is a disaster. And we’re gonna have to do something in your tenure to help young men and women understand, you know, the situation that we’re in because we’re gonna start losing Title IX. We’ve got a young man that just signed an eight-million-dollar contract, and he’s 20 years old. And it’s out of control. So, the next time you come, hopefully, we can have a hearing on what we call Name, Image, and Likeness. I’m all for kids making money, but it is a workforce. It needs to be changed. It needs to be regulated to a point where, you know, all men and women, young men and women can have a chance to make money. So just to bring that to light, but that will be under your purview in the very near future.

    Thank you, Mr. Chairman.”

    CHAVEZ-DeREMER: “Thank you, Senator.”

    Senator Tommy Tuberville represents Alabama in the United States Senate and is a member of the Senate Armed Services, Agriculture, Veterans’ Affairs, HELP, and Aging Committees.

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI USA: King Scorns “Thoughtful” Cuts at VA, Impacting Veterans’ Benefits

    US Senate News:

    Source: United States Senator for Maine Angus King

    WASHINGTON, D.C.— Today, U.S. Senator Angus King (I-ME) scorned the recent firing of one thousands employees at the Department of Veterans Affairs (VA) across throughout the country as having a detrimental impact on veterans and their ability to access their earned benefits. In a hearing of the Senate Veterans’ Affairs Committee (SVAC), King also questioned the Honorable Paul Lawrence Ph.D., nominee to be Deputy Secretary of Veterans Affairs, on his support for these cuts and how he will work within the department to ensure that veterans are not victims of the VA’s quest to “reduce inefficiencies” – and rely solely on new technology – across the federal government.

    “On the layoffs, here is the problem. You have testified, and the press release has been, that this is done in a thoughtful way with reviews. I am a great advocate of Ronald Reagan’s admonition ‘trust but verify.’ I would like to see some data that verifies that that took place. It is hard for me to believe that 1000 people were laid off in a matter of weeks with the kind of thoughtful process that you are defining,” Senator King said, before posing a question that quoted Project 2025 (italicized). “The next administration should explore how reviews would be accelerated with clearance from OMB to target significant cost savings from revising disability rating awards.’ That is a change of benefits. For future claimants, and listen to this, ‘while preserving them fully or partially for existing claimants.’”

    Senator King continued, “Partially is a pregnant term. That means you are talking about potentially reducing benefits for people who are getting them now…the phrase ‘preserving benefits fully or partially for existing claimants’ is not very reassuring to the veterans of this country.”

    Senator King then questioned the nominee on his support for AI in reviewing veterans claims, noting that AI is a tool, but cannot be used as a medical decision maker when lives are at stake — by again quoting Project 2025 (in italics)

    “One is a suggestion for the VA to increase automation. ‘The best way to provide benefits more faster and more accurately is by using technology to perform most of the work.’ We are already learning in the private sector through insurance companies that giving AI the decision about making these kind of decisions does not work well. Do you think increased use of technology and artificial intelligence in claims processing is a good idea?” King asked.

    Dr. Lawrence responded, “Thank you for the question, Senator. If you noticed it said most of the work. The way the claim comes about is that there is a lot of work where you gather information and it is called development. That’s what takes so long, getting the veterans’ information in front of someone to make a decision. Technology can be used to gather the information faster. So, a government employee and a claims adjudicator can make the decision.”

    King asked again, “You are testifying that you are not talking about AI making the decision but simply automating the collection of data?”

    “It is called development. That is correct. The decision should be made by an individual, a V.A. employee as required by law. But also to bring judgment into things. I think technology is great but it is not the end all be all,” Dr. Lawrence concluded.

    Representing one of the states with the highest rates of military families and veterans per capita, Senator King has been a staunch advocate for America’s servicemembers and veterans. Last year, he led the bipartisan Military Spouse Employment Act — pieces of which passed into law in the FY2024 NDAA — which allows military spouses to have a remote work career with any federal agency and helps them to maintain consistent employment should they move with their spouse. He also introduced the Improving Access to Prenatal Care for Military Families Act to expand military family care to cover critical health care during pregnancies. Most recently, he joined the bipartisan Fairness for Servicemembers and their Families Act to improve financial security for military families by ensuring life insurance packages for servicemembers and veterans adjust for increases in cost of living and inflation.

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI Canada: Bill introduced to extend term of acting conflict of interest commissioner

    Legislation has been introduced to extend the appointment term of the acting conflict of interest commissioner until the next conflict of interest commissioner can be appointed.

    Without the proposed legislation, the office will become vacant before the next commissioner can be appointed. Victoria Gray, KC, was appointed to the acting role on Jan. 6, 2025. The term expires 20 sitting days of legislative assembly after the appointment date, on April 7, 2025, as per the Member’s Conflict of Interest Act.

    The search for a commissioner is carried out by a special committee of the legislature through a process that takes approximately six to eight months. Typically, this process would have been already underway, but it has been delayed due to the 2024 provincial general election and interregnum period. Government anticipates that the special committee will be struck imminently and will begin its work shortly.

    The commissioner is an independent officer of the legislative assembly of British Columbia. The commissioner serves five-year terms and provides advice to members of the legislative assembly concerning their obligations under the Members’ Conflict of Interest Act. The commissioner’s primary roles are:

    • to provide confidential advice to members about their obligations under the act;
    • to oversee the disclosure process, including meeting with each member at least annually to review the disclosure of the member’s financial interests; and
    • to respond to allegations that a member has contravened the act and conduct an inquiry if needed.

    Gray completed a five-year term as commissioner from Jan. 6, 2020, to Jan. 5, 2025. She sat on the B.C. Supreme Court from 2001 until 2017, after 19 years of practicing as a commercial litigator in Vancouver and teaching civil litigation at the Peter A. Allard School of Law at the University of British Columbia.

    Learn More:

    For information about the conflict of interest commissioner, visit: https://coibc.ca/

    To read about the appointment of Gray as acting commissioner, visit: https://news.gov.bc.ca/31886

    MIL OSI Canada News –

    February 20, 2025

  • MIL-OSI New Zealand: Right to Repair Bill passes significant step

    Source: Green Party

    Green Party Co-Leader Marama Davidson’s Consumer Guarantees Right to Repair Amendment Bill has passed its first reading in Parliament this evening.

    “This is a significant step towards building a circular economy that empowers our people and protects our planet,” says Green Party co-leader Marama Davidson.

    “This Bill combines climate action with cost of living relief. We can build a better future for ourselves whilst also making our lives easier today.

    “The Right to Repair is about empowering consumers to repair what they own, protecting them from recurring costs and in turn preventing more and more waste going to landfill and polluting our environment.

    “This Bill would require manufacturers to provide repair parts and resources to allow consumers to extend the life cycle of the products they use. Passing this would be a win for regular people over big corporates who build obsolescence into their products so people have to keep coming back to replace their things and spend more of their money. 

    “This is something that would benefit not only households but also businesses – from hairdressers to farmers – by enabling them to fix the appliances and tools they rely on to do their work. 

    “I want to thank the community and organisations who have pushed for this legislation for so long. It is this collective work that has gotten the Bill this far.

    “I am also grateful for those political parties who voted in favour of this Bill. I look forward to the select committee process and working with the public as well as members across Parliament to ensure this Bill becomes law,” says Marama Davidson. 

    MIL OSI New Zealand News –

    February 20, 2025

  • MIL-OSI USA: Jefferson, How Healthy are U.S. Households’ Balance Sheets?

    Source: US State of New York Federal Reserve

    Thank you, Professor Ho for that kind introduction and for the opportunity to talk to the Vassar community.1 I am happy to be back on campus. As a teenager in Washington, D.C., I had the very good fortune that a high school counselor pushed me to apply to Vassar College. I was accepted, and I earned my bachelor’s degree here. Attending Vassar opened a wider variety of opportunities to me than I would have otherwise had available. But I encountered one problem: Vassar did not offer any banking or business courses, which is what I wanted to study. So, I enrolled in an economics class, figuring it was the next best thing. I was hooked, and I have been studying economics ever since.

    My time here as a student was transformative, and I was honored to have served on Vassar’s board from 2002 to 2022. Vassar is a vibrant intellectual community.
    To motivate the topic of today’s speech, let me begin by sharing with you briefly my assessment of the current state of the U.S. economy. The performance of the U.S. economy has been quite strong overall.2 Last year, gross domestic product grew at a solid pace of 2.5 percent. I see the labor market as being in a solid position, with job creation steady and the unemployment rate at 4 percent in January. Inflation has come down a great deal over the past two and a half years but remains somewhat elevated relative to our 2 percent target. Based on recently released data, it is estimated that the 12-month change in the personal consumption expenditures price index was 2.4 percent in January. Progress toward our 2 percent objective has been slow in the past year. I expect the path of inflation to continue to be bumpy. While a cumulative cut in the policy rate by 100 basis points last year has brought the stance of monetary policy closer to a neutral setting, monetary policy continues to be restrictive. I believe that, with a strong economy and a solid labor market, we can take our time to assess the incoming data to make any further adjustments to our policy rate.
    Household consumption grew by 3.2 percent over last year. Understanding the causes of the continued robustness in consumer spending is important because it accounts for two-thirds of overall economic activity. Therefore, any accurate forecast of future economic activity would need to get the growth in consumer spending right.
    Today, I will discuss one important factor behind the recent strength in consumer spending: households’ balance sheets—that is, their assets, such as stocks, bank accounts, and houses, and their liabilities, such as mortgages, car loans, and other forms of borrowing. At first glance, households appear to be in a strong financial position. Overall, American households currently possess a very high level of wealth that is driven by elevated house values, relatively low overall debt levels, and a strong stock market.
    Asset performance and the amount of debt, however, explain only part of the picture. The health of household finances also depends on the cost of new and existing debt and the availability of credit. Household balance sheets are an important factor behind the recent strength in consumer spending. That said, some households may have a difficult time weathering unexpected costs or economic shocks. Looking at a variety of indicators across the income distribution shows that, while, in aggregate, household balance sheets are indeed strong, low- and middle-income households, and those with lower credit scores, may be stretched.
    The remainder of my talk is organized as follows. I will begin by discussing household wealth, both in aggregate and across the distribution of income. Then, I connect elevated wealth to recent spending patterns. After that, I discuss the assets side of household balance sheets. Then, I turn to liabilities, including the cost of servicing debt. Next, I discuss households’ ability to get new credit and the cost of such credit. Before concluding, I discuss the role of households’ balance sheets in the transmission of monetary policy.
    Overall Household Wealth and Its Implications for SpendingLet me now turn to the overall picture of household wealth. Figure 1 shows a stylized household balance sheet, with assets on the left and liabilities on the right. Net worth, also called wealth, is the difference between the two sides of the balance sheet—assets less liabilities—and it is a key indicator of households’ financial health. Relative to income, households’ net worth is near its highest level in the past 30 years. Total net worth in the U.S. was over $50 trillion higher in the third quarter of last year than it was at the end of 2019. After one accounts for inflation, this accumulation represents an increase in overall wealth of about 20 percent for U.S. households, as shown by the solid black line in figure 2.
    These recent gains in household net worth have been broad based across the income distribution. The net worth of low- and middle-income households—defined as the bottom 40 percent of the income distribution and shown by the dashed red line—has increased in line with aggregate net worth.3 Although these households account for 25 percent of total consumption, which is less than their population share, they are still key to the performance of the economy overall.
    Let me now turn to the implications of household net worth for our understanding of the recent strength in spending. Figure 3 shows the saving rate, which measures the share of disposable income—that is, income after taxes and government transfers—that households save rather than spend. The saving rate has fluctuated widely over the past few years. It rose during the pandemic, as many households received supplementary income support from the government and some cut back on spending. Then, households spent some of the savings that they had accumulated during the pandemic, leading the saving rate to fall to a relatively low level in 2022. The saving rate has recovered somewhat since then. Now, it hovers around 1 to 1.5 percentage points below its level before the pandemic, indicating that households are still spending more of their income than usual. It seems likely that elevated household wealth helps explain this higher-than-usual spending.
    Overall spending has been elevated, but how has high consumption been spread across the income distribution? Recent research shows that the spending of low- and middle-income households has lagged that of higher-income households over the past few years.4 As shown in figure 4, although real retail spending growth moved similarly for all households before the pandemic, it has diverged since the middle of 2021. Since then, spending for low-income households moved roughly sideways until the middle of last year, when it began to grow again. High-income households’ consumption, by contrast, has grown more consistently over this period.
    AssetsHaving discussed net worth and its implications for spending, now I drill down into the two components of net worth—household assets and liabilities. With regard to the asset side, elevated net worth largely reflects gains in two important asset categories: stock market holdings and real estate. Each category accounts for roughly one-fourth of households’ assets. The stock market valuation has increased at a very rapid pace over the past five years, leading to a $20 trillion rise in the value of households’ stock portfolios. As house prices rose, the value of households’ real estate has also increased by about the same amount.
    Real estate is a particularly important source of wealth for low- and middle-income households, comprising 40 percent of their net worth. Therefore, the growth in real estate wealth over the past five years accounts for a very significant share—over half—of the increase in these households’ overall wealth. That said, many low-income households do not own their home, and so they did not benefit from the growth in house prices. Equities comprise a smaller share of these households’ wealth, and so they account for only around 10 percent of the increase in their wealth.
    Wealth allows households to weather unexpected shocks, such as the loss of a job or a surprise bill; however, not all forms of wealth are quickly and easily accessible in case of such emergencies. It can be expensive for households to access the equity that they have in their homes. Also, much of households’ stock holdings are in retirement accounts that are difficult to liquidate. So, to understand how resilient households’ financial situations are, I also pay close attention to the most liquid components of their net worth, which include bank deposits and money market mutual funds. As the solid black line in figure 5 shows, in aggregate, households hold about 20 percent more of these liquid assets than they did before the pandemic. As the dashed red line shows, in contrast to the aggregate, low- and middle-income households have a slightly smaller liquid asset buffer than they did before the pandemic. This smaller buffer suggests that some of these households may not be as equipped to handle economic shocks as they were five years ago. That said, low- and middle-income households still hold more of these assets than they did 10 years ago, when many of them were still recovering from the Great Recession.
    On the whole, the asset side of households’ balance sheets paints a very healthy picture of their financial positions. Rising house and equity prices have increased net worth for households across the income distribution, and elevated asset valuations seem to help explain strong consumption growth last year.
    LiabilitiesLet me now turn to household liabilities—what households owe to their lenders. Figure 6 plots three major categories of household debt relative to disposable personal income.5 You see home mortgages, the largest share, at the bottom in blue; consumer credit, which includes credit cards, auto loans, student loans in orange; and other consumer loans in beige.6
    Total household debt rose through the 2000s and peaked around the time of the Global Financial Crisis of 2007 to 2009. It then began a slow decline as households “deleveraged.” The evolution of total debt is driven by mortgage debt, which currently accounts for about 60 percent of total household debt. Mortgage debt levels remain relatively subdued after rising somewhat during the COVID-19 pandemic, partly due to increasing home prices leading borrowers to take out larger loans.
    Figure 7 zooms in on revolving credit—largely, credit card balances—which is part of the previous “consumer credit” category.7 Balances were at about 7 percent of disposable income until the COVID-19 pandemic. Households reduced their spending—decreasing the need for credit card debt—and in part used income support programs to pay down existing credit card debt. The result was a nearly 3 percentage point drop in revolving credit relative to disposable personal income. As consumer spending rose and households began to take on more credit card debt, this ratio began to rebound in 2021 but remains about 1 percentage point below its pre-pandemic levels.
    Although levels of debt may be low, how costly is it for households to remain current on that debt? Figure 8 plots the debt service ratio, which is the amount of required debt payments relative to disposable personal income.8 Along with the fall in debt to which I just referred, this ratio plummeted during the initial stages of the COVID-19 pandemic. It has since risen, but it remains about 1 percentage point below its pre-pandemic level. That said, interest payments on revolving debt, which excludes mortgages, have risen over the past few years. The share of disposable personal income going to pay this interest rate is now slightly higher than it was just before the pandemic.
    Credit Availability and CostsSo far, I have discussed households’ current debt liabilities and how households are able to manage their current debt payments. Even households with elevated levels of assets may wish to obtain new credit. Policymakers and economists often ask, how easy is it for households, in general, to increase their borrowing, and at what cost?
    Lenders consider a range of factors in determining whether to supply credit and how much credit to extend. One key factor is the borrower’s “credit risk score.” These scores, which are calculated by private companies, use information on individuals’ past payment behavior and a variety of other factors to create a number that is predictive of their ability to repay debt.
    Figure 9 plots the fraction of individuals with credit risk scores in the subprime, near-prime, and prime categories since 2014. There has been a gradual increase in the fraction of borrowers with prime scores, in part reflecting the deleveraging that I referred to earlier, which is mirrored by the decline in the fraction with subprime scores. As you can see, the fraction of subprime scores took a sharp turn downward at the start of the COVID-19 pandemic. At that time, many people were able to use the pandemic-era income support programs to become current on their debt and otherwise boost their scores into near-prime and prime categories. This “credit score migration” helped many individuals obtain credit.9
    Before obtaining new credit, people may first turn to lines of credit that they already have—for example, credit cards. Figure 10 plots “utilization rates”—the ratio of credit card balances to credit limits—for subprime, near-prime, and prime consumers. Utilization rates fell for all three groups at the beginning of the pandemic but have risen since then and are now somewhat above their pre-pandemic levels for both subprime and near-prime borrowers. These groups may be reluctant to draw down their credit lines further.
    It can be challenging to determine the availability of new credit. While the total amount of credit that people have and their new borrowing can be observed, these quantities are determined both by lenders’ willingness to supply credit and borrowers’ demand for credit. Borrowers taking out fewer new loans may be due to a reduced supply of credit, lower demand for credit, or a combination of the two. Sometimes, however, one of these factors can be identified. For example, during the COVID-19 pandemic, reductions in household spending and increases in income support programs likely reduced the demand for credit, contributing to the decline in debt levels during that period.
    A more systematic method that we have used at the Federal Reserve to help disentangle credit supply from demand has involved questions in our Senior Loan Officer Opinion Survey, or SLOOS.10 This quarterly survey asks officials who oversee bank lending practices for their institutions about how they have changed loan underwriting standards over the past quarter for a variety of loan categories. “Loan underwriting standards,” also known more simply as lending standards, refers to the requirements that banks impose before extending a loan. For example, banks may establish minimum credit risk scores for potential borrowers to qualify for certain kinds of consumer borrowing. Banks that raise minimum credit scores are said to have “tightened” standards and those that lower them to have “eased” standards. Tightening standards likely reduces the supply of credit.11
    Because the SLOOS surveys commercial banks, its results are most informative for those loan categories for which banks do a substantial amount of lending. Hence, figure 11 shows survey results for consumer loans (credit card and auto loans), averaged together, weighting by balance sheet size.12 Banks make almost all credit card loans, and about one-third of auto loans. The figure plots the fraction of banks that have reported tightening less the fraction that have reported easing each quarter, weighted by the bank’s loan portfolio—so that plus-100 percent would indicate that all banks tightened, and minus-100 percent would indicate that all banks eased standards. For both credit cards and auto loans, banks eased standards in the early days of the pandemic but began to tighten them in 2022. More recent responses suggest that banks continued to tighten standards over 2024, making it more difficult for borrowers to obtain new loans. Although this tightening could limit growth in spending by those households that would need more credit cards to do so, recall that higher-credit-score borrowers are not close to exhausting their credit lines. In the most recent survey, banks have eased standards, which could support spending.
    Monetary Policy TransmissionNow, before I conclude, let me say a few things about how the Federal Reserve’s monetary policy has been affecting the cost of borrowing for households. The primary tool that the Federal Reserve uses to influence the economy is the federal funds rate. The Federal Open Market Committee (FOMC) meets eight times a year to discuss the appropriate setting of the committee’s target range for the federal funds rate. The FOMC’s objective when setting this range is to achieve its congressionally mandated goals of maximum employment and price stability. Changes in the FOMC’s target for the federal funds rate affect overall financial conditions through various channels, including its effect on interest rates that matter for consumers’ decisions to purchase houses and cars or borrow on their credit cards. For example, when the FOMC eases monetary policy—that is, reduces its target for the federal funds rate—the resulting lower interest rates on consumer loans elicit greater spending on goods and services. Higher spending can, in turn, lead prices to rise. Lower mortgage rates make buying a house more affordable and encourage existing homeowners to refinance their mortgages. Of course, the rates charged on longer-term loans, such as mortgages, are also affected by expectations of how monetary policy and the broader economy will evolve over the duration of the loans, not just by the current level of the federal funds rate.
    With respect to lending costs, the reductions in the target range for the federal funds rate last year have begun to pass through to rates on consumer borrowing. In the credit card market, interest rates are floating and are set as a fixed markup over the prime rate. By convention, the prime rate is equal to the upper end of the target range the FOMC sets for the federal funds rate, plus 3 percentage points.13 As seen in figure 12, auto loan and credit card rates have fallen in recent months, with the decline in the prime rate. Rates on auto loans are also influenced by the interest rates on shorter-maturity Treasury securities and risk spreads lenders assess to account for delinquencies and defaults. Auto loan rates have declined, thus far largely because of falls in risk spreads.
    In the U.S., mortgages are generally fixed rate and have a longer duration than most other forms of consumer borrowing. Consequently, rates on new and existing loans can differ substantially. As shown by the solid blue line in figure 13, the majority of households still have mortgages with rates below 4 percent that were set some time ago. But rates on new mortgages are elevated compared with the ranges observed since the 2007–09 financial crisis, with the current average 30-year fixed rate around 7 percent. As I noted earlier, mortgages’ long duration means their rates are driven more by longer-term interest rates, which are in turn determined by many factors beyond just monetary policy. Households who recently became homeowners or moved must bear the cost of paying elevated mortgage rates. As a result, many are not moving.14
    Overall, interest rates for many forms of consumer credit—with the notable exception of mortgages—have declined in recent months, starting to show the effects of the recent fall in shorter-term interest rates. Nonetheless, available data suggest that while new credit is available for households with higher credit scores and income levels, those households with lower credit scores and income levels are finding it relatively more difficult to obtain credit.
    ConclusionLet’s return to the title question: How strong are households’ balance sheets? Generally, households appear to be in a good position: Asset holdings are high across the income distribution, driven by high house and equity prices, and debt levels are subdued. Interest rates on some forms of debt have begun to come down, and required debt service is low as a share of income. That said, some households appear to be stretched. Lower-credit-score households’ utilization rates are elevated, and banks have tightened loan underwriting standards on some forms of credit. And even though, as a group, low- and middle-income households possess elevated levels of overall wealth, they have less of a buffer of liquid assets than they did before the pandemic. These indicators suggest that certain groups of households may have a hard time weathering unexpected costs or economic shocks.
    In closing, let me reiterate that it is important to monitor closely the strength of household balance sheets, which inform forecasts of overall economic activity. Strong balance sheets help support consumption spending, which in turn can help deliver the economic growth that puts the Federal Reserve in the best position to achieve its policy goals of maximum employment and price stability.
    ReferencesAladangady, Aditya, Jacob Krimmel, and Tess Scharlemann (2024). “Locked In: Rate Hikes, Housing Markets, and Mobility,” Finance and Economics Discussion Series 2024-088. Washington: Board of Governors of the Federal Reserve System, November.
    Bassett, William F., Mary Beth Chosak, John C. Driscoll, and Egon Zakrajšek (2014). “Changes in Bank Lending Standards and the Macroeconomy,” Journal of Monetary Economics, vol. 62 (March), pp. 23–40.
    Driscoll, John C., Jessica N. Flagg, Bradley Katcher, and Kamila Sommer (2024). “The Effects of Credit Score Migration on Subprime Auto Loan and Credit Card Delinquencies,” FEDS Notes. Washington: Board of Governors of the Federal Reserve System, January 12.
    English, William B. (2021). “The ‘Marketization’ of Bank Business Loans in the United States.” Working Paper, Yale School of Management, October.
    Goodman, Sarena, Geng Li, Alvaro Mezza, and Lucas Nathe (2021). “Developments in the Credit Score Distribution over 2020,” FEDS Notes. Washington: Board of Governors of the Federal Reserve System, April 30.
    Hacıoğlu Hoke, Sinem, Leo Feler, and Jack Chylak (2024). “A Better Way of Understanding the US Consumer: Decomposing Retail Spending by Household Income,” FEDS Notes. Washington: Board of Governors of the Federal Reserve System, October 11.

    1. The views expressed here are my own and are not necessarily those of my colleagues on the Federal Reserve Board or the Federal Open Market Committee. Return to text
    2. For a detailed discussion on my recent views on inflation, see Philip N. Jefferson (2025), “U.S. Economic Outlook and Monetary Policy,” speech delivered at the Economics Department Special Lecture, Lafayette College, Easton, Pennsylvania, February 4; and for my recent views on the labor market, see Philip N. Jefferson (2025), “Do Non-inflationary Economic Expansions Promote Shared Prosperity? Evidence from the U.S. Labor Market,” speech delivered at Swarthmore College, Swarthmore, Pennsylvania, February 5. Return to text
    3. See Board of Governors of the Federal Reserve System (2024), “DFA: Distributional Financial Accounts,” webpage. These data provide quarterly estimates of the distribution of a comprehensive measure of U.S. household wealth. Return to text
    4. For more details, see Hacıoğlu Hoke, Feler, and Chylak (2024). Return to text
    5. Data are taken from Board of Governors of the Federal Reserve System (2024), Statistical Release Z.1, “Financial Accounts of the United States”. Return to text
    6. See Board of Governors of the Federal Reserve System (2024), Statistical Release Z.1, “Financial Accounts of the United States”. Return to text
    7. Data are taken from Board of Governors of the Federal Reserve System (2025), Statistical Release G.19, “Consumer Credit”. Return to text
    8. For the series and information on how it is computed, see Board of Governors of the Federal Reserve System (2024), “Household Debt Service Ratios”. Return to text
    9. For more discussion, see Goodman and others (2021) and Driscoll and others (2024). Return to text
    10. See Board of Governors of the Federal Reserve System (2025), “Senior Loan Officer Opinion Survey on Bank Lending Practices”. Return to text
    11. For an example of use of the SLOOS to help disentangle loan supply and demand, see Bassett and others (2014). Return to text
    12. The SLOOS results reported here are based on banks’ responses weighted by each bank’s outstanding loans in the respective loan category and might therefore differ from the results reported in the published SLOOS, which are based on banks’ unweighted responses. Return to text
    13. Before the establishment in 2008 of a range for the federal fund rate, the convention was to use the target for the federal funds rate plus 3 percentage points. See English (2021) for more discussion. Return to text
    14. See Aladangady, Krimmel, and Scharlemann (2024). Return to text

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI USA: Benton Exhibit Honors Minnie Negoro, Pioneering UConn Ceramics Professor

    Source: US State of Connecticut

    A new exhibition at the William Benton Museum of Art celebrates the contributions of Minnie Negoro, a former professor who laid the foundation for UConn’s ceramics program, while also highlighting her journey through one of the darkest chapters in U.S. history. 

    Curated by faculty in the College of Liberal Arts and Sciences (CLAS) with help from students, the exhibition tells the story of Negoro’s life — from her forced relocation to a Japanese American incarceration camp during World War II to her lasting influence as a beloved professor and artist.  

    Hana Maruyama, assistant professor of history and social and critical inquiry in CLAS and lead curator of the exhibition, hopes it will honor Negoro’s legacy at UConn while spotlighting the importance of public history.  

    “Her former students knew she had existed, her colleagues in the art department knew she had existed, but from the Asian American studies side, that kind of institutional memory had kind of been lost,” Maruyama says. 

    Rediscovering a Forgotten Story 

    Jason Chang—head of the Department of Social and Critical Inquiry, associate professor of history, and co-curator of the exhibition— first uncovered Negoro’s story while leading the former Asian and Asian American Studies Institute. Recognizing its significance, he partnered with Maruyama and a team of scholars and artists to examine Negoro’s impact at UConn. Their research soon uncovered an unexpected discovery—this year marks 60 years since Negoro’s arrival at the University. 

    Maruyama, who studies Japanese American incarceration and had family imprisoned at Heart Mountain, quickly realized that while Negoro had a profound impact on her students and the School of Fine Arts, little had been documented in archives or other public history sources. 

    Determined to preserve that legacy, Maruyama began seeking out information from Negoro’s former colleagues and students.  

    “One year is not a lot of time to create an exhibition,” says Maruyama, who previously worked at the Smithsonian Institution. “It’s very typical for an exhibition to take five to eight years, but I just think her story is so important and hasn’t gotten the attention that she deserved.” 

    From Internment to UConn Professor  

    Just a semester away from graduating from the University of California, Los Angeles, Negoro and her family were among the 125,000 Japanese Americans forcibly removed from the West Coast and placed in incarceration camps across the U.S. in 1942.  

    Although Negoro was an art major, she didn’t learn to use a potter’s wheel until she arrived at Heart Mountain, Wyoming. There, she was one of six people hired to work at the Heart Mountain Ceramics Plant, according to Maruyama.  

    She developed her skills through a government initiative to use imprisoned Japanese Americans to produce tableware for the U.S. Army and other incarceration camps. Despite the repressive circumstances, Negoro’s training at Heart Mountain launched her career and eventually paved the way for UConn’s ceramics program.  

    Negoro was able to leave Heart Mountain through a program that permitted Japanese American students to attend colleges outside the exclusion zone. Under the guidance of one of her mentors from Heart Mountain, she pursued an MFA at Alfred University.  

    After earning her degree, Negoro ran her own ceramics studio in New York for a decade and taught at institutions such as the Rhode Island School of Design and the Chouinard Art Institute in Los Angeles before arriving at UConn in 1965.  

    “They just kept renewing her contract and eventually she got on a tenure track and the rest is history,” Maruyama says. “She taught here for the next 20-plus years.”  

    Maruyama says now, decades later, many of Negoro’s former students are still eager to share how she impacted not only their education and careers but also their lives.  

    “They are so committed to preserving her legacy,” Maruyama says. “As an educator, it was inspiring for me to hear them talk about how much she impacted their lives.” 

    Minnie Negoro demonstrates the use of the potter’s wheel to a group of students on December 5, 1967. (Courtesy of UConn Archives and Special Collections).

    Students Help Share Negoro’s Story 

    To further honor Negoro’s legacy, Maruyama involved her own students in the process of putting together the exhibit. She revamped her spring 2024 “Topics in Public History” course to have them create an initial draft of the exhibition.  

    “The students were excited to be working on something that was going to go on display,” Maruyama says. “They put their hearts and souls into it.” 

    Everett Padro ’26 (CLAS), a history major, says he’s been interested in public history since childhood.  

    “I used to go to the Smithsonian because I have family members that work there,” he says. “I would just be blown away by not only the artifacts they had but how they organized and kept track of and cared for them.” 

    Padro, who is now considering a career in museum curation, was excited to learn Maruyama’s class would allow him to get some hands-on experience while also exploring the history of something close to home.  

    “It was a pleasant surprise getting to work so intimately with first-hand accounts and structuring this as a teamwork effort to create this exhibit,” Padro says. 

    According to Maruyama, students contributed to multiple aspects of the exhibit, including working on oral and digital histories, writing content, researching UConn’s special collections, and creating a social media campaign. 

    Padro appreciated the opportunity to work on his interests, choosing to work on digitally archiving old photos.  

    “I was interested to see how we can preserve and tell this story to future generations–not only who she was but how she’s relevant to the University,” Padro says. 

    A Lasting Legacy 

    The exhibit features images, artifacts, and writing that explain Negoro’s life and impact as a teacher, as well as examples of her work. It also showcases the work of alumni, many of whom credit her guidance for their success.  

    “What I find kind of incredible about her is that she also had a reputation for being a tough teacher,” Maruyama says. “She was making those undergrads do ceramics math, and ceramics chemistry. This was not just an art class. She really got into the science of ceramics and that’s not something that a lot of undergraduate ceramics programs do.” 

    The exhibit will remain on display until July 27, 2025. Maruyama hopes it will cement Negoro’s legacy at UConn while also bringing attention to the broader history of Japanese American incarceration.  

    “This history is still so personal for many of us,” she says. “Minnie Negoro’s story is about resilience, creativity, and the power of education. It’s about making sure we don’t forget.” 

    — 

    Minnie Negoro: From Heart Mountain to UConn, will be on display in the Benton Museum through July 2025. Hana Maruyama, Assistant Professor of History and Social and Critical Inquiry at UConn, will lead a guided tour of the exhibit on Friday, Feb. 21, 2025. 

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI USA: Missouri Secretary of State Denny Hoskins, CPA, Calls for Repeal of Burdensome Corporate Transparency Act

    Source: US State of Missouri

     

     

    For Immediate Release:   February 19, 2025

               

    Missouri Secretary of State Denny Hoskins, CPA, Calls for Repeal of Burdensome Corporate Transparency Act

    JEFFERSON CITY, MO – Missouri Secretary of State Denny Hoskins, CPA, has joined 19 other Secretaries of State in urging President Donald J. Trump to support the repeal of the Corporate Transparency Act (CTA), a federal law that places costly and confusing reporting requirements on small businesses.

    “The Corporate Transparency Act is government overreach at its worst—hitting small businesses with unnecessary red tape while letting big corporations and nonprofits off the hook,” said Secretary Hoskins. “Missouri’s entrepreneurs should be focused on growing their businesses, not filling out government paperwork under threat of fines or jail time.”

    The CTA requires millions of small businesses to report detailed ownership information to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN), with penalties of up to $10,000 and two years in prison for noncompliance. Meanwhile, large corporations and tax-exempt organizations—entities more likely to engage in illicit financial activity—are exempt from these requirements.

    The coalition of Secretaries of State highlighted the CTA’s flawed implementation, the lack of clear guidance from FinCEN, and the financial burden on small business owners, which is estimated to cost $145 million in compliance expenses nationwide.

    A bill has been introduced in Congress—H.R. 8147, the “Repealing Big Brother Overreach Act”—to fully repeal the CTA. Secretary Hoskins strongly supports this effort and urges lawmakers to act swiftly.

    “I stand with small business owners across Missouri who are frustrated, confused, and rightfully concerned about this law,” Hoskins said. “Repealing the CTA is the right thing to do to protect our entrepreneurs and strengthen our economy.”

    The full letter, signed by 20 Secretaries of State, has been sent to the White House for consideration and is attached to this release. Secretary Hoskins remains committed to advocating for Missouri’s businesses and cutting through unnecessary government bureaucracy. An additional editorial penned by the Secretary is attached for use.

     

    For more information, please contact: Rachael Dunn, Director of Communications, [email protected].

    About Secretary of State Denny Hoskins
    Denny Hoskins, CPA, was elected Missouri Secretary of State in November 2024. With a strong background in business and public service, he is committed to improving government efficiency, transparency, and supporting Missouri families.

    Final Jt. SoS Corp. Transparency Act Letter v20250214.pdf

     

    Repeal the Corporate Transparency Act to Protect Small Businesses
    By Missouri Secretary of State Denny Hoskins, CPA


    Small businesses are the backbone of Missouri’s economy. They create jobs, drive growth, and keep our communities strong. But instead of supporting them, Washington bureaucrats are making it harder to do business.


    The Corporate Transparency Act (CTA), passed in 2021, was supposed to combat money laundering. Instead, it’s a bureaucratic disaster that unfairly burdens Missouri’s small businesses while exempting big corporations and nonprofits.


    What Does the CTA Do?
    The law requires nearly every small business with fewer than 20 employees to report detailed ownership information to the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). If a business owner fails to comply—whether due to confusion or an honest mistake—they could face fines of up to $10,000 and even jail time.


    This means a family-owned restaurant in Kansas City, a small farm in rural Missouri, or a startup in St. Louis must navigate complex federal reporting requirements, while large corporations and tax-exempt organizations—entities far more likely to engage in financial misconduct—are exempt.


    Why Is the CTA a Problem?
    Since the law took effect, my office has been flooded with concerns from small business owners, accountants, and attorneys who are confused about how to comply. The federal government has provided little guidance, leaving entrepreneurs to figure it out on their own—under threat of steep penalties.


    Even worse, experts estimate compliance with the CTA will cost small businesses nationwide over $145 million in administrative expenses. That’s money and time that could be spent hiring workers, expanding operations, and serving customers—not filling out government paperwork.


    Repealing the CTA Is the Right Move

    I have joined 19 other Secretaries of State in calling on President Trump and Congress to repeal the CTA immediately. There is already a solution—H.R. 8147, the “Repealing Big Brother Overreach Act”, which would end this unnecessary burden on small businesses.


    Missouri’s small businesses should not be treated like criminals just for trying to make an honest living. It’s time to repeal the CTA and let entrepreneurs focus on what they do best—creating jobs and growing our economy.


    Denny Hoskins, CPA, serves as Missouri’s 41st Secretary of State, where he advocates for small businesses, election integrity, and economic growth.

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI: Remitly Reports Fourth Quarter and Full Year 2024 Results Above Outlook

    Source: GlobeNewswire (MIL-OSI)

    Fourth quarter active customers up 32% and revenue up 33% year over year
    Fourth quarter net loss was $5.7 million and Adjusted EBITDA was $43.7 million

    SEATTLE, Feb. 19, 2025 (GLOBE NEWSWIRE) — Remitly Global, Inc. (NASDAQ: RELY), a trusted provider of digital financial services that transcend borders, reported results for the fourth quarter and full year ended December 31, 2024.

    “We delivered an exceptional fourth quarter and full year, exceeding expectations, as our product strength and customer loyalty drove durable growth and improving profitability,” said Matt Oppenheimer, co-founder and Chief Executive Officer, Remitly. “Our product experience continues to resonate with customers as we deliver simplicity, convenience, and trust. As we look ahead to 2025 and beyond, I am excited about the growth opportunities and innovation that will enable us to deliver on our vision.”

    Fourth Quarter 2024 Highlights and Key Operating Data
    (All comparisons relative to the fourth quarter of 2023)

    • Active customers increased to 7.8 million, from 5.9 million, up 32%.
    • Send volume increased to $15.4 billion, from $11.1 billion, up 39%.
    • Revenue totaled $351.9 million, compared to $264.8 million, up 33%.
    • Net loss was $5.7 million, compared to a net loss of $35.0 million.
    • Adjusted EBITDA was $43.7 million, compared to $8.2 million, up 434%.

    Full Year 2024 Highlights and Key Operating Data:
    (All comparisons relative to the full year 2023)

    • Send volume increased to $54.6 billion, from $39.5 billion, up 38%.
    • Revenue totaled $1,264.0 million, compared to $944.3 million, up 34%.
    • Net loss was $37.0 million, compared to a net loss of $117.8 million.
    • Adjusted EBITDA was $134.8 million, compared to $44.5 million, up 203%.

    2025 Financial Outlook
    For fiscal year 2025, Remitly currently expects:

    • Total revenue in the range of $1.565 billion to $1.580 billion, representing a growth rate of 24% to 25% year over year.
    • GAAP net income to be positive for 2025 and for Adjusted EBITDA to be in the range of $180 million to $200 million.

    For the first quarter of 2025, Remitly currently expects:

    • Total revenue in the range of $345 million to $348 million, representing a growth rate of 28% to 29% year over year.
    • A GAAP net loss position for the first quarter of 2025 and for Adjusted EBITDA to be in the range of $36 million to $40 million.

    Reconciliation of GAAP to Non-GAAP Financial Measures
    A reconciliation of GAAP to non-GAAP financial measures has been provided in the financial statement tables included in this earnings release. An explanation of these measures is also included below under the heading “Non-GAAP Financial Measures.” We have not provided a quantitative reconciliation of forecasted Adjusted EBITDA to forecasted GAAP net income (loss) or to forecasted GAAP income (loss) before income taxes within this earnings release because we cannot, without unreasonable effort, calculate certain reconciling items with confidence due to the variability, complexity, and limited visibility of the adjusting items that would be excluded from forecasted Adjusted EBITDA. These items include, but are not limited to, income taxes and stock-based compensation expense, which are directly impacted by unpredictable fluctuations in the market price of our common stock. The variability of these items could have a significant impact on our future GAAP financial results.

    Note: All percentage changes described within this press release are calculated using amounts in the Company’s Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”), for which revenue and active customers are presented in thousands and send volume is presented in millions. Rounding differences may occur when individually calculating percentages or totals from rounded amounts included within the press release body as compared to the amounts included within the Company’s SEC filings.

    Webcast Information
    Remitly will host a webcast at 5:00 p.m. Eastern time on Wednesday, February 19, 2025 to discuss its fourth quarter and full year 2024 financial results. The live webcast and investor presentation will be accessible on Remitly’s website at https://ir.remitly.com. A webcast replay will be available on our website at https://ir.remitly.com following the live event.

    We have used, and intend to continue to use, the Investor Relations section of our website at https://ir.remitly.com as a means of disclosing material nonpublic information and for complying with our disclosure obligations under Regulation FD.

    Non-GAAP Financial Measures
    Some of the financial information and data contained in this earnings release, such as Adjusted EBITDA and non-GAAP operating expenses, have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). We regularly review our key business metrics and non-GAAP financial measures to evaluate our performance, identify trends affecting our business, prepare financial projections, and make strategic decisions. We believe that these key business metrics and non-GAAP financial measures provide meaningful supplemental information for management and investors in assessing our historical and future operating performance. Adjusted EBITDA and non-GAAP operating expenses are key output measures used by our management to evaluate our operating performance, inform future operating plans, and make strategic long-term decisions, including those relating to operating expenses and the allocation of internal resources. Remitly believes that the use of Adjusted EBITDA and non-GAAP operating expenses provides additional tools to assess operational performance and trends in, and in comparing Remitly’s financial measures with, other similar companies, many of which present similar non-GAAP financial measures to investors. Remitly’s non-GAAP financial measures may be different from non-GAAP financial measures used by other companies. The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, financial measures determined in accordance with GAAP. Because of the limitations of non-GAAP financial measures, you should consider the non-GAAP financial measures presented herein in conjunction with Remitly’s financial statements and the related notes thereto. Please refer to the non-GAAP reconciliations in this press release for a reconciliation of these non-GAAP financial measures to the most comparable financial measure prepared in accordance with GAAP.

    We calculate Adjusted EBITDA as net loss adjusted by (i) interest (income) expense, net, (ii) provision for income taxes, (iii) noncash charges of depreciation and amortization, (iv) gains and losses from the remeasurement of foreign currency assets and liabilities into their functional currency, (v) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, (vi) noncash stock-based compensation expense, net, and (vii) certain acquisition, integration, restructuring, and other costs. We calculate non-GAAP operating expenses as our GAAP operating expenses adjusted by (i) noncash stock-based compensation expense, net, (ii) noncash charges associated with our donation of common stock in connection with our Pledge 1% commitment, as well as (iii) certain acquisition, integration, restructuring, and other costs.

    Forward-Looking Statements
    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are forward-looking statements. These statements include, but are not limited to, statements regarding our future results of operations and financial position, including our fiscal year and first quarter 2025 financial outlook, including forecasted fiscal year and first quarter 2025 revenue, net income (loss), and Adjusted EBITDA, anticipated future expenses and investments, expectations relating to certain of our key financial and operating metrics, our business strategy and plans, our growth, our position and potential opportunities, and our objectives for future operations. The words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “likely,” “plan,” “potential,” “predict,” “project,” “seek,” “should,” “target,” “will,” “would,” or similar expressions and the negatives of those terms are intended to identify forward-looking statements. Forward-looking statements are based on management’s expectations, assumptions, and projections based on information available at the time the statements were made. These forward-looking statements are subject to a number of risks, uncertainties, and assumptions, including risks and uncertainties related to our expectations regarding our revenue, expenses, and other operating results; our ability to acquire new customers and successfully retain existing customers; our ability to develop new products and services in a timely manner; our ability to achieve or sustain our profitability; our ability to maintain and expand our strategic relationships with third parties; our business plan and our ability to effectively manage our growth; anticipated trends, growth rates, and challenges in our business and in the market segments in which we operate; our ability to attract and retain qualified employees; uncertainties regarding the impact of geopolitical and macroeconomic conditions, including currency fluctuations, inflation, regulatory changes (including as may be related to immigration, fiscal policy, foreign trade, or foreign investment), or regional and global conflicts or related government sanctions; our ability to maintain the security and availability of our solutions; our ability to maintain our money transmission licenses and other regulatory clearances; our ability to maintain and expand international operations; and our expectations regarding anticipated technology needs and developments and our ability to address those needs and developments with our solutions. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties, and assumptions, our actual results could differ materially and adversely from those anticipated or implied in the forward-looking statements. Further information on risks that could cause actual results to differ materially from forecasted results is included in our annual report on Form 10-K for the year ended December 31, 2024 to be filed with the SEC, and within our annual report on Form 10-K for the year ended December 31, 2023 filed with the SEC, which are or will be available on our website at https://ir.remitly.com and on the SEC’s website at www.sec.gov. Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons if actual results differ materially from those anticipated in the forward-looking statements.

    About Remitly
    Remitly is a trusted provider of digital financial services that transcend borders. With a global footprint spanning more than 170 countries, Remitly’s digitally native, cross-border payments app delights customers with a fast, reliable, and transparent money movement experience. Building on its strong foundation, Remitly is expanding its suite of products to further its vision and transform lives around the world.

    Contacts

    Media:
    Kendall Sadler
    kendall@remitly.com

    Investor Relations:
    Stephen Shulstein
    stephens@remitly.com

    REMITLY GLOBAL, INC.
    Condensed Consolidated Statements of Operations
    (unaudited)
     
      Three Months Ended December 31,   Twelve Months Ended December 31,
    (in thousands, except share and per share data) 2024   2023   2024   2023
    Revenue $ 351,895     $ 264,758     $ 1,263,963     $ 944,285  
    Costs and expenses              
    Transaction expenses(1)   118,389       89,118       431,604       329,113  
    Customer support and operations(1)   22,008       19,917       83,918       82,521  
    Marketing(1)   83,937       75,343       303,799       234,417  
    Technology and development(1)   70,611       59,240       269,817       219,939  
    General and administrative(1)   54,875       48,657       195,857       179,372  
    Depreciation and amortization   5,814       3,484       18,054       13,118  
    Total costs and expenses   355,634       295,759       1,303,049       1,058,480  
    Loss from operations   (3,739 )     (31,001 )     (39,086 )     (114,195 )
    Interest income   1,844       2,247       8,077       7,447  
    Interest expense   (967 )     (786 )     (3,241 )     (2,352 )
    Other income (expense), net   (2,273 )     (64 )     3,999       (2,838 )
    Loss before provision for income taxes   (5,135 )     (29,604 )     (30,251 )     (111,938 )
    Provision for income taxes   589       5,417       6,727       5,902  
    Net loss $ (5,724 )   $ (35,021 )   $ (36,978 )   $ (117,840 )
    Net loss per share attributable to common stockholders:              
    Basic and diluted $ (0.03 )   $ (0.19 )   $ (0.19 )   $ (0.65 )
    Weighted-average shares used in computing net loss per share attributable to common stockholders:              
    Basic and diluted   199,049,777       186,343,078       194,646,436       180,818,399  
    ___________________________
    (1) Exclusive of depreciation and amortization, shown separately.
                                   
    REMITLY GLOBAL, INC.
    Condensed Consolidated Balance Sheets
    (unaudited)
     
      December 31,   December 31,
    (in thousands) 2024   2023
    Assets      
    Current assets      
    Cash and cash equivalents $ 368,097     $ 323,710  
    Disbursement prefunding   288,934       195,848  
    Customer funds receivable, net   193,965       379,417  
    Prepaid expenses and other current assets   46,518       33,143  
    Total current assets   897,514       932,118  
    Property and equipment, net   31,566       16,010  
    Operating lease right-of-use assets   13,002       9,525  
    Goodwill   54,940       54,940  
    Intangible assets, net   10,463       16,642  
    Other noncurrent assets, net   5,386       7,071  
    Total assets $ 1,012,871     $ 1,036,306  
    Liabilities and stockholders’ equity      
    Current liabilities      
    Accounts payable $ 16,159     $ 35,051  
    Customer liabilities   188,984       177,473  
    Short-term debt   2,468       2,481  
    Accrued expenses and other current liabilities   116,652       145,802  
    Operating lease liabilities   4,745       6,032  
    Total current liabilities   329,008       366,839  
    Operating lease liabilities, noncurrent   9,073       4,477  
    Long-term debt   —       130,000  
    Other noncurrent liabilities   9,319       5,653  
    Total liabilities   347,400       506,969  
    Commitments and contingencies      
    Stockholders’ equity      
    Common stock   20       19  
    Additional paid-in capital   1,195,390       1,020,286  
    Accumulated other comprehensive (loss) income   (1,658 )     335  
    Accumulated deficit   (528,281 )     (491,303 )
    Total stockholders’ equity   665,471       529,337  
    Total liabilities and stockholders’ equity $ 1,012,871     $ 1,036,306  
                   
    REMITLY GLOBAL, INC.
    Condensed Consolidated Statements of Cash Flows
    (unaudited)
     
      Year Ended December 31,
    (in thousands) 2024   2023
    Cash flows from operating activities      
    Net loss $ (36,978 )   $ (117,840 )
    Adjustments to reconcile net loss to net cash provided by (used in) operating activities:      
    Depreciation and amortization   18,054       13,118  
    Stock-based compensation expense, net   152,137       136,967  
    Donation of common stock   2,587       4,600  
    Other   454       713  
    Changes in operating assets and liabilities:      
    Disbursement prefunding   (93,086 )     (31,778 )
    Customer funds receivable   186,357       (183,422 )
    Prepaid expenses and other assets   (12,224 )     (13,035 )
    Operating lease right-of-use assets   5,981       5,186  
    Accounts payable   (20,823 )     27,559  
    Customer liabilities   12,666       61,718  
    Accrued expenses and other liabilities   (14,499 )     47,357  
    Operating lease liabilities   (6,141 )     (4,733 )
    Net cash provided by (used in) operating activities   194,485       (53,590 )
    Cash flows from investing activities      
    Purchases of property and equipment   (5,998 )     (2,857 )
    Capitalized internal-use software costs   (11,704 )     (6,247 )
    Cash paid for acquisition, net of acquired cash, cash equivalents, and restricted cash   —       (40,933 )
    Net cash used in investing activities   (17,702 )     (50,037 )
    Cash flows from financing activities      
    Proceeds from exercise of stock options   8,667       14,288  
    Proceeds from issuance of common stock in connection with ESPP   9,382       6,132  
    Proceeds from revolving credit facility borrowings   1,453,000       764,000  
    Repayments of revolving credit facility borrowings   (1,583,000 )     (634,000 )
    Taxes paid related to net share settlement of equity awards   (5,228 )     (6,702 )
    Cash paid for settlement of amounts previously held back for acquisition consideration   (10,261 )     —  
    Repayment of assumed indebtedness   —       (17,068 )
    Net cash (used in) provided by financing activities   (127,440 )     126,650  
    Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash   (4,555 )     1,272  
    Net increase in cash, cash equivalents, and restricted cash   44,788       24,295  
    Cash, cash equivalents, and restricted cash at beginning of period   325,029       300,734  
    Cash, cash equivalents, and restricted cash at end of period $ 369,817     $ 325,029  
    Reconciliation of cash, cash equivalents, and restricted cash      
    Cash and cash equivalents $ 368,097     $ 323,710  
    Restricted cash included in prepaid expenses and other current assets   658       774  
    Restricted cash included in other noncurrent assets, net   1,062       545  
    Total cash, cash equivalents, and restricted cash $ 369,817     $ 325,029  
                   
    REMITLY GLOBAL, INC.
    Reconciliation of GAAP to Non-GAAP Financial Measures
    (unaudited)
     
    Reconciliation of net loss to Adjusted EBITDA:
                   
      Three Months Ended December 31,   Twelve Months Ended December 31,
    (in thousands) 2024   2023   2024   2023
    Net loss $ (5,724 )   $ (35,021 )   $ (36,978 )   $ (117,840 )
    Add:              
    Interest income, net   (877 )     (1,461 )     (4,836 )     (5,095 )
    Provision for income taxes   589       5,417       6,727       5,902  
    Depreciation and amortization   5,814       3,484       18,054       13,118  
    Foreign exchange (gain) loss   2,273       (8 )     (4,394 )     2,603  
    Donation of common stock   —       —       2,587       4,600  
    Stock-based compensation expense, net   41,614       35,960       152,137       136,967  
    Acquisition, integration, restructuring, and other costs(1)   —       (193 )     1,468       4,197  
    Adjusted EBITDA $ 43,689     $ 8,178     $ 134,765     $ 44,452  
    ___________________________
    (1) Acquisition, integration, restructuring, and other costs for the twelve months ended December 31, 2024 consisted primarily of $0.8 million in restructuring charges incurred, $0.5 million of non-recurring legal charges, and $0.2 million related to the change in the fair value of the holdback liability associated with the acquisition of Rewire (O.S.G.) Research and Development Ltd. (“Rewire”). Acquisition, integration, restructuring, and other costs for the three months ended December 31, 2023 consisted primarily of $(0.8) million related to the change in the fair value of the holdback liability and $0.6 million of expenses incurred in connection with the acquisition and integration of Rewire. Acquisition, integration, restructuring, and other costs for the twelve months ended December 31, 2023 consisted primarily of $1.7 million of expenses incurred in connection with the acquisition and integration of Rewire, $1.4 million in restructuring charges incurred, and $1.1 million related to the change in the fair value of the holdback liability associated with the acquisition of Rewire.
     
    Reconciliation of operating expenses to non-GAAP operating expenses:
                   
      Three Months Ended December 31,   Twelve Months Ended December 31,
    (in thousands) 2024   2023   2024   2023
    Customer support and operations $ 22,008   $ 19,917     $ 83,918   $ 82,521
    Excluding: Stock-based compensation expense, net   268     394       1,158     1,404
    Excluding: Acquisition, integration, restructuring, and other costs   —     —       758     739
    Non-GAAP customer support and operations $ 21,740   $ 19,523     $ 82,002   $ 80,378
                   
      Three Months Ended December 31,   Twelve Months Ended December 31,
      2024   2023   2024   2023
    Marketing $ 83,937   $ 75,343     $ 303,799   $ 234,417
    Excluding: Stock-based compensation expense, net   4,595     3,930       17,609     16,165
    Non-GAAP marketing $ 79,342   $ 71,413     $ 286,190   $ 218,252
                   
      Three Months Ended December 31,   Twelve Months Ended December 31,
      2024   2023   2024   2023
    Technology and development $ 70,611   $ 59,240     $ 269,817   $ 219,939
    Excluding: Stock-based compensation expense, net   22,527     19,920       84,381     74,967
    Excluding: Acquisition, integration, restructuring, and other costs   —     700       —     1,224
    Non-GAAP technology and development $ 48,084   $ 38,620     $ 185,436   $ 143,748
                   
      Three Months Ended December 31,   Twelve Months Ended December 31,
      2024   2023   2024   2023
    General and administrative $ 54,875   $ 48,657     $ 195,857   $ 179,372
    Excluding: Stock-based compensation expense, net   14,224     11,716       48,989     44,431
    Excluding: Donation of common stock   —     —       2,587     4,600
    Excluding: Acquisition, integration, restructuring, and other costs   —     (893 )     710     2,234
    Non-GAAP general and administrative $ 40,651   $ 37,834     $ 143,571   $ 128,107

    The MIL Network –

    February 20, 2025

  • MIL-OSI: Enovix Announces Fourth Quarter and Full Year 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    FREMONT, Calif., Feb. 19, 2025 (GLOBE NEWSWIRE) — Enovix Corporation (“Enovix”) (Nasdaq: ENVX), a global high-performance battery company, announced today financial results for the fourth quarter and full year 2024, which included the summary below from its President and CEO, Dr. Raj Talluri.

    Fellow Shareholders,

    In the fourth quarter of 2024, we achieved key milestones in manufacturing, technology, and sales, setting the stage for a breakout year in 2025. We are focused on launching our first smartphone battery and converting our IoT pipeline into contracted backlog. Customers across multiple industries are acknowledging the readiness of our manufacturing capabilities, which are coming online at the perfect time to meet strong demand for our high energy-density solutions and diversified supply chain.

    Other recent highlights include:

    • Record Revenue: Fourth quarter revenues were a record $9.7 million, near the high end of our guidance. Full year 2024 revenues were also a record of $23.1 million, up 202%, from $7.6 million in 2023.
    • Smartphone Batteries: We shipped early engineering samples to our lead smartphone OEM, with results confirming that critical safety tests are passing. Additionally, cell dimensions were received in continuation of our agreement. We remain on track for commercial smartphone battery launches in 2025, pending successful completion of customer qualification. Furthermore, a new OEM customer submitted first samples purchase order, expanding our active engagements to 7 of the top 8 smartphone OEMs.
    • XR Batteries: Secured a landmark prepaid purchase order from a global technology leader in Artificial Intelligence (AI) and immersive technologies, reserving dedicated production capacity for next-generation smart eyewear. First samples, featuring our custom cells from Fab2 integrated into packs in our Korea facility, were delivered to the customer earlier this month.
    • Manufacturing Readiness: Fab2 in Malaysia completed Site Acceptance Testing (SAT) for the High-Volume Manufacturing (HVM) line, a key milestone in our journey to scale production. Additionally, we were honored to host several customers at our factory in Malaysia, conducting detailed line tours. And multiple OEMs initiated formal factory audits to support their qualification processes.
    • Products: We successfully completed safety testing of EX-1M and performance results indicate that we are on track to meet targets for energy density, cycle life, and fast charging. And the first EX-2M samples from Fab2 were shipped to customers on schedule.
    • Capitalization: 2024 year-end cash and cash equivalents of $272.9 million and continued operating expense discipline provides optionality for funding additional HVM lines.

    2025 is off to a fast start, fueled by accelerating AI innovation and a shifting landscape that is driving OEMs to diversify their supply chains. As a leader in high-energy-density battery technology with manufacturing facilities in Korea and Malaysia, Enovix is well positioned to capitalize on these industry trends.

    A key strategic decision in 2024 was to invest in the emerging AI-enabled smart eyewear market by developing a battery cell tailored for this market. We believe this investment is now paying off, as our product is expected to launch as this market is gaining momentum. New estimates from IDC project the smart eyewear market will reach multiple tens of millions of units by 2028, driven by recent hardware and software ecosystem advancements, the growing adoption of AI applications, and the expanding use cases across consumer, enterprise and defense markets. A majority of America’s largest tech companies, along with several top-tier Asia-based OEMs, have announced smart eyewear products. However, one major bottleneck remains – no product today delivers resiliency to all-day usage with ever-increasing sensor, communications (WiFi, Bluetooth, cellular, and satellite), and computing demands. This presents a prime opportunity for Enovix. With our high-energy-density battery already developed, HVM ramping up, and many of the market’s key players based in our backyard of Silicon Valley, we believe we are well-positioned to lead in this space.

    In smartphones, the strong tailwinds we identified last quarter continue in 2025. OEMs are increasingly requesting batteries with capacities near 7,000 milliamp-hours to support the growing power demands of next-generation AI applications. Additionally, with smartphone penetration already at saturation levels, market leaders are intensifying their focus on product differentiation – particularly in regions outside the US, where competition is fierce. We believe that our EX-2M and upcoming EX-3M battery solutions align with evolving demands, reinforcing our role as a strategic partner to leading OEMs.

    A new industry trend that has emerged subsequent to our last shareholder letter is supply chain-driven demand, particularly in the defense sector. Soon after the US elections in November, we observed an increase in inbound interest from drone manufacturers and defense suppliers seeking battery solutions that comply with allied country supply chain requirements. As a reminder, a significant portion of our 2024 revenue came from sales of conventional graphite battery products to defense customers. Earlier this month, we secured a purchase order for samples from a new defense customer with over $1 billion in annual sales to the US military, focused on autonomous AI systems. While these developments are still evolving, we are optimistic about the potential upside.

    Business Update

    Manufacturing. We successfully completed our key fourth-quarter objectives on schedule, including SAT for the HVM line and shipping the first EX-2M samples. We also further improved yields across both the Agility and HVM lines, with incremental targets in place throughout the year that we believe will ensure readiness for smartphone mass production in the fourth quarter of 2025. Customer audits are now underway at our Malaysia facility. While preparing Fab2 for mass production remains our primary manufacturing focus in 2025, we are also prioritizing efforts to accelerate custom cell development timelines. Our initial success in the emerging smart eyewear market was made possible because we dedicated resources to making a new variant of EX-1M designed to fit within the confines of the glasses frames. As we scale, our ability to swiftly develop tailored solutions with precision manufacturing and latest chemistries will play a critical role in our success. Additionally, we continue to act in a disciplined manner to select the right customer opportunities to pursue for long-term growth.

    Commercialization. Our business team remains focused on smartphone mass production as the primary commercialization goal for 2025. In October of 2024, we took a major step toward this objective by executing a strategic partnership that outlined key milestones leading up to our entry into the smartphone market by late 2025. This agreement was followed by a purchase order in the fourth quarter of 2024 tied to one of those milestones, and in the first quarter of 2025 we received battery dimensions for a planned 2025 smartphone launch. Additionally, we secured a first purchase order for samples from a new global smartphone manufacturer, expanding our customer engagements to 7 of the top 8 smartphone OEMs.

    In addition to being focused on smartphone business, we are also being highly selective with IoT opportunities, prioritizing segments where our technology and global supply chain have a strong competitive advantage. Among these, smart eyewear emerged as a natural fit, and we are now in the process of developing custom cells for marquee customers. This quarter, we shipped our first samples to customers using our Korea-based packing capability that is now fully integrated with our silicon cell production out of Malaysia. Our first commercial shipments are scheduled to commence mid-year, and we are actively securing additional IoT purchase orders.

    In the EV space, we continue advancing development agreements with two of the world’s largest automotive OEMs. Consistent with our capital-efficient strategy, we remain focused on targeted collaborations that allow us to scale in this vertical while optimizing investment.

    Across these markets, our disciplined approach to commercialization ensures that we are not only securing near-term revenue opportunities but also building a foundation for long-term leadership in high-energy-density battery solutions.

    Products:

    Our battery technology continues to advance across multiple generations, with significant progress in safety and performance validation, customer sampling, and next-generation design. We successfully completed safety testing of EX-1M and performance results indicate that we are on track to meet targets for energy density, cycle life, and fast charging. For EX-2M, we delivered early engineering samples to OEMs across both smartphone and IoT markets and received positive feedback. Additionally, EX-2M has outperformed traditional graphite-based cells in select safety tests such as crush and impact tests. We are now refining our electrochemistry to further enhance performance metrics. Looking ahead, we have officially kicked off the design phase for EX-3M. As we continue refining key performance specifications, we are incorporating feedback from lead OEMs to ensure alignment with their evolving requirements. Our goal is to finalize the EX-3M design in early 2025, paving the way for our next-generation battery technology.

    These advancements reflect our commitment to delivering high-performance, high-energy-density battery solutions across multiple product categories, reinforcing our position as a leader in battery innovation.

    Financials: Revenue was $9.7 million in the fourth quarter of 2024, near the high end of our guidance range and up more than 30 percent year over year. A majority of revenues were from our conventional battery capacity in South Korea which is seeing a positive demand environment from defense customers and benefiting from increased collaboration with our US engineers. Our GAAP cost of revenue was $8.7 million in the fourth quarter of 2024 leading to the Company’s first ever positive gross margin which totaled $1.1 million or 11% of sales.

    Our GAAP operating expenses were $35.6 million in the fourth quarter of 2024 compared to $48.6 million in the third quarter, which reflects some of the expense reductions related to our shift of various functions to lower cost regions such as Malaysia and India. Our non-GAAP operating expenses were $24.3 million in the fourth quarter of 2024, down from $27.2 million in the previous quarter.

    Our GAAP net loss attributable to Enovix was $37.5 million in the fourth quarter of 2024, compared to $22.5 million in the previous quarter. As a reminder our GAAP net loss is impacted quarterly by changes in fair value of common stock warrants, which resulted in a $5.1 million expense in the fourth quarter compared to a $29.9 million benefit in the third quarter of 2024.  

    Adjusted EBITDA in the fourth quarter of 2024 was a loss of $11.7 million compared to an adjusted EBITDA loss of $21.6 million in the previous quarter. The sequential improvement was driven by positive gross margin, lower operating expenses and a $1.0 million increase in depreciation and amortization.

    Earnings per share loss in the fourth quarter of 2024 was $0.20 on a GAAP basis and $0.11 on a non-GAAP basis compared to third quarter earnings per share loss of $0.30 on a GAAP basis and $0.17 on a non-GAAP basis.

    We exited 2024 with $272.9 million of cash and cash equivalents following the receipts of approximately $107 million of net proceeds from an equity offering in the fourth quarter which was partially offset by $16.0 million used in operating activities and capital expenditures of $16.4 million during the quarter.

    A full reconciliation of our GAAP to non-GAAP results is available later in this report.

    Outlook

    For the first quarter of 2025, we expect revenue between $3.5 million and $5.5 million, a GAAP EPS loss of $0.23 to $0.29, an adjusted EBITDA loss of $21.0 million to $27.0 million, and a non-GAAP EPS loss of $0.15 to $0.21.

    Summary

    The top milestones we identified at the beginning of 2024 were achieving SAT for agility and our high-volume manufacturing lines in Malaysia and delivering samples of our leading smartphone batteries, EX-1M and EX-2M, to customers. Not only did we hit these top milestones, we also advanced relationships with market leaders in smartphones, AR/VR, and automotive industries. We believe that these relationships, supported by purchase orders and commercial launch schedules, provide a clear path for us to commence mass production in 2025.

    Conference Call Information

    Enovix will hold a video conference call at 2:00 PM PT / 5:00 PM ET today, February 19, 2025, to discuss the company’s business updates and financial results. To join the call, participants must use the following link to register: https://enovix-q4-2024.open-exchange.net/registration. This link will also be available via the Investor Relations section of the Enovix website at https://ir.enovix.com. An archived version of the call will be available on the Enovix website for one year at https://ir.enovix.com.

    About Enovix

    Enovix is on a mission to deliver high-performance batteries that unlock the full potential of technology products. Everything from IoT, mobile, and computing devices, to the vehicle you drive, needs a better battery. Enovix partners with OEMs worldwide to usher in a new era of user experiences. Our innovative, materials-agnostic approach to building a higher performing battery without compromising safety keeps us flexible and on the cutting-edge of battery technology innovation.

    Enovix is headquartered in Silicon Valley with facilities in India, Korea and Malaysia. For more information visit https://enovix.com and follow us on LinkedIn.

    Non-GAAP Financial Measures

    Non-GAAP operating expenses, EBITDA, Adjusted EBITDA, non-GAAP net loss per share, and other non-GAAP measures are intended as supplemental financial measures of our performance that provide an additional tool for investors to use in evaluating ongoing operating results, trends, and in comparing our financial measures with those of comparable companies.

    However, you should be aware that other companies may calculate similar non-GAAP measures differently. Non-GAAP financial measures have limitations, including that they exclude certain expenses that are required under GAAP, which adjustments reflect the exercise of judgment by management. Reconciliations of each non-GAAP financial measure to the most directly comparable GAAP financial measure can be found in the tables at the end of this shareholder letter.

    While Enovix provides first quarter 2025 guidance for adjusted EBITDA loss and non-GAAP EPS loss, we are unable to provide without unreasonable effort a GAAP to non-GAAP reconciliation of these projected non-GAAP measures. Such qualitative reconciliation to the corresponding GAAP financial measure cannot be provided without unreasonable effort because of the inherent difficulty in accurately forecasting the occurrence and financial impact of the various adjustments that have not yet occurred, are out of our control, or cannot be reasonably predicted, including but not limited to warrant liabilities and stock-based compensation. For the same reasons, we are unable to assess the probable significance of the unavailable information, which could have a material impact on our future GAAP financial results.

    Forward-Looking Statements

    This letter to shareholders contains 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. Forward-looking statements generally relate to future events or our future financial or operating performance and can be identified by words such as anticipate, believe, continue, could, estimate, expect, intend, may, might, plan, possible, potential, predict, project, setting the stage, should, would and similar expressions that convey uncertainty about future events or outcomes. Forward-looking statements in this letter to shareholders include, without limitation, out expected performance and results for the first quarter of 2025; that 2025 will be a breakout year; the timing for completion of customer qualification for and the launch of our first smartphone battery in 2025; our expectations regarding our ability to commence mass production in 2025 and full utilization of the first HVM line in 2026; our expectations regarding, and our ability to respond to, market and customer demand; our expectations regarding the level of customers’ interest in our high energy-density solutions and diversified supply chain, the demand for more energy dense batteries and the suitability of our products to address this demand, and the impact of artificial intelligence (“AI”) features on the foregoing; our ability to develop and deliver a battery cell tailored to the smart eyewear market, including our ability to deliver a battery that delivers a full day of usage on a single charge, and the anticipated benefits of our investments in these products and market; our anticipated commercial shipments of batteries for smart eyewear and other IoT products by mid-year 2025; our ability to convert our IoT pipeline into contracted backlog; projected improvements in our manufacturing and commercialization and R&D activities at Fab2, including the ability of the sales team to support the path to profitability by attracting demand across high-growth markets; our achievement of the milestones under our strategic partnership with a leading smartphone OEM; expectations relating to broader agreements with automative OEMs; our ability to successfully complete safety testing and customer qualification and our ability to and the timing of our entry into the smartphone market in 2025 with high-volume production from our Fab2 facility; our ability to meet our spec targets for energy density, cycle life and fast charging for our EX-1M cells; our ability to develop and commercialize customer and product-specific variants of our products and other tailored solutions for our customers; our expectations regarding EX-1M and EX-2M readiness and production, and predicted EX-3M battery solution production; our ability to meet goals for yield, throughput, energy density, cycle life and fast charging; the readiness of our production and manufacturing capabilities; our expectations with respect to the development and innovation of EX-2M and EX-3M, including our ability to finalize the EX-3M design in Q1 2025; our expectations regarding Fab2 in and its capacity to support multiple customer qualifications; our observations and expectations around supply chain-driven demand including in the defense sector, and interest from specific customer segments including drone manufacturers and military suppliers; the anticipated contributions of our R&D teams to support product innovation; our revenue funnel; our efforts in the portable electronics and EV markets, including the IoT, smartphone, smart eyewear and virtual reality categories; expectations regarding the reservation and use of production capacity and our ability to satisfy production expectations relating to next-generation smart eyewear; our ability to meet milestones and deliver on our objectives and expectations; our ability to fund additional HVM lines; anticipated increases in demand and interest in our products from manufacturers and suppliers seeking battery solutions that comply with allied country supply chain requirements; the implementation and expected success of our business model and growth strategy, including our focus on the addressable market categories in which we believe an improved battery drives a high value to the product and premium pricing for our solutions; our ability to manage our expenses and realize our annual cost savings goals; our ability to capitalize on industry trends, including trends relating to accelerating AI innovation; our ability to manage and achieve the benefits of our restructuring efforts, including continued operating expense discipline to facilitate funding for additional HVM lines at Fab2; and forecasts of our financial and performance metrics.

    Actual results could differ materially from these forward-looking statements as a result of certain risks and uncertainties, including, without limitation, our ability to improve energy density, cycle life, fast charging, capacity roll off and gassing metrics among our products; our reliance on new and complex manufacturing processes for our operations; our ability to establish sufficient manufacturing operations and improve and optimize manufacturing processes to meet demand, source materials and establish supply relationships, and secure adequate funds to execute on our operational and strategic goals; our reliance on a manufacturing agreement with a Malaysia-based company for many of the facilities, procurement, personnel and financing needs of our operations; our operation in international markets, including our exposure to operational, financial and regulatory risks, as well as risks relating to geopolitical tensions and conflicts, including changes in trade policies and regulations; that we may be required to pay costs for components and raw materials that are more expensive than anticipated, including as a result of trade barriers, trade sanctions, export restrictions, tariffs, embargoes or shortages and other general economic and political conditions, which could delay the introduction of our products and negatively impact our business; our ability to adequately control the costs associated with our operations and the components necessary to build our lithium-ion battery cells; our lengthy sales cycles; the safety hazards associated with our batteries and the manufacturing process; a concentration of customers in the military market and our dependence on these customer accounts; certain unfavorable terms in our commercial agreements that may limit our ability to market our products; our ability to develop, market and sell our batteries, expectations relating to the performance of our batteries, and market acceptance of our products; our ability to accurately estimate the future supply and demand of our batteries, which could result in a variety of inefficiencies in our business; changes in consumer preferences or demands; changes in industry standards; the impact of technological development and competition; and global economic conditions, including tariffs, inflationary and supply chain pressures, and political, social, and economic instability, including as a result of armed conflict, war or threat of war, or trade and other international disputes that could disrupt supply or delivery of, or demand for, our products.

    For additional information on these risks and uncertainties and other potential factors that could cause actual results to differ from the results predicted, please refer to our filings with the Securities and Exchange Commission (“SEC”), including in the “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” sections of our annual report on Form 10-K and quarterly reports on Form 10-Q and other documents that we have filed, or will file, with the SEC. Any forward-looking statements in this letter to shareholders speak only as of the date on which they are made. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

    For media and investor inquiries, please contact:

    Enovix Corporation
    Robert Lahey
    Email: ir@enovix.com

     
    Enovix Corporation
    Condensed Consolidated Balance Sheets
    (Unaudited) (In Thousands, Except Share and per Share Amounts)
     
      December 29, 2024   December 31, 2023
    Assets      
    Current assets:      
    Cash and cash equivalents $ 272,869     $ 233,121  
    Short-term investments   —       73,694  
    Accounts receivable, net   4,566       909  
    Notes receivable, net   4       1,514  
    Inventory   7,664       8,737  
    Prepaid expenses and other current assets   9,903       5,202  
    Total current assets   295,006       323,177  
    Property and equipment, net   167,947       166,471  
    Customer relationship intangibles and other intangibles, net   36,394       42,168  
    Operating lease, right-of-use assets   13,479       15,290  
    Goodwill   12,217       12,098  
    Other assets, non-current   2,126       5,100  
    Total assets $ 527,169     $ 564,304  
    Liabilities and Stockholders’ Equity      
    Current liabilities:      
    Accounts payable $ 9,492     $ 21,251  
    Accrued expenses   19,843       13,976  
    Accrued compensation   8,228       10,731  
    Short-term debt   9,452       5,917  
    Deferred revenue   3,650       6,708  
    Other liabilities   3,036       2,435  
    Total current liabilities   53,701       61,018  
    Long-term debt, net   169,820       169,099  
    Warrant liability   28,380       42,900  
    Operating lease liabilities, non-current   13,293       15,594  
    Deferred revenue, non-current   3,774       3,774  
    Deferred tax liability   8,784       10,803  
    Other liabilities, non-current   14       13  
    Total liabilities   277,766       303,201  
    Commitments and Contingencies      
    Stockholders’ equity:      
    Common stock, $0.0001 par value; authorized shares of 1,000,000,000; issued and outstanding shares of 190,559,335 and 167,392,315 as of December 29, 2024 and December 31, 2023, respectively   19       17  
    Preferred stock, $0.0001 par value; authorized shares of 10,000,000; no shares issued or outstanding as of December 29, 2024 and December 31, 2023, respectively   —       —  
    Additional paid-in-capital   1,067,951       857,037  
    Accumulated other comprehensive loss   (143 )     (62 )
    Accumulated deficit   (821,086 )     (598,845 )
    Total Enovix’s stockholders’ equity   246,741       258,147  
    Non-controlling interest   2,662       2,956  
    Total equity   249,403       261,103  
    Total liabilities and equity $ 527,169     $ 564,304  
     
    Enovix Corporation
    Condensed Consolidated Statements of Operations
    (Unaudited)
    (In Thousands, Except Share and per Share Amounts)
     
      Quarters Ended   Fiscal Years Ended
      December 29,
    2024    		   December 31,
    2023    		   December 29,
    2024    		   December 31,
    2023
    Revenue $ 9,717     $ 7,381     $ 23,074     $ 7,644  
    Cost of revenue   8,665       19,769       25,119       63,061  
    Gross margin   1,052       (12,388 )     (2,045 )     (55,417 )
    Operating expenses:              
    Research and development   22,433       34,582       124,506       88,392  
    Selling, general and administrative   13,135       17,807       74,311       79,014  
    Impairment of equipment   —       —       —       4,411  
    Restructuring cost   —       —       41,807       3,021  
    Total operating expenses   35,568       52,389       240,624       174,838  
    Loss from operations   (34,516 )     (64,777 )     (242,669 )     (230,255 )
    Other income (expense):              
    Change in fair value of common stock warrants   (5,115 )     2,040       12,244       6,180  
    Interest income   2,587       4,128       12,332       14,070  
    Interest expense   (1,719 )     (1,629 )     (6,787 )     (4,456 )
    Other income (loss), net   2,463       (433 )     954       (304 )
    Total other income (loss), net   (1,784 )     4,106       18,743       15,490  
    Loss before income tax expense (benefit)   (36,300 )     (60,671 )     (223,926 )     (214,765 )
    Income tax expense (benefit)   1,152       (633 )     (1,392 )     (633 )
    Net loss   (37,452 )     (60,038 )     (222,534 )     (214,132 )
    Net gain (loss) attributable to non-controlling interests   13       (61 )     (293 )     (61 )
    Net loss attributable to Enovix $ (37,465 )   $ (59,977 )   $ (222,241 )   $ (214,071 )
                   
    Net loss per share attributable to Enovix shareholders, basic $ (0.20 )   $ (0.36 )   $ (1.27 )   $ (1.35 )
    Weighted average number of common shares outstanding, basic   184,971,942       165,708,522       175,038,107       159,065,697  
    Net loss per share attributable to Enovix shareholders, diluted $ (0.20 )   $ (0.36 )   $ (1.27 )   $ (1.38 )
    Weighted average number of common shares outstanding, diluted   184,971,942       165,708,522       175,038,107       159,575,555  
     
    Enovix Corporation
    Condensed Consolidated Statements of Cash Flows
    (Unaudited)
     
    (In Thousands) Fiscal Years
        2024       2023  
    Cash flows used in operating activities:      
    Net loss $ (222,534 )   $ (214,132 )
    Adjustments to reconcile net loss to net cash used in operating activities      
    Depreciation, accretion and amortization   44,961       34,009  
    Stock-based compensation   58,837       69,452  
    Changes in fair value of common stock warrants   (12,244 )     (6,180 )
    Impairment and loss on disposals of long-lived assets   38,258       4,411  
    Others   448       703  
    Changes in operating assets and liabilities:      
    Accounts and notes receivables   (2,465 )     (370 )
    Inventory   1,073       4,509  
    Prepaid expenses and other assets   (2,211 )     (626 )
    Accounts payable   (7,970 )     6,096  
    Accrued expenses and compensation   3,016       1,977  
    Deferred revenue   (3,058 )     (3,860 )
    Deferred tax liability   (2,697 )     (813 )
    Other liabilities   (2,047 )     188  
    Net cash used in operating activities   (108,633 )     (104,636 )
    Cash flows from investing activities:      
    Purchase of property and equipment   (76,188 )     (61,795 )
    Routejade acquisition, net of cash and restricted cash acquired   —       (9,968 )
    Purchases of investments   (31,812 )     (138,343 )
    Maturities of investments   106,621       67,150  
    Net cash used in investing activities   (1,379 )     (142,956 )
    Cash flows from financing activities:      
    Proceeds from issuance of common stocks, net of issuance costs   107,192       —  
    Proceeds from issuance of Convertible Senior Notes and loans   4,572       172,500  
    Repayment of debt   (209 )     (69 )
    Payments of debt issuance costs   —       (5,917 )
    Purchase of Capped Calls   —       (17,250 )
    Payroll tax payments for shares withheld upon vesting of RSUs   (7,079 )     (3,931 )
    Proceeds from the exercise of stock options and issuance of common stock under ATM, net of issuance costs   44,771       11,928  
    Proceeds from issuance of common stock under employee stock purchase plan   1,506       2,350  
    Repurchase of unvested restricted common stock   (4 )     (26 )
    Net cash provided by financing activities   150,749       159,585  
    Effect of exchange rate changes on cash, cash equivalents and restricted cash   (1,169 )     154  
    Change in cash, cash equivalents, and restricted cash   39,568       (87,853 )
    Cash and cash equivalents and restricted cash, beginning of period   235,123       322,976  
    Cash and cash equivalents, and restricted cash, end of period $ 274,691     $ 235,123  
           

    Net Loss Attributable to Enovix to Adjusted EBITDA Reconciliation

    While we prepare our consolidated financial statements in accordance with GAAP, we also utilize and present certain financial measures that are not based on GAAP. We refer to these financial measures as “non-GAAP” financial measures. In addition to our financial results determined in accordance with GAAP, we believe that EBITDA and Adjusted EBITDA are useful measures in evaluating its financial and operational performance distinct and apart from financing costs, certain non-cash expenses and non-operational expenses.

    These non-GAAP financial measures should be considered in addition to results prepared in accordance with GAAP but should not be considered a substitute for or superior to GAAP. We endeavor to compensate for the limitation of the non-GAAP financial measures presented by also providing the most directly comparable GAAP measures.

    We use non-GAAP financial information to evaluate our ongoing operations and for internal planning, budgeting and forecasting purposes. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors in assessing its operating performance and comparing its performance with competitors and other comparable companies. You should review the reconciliations below but not rely on any single financial measure to evaluate our business.

    “EBITDA” is defined as earnings (net loss) attributable to Enovix adjusted for interest expense, income tax benefit, depreciation and amortization expense. “Adjusted EBITDA” includes additional adjustments to EBITDA such as stock-based compensation expense, change in fair value of common stock warrants, inventory step-up, impairment of equipment and other special items as determined by management which it does not believe to be indicative of its underlying business trends.

    Below is a reconciliation of net loss attributable to Enovix on a GAAP basis to the non-GAAP EBITDA and Adjusted EBITDA financial measures for the periods presented below (in thousands):

      Quarters Ended   Fiscal Years Ended
      December 29,
    2024    		   December 31,
    2023    		   December 29,
    2024    		   December 31,
    2023
    Net loss attributable to Enovix $ (37,465 )   $ (59,977 )   $ (222,241 )   $ (214,071 )
    Interest expense   1,719       1,629       6,787       4,456  
    Income tax expense (benefit)   1,152       (633 )     (1,392 )     (633 )
    Depreciation and amortization   7,544       24,009       44,961       34,009  
    EBITDA   (27,050 )     (34,972 )     (171,885 )     (176,239 )
    Stock-based compensation expense (1)   10,207       11,620       57,621       69,093  
    Change in fair value of common stock warrants   5,115       (2,040 )     (12,244 )     (6,180 )
    Inventory step-up   —       2,206       1,907       2,206  
    Impairment of equipment   —       —       —       4,411  
    Restructuring cost (1)   —       —       41,807       3,021  
    Acquisition cost   —       158       —       1,273  
    Adjusted EBITDA $ (11,728 )   $ (23,028 )   $ (82,794 )   $ (102,415 )

    ________________________
    (1)    $1.2 million of stock-based compensation expense is included in the restructuring cost line of the table above for the fiscal year ended December 29, 2024. $0.4 million of stock-based compensation expense is included in the restructuring cost line of the table above for the fiscal year ended December 31, 2023.


    Free Cash Flow Reconciliation

    We define “Free Cash Flow” as (i) net cash from operating activities less (ii) capital expenditures, net of proceeds from disposals of property and equipment, all of which are derived from our Consolidated Statements of Cash Flow. The presentation of non-GAAP Free Cash Flow is not intended as an alternative measure of cash flows from operations, as determined in accordance with GAAP. We believe that this financial measure is useful to investors because it provides investors to view our performance using the same tool that we use to gauge our progress in achieving our goals and it is an indication of cash flow that may be available to fund investments in future growth initiatives. Below is a reconciliation of net cash used in operating activities to the Free Cash Flow financial measures for the periods presented below (in thousands):

      Fiscal Years
        2024       2023  
    Net cash used in operating activities $ (108,633 )   $ (104,636 )
    Capital expenditures   (76,188 )     (61,795 )
    Free Cash Flow $ (184,821 )   $ (166,431 )

    Other Non-GAAP Financial Measures Reconciliation
    (In Thousands, Except Share and per Share Amounts)

        Quarters Ended   Fiscal Years Ended
        December 29,
    2024    		   December 31,
    2023    		   December 29,
    2024    		   December 31,
    2023
    Revenue   $ 9,717     $ 7,381     $ 23,074     $ 7,644  
                     
    GAAP cost of revenue   $ 8,665     $ 19,769     $ 25,119     $ 63,061  
    Stock-based compensation expense     (124 )     (459 )     (320 )     (5,460 )
    Inventory step-up     —       (2,206 )     (1,907 )     (2,206 )
    Non-GAAP cost of revenue   $ 8,541     $ 17,104     $ 22,892     $ 55,395  
                     
    GAAP gross margin   $ 1,052     $ (12,388 )   $ (2,045 )   $ (55,417 )
    Stock-based compensation expense     124       459       320       5,460  
    Inventory step-up     —       2,206       1,907       2,206  
    Non-GAAP gross margin   $ 1,176     $ (9,723 )   $ 182     $ (47,751 )
                     
    GAAP research and development (R&D) expense   $ 22,433     $ 34,582     $ 124,506     $ 88,392  
    Stock-based compensation expense     (5,082 )     (5,337 )     (24,853 )     (27,409 )
    Amortization of intangible assets     (416 )     (277 )     (1,664 )     (277 )
    Non-GAAP R&D expense   $ 16,935     $ 28,968     $ 97,989     $ 60,706  
                     
    GAAP selling, general and administrative (SG&A) expense   $ 13,135     $ 17,807     $ 74,311     $ 79,014  
    Stock-based compensation expense     (5,001 )     (5,824 )     (32,448 )     (36,224 )
    Amortization of intangible assets     (773 )     (536 )     (3,077 )     (536 )
    Acquisition cost     —       (158 )     —       (1,273 )
    Non-GAAP SG&A expense   $ 7,361     $ 11,289     $ 38,786     $ 40,981  
                     
    GAAP operating expenses   $ 35,568     $ 52,389     $ 240,624     $ 174,838  
    Stock-based compensation expense included in R&D expense     (5,082 )     (5,337 )     (24,853 )     (27,409 )
    Stock-based compensation expense included in SG&A expense     (5,001 )     (5,824 )     (32,448 )     (36,224 )
    Amortization of intangible assets     (1,189 )     (813 )     (4,741 )     (813 )
    Impairment of equipment     —       —       —       (4,411 )
    Restructuring cost (1)     —       —       (41,807 )     (3,021 )
    Acquisition cost     —       (158 )     —       (1,273 )
    Non-GAAP operating expenses   $ 24,296     $ 40,257     $ 136,775     $ 101,687  

    ________________________
    (1)    $1.2 million of stock-based compensation expense is included in the restructuring cost line of the table above for the fiscal year ended December 29, 2024. $0.4 million of stock-based compensation expense is included in the restructuring cost line of the table above for the fiscal year ended December 31, 2023.

        Quarters Ended   Fiscal Years Ended
        December 29,
    2024    		   December 31,
    2023    		   December 29,
    2024    		   December 31,
    2023
    GAAP loss from operations   $ (34,516 )   $ (64,777 )   $ (242,669 )   $ (230,255 )
    Stock-based compensation expense (1)     10,207       11,620       57,621       69,093  
    Amortization of intangible assets     1,189       813       4,741       813  
    Inventory step-up     —       2,206       1,907       2,206  
    Impairment of equipment     —       —       —       4,411  
    Restructuring cost (1)     —       —       41,807       3,021  
    Acquisition cost     —       158       —       1,273  
    Non-GAAP loss from operations   $ (23,120 )   $ (49,980 )   $ (136,593 )   $ (149,438 )
                     
    GAAP net loss attributable to Enovix   $ (37,465 )   $ (59,977 )   $ (222,241 )   $ (214,071 )
    Stock-based compensation expense (1)     10,207       11,620       57,621       69,093  
    Change in fair value of common stock warrants     5,115       (2,040 )     (12,244 )     (6,180 )
    Inventory step-up     —       2,206       1,907       2,206  
    Amortization of intangible assets     1,189       813       4,741       813  
    Impairment of equipment     —       —       —       4,411  
    Restructuring cost (1)     —       —       41,807       3,021  
    Acquisition cost     —       158       —       1,273  
    Non-GAAP net loss attributable to Enovix shareholders   $ (20,954 )   $ (47,220 )   $ (128,409 )   $ (139,434 )
                     
    GAAP net loss per share attributable to Enovix, basic   $ (0.20 )   $ (0.36 )   $ (1.27 )   $ (1.35 )
    GAAP weighted average number of common shares outstanding, basic     184,971,942       165,708,522       175,038,107       159,065,697  
                     
    GAAP net loss per share attributable to Enovix, diluted   $ (0.20 )   $ (0.36 )   $ (1.27 )   $ (1.38 )
    GAAP weighted average number of common shares outstanding, diluted     184,971,942       165,708,522       175,038,107       159,575,555  
                     
    Non-GAAP net loss per share attributable to Enovix, basic   $ (0.11 )   $ (0.28 )   $ (0.73 )   $ (0.88 )
    GAAP weighted average number of common shares outstanding, basic     184,971,942       165,708,522       175,038,107       159,065,697  
                     
    Non-GAAP net loss per share attributable to Enovix, diluted   $ (0.11 )   $ (0.28 )   $ (0.73 )   $ (0.87 )
    GAAP weighted average number of common shares outstanding, diluted     184,971,942       165,708,522       175,038,107       159,575,555  

    ________________________
    (1)    $1.2 million of stock-based compensation expense is included in the restructuring cost line of the table above for the fiscal year ended December 29, 2024. $0.4 million of stock-based compensation expense is included in the restructuring cost line of the table above for the fiscal year ended December 31, 2023.

    The MIL Network –

    February 20, 2025

  • MIL-OSI: TeraWulf Schedules Conference Call for Fourth Quarter and Year End 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    EASTON, Md., Feb. 19, 2025 (GLOBE NEWSWIRE) — TeraWulf Inc. (Nasdaq: WULF) (“TeraWulf” or the “Company”), a leading owner and operator of vertically integrated, next-generation digital infrastructure powered by predominantly zero-carbon energy, today announced that it will hold its earnings conference call and webcast for the fourth quarter ended December 31, 2024 on Friday, February 28, 2025 at 8:00 a.m. Eastern Time.

    A press release detailing these results will be issued prior to the call on the same day.

    Conference Call Information

    To participate in this event, please log on or dial in approximately 5 minutes before the beginning of the call.

    Date: February 28, 2025
    Time: 8:00 a.m. ET
    Access ID: 13751951
    Webcast: https://viavid.webcasts.com/starthere.jsp?ei=1709303&tp_key=90f2b11735 
    Dial in: 1-877-407-0789 or 1-201-689-8562 
    Call me™: https://callme.viavid.com/viavid/?callme=true&passcode=13748140&h=true&info=company&r=true&B=6

    Participants can use the dial-in numbers listed above or click the Call me™ link for instant telephone access to the event. The Call me™ link will be available 15 minutes prior to the scheduled start time.

    Replay Information

    Dial-In: (844) 512-2921 or (412) 317-6671
    Replay Expiration: Friday, March 14, 2025 at 11:59 PM ET
    Access ID: 13751951

    About TeraWulf

    TeraWulf develops, owns, and operates environmentally sustainable, next-generation data center infrastructure in the United States, specifically designed for Bitcoin mining and high-performance computing. Led by a team of seasoned energy entrepreneurs, the Company owns and operates the Lake Mariner facility situated on the expansive site of a now retired coal plant in Western New York. Currently, TeraWulf generates revenue primarily through Bitcoin mining, leveraging predominantly zero-carbon energy sources, including nuclear and hydroelectric power. Committed to environmental, social, and governance (ESG) principles that align with its business objectives, TeraWulf aims to deliver industry-leading economics in mining and data center operations at an industrial scale.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. Such forward-looking statements include statements concerning anticipated future events and expectations that are not historical facts. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. In addition, forward-looking statements are typically identified by words such as “plan,” “believe,” “goal,” “target,” “aim,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, although the absence of these words or expressions does not mean that a statement is not forward-looking. Forward-looking statements are based on the current expectations and beliefs of TeraWulf’s management and are inherently subject to a number of factors, risks, uncertainties and assumptions and their potential effects. There can be no assurance that future developments will be those that have been anticipated. Actual results may vary materially from those expressed or implied by forward-looking statements based on a number of factors, risks, uncertainties and assumptions, including, among others: (1) conditions in the cryptocurrency mining industry, including fluctuation in the market pricing of bitcoin and other cryptocurrencies, and the economics of cryptocurrency mining, including as to variables or factors affecting the cost, efficiency and profitability of cryptocurrency mining; (2) competition among the various providers of cryptocurrency mining services; (3) changes in applicable laws, regulations and/or permits affecting TeraWulf’s operations or the industries in which it operates, including regulation regarding power generation, cryptocurrency usage and/or cryptocurrency mining, and/or regulation regarding safety, health, environmental and other matters, which could require significant expenditures; (4) the ability to implement certain business objectives and to timely and cost-effectively execute integrated projects; (5) failure to obtain adequate financing on a timely basis and/or on acceptable terms with regard to growth strategies or operations; (6) loss of public confidence in bitcoin or other cryptocurrencies and the potential for cryptocurrency market manipulation; (7) adverse geopolitical or economic conditions, including a high inflationary environment; (8) the potential of cybercrime, money-laundering, malware infections and phishing and/or loss and interference as a result of equipment malfunction or break-down, physical disaster, data security breach, computer malfunction or sabotage (and the costs associated with any of the foregoing); (9) the availability, delivery schedule and cost of equipment necessary to maintain and grow the business and operations of TeraWulf, including mining equipment and infrastructure equipment meeting the technical or other specifications required to achieve its growth strategy; (10) employment workforce factors, including the loss of key employees; (11) litigation relating to TeraWulf and/or its business; and (12) other risks and uncertainties detailed from time to time in the Company’s filings with the Securities and Exchange Commission (“SEC”). Potential investors, stockholders and other readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date on which they were made. TeraWulf does not assume any obligation to publicly update any forward-looking statement after it was made, whether as a result of new information, future events or otherwise, except as required by law or regulation. Investors are referred to the full discussion of risks and uncertainties associated with forward-looking statements and the discussion of risk factors contained in the Company’s filings with the SEC, which are available at www.sec.gov.

    Investors:
    Investors@terawulf.com

    Media:
    media@terawulf.com

    The MIL Network –

    February 20, 2025

  • MIL-OSI: Highlander Silver Announces $25 Million Bought Deal Private Placement of Common Shares

    Source: GlobeNewswire (MIL-OSI)

    NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR FOR RELEASE, PUBLICATION, DISTRIBUTION OR DISSEMINATION DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, IN OR INTO THE UNITED STATES.

    TORONTO, Feb. 19, 2025 (GLOBE NEWSWIRE) — Highlander Silver Corp. (CSE: HSLV; “Highlander Silver” or the “Company”) is pleased to announce that it has entered into an agreement with Ventum Financial Corp. as lead underwriter and sole bookrunner on behalf of a syndicate of underwriters (collectively, the “Underwriters”), pursuant to which the Underwriters have agreed to purchase, on a bought deal private placement basis, 17,857,200 common shares (the “Shares”) of the Company at a price of $1.40 per Share for aggregate gross proceeds of $25,000,080 (the “Offering”), excluding additional proceeds raised from the exercise of the Underwriters’ Option (defined below).

    Certain members of the Board and management of Highlander Silver and members of the Lundin family have indicated their interest in participating in the Offering.

    The Company intends to use the net proceeds from the Offering to fund the advancement of exploration activities at the Company’s San Luis gold-silver project in Peru, as well as for working capital and general corporate purposes.

    The Company has agreed to grant the Underwriters an option (the “Underwriters’ Option”) which will allow the Underwriters to purchase up to an additional 15% of the Shares, on the same terms as the Offering. The Underwriters’ Option may be exercised in whole or in part up to 48 hours prior to the Closing Date (as defined below).

    The Offering is scheduled to close on March 11, 2025 (the “Closing Date”), or such other date as the Company and the Underwriters may agree and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals, including the approval of the Canadian Securities Exchange.

    The Shares (including any Shares issued pursuant to the Underwriters’ Option) will be offered on a private placement basis pursuant to exemptions from prospectus requirements under applicable securities laws, in all provinces of Canada, except Québec, and will be subject to a statutory hold period of four months and one day from the Closing Date.

    This news release does not constitute an offer to sell or a solicitation of an offer to sell any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) or any state securities laws and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

    All currency references herein are to Canadian dollar unless otherwise stated.

    About Highlander Silver

    Highlander Silver is advancing a portfolio of silver exploration and development assets in the Americas, including the bonanza grade San Luis gold-silver project that is located adjacent to the Pierina mine in Central Peru. Highlander Silver is backed by the Augusta Group, which boasts an exceptional track record of value creation totaling over $4.5B in exit transactions, and supported by strategic shareholders, the Lundin Family and Eric Sprott. The Company is listed on the Canadian Securities Exchange (“CSE”) under the ticker symbol HSLV. Additional information about Highlander Silver and its mineral projects can be viewed on the Company’s SEDAR+ profile at (www.sedarplus.ca) and its website at www.highlandersilver.com.

    Neither the CSE nor the Canadian Investment Regulatory Organization accepts responsibility for the adequacy or accuracy of this news release.

    For further information, please contact:

    Arun Lamba, Vice President Corporate Development

    Email: alamba@highlandersilver.com

    Cautionary Notes and Forward-looking Statements

    Certain information contained in this news release constitutes “forward-looking information” under Canadian securities legislation. This includes, but is not limited to, information or statements with respect to the Offering, including statements with respect to the completion of the Offering and the anticipated closing date thereof; the expected receipt of regulatory and other approvals relating to the Offering; participants in the Offering; the expected proceeds of the Offering and the anticipated use of the net proceeds therefrom; the future exploration plans of the Company, timing of future exploration, anticipated results of exploration and potential mineralization of the Company’s mineral projects. Such forward looking information or statements can be identified by the use of words such as “believes”, “plans”, “suggests”, “targets” or “prospects” or variations (including negative variations) of such words and phrases, or state that certain actions, events or results “will” be taken, occur, or be achieved. Forward-looking information involves known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of the Company and/or its subsidiaries to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking information. Such factors include, among others, general business, economic, competitive, political and social uncertainties, the actual results of current exploration activities, changes in project parameters as plans continue to be refined, future prices of precious and base metals, accident, labour disputes and other risks of the mining industry, and delays in obtaining governmental approvals or financing. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking information, there may be other factors that could cause actions, events or results to differ from those anticipated, estimated or intended. Forward-looking information contained herein are made as of the date of this news release. There can be no assurance that forward-looking information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking information if circumstances or management’s estimates or opinions should change, except as required by applicable securities laws. Accordingly, the reader is cautioned not to place undue reliance on forward-looking information.

    The MIL Network –

    February 20, 2025

  • MIL-OSI: Tenaris Announces 2024 Fourth Quarter and Annual Results

    Source: GlobeNewswire (MIL-OSI)

    The financial and operational information contained in this press release is based on audited consolidated financial statements presented in U.S. dollars and prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board and adopted by the European Union, or IFRS. Additionally, this press release includes non-IFRS alternative performance measures i.e., EBITDA, Free Cash Flow, Net cash / debt and Operating working capital days. See exhibit I for more details on these alternative performance measures.

    LUXEMBOURG, Feb. 19, 2025 (GLOBE NEWSWIRE) — Tenaris S.A. (NYSE and Mexico: TS and EXM Italy: TEN) (“Tenaris”) today announced its results for the fourth quarter and year ended December 31, 2024 in comparison with its results for the fourth quarter and year ended December 31, 2023.

    Summary of 2024 Fourth Quarter Results

    (Comparison with third quarter of 2024 and fourth quarter of 2023)

      4Q 2024 3Q 2024 4Q 2023
    Net sales ($ million) 2,845 2,915 (2%) 3,415 (17%)
    Operating income ($ million) 558 537 4% 819 (32%)
    Net income ($ million) 519 459 13% 1,146 (55%)
    Shareholders’ net income ($ million) 516 448 15% 1,129 (54%)
    Earnings per ADS ($) 0.94 0.81 16% 1.92 (51%)
    Earnings per share ($) 0.47 0.40 16% 0.96 (51%)
    EBITDA* ($ million) 726 688 6% 975 (26%)
    EBITDA margin (% of net sales) 25.5% 23.6%   28.6%  
               

    *EBITDA in fourth quarter of 2024 includes a $67 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas. If this charge was not included EBITDA would have amounted to $659 million, or 23.2% of sales

    Net sales in the fourth quarter were more resilient than expected as we were able to reduce inventories and advance some shipments in the Middle East and Turkey, despite lower demand in Mexico, Argentina and Saudi Arabia. Our EBITDA declined 4% on a comparable basis with the margin supported by a favorable product mix which offset the effect of residual price declines in North America. Net income increased due to the partial reversal of the provision made in the second quarter for the ongoing litigation related to the acquisition of a participation in Usiminas jointly with our associate company, Ternium.

    During the quarter, our free cash flow amounted to $310 million and, after spending $299 million on dividends and $454 million on share buybacks, our net cash position declined to $3.6 billion at December 31, 2024.

    Summary of 2024 Annual Results

      12M 2024 12M 2023 Increase/(Decrease)
    Net sales ($ million) 12,524 14,869 (16%)
    Operating income ($ million) 2,419 4,316 (44%)
    Net income ($ million) 2,077 3,958 (48%)
    Shareholders’ net income ($ million) 2,036 3,918 (48%)
    Earnings per ADS ($) 3.61 6.65 (46%)
    Earnings per share ($) 1.81 3.32 (45%)
    EBITDA* ($ million) 3,052 4,865 (37%)
    EBITDA margin (% of net sales) 24.4% 32.7%  
           

    *EBITDA in 12M 2024 includes a $107 million loss from the provision for the ongoing litigation related to the acquisition of a participation in Usiminas. If this charge was not included EBITDA would have amounted to $3,159 million, or 25.2% of sales.

    Our sales in 2024 amounted to $12.5 billion with a decrease of 16% compared to 2023, primarily reflecting a decline in market prices for our tubular products used in onshore drilling applications in the Americas, lower drilling activity in Mexico and Colombia, lower shipments for pipeline projects in Argentina and lower sales of mechanical pipes in Europe. On the other hand, sales in the Middle East reached a record level as Saudi Aramco replenished OCTG stocks and increased gas drilling activity. EBITDA and margins also declined to $3.1 billion, being further affected by a $107 million loss from a provision for the ongoing litigation related to the acquisition of a participation in Usiminas. Net income amounted to $2.1 billion, or 17% of net sales, and was affected by a reduction of $43 million from our participation in Ternium related to the same case.

    Cash flow provided by operating activities amounted to $2.9 billion during 2024. This was used to fund capital expenditures of $694 million, with the remainder distributed to shareholders through dividend payments of $758 million and share buybacks for $1,440 million in the year. We maintained a net cash position of $3.6 billion at the end of December 2024.

    Change of Chief Financial Officer

    Effective as of May 2, 2025, Mr. Carlos Gomez Alzaga will assume the position of Chief Financial Officer, replacing Ms. Alicia Mondolo, who will retire from this role.

    Mr. Gomez Alzaga, who has more than 20 years of experience in Administration and Finance at Tenaris, previously served as Regional CFO for Mexico and Central America, and Economic and Financial Planning Director, among other positions, and currently holds the position of Regional CFO for Argentina and South America.

    Ms. Mondolo will continue to serve as senior advisor to our Chairman and CEO.

    Paolo Rocca and the Board of Tenaris would like to express their gratitude and appreciation for Alicia´s contribution as CFO of Tenaris and her 41 years of service within the Techint Group.

    Market Background and Outlook

    Oil prices remain relatively stable (as they have done over the past two years) with OPEC+ maintaining their voluntary production cuts in the face of limited global demand growth. European and US natural gas prices have, however, risen as relatively cold winter weather and the cutoff of Russian supply have led to a rapid drawdown in inventories.

    These prices and the continuing balance between oil and gas demand and supply should continue to support overall investment in oil and gas drilling activity, as well as OCTG demand, at current levels, albeit with some regional nuances.

    In North America, consolidation among major operators and drilling efficiencies led to a drop in US drilling activity last year, which has now stabilized, while OCTG consumption per rig has been increasing. In Latin America, drilling activity is increasing in Argentina, as investment in pipeline and LNG infrastructure investment for the Vaca Muerta shale moves forward, while, in Mexico, it has been affected by financial constraints on Pemex. In the Middle East, some reduction in oil drilling has taken place in Saudi Arabia while gas drilling has risen, and, in Abu Dhabi, oil drilling is increasing.

    OCTG reference prices in North America, which fell steadily for two years until the second half of 2024, have so far recovered by 9% from their August low and could rise further following the US government’s announced reset of Section 232 tariffs on all imports of steel products without exception.

    In this environment, we expect our sales and EBITDA (excluding extraordinary effects) in the first quarter to be in line with the previous one before rising moderately in the second quarter. Beyond that, likely changes in US tariffs and their possible ramifications on trade flows will introduce a new dynamic with a high level of uncertainty for costs and prices to our results.

    Annual Dividend Proposal

    Upon approval of the Company´s annual accounts in April 2025, the board of directors intends to propose, for approval of the annual general shareholders’ meeting to be held on May 6, 2025, the payment of a dividend per share of $0.83 (in an aggregate amount of approximately $0.9 billion), which would include the interim dividend per share of $0.27 (approximately $0.3 billion) paid in November 2024. If the annual dividend is approved by the shareholders, a dividend of $0.56 per share ($1.12 per ADS), or approximately $0.6 billion, will be paid according to the following timetable:

    • Payment date: May 21, 2025
    • Record date: May 20, 2025
    • Ex-dividend for securities listed in Europe and Mexico: May 19, 2025
    • Ex-dividend for securities listed in the United States: May 20, 2025

    Analysis of 2024 Fourth Quarter Results

    Tubes

    The following table indicates, for our Tubes business segment, sales volumes of seamless and welded pipes for the periods indicated below:

    Tubes Sales volume (thousand metric tons) 4Q 2024 3Q 2024
    		 4Q 2023
    Seamless 748 746 0% 760 (2%)
    Welded 164 191 (14%) 246 (33%)
    Total 913 937 (3%) 1,006 (9%)
               

    The following table indicates, for our Tubes business segment, net sales by geographic region, operating income and operating income as a percentage of net sales for the periods indicated below:

    Tubes 4Q 2024 3Q 2024 4Q 2023
    (Net sales – $ million)          
    North America 1,131 1,273 (11%) 1,501 (25%)
    South America 595 484 23% 590 1%
    Europe 341 280 22% 302 13%
    Asia Pacific, Middle East and Africa 629 754 (17%) 805 (22%)
    Total net sales ($ million) 2,695 2,790 (3%) 3,198 (16%)
    Services performed on third party tubes ($ million) 93 97 (4%) 34 176%
    Operating income ($ million) 533 527 1% 780 (32%)
    Operating margin (% of sales) 19.8% 18.9%   24.4%  
               

    Net sales of tubular products and services decreased 3% sequentially and 16% year on year. Sequentially volumes sold decreased 3% while average selling prices decreased less than 1% as a favorable product mix offset price declines in North America. Sequentially, in North America sales declined due to lower prices throughout the region and lower activity in Mexico. In South America sales increased as higher sales in Brazil with shipments to the Raia pipeline and a recovery of OCTG offset lower sales for pipelines and the industrial market in Argentina. In Europe sales increased due to shipments to the Sakarya offshore line pipe project and higher sales of OCTG in Turkey. In Asia Pacific, Middle East and Africa sales declined due to lower sales in Saudi Arabia upon completion of inventory replenishment program and lower activity, partially offset by an increase in sales to the UAE.

    Operating results from tubular products and services amounted to a gain of $533 million in the fourth quarter of 2024 compared to a gain of $527 million in the previous quarter and a gain of $780 million in the fourth quarter of 2023. This quarter’s operating income includes a $67 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas. Excluding this gain Tubes operating income would have amounted to $467 million (17.3% of sales) in the fourth quarter, a 12% sequential reduction following the decline in sales and margins. Margins declined due to the decline in prices and a more costly product mix.

    Others

    The following table indicates, for our Others business segment, net sales, operating income and operating income as a percentage of net sales for the periods indicated below:

    Others 4Q 2024 3Q 2024 4Q 2023
    Net sales ($ million) 150 125 20% 217 (31%)
    Operating income ($ million) 25 10 156% 39 (36%)
    Operating margin (% of sales) 16.8% 7.9%   18.1%  
               

    Net sales of other products and services increased 20% sequentially and decreased 31% year on year. Sequentially, sales increased mainly due to higher sales of oil services in Argentina and coiled tubing.

    Selling, general and administrative expenses, or SG&A, amounted to $446 million, or 15.7% of net sales, in the fourth quarter of 2024, compared to $454 million, 15.6% in the previous quarter and $471 million, 13.8% in the fourth quarter of 2023. Sequentially, the decline in SG&A is mainly due to lower shipment costs due to a reduction in volumes shipped.

    Other operating results amounted to a net gain of $81 million in the fourth quarter of 2024, compared to a gain of $11 million in the previous quarter and a $5 million loss in the fourth quarter of 2023. The fourth quarter of 2024 includes a $67 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas.

    Financial results amounted to a gain of $48 million in the fourth quarter of 2024, compared to a gain of $48 million in the previous quarter and a gain of $93 million in the fourth quarter of 2023. Financial result of the quarter is mainly attributable to a $42 million net finance income from the net return of our portfolio investments.

    Equity in earnings of non-consolidated companies generated a gain of $35 million in the fourth quarter of 2024, compared to a gain of $8 million in the previous quarter and a gain of $57 million in the fourth quarter of 2023. These results are mainly derived from our participation in Ternium (NYSE:TX). During the fourth quarter of 2024 the result from Ternium´s investment includes a $43 million gain from the partial reversal of a provision for the ongoing litigation related to the acquisition of a participation in Usiminas.

    Income tax charge amounted to $123 million in the fourth quarter of 2024, compared to $134 million in the previous quarter and $177 million in the fourth quarter of 2023.

    Cash Flow and Liquidity of 2024 Fourth Quarter

    Net cash generated by operating activities during the fourth quarter of 2024 was $492 million, compared to $552 million in the previous quarter and $0.8 billion in the fourth quarter of 2023. During the fourth quarter of 2024 cash generated by operating activities includes a net working capital increase of $37 million.

    With capital expenditures of $182 million, our free cash flow amounted to $310 million during the quarter. Following a dividend payment of $299 million and share buybacks of $454 million in the quarter, our net cash position amounted to $3.6 billion at December 31, 2024.

    Analysis of 2024 Annual Results

    The following table shows our net sales by business segment for the periods indicated below:

    Net sales ($ million) 12M 2024
    		 12M 2023
    		 Increase/(Decrease)
    Tubes 11,907 95% 14,185 95% (16%)
    Others 617 5% 684 5% (10%)
    Total 12,524   14,869   (16%)
               

    Tubes

    The following table indicates, for our Tubes business segment, sales volumes of seamless and welded pipes for the periods indicated below:

    Tubes Sales volume (thousand metric tons) 12M 2024 12M 2023 Increase/(Decrease)
    Seamless 3,077 3,189 (4%)
    Welded 852 953 (11%)
    Total 3,928 4,141 (5%)
           

    The following table indicates, for our Tubes business segment, net sales by geographic region, operating income and operating income as a percentage of net sales for the periods indicated below:

    Tubes 12M 2024 12M 2023 Increase/(Decrease)
    (Net sales – $ million)      
    North America 5,432 7,572 (28%)
    South America 2,294 3,067 (25%)
    Europe 1,143 1,055 8%
    Asia Pacific, Middle East and Africa 3,038 2,491 22%
    Total net sales ($ million) 11,907 14,185 (16%)
    Services performed on third party tubes ($ million) 484 165 193%
    Operating income ($ million) 2,305 4,183 (45%)
    Operating margin (% of sales) 19.4% 29.5%  
           

    Net sales of tubular products and services decreased 16% to $11,907 million in 2024, compared to $14,185 million in 2023 due to a 5% decrease in volumes and a 12% decrease in average selling prices, primarily reflecting a decline in market prices for our tubular products used in onshore drilling applications in the Americas, lower drilling activity in Mexico and Colombia, lower shipments for pipeline projects in Argentina and lower sales of mechanical pipes in Europe. On the other hand, sales in the Middle East reached a record level as Saudi Aramco replenished OCTG stocks and increased gas drilling activity.

    Operating results from tubular products and services amounted to a gain of $2,305 million in 2024 compared to a gain of $4,183 million in 2023. The decline in operating results is mainly due to the decline in average selling prices and the corresponding impact on sales and margins. Additionally, in 2024 our Tubes operating income includes a charge of $107 million from the provision for the ongoing litigation related to the acquisition of a participation in Usiminas, included in other operating expenses.

    Others

    The following table indicates, for our Others business segment, net sales, operating income and operating income as a percentage of net sales for the periods indicated below:

    Others 12M 2024 12M 2023 Increase/(Decrease)
    Net sales ($ million) 617 684 (10%)
    Operating income ($ million) 113 133 (15%)
    Operating margin (% of sales) 18.4% 19.5%  
           

    Net sales of other products and services decreased 10% to $617 million in 2024, compared to $684 million in 2023.

    Operating results from other products and services amounted to a gain of $113 million in 2024, compared to a gain of $133 million in 2023.

    Selling, general and administrative expenses, or SG&A, amounted to $1,905 million in 2024, representing 15.2% of sales, and $1,919 million in 2023, representing 12.9% of sales. SG&A expenses increased as a percentage of sales due to the 16% decline in revenues, mainly due to lower Tubes average selling prices and an increase of fixed costs.

    Other operating results amounted to a loss of $65 million in 2024, compared to a gain of $36 million in 2023. In 2024 we recorded a $107 million loss from provision for the ongoing litigation related to the acquisition of a participation in Usiminas. In 2023 other operating income includes a non-recurring gain of $33 million corresponding to the transfer of the awards related to the Company’s Venezuelan nationalized assets.

    Financial results amounted to a gain of $129 million in 2024, compared to a gain of $221 million in 2023. While net finance income increased due to a higher net financial position, net foreign exchange results decreased significantly in respect to the previous year.

    Equity in earnings of non-consolidated companies generated a gain of $9 million in 2024, compared to a gain of $95 million in 2023. These results were mainly derived from our equity investment in Ternium (NYSE:TX) and in 2024 were negatively affected by a $43 million loss from the provision for the ongoing litigation related to the acquisition of a participation in Usiminas on our Ternium investment.

    Income tax amounted to a charge of $480 million in 2024, compared to $675 million in 2023. The lower income tax charge mainly reflects the reduction in results at several subsidiaries.

    Cash Flow and Liquidity of 2024

    Net cash provided by operating activities in 2024 amounted to $2.9 billion (including a reduction in working capital of $287 million), compared to cash provided by operations of $4.4 billion (including a reduction in working capital of $182 million) in 2023.

    Capital expenditures amounted to $694 million in 2024, compared to $619 million in 2023. Free cash flow amounted to $2.2 billion in 2024, compared to $3.8 billion in 2023.

    Following dividend payments of $758 million and share buybacks of $1.4 billion during 2024, our net cash position amounted to $3.6 billion at December 31, 2024.

    Conference call

    Tenaris will hold a conference call to discuss the above reported results, on February 20, 2025, at 08:00 a.m. (Eastern Time). Following a brief summary, the conference call will be opened to questions.

    To listen to the conference please join through one of the following options:
    ir.tenaris.com/events-and-presentations or
    https://edge.media-server.com/mmc/p/p836i5mj 

    If you wish to participate in the Q&A session please register at the following link:

    https://register.vevent.com/register/BIb7ae4609ff564d95a338d90813a3c8cc 

    Please connect 10 minutes before the scheduled start time.

    A replay of the conference call will also be available on our webpage at: ir.tenaris.com/events-and-presentations

    Some of the statements contained in this press release are “forward-looking statements”. Forward-looking statements are based on management’s current views and assumptions and involve known and unknown risks that could cause actual results, performance or events to differ materially from those expressed or implied by those statements. These risks include but are not limited to risks arising from uncertainties as to future oil and gas prices and their impact on investment programs by oil and gas companies.

    Consolidated Income Statement

    (all amounts in thousands of U.S. dollars) Three-month period ended
    December 31,    		 Twelve-month period ended
    December 31,
      2024 2023 2024 2023
             
    Net sales 2,845,226 3,414,930 12,523,934 14,868,860
    Cost of sales (1,922,263) (2,120,591) (8,135,489) (8,668,915)
    Gross profit 922,963 1,294,339 4,388,445 6,199,945
    Selling, general and administrative expenses (445,988) (470,542) (1,904,828) (1,919,307)
    Other operating income 18,483 1,468 60,650 53,043
    Other operating expenses 62,919 (6,302) (125,418) (17,273)
    Operating income 558,377 818,963 2,418,849 4,316,408
    Finance income 51,331 63,621 242,319 213,474
    Finance cost (8,928) (19,759) (61,212) (106,862)
    Other financial results 5,777 49,249 (52,051) 114,365
    Income before equity in earnings of non-consolidated companies and income tax 606,557 912,074 2,547,905 4,537,385
    Equity in earnings of non-consolidated companies 35,283 56,859 8,548 95,404
    Income before income tax 641,840 968,933 2,556,453 4,632,789
    Income tax (122,709) 176,848 (479,680) (674,956)
    Income for the period 519,131 1,145,781 2,076,773 3,957,833
             
    Attributable to:        
    Shareholders’ equity 516,213 1,129,098 2,036,445 3,918,065
    Non-controlling interests 2,918 16,683 40,328 39,768
      519,131 1,145,781 2,076,773 3,957,833
             

    Consolidated Statement of Financial Position

    (all amounts in thousands of U.S. dollars) At December 31, 2024   At December 31, 2023
             
    ASSETS          
    Non-current assets          
    Property, plant and equipment, net 6,121,471     6,078,179  
    Intangible assets, net 1,357,749     1,377,110  
    Right-of-use assets, net 148,868     132,138  
    Investments in non-consolidated companies 1,543,657     1,608,804  
    Other investments 1,005,300     405,631  
    Deferred tax assets 831,298     789,615  
    Receivables, net 205,602 11,213,945   185,959 10,577,436
    Current assets          
    Inventories, net 3,709,942     3,921,097  
    Receivables and prepayments, net 179,614     181,368  
    Current tax assets 332,621     256,401  
    Contract assets 50,757     47,451  
    Trade receivables, net 1,907,507     2,480,889  
    Derivative financial instruments 7,484     9,801  
    Other investments 2,372,999     1,969,631  
    Cash and cash equivalents 675,256 9,236,180   1,637,821 10,504,459
    Total assets   20,450,125     21,081,895
    EQUITY          
    Shareholders’ equity   16,593,257     16,842,972
    Non-controlling interests   220,578     187,465
    Total equity   16,813,835     17,030,437
    LIABILITIES          
    Non-current liabilities          
    Borrowings 11,399     48,304  
    Lease liabilities 100,436     96,598  
    Derivative financial instruments –     255  
    Deferred tax liabilities 503,941     631,605  
    Other liabilities 301,751     271,268  
    Provisions 82,106 999,633   101,453 1,149,483
    Current liabilities          
    Borrowings 425,999     535,133  
    Lease liabilities 44,490     37,835  
    Derivative financial instruments 8,300     10,895  
    Current tax liabilities 366,292     488,277  
    Other liabilities 585,775     422,645  
    Provisions 119,344     35,959  
    Customer advances 206,196     263,664  
    Trade payables 880,261 2,636,657   1,107,567 2,901,975
    Total liabilities   3,636,290     4,051,458
    Total equity and liabilities   20,450,125     21,081,895
               

    Consolidated Statement of Cash Flows

      Three-month period ended
    December 31,    		 Twelve-month period ended
    December 31,
    (all amounts in thousands of U.S. dollars) 2024 2023 2024 2023
             
    Cash flows from operating activities        
    Income for the period 519,131 1,145,781 2,076,773 3,957,833
    Adjustments for:        
    Depreciation and amortization 167,781 156,347 632,854 548,510
    Bargain purchase gain – – (2,211) (3,162)
    Income tax accruals less payments (160) (277,559) (222,510) (143,391)
    Equity in earnings of non-consolidated companies (35,283) (56,859) (8,548) (95,404)
    Interest accruals less payments, net 7,246 (8,554) (1,067) (53,480)
    Provision for the ongoing litigation related to the acquisition of participation in Usiminas (87,975) – 89,371 –
    Changes in provisions (19,808) (651) (25,155) 21,284
    Reclassification of currency translation adjustment reserve – (878) – (878)
    Changes in working capital (36,604) (65,697) 286,917 182,428
    Others, including net foreign exchange differences (22,100) (56,195) 39,794 (18,667)
    Net cash provided by operating activities 492,228 835,735 2,866,218 4,395,073
             
    Cash flows from investing activities        
    Capital expenditures (181,870) (166,820) (693,956) (619,445)
    Changes in advance to suppliers of property, plant and equipment 5,092 834 (10,391) 1,736
    Acquisition of subsidiaries, net of cash acquired – (161,238) 31,446 (265,657)
    Other investments at fair value – (1,126) – (1,126)
    Additions to associated companies – – – (22,661)
    Loan to joint ventures (1,414) (1,092) (5,551) (3,754)
    Proceeds from disposal of property, plant and equipment and intangible assets 9,646 3,858 28,963 12,881
    Dividends received from non-consolidated companies 20,674 25,268 73,810 68,781
    Changes in investments in securities 458,407 740,153 (821,478) (1,857,272)
    Net cash provided by (used in) investing activities 310,535 439,837 (1,397,157) (2,686,517)
             
    Cash flows from financing activities        
    Dividends paid (299,230) (235,128) (757,786) (636,511)
    Dividends paid to non-controlling interest in subsidiaries – – (5,862) (18,967)
    Changes in non-controlling interests 28 – 1,143 3,772
    Acquisition of treasury shares (454,462) (213,739) (1,439,589) (213,739)
    Payments of lease liabilities (17,248) (15,524) (68,574) (51,492)
    Proceeds from borrowings 344,222 365,455 1,870,666 1,723,677
    Repayments of borrowings (382,656) (406,774) (1,999,427) (1,931,747)
    Net cash used in financing activities (809,346) (505,711) (2,399,429) (1,125,007)
             
    (Decrease) increase in cash and cash equivalents (6,583) 769,861 (930,368) 583,549
             
    Movement in cash and cash equivalents        
    At the beginning of the year 681,306 864,012 1,616,597 1,091,433
    Effect of exchange rate changes (13,925) (17,276) (25,431) (58,385)
    (Decrease) increase in cash and cash equivalents (6,583) 769,861 (930,368) 583,549
    At December 31, 660,798 1,616,597 660,798 1,616,597
             

    Exhibit I – Alternative performance measures

    Alternative performance measures should be considered in addition to, not as substitute for or superior to, other measures of financial performance prepared in accordance with IFRS.

    EBITDA, Earnings before interest, tax, depreciation and amortization.

    EBITDA provides an analysis of the operating results excluding depreciation and amortization and impairments, as they are recurring non-cash variables which can vary substantially from company to company depending on accounting policies and the accounting value of the assets. EBITDA is an approximation to pre-tax operating cash flow and reflects cash generation before working capital variation. EBITDA is widely used by investors when evaluating businesses (multiples valuation), as well as by rating agencies and creditors to evaluate the level of debt, comparing EBITDA with net debt.

    EBITDA is calculated in the following manner:

    EBITDA = Net income for the period + Income tax charges +/- Equity in Earnings (losses) of non-consolidated companies +/- Financial results + Depreciation and amortization +/- Impairment charges/(reversals).

    EBITDA is a non-IFRS alternative performance measure.

    (all amounts in thousands of U.S. dollars) Three-month period ended
    December 31,    		 Twelve-month period ended
    December 31,
      2024 2023 2024 2023
    Income for the period 519,131 1,145,781 2,076,773 3,957,833
    Income tax charge / (credit) 122,709 (176,848) 479,680 674,956
    Equity in earnings of non-consolidated companies (35,283) (56,859) (8,548) (95,404)
    Financial results (48,180) (93,111) (129,056) (220,977)
    Depreciation and amortization 167,781 156,347 632,854 548,510
    EBITDA 726,158 975,310 3,051,703 4,864,918
             

    Free Cash Flow

    Free cash flow is a measure of financial performance, calculated as operating cash flow less capital expenditures. FCF represents the cash that a company is able to generate after spending the money required to maintain or expand its asset base.

    Free cash flow is calculated in the following manner:

    Free cash flow = Net cash (used in) provided by operating activities – Capital expenditures.

    Free cash flow is a non-IFRS alternative performance measure.

    (all amounts in thousands of U.S. dollars) Three-month period ended
    December 31,    		 Twelve-month period ended
    December 31,
      2024 2023 2024 2023
    Net cash provided by operating activities 492,228 835,735 2,866,218 4,395,073
    Capital expenditures (181,870) (166,820) (693,956) (619,445)
    Free cash flow 310,358 668,915 2,172,262 3,775,628
             

    Net Cash / (Debt)

    This is the net balance of cash and cash equivalents, other current investments and fixed income investments held to maturity less total borrowings. It provides a summary of the financial solvency and liquidity of the company. Net cash / (debt) is widely used by investors and rating agencies and creditors to assess the company’s leverage, financial strength, flexibility and risks.

    Net cash/ debt is calculated in the following manner:

    Net cash = Cash and cash equivalents + Other investments (Current and Non-Current)+/- Derivatives hedging borrowings and investments – Borrowings (Current and Non-Current).

    Net cash/debt is a non-IFRS alternative performance measure.

    (all amounts in thousands of U.S. dollars) At December 31,
      2024 2023
    Cash and cash equivalents 675,256 1,637,821
    Other current investments 2,372,999 1,969,631
    Non-current investments 998,251 398,220
    Current borrowings (425,999) (535,133)
    Non-current borrowings (11,399) (48,304)
    Net cash / (debt) 3,609,108 3,422,235
         

    Operating working capital days

    Operating working capital is the difference between the main operating components of current assets and current liabilities. Operating working capital is a measure of a company’s operational efficiency, and short-term financial health.

    Operating working capital days is calculated in the following manner:

    Operating working capital days = [(Inventories + Trade receivables – Trade payables – Customer advances) / Annualized quarterly sales ] x 365.

    Operating working capital days is a non-IFRS alternative performance measure.

    (all amounts in thousands of U.S. dollars) Three-month period ended December 31,
      2024 2023
    Inventories 3,709,942 3,921,097
    Trade receivables 1,907,507 2,480,889
    Customer advances (206,196) (263,664)
    Trade payables (880,261) (1,107,567)
    Operating working capital 4,530,992 5,030,755
    Annualized quarterly sales 11,380,904 13,659,720
    Operating working capital 145 134
         

    Giovanni Sardagna        
    Tenaris
    1-888-300-5432
    www.tenaris.com

    The MIL Network –

    February 20, 2025

  • MIL-OSI: Ansys Announces Q4 and FY 2024 Financial Results

    Source: GlobeNewswire (MIL-OSI)

    / Q4 2024 Results

    • Revenue of $882.2 million
    • GAAP diluted earnings per share of $3.21 and non-GAAP diluted earnings per share of $4.44
    • GAAP operating profit margin of 40.3% and non-GAAP operating profit margin of 53.3%
    • Operating cash flows of $258.0 million and unlevered operating cash flows of $266.8 million
    • Annual contract value (ACV) of $1,094.6 million

    /FY 2024 Results

    • Revenue of $2,544.8 million
    • GAAP diluted earnings per share of $6.55 and non-GAAP diluted earnings per share of $10.91
    • GAAP operating profit margin of 28.2% and non-GAAP operating profit margin of 45.7%
    • Operating cash flows of $795.7 million and unlevered operating cash flows of $834.6 million
    • ACV of $2,563.0 million
    • Deferred revenue and backlog of $1,718.3 million on December 31, 2024

    PITTSBURGH, Feb. 19, 2025 (GLOBE NEWSWIRE) — ANSYS, Inc. (NASDAQ: ANSS), today reported fourth quarter 2024 revenue of $882.2 million, an increase of 10% in reported currency, or 11% in constant currency, when compared to the fourth quarter of 2023. For FY 2024, revenue growth was 12% in reported currency, or 13% in constant currency, when compared to FY 2023. For the fourth quarter of 2024, the Company reported diluted earnings per share of $3.21 and $4.44 on a GAAP and non-GAAP basis, respectively, compared to $3.14 and $3.94 on a GAAP and non-GAAP basis, respectively, for the fourth quarter of 2023. For FY 2024, the Company reported diluted earnings per share of $6.55 and $10.91 on a GAAP and non-GAAP basis, respectively, compared to $5.73 and $8.80 on a GAAP and non-GAAP basis, respectively, for FY 2023. Additionally, the Company reported fourth quarter and FY 2024 ACV growth of 15% and 11% in reported currency, respectively, or 16% and 13% in constant currency, respectively, when compared to the fourth quarter and FY 2023. Fourth quarter 2024 ACV of $1.1 billion contributed 43% of the full year 2024 ACV while Q1, Q2 and Q3 each contributed 16%, 20% and 21%, respectively. The Company expects double-digit FY 2025 ACV growth.

    As previously announced, on January 15, 2024, Ansys entered into a definitive agreement with Synopsys, Inc. (“Synopsys”) under which Synopsys will acquire Ansys. As previously announced by Synopsys, Ansys and Synopsys have received conditional clearance from the European Commission. The U.K. Competition and Markets Authority provisionally accepted our remedies towards a transaction approval in Phase 1. The State Administration for Market Regulation of the People’s Republic of China has officially accepted our filing, and its review of the proposed transaction is in process. We continue to work with the regulators in other relevant jurisdictions to conclude their reviews. The transaction is anticipated to close in the first half of 2025, subject to the receipt of required regulatory approvals and other customary closing conditions. As previously announced, in light of the pending transaction with Synopsys, Ansys has suspended quarterly earnings conference calls and no longer provides quarterly or annual guidance.

    The non-GAAP financial results highlighted represent non-GAAP financial measures. Reconciliations of these measures to the comparable GAAP measures can be found later in this release.
     

    / Summary of Financial Results

    Ansys’ fourth quarter and fiscal year (FY) 2024 and 2023 financial results are presented below. The 2024 and 2023 non-GAAP results exclude the income statement effects of stock-based compensation, excess payroll taxes related to stock-based compensation, amortization of acquired intangible assets, expenses related to business combinations and adjustments for the income tax effect of the excluded items.

    Our results are as follows:

      GAAP
    (in thousands, except per share data and percentages) Q4 QTD
    2024    		   Q4 QTD
    2023    		   % Change   FY
    2024    		   FY
    2023    		   % Change
    Revenue $ 882,174     $ 805,108     9.6 %   $ 2,544,809     $ 2,269,949     12.1 %
    Net income $ 282,688     $ 274,762     2.9 %   $ 575,692     $ 500,412     15.0 %
    Diluted earnings per share $ 3.21     $ 3.14     2.2 %   $ 6.55     $ 5.73     14.3 %
    Gross margin   91.8 %     91.3 %         89.0 %     88.0 %    
    Operating profit margin   40.3 %     41.4 %         28.2 %     27.6 %    
    Effective tax rate   21.3 %     15.4 %         19.8 %     15.5 %    
                                           
      Non-GAAP
    (in thousands, except per share data and percentages) Q4 QTD
    2024    		   Q4 QTD
    2023    		   % Change   FY
    2024    		   FY
    2023    		   % Change
    Net income $ 391,044     $ 345,317     13.2 %   $ 959,252     $ 769,308     24.7 %
    Diluted earnings per share $ 4.44     $ 3.94     12.7 %   $ 10.91     $ 8.80     24.0 %
    Gross margin   94.6 %     94.3 %         93.1 %     92.2 %    
    Operating profit margin   53.3 %     53.0 %         45.7 %     42.6 %    
    Effective tax rate   17.5 %     17.5 %         17.5 %     17.5 %    
                                           
      Other Metrics
    (in thousands, except percentages) Q4 QTD
    2024    		   Q4 QTD
    2023    		   % Change   FY
    2024    		   FY
    2023    		   % Change
    ACV $   1,094,552   $   955,161   14.6 %   $ 2,563,029   $ 2,300,466   11.4 %
    Operating cash flows $   257,973   $   232,722   10.9 %   $    795,740   $    717,122   11.0 %
    Unlevered operating cash flows $   266,777   $   242,848   9.9 %   $    834,582   $    755,129   10.5 %
                                       

    / Key Long-Term Metrics

    The Company’s long-term outlook covering the years 2022 through 2025 provided at the 2022 Investor Update has been suspended given the pending transaction with Synopsys. Below is a summary of key metrics covering the years 2022 through 2024.

    • Consistent double-digit ACV growth with a 2022 through 2024 CAGR of 12.3% at actual exchange rates and 13.0% at 2022 exchange rates.
    • Unlevered operating cash flows grew faster than ACV with a 2022 through 2024 CAGR of 13.5%.
    • With FY 2024 unlevered operating cash flows of $834.6 million, cumulative 3-year unlevered operating cash flows (FY 2022 to 2024) are $2.2 billion.
    • Note: 2024 unlevered operating cash flows includes $28.2 million of cash outflows primarily associated with the pending transaction with Synopsys.
    Supplemental Financial Information

    / Annual Contract Value

    (in thousands, except percentages) Q4 QTD
    2024    		   Q4 QTD 2024 in Constant Currency   Q4 QTD
    2023    		   % Change   % Change in
    Constant Currency
    ACV $    1,094,552   $      1,110,711   $        955,161   14.6 %   16.3 %
                       
    (in thousands, except percentages) FY
    2024    		   FY 2024 in
    Constant Currency    		   FY
    2023    		   % Change   % Change in
    Constant Currency
    ACV $    2,563,029   $      2,593,819   $    2,300,466   11.4 %   12.8 %
                                 

    *Subscription lease ACV includes the bundled arrangement of time-based licenses with related maintenance.
    **Perpetual and service ACV includes perpetual licenses, with related maintenance, and services.

    Recurring ACV includes both subscription lease ACV and all maintenance ACV (including maintenance from perpetual licenses). It excludes perpetual license ACV and service ACV.

      

    / Revenue

    (in thousands, except percentages) Q4 QTD
    2024    		   Q4 QTD 2024 in Constant Currency   Q4 QTD
    2023    		   % Change   % Change in
    Constant Currency
    Revenue $        882,174   $         893,996   $        805,108   9.6 %   11.0 %
                       
    (in thousands, except percentages) FY
    2024    		   FY 2024 in
    Constant Currency    		   FY
    2023    		   % Change   % Change in
    Constant Currency
    Revenue $    2,544,809   $     2,570,207   $    2,269,949   12.1 %   13.2 %
                                 
    REVENUE BY LICENSE TYPE
                           
    (in thousands, except percentages) Q4 QTD
    2024    		   % of Total   Q4 QTD
    2023    		   % of Total   % Change   % Change in Constant Currency
    Subscription Lease $        441,120   50.0 %   $        399,556   49.6 %   10.4 %   12.1 %
    Perpetual            102,295   11.6 %              102,721   12.8 %   (0.4)%   1.7 %
    Maintenance1            319,381   36.2 %              283,130   35.2 %   12.8 %   13.8 %
    Service              19,378   2.2 %                19,701   2.4 %   (1.6)%   (1.2)%
    Total $        882,174       $        805,108       9.6 %   11.0 %
                           
                           
    (in thousands, except percentages) FY
    2024    		   % of Total   FY
    2023    		   % of Total   % Change   % Change in Constant Currency
    Subscription Lease $        948,831   37.3 %   $        786,050   34.6 %   20.7 %   22.1 %
    Perpetual            315,085   12.4 %              302,698   13.3 %   4.1 %   5.1 %
    Maintenance1         1,209,217   47.5 %           1,103,523   48.6 %   9.6 %   10.6 %
    Service              71,676   2.8 %                77,678   3.4 %   (7.7)%   (7.4)%
    Total $    2,544,809       $    2,269,949       12.1 %   13.2 %
                                   

    1Maintenance revenue is inclusive of both maintenance associated with perpetual licenses and the maintenance component of subscription leases.

    REVENUE BY GEOGRAPHY
                           
    (in thousands, except percentages) Q4 QTD
    2024    		   % of Total   Q4 QTD
    2023    		   % of Total   % Change   % Change in Constant Currency
    Americas $        457,752   51.9 %   $        410,681   51.0 %   11.5 %   11.5 %
                           
    Germany              98,527   11.2 %                81,828   10.2 %   20.4 %   24.2 %
    Other EMEA            170,541   19.3 %              155,023   19.3 %   10.0 %   12.2 %
    EMEA            269,068   30.5 %              236,851   29.4 %   13.6 %   16.3 %
                           
    Japan              52,294   5.9 %                61,243   7.6 %   (14.6)%   (11.1)%
    Other Asia-Pacific            103,060   11.7 %                96,333   12.0 %   7.0 %   10.1 %
    Asia-Pacific            155,354   17.6 %              157,576   19.6 %   (1.4)%   1.8 %
                           
    Total $        882,174       $        805,108       9.6 %   11.0 %
                           
                           
    (in thousands, except percentages) FY
    2024    		   % of Total   FY
    2023    		   % of Total   % Change   % Change in Constant Currency
    Americas $    1,297,367   51.0 %   $    1,106,242   48.7 %   17.3 %   17.3 %
                           
    Germany            209,714   8.2 %              199,068   8.8 %   5.3 %   6.6 %
    Other EMEA            445,791   17.5 %              406,719   17.9 %   9.6 %   9.8 %
    EMEA            655,505   25.8 %              605,787   26.7 %   8.2 %   8.8 %
                           
    Japan            184,547   7.3 %              203,013   8.9 %   (9.1)%   (2.1)%
    Other Asia-Pacific            407,390   16.0 %              354,907   15.6 %   14.8 %   16.9 %
    Asia-Pacific            591,937   23.3 %              557,920   24.6 %   6.1 %   10.0 %
                           
    Total $    2,544,809       $    2,269,949       12.1 %   13.2 %
                                   
    REVENUE BY CHANNEL
                   
      Q4 QTD
    2024    		   Q4 QTD
    2023    		   FY
    2024    		   FY
    2023
    Direct revenue, as a percentage of total revenue 79.7 %   74.5 %   75.2 %   73.9 %
    Indirect revenue, as a percentage of total revenue 20.3 %   25.5 %   24.8 %   26.1 %
                           

    / Deferred Revenue and Backlog

    (in thousands) December 31,
    2024    		   September 30,
    2024    		   December 31,
    2023    		   September 30,
    2023
    Current Deferred Revenue $            504,527   $            427,188   $            457,514   $            349,668
    Current Backlog                524,617                  475,604                  439,879                  424,547
    Total Current Deferred Revenue and Backlog            1,029,144                  902,792                  897,393                  774,215
                   
    Long-Term Deferred Revenue                  31,778                    24,150                    22,240                    20,765
    Long-Term Backlog                657,345                  536,855                  552,951                  410,697
    Total Long-Term Deferred Revenue and Backlog                689,123                  561,005                  575,191                  431,462
                   
    Total Deferred Revenue and Backlog $        1,718,267   $        1,463,797   $        1,472,584   $        1,205,677
                           

    / Currency

    The fourth quarter and FY 2024 revenue, operating income, ACV and deferred revenue and backlog, as compared to the fourth quarter and FY 2023, were impacted by fluctuations in the exchange rates of foreign currencies against the U.S. Dollar. The currency fluctuation impacts on revenue, GAAP and non-GAAP operating income, ACV, and deferred revenue and backlog based on 2023 exchange rates are reflected in the tables below. Amounts in brackets indicate an adverse impact from currency fluctuations.

    (in thousands) Q4 QTD
    2024    		   FY
    2024
    Revenue $       (11,822 )   $       (25,398 )
    GAAP operating income $          (9,057 )   $       (19,588 )
    Non-GAAP operating income $          (9,076 )   $       (19,335 )
    ACV $       (16,159 )   $       (30,790 )
    Deferred revenue and backlog $       (38,306 )   $       (40,993 )
                   

    The most meaningful currency impacts are typically attributable to U.S. Dollar exchange rate changes against the Euro and Japanese Yen. Historical exchange rates are reflected in the charts below.

      Period-End Exchange Rates
    As of EUR/USD   USD/JPY
    December 31, 2024                    1.04                       157
    December 31, 2023                    1.10                       141
    December 31, 2022                    1.07                       131
           
      Average Exchange Rates
    Three Months Ended EUR/USD   USD/JPY
    December 31, 2024                    1.07                       153
    December 31, 2023                    1.08                       148
           
      Average Exchange Rates
    Twelve Months Ended EUR/USD   USD/JPY
    December 31, 2024                    1.08                       151
    December 31, 2023                    1.08                       140
           

    / GAAP Financial Statements

    ANSYS, INC. AND SUBSIDIARIES
    Condensed Consolidated Balance Sheets
    (Unaudited)
    (in thousands) December 31, 2024   December 31, 2023
    ASSETS:      
    Cash & short-term investments $                      1,497,517   $                          860,390
    Accounts receivable, net                          1,022,850                                864,526
    Goodwill                          3,778,128                             3,805,874
    Other intangibles, net                              716,244                                835,417
    Other assets                          1,036,692                                956,668
    Total assets $                      8,051,431   $                      7,322,875
    LIABILITIES & STOCKHOLDERS’ EQUITY:      
    Current deferred revenue $                          504,527   $                          457,514
    Long-term debt                              754,208                                753,891
    Other liabilities                              706,256                                721,106
    Stockholders’ equity                          6,086,440                             5,390,364
    Total liabilities & stockholders’ equity $                      8,051,431   $                      7,322,875
               
    ANSYS, INC. AND SUBSIDIARIES
    Condensed Consolidated Statements of Income
    (Unaudited)
      Three Months Ended   Twelve Months Ended
    (in thousands, except per share data) December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Revenue:              
    Software licenses $                   543,415     $                   502,277     $               1,263,916     $           1,088,748  
    Maintenance and service                       338,759                           302,831                        1,280,893                   1,181,201  
    Total revenue                       882,174                           805,108                        2,544,809                   2,269,949  
    Cost of sales:              
    Software licenses                         12,947                             10,909                             45,367                         40,004  
    Amortization                         21,801                             20,586                             88,560                         80,990  
    Maintenance and service                         37,940                             38,554                           145,892                       150,304  
    Total cost of sales                         72,688                             70,049                           279,819                       271,298  
    Gross profit                       809,486                           735,059                        2,264,990                   1,998,651  
    Operating expenses:              
    Selling, general and administrative                       314,009                           269,857                           995,340                       855,135  
    Research and development                       134,259                           126,288                           528,014                       494,869  
    Amortization                            5,623                                5,914                             23,748                         22,512  
    Total operating expenses                       453,891                           402,059                        1,547,102                   1,372,516  
    Operating income                       355,595                           333,000                           717,888                       626,135  
    Interest income                         14,636                                7,199                             51,131                         19,588  
    Interest expense                        (10,924 )                          (12,551 )                          (47,849 )                     (47,145 )
    Other expense, net                               (14 )                            (2,876 )                            (3,132 )                       (6,440 )
    Income before income tax provision                       359,293                           324,772                           718,038                       592,138  
    Income tax provision                         76,605                             50,010                           142,346                         91,726  
    Net income $                   282,688     $                   274,762     $                   575,692     $              500,412  
    Earnings per share – basic:              
    Earnings per share $                          3.23     $                          3.16     $                          6.59     $                     5.76  
    Weighted average shares                         87,455                             86,888                             87,313                         86,833  
    Earnings per share – diluted:              
    Earnings per share $                          3.21     $                          3.14     $                          6.55     $                     5.73  
    Weighted average shares                         88,137                             87,541                             87,895                         87,386  
                                   

    / Glossary of Terms

    Annual Contract Value (ACV): ACV is a key performance metric and is useful to investors in assessing the strength and trajectory of our business. ACV is a supplemental metric to help evaluate the annual performance of the business. Over the life of the contract, ACV equals the total value realized from a customer. ACV is not impacted by the timing of license revenue recognition. ACV is used by management in financial and operational decision-making and in setting sales targets used for compensation. ACV is not a replacement for, and should be viewed independently of, GAAP revenue and deferred revenue as ACV is a performance metric and is not intended to be combined with any of these items. There is no GAAP measure comparable to ACV. ACV is composed of the following:

    • the annualized value of maintenance and subscription lease contracts with start dates or anniversary dates during the period, plus
    • the value of perpetual license contracts with start dates during the period, plus
    • the annualized value of fixed-term services contracts with start dates or anniversary dates during the period, plus
    • the value of work performed during the period on fixed-deliverable services contracts.

    When we refer to the anniversary dates in the definition of ACV above, we are referencing the date of the beginning of the next twelve-month period in a contractually committed multi-year contract. If a contract is three years in duration, with a start date of July 1, 2024, the anniversary dates would be July 1, 2025 and July 1, 2026. We label these anniversary dates as they are contractually committed. While this contract would be up for renewal on July 1, 2027, our ACV performance metric does not assume any contract renewals.

    Example 1: For purposes of calculating ACV, a $100,000 subscription lease contract or a $100,000 maintenance contract with a term of July 1, 2024 – June 30, 2025, would each contribute $100,000 to ACV for fiscal year 2024 with no contribution to ACV for fiscal year 2025.

    Example 2: For purposes of calculating ACV, a $300,000 subscription lease contract or a $300,000 maintenance contract with a term of July 1, 2024 – June 30, 2027, would each contribute $100,000 to ACV in each of fiscal years 2024, 2025 and 2026. There would be no contribution to ACV for fiscal year 2027 as each period captures the full annual value upon the anniversary date.

    Example 3: A perpetual license valued at $200,000 with a contract start date of March 1, 2024 would contribute $200,000 to ACV in fiscal year 2024.

    Backlog: Deferred revenue associated with installment billings for periods beyond the current quarterly billing cycle and committed contracts with start dates beyond the end of the current period.

    Deferred Revenue: Billings made or payments received in advance of revenue recognition.

    Subscription Lease or Time-Based License: A license of a stated product of our software that is granted to a customer for use over a specified time period, which can be months or years in length. In addition to the use of the software, the customer is provided with access to maintenance (unspecified version upgrades and technical support) without additional charge. The revenue related to these contracts is recognized ratably over the contract period for the maintenance portion and up front for the license portion.

    Perpetual / Paid-Up License: A license of a stated product and version of our software that is granted to a customer for use in perpetuity. The revenue related to this type of license is recognized up front.

    Maintenance: A contract, typically one year in duration, that is purchased by the owner of a perpetual license and that provides access to unspecified version upgrades and technical support during the duration of the contract. The revenue from these contracts is recognized ratably over the contract period.

    / Reconciliations of GAAP to Non-GAAP Measures (Unaudited)

      Three Months Ended
      December 31, 2024
    (in thousands, except percentages and per share data) Gross Profit   % of Revenue   Operating Income   % of Revenue   Net Income   EPS – Diluted1
    Total GAAP $      809,486   91.8 %   $      355,595   40.3 %   $    282,688     $        3.21  
    Stock-based compensation expense               3,635   0.4 %              73,016   8.2 %             73,016                 0.83  
    Excess payroll taxes related to stock-based awards                     39   — %                1,272   0.2 %               1,272                 0.01  
    Amortization of intangible assets from acquisitions             21,801   2.4 %              27,424   3.1 %             27,424                 0.31  
    Expenses related to business combinations                     —   — %              12,988   1.5 %             12,988                 0.15  
    Adjustment for income tax effect                     —   — %                      —   — %             (6,344 )             (0.07 )
    Total non-GAAP $      834,961   94.6 %   $      470,295   53.3 %   $    391,044     $        4.44  
                                           

    1 Diluted weighted average shares were 88,137.

      Three Months Ended
      December 31, 2023
    (in thousands, except percentages and per share data) Gross Profit   % of Revenue   Operating Income   % of Revenue   Net Income   EPS – Diluted1
    Total GAAP $      735,059   91.3 %   $     333,000   41.4 %   $    274,762     $        3.14  
    Stock-based compensation expense               3,413   0.4 %              63,358   7.9 %             63,358                 0.73  
    Excess payroll taxes related to stock-based awards                       4   — %                   271   — %                  271                    —  
    Amortization of intangible assets from acquisitions             20,586   2.6 %              26,500   3.3 %             26,500                 0.30  
    Expenses related to business combinations                     —   — %                3,664   0.4 %               3,664                 0.04  
    Adjustment for income tax effect                     —   — %                      —   — %           (23,238 )             (0.27 )
    Total non-GAAP $      759,062   94.3 %   $     426,793   53.0 %   $    345,317     $        3.94  
                                           

    1 Diluted weighted average shares were 87,541.

      Twelve Months Ended
      December 31, 2024
    (in thousands, except percentages and per share data) Gross Profit   % of Revenue   Operating Income   % of Revenue   Net Income   EPS – Diluted1
    Total GAAP $   2,264,990   89.0 %   $     717,888   28.2 %   $    575,692     $        6.55  
    Stock-based compensation expense             14,313   0.6 %           270,900   10.7 %           270,900                 3.08  
    Excess payroll taxes related to stock-based awards                  506   — %                8,643   0.3 %               8,643                 0.10  
    Amortization of intangible assets from acquisitions             88,560   3.5 %           112,308   4.4 %           112,308                 1.28  
    Expenses related to business combinations                     —   — %             52,841   2.1 %             52,841                 0.60  
    Adjustment for income tax effect                     —   — %                      —   — %           (61,132 )             (0.70 )
    Total non-GAAP $   2,368,369   93.1 %   $ 1,162,580   45.7 %   $    959,252     $      10.91  
                                           

    1 Diluted weighted average shares were 87,895.

      Twelve Months Ended
      December 31, 2023
    (in thousands, except percentages and per share data) Gross Profit   % of Revenue   Operating Income   % of Revenue   Net Income   EPS – Diluted1
    Total GAAP $   1,998,651   88.0 %   $     626,135   27.6 %   $    500,412     $        5.73  
    Stock-based compensation expense             13,337   0.6 %           221,891   9.9 %           221,891                 2.54  
    Excess payroll taxes related to stock-based awards                  307   0.1 %                5,541   0.2 %               5,541                 0.06  
    Amortization of intangible assets from acquisitions             80,990   3.5 %           103,502   4.5 %           103,502                 1.18  
    Expenses related to business combinations                     —   — %                9,422   0.4 %               9,422                 0.11  
    Adjustment for income tax effect                     —   — %                      —   — %           (71,460 )             (0.82 )
    Total non-GAAP $   2,093,285   92.2 %   $     966,491   42.6 %   $    769,308     $        8.80  
                                           

    1 Diluted weighted average shares were 87,386.

      Three Months Ended   Twelve Months Ended
    (in thousands) December 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023    		   December 31,
    2022
    Net cash provided by operating activities $            257,973     $            232,722     $            795,740     $            717,122     $            631,003  
    Cash paid for interest                  10,671                      12,274                      47,081                      46,069                      20,844  
    Tax benefit                   (1,867 )                     (2,148 )                     (8,239 )                     (8,062 )                     (3,752 )
    Unlevered operating cash flows $            266,777     $            242,848     $            834,582     $            755,129     $            648,095  
                                           

    / Use of Non-GAAP Measures

    We provide non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income, non-GAAP diluted earnings per share and unlevered operating cash flows as supplemental measures to GAAP regarding our operational performance. These financial measures exclude the impact of certain items and, therefore, have not been calculated in accordance with GAAP. A detailed explanation of each of the adjustments to these financial measures is described below. This press release also contains a reconciliation of each of these non-GAAP financial measures to its most comparable GAAP financial measure, as applicable.

    We use non-GAAP financial measures (a) to evaluate our historical and prospective financial performance as well as our performance relative to our competitors, (b) to set internal sales targets and spending budgets, (c) to allocate resources, (d) to measure operational profitability and the accuracy of forecasting, (e) to assess financial discipline over operational expenditures and (f) as an important factor in determining variable compensation for management and employees. In addition, many financial analysts that follow us focus on and publish both historical results and future projections based on non-GAAP financial measures. We believe that it is in the best interest of our investors to provide this information to analysts so that they accurately report the non-GAAP financial information. Moreover, investors have historically requested, and we have historically reported, these non-GAAP financial measures as a means of providing consistent and comparable information with past reports of financial results.

    While we believe that these non-GAAP financial measures provide useful supplemental information to investors, there are limitations associated with the use of these non-GAAP financial measures. These non-GAAP financial measures are not prepared in accordance with GAAP, are not reported by all our competitors and may not be directly comparable to similarly titled measures of our competitors due to potential differences in the exact method of calculation. We compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measures.

    The adjustments to these non-GAAP financial measures, and the basis for such adjustments, are outlined below:

    Amortization of intangible assets from acquisitions. We incur amortization of intangible assets, included in our GAAP presentation of amortization expense, related to various acquisitions we have made. We exclude these expenses for the purpose of calculating non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance because these costs are fixed at the time of an acquisition, are then amortized over a period of several years after the acquisition and generally cannot be changed or influenced by us after the acquisition. Accordingly, we do not consider these expenses for purposes of evaluating our performance during the applicable time period after the acquisition, and we exclude such expenses when making decisions to allocate resources. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate the effectiveness of the methodology and information used by us in our financial and operational decision-making, and (b) compare our past reports of financial results as we have historically reported these non-GAAP financial measures.

    Stock-based compensation expense. We incur expense related to stock-based compensation included in our GAAP presentation of cost of maintenance and service; research and development expense; and selling, general and administrative expense. We also incur excess payroll tax expense related to stock-based compensation, which is an additional non-GAAP adjustment. Although stock-based compensation is an expense and viewed as a form of compensation, we exclude these expenses for the purpose of calculating non-GAAP gross profit, non-GAAP gross profit margin, non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance. Specifically, we exclude stock-based compensation during our annual budgeting process and our quarterly and annual assessments of our performance. The annual budgeting process is the primary mechanism whereby we allocate resources to various initiatives and operational requirements. Additionally, the annual review by our Board of Directors during which it compares our historical business model and profitability to the planned business model and profitability for the forthcoming year excludes the impact of stock-based compensation. In evaluating the performance of our senior management and department managers, charges related to stock-based compensation are excluded from expenditure and profitability results. In fact, we record stock-based compensation expense into a stand-alone cost center for which no single operational manager is responsible or accountable. In this way, we can review, on a period-to-period basis, each manager’s performance and assess financial discipline over operational expenditures without the effect of stock-based compensation. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate our operating results and the effectiveness of the methodology used by us to review our operating results, and (b) review historical comparability in our financial reporting as well as comparability with competitors’ operating results.

    Expenses related to business combinations. We incur expenses for professional services rendered in connection with acquisitions and divestitures, which are included in our GAAP presentation of selling, general and administrative expense. We also incur other expenses directly related to business combinations, including compensation expenses and concurrent restructuring activities, such as employee severances and other exit costs. These costs are included in our GAAP presentation of selling, general and administrative and research and development expenses. We exclude these acquisition-related expenses for the purpose of calculating non-GAAP operating income, non-GAAP operating profit margin, non-GAAP net income and non-GAAP diluted earnings per share when we evaluate our continuing operational performance, as we generally would not have otherwise incurred these expenses in the periods presented as a part of our operations. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate our operating results and the effectiveness of the methodology used by us to review our operating results, and (b) review historical comparability in our financial reporting as well as comparability with competitors’ operating results.

    Non-GAAP tax provision. We utilize a normalized non-GAAP annual effective tax rate (AETR) to calculate non-GAAP measures. This methodology provides better consistency across interim reporting periods by eliminating the effects of non-recurring items and aligning the non-GAAP tax rate with our expected geographic earnings mix. To project this rate, we analyzed our historic and projected non-GAAP earnings mix by geography along with other factors such as our current tax structure, recurring tax credits and incentives, and expected tax positions. On an annual basis we re-evaluate and update this rate for significant items that may materially affect our projections.

    Unlevered operating cash flows. We make cash payments for the interest incurred in connection with our debt financing which are included in our GAAP presentation of operating cash flows. We exclude this cash paid for interest, net of the associated tax benefit, for the purpose of calculating unlevered operating cash flows. Unlevered operating cash flow is a supplemental non-GAAP measure that we use to evaluate our core operating business. We believe this measure is useful to investors and management because it provides a measure of our cash generated through operating activities independent of the capital structure of the business.

    Non-GAAP financial measures are not in accordance with, or an alternative for, GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP financial measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

    We have provided a reconciliation of the non-GAAP financial measures to the most directly comparable GAAP financial measures as listed below:

    GAAP Reporting Measure Non-GAAP Reporting Measure
    Gross Profit Non-GAAP Gross Profit
    Gross Profit Margin Non-GAAP Gross Profit Margin
    Operating Income Non-GAAP Operating Income
    Operating Profit Margin Non-GAAP Operating Profit Margin
    Net Income Non-GAAP Net Income
    Diluted Earnings Per Share Non-GAAP Diluted Earnings Per Share
    Operating Cash Flows Unlevered Operating Cash Flows
       

    Constant currency. In addition to the non-GAAP financial measures detailed above, we use constant currency results for financial and operational decision-making and as a means to evaluate period-to-period comparisons by excluding the effects of foreign currency fluctuations on the reported results. To present this information, the 2024 period results for entities whose functional currency is a currency other than the U.S. Dollar were converted to U.S. Dollars at rates that were in effect for the 2023 comparable period, rather than the actual exchange rates in effect for 2024. Constant currency growth rates are calculated by adjusting the 2024 period reported amounts by the 2024 currency fluctuation impacts and comparing the adjusted amounts to the 2023 comparable period reported amounts. We believe that these non-GAAP financial measures are useful to investors because they allow investors to (a) evaluate the effectiveness of the methodology and information used by us in our financial and operational decision-making, and (b) compare our reported results to our past reports of financial results without the effects of foreign currency fluctuations.

    / About Ansys

    Our Mission: Powering Innovation that Drives Human Advancement™

    When visionary companies need to know how their world-changing ideas will perform, they close the gap between design and reality with Ansys simulation. For more than 50 years, Ansys software has enabled innovators across industries to push boundaries by using the predictive power of simulation. From sustainable transportation to advanced semiconductors, from satellite systems to life-saving medical devices, the next great leaps in human advancement will be powered by Ansys.

    / Forward-Looking Information

    This document contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). Forward-looking statements are statements that provide current expectations or forecasts of future events based on certain assumptions. Forward-looking statements are subject to risks, uncertainties, and factors relating to our business which could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements.

    Forward-looking statements use words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “outlook,” “plan,” “predict,” “project,” “should,” “target,” or other words of similar meaning. Forward-looking statements include those about market opportunity, including our total addressable market, the proposed transaction with Synopsys, including the expected date of closing and the potential benefits thereof, and other aspects of future operations. We caution readers not to place undue reliance upon any such forward-looking statements, which speak only as of the date they are made. We undertake no obligation to update forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law.

    The risks associated with the following, among others, could cause actual results to differ materially from those described in any forward-looking statements:

    • our ability to complete the proposed transaction with Synopsys on anticipated terms and timing, including completing the associated divestiture of our PowerArtist RTL business and obtaining regulatory approvals, and other conditions related to the completion of the transaction with Synopsys;
       
    • the realization of the anticipated benefits of the proposed transaction with Synopsys, including potential disruptions to our and Synopsys’ businesses and commercial relationships with others resulting from the announcement, pendency, or completion of the proposed transaction and uncertainty as to the long-term value of Synopsys’ common stock;
       
    • restrictions on our operations during the pendency of the proposed transaction with Synopsys that could impact our ability to pursue certain business opportunities or strategic transactions, including tuck-in M&A;
       
    • adverse conditions in the macroeconomic environment, including inflation, recessionary conditions and volatility in equity and foreign exchange markets;
       
    • political, economic and regulatory uncertainties in the countries and regions in which we operate;
       
    • impacts from tariffs, trade sanctions, export controls or other trade barriers, including export control restrictions and licensing requirements for exports to China;
       
    • impacts resulting from the conflict between Israel and Hamas and other countries and groups in the Middle East, including impacts from changes to diplomatic relations and trade policy between the United States and other countries resulting from the conflict;
       
    • impacts from changes to diplomatic relations and trade policy between the United States and Russia or between the United States and other countries that may support Russia or take similar actions due to the conflict between Russia and Ukraine;
       
    • constrained credit and liquidity due to disruptions in the global economy and financial markets, which may limit or delay availability of credit under our existing or new credit facilities, or which may limit our ability to obtain credit or financing on acceptable terms or at all;
       
    • our ability to timely recruit and retain key personnel in a highly competitive labor market, including potential financial impacts of wage inflation and potential impacts due to the proposed transaction with Synopsys;
       
    • our ability to protect our proprietary technology; cybersecurity threats or other security breaches, including in relation to breaches occurring through our products and an increased level of our activity that is occurring from remote global off-site locations; and disclosure or misuse of employee or customer data whether as a result of a cybersecurity incident or otherwise;
       
    • volatility in our revenue due to the timing, duration and value of multi-year subscription lease contracts; and our reliance on high renewal rates for annual subscription lease and maintenance contracts;
       
    • declines in our customers’ businesses resulting in adverse changes in procurement patterns; disruptions in accounts receivable and cash flow due to customers’ liquidity challenges and commercial deterioration; uncertainties regarding demand for our products and services in the future and our customers’ acceptance of new products; delays or declines in anticipated sales due to reduced or altered sales and marketing interactions with customers; and potential variations in our sales forecast compared to actual sales;
       
    • our ability and our channel partners’ ability to comply with laws and regulations in relevant jurisdictions; and the outcome of contingencies, including legal proceedings, government or regulatory investigations and tax audit cases;
       
    • uncertainty regarding income tax estimates in the jurisdictions in which we operate; and the effect of changes in tax laws and regulations in the jurisdictions in which we operate;
       
    • the quality of our products, including the strength of features, functionality and integrated multiphysics capabilities; our ability to develop and market new products to address the industry’s rapidly changing technology, including the use of artificial intelligence and machine learning in our products as well as the products of our competitors; failures or errors in our products and services; and increased pricing pressure as a result of the competitive environment in which we operate;
       
    • investments in complementary companies, products, services and technologies; our ability to complete and successfully integrate our acquisitions and realize the financial and business benefits of such transactions; and the impact indebtedness incurred in connection with any acquisition could have on our operations;
       
    • investments in global sales and marketing organizations and global business infrastructure, and dependence on our channel partners for the distribution of our products;
       
    • current and potential future impacts of any global health crisis, natural disaster or catastrophe; the actions taken to address these events by our customers, our suppliers, and regulatory authorities; the resulting effects on our business, the global economy and our consolidated financial statements; and other public health and safety risks and related government actions or mandates;
       
    • operational disruptions generally or specifically in connection with transitions to and from remote work environments; and the failure of our technological infrastructure or those of the service providers upon whom we rely including for infrastructure and cloud services;
       
    • our intention to repatriate previously taxed earnings and to reinvest all other earnings of our non-U.S. subsidiaries;
       
    • plans for future capital spending; the extent of corporate benefits from such spending including with respect to customer relationship management; and higher than anticipated costs for research and development or a slowdown in our research and development activities;
       
    • our ability to execute on our strategies related to environmental, social, and governance matters, and meet evolving and varied expectations, including as a result of evolving regulatory and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs and the availability of requisite financing, and changes in carbon markets; and
       
    • other risks and uncertainties described in our reports filed from time to time with the Securities and Exchange Commission (the SEC).  

    Ansys and any and all ANSYS, Inc. brand, product, service and feature names, logos and slogans are registered trademarks or trademarks of ANSYS, Inc. or its subsidiaries in the United States or other countries. All other brand, product, service and feature names or trademarks are the property of their respective owners.

    Visit https://investors.ansys.com for more information.

    ANSS-F

    Photos accompanying this announcement are available at
    https://www.globenewswire.com/NewsRoom/AttachmentNg/771cf00e-f710-44a2-8ccc-01eb3722147f

    https://www.globenewswire.com/NewsRoom/AttachmentNg/463dbc35-5aba-4a20-b2cb-2f5ed540482e

    https://www.globenewswire.com/NewsRoom/AttachmentNg/37428910-76eb-46be-b869-77a96fa55c58

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    This press release was published by a CLEAR® Verified individual.

    The MIL Network –

    February 20, 2025

  • MIL-OSI: Crescent Capital BDC, Inc. Reports Fourth Quarter 2024 Earnings Results; Declares a First Quarter Base Dividend of $0.42 Per Share and Series of Special Dividends

    Source: GlobeNewswire (MIL-OSI)

    LOS ANGELES, Feb. 19, 2025 (GLOBE NEWSWIRE) — Crescent Capital BDC, Inc. (“Crescent BDC” or “Company”) (NASDAQ: CCAP) today reported net investment income of $2.40 per share and net income of $1.99 per share for the year ended December 31, 2024. For the quarter ended December 31, 2024, net investment income and net income per share were $0.55 and $0.27, respectively. Reported net asset value (NAV) per share was $19.98 at December 31, 2024. The Company announced that its Board of Directors (the “Board”) declared a first quarter 2025 regular cash dividend of $0.42 per share to stockholders of record as of March 31, 2025, payable on April 15, 2025, and a series of special cash dividends related to undistributed taxable income in the aggregate amount of $0.15 per share, to be paid in three equal quarterly installments of $0.05 per share.1 

    Selected Financial Highlights
    ($ in millions, except per share amounts)

      As of and for the three months ended    
      December 31, 2024     September 30, 2024     December 31, 2023    
    Investments, at fair value   $   1,598.9     $   1,591.4     $   1,582.1    
    Total assets   $   1,656.3     $   1,645.0     $   1,627.4    
    Total net assets   $   740.6     $   748.8     $   742.6    
    Net asset value per share   $   19.98     $   20.20     $   20.04    
                               
    Investment income   $   46.4     $   51.6     $   50.0    
    Net investment income   $   20.5     $   23.5     $   22.8    
    Net realized gains (losses), net of taxes   $   (3.2 )   $   3.8     $   (6.6 )  
    Net change in unrealized gains (losses), net of taxes   $   (7.3 )   $   (12.0 )   $   14.7    
    Net increase (decrease) in net assets resulting from operations   $   10.0     $   15.3     $   30.9    
                               
    Net investment income per share   $   0.55     $   0.64     $   0.61    
    Net realized gains (losses) per share, net of taxes   $   (0.09 )   $   0.10     $   (0.18 )  
    Net change in unrealized gains (losses) per share, net of taxes   $   (0.19 )   $   (0.32 )   $   0.40    
    Net increase (decrease) in net assets resulting from operations per share   $   0.27     $   0.41     $   0.83    
    Regular distributions paid per share   $   0.42     $   0.42     $   0.41    
    Supplemental distributions paid per share   $   0.07     $   0.09     $   0.09    
                               
    Weighted average yield on income producing securities (at cost)2       10.9 %       11.6 %       12.3 %  
    Percentage of debt investments at floating rates       97.3 %       97.4 %       98.7 %  


    Portfolio & Investment Activity

    As of December 31, 2024 and December 31, 2023, the Company had investments in 185 and 186 portfolio companies with an aggregate fair value of $1,598.9 and $1,582.1 million, respectively. The portfolio at fair value was comprised of the following asset types:

    Portfolio Asset Types:                                
        As of    
    $ in millions   December 31, 2024       December 31, 2023    
    Investment Type   Fair Value     Percentage       Fair Value     Percentage    
    Senior secured first lien   $   379.7       23.7   %   $   429.2       27.0   %
    Unitranche first lien3       1,044.1       65.3           973.9       61.5    
    Unitranche first lien – last out3       14.8       0.9           13.5       0.9    
    Senior secured second lien       38.5       2.4           58.2       3.7    
    Unsecured debt       17.5       1.1           4.1       0.3    
    Equity & other       64.9       4.1           50.1       3.2    
    LLC/LP equity interests       39.4       2.5           53.1       3.4    
    Total investments   $   1,598.9       100.0   %   $   1,582.1       100.0   %


    Full Year

    For the year ended December 31, 2024, the Company invested $395.0 million across 33 new portfolio companies, 30 existing portfolio companies and several follow-on revolver and delayed draw fundings. For this period, the Company had $371.1 million in aggregate exits, sales and repayments. For the year ended December 31, 2023, the Company invested $200.7 million across 15 new portfolio companies, 18 existing portfolio companies and several follow-on revolver and delayed draw fundings. This excludes $335.0 million of assets at cost acquired in connection with the acquisition of First Eagle Alternative Capital BDC, Inc. (“FCRD”) in March 2023. The assets acquired through the FCRD transaction, at cost, were comprised of $185.1 million of senior secured first lien, $100.1 million of unitranche first lien, $2.8 million of equity investments and $47.0 million of LLC/LP equity interests. During this period, the Company had $231.2 million in aggregate exits, sales and repayments.

    Fourth Quarter

    For the quarter ended December 31, 2024, the Company invested $127.1 million across 14 new portfolio companies and several follow-on revolver and delayed draw fundings. During this period, the Company had $105.8 million in aggregate exits, sales and repayments. For the quarter ended September 30, 2024, the Company invested $72.7 million across six new portfolio companies and several follow-on revolver and delayed draw fundings. For this period, the Company had $92.3 million in aggregate exits, sales and repayments.

    Results of Operations

    Full Year

    For the year ended December 31, 2024, investment income increased to $197.4 million from $184.1 million for the year ended December 31, 2023. Interest income, which includes amortization of upfront fees, increased to $183.0 million for the year ended December 31, 2024 from $169.8 million for the year ended December 31, 2023, due to the growth of our income producing portfolio and one-time non-recurring income. Included in interest from investments for the years ended December 31, 2024 and 2023 are $3.7 million and $1.8 million of accelerated accretion of OID related to paydown activity, respectively. Dividend income decreased to $11.3 million for the year ended December 31, 2024 from $13.3 million for the year ended December 31, 2023. Other income, which includes consent, waiver, amendment, agency, underwriting and arranger fees, was $3.1 million and $1.0 million for the years ended December 31, 2024 and 2023, respectively.

    For the years ended December 31, 2024 and 2023, total expenses, including income and excise taxes, totaled $108.4 million and $101.6 million, respectively. Interest and other debt financing costs increased from $58.8 million for the year ended December 31, 2023 to $62.8 million for the year ended December 31, 2024, due to higher weighted average debt outstanding.

    Fourth Quarter

    For the quarter ended December 31, 2024, investment income decreased to $46.4 million from $51.6 million for the quarter ended September 30, 2024, respectively. Interest income, which includes amortization of upfront fees, decreased to $43.4 million for the quarter ended December 31, 2024 from $47.8 million for the quarter ended September 30, 2024, primarily due to a decrease in benchmark rates. Included in interest from investments for the quarters ended December 31, 2024 and September 30, 2024 are $0.5 million and $1.4 million of accelerated accretion of OID related to paydown activity, respectively. Dividend income decreased to $2.4 million for the quarter ended December 31, 2024 from $3.0 million for the quarter ended September 30, 2024. Other income, which includes consent, waiver, amendment, agency, underwriting and arranger fees, was $0.6 million and $0.8 million for the quarter ended December 31, 2024 and September 30, 2024, respectively.

    For the three months ended December 31, 2024 and September 30, 2024, total net expenses, including income and excise taxes, totaled $25.9 million and $28.1 million, respectively.

    Liquidity and Capital Resources

    As of December 31, 2024, the Company had $39.4 million in cash and cash equivalents and restricted cash and $337.5 million of undrawn capacity on its credit facilities and December 2024 note issuances, subject to borrowing base and other limitations. The weighted average cost of debt on the Company’s debt outstanding as of December 31, 2024 was 6.38%.

    The Company’s debt to equity ratio was 1.19x as of December 31, 2024.

    Conference Call

    The Company will host a webcast/conference call on Thursday, February 20, 2025 at 12:00 p.m. (Eastern Time) to discuss its financial results for the quarter and year ended December 31, 2024. Please visit Crescent BDC’s webcast link located on the Events & Presentations page of the Investor Relations section of Crescent BDC’s website for a slide presentation that complements the earnings conference call. 

    All interested parties are invited to participate via telephone or the live webcast, which will be hosted on a webcast link located on the Events & Presentations page of the Investor Resources section of Crescent BDC’s website at www.crescentbdc.com. Please visit the website to test your connection before the webcast. Participants are also invited to access the conference call by dialing the following number:

    Toll Free: (800) 715-9871
    Conference ID: 1217499

    All callers will need to reference the Conference ID once connected with the operator. An archived replay will be available via a webcast link located on the Investor Relations section of Crescent BDC’s website.

    Endnotes

    Note: Numbers may not sum due to rounding.

    1. The first special dividend will be paid on March 14, 2025 to stockholders of record as of February 28, 2025. The second special dividend will be paid on June 13, 2025 to stockholders of record as of May 30, 2025. The third special dividend will be paid on September 15, 2025 to stockholders of record as of August 29, 2025.
    2. Yield includes performing debt and other income producing investments (excluding investments on non-accrual).
    3. Unitranche loans are first lien loans that may extend deeper in a company’s capital structure than traditional first lien debt and may provide for a waterfall of cash flow priority among different lenders in the unitranche loan. In certain instances, the Company may find another lender to provide the “first out” portion of such loan and retain the “last out” portion of such loan, in which case, the “first out” portion of the loan would generally receive priority with respect to payment of principal, interest and any other amounts due thereunder over the “last out” portion that the Company would continue to hold. In exchange for the greater risk of loss, the “last out” portion earns a higher interest rate.
    Crescent Capital BDC, Inc.
    Consolidated Statements of Assets and Liabilities
    (in thousands except share and per share data)
    		  
      As of
    December 31, 2024    		     As of
    December 31, 2023    		  
    Assets          
    Investments, at fair value          
    Non-controlled non-affiliated investments (cost of$1,511,386 and $1,469,251, respectively) $ 1,504,013     $ 1,465,537  
    Non-controlled affiliated investments (cost of $46,104 and $56,084, respectively)   46,793       52,619  
    Controlled investments (cost of $66,416 and $67,353, respectively)   48,051       63,919  
    Cash and cash equivalents   10,130       7,780  
    Restricted cash and cash equivalents   29,292       16,690  
    Interest and dividend receivable   11,008       14,000  
    Receivable from unsettled transactions   1,163       251  
    Unrealized appreciation on foreign currency forward contracts   4,815       5,128  
    Deferred tax assets   746       114  
    Other assets   263       1,341  
    Total assets $ 1,656,274     $ 1,627,379  
               
    Liabilities          
    Debt (net of deferred financing costs of $8,214 and $7,138) $ 875,837     $ 844,783  
    Distributions payable   15,566       15,195  
    Interest and other debt financing costs payable   10,408       10,900  
    Management fees payable   5,066       5,026  
    Incentive fees payable   4,305       4,770  
    Deferred tax liabilities   746       578  
    Unrealized depreciation on foreign currency forward contracts   –       84  
    Accrued expenses and other liabilities   3,709       3,449  
    Total liabilities $ 915,637     $ 884,785  
               
    Net assets          
    Preferred stock, par value $0.001  per share (10,000 shares authorized,
    zero outstanding, respectively)    		 $ –     $ –  
    Common stock, par value $0.001 per share (200,000,000 shares authorized,
    37,061,547 shares issued and outstanding)    		   37       37  
    Paid-in capital in excess of par value   959,098       965,895  
    Accumulated earnings (loss)   (218,498 )     (223,338 )
    Total net assets $ 740,637     $ 742,594  
    Total liabilities and net assets $ 1,656,274     $ 1,627,379  
    Net asset value per share $ 19.98     $ 20.04  
    Crescent Capital BDC, Inc.
    Consolidated Statements of Operations
    (in thousands except share and per share data)    		  
        For the years ended December 31,  
          2024       2023       2022  
    Investment Income:                  
    From non-controlled non-affiliated investments:                  
    Interest income   $ 166,912     $ 162,089     $ 101,751  
    Paid-in-kind interest     9,592       3,191       1,564  
    Dividend income     497       438       127  
    Other income     3,056       658       540  
    From non-controlled affiliated investments:                  
    Interest income     3,834       2,974       1,625  
    Paid-in-kind interest     1,529       816       2,106  
    Dividend income     1,058       2,058       5,169  
    Other income     16       309       —  
    From controlled investments:                  
    Interest income     1,077       609       745  
    Paid-in-kind interest     —       192       732  
    Dividend income     9,784       10,800       2,358  
    Other income     8       —       —  
    Total investment income     197,363       184,134       116,717  
                       
    Expenses:                  
    Interest and other debt financing costs     62,761       58,742       31,880  
    Management fees     20,223       19,613       16,344  
    Income based incentive fees     18,855       17,451       11,214  
    Capital gains based incentive fees     —       —       (6,324 )
    Professional fees     2,027       1,593       1,302  
    Directors’ fees     618       600       524  
    Other general and administrative expenses     2,561       2,753       2,660  
    Total expenses     107,045       100,752       57,600  
    Management fees waiver     (125 )     (190 )     (229 )
    Income based incentive fees waiver     (145 )     (276 )     (538 )
    Net expenses     106,775       100,286       56,833  
    Net investment income before taxes     90,588       83,848       59,884  
    (Benefit) provision for income and excise taxes     1,555       1,307       155  
    Net investment income     89,033       82,541       59,729  
    Net realized and unrealized gains (losses) on investments:                  
    Net realized gain (loss) on:                  
    Non-controlled non-affiliated investments     (6,969 )     (12,465 )     1,157  
    Non-controlled affiliated investments     (5,214 )     —       7,098  
    Controlled investments     6,443       —       (3,301 )
    Foreign currency transactions     (1,171 )     (1,435 )     (33 )
    Foreign currency forward contracts     3,223       1,021       24  
    Net change in unrealized appreciation (depreciation) on:                  
    Non-controlled non-affiliated investments and foreign currency translation     (1,154 )     21,772       (43,818 )
    Non-controlled affiliated investments     4,154       (4,505 )     (9,419 )
    Controlled investments     (14,931 )     (1,171 )     (1,600 )
    Foreign currency forward contracts     (229 )     (2,954 )     6,513  
    Net realized and unrealized gains (losses) on investments     (15,848 )     263       (43,379 )
    Benefit (provision) for taxes on realized gain on investments     —       132       (911 )
    Benefit (provision) for taxes on unrealized appreciation (depreciation) on investments     464       901       105  
    Net increase (decrease) in net assets resulting from operations   $ 73,649     $ 83,837     $ 15,544  
                       
    Per common share data:                  
    Net increase (decrease) in net assets resulting from operations per share (basic and diluted):   $ 1.99     $ 2.33     $ 0.50  
    Net investment income per share (basic and diluted):   $ 2.40     $ 2.30     $ 1.93  
    Weighted average shares outstanding (basic and diluted):     37,061,547       35,928,203       30,887,360  


    About Crescent BDC

    Crescent BDC is a business development company that seeks to maximize the total return of its stockholders in the form of current income and capital appreciation by providing capital solutions to middle market companies with sound business fundamentals and strong growth prospects. Crescent BDC utilizes the extensive experience, origination capabilities and disciplined investment process of Crescent. Crescent BDC is externally managed by Crescent Cap Advisors, LLC, a subsidiary of Crescent. Crescent BDC has elected to be regulated as a business development company under the Investment Company Act of 1940. For more information about Crescent BDC, visit www.crescentbdc.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.

    About Crescent Capital Group

    Crescent is a global credit investment manager with $45 billion of assets under management. For over 30 years, the firm has focused on below investment grade credit through strategies that invest in marketable and privately originated debt securities including senior bank loans, high yield bonds, as well as private senior, unitranche and junior debt securities. Crescent is headquartered in Los Angeles with offices in New York, Boston, Chicago and London with more than 230 employees globally. Crescent is a part of SLC Management, the institutional alternatives and traditional asset management business of Sun Life. For more information about Crescent, visit www.crescentcap.com. However, the contents of such website are not and should not be deemed to be incorporated by reference herein.

    Contact:

    Dan McMahon
    daniel.mcmahon@crescentcap.com        
    212-364-0149

    Forward-Looking Statements

    This press release, and other statements that Crescent BDC may make, may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act, with respect to Crescent BDC’s future financial or business performance, strategies or expectations. Forward-looking statements are typically identified by words or phrases such as “trend,” “potential,” “opportunity,” “pipeline,” “believe,” “comfortable,” “expect,” “anticipate,” “current,” “intention,” “estimate,” “position,” “assume,” “outlook,” “continue,” “remain,” “maintain,” “sustain,” “seek,” “achieve,” and similar expressions, or future or conditional verbs such as “will,” “would,” “should,” “could,” “may” or similar expressions.

    Crescent BDC cautions that forward-looking statements are subject to numerous assumptions, risks and uncertainties, which may change over time. Forward-looking statements speak only as of the date they are made, and Crescent BDC assumes no duty to and does not undertake to update forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements and future results could differ materially from historical performance.

    In addition to factors previously disclosed in Crescent BDC’s SEC reports and those identified elsewhere in this press release, the following factors, among others, could cause actual results to differ materially from forward-looking statements or historical performance: (1) our future operating results; (2) our business prospects and the prospects of our portfolio companies; (3) the impact of investments that we expect to make; (4) our contractual arrangements and relationships with third parties; (5) the dependence of our future success on the general economy and its impact on the industries in which we invest; (6) the financial condition of and ability of our current and prospective portfolio companies to achieve their objectives; (7) our expected financings and investments; (8) the adequacy of our cash resources and working capital, including our ability to obtain continued financing on favorable terms; (9) the timing of cash flows, if any, from the operations of our portfolio companies; (10) the impact of increased competition; (11) the ability of our investment adviser to locate suitable investments for us and to monitor and administer our investments; (12) potential conflicts of interest in the allocation of opportunities between us and other investment funds managed by our investment adviser or its affiliates; (13) the ability of our investment adviser to attract and retain highly talented professionals; (14) changes in law and policy accompanying the new administration and uncertainty pending any such changes; (15) increased geopolitical unrest, terrorist attacks or acts of war, which may adversely affect the general economy, domestic and local financial and capital markets, or the specific industries of our portfolio companies; (16) changes and volatility in political, economic or industry conditions, the interest rate environment, foreign exchange rates or financial and capital markets; (17) the unfavorable resolution of legal proceedings; and (18) the impact of changes to tax legislation and, generally, our tax position.

    Crescent BDC’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC, identifies additional factors that can affect forward-looking statements.

    Other Information

    The information in this press release is summary information only and should be read in conjunction with Crescent BDC’s annual report on Form 10-K for the year ended December 31, 2024, which Crescent BDC filed with the U.S. Securities and Exchange Commission (the SEC) on February 19, 2024, as well as Crescent BDC’s other reports filed with the SEC. A copy of Crescent BDC’s annual report on Form 10-K for the year ended December 31, 2024, Crescent BDC’s quarterly reports on Form 10-Q and Crescent BDC’s other reports filed with the SEC can be found on Crescent BDC’s website at www.crescentbdc.com and the SEC’s website at www.sec.gov.

    The MIL Network –

    February 20, 2025

  • MIL-OSI: Vital Energy Reports Fourth-Quarter and Full-Year 2024 Financial and Operating Results

    Source: GlobeNewswire (MIL-OSI)

    Reports record total and oil production for 4Q-24 and FY-24

    Updates development inventory to >11 years of oil-weighted locations

    TULSA, OK, Feb. 19, 2025 (GLOBE NEWSWIRE) — Vital Energy, Inc. (NYSE: VTLE) (“Vital Energy” or the “Company”) today reported fourth-quarter and full-year 2024 financial and operating results and provided its 2025 outlook. Supplemental slides have been posted to the Company’s website and can be found at www.vitalenergy.com. A conference call to discuss results is planned for 7:30 a.m. CT, Thursday, February 20, 2025. A webcast will be available on the Company’s website.

    Fourth-Quarter 2024 Highlights

    • Successfully integrated Point Energy assets; acquired production exceeding expectations and operating cost reductions in-line with expectations
    • Reported a net loss of $359.4 million, Adjusted Net Income1 of $86.5 million and cash flows from operating activities of $257.2 million
    • Generated Consolidated EBITDAX1 of $383.5 million and Adjusted Free Cash Flow1 of $110.8 million
    • Produced Company-record 147.8 thousand barrels of oil equivalent per day (“MBOE/d”) and oil production of 69.8 thousand barrels of oil per day (“MBO/d”)
    • Reported lease operating expense (“LOE”) of $8.89 per BOE, below guidance of $9.35 per BOE
    • Reported capital investments of $226.1 million, excluding non-budgeted acquisitions and leasehold expenditures

    Full-Year 2024 Highlights

    • Increased oil-weighted inventory to ~925 locations, ~400 of which breakeven below $50 per barrel WTI
    • Issued an aggregate $1 billion of senior unsecured notes due 2032 at 7.875% and utilized the proceeds to repurchase higher coupon notes, resulting in annualized interest expense savings of $11 million
    • Reported a net loss of $173.5 million, Adjusted Net Income1 of $270.0 million and cash flows from operating activities of $1.0 billion
    • Generated Consolidated EBITDAX1 of $1.3 billion and Adjusted Free Cash Flow1 of $232.8 million
    • Reported year-end 2024 proved reserves of 455.3 million BOE, an increase of 12% versus prior year

    1Non-GAAP financial measure; please see supplemental reconciliations of GAAP to non-GAAP financial measures at the end of this release. 

    “We strengthened our business in 2024 through enhanced scale, optimized assets and a lengthened runway of high-quality inventory,” said Jason Pigott, President and Chief Executive Officer. “We successfully integrated our largest ever asset purchase in the Delaware Basin and early results positively impacted our operating and financial performance. Vital Energy continues to show that our talented people can capture important synergies from acquisitions while expanding inventory.”

    “In 2025, our primary goals are reducing costs, maximizing Adjusted Free Cash Flow generation, absolute debt reduction, and extending and enhancing our existing inventory,” continued Pigott. “Our inventory provides us with ample high-return development opportunities and a strong outlook for Adjusted Free Cash Flow generation. Recent operational achievements, like horseshoe wells, are creating new efficiencies and allowing us to develop highly productive, stranded leasehold. We will continue to focus on optimizing our asset base to achieve our cash flow and debt repayment targets.”

    Fourth-Quarter 2024 Financial and Operations Summary
    Financial Results. The Company reported a net loss of $359.4 million, or $(9.59) per diluted share, which included a non-cash pre-tax impairment loss on oil and gas properties of $481.3 million, and Adjusted Net Income of $86.5 million, or $2.30 per adjusted diluted share. Cash flows from operating activities were $257.2 million and Consolidated EBITDAX was $383.5 million.

    Production. Vital Energy’s total and oil production exceeded the high end of guidance, averaging 147,819 BOE/d and 69,827 BO/d, respectively. Volumes were driven by better-than-expected production from the Point Energy assets.

    Capital Investments. Total capital investments, excluding non-budgeted acquisitions and leasehold expenditures, were $226 million, including approximately $17 million of additional drilling and completions investments related to increased working interest and carried interest and $5 million from acceleration of activity into the fourth quarter.

    Investments included $190 million for drilling and completions, $22 million in infrastructure investments, $8 million in other capitalized costs and $6 million in land, exploration and data-related costs.

    Operating Expenses. LOE during the period was $8.89 per BOE, below guidance of $9.35 per BOE, as the Company integrated its Point Energy assets. Lower expenses were primarily related to reduced workover activity on the Point Energy assets during integration.

    General and Administrative Expenses. General and administrative expenses totaled $1.95 per BOE for fourth-quarter 2024, in line with guidance. General and administrative expenses, excluding long-term incentive plan (“LTIP”) and transaction expenses were $1.71 per BOE. Cash LTIP expenses were $0.02 per BOE and reflected the decrease in Vital Energy’s common stock price during the third quarter. Non-cash LTIP expenses were $0.22 per BOE.

    Liquidity. At December 31, 2024, the Company had $880 million drawn on its $1.5 billion senior secured credit facility and cash and cash equivalents of $40 million.

    2025 Outlook

    Vital Energy’s 2025 development plan is designed to maximize cash flow to facilitate debt repayment, supported by its robust hedge position. In comparison to the Company’s earlier projections, the finalized 2025 outlook has lower capital investment levels and slightly lower oil production. In 2025, the Company expects to generate approximately $330 million of Adjusted Free Cash Flow at $70 per barrel WTI.

    Capital Investments. Vital Energy plans to invest $825 – $925 million in 2025, excluding non-budgeted acquisitions and leasehold expenditures. Efficiencies and lower costs are driving capital investments approximately 3% lower than earlier projections while expecting to complete approximately the same net lateral feet as in 2024.

    Production. The Company expects total production of 134.0 – 140.0 MBOE/d and oil production of 62.5 – 66.5 MBO/d. Production is approximately 3% lower than earlier projections. The shortfall is related to operational delays and the underperformance of a seven-well development package in Upton County.

    Operating Expenses. The Company has made significant progress reducing operating expenses through integration of its Point Energy assets. Some workover expense was deferred from fourth-quarter 2024 into the first quarter of 2025. Average LOE for the two quarters is expected to be around $9.20 per BOE, putting the Company on pace to achieve LOE below $9.00 per BOE by the end of 2025.

    Oil-Weighted Inventory

    The Company has continued to extend and enhance its inventory of high-return development locations. At year-end 2024, Vital Energy had approximately 925 locations with an average breakeven WTI oil price of around $50 WTI. Approximately 400 of these locations breakeven below $50 per barrel WTI. Additionally, there are an additional approximately 250 locations that can be added to inventory pending successful delineation.

    2024 Proved Reserves

    Vital Energy’s total proved reserves at year-end 2024 were 455.3 MMBOE (40% oil, 70% developed). The standardized measure of discounted net cash flows was $4.22 billion and the PV-10 value was $4.51 billion utilizing SEC benchmark pricing of $75.48 per barrel WTI for oil ($76.76 per barrel average realized price) and $2.13 per MMBtu Henry Hub for natural gas ($0.85 per Mcf average realized price).

    First-Quarter 2025 Guidance

    The table below reflects the Company’s guidance for production and capital investments.

        1Q-25E
    Total production (MBOE/d)           135.0 – 141.0
    Oil production (MBO/d)           62.0 – 66.0
    Capital investments, excluding non-budgeted acquisitions ($ MM)           $230 – $260
         

    The table below reflects the Company’s guidance for select revenue and expense items.

        1Q-25E
    Average sales price realizations (excluding derivatives):    
    Oil (% of WTI)           101%
    NGL (% of WTI)           26%
    Natural gas (% of Henry Hub)           50%
         
    Net settlements received (paid) for matured commodity derivatives ($ MM):    
    Oil           $14
    NGL           ($2)
    Natural gas           $0
         
    Selected average costs & expenses:    
    Lease operating expenses ($ MM)           $115 – $120
    Production and ad valorem taxes (% of oil, NGL and natural gas sales revenues)           6.30%
    Oil transportation and marketing expenses ($ MM)           $11.5 – $12.5
    Gas gathering, processing and transportation expenses ($ MM)           $7.0 – $8.0
    General and administrative expenses (excluding LTIP and transaction expenses, $ MM)           $21.5 – $23.0
    General and administrative expenses (LTIP cash, $ MM)           $0.5 – $0.6
    General and administrative expenses (LTIP non-cash, $ MM)           $3.0 – $3.5
    Depletion, depreciation and amortization ($ MM)           $180 – $190
         

    Conference Call Details

    Vital Energy plans to host a conference call at 7:30 a.m. CT on Thursday, February 20, 2025, to discuss its fourth-quarter and full-year 2024 financial and operating results and its 2025 outlook. Supplemental slides will be posted to the Company’s website. Interested parties are invited to listen to the call via the Company’s website at www.vitalenergy.com, under the tab for “Investor Relations | News & Presentations | Upcoming Events.”

    About Vital Energy

    Vital Energy, Inc. is an independent energy company with headquarters in Tulsa, Oklahoma. Vital Energy’s business strategy is focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas.

    Additional information about Vital Energy may be found on its website at www.vitalenergy.com.

    Forward-Looking Statements
    This press release and any oral statements made regarding the contents of this release, including in the conference call referenced herein, contain forward-looking statements as defined under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities that Vital Energy assumes, plans, expects, believes, intends, projects, indicates, enables, transforms, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management’s current belief, based on currently available information, as to the outcome and timing of future events. Such statements are not guarantees of future performance and involve risks, assumptions and uncertainties. General risks relating to Vital Energy include, but are not limited to, continuing and worsening inflationary pressures and associated changes in monetary policy that may cause costs to rise; changes in domestic and global production, supply and demand for commodities, including as a result of actions by the Organization of Petroleum Exporting Countries and other producing countries (“OPEC+”) and the Russian-Ukrainian or Israeli-Hamas military conflicts, the decline in prices of oil, natural gas liquids and natural gas and the related impact to financial statements as a result of asset impairments and revisions to reserve estimates, reduced demand due to shifting market perception towards the oil and gas industry; competition in the oil and gas industry; the ability of the Company to execute its strategies, including its ability to successfully identify and consummate strategic acquisitions at purchase prices that are accretive to its financial results and to successfully integrate acquired businesses, assets and properties and its ability to successfully execute on its strategy to enhance well productivity, including by drilling long-lateral horseshoe wells, pipeline transportation and storage constraints in the Permian Basin, the effects and duration of the outbreak of disease, and any related government policies and actions, long-term performance of wells, drilling and operating risks, the possibility of production curtailment, the impact of new laws and regulations, including those regarding the use of hydraulic fracturing, and under the Inflation Reduction Act (the “IRA”), including those related to climate change, the impact of legislation or regulatory initiatives intended to address induced seismicity on our ability to conduct our operations; uncertainties in estimating reserves and production results; hedging activities, tariffs on steel, the impacts of severe weather, including the freezing of wells and pipelines in the Permian Basin due to cold weather, technological innovations and scientific developments, physical and transition risks associated with climate change, to ESG and sustainability-related matters, risks related to our public statements with respect to such matters that may be subject to heightened scrutiny from public and governmental authorities related to the risk of potential “greenwashing,” i.e., misleading information or false claims overstating potential sustainability-related benefits, risks regarding potentially conflicting anti-ESG initiatives from certain U.S. state or other governments, possible impacts of litigation and regulations, the impact of the Company’s transactions, if any, with its securities from time to time, the impact of new environmental, health and safety requirements applicable to the Company’s business activities, the possibility of the elimination of federal income tax deductions for oil and gas exploration and development and imposition of any additional taxes under the IRA or otherwise, and other factors, including those and other risks described in its Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Annual Report”), subsequent Quarterly Reports on Form 10-Q and those set forth from time to time in other filings with the Securities and Exchange Commission (“SEC”). These documents are available through Vital Energy’s website at www.vitalenergy.com under the tab “Investor Relations” or through the SEC’s Electronic Data Gathering and Analysis Retrieval System at www.sec.gov. Any of these factors could cause Vital Energy’s actual results and plans to differ materially from those in the forward-looking statements. Therefore, Vital Energy can give no assurance that its future results will be as estimated. Any forward-looking statement speaks only as of the date on which such statement is made. Vital Energy does not intend to, and disclaims any obligation to, correct, update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

    This press release and any accompanying disclosures include financial measures that are not in accordance with generally accepted accounting principles (“GAAP”), such as Adjusted Free Cash Flow, Adjusted Net Income, Net Debt and Consolidated EBITDAX. While management believes that such measures are useful for investors, they should not be used as a replacement for financial measures that are in accordance with GAAP. For a reconciliation of such non-GAAP financial measures to the nearest comparable measure in accordance with GAAP, please see the supplemental financial information at the end of this press release.

    Unless otherwise specified, references to “average sales price” refer to average sales price excluding the effects of the Company’s derivative transactions.

    All amounts, dollars and percentages presented in this press release are rounded and therefore approximate.

    Vital Energy, Inc.
    Selected operating data

        Three months ended December 31,   Year ended December 31,
          2024     2023       2024     2023
        (unaudited)   (unaudited)
    Sales volumes:                
    Oil (MBbl)             6,424     4,881       22,585     16,894
    NGL (MBbl)              3,703     2,808       13,270     9,128
    Natural gas (MMcf)             20,836     16,644       78,794     55,404
    Oil equivalent (MBOE)(1)             13,599     10,465       48,987     35,256
    Average daily oil equivalent sales volumes (BOE/d)(1)             147,819     113,747       133,845     96,591
    Average daily oil sales volumes (Bbl/d)(1)             69,827     53,070       61,708     46,284
    Average sales prices(1):                
    Oil ($/Bbl)(2)           $ 70.80   $ 79.37     $ 76.55   $ 78.64
    NGL ($/Bbl)(2)           $ 16.75   $ 14.14     $ 14.38   $ 15.00
    Natural gas ($/Mcf)(2)           $ 0.59   $ 0.90     $ 0.20   $ 1.14
    Average sales price ($/BOE)(2)           $ 38.92   $ 42.26     $ 39.51   $ 43.36
    Oil, with commodity derivatives ($/Bbl)(3)           $ 76.08   $ 77.73     $ 76.56   $ 76.99
    NGL, with commodity derivatives ($/Bbl)(3)           $ 16.75   $ 14.14     $ 14.29   $ 15.00
    Natural gas, with commodity derivatives ($/Mcf)(3)           $ 1.25   $ 1.18     $ 0.95   $ 1.34
    Average sales price, with commodity derivatives ($/BOE)(3)           $ 42.42   $ 41.94     $ 40.70   $ 42.87
    Selected average costs and expenses per BOE sold(1):                
    Lease operating expenses           $ 8.89   $ 8.33     $ 9.15   $ 7.41
    Production and ad valorem taxes             2.43     2.27       2.41     2.64
    Oil transportation and marketing expenses             0.76     0.85       0.92     1.17
    Gas gathering, processing and transportation expenses             0.42     0.16       0.36     0.06
    General and administrative (excluding LTIP and transaction expenses)             1.71     2.12       1.75     2.26
    Total selected operating expenses           $ 14.21   $ 13.73     $ 14.59   $ 13.54
    General and administrative (LTIP):                
    LTIP cash           $ 0.02   $ (0.09 )   $ 0.05   $ 0.11
    LTIP non-cash           $ 0.22   $ 0.22     $ 0.27   $ 0.28
    General and administrative (transaction expenses)           $ —   $ 0.79     $ 0.01   $ 0.32
    Depletion, depreciation and amortization           $ 15.77   $ 14.58     $ 15.15   $ 13.14

    _______________________________________________________________________________

    (1) The numbers presented are calculated based on actual amounts and may not recalculate using the rounded numbers presented in the table above.
    (2) Price reflects the average of actual sales prices received when control passes to the purchaser/customer adjusted for quality, certain transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the delivery point.
    (3) Price reflects the after-effects of the Company’s commodity derivative transactions on its average sales prices. The Company’s calculation of such after-effects includes settlements of matured commodity derivatives during the respective periods.
       

    Vital Energy, Inc.
    Consolidated balance sheets

    (in thousands, except share data)   December 31, 2024   December 31, 2023
        (unaudited)
    Assets        
    Current assets:        
    Cash and cash equivalents           $ 40,179     $ 14,061  
    Accounts receivable, net             299,698       238,773  
    Derivatives             101,474       99,336  
    Other current assets             25,205       18,749  
    Total current assets             466,556       370,919  
    Property and equipment:        
    Oil and natural gas properties, full cost method:        
    Evaluated properties             13,587,040       11,799,155  
    Unevaluated properties not being depleted             242,792       195,457  
    Less: accumulated depletion and impairment             (8,966,200 )     (7,764,697 )
    Oil and natural gas properties, net             4,863,632       4,229,915  
    Midstream and other fixed assets, net             134,265       130,293  
    Property and equipment, net             4,997,897       4,360,208  
    Derivatives             34,564       51,071  
    Operating lease right-of-use assets             104,329       144,900  
    Deferred income taxes             239,685       188,836  
    Other noncurrent assets, net             35,915       33,647  
    Total assets           $ 5,878,946     $ 5,149,581  
    Liabilities and stockholders’ equity        
    Current liabilities:        
    Accounts payable and accrued liabilities           $ 185,115     $ 159,892  
    Accrued capital expenditures             95,593       91,937  
    Undistributed revenue and royalties             187,563       194,307  
    Operating lease liabilities             73,143       70,651  
    Other current liabilities             59,725       78,802  
    Total current liabilities             601,139       595,589  
    Long-term debt, net             2,454,242       1,609,424  
    Derivatives             5,814       —  
    Asset retirement obligations             82,941       81,680  
    Operating lease liabilities             26,733       71,343  
    Other noncurrent liabilities             7,506       6,288  
    Total liabilities             3,178,375       2,364,324  
    Commitments and contingencies        
    Stockholders’ equity:        
    Preferred stock, $0.01 par value, 50,000,000 shares authorized, and zero and 595,104 issued and outstanding as of December 31, 2024 and 2023, respectively             —       6  
    Common stock, $0.01 par value, 80,000,000 shares authorized, and 38,144,248 and 35,413,551 issued and outstanding as of December 31, 2024 and December 31, 2023, respectively             381       354  
    Additional paid-in capital             3,823,241       3,733,775  
    Accumulated deficit             (1,123,051 )     (948,878 )
    Total stockholders’ equity             2,700,571       2,785,257  
    Total liabilities and stockholders’ equity           $ 5,878,946     $ 5,149,581  
                     

    Vital Energy, Inc.
    Consolidated statements of operations

        Three months ended December 31,   Year ended December 31,
    (in thousands, except per share data)     2024       2023       2024       2023  
        (unaudited)   (unaudited)
    Revenues:                
    Oil sales           $ 454,852     $ 387,536     $ 1,728,971     $ 1,328,518  
    NGL sales             62,023       39,705       190,775       136,901  
    Natural gas sales             12,394       14,954       15,544       63,214  
    Sales of purchased oil             3,759       121       12,745       14,313  
    Other operating revenues             1,342       2,205       4,279       4,658  
    Total revenues             534,370       444,521       1,952,314       1,547,604  
    Costs and expenses:                
    Lease operating expenses             120,922       87,190       448,078       261,129  
    Production and ad valorem taxes             33,010       23,726       117,947       93,224  
    Oil transportation and marketing expenses             10,366       8,893       44,843       41,284  
    Gas gathering, processing and transportation expenses             5,759       1,642       17,825       2,013  
    Costs of purchased oil             3,912       209       13,243       15,065  
    General and administrative             26,644       31,766       101,578       104,819  
    Organizational restructuring expenses             795       1,654       795       1,654  
    Depletion, depreciation and amortization             214,498       152,626       741,966       463,244  
    Impairment expense             481,305       —       481,305       —  
    Other operating expenses, net             3,434       1,685       8,799       6,223  
    Total costs and expenses             900,645       309,391       1,976,379       988,655  
    Gain on disposal of assets, net             508       132       1,513       672  
    Operating income (loss)             (365,767 )     135,262       (22,552 )     559,621  
    Non-operating income (expense):                
    Gain (loss) on derivatives, net             (43,924 )     229,105       38,140       96,230  
    Interest expense             (53,564 )     (50,431 )     (177,794 )     (149,819 )
    Loss on extinguishment of debt, net             —       (4,039 )     (66,115 )     (4,039 )
    Other income, net             1,139       6,051       7,060       9,748  
    Total non-operating income (expense), net             (96,349 )     180,686       (198,709 )     (47,880 )
    Income (loss) before income taxes             (462,116 )     315,948       (221,261 )     511,741  
    Income tax benefit (expense)             102,724       (34,514 )     47,740       183,337  
    Net income (loss)              (359,392 )     281,434       (173,521 )     695,078  
    Preferred stock dividends             —       (449 )     (652 )     (449 )
    Net income (loss) available to common stockholders           $ (359,392 )   $ 280,985     $ (174,173 )   $ 694,629  
    Net income (loss) per common share:                
    Basic           $ (9.59 )   $ 10.04     $ (4.74 )   $ 34.30  
    Diluted           $ (9.59 )   $ 9.44     $ (4.74 )   $ 33.44  
    Weighted-average common shares outstanding:                
    Basic             37,477       27,991       36,725       20,254  
    Diluted             37,477       29,813       36,725       20,783  
                                     

    Vital Energy, Inc.
    Consolidated statements of cash flows

        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024       2023       2024       2023  
        (unaudited)   (unaudited)
    Cash flows from operating activities:                
    Net income (loss)           $ (359,392 )   $ 281,434     $ (173,521 )   $ 695,078  
    Adjustments to reconcile net income (loss) to net cash provided by operating activities:                
    Share-settled equity-based compensation, net             3,398       2,592       14,646       10,994  
    Depletion, depreciation and amortization             214,498       152,626       741,966       463,244  
    Impairment expense             481,305       —       481,305       —  
    Mark-to-market on derivatives:                
    (Gain) loss on derivatives, net             43,924       (229,105 )     (38,140 )     (96,230 )
    Settlements received (paid) for matured derivatives, net             47,571       (3,328 )     58,322       (17,648 )
    Loss on extinguishment of debt, net             —       4,039       66,115       4,039  
    Deferred income tax (benefit) expense             (102,474 )     31,089       (50,196 )     (189,060 )
    Other, net             8,055       5,672       27,663       13,983  
    Changes in operating assets and liabilities:                
    Accounts receivable, net             (74,978 )     (38,935 )     (61,163 )     (77,742 )
    Other current assets             1,211       6,835       (6,456 )     (2,754 )
    Other noncurrent assets, net             (315 )     (782 )     (1,151 )     484  
    Accounts payable and accrued liabilities             34,084       48,520       12,803       52,763  
    Undistributed revenue and royalties             (10,169 )     (32,106 )     (29,762 )     (31,907 )
    Other current liabilities             (23,572 )     7,190       (25,004 )     (5,656 )
    Other noncurrent liabilities             (5,972 )     (2,007 )     (17,097 )     (6,632 )
      Net cash provided by operating activities             257,174       233,734       1,000,330       812,956  
    Cash flows from investing activities:                
    Acquisitions of oil and natural gas properties, net             (19,686 )     (309,379 )     (850,911 )     (849,508 )
    Capital expenditures:                
    Oil and natural gas properties             (231,158 )     (162,351 )     (864,437 )     (617,397 )
    Midstream and other fixed assets             (6,711 )     (3,329 )     (23,341 )     (14,021 )
    Proceeds from dispositions of capital assets, net of selling costs             133       60       2,874       2,403  
    Other investing activities             —       311       (1,776 )     2,393  
      Net cash used in investing activities             (257,422 )     (474,688 )     (1,737,591 )     (1,476,130 )
    Cash flows from financing activities:                
    Borrowings on Senior Secured Credit Facility             310,000       135,000       1,750,000       765,000  
    Payments on Senior Secured Credit Facility             (290,000 )     —       (1,005,000 )     (700,000 )
    Issuance of senior unsecured notes             —       —       1,001,500       897,710  
    Extinguishment of debt             —       (457,792 )     (952,214 )     (457,792 )
    Proceeds from issuance of common stock, net of offering costs             —       220       —       161,223  
    Stock exchanged for tax withholding             (36 )     (21 )     (3,569 )     (3,077 )
    Payments for debt issuance costs             (340 )     (10,680 )     (22,078 )     (27,011 )
    Other, net             (1,389 )     (1,407 )     (5,260 )     (3,253 )
    Net cash provided by (used in) financing activities             18,235       (334,680 )     763,379       632,800  
    Net increase (decrease) in cash and cash equivalents             17,987       (575,634 )     26,118       (30,374 )
    Cash and cash equivalents, beginning of period             22,192       589,695       14,061       44,435  
    Cash and cash equivalents, end of period           $ 40,179     $ 14,061     $ 40,179     $ 14,061  
                                     

    Vital Energy, Inc.
    Supplemental reconciliations of GAAP to non-GAAP financial measures

    Non-GAAP financial measures

    The non-GAAP financial measures of Adjusted Free Cash Flow, Adjusted Net Income, Consolidated EBITDAX, Net Debt and Net Debt to Consolidated EBITDAX, as defined by the Company, may not be comparable to similarly titled measures used by other companies. Furthermore, these non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP measures of liquidity or financial performance, but rather should be considered in conjunction with GAAP measures, such as net income or loss, operating income or loss or cash flows from operating activities.

    Adjusted Free Cash Flow

    Adjusted Free Cash Flow is a non-GAAP financial measure that the Company defines as net cash provided by operating activities (GAAP) before net changes in operating assets and liabilities and transaction expenses related to non-budgeted acquisitions, less capital investments, excluding non-budgeted acquisition costs. Management believes Adjusted Free Cash Flow is useful to management and investors in evaluating operating trends in its business that are affected by production, commodity prices, operating costs and other related factors. There are significant limitations to the use of Adjusted Free Cash Flow as a measure of performance, including the lack of comparability due to the different methods of calculating Adjusted Free Cash Flow reported by different companies.

    The following table presents a reconciliation of net cash provided by operating activities (GAAP) to Adjusted Free Cash Flow (non-GAAP) for the periods presented:

        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024       2023       2024       2023  
        (unaudited)   (unaudited)
    Net cash provided by operating activities           $ 257,174     $ 233,734     $ 1,000,330     $ 812,956  
    Less:                
    Net changes in operating assets and liabilities             (79,711 )     (11,285 )     (127,830 )     (71,444 )
    General and administrative (transaction expenses)             19       (8,221 )     (548 )     (11,341 )
    Cash flows from operating activities before net changes in operating assets and liabilities and transaction expenses related to non-budgeted acquisitions              336,866       253,240       1,128,708       895,741  
    Less capital investments, excluding non-budgeted acquisition costs:                
    Oil and natural gas properties(1)(2)             221,033       179,696       873,637       663,025  
    Midstream and other fixed assets(1)             5,043       4,511       22,276       15,601  
    Total capital investments, excluding non-budgeted acquisition costs              226,076       184,207       895,913       678,626  
    Adjusted Free Cash Flow (non-GAAP)            $ 110,790     $ 69,033     $ 232,795     $ 217,115  

    _______________________________________________________________________________

    (1) Includes capitalized share-settled equity-based compensation and asset retirement costs.
    (2) For the three months and year ended December 31, 2024, capital investments for oil and natural gas properties, excluding non-budgeted acquisition costs, includes $16.8 million of additional drilling and completions investments related to increased working interest and carried interest.
       

    Adjusted Net Income

    Adjusted Net Income is a non-GAAP financial measure that the Company defines as net income or loss (GAAP) plus adjustments for mark-to-market on derivatives, premiums paid or received for commodity derivatives that matured during the period, organizational restructuring expenses, impairment expense, gains or losses on disposal of assets, income taxes, other non-recurring income and expenses and adjusted income tax expense. Management believes Adjusted Net Income helps investors in the oil and natural gas industry to measure and compare the Company’s performance to other oil and natural gas companies by excluding from the calculation items that can vary significantly from company to company depending upon accounting methods, the book value of assets and other non-operational factors.

    The following table presents a reconciliation of net income (loss) (GAAP) to Adjusted Net Income (non-GAAP) for the periods presented:

        Three months ended December 31,   Year ended December 31,
    (in thousands, except per share data)     2024       2023       2024       2023  
        (unaudited)   (unaudited)
    Net income (loss)            $ (359,392 )   $ 281,434     $ (173,521 )   $ 695,078  
    Plus:                
    Mark-to-market on derivatives:                
    (Gain) loss on derivatives, net             43,924       (229,105 )     (38,140 )     (96,230 )
    Settlements received (paid) for matured derivatives, net             47,571       (3,328 )     58,322       (17,068 )
    Settlements received for contingent consideration             —       311       —       1,813  
    Organizational restructuring expenses             795       1,654       795       1,654  
    Impairment expense             481,305       —       481,305       —  
    Gain on disposal of assets, net             (508 )     (132 )     (1,513 )     (672 )
    Loss on extinguishment of debt, net             —       4,039       66,115       4,039  
    Income tax (benefit) expense             (102,724 )     34,514       (47,740 )     (183,337 )
    General and administrative (transaction expenses)             (19 )     8,221       548       11,341  
    Adjusted income before adjusted income tax expense             110,952       97,608       346,171       416,618  
    Adjusted income tax expense(1)             (24,410 )     (21,474 )     (76,158 )     (91,656 )
    Adjusted Net Income (non-GAAP)           $ 86,542     $ 76,134     $ 270,013     $ 324,962  
    Net income (loss) per common share:                
    Basic           $ (9.59 )   $ 10.04     $ (4.74 )   $ 34.30  
    Diluted           $ (9.59 )   $ 9.44     $ (4.74 )   $ 33.44  
    Adjusted Net Income per common share:                
    Basic           $ 2.31     $ 2.72     $ 7.35     $ 16.04  
    Diluted           $ 2.31     $ 2.55     $ 7.35     $ 15.64  
    Adjusted diluted           $ 2.30     $ 2.55     $ 7.21     $ 15.64  
    Weighted-average common shares outstanding:                
    Basic             37,477       27,991       36,725       20,254  
    Diluted             37,477       29,813       36,725       20,783  
    Adjusted diluted             37,670       29,813       37,445       20,783  

    _______________________________________________________________________________

    (1) Adjusted income tax expense is calculated by applying a statutory tax rate of 22% for each of the periods ended December 31, 2024 and 2023.
       

    Consolidated EBITDAX

    Consolidated EBITDAX is a non-GAAP financial measure defined in the Company’s Senior Secured Credit Facility as net income or loss (GAAP) plus adjustments for share-settled equity-based compensation, depletion, depreciation and amortization, impairment expense, organizational restructuring expenses, gains or losses on disposal of assets, mark-to-market on derivatives, accretion expense, interest expense, income taxes and other non-recurring income and expenses. Consolidated EBITDAX provides no information regarding a company’s capital structure, borrowings, interest costs, capital expenditures, working capital movement or tax position. Consolidated EBITDAX does not represent funds available for future discretionary use because it excludes funds required for debt service, capital expenditures, working capital, income taxes, franchise taxes and other commitments and obligations. However, management believes Consolidated EBITDAX is useful to an investor because this measure:

    • is used by investors in the oil and natural gas industry to measure a company’s operating performance without regard to items that can vary substantially from company to company depending upon accounting methods, the book value of assets, capital structure and the method by which assets were acquired, among other factors;
    • helps investors to more meaningfully evaluate and compare the results of the Company’s operations from period to period by removing the effect of the Company’s capital structure from the Company’s operating structure; and
    • is used by management for various purposes, including (i) as a measure of operating performance, (ii) as a measure of compliance under the Senior Secured Credit Facility, (iii) in presentations to the board of directors and (iv) as a basis for strategic planning and forecasting.

    There are significant limitations to the use of Consolidated EBITDAX as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect the Company’s net income or loss and the lack of comparability of results of operations to different companies due to the different methods of calculating Consolidated EBITDAX, or similarly titled measures, reported by different companies. The Company is subject to financial covenants under the Senior Secured Credit Facility, one of which establishes a maximum permitted ratio of Net Debt, as defined in the Senior Secured Credit Facility, to Consolidated EBITDAX. See Note 7 in the 2024 Annual Report, to be filed with the SEC, for additional discussion of the financial covenants under the Senior Secured Credit Facility. Additional information on Consolidated EBITDAX can be found in the Company’s Eleventh Amendment to the Senior Secured Credit Facility, as filed with the SEC on September 13, 2023.

    The following table presents a reconciliation of net income (loss) (GAAP) to Consolidated EBITDAX (non-GAAP) for the periods presented:

        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024       2023       2024       2023  
        (unaudited)   (unaudited)
    Net income (loss)            $ (359,392 )   $ 281,434     $ (173,521 )   $ 695,078  
    Plus:                
    Share-settled equity-based compensation, net             3,398       2,592       14,646       10,994  
    Depletion, depreciation and amortization             214,498       152,626       741,966       463,244  
    Impairment expense             481,305       —       481,305       —  
    Organizational restructuring expenses             795       1,654       795       1,654  
    Gain on disposal of assets, net             (508 )     (132 )     (1,513 )     (672 )
    Mark-to-market on derivatives:                
    (Gain) loss on derivatives, net             43,924       (229,105 )     (38,140 )     (96,230 )
    Settlements received (paid) for matured derivatives, net             47,571       (3,328 )     58,322       (17,068 )
    Settlements received for contingent consideration             —       311       —       1,813  
    Accretion expense             1,107       988       4,209       3,703  
    Interest expense             53,564       50,431       177,794       149,819  
    Loss extinguishment of debt, net             —       4,039       66,115       4,039  
    Income tax (benefit) expense             (102,724 )     34,514       (47,740 )     (183,337 )
    General and administrative (transaction expenses)             (19 )     8,221       548       11,341  
    Consolidated EBITDAX (non-GAAP)           $ 383,519     $ 304,245     $ 1,284,786     $ 1,044,378  
                                     

    The following table presents a reconciliation of net cash provided by operating activities (GAAP) to Consolidated EBITDAX (non-GAAP) for the periods presented:

        Three months ended December 31,   Year ended December 31,
    (in thousands)     2024       2023       2024       2023  
        (unaudited)   (unaudited)
    Net cash provided by operating activities           $ 257,174     $ 233,734     $ 1,000,330     $ 812,956  
    Plus:                
    Interest expense             53,564       50,431       177,794       149,819  
    Organizational restructuring expenses             795       1,654       795       1,654  
    Current income tax (benefit) expense             (250 )     3,425       2,456       5,723  
    Net changes in operating assets and liabilities             79,711       11,285       127,830       71,444  
    General and administrative (transaction expenses)             (19 )     8,221       548       11,341  
    Settlements received for contingent consideration             —       311       —       1,813  
    Other, net             (7,456 )     (4,816 )     (24,967 )     (10,372 )
    Consolidated EBITDAX (non-GAAP)           $ 383,519     $ 304,245     $ 1,284,786     $ 1,044,378  
                                     

    Net Debt

    Net Debt is a non-GAAP financial measure defined in the Company’s Senior Secured Credit Facility as the face value of long-term debt plus any outstanding letters of credit, less cash and cash equivalents, where cash and cash equivalents are capped at $100 million when there are borrowings on the Senior Secured Credit Facility. Management believes Net Debt is useful to management and investors in determining the Company’s leverage position since the Company has the ability, and may decide, to use a portion of its cash and cash equivalents to reduce debt.

    Net Debt to Consolidated EBITDAX

    Net Debt to Consolidated EBITDAX is a non-GAAP financial measure defined in the Company’s Senior Secured Credit Facility as Net Debt divided by Consolidated EBITDAX for the previous four quarters, which requires various treatment of asset transaction impacts. Net Debt to Consolidated EBITDAX is used by the Company’s management for various purposes, including as a measure of operating performance, in presentations to its board of directors and as a basis for strategic planning and forecasting.

    PV-10

    PV-10 is a non-GAAP financial measure that is derived from the standardized measure of discounted future net cash flows, which is the most directly comparable GAAP financial measure. PV-10 is a computation of the standardized measure of discounted future net cash flows on a pre-tax basis. PV-10 is equal to the standardized measure of discounted future net cash flows at the applicable date, before deducting future income taxes, discounted at 10 percent. Management believes that the presentation of PV-10 is relevant and useful to investors because it presents the discounted future net cash flows attributable to the Company’s estimated proved reserves prior to taking into account future corporate income taxes, and it is a useful measure for evaluating the relative monetary significance of the Company’s proved oil, NGL and natural gas assets. Further, investors may utilize the measure as a basis for comparison of the relative size and value of proved reserves to other companies. The Company uses this measure when assessing the potential return on investment related to proved oil, NGL and natural gas assets. However, PV-10 is not a substitute for the standardized measure of discounted future net cash flows. The PV-10 measure and the standardized measure of discounted future net cash flows do not purport to present the fair value of the Company’s oil, NGL and natural gas reserves of the property.

    (in millions)   December 31, 2024
        (unaudited)
    Standardized measure of discounted future net cash flows           $ 4,215  
    Less: present value of future income taxes discounted at 10%             (295 )
    PV-10 (non-GAAP)           $ 4,510  

    Investor Contact:
    Ron Hagood
    918.858.5504
    ir@vitalenergy.com

    The MIL Network –

    February 20, 2025

  • MIL-OSI USA: Warner, Kaine, Kiggans, & Subramanyam Introduce Bill to Remove Unnecessary Burdens and Costs to Relocate Contaminated Chincoteague Water Wells

    US Senate News:

    Source: United States Senator for Virginia Tim Kaine
    Published: February 19 2025

    WASHINGTON, D.C. – Yesterday, U.S. Senators Mark R. Warner and Tim Kaine (both D-VA) and U.S. Representatives Jen Kiggans (R-VA-02) and Suhas Subramanyam (D-VA-10) introduced bipartisan, bicameral legislation to authorize NASA to negotiate an agreement with the Town of Chincoteague to address costs associated with relocating the contaminated water wells, reimburse for those identified costs, and provide more local control of the water supply to the Town of Chincoteague. Several of the Town’s wells are located on NASA property and have been contaminated with per- and polyfluoroalkyl substances (PFAS). While the well water is currently being treated to remove PFAS and is safe to drink, these treatments must occur regularly, which is an ongoing cost for NASA. This bill offers a permanent solution to resolve the contamination management hurdle while saving the federal government money.
    “We’re proud to introduce this bipartisan, bicameral legislation to remove unnecessary burdens to allow the Town of Chincoteague and NASA to come to an agreement on the costs of relocating contaminated water wells,” said the members. “We will keep working together to get this across the finish line.”
    The legislation was passed by the U.S. Senate in December 2024, but it did not pass in the U.S. House of Representatives before the end of the 118th Congress and therefore must be reintroduced.
    Full text of the Senate legislation can be found here.

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI USA: Sens. Moran, Grassley, Cantwell Introduce Legislation to Create PBM Accountability

    US Senate News:

    Source: United States Senator for Kansas – Jerry Moran
    WASHINGTON. – U.S. Senators Jerry Moran (R-Kan.), Chuck Grassley (R-Iowa) and Maria Cantwell (D-Wash.) introduced legislation to combat the high cost of prescription drugs and provide greater transparency of pharmacy benefit managers (PBMs).
    The Pharmacy Benefit Manager (PBM) Transparency Act would ban deceptive and unfair pricing schemes, prohibit arbitrary claw backs of payments made to pharmacies and require PBMs to report to the Federal Trade Commission (FTC) on how much money they make through spread pricing and pharmacy fees.
    “PBMs have engaged in deceptive and unfair drug pricing practices for years without proper oversight, driving up the cost of prescription drugs and hurting Kansas pharmacies,” said Sen. Moran. “PBMs should be prohibited from unfairly manipulating costs, and this legislation would provide more transparency through reporting requirements to the FTC to help level the playing field for our pharmacies.”
    “Iowans are fed up with the skyrocketing cost of prescription drugs and eager for Congress to act to put a stop to pharmacy benefit managers’ shady practices,” said Sen. Grassley. “These bipartisan legislative solutions will bring much-needed transparency to prescription drug pricing and ensure the federal government can effectively target the abusive practices that unfairly drive up drug costs.” 
    “For too long, Americans have been left in the dark while PBMs – the mysterious middlemen – manipulate prescription drug prices,” said Sen. Cantwell. “We need to hold PBMs accountable for skyrocketing drug costs. With these bipartisan bills, I’m continuing to fight for accountability and transparency in the drug market so we can shine a light on unfair practices and make sure patients get a fair deal on the medications they need.” 
    The senators were joined by Sens. Joni Ernst (R-Iowa), Peter Welch (D-Vt.), Shelley Moore Capito (R-W.V.), Jeanne Shaheen (D-N.H.), Roger Marshall (R-Kan.), Martin Heinrich (D-N.M.), Cindy Hyde-Smith (R-Miss.), Thom Tillis (R-N.C.) and Mike Rounds (R-S.D.) in introducing this legislation.

    MIL OSI USA News –

    February 20, 2025

  • MIL-OSI Security: Detroit Man Sentenced To Over Four Years in Federal Prison For Participating In Multi-State Pandemic Unemployment Insurance Fraud Scheme

    Source: Office of United States Attorneys

    DETROIT – A man from Detroit, Michigan was sentenced today for his role in a multi-state, million-dollar unemployment insurance fraud scheme aimed at defrauding the U.S. government and the states of Michigan, Pennsylvania, and Maryland, of funds earmarked for unemployment assistance during the COVID-19 pandemic, announced Acting United States Attorney Julie A. Beck.

    Joining in the announcement were Special Agent in Charge Cheyvoryea Gibson, Federal Bureau of Investigation, Special Agent in Charge Charles Miller, Internal Revenue Service-Criminal Investigation, and Megan Howell, Acting Special Agent in Charge, Chicago Region, U.S. Department of Labor Office of Inspector General.

    Tracey Dotson, 49, was sentenced to 51 months in prison and ordered to pay more than $900,000 in restitution in the sentence handed down by United States District Judge Matthew F. Leitman.

    According to court records, Dotson and a co-defendant conspired to, and did, defraud the federal government and the states of Michigan, Pennsylvania, and Maryland of roughly $1 million in funds intended to support individuals who had lost their jobs during the COVID-19 pandemic. The pair committed their crimes through the use of interstate wires and the unauthorized possession and use of social security numbers and other means of identification belonging to other individuals.

    Dotson pleaded guilty to wire fraud and conspiracy to commit wire fraud in April 2024. Dotson and his co-defendant, using stolen personal identification, filed hundreds of false unemployment claims with state unemployment insurance agencies in Michigan, Pennsylvania, and Maryland in the names of other individuals without their knowledge or consent.   The defendants then received hundreds of Bank of America prepaid debit cards in the names of those individuals loaded with roughly $1 million in Pandemic Unemployment Assistance funds at addresses in Michigan and Pennsylvania. Dotson, his co-defendant, and their accomplices then successfully unloaded more than $930,000 from the cards via cash withdrawals and purchases that included high-end jewelry, designer fashion accessories by Gucci and Louis Vuitton, drugs, at least one vehicle, and at least one firearm.

    “Taxpayer unemployment assistance funds diverted to the pockets of criminals during the pandemic resulted in fewer resources that were available for those genuinely in need at that challenging time,” said Acting U.S. Attorney Julie Beck. “Our office is steadfast in its commitment to bringing those to justice who used a global health crisis as a means to illegally line their own pockets at the expense of taxpayers. “

    “This sentence underscores the FBI’s commitment to investigating complex financial crimes,” said Cheyvoryea Gibson, Special Agent in Charge of the FBI in Michigan. “We will not tolerate the greed and selfish conduct demonstrated by those who chose to defraud the unemployment insurance system, especially when we faced an unprecedented global pandemic. The FBI and our federal partners remain steadfast in holding criminals accountable and protecting government assistance programs. The pandemic may be in our rearview mirrors, but our investigations continue to move forward in the name of justice.”

    “Individuals who commit such blatant unemployment insurance fraud and identity theft of this magnitude deserve to be punished to the fullest extent of the law,” said Charles Miller, Special Agent in Charge, Detroit Field Office, IRS Criminal Investigation.  “Tracey Dotson and his co-conspirator took advantage of a program intended to help those in need get through a devastating global pandemic, exposed personal identity information of many, and caused immeasurable hardship to innocent victims. IRS Criminal Investigation remains committed to the pursuit of pandemic fraud and identity theft, together with our partners at the U.S. Attorney’s Office, we will hold those who engage in similar conduct accountable.”

    “Tracey Dotson and his co-conspirator defrauded multiple state workforce agencies by using stolen identities to obtain unemployment insurance (UI) benefits. As a result, he stole vital taxpayer resources intended for unemployed American workers in dire need of UI benefits. Today’s sentencing affirms the Office of Inspector General’s commitment to work with our law enforcement partners to investigate and bring to justice those who exploit this critical benefit program,” said Megan Howell, Acting Special Agent-in-Charge, Great Lakes Region, U.S. Department of Labor, Office of Inspector General.

    This case was prosecuted by Assistant United States Attorneys Carl D. Gilmer-Hill and Jessica A. Nathan. The investigation was conducted jointly by the Federal Bureau of Investigation, Internal Revenue Service – Criminal Investigation, and Department of Labor, Office of Inspector General.

    MIL Security OSI –

    February 20, 2025

  • MIL-OSI Security: Financial TV News Analyst-Turned-Fugitive Agrees to Plead Guilty to Federal Charge for Conning Investors Out of Millions of Dollars

    Source: Office of United States Attorneys

    LOS ANGELES – A former San Gabriel Valley resident – who was a frequent guest on financial television news programs then became a fugitive from justice after being accused of scamming investors – has agreed to plead guilty to defrauding his victims out of at least $2.7 million, the Justice Department announced today.

    James Arthur McDonald Jr., 53, formerly of Arcadia, has agreed to plead guilty to one count of securities fraud, a felony that carries a statutory maximum sentence of 20 years in federal prison.

    McDonald has been in federal custody since June 2024, when he was arrested in a residence in Port Orchard, Washington, after being a fugitive since November 2021, when he failed to appear before the United States Securities and Exchange Commission (SEC) to testify after allegations arose that he had defrauded investors. 

    According to his plea agreement, at McDonald’s Washington state hideout, law enforcement found, among other things, a fake Washington, D.C., driver’s license bearing McDonald’s photograph and the name “Brian Thomas.”

    McDonald was the CEO and chief investment officer of two companies headquartered in Los Angeles: Hercules Investments LLC and Index Strategy Advisors Inc. (ISA). He frequently appeared as an analyst on the CNBC financial television news network.

    In late 2020, McDonald lost tens of millions of dollars of Hercules client money after adopting a risky short position that effectively bet against the health of the United States economy in the aftermath of the U.S. presidential election. McDonald projected that the COVID-19 pandemic and the election would result in major selloffs that would cause the stock market to drop. When the market decline didn’t occur, Hercules clients lost between $30 million and $40 million. By December 2020, Hercules clients were complaining to company employees about the losses in their accounts, according to court documents.

    In early 2021, McDonald solicited millions of dollars’ worth of funds from investors in the form of a purported capital raise for Hercules but misrepresented how the funds would be used and failed to disclose the massive losses Hercules previously sustained. As part of the capital raise, McDonald obtained $675,000 in investment funds from one victim group on March 9, 2021. He misappropriated most of those funds in various ways, including spending $174,610 at a Porsche dealership and transferring $109,512 to the landlord of a home McDonald was renting in Arcadia.

    McDonald also defrauded clients of ISA, his other firm, using less than half of the approximately $3.6 million he raised for trading purposes. Instead, McDonald frequently commingled ISA client funds with funds from his personal bank account, which he used to purchase luxury cars and to pay rent on his home, personal credit card charges, and Hercules operating expenses and to make Ponzi-like payments to ISA clients — that is, paying some ISA clients using funds from other clients. 

    In total, McDonald caused losses of between approximately $2,745,892 and approximately $3,025,892, according to his plea agreement.

    The FBI and IRS Criminal Investigation are investigating this matter.

    In September 2022, the SEC filed a civil complaint charging McDonald and Hercules with violations of federal securities law. In April 2024, United States District Judge Percy Anderson found McDonald and Hercules liable and ordered that they pay several million dollars in disgorgement and civil penalties.

    Assistant United States Attorneys Alexander B. Schwab and Nisha Chandran of the Corporate and Securities Fraud Strike Force are prosecuting this case.

    MIL Security OSI –

    February 20, 2025

  • MIL-OSI Global: Canada’s cuts to newcomer English language programs puts communities’ well-being at risk

    Source: The Conversation – Canada – By Natalia Balyasnikova, Assistant Professor of Adult Education, York University, Canada

    The impact of of Immigration Refugees and Citizenship Canada’s 2024-25 department plan, released about a year ago, are only now starting to become clear in cities across Canada.

    Whether it’s colleges in Vancouver, Lethbridge or Toronto, many federally funded English-language training programs are experiencing crushing funding cuts resulting in closures, layoffs and fewer classes available.



    Read more:
    To really narrow digital divides, Canada should consistently fund adult education programs

    At risk is the future of Language Instruction for Newcomers to Canada (LINC) — a federally funded program that has been running since 1992.

    Instead of further cutting funding to LINC, the government should expand the programming in recognition that learning a language is about much more than acquiring a discrete set of skills.

    Importance of language programs

    The LINC program has 60 assessment sites across the country and has served roughly 50,000-60,000 learners per year.

    Language learning programs expecting to receive the most significant cuts will be those focused on building employment skills and preparing learners for higher education.

    Rather than the reducing barriers to newcomers’ employment as promised, the changes will make it more difficult for newcomers to access the language learning programs needed for work and life.

    Immigration is central

    The IRCC states “immigration is central to our future” and that its sustainable development strategy remains committed to addressing the barriers to employment and social belonging that newcomers face.

    While not without critique, LINC classes have an important function beyond helping newcomers acquire language skills.

    Through these programs, newcomers build confidence to be able to advocate for themselves, develop a sense of citizenship, contribute to values of equality, respect and rights and access resources essential for life in Canada. All of these contribute to one’s sense of belonging.

    Addressing connection, community

    There is strong evidence that learning in groups reduces isolation, loneliness and feelings of unbelonging, and increases sense of community and connection for immigrants.

    Research shows that learning activities that have goals beyond developing practical language skills such as drama and poetry are opportunities to build a sense of community, empowerment and belonging to facilitate intercultural dialogue.

    They also contribute to the development of learners’ resilience and leadership.



    Read more:
    Theatre shows how the art of inclusion can help build a better Canada

    A vision for sustainability

    Canada is often portrayed as a tolerant and welcoming country, a stronghold of multiculturalism and multilingualism. Canada has made promises to build a nation that is economically, socially and culturally prosperous.

    To make this promise sustainable, it is essential to continue addressing the complex needs of newcomers, especially by ensuring access to inclusive and quality education throughout their lives.

    IRCC’s choice to cut funding is influenced by a short-term economic model that seems to forget that nearly 20 per cent of Canada’s population are new permanent residents.

    These residents should have access to learning offerings and intercultural socialization opportunities. These would ideally include offerings centred on critical conversations, discussions of shared experiences, visions for life in Canada and building allyships between new immigrants and long-time citizens. Such learning, socialization and relationship-building opportunities could be made accessible through LINC.

    Social stratification concerns

    By reducing funding available for English-language classes, the federal government is denying thousands of people their fundamental right to education. The current budget cuts will inevitably contribute to growing social stratification and increase the challenges faced by the already overwhelmed immigration and educational sectors.

    A recent statement by TESL Ontario, the certification body for educators who teach English as another language in Ontario, urges the Canadian government to consider impacts on language teachers who face precarious employment and low pay, a concern shared by unions across the public sector.

    Language learning programs are foundational to ensuring sustainable settlement in Canada. A truly sustainable development strategy would see the continued funding of English-language programs as essential to ensuring the continued economic and societal well-being of all people living in Canada.

    The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

    – ref. Canada’s cuts to newcomer English language programs puts communities’ well-being at risk – https://theconversation.com/canadas-cuts-to-newcomer-english-language-programs-puts-communities-well-being-at-risk-249103

    MIL OSI – Global Reports –

    February 20, 2025

  • MIL-OSI United Kingdom: PM call with President Zelenskyy of Ukraine: 19 February 2025

    Source: United Kingdom – Executive Government & Departments

    The Prime Minister spoke to President Zelenskyy this evening.

    The Prime Minister spoke to President Zelenskyy this evening and stressed the need for everyone to work together. 

    The Prime Minister expressed his support for President Zelenskyy as Ukraine’s democratically elected leader and said that it was perfectly reasonable to suspend elections during war time as the UK did during World War II. 

    The Prime Minister reiterated his support for the US-led efforts to get a lasting peace in Ukraine that deterred Russia from any future aggression.

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    Published 19 February 2025

    MIL OSI United Kingdom –

    February 20, 2025

  • MIL-Evening Report: Collateral damage: how the war on ‘woke banking’ could backfire on New Zealand

    Source: The Conversation (Au and NZ) – By Martien Lubberink, Associate Professor of Accounting and Capital, Te Herenga Waka — Victoria University of Wellington

    Getty Images

    It would be hard to think of an industry less obviously “woke” than banking, but that’s how coalition partner NZ First has characterised certain practices within the finance sector.

    The party’s tortuously titled Financial Markets (Conduct of Institutions) Amendment (Duty to Provide) Amendment Bill – dubbed the “woke banking” bill – takes aim at efforts to build sustainability concepts into investment practices.

    Known as the “environmental, social and governance (ESG) framework”, such policies are designed to guide how a bank manages risks and opportunities beyond basic profit and loss.

    NZ First’s bill seeks to ensure no New Zealand business can be denied banking services unless the decision is grounded in law. Its proponents argue it will prevent ESG standards from perpetuating “woke ideology” in the banking sector, driven by what they describe as “unelected, globalist, climate radicals”.

    Prime Minister Christopher Luxon has supported the bill’s aims, recently calling it “utterly unacceptable” that petrol stations and mines were being denied banking services due to banks’ commitment to climate change goals.

    Coalition partner ACT similarly called for the end of “banking wokery”. And last week the Finance and Expenditure Committee announced an extension of its inquiry into banking competition to include, among other issues, the “debanking of legitimate sectors”.

    Risk management isn’t ‘woke’

    Much of this is largely politically performative, however. A broader international trend has for, some time now, seen financial institutions increasingly aligning their lending practices with ESG criteria.

    In Europe, for example, data from the European Banking Authority show banks have halved their exposures to mining firms since 2020, reflecting that global shift towards sustainability and risk management.

    This is about more than “woke” agendas and is unlikely to reverse, given current global efforts to decarbonise. Encouraging or forcing banks to invest in carbon-emitting industries introduces financial risk. If those assets lose value, it constitutes irresponsible lending.

    While the current US administration may be embracing fossil fuel industries, consumer and investor demand for sustainable policies is still strong. When banks such as the BNZ prepare for an orderly exit from declining industries, they are simply engaging in risk management.

    Banks also manage regulatory risk. While the current government may enact the bill and force banks to invest in carbon-emitting industries, a future government could reverse that policy. This undermines long-term investment strategies.

    Regulatory uncertainty

    There is also a danger New Zealand is perceived internationally as not being serious about business and investment. In particular, the prime minister’s pressure on bank lending policies cuts across his stated commitment to the Paris Agreement on climate change.

    The resulting regulatory uncertainty is counterproductive: it potentially deters international investors at a time when the government aims to attract foreign investment.

    Ultimately, if bank lending policies lead to poor outcomes, it is ordinary New Zealanders who will likely bear the costs through higher interest rates or even bank failures.

    In its eagerness to boost lending, the government is also encroaching on the Reserve Bank’s territory by directing it to prioritise competition, including reviewing risk weightings and capital thresholds (designed to build buffers against failure) for new entrants to the market.

    But history shows that before the 2007-2009 global financial crisis, similar bank-friendly initiatives – often labelled “principles-based” – led to bad debt accumulation and increased economic vulnerability.

    Institutional failure

    The shift towards what we might call populist banking policies is not confined to New Zealand. Globally, there is a declining political interest in financial stability and prudential regulation.

    For example, agreement on the “Basel III” reforms – developed in response to the global financial crisis and aimed at strengthening the regulation, supervision and risk management of banks – will likely be delayed by the Trump administration.

    This will have ripple effects in Europe, Britain and the rest of the world, signalling a softening of global capital requirements. As Erik Thedéen, chair of the Basel Committee on Banking Supervision, described this:

    Shaving off a few basis points of capital will not unlock a wave of new lending, but it will weaken your resilience. More generally, being well capitalised is a competitive advantage for banks and their shareholders. It ensures they can continue to grow and invest in profitable projects across the financial cycle.

    Politicians need to be very careful when interfering with bank supervision policies in general. They risk undermining the independence of crucial institutions, with real consequences.

    Last year’s Nobel Prize for economics went to Daron Acemoglu, Simon Johnson and James A. Robinson for their “studies of how institutions are formed and affect prosperity”. Their warning is that institutional failure can lead to the failure of nations.

    A resilient banking system

    While New Zealand isn’t in such imminent danger, political leaders need to be aware that populist appeals to certain voter segments can lead to policies that undermine the banking system and economic growth, and disproportionately affect the most vulnerable.

    As Stelios Haji-Ioannou, founder of low-cost airline EasyJet, once remarked: “if you think safety is expensive, try an accident”.

    New Zealand needs to focus on policies that promote long-term financial stability, enhance productivity and sustainable economic growth. Globally, there needs to be a recommitment to prudential regulation to ensure the lessons of the global financial crisis are not forgotten.

    Only by doing so can we build a resilient banking system that serves the interests of all, not just a privileged few.

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

    – ref. Collateral damage: how the war on ‘woke banking’ could backfire on New Zealand – https://theconversation.com/collateral-damage-how-the-war-on-woke-banking-could-backfire-on-new-zealand-249930

    MIL OSI Analysis – EveningReport.nz –

    February 20, 2025

  • MIL-Evening Report: Can you afford a private school? Average fees for Year 12 are at least $15,000

    Source: The Conversation (Au and NZ) – By Emma Rowe, Associate Professor in Education, Deakin University

    Monkey Business Images/ Shutterstock

    This week, updated figures once again showed an increasing number of Australian families are choosing to send their children to private schools.

    Just over 63% of Australian students are enrolled in government schools. Almost 20% are in Catholic schools and almost 17% go to independent schools, according to Australian Bureau of Statistics.

    How much is it costing parents?

    While headlines often focus on the most expensive schools, there is a huge range of private schools operating in Australia.

    In our new analysis, which is not peer-reviewed, we looked at private school fees in New South Wales and Victoria (the two most populous states).



    Read more:
    More Australian families are choosing private schools – we need to understand why

    Fees for Year 12

    We looked only at independent schools. The non-government school sector is made up of Catholic and independent schools, but Catholic private schools typically charge lower fees and this can skew the data on the sector.

    The tuition fees we refer to are based on what is publicly available through each school’s website.

    We collected all available data for Year 12 tuition fees in every independent school in NSW and Victoria in 2021 and 2024. We chose to focus on Year 12, as this is typically the most expensive year at school.

    • In NSW, we found fee information for 369 schools (77% of independent schools).

    • In Victoria we found fee information for 138 schools (92% of independent schools).

    Private school fees don’t necessarily include other expenses such as music or sport.
    DGLimages/Shutterstock



    Read more:
    Are public schools really ‘free’? Families can pay hundreds of dollars in voluntary fees

    What is the average tuition fee?

    In 2024, the average tuition fee for a Year 12 student in NSW was A$15,674 and in Victoria it was $20,923.

    This is in keeping with other analyses showing Victoria is the most expensive state for school fees in Australia.

    These figures suggest while many schools are far from the headlines of “$50,000 fees”, many families are still paying substantial amounts for a private education – particularly if they have more than one child.

    However, there were significant variations in tuition fees between schools. In NSW, 12% of schools in our sample charged under $5,000 per year per student. In Victoria, 9% charged less than $5,000.

    One alternative school in NSW charged just $100 per student per year. This is less than parents typically pay out of their own pocket at the average public school.

    This shows us there some cheaper options available, depending on where families live although they are certainly not the majority.

    At the other end of the sample, The Scots College in NSW and Geelong Grammar School in Victoria charged the highest tuition fees in their respective states for 2024. Geelong Grammar charged $49,720 for Year 12; Scots charged $46,920.

    There are other costs

    While we only looked at tuition fees, families might also have to pay levies for infrastructure or technology.

    There are also extra charges for activities such as camps, excursions and incursions, as well as fees for uniforms, school buses, and special subjects such as music and sport.

    For the majority of independent schools, parents are asked to pay to enrol or go on the waiting list. The average application fee in Victoria was $156 and in NSW was $197. These fees widely differed between schools, ranging from zero to $650.

    How much are fees growing?

    Fees keep climbing each year, and media reports tell us some school fees have already increased for 2025.

    Our analysis found in Victoria, tuition fees in independent schools increased by an average of 15% from 2021 to 2024 – roughly 3.75% each year. In NSW, fees increased by 13% from 2021 to 2024, or about 3.25% per year.

    In media coverage, individual schools have blamed fee increases on inflation, “operational costs”, rising staff costs, and a drop in federal funding.

    Will fees keep rising?

    In some OECD countries, if private schools receive government funding, there are conditions placed on what they can charge for tuition.

    This is not the case in Australia, where the system is unregulated and uncapped.

    Unless this policy approach changes, we can expect private schools to keep increasing fees, as long as there are families willing and able to pay them.

    Emma Rowe receives funding from the Australian Research Council.

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

    – ref. Can you afford a private school? Average fees for Year 12 are at least $15,000 – https://theconversation.com/can-you-afford-a-private-school-average-fees-for-year-12-are-at-least-15-000-248769

    MIL OSI Analysis – EveningReport.nz –

    February 20, 2025

  • MIL-Evening Report: Two in five scientists report harassment and intimidation. Often, the perpetrators are inside the institution

    Source: The Conversation (Au and NZ) – By Robert Hales, Director, Centre for Sustainable Enterprise, Griffith University

    Roman Samborskyi/Shutterstock

    The goal of science is to uncover truths and create new knowledge. But this is not always welcome. Increasingly, scientific findings are being attacked or downplayed. And scientists themselves face intimidation or harassment.

    In our global study of more than 2,000 scientists across six areas of science, two-fifths (41%) of respondents had, as a result of their work, been harassed or intimidated at least once over a five-year period.

    Intimidation efforts included online abuse, physical threats, and threats to budgets or employment. Harassment, while personal, could be meted out by superiors, colleagues or outsiders. Some scientists felt their leaders had thrown them under the bus to protect the institution’s reputation.

    Who’s doing the intimidation? Strikingly, a majority of cases of intimidation and harassment actually came from inside the institution for most fields. That is, it was perpetrated by senior colleagues or managers. But for climate scientists, most intimidation efforts came from outside.

    Intimidation of scientists doesn’t happen in a vacuum. In recent years, there has been a rise in populist leaders who pour scorn on “elites” and evidence. Scientific issues are increasingly politicised. Disinformation is rampant. This atmosphere adds to the pressure faced by scientists, especially those working in politically sensitive areas such as climate science or COVID.

    Harassment and intimidation can silence or isolate scientists.
    Hayk_Shalunts/Shutterstock

    What did we find?

    We used an online database of scientists to find and contact experts publishing in six fields: climate science, medical health, humanities and social science, food and plant science, astronomy, and other STEM areas.

    More than 2,000 responded to our survey on whether they had experienced various types of intimidation or harassment. We asked respondents for more detail on the perpetrators, what triggered the incident, and what effect it had on them.

    Many respondents had a clear view as to what the intimidation or harassment was meant to do. The motivations of perpetrators varied greatly. But the most common reasons were to damage their reputation, to stop them from publishing certain types of research, or to “put me in my place”.

    Specific fields of science were more prone to harassment and intimidation – in particular climate science, and humanities and social science.

    Among those scientists who had been intimidated, climate scientists reported online abuse three times more often than astronomers. Climate science is politically charged, because climate change is clearly linked to pollution from some of the world’s largest industries – oil, gas and coal. Astronomy is not. Half of the climate scientist respondents experiencing intimidation saw the bad behaviour as a way to discourage them from undertaking specific research and speaking about it.

    Researchers from humanities and social sciences faced similar levels of online abuse to climate scientists.

    When it came to personal harassment, there was a clear gender dimension. Among those who reported experiencing harassment, female scientists were more than four times more likely to report “unwelcome or inappropriate behaviour of a sexual nature” than their male counterparts. Women were affected almost twice as much as men by non-sexual forms of personal harassment.

    Our findings follow earlier research finding similar rates of intimidation. For instance, a 2021 survey of 321 scientists working on COVID-19 found 15% had received death threats and 22% received threats of sexual violence.

    Intimidation and harassment are damaging

    The consequences of intimidation are profound and far-reaching. Many scientists told us the experience had caused lasting damage, whether to wellbeing, career prospects or research activities.

    More than 40% of those affected said their career prospects had worsened following incidents of harassment. Just over a third (34%) reported a decline in their desire to work in science. Scientists who experienced intimidation often cut back their collaboration with colleagues (35%), leaving them more isolated.

    Many of our respondents described flow-on effects such as decreased access to funding (35% of respondents) and less public communication from their institution about their work (23%).

    Scientists targeted with multiple types of harassment reported very damaging effects, from difficulty finding their next job to poor mental health.

    Intimidation slows progress

    Intimidation and harassment have a chilling effect on science. This, in turn, could hinder progress on crucial issues such as climate change, public health and technological advancements.

    The disproportionate impact on women and researchers in politically sensitive fields threatens to undermine diversity and inclusivity in science.

    Without targeted interventions, women in science may continue to suffer disproportionate levels of harassment and intimidation. This will have long-term implications for gender diversity in scientific leadership and the direction of research in various fields.

    In the United States, the Trump administration’s withdrawals from the Paris climate agreement and the World Health Organization are likely to further embolden anti-science movements. Many American scientific institutions are engaged in anticipatory obedience of the Trump administration’s demands that diversity and anti-discrimination programs be abolished, or climate change stop being mentioned. Many even go beyond what is explicitly sought.

    Female scientists are targeted in different ways.
    PeopleImages.com – Yuri A/Shutterstock

    What can be done?

    Science and academia is often seen as a bastion of free inquiry and open discussion. One of our most surprising findings was how common intimidation was within scientific institutions.

    The key to beating intimidation is organisational support and clear strategies, not obedience. These include:

    • genuine commitment to institutional policies protecting scientists from both internal and external intimidation

    • formal, well-resourced support systems for researchers facing harassment or pressure (not the HR office)

    • programs to increase public understanding of the scientific process to build trust and resilience to misinformation

    • boosting international collaboration between scientists and policymakers to ensure resilience against country-specific efforts to undermine science

    • educating the public on the importance of scientific independence and of fostering respectful dialogue around contentious topics.

    As populist movements gain traction in many countries, scientists working on controversial issues will face heightened scrutiny – and potentially more intimidation.

    Climate science is likely to remain a particularly contested field. As the damage wrought by climate change becomes more and more apparent, it will get even more contentious.

    Over the last few centuries, science has produced breakthroughs in many areas. But the integrity of science is not guaranteed. Harassment and intimidation from both inside and outside institutions has a very real effect on scientists.

    The future of evidence-based decision-making and ability to tackle global challenges depends on fostering an environment where scientists can work free from fear and undue pressure.

    Robert Hale receives funding from the Australian Research Council.

    David Peetz undertook research over many years with occasional financial support from governments from both sides of politics, employers and unions. He has been and is involved in several Australian Research Council-funded projects, including this one.

    Ian Lowe was president of the Australian Conservation Foundation from 2004 to 2014.

    Carolyn Troup and Georgina Murray do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

    – ref. Two in five scientists report harassment and intimidation. Often, the perpetrators are inside the institution – https://theconversation.com/two-in-five-scientists-report-harassment-and-intimidation-often-the-perpetrators-are-inside-the-institution-248013

    MIL OSI Analysis – EveningReport.nz –

    February 20, 2025

  • MIL-Evening Report: The prime minister earns $607,000 a year. Why does his top public servant earn more than $1 million?

    Source: The Conversation (Au and NZ) – By Chris Wallace, Professor, School of Politics Economics & Society, Faculty of Business Government & Law, University of Canberra

    Tasmanian Senator Jacqui Lambie represents the lowest-income Australians, with median weekly earnings of $1,208 a week. In the Australian Capital Territory, where the nation’s highest median weekly earners live, including the brains trust of the Australian Public Service, it’s $1,688 a week – 40% higher.

    As a federal politician, Lambie shuttles between these two starkly different earnings worlds and is not happy about the disparity.

    Of course, Lambie herself is on a reasonable wicket. Parliamentarians’ base salaries are $233,660 a year, according to an Instagram post she made this month drawing attention to the issue.

    At a time of considerable financial stress for Australians hit by the combination of inflation, high interest rates and housing shortages, Lambie struck a nerve with her post, which listed a range of public roles drawing big six figure-plus annual salaries.

    In doing so, Lambie underlined the far higher salaries paid to senior public servants compared to the ministers to whom they’re responsible.

    Department of Prime Minister and Cabinet Secretary Glyn Davis earns $1,011,410 a year, 66% more than the man he serves, Prime Minister Anthony Albanese, who earns $607,516.

    Treasury Secretary Steven Kennedy’s salary is more than double that of Treasurer Jim Chalmers, who is paid $438,112. Another three departmental secretaries each earn $960,840.

    Lambie’s Instagram post drew hundreds of comments including:

    How does a public servant earn more than the prime minister? That’s wrong!!

    Politicians get flak about their salaries from belligerent constituents, but also keenly feel the injustice of earning far less than senior public servants.

    Higher pay for higher risk

    The salaries of both politicians and public servants have long and specific histories. Without an income, only the rich could afford to be politicians, so publicly paid allowances and salaries have historically been an important equity and inclusion measure. They remain so today.

    The original framers of the public service component of our Westminster system of government believed that to prevent conflicts of interest that drive corruption, the bureaucracy ought to be staffed by “permanent officers” with job security. In exchange for what, barring wrongdoing, was going to be a lifetime career, public service pay was historically adequate but not extravagant.

    This nexus was broken when, in exchange for higher pay, the Keating government introduced five-year contracts for departmental secretaries in March 1994. Three departmental secretaries refused contracts and continued as “permanent officers”. The rest took the money and the increased employment risk that went with it.

    Two years later, the Keating government lost office and incoming Prime Minister John Howard summarily fired nearly a third of departmental secretaries, fatally eroding the “frank and fearless” tradition of public service advice underpinned by security of employment.

    Compromised advice

    Contract employment for secretaries, who effectively can now be fired at will, not only created pressure for public servants to tell ministers what they wanted to hear, but also untethered their salaries from historical norms. Higher pay reflected that insecurity. The flow-on effect meant other salaries in the senior executive service also floated upwards.

    Contracts for secretaries have also been central to the revolving door that’s developed between the top of the public service and large consulting firms, creating conflicts of interest unknown in the traditional Westminster public service.

    The big four consulting firms are attractive alternative employers for highly paid and insecure departmental secretaries.

    Little wonder, then, that a quasi-privatisation of public service advice through consultancy contracts to those firms occurred, at vast expense to taxpayers – something Finance Minister Katy Gallagher has made strong efforts to reverse.

    Lambie’s push for answers

    Lambie has introduced the Remuneration Tribunal Amendment (There for the Public Service, Not Profit) Bill 2025 to cap senior APS pay at $430,000. It’s a bid to address remuneration which has raced far beyond ministerial salaries, and well beyond reasonable public expectations.

    The Lambie bill has been referred to a Senate committee, which presents an opportunity to evolve debate on the deeper reasons for what has gone awry in the public service and to devise a response that gets to the root of the problem.

    The precarity of contract employment for departmental secretaries, which is used to justify high salaries, is both unnecessary and harmful to the quality of public policy and administration in Australia.

    The intrinsic interest and challenge of working for the nation and the betterment of its citizens has always paid well in terms of a “psychic wage” on top of senior public servants’ actual salaries. If the complaint is that an executive could make much more in the private sector, they’re probably not the right person to work in the public service anyway.

    One reply to Lambie’s Insta post summed up the situation:

    It’s the pollies that made this mess.

    Politicians are the ones who are going to have to clean it up.

    It is neither likely nor plausible that highly paid public service leaders will cut their own salaries in return for an end to the five year contract system for secretaries.

    But that is what a return to good public service governance – and to frank and fearless advice in the national interest – now requires.

    Chris Wallace has received funding from the Australian Research Council.

    – ref. The prime minister earns $607,000 a year. Why does his top public servant earn more than $1 million? – https://theconversation.com/the-prime-minister-earns-607-000-a-year-why-does-his-top-public-servant-earn-more-than-1-million-250045

    MIL OSI Analysis – EveningReport.nz –

    February 20, 2025

  • MIL-Evening Report: Will the government’s online gambling advertising legislation ever eventuate? Don’t bet on it

    Source: The Conversation (Au and NZ) – By David Rowe, Emeritus Professor of Cultural Research, Institute for Culture and Society, Western Sydney University

    Lukas Coch/AAP, Shutterstock, X.com, The Conversation

    As the next federal election came into view before the summer break, concern increased that Labor wouldn’t be honouring its commitment to introduce new restrictions on online (especially sport) gambling advertising during the current parliamentary sitting.

    Those fears were well-founded, despite pressure from many sides and broad bipartisan political support.

    The Greens made a last-ditch attempt to cooperate with the government to pass some reforms in the February 2025 sitting, but were rebuffed.

    Instead, Communications Minister Michelle Rowland blamed the delay on the complexity of advertising reform and the need to continue consultation.

    This is despite a House of Representatives inquiry into the harmful impacts of online gambling, led by the late Labor MP Peta Murphy, concluding in June 2023.

    In the meantime, much less well-researched but wider-ranging legislation banning children under 16 from using social media was introduced and passed in just eight days in November 2024.

    There are both deep historical and immediate political reasons why this legislation has been bogged down.

    A nation of sporting gamblers

    Professional sport in Australia has an inglorious history of promoting unhealthy goods and services, including cigarettes, sugary drinks, fast food, alcohol and gambling.

    Television and, later, online advertisements have been particularly effective vehicles for connecting sport gambling with potential consumers.

    This has prompted widespread objections to the health and social consequences and intrusiveness of gambling advertising.

    There is convincing evidence that Australia’s world-leading per capita expenditure on gambling and the integral role of sport gambling ads cause harm to a considerable number of people, families and communities.

    Such harm includes negative effects on relationships, health, psychological wellbeing, finances, work and study.

    The gamblification of sport

    Although sport comes third among the main areas of gambling in Australia, it is by far the most prominent, especially in homes.



    Read more:
    Pokies? Lotto? Sports betting? Which forms of problem gambling affect Australians the most?

    The so-called gamblification of sport, accelerated by digitisation, normalises the concept of betting odds among children and young people.

    Sport and media’s enthusiasm for gambling money has provoked strong pushback over its negative social consequences, with mounting public pressure for greater controls on gambling advertising.

    A recent poll found about 72% of those surveyed wanted to ban online gambling ads, while another of AFL fans reported 76% supported television and radio ad bans.

    The response of and to the Murphy Report

    The House of Representatives Standing Committee on Social Policy and Legal Affairs was charged with investigating online gambling and its impacts.

    It made 31 recommendations, with rare cross-party support, in its “you win some, you lose more” report (which was not only about sport).

    Contrary to most public debate and media reporting, it did not formally recommend a blanket ban on all gambling advertising. Its terms of reference only covered online gambling.

    But Murphy’s foreword – calling for a “phased, comprehensive ban on all gambling advertising on all media; broadcast and online, that leaves no room for circumvention” – caught the most attention.

    The main recommendation was for a three-year, four-phase ban on all forms of online gambling advertising. Dedicated racing channels and programming were exempted and small community radio broadcasters given extra time to comply.

    After further consultation lasting almost 18 months, it’s clear this calibrated proposal is not favoured by the government.

    Journalists were backgrounded about a watered down law capping ads for gambling at two per hour per TV channel before 10pm, and banning them for an hour either side of a live sport event. A blanket ban would apply only to betting ads on social media and other digital platforms.

    Yet even these more modest reforms did not proceed as anticipated.

    The reason, it has been widely reported, was heavy lobbying by the sport, media and gambling industries.

    High-stakes horse trading

    The privileged access to government gained by these sectional interests has had a powerful impact on gambling legislation.

    The Coalition of Major Professional and Participation Sports has continually resisted tightening regulations on sport sponsorship and gambling ads.

    It claims their reduction or loss would damage the financial viability of its members and their support for grassroots sport.

    However, Australia’s major sports leagues derive significant gambling revenue from direct sources (sponsorship, product fees) and indirectly from the value of media rights.

    The AFL and NRL generated cumulative revenues of $1.06 billion and $701 million respectively in 2023.

    So while sport leagues would have less capacity to monetise their media rights if gambling ads were reduced, it would neither threaten professional sport in general nor seriously jeopardise funding of junior participation.

    Follow the money

    An Australian Communications and Media Authority report discovered capital city free-to-air television featured 1,381 gambling spots per day between May 2022 and April 2023.

    Gambling companies spent $162 million on free-to-air television advertising during this period, not including further investment on subscription platforms.

    As free-to-air commercial TV is already losing advertising income to digital media platforms, restrictions on this lucrative advertiser category would not be as easily absorbed today as the tobacco advertising bans in the 1970s.

    This is why sports and their media and betting partners are fighting so hard against the legislation.

    And all this capital flowing to and through sport, gambling, and media has created the potential to inflict political harm on gambling reforming governments.

    Negotiations behind closed doors can easily break out into public campaigns, akin to the infamous “axe the (carbon) tax” agitation, if powerful organisations are not satisfied.

    Gambling and the young voter

    Sport gambling ads in Australia have especially targeted young men in a jocular larrikin style. But young women are now also being induced to gamble in greater numbers.



    Read more:
    9 out of 10 Australian sports bettors are men. Here’s why that might change

    Those who want curbs on sport gambling advertisements have been cast by some as “wowsers” and “puritans”.

    State intervention in the sport-media-gambling nexus may provoke a backlash that working-class men are under attack for engaging in their favourite pastimes.

    Like the latest reforms to sport TV anti-siphoning laws, new policies are the product of high-stakes horse trading between nervous governments and pressure groups with manifestly variable degrees of influence.

    As in the gambling world, evidence-based policy can confront very uneven odds.

    David Rowe has received funding from the Australian Research Council to support research relating to this article: Struggling for Possession: The Control and Use of Online Media Sport (with Brett Hutchins, DP0877777); ‘A Nation of “Good Sports”? Cultural Citizenship and Sport in Contemporary Australia’ (DP130104502), and ‘Australian Cultural Fields: National and Transnational Dynamics’ (with Tony Bennett et al, DP140101970).

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

    – ref. Will the government’s online gambling advertising legislation ever eventuate? Don’t bet on it – https://theconversation.com/will-the-governments-online-gambling-advertising-legislation-ever-eventuate-dont-bet-on-it-238084

    MIL OSI Analysis – EveningReport.nz –

    February 20, 2025

  • MIL-Evening Report: Humans generate 62 million tonnes of e-waste each year. Here’s what happens when it’s recycled

    Source: The Conversation (Au and NZ) – By Sukhbir Sandhu, Associate Professor in Sustainability, University of South Australia

    Huguette Roe/Shutterstock

    In 2022, humans generated roughly 62 million tonnes of electronic waste – or e-waste. That’s enough to fill more than 1.5 million garbage trucks. And by 2030, that figure is expected to rise to 82 million tonnes.

    Australia is a huge contributor to this problem. Every year each Australian, on average, generates 20kg of e-waste, compared with the global average of 7kg per person.

    Less than one quarter of the world’s e-waste – which includes desktop computers, laptops, mobile phones, televisions, kitchen appliances, batteries and solar panels – is recycled. That means most of it ends up in landfill, which can result in major accidents. For example, earlier this month, a rubbish truck in Melbourne caught fire after a laptop battery that had been thrown in the garbage bin exploded.

    So what can be done to increase the amount of e-waste that’s recycled? And what actually happens during the e-waste recycling process?

    From breakdown to planned obsolescence

    The growing problem of e-waste is fuelled by both perceived and planned obsolescence.

    Perceived obsolescence happens when we discard functioning products in favour of newer models. For example, we buy the latest iPhone even though our current phone works fine.

    Planned obsolescence is when manufacturers “build in” a use-by date. One way they do this is by not offering software updates, which then renders an existing product incompatible with other, newer devices or presents cybersecurity risks.

    Of course, sometimes existing electronic products simply stop working, which forces us to buy a replacement.

    A multi-step process

    In Australia, the process of recycling e-waste starts with consumers delivering their e-waste to a designated collection centre.

    Some manufacturers offer trade-in programs where people can drop off their old phones and laptops at retail shops and get a small discount on a new product. Some councils also run services for periodic collection and offer drop-off centres for e-waste.

    The collection is followed by sorting and inspection of the discarded items.

    At this stage, the discarded electronic items are sorted based on the type of devices. Some devices can be refurbished and reused if they are still functional.

    Those that cannot be refurbished are dismantled.

    This involves separating the various components, such as circuit boards, batteries and wiring. Hazardous materials such as mercury and lead are removed, before recyclable and valuable materials are recovered. These include plastic and glass, as well as precious metals like gold and silver from the circuit boards.

    After purifying and refining, the recycled materials can be used in new electronics or put to other uses.

    According to the national waste report there are 535 facilities in Australia that accept e-waste. But only 20 facilities reprocess these for further recycling.

    This means much of Australia’s e-waste is exported to China, India and other Asian countries to be recycled.

    Less than one quarter of the world’s e-waste is recycled.
    SibFilm/Shutterstock

    Significant challenges

    There are significant challenges when it comes to recycling e-waste.

    Some are associated with consumer behaviour. For example, unlike kerbside recycling services for paper, glass and cardboard, recycling e-waste generally involves consumers making a special trip to a designated drop-off location. Accessing these locations involves extra effort and can be an inconvenience which deters people from recycling their e-waste.

    Also, compared to container deposit schemes, where people get paid to recycle their glass bottles and cans, there are generally no monetary incentives available for recycling e-waste.

    Concerns about data security also prevent some people from recycling their e-waste. People are often reluctant to recycle their computer, phones and other electronic items as they are worried their data could be stolen during the recycling process, even after they have deleted the files.

    The other set of challenges with recycling e-waste comes from the economic incentives for recycling. Recycling e-waste is complex and costly. The costs involved in recycling can often be higher than the price of raw materials. Hazardous wastes must also be disposed safely, which adds extra costs to the process.

    All of this makes it less attractive for businesses to recycle e-waste.

    The way forward

    Australia’s new circular economy framework is expected to provide a way forward for businesses to address some of these challenges.

    The framework seeks to double the rate at which Australia recovers, recycles and reuses materials by 2035, partly by providing direction and designing policies for businesses that encourage recycling.

    It’s also important for local governments to make it easier for people to recycle their e-waste.

    While it may not be cost effective for councils to have kerbside recycling for e- waste, they could place e-waste collection centres in local areas.

    Councils can also explore offering consumers incentives for e-waste recycling. These incentives can be monetary. But even non-monetary incentives, such as letting people know how their recycled e-waste contributes to addressing the bigger problem, can be a motivation.

    And finally, as consumers, it would help to remember that the best way to contribute to decreasing e-waste is to repair and reuse our existing products.

    Sukhbir Sandhu has received funding from Australian Research Council, European Union, and Green Industries SA.

    – ref. Humans generate 62 million tonnes of e-waste each year. Here’s what happens when it’s recycled – https://theconversation.com/humans-generate-62-million-tonnes-of-e-waste-each-year-heres-what-happens-when-its-recycled-249842

    MIL OSI Analysis – EveningReport.nz –

    February 20, 2025
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