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Category: Politics

  • MIL-OSI Europe: AMERICA/COLOMBIA – In Toribio, the end of a historic stage, but not the end of a mission

    Source: Agenzia Fides – MIL OSI

    Friday, 31 January 2025

    IMC

    Toribio (Agenzia Fides) – “Thank you for having walked with us, for being part of our history,” were some of the words that resonated during the Mass of thanksgiving celebrated on Sunday, January 26, which marked the 41 years of presence of the Consolata Missionaries in Toribío, in northern Cauca.”The end of the presence of the missionaries in Toribío marked the end of a historic stage, but not the end of a mission,” reads a note released by the missionaries. “The seed sown for more than four decades continues to bear fruit in community leaders, families strengthened in their faith and a local Church committed to justice and peace.”For more than four decades, the Consolata Missionaries have walked alongside the communities of Toribío, a territory rich in indigenous cultural heritage, but also marked by deep social and political difficulties. The missionaries have witnessed resistance, solidarity and commitment to the indigenous, peasant and Afro-descendant communities of the Nasa indigenous people.”Dear family, we greet you from this parish church of San Giovanni Battista and from this town of Toribío: ‘We did what we had to do’,” said Father Venanzio Mwangi, Regional Superior, citing the teachings of their Founder San Giuseppe Allamano.The ceremony brought together a large crowd of faithful, community leaders and representatives of local organizations, who expressed their gratitude for the pastoral and social work of the missionaries. They recalled the history shared with the community, evoking moments of joy and pain, the struggles for social justice, the defense of the territory and the promotion of peace in the midst of armed conflict.In Toribío, the Consolata Missionaries arrived after the violent death in 1984 of Father Álvaro Ulcué Chocué, the first indigenous priest of the Nasa ethnic group, ordained in the Church of the Archdiocese of Popayán, whose example has inspired their work and whose legacy lives on in the region.Over the years, the missionaries have integrated themselves into the communities, not only as spiritual guides, but also as allies in building a more dignified future. They have built parishes, trained community leaders and strengthened an inculturated spirituality that respects and values the ancestral traditions of the Nasa people.The Cauca region is particularly strategic because it brings together in one place all the phases of work and marketing: illicit crops, processing workshops and the important routes, the paths that drugs take to leave the country illegally. (AP) (Agenzia Fides, 31/1/2025)
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    MIL OSI Europe News –

  • MIL-OSI Europe: ASIA/SYRIA – Syrian Catholic Archbishop of Homs: The new era is full of mysteries

    Source: Agenzia Fides – MIL OSI

    Friday, 31 January 2025

    by Gianni ValenteHoms (Agenzia Fides) – “A new era has begun for Syria. And it is a difficult time again,” said Archbishop Jacques Mourad. The monk of the Deir Mar Musa community, spiritual son of Father Paolo Dall’Oglio, was held hostage for months by jihadists of the Islamic State in 2015. Perhaps this experience made his Christian vision even clearer. And today, as Syrian Catholic Archbishop of Homs, what he sees and hears about the new suffering in Syria does not correspond to the dominant narrative in the media, especially in the West, which reports on a “regime change”, a successful and peaceful regime change with new Islamist leaders seeking international recognition after more than 50 years of the Assad clan ruling the country.The dominant media coverage, for example, fails to mention the widespread violence and fear that once again overshadows the days of a large part of the Syrian population. A violence that – as Jacques Mourad admits – “seems to be a trap that all those who come to power here fall into”.In recent weeks – the Syrian Catholic Archbishop of Homs told Fides – people have disappeared, prisons are filling up “and we do not know who is still alive and who is dead”. Those accused of having colluded with the collapsed regime are being tortured in public. And he also reports “several cases of young Christians being threatened and tortured in the streets in front of everyone, in order to instill fear and force them to renounce their faith and become Muslims”. Crimes that are taking place far from Damascus.Things are not going well and Father Mourad feels that “nobody can do anything” to get out of this new period of fear and revenge. “I try to encourage people, to console them, to ask for patience and to look for solutions,” said Archbishop Jacques Mourad. “During the Christmas period, I visited our 12 parishes and also went to the villages to encourage them, to keep hope together. There were beautiful meetings with different groups. But when the violence increases, our words and our calls for patience will no longer convince them.”Meanwhile, Cardinal Claudio Gugerotti, Prefect of the Dicastery for the Oriental Churches, visited Syria in recent days as the Pope’s envoy to testify to the closeness of the Successor of Peter to the Christian communities who are experiencing this moment of the tormented Syrian affair with an additional burden of worries, compared to those suffered by other Syrians.”The previous regime,” explains Archbishop Mourad, “presented itself as the defender of Christians. They always said: if we leave, the fanatics will return. Now many priests are pessimistic about the future. My answer is always the same: the situation is definitely incomparable to that of the past, when there were unimaginable crimes. But since the new violence, there are also those who say: ‘You saw that what Bashar al Assad said is true.’ The result is that many Christians now, more than ever, see no other way than to emigrate. To leave Syria. And it is difficult for us to say that we must not lose hope. We try, but people do not believe what we say. What they experience and what they see are too different.”In the churches, since the fall of the Assad regime, in many ways everything seems to continue as before: services, processions, prayers and works of charity. The new rulers have not issued any compulsory regulations that in any way affect the everyday life of the church. The recognized leader Ahmad Sharaa, also known as Abu Muhammad Dscholani, leader of the armed jihadist group “Hayat Tahrir al Sham”, who declared himself “interim president” of Syria on January 29, met with Father Ibrahim Faltas and the Franciscans at the end of 2024 and found words of praise for Pope Francis, stressing that the Christians who emigrated during and after the civil war should return to Syria. The violence suffered by the young Christians took the form of attacks on individuals. “But,” says Jacques Mourad, “when the confiscation of weapons began, the Christian and Alawite soldiers were disarmed. Nobody took the weapons away from the Sunnis.” “And the reality,” he adds, “is that there is no government. There are different armed groups. Some are fanatics, others are not. And each has its own power and imposes its own rule in the areas it controls. And they have many weapons, having also acquired those of the old regime”. Like other bishops, Archbishop Mourad met with representatives of the new forces. He heard reassuring words, but then things did not change.Jacques Mourad says he does not know how things can go on. In the meantime, he himself is moving on.”We continue our life as parishes and as a diocese, day after day,” he says. Since April last year, the Archbishop has been responsible for catechism in all of Syria. Even then, the situation was serious: no work, society and Christian communities still torn apart by the consequences of the war. “I thought the most important thing was to start again with the children. You can only start again with children and young people after the war has somehow wiped out everything. And together with them you have to start again with the essential, original things,” the Archbishop continued.The regional church committees were re-established to work together on the training of catechists, because “many who had experience had left. Now there are young people who are enthusiastic, but who still need to make a spiritual journey and a catechetical and biblical formation”. The dioceses, the Jesuits and the Bible Society have joined forces “to set out together. We thank the Lord because so many young people show such desire, such courage and such generosity”. The same goes for the liturgies and the resumption of pilgrimages to Mar Musa and to all the other monasteries, “to revive the memory, in this situation of poverty and suffering, which is still very serious. And to see if something is reborn, like a new sprout”. (Agenzia Fides, 31/1/2025)
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    MIL OSI Europe News –

  • MIL-OSI: Helport AI Opens Office in the Philippines

    Source: GlobeNewswire (MIL-OSI)

    New ‘Global Center of Excellence’ to Drive Artificial Intelligence Operations and Service Offerings in the Business Process Outsourcing Industry

    SINGAPORE and SAN DIEGO, Jan. 31, 2025 (GLOBE NEWSWIRE) — Helport AI Limited (NASDAQ: HPAI) (“Helport AI”), an AI technology company serving enterprise clients with intelligent customer communication software, services, and solutions, today announced the grand opening of its new office in the Philippines. Located at the IBM Plaza in Eastwood City, Quezon City, this facility is expected to establish Helport AI’s Global Center of Excellence for AI operations and training.

    The new office represents Helport AI’s commitment to fostering innovation in the business process outsourcing (BPO) industry and supporting the growing demand for advanced AI solutions in Southeast Asia. The office will serve as a hub for Helport AI’s research and development efforts.

    A Strategic Step for Helport AI

    Guanghai Li, CEO of Helport AI, highlighted the significance of this milestone during the opening ceremony. “Our decision to establish a presence in the Philippines underscores the immense potential of this region,” said Li. “The Philippines is home to a thriving BPO sector and a highly skilled workforce. We believe this office will play a pivotal role in advancing our AI-driven solutions, helping our clients achieve greater efficiency, enhancing customer satisfaction, and anticipating potential industry disruption.”

    The Philippines office will focus on refining Helport AI’s flagship product, an intelligent co-pilot software for call center agents. This technology provides real-time guidance to agents, optimizing customer interactions while reducing onboarding time and training costs. As an integral part of Helport AI’s portfolio, this tool has already proven its scalability, with clients reporting improved agent performance and operational efficiency.

    A Celebration of Innovation and Collaboration

    The grand opening event featured a series of keynotes and discussions, including a presentation on “The Future of AI in BPO” and a live demonstration of Helport AI’s software. The program concluded with a ribbon-cutting ceremony and a networking session attended by industry leaders, government officials, and alliance partners.

    Over fifty guests, including representatives from local BPO companies, investors, industry associations, and members of the news media, attended the gathering. They expressed interest in Helport AI’s solutions and demonstrated a desire for future collaboration, signaling the potential for partnerships in the region.

    Looking Ahead

    This new office marks another chapter in Helport AI’s journey toward redefining the future of AI in the BPO sector. With robust in-house AI training capabilities and a growing global footprint, Helport AI aspires to empower businesses, transform customer interactions, and drive sustainable growth.

    About Helport AI

    Helport AI (NASDAQ: HPAI) is an AI technology company dedicated to optimizing customer communication through its digital platform and intelligent software solutions. Offering enterprise level customer contact services, Helport AI’s mission is to empower everyone to work as an expert. Learn more at www.helport.ai.

    Forward-Looking Statements

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

    Helport AI Investor Relations:
    Website: https://ir.helport.ai/
    Email: ir@helport.ai

    External Investor Relations Contact:
    Chris Tyson 
    Executive Vice President
    MZ North America
    Direct: 949-491-8235
    HPAI@mzgroup.us
    www.mzgroup.us

    A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/9fdedad8-fef3-4e3b-8b9e-40960895c3a5

    The MIL Network –

  • MIL-OSI Global: South Africa’s debt has skyrocketed – new rules are needed to manage it

    Source: The Conversation – Africa – By Robert Botha, Research Fellow at the Impumelelo Economic Growth Lab. The Impumelelo Economic Growth Lab is a unit of the Bureau for Economic Research (BER), Stellenbosch University

    South Africa’s fiscal trajectory paints a concerning picture. Public expenditure exceeds revenue. As a result sovereign debt is building up and interest on this debt is increasing.

    This raises concerns over the South African government’s financial sustainability. The debt-to-GDP ratio has skyrocketed from 23.6% in 2008/09 to a projected 74.7% in 2024/25. The International Monetary Fund has recommended that, over the long term, South Africa should reduce its debt-to-GDP ratio to 60% of GDP, in line with that of peers.

    Arguably more important than the debt level is how quickly debt has accumulated. Debt servicing costs, which consist of the interest on government debt and other costs directly associated with borrowing, have been the fastest-growing line item in the national budget. Rising interest payments have been crowding out critical expenditures on services such as health, education and infrastructure.

    As I argue in a recently published report titled “A fiscal anchor for South Africa: Avoiding the mistakes of the past”, establishing a credible fiscal anchor (or fiscal rule) could be step towards avoiding a debt spiral and regaining fiscal sustainability and credibility.

    Fiscal rules are constraints on fiscal policy, designed to impose numerical limits. For example, a limit on the allowable debt-to-GDP ratio, or the allowable balance after accounting for government expenditure and revenue. Fiscal rules are widely used – 105 countries have adopted them so far.

    Failing to address the country’s fiscal challenges risks plunging South Africa into a debt trap. This happens when a country finds it difficult to escape a cycle of debt and has to borrow more to pay off old debt. If debt-servicing costs continue to rise, essential public services will come under even greater strain.

    Several emerging markets have experienced the severe consequences of unchecked debt accumulation and debt servicing costs. Argentina is one example. Without a credible plan to stabilise and reduce debt and debt servicing costs, the risk of economic stagnation and financial instability grows quickly.

    Fiscal erosion and credibility concerns

    The roots of South Africa’s current predicament lie in years of mistakes. These include:

    • spending beyond its means

    • questionable political decisions like bailing out state-owned entities

    • poor governance and oversight at municipal and local government level, which led to inefficient public spending.

    These factors were underpinned by an underperforming economy, unrealised forecasts and arguably weak institutional checks.

    For the last 15 years South Africa’s National Treasury has undertaken to stabilise the country’s debt-to-GDP ratio. This would have required keeping the ratio constant. But these commitments have consistently been deferred. Debt stabilisation targets have been revised upwards 13 times, from 40% in 2015/16 to the current 75.5%. The stabilisation year has been pushed back 10 times, from the initial year of 2015/16 to the current target of 2025/26. This has created a perception of inconsistent policy.

    Over-optimistic macroeconomic forecasting has undermined credibility. Over the last ten years, GDP growth projections have routinely overshot actual performance by an average of 0.5 percentage points in the first year of forecasts and even more in subsequent years. In defence of the National Treasury, the South African economy has performed worse than more forecasters expected in recent years.

    Adding to the fiscal strain are rising social expenditures, the public sector wage bill and repeated bailouts of state-owned enterprises. This spending relieves short-term political and social pressures, but undermines the country’s long-term fiscal health.

    Without credible mechanisms to constrain spending, South Africa’s fiscal framework lacks the discipline needed to ensure sustainability, and to restore credibility.

    Why fiscal rules matter

    Fiscal rules are there to promote discipline, ensure that debt can be paid and enhance credibility. The experience in the 105 countries that have adopted them suggests that strong, well-designed rules can signal a government’s commitment to fiscal prudence.

    It’s difficult to establish whether there is a causal relationship between fiscal rules and fiscal performance. But there’s at least a correlation. As a practical example of enforcing fiscal rules, in November 2023, the German constitutional court overruled a budget that was passed in the Bundestag but breached Germany’s fiscal rules.

    However, fiscal rules are not a panacea. Poorly designed or inadequately enforced rules can make the problems worse. For South Africa, this risk is acute.

    Political commitment and strong institutional frameworks are needed too. Also, a shift in how fiscal policy is conceived and implemented.

    Designing new rules

    Drawing lessons from global best practices, South Africa’s fiscal rules must be enforceable, flexible and simple. A well-designed rule should:

    • stabilise and eventually reduce the debt-to-GDP ratio

    • target government spending as a share of GDP, emphasising consumption spending like salaries and goods and services, rather than capital expenditure

    • have political buy-in

    • be overseen independently

    • be legally binding and enforceable.

    Context

    South Africa’s low economic growth rate is a complication. Average interest rates on government debt are higher than the nominal GDP growth rate. But reining in spending too much could stifle growth, creating a vicious cycle.

    That’s why stabilising debt first would make more sense than aiming to reduce debt too rapidly.

    South Africa’s fiscal rules must also have some flexibility. For instance, they could allow for shocks such as natural disasters or global economic crises.

    Fiscal rules could follow a phased approach to initially focus on stabilising debt, and then to move towards reducing debt. Both of these phases would entail expenditure rules to guide annual budget processes and to place limits on spending.

    The benefits

    Credible fiscal rules could have a number of benefits.

    Firstly, they could improve South Africa’s credibility by signalling to markets and international institutions that South Africa is committed to fiscal discipline.

    Secondly, fiscal credibility is associated with reduced sovereign risk premiums, which translates into lower debt-servicing costs. In turn this would free up resources for critical development priorities.

    Third, they can foster a more stable economic environment for investment and growth.

    Fourth, they would help coordinate policies. South Africa enjoys rule-based monetary policy in the form of inflation targeting but lacks the same for fiscal policy. This can lead to sub-optimal outcomes. For example, the central bank can keep interest rates too high, not necessarily because it thinks the treasury’s policies are inflationary, but because it cannot predict the treasury’s actions.

    The way forward

    Adopting fiscal rules in South Africa comes with risks. Weak institutional capacity, especially in oversight bodies like the Parliamentary Budget Office, could undermine rule enforcement.

    To shield against these risks, South Africa should have stronger institutions. It could create an independent statutory fiscal council, possibly falling under Parliament, the National Treasury or as an independent constitutional advisory body.

    Oversight bodies would also need to build their capacity.

    Robert Botha is a Research Fellow at the Impumelelo Economic Growth Lab. The Impumelelo Economic Growth Lab is a unit of the Bureau for Economic Research (BER)

    – ref. South Africa’s debt has skyrocketed – new rules are needed to manage it – https://theconversation.com/south-africas-debt-has-skyrocketed-new-rules-are-needed-to-manage-it-248355

    MIL OSI – Global Reports –

  • MIL-OSI Russia: Denis Manturov held a session on the use of artificial intelligence to enhance the combat capabilities of weapons and control systems

    Translartion. Region: Russians Fedetion –

    Source: Government of the Russian Federation – An important disclaimer is at the bottom of this article.

    Denis Manturov, Dmitry Chernyshenko, Deputy Minister of Defense Alexey Krivoruchko and representatives of the Ministry of Industry and Trade, the Ministry of Digital Development, Communications and Mass Media of Russia, members of the board of the military-industrial complex, heads of military command bodies, representatives of defense industry enterprises and the People’s Defense Industry Complex at a session on the use of artificial intelligence to increase the combat capabilities of weapons and control systems

    January 31, 2025

    Denis Manturov, Dmitry Chernyshenko and Deputy Minister of Defense Alexey Krivoruchko at a session on the use of artificial intelligence to enhance the combat capabilities of weapons and control systems

    January 31, 2025

    Denis Manturov and Dmitry Chernyshenko visited the Military Innovation Technopolis (VIT) “ERA”

    January 31, 2025

    Denis Manturov and Dmitry Chernyshenko visited the Military Innovation Technopolis (VIT) “ERA”

    January 31, 2025

    Samples of unmanned aircraft systems for intercepting air targets

    January 31, 2025

    Samples of unmanned aircraft systems for intercepting air targets

    January 31, 2025

    Previous news Next news

    Denis Manturov, Dmitry Chernyshenko, Deputy Minister of Defense Alexey Krivoruchko and representatives of the Ministry of Industry and Trade, the Ministry of Digital Development, Communications and Mass Media of Russia, members of the board of the military-industrial complex, heads of military command bodies, representatives of defense industry enterprises and the People’s Defense Industry Complex at a session on the use of artificial intelligence to increase the combat capabilities of weapons and control systems

    A strategic session was held at the Military Innovation Technopolis (VIT) “Era” under the leadership of First Deputy Prime Minister Denis Manturov.

    The event was attended by Deputy Prime Minister Dmitry Chernyshenko, Deputy Minister of Defense Alexey Krivoruchko, representatives of the Ministry of Industry and Trade and the Ministry of Digital Development, members of the board of the Military-Industrial Commission, heads of military command bodies, representatives of enterprises of the defense industry complex and the national defense industry complex.

    During the meeting, issues of the influence of artificial intelligence on increasing the combat effectiveness of units in combat zones and increasing the combat capabilities of weapons, equipment, and control systems were considered.

    “All leading countries of the world are aware of the growing role of artificial intelligence technologies, big data processing and cloud computing, having included their development among their strategic priorities. In fact, we can talk about another race of technological competition, comparable to the arms race and space exploration programs. Russia as a whole is following in the wake of global trends. Russian companies are developing technological products, including large language models, computer vision, machine learning, based on neural network tools. Most of the existing and planned developments have dual-use potential. Our task is to use them in solving applied military problems,” Denis Manturov noted.

    Artificial intelligence is used for automatic processing and analysis of intelligence data, can improve information support for combat operations, increase the ability to predict threats and the course of conflict development. Digital technologies are the basis for the mass introduction of robotic systems and swarm interaction of unmanned aerial vehicles.

    “Artificial intelligence is a breakthrough and fast technology that is important for both civilian and military needs. In the coming years, we will increase the volume of funding for AI research. We plan to accumulate these resources within the framework of a single AI research program. It is planned to allocate 5% of the state budget for funding scientific research in the field of AI and 15% of the state budget for funding research in other areas, but with the mandatory use of AI tools. Consolidation of these resources in the field of AI and training of specialists are extremely important for achieving technological sovereignty and other goals set by the President of Russia,” said Dmitry Chernyshenko.

    “It is also important to use the capabilities of AI analytics for a deep analysis of the conflict in Ukraine and further training of domestic intelligent systems,” Denis Manturov emphasized.

    The session participants discussed the formation of information and computing systems for the trusted use of elements of artificial intelligence for military purposes, as well as the experience of transitioning to a new generation of drones on neuroprocessors.

    An exhibition of new samples and technologies developed by residents of innovative scientific and technological centers and innovative development funds of the Russian Federation was opened for the participants of the strategic session. A number of samples using AI technologies were selected by the Main Directorate for Innovative Development of the Ministry of Defense of Russia together with the People’s Front for use in the special military operation zone.

    In particular, control modules for receiving video images, analyzing, capturing and automatically tracking targets, semi-autonomous underwater robotic systems (RTS) for reconnaissance, technical control of underwater objects, delivery and manipulation of cargo in difficult underwater conditions, unified consoles for simultaneous control of a group of RTS (several unmanned boats, ground-based RTS or a swarm of UAVs) were presented.

    Manufacturers also presented universal flight controller control units based on technical vision. In particular, in complex electronic environments, these devices retain full functionality of video analytics and allow you to hit a target when you lose control of the drone or return to the base on your own.

    In addition, the participants of the strategic session considered unmanned aircraft systems for intercepting air targets. Interceptor control systems with artificial intelligence allow for automatic detection and capture of targets for subsequent neutralization with a net, special pellets or kinetic damage.

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

    MIL OSI Russia News –

  • MIL-OSI: Orrstown Financial Services, Inc. Reports Fourth Quarter 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    • Net income of $13.7 million, or $0.71 per diluted share, for the three months ended December 31, 2024 compared to net loss of $7.9 million, or $0.41 per diluted share, for the three months ended September 30, 2024; the fourth quarter of 2024 included $3.9 million in expenses related to the merger and $0.5 million for a legal settlement compared to $17.0 million in expenses related to the merger, $15.5 million of provision for credit losses on non-purchase credit deteriorated loans and $4.8 million for an executive retirement, net of taxes, for the third quarter of 2024;
    • Excluding the impact of the non-recurring charges referenced above, net income and diluted earnings per share, respectively, were $16.7 million(1) and $0.87(1) for the fourth quarter of 2024 compared to adjusted net income and diluted earnings per share of $21.4 million(1) and $1.11(1), respectively;
    • The Board of Directors declared a cash dividend of $0.26 per common share, payable February 21, 2025, to shareholders of record as of February 14, 2025; this represents an increase in the Company’s quarterly cash dividend of $0.03 per share, or 13%;
    • The previously announced cost save target of 18% has been achieved for the go-forward operating run rate as of December 31, 2024;
    • With the core conversion being completed in November 2024, the fourth quarter results reflected several ongoing activities associated with the conversion and the transitional period; the fourth quarter also included elevated salaries and employee benefit expenses due to year end performance-based incentive accruals;
    • Net interest margin, on a tax equivalent basis, was 4.05% in the fourth quarter of 2024 compared to 4.14% in the third quarter of 2024; the net accretion impact of purchase accounting marks was $7.2 million of net interest income, which represents 52 basis points of net interest margin for the fourth quarter of 2024 compared to $5.8 million of net interest income, which represents 42 basis points of net interest margin, for the third quarter of 2024;
    • Commercial loans declined by $59.5 million, or 2%, from September 30, 2024 to December 31, 2024 due primarily to strategic actions to reduce risk in the portfolio, including reducing commercial real estate (“CRE”) loan concentrations; a pool of mostly commercial and industrial loans totaling $6.0 million was sold, including $2.6 million of nonaccrual loans; total classified loans declined by $16.9 million during the fourth quarter of 2024;
    • Noninterest income decreased by $1.2 million to $11.2 million in the three months ended December 31, 2024 compared to $12.4 million in the three months ended September 30, 2024; this reduction was driven by certain courtesy fee waivers provided to clients as well as tax credits recognized in the third quarter of 2024 that did not recur in the fourth quarter;
    • The provision for credit losses was $1.8 million for the three months ended December 31, 2024, inclusive of a charge-off of $2.4 million for one commercial and industrial (C&I) relationship and charge-offs associated with the loan sale of $0.6 million, which was offset by the acceleration of a purchase mark for the same amount;
    • Tangible book value per common share(1) increased to $21.19 per share at December 31, 2024 compared to $21.12 per share at September 30, 2024.

    (1) Non-GAAP measure. See Appendix A for additional information.

    HARRISBURG, Pa., Jan. 31, 2025 (GLOBE NEWSWIRE) — Orrstown Financial Services, Inc. (NASDAQ: ORRF), the parent company of Orrstown Bank (the “Bank”), announced earnings for the three months ended December 31, 2024. Net income totaled $13.7 million for the three months ended December 31, 2024, compared to net loss of $7.9 million for the three months ended September 30, 2024 and net income of $7.6 million for the three months ended December 31, 2023. Diluted earnings per share was $0.71 for the three months ended December 31, 2024, compared to diluted loss per share of $0.41 for the three months ended September 30, 2024 and diluted earnings per share of $0.73 for the three months ended December 31, 2023. For the fourth quarter of 2024, excluding the impact of merger-related expenses and other non-recurring charges, net of taxes, net income and diluted earnings per share were $16.7 million(1) and $0.87(1), respectively. For the third quarter of 2024, excluding the impact of the merger-related expenses, net of taxes, net income and diluted earnings per share were $21.4 million(1) and $1.11(1), respectively. For the fourth quarter of 2023, excluding the impact from the merger-related expenses, net income and diluted earnings per share were $8.6 million(1) and $0.83(1), respectively.

    “While we are pleased with another year of strong core earnings, we are even more excited about what lies ahead,” said Thomas R. Quinn, Jr., President and Chief Executive Officer. “We successfully completed our core conversion in November and have achieved the targeted 18% cost savings in our future operating run rate of the two banks’ combined noninterest expense base. With the integration behind us, we look forward to returning our focus to growing the company, enhancing shareholder value and building the premier community banking franchise in our Pennsylvania and Maryland markets.”

    (1) Non-GAAP measure. See Appendix A for additional information.

    DISCUSSION OF RESULTS

    Balance Sheet

    Loans

    Loans held for investment was $3.9 billion at December 31, 2024, a decrease of $50.2 million, compared to $4.0 billion at September 30, 2024. The decrease from the third quarter of 2024 was primarily due to strategic actions to reduce risk in the portfolio, including reducing CRE loan concentrations.

    Investment Securities

    Investment securities, all of which are classified as available-for-sale, increased by $2.9 million to $829.7 million at December 31, 2024 from $826.8 million at September 30, 2024. During the fourth quarter of 2024, investment securities totaling $37.7 million were purchased, partially offset by paydowns of $18.1 million and net unrealized losses of $16.2 million. The overall duration of the Company’s investment securities portfolio was 4.1 years at December 31, 2024 compared to 4.6 years at September 30, 2024. See Appendix B for a summary of the Bank’s investment securities at December 31, 2024, highlighting their concentrations, credit ratings and credit enhancement levels.

    Deposits

    During the fourth quarter of 2024, deposits decreased by $35.1 million to $4.6 billion at December 31, 2024 compared to $4.7 billion at September 30, 2024 due to normal seasonal activity. The Bank’s loan-to-deposit ratio decreased slightly to 85% at December 31, 2024 from 86% at September 30, 2024.

    Borrowings

    The Bank actively manages its liquidity position through its various sources of funding to meet the needs of its clients. FHLB advances and other borrowings remained at $115.4 million at December 31, 2024 and September 30, 2024. The Bank seeks to maintain sufficient liquidity to ensure client needs can be addressed in a timely basis. The Bank had available alternative funding sources, such as FHLB advances and other wholesale options, of approximately $1.7 billion at December 31, 2024.

    Goodwill and Intangible Assets

    Goodwill decreased by $2.5 million from September 30, 2024 to December 31, 2024 due to certain purchase accounting adjustments, primarily an increase in the core deposit intangible of $4.1 million.

    Income Statement

    Net Interest Income and Margin

    Net interest income was $50.6 million for the three months ended December 31, 2024 compared to $51.7 million for the three months ended September 30, 2024. The net interest margin, on a tax equivalent basis, decreased to 4.05% in the fourth quarter of 2024 from 4.14% in the third quarter of 2024. The net interest margin was positively impacted by the net accretion impact of purchase accounting marks on loans, securities, deposits and borrowings of $7.2 million, which represents 52 basis points of net interest margin during the fourth quarter of 2024. During the third quarter of 2024, the net accretion impact of purchase accounting marks was $5.8 million, which represented 42 basis points of net interest margin. Funding costs show signs of stabilizing.

    Interest income on loans, on a tax equivalent basis, decreased by $2.7 million to $68.1 million for the three months ended December 31, 2024 compared to $70.8 million for the three months ended September 30, 2024. Average loans decreased by $28.0 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024.

    Interest income on investment securities, on a tax equivalent basis, was $9.9 million for the fourth quarter of 2024 compared to $10.1 million in the third quarter of 2024.

    Interest expense, on a tax equivalent basis, decreased by $1.9 million to $29.4 million for the three months ended December 31, 2024 compared to $31.3 million for the three months ended September 30, 2024. Average interest-bearing deposits decreased by $58.1 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. Average borrowings decreased by $1.3 million during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. Interest expense includes $0.9 million and $1.5 million of amortization of purchase accounting marks for the three months ended December 31, 2024 and September 30, 2024, respectively.

    Provision for Credit Losses

    The allowance for credit losses (“ACL”) on loans decreased to $48.7 million at December 31, 2024 from $49.6 million at September 30, 2024. The ACL to total loans was 1.24% at December 31, 2024 compared to 1.25% at September 30, 2024. The Company recorded a provision for credit losses on loans of $2.1 million for the three months ended December 31, 2024 compared to $14.1 million for the three months ended September 30, 2024. Net charge-offs were $3.0 million for the three months ended December 31, 2024 compared to net charge-offs of $0.3 million for the three months ended September 30, 2024. During the fourth quarter of 2024, the Bank sold $6.0 million of mostly C&I loans, which resulted in a charge-off totaling $0.6 million. There was also a corresponding $0.6 million of purchase accounting accretion associated with these loans.

    Classified loans decreased by $16.9 million to $88.6 million at December 31, 2024 from $105.5 million at September 30, 2024 primarily due to a combination of repayments and net rating upgrades, in addition to the loan sale. Non-accrual loans decreased by $2.8 million to $24.1 million at December 31, 2024 from $26.9 million at September 30, 2024 partially due to a sale of mostly C&I loans on nonaccrual status totaling $2.6 million during the fourth quarter of 2024. Nonaccrual loans to total loans decreased to 0.61% at December 31, 2024 compared to 0.68% at September 30, 2024 and decreased from 1.11% at December 31, 2023. Management believes the ACL to be adequate based on current asset quality metrics and economic conditions.

    Noninterest Income

    Noninterest income decreased by $1.2 million to $11.2 million in the three months ended December 31, 2024 from $12.4 million in the three months ended September 30, 2024. There were reduced service charges in the fourth quarter due to fee waivers provided to clients in the post-conversion period from November through the end of the year.

    Wealth management income decreased to $4.9 million in the three months ended December 31, 2024 compared to $5.0 million for the three months ended September 30, 2024. The team continues to provide value added services to clients and deliver strong results.

    Other income decreased by $0.3 million to $1.6 million in the three months ended December 31, 2024 compared to $1.9 million in the three months ended September 30, 2024 due to income from solar tax credits totaling $0.3 million recorded during the third quarter of 2024.

    Noninterest Expenses

    Noninterest expenses decreased by $17.4 million to $42.9 million in the three months ended December 31, 2024 from $60.3 million in the three months ended September 30, 2024.

    The Company’s financial results for any periods ended prior to July 1, 2024 reflect Orrstown’s results only on a standalone basis. As a result of this factor and the merger-related items below, the Company’s financial results for the fourth quarter of 2024 may not be directly comparable to prior reported periods.

    For the three months ended December 31, 2024, merger-related expenses totaled $3.9 million, a decrease of $13.1 million, compared to $17.0 million for the three months ended September 30, 2024. The merger costs incurred during the fourth quarter of 2024 include employee separation costs, software conversion costs and professional fees. The Company expect to incur some additional merger-related expenses in the first quarter of 2025.

    Salaries and benefits expense decreased by $4.8 million to $22.4 million for the three months ended December 31, 2024 compared to $27.2 million for the three months ended September 30, 2024. The three months ended September 30, 2024 included $4.8 million of expenses associated with the retirement of an executive.

    Intangible asset amortization increased to $2.8 million for the three months ended December 31, 2024 compared to $2.5 million for the three months ended September 30, 2024. This increase is due to the amortization expense recognized on the core deposit intangible of $40.1 million and wealth customer relationship intangible of $10.4 million established on July 1, 2024 from the merger. Due to the aforementioned purchase accounting adjustment, the three months ended December 31, 2024 included $0.4 million of additional amortization expense associated with this adjustment.

    Taxes other than income decreased by $0.8 million in the three months ended December 31, 2024 compared to the three months ended September 30, 2024. This decrease reflects tax credits recognized during the fourth quarter of 2024.

    Income Taxes

    The Company’s effective tax rate was 20.1% for both the fourth and third quarters of 2024. The Company’s effective tax rate for the three months ended December 31, 2024 is less than the 21% federal statutory rate primarily due to tax-exempt income, including interest earned on tax-exempt loans and securities and income from life insurance policies and tax credits partially offset by the disallowed portion of interest expense against earnings in association with the Bank’s tax-exempt investments under the Tax Equity and Fiscal Responsibility Act of 1982 (“TEFRA”) and the impact of nondeductible merger-related costs. The Company regularly analyzes its projected taxable income and makes adjustments to the provision for income taxes accordingly.

    Capital

    Shareholders’ equity totaled $516.7 million at December 31, 2024 compared to $516.2 million at September 30, 2024. The impact of net income of $13.7 million was offset by a reduction of $10.4 million in accumulated other comprehensive loss from an increase in unrealized losses in the investment portfolio and dividend payments of $4.4 million.

    Tangible book value per share(1) increased to $21.19 per share at December 31, 2024 from $21.12 per share at September 30, 2024.

    The Company’s tangible common equity ratio was 7.5% at both December 31, 2024 and September 30, 2024. The Company’s total risk-based capital ratio was 12.4% at both December 31, 2024 and September 30, 2024. The Company’s Tier 1 leverage ratio increased to 8.3% at December 31, 2024 compared to 8.0% at September 30, 2024 driven by earnings and a decrease in average assets during the fourth quarter of 2024.

    At December 31, 2024, all four capital ratios applicable to the Company were above regulatory minimum levels to be deemed “well capitalized” under current bank regulatory guidelines. The Company continues to believe that capital is adequate to support the risks inherent in the balance sheet, as well as growth requirements.

    (1) Non-GAAP measure. See Appendix A for additional information.

    Investor Relations Contact:
    Neelesh Kalani
    Executive Vice President, Chief Financial Officer
    Phone (717) 510-7097
    FINANCIAL HIGHLIGHTS (Unaudited)              
                   
      Three Months Ended   Twelve Months Ended
      December 31,   December 31,   December 31,   December 31,
    (In thousands)   2024       2023       2024       2023  
                   
    Profitability for the period:              
    Net interest income $ 50,573     $ 26,018     $ 155,254     $ 104,906  
    Provision for credit losses   1,755       418       16,546       1,682  
    Noninterest income   11,247       6,491       37,435       25,652  
    Noninterest expenses   42,930       22,392       148,337       83,843  
    Income before income tax expense   17,135       9,699       27,806       45,033  
    Income tax expense   3,451       2,056       5,756       9,370  
    Net income available to common shareholders $ 13,684     $ 7,643     $ 22,050     $ 35,663  
                   
    Financial ratios:              
    Return on average assets (1)   1.00 %     1.00 %     0.51 %     1.19 %
    Return on average assets, adjusted (1) (2) (3)   1.22 %     1.13 %     1.30 %     1.22 %
    Return on average equity (1)   10.54 %     12.21 %     5.62 %     14.66 %
    Return on average equity, adjusted (1) (2) (3)   12.86 %     13.77 %     14.29 %     15.06 %
    Net interest margin (1)   4.05 %     3.71 %     3.92 %     3.80 %
    Efficiency ratio   69.4 %     68.9 %     77.0 %     64.2 %
    Efficiency ratio, adjusted (2) (3)   62.3 %     65.6 %     62.5 %     63.4 %
    Income per common share:              
    Basic $ 0.72     $ 0.74     $ 1.49     $ 3.45  
    Basic, adjusted (2) (3) $ 0.87     $ 0.84     $ 3.80     $ 3.54  
    Diluted $ 0.71     $ 0.73     $ 1.48     $ 3.42  
    Diluted, adjusted (2) (3) $ 0.87     $ 0.83     $ 3.76     $ 3.51  
                   
    Average equity to average assets   9.45 %     8.18 %     9.08 %     8.11 %
                   
    (1) Annualized for the three months ended December 31, 2024 and 2023.
    (2) Ratio has been adjusted for the non-recurring charges for all periods presented.
    (3) Non-GAAP based financial measure. Please refer to Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.
    FINANCIAL HIGHLIGHTS (Unaudited)      
    (continued)      
      December 31,   December 31,
    (Dollars in thousands, except per share amounts)   2024       2023  
    At period-end:      
    Total assets $ 5,431,023     $ 3,064,240  
    Loans, net of allowance for credit losses   3,882,525       2,269,611  
    Loans held-for-sale, at fair value   6,614       5,816  
    Securities available for sale, at fair value   829,711       513,519  
    Total deposits   4,615,706       2,558,814  
    FHLB advances and other borrowings and Securities sold under agreements to repurchase   141,227       147,285  
    Subordinated notes and trust preferred debt   68,680       32,093  
    Shareholders’ equity   516,682       265,056  
           
    Credit quality and capital ratios (1):      
    Allowance for credit losses to total loans   1.24 %     1.25 %
    Total nonaccrual loans to total loans   0.61 %     1.11 %
    Nonperforming assets to total assets   0.45 %     0.83 %
    Allowance for credit losses to nonaccrual loans   202 %     112 %
    Total risk-based capital:      
    Orrstown Financial Services, Inc.   12.4 %     13.0 %
    Orrstown Bank   12.4 %     12.8 %
    Tier 1 risk-based capital:      
    Orrstown Financial Services, Inc.   10.2 %     10.8 %
    Orrstown Bank   11.2 %     11.6 %
    Tier 1 common equity risk-based capital:      
    Orrstown Financial Services, Inc.   10.0 %     10.8 %
    Orrstown Bank   11.2 %     11.6 %
    Tier 1 leverage capital:      
    Orrstown Financial Services, Inc.   8.3 %     8.9 %
    Orrstown Bank   9.1 %     9.5 %
           
    Book value per common share $ 26.65     $ 24.98  
           
    (1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (“CECL”) to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the CECL standard.
    CONSOLIDATED BALANCE SHEETS (Unaudited)      
           
    (Dollars in thousands, except per share amounts) December 31, 2024   December 31, 2023
    Assets      
    Cash and due from banks $ 51,026     $ 32,586  
    Interest-bearing deposits with banks   187,282       32,575  
    Cash and cash equivalents   238,308       65,161  
    Restricted investments in bank stocks   20,232       11,992  
    Securities available for sale (amortized cost of $864,920 and $549,089 at December 31, 2024 and December 31, 2023, respectively)   829,711       513,519  
    Loans held for sale, at fair value   6,614       5,816  
    Loans   3,931,214       2,298,313  
    Less: Allowance for credit losses   (48,689 )     (28,702 )
    Net loans   3,882,525       2,269,611  
    Premises and equipment, net   50,217       29,393  
    Cash surrender value of life insurance   143,854       73,204  
    Goodwill   68,106       18,724  
    Other intangible assets, net   47,765       2,414  
    Accrued interest receivable   21,058       13,630  
    Deferred tax assets, net   42,647       22,017  
    Other assets   79,986       38,759  
    Total assets $ 5,431,023     $ 3,064,240  
           
    Liabilities      
    Deposits:      
    Noninterest-bearing $ 886,786     $ 430,959  
    Interest-bearing   3,728,920       2,127,855  
    Total deposits   4,615,706       2,558,814  
    Securities sold under agreements to repurchase and federal funds purchased   25,863       9,785  
    FHLB advances and other borrowings   115,364       137,500  
    Subordinated notes and trust preferred debt   68,680       32,093  
    Other liabilities   88,728       60,992  
    Total liabilities   4,914,341       2,799,184  
           
    Shareholders’ Equity      
    Preferred stock, $1.25 par value per share; 500,000 shares authorized; no shares issued or outstanding   —       —  
    Common stock, no par value—$0.05205 stated value per share; 50,000,000 shares authorized; 19,722,640 shares issued and 19,389,967 outstanding at December 31, 2024; 11,204,599 shares issued and 10,612,390 outstanding at December 31, 2023   1,027       583  
    Additional paid—in capital   423,274       189,027  
    Retained earnings   126,540       117,667  
    Accumulated other comprehensive loss   (26,316 )     (28,476 )
    Treasury stock— 332,673 and 592,209 shares, at cost at December 31, 2024 and December 31, 2023, respectively   (7,843 )     (13,745 )
    Total shareholders’ equity   516,682       265,056  
    Total liabilities and shareholders’ equity $ 5,431,023     $ 3,064,240  
    ORRSTOWN FINANCIAL SERVICES, INC.
    CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
                     
        Three Months Ended   Twelve Months Ended
        December 31,   December 31,   December 31,   December 31,
    (Dollars in thousands, except per share amounts)     2024       2023       2024       2023  
    Interest income                
    Loans   $ 67,870     $ 33,910     $ 210,287     $ 126,595  
    Investment securities – taxable     8,773       4,787       27,361       18,031  
    Investment securities – tax-exempt     880       871       3,521       3,462  
    Short-term investments     2,492       460       7,764       1,809  
    Total interest income     80,015       40,028       248,933       149,897  
    Interest expense                
    Deposits     26,850       12,118       84,234       37,510  
    Securities sold under agreements to repurchase and federal funds purchased     67       30       215       114  
    FHLB advances and other borrowings     1,165       1,358       4,945       5,350  
    Subordinated notes and trust preferred debt     1,360       504       4,285       2,017  
    Total interest expense     29,442       14,010       93,679       44,991  
    Net interest income     50,573       26,018       155,254       104,906  
    Provision for credit losses     1,755       418       16,546       1,682  
    Net interest income after provision for credit losses     48,818       25,600       138,708       103,224  
    Noninterest income                
    Service charges     2,050       1,198       6,893       4,866  
    Interchange income     1,608       952       5,259       3,873  
    Swap fee income     597       588       1,676       1,039  
    Wealth management income     4,902       2,945       16,353       11,340  
    Mortgage banking activities     517       143       1,835       591  
    Investment securities (losses) gains     (5 )     (39 )     249       (47 )
    Other income     1,578       704       5,170       3,990  
    Total noninterest income     11,247       6,491       37,435       25,652  
    Noninterest expenses                
    Salaries and employee benefits     22,444       12,848       76,581       50,983  
    Occupancy, furniture and equipment     4,893       2,534       14,570       9,593  
    Data processing     1,540       1,247       6,088       4,913  
    Advertising and bank promotions     878       501       2,587       2,157  
    FDIC insurance     955       460       2,677       1,960  
    Professional services     1,591       702       4,142       2,905  
    Taxes other than income     (312 )     203       734       1,050  
    Intangible asset amortization     2,838       236       5,742       953  
    Merger-related expenses     3,887       1,059       22,671       1,059  
    Restructuring expenses     39       —       296       —  
    Other operating expenses     4,177       2,602       12,249       8,270  
    Total noninterest expenses     42,930       22,392       148,337       83,843  
    Income before income tax expense     17,135       9,699       27,806       45,033  
    Income tax expense     3,451       2,056       5,756       9,370  
    Net income   $ 13,684     $ 7,643     $ 22,050     $ 35,663  
    continued
                     
        Three Months Ended   Twelve Months Ended
        December 31,   December 31,   December 31,   December 31,
          2024       2023       2024       2023  
    Share information:                
    Basic earnings per share   $ 0.72     $ 0.74     $ 1.49     $ 3.45  
    Diluted earnings per share   $ 0.71     $ 0.73     $ 1.48     $ 3.42  
    Dividends paid per share   $ 0.23     $ 0.20     $ 0.86     $ 0.80  
    Weighted average shares – basic     19,118       10,321       14,761       10,340  
    Weighted average shares – diluted     19,300       10,419       14,914       10,435  
    ANALYSIS OF NET INTEREST INCOME        
    Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)    
         
      Three Months Ended
      12/31/2024   9/30/2024   6/30/2024   3/31/2024   12/31/2023
          Taxable-   Taxable-       Taxable-   Taxable-       Taxable-   Taxable-       Taxable-   Taxable-       Taxable-   Taxable-
      Average   Equivalent   Equivalent   Average   Equivalent   Equivalent   Average   Equivalent   Equivalent   Average   Equivalent   Equivalent   Average   Equivalent   Equivalent
    (In thousands) Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate   Balance   Interest   Rate
    Assets                                                          
    Federal funds sold & interest-bearing bank balances $ 199,236   $ 2,492     4.96 %   $ 184,465   $ 2,452     5.29 %   $ 142,868   $ 1,864     5.25 %   $ 74,523   $ 956     5.16 %   $ 37,873   $ 460     4.82 %
    Investment securities (1)(2)   849,389     9,887     4.66       849,700     10,123     4.77       538,451     6,114     4.54       519,851     5,694     4.39       508,891     5,890     4.63  
    Loans (1)(3)(4)(5)(6)   3,961,269     68,073     6.82       3,989,259     70,849     7.07       2,324,942     35,690     6.17       2,308,103     36,382     6.34       2,286,678     34,055     5.91  
    Total interest-earning assets   5,009,894     80,452     6.38       5,023,424     83,424     6.61       3,006,261     43,668     5.84       2,902,477     43,032     5.96       2,833,442     40,405     5.67  
    Other assets   454,271             491,719             204,863             196,295             204,382        
    Total assets $ 5,464,165           $ 5,515,143           $ 3,211,124           $ 3,098,772           $ 3,037,824        
    Liabilities and Shareholders’ Equity                                                
    Interest-bearing demand deposits(7) $ 1,257,316     5,360     1.69     $ 2,554,743     16,165     2.52     $ 1,649,753     10,118     2.47     $ 1,570,622     9,192     2.35     $ 1,543,575     8,333     2.14  
    Savings deposits(7)   1,538,287     10,381     2.68       283,337     148     0.21       165,467     140     0.34       170,005     144     0.34       178,351     153     0.34  
    Time deposits   998,963     11,109     4.41       1,014,628     12,290     4.82       481,721     5,007     4.18       428,443     4,180     3.92       392,085     3,632     3.67  
    Total interest-bearing deposits   3,794,566     26,850     2.81       3,852,708     28,603     2.95       2,296,941     15,265     2.67       2,169,070     13,516     2.51       2,114,011     12,118     2.27  
    Securities sold under agreements to repurchase and federal funds purchased   21,572     67     1.23       23,075     96     1.66       13,412     27     0.81       12,010     25     0.85       13,874     30     0.85  
    FHLB advances and other borrowings   115,373     1,165     4.01       115,388     1,154     3.98       115,000     1,152     4.03       137,505     1,474     4.31       127,843     1,358     4.21  
    Subordinated notes and trust preferred debt   68,571     1,360     7.88       68,399     1,437     8.36       32,118     734     9.19       32,100     754     9.45       32,083     504     6.29  
    Total interest-bearing liabilities   4,000,082     29,442     2.92       4,059,570     31,290     3.07       2,457,471     17,178     2.81       2,350,685     15,769     2.70       2,287,811     14,010     2.43  
    Noninterest-bearing demand deposits   849,999             807,886             423,037             417,469             441,695        
    Other liabilities   97,685             110,017             57,828             62,329             59,876        
    Total liabilities   4,947,766             4,977,473             2,938,336             2,830,483             2,789,382        
    Shareholders’ equity   516,399             537,670             272,788             268,289             248,442        
    Total $ 5,464,165           $ 5,515,143           $ 3,211,124           $ 3,098,772           $ 3,037,824        
    Taxable-equivalent net interest income / net interest spread       51,010     3.46 %         52,134     3.55 %         26,490     3.02 %         27,263     3.26 %         26,395     3.24 %
    Taxable-equivalent net interest margin         4.05 %           4.14 %           3.54 %           3.77 %           3.71 %
    Taxable-equivalent adjustment       (437 )             (437 )             (387 )             (382 )             (377 )    
    Net interest income     $ 50,573             $ 51,697             $ 26,103             $ 26,881             $ 26,018      
    Ratio of average interest-earning assets to average interest-bearing liabilities         125 %           124 %           122 %           123 %           124 %
                                                               
    NOTES:                                                          
    (1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
    (2) Average balance of investment securities is computed at fair value.
    (3) Average balances include nonaccrual loans.
    (4) Interest income on loans includes prepayment and late fees, where applicable.
    (5) Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status in the three months ended March 31, 2024.
    (6) Interest income on loans includes accretion on purchase accounting marks of $7.6 million, $7.3 million, $0.2 million, $0.1 million and $0.1 million for the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, respectively.
    (7) Changes between average deposit type balances are due to operational updates for deposit sweeps during the three months ended December 31, 2024.
    ANALYSIS OF NET INTEREST INCOME        
    Average Balances and Interest Rates, Taxable-Equivalent Basis (Unaudited)    
    (continued)                      
      Twelve Months Ended
      December 31, 2024   December 31, 2023
          Taxable-   Taxable-       Taxable-   Taxable-
      Average   Equivalent   Equivalent   Average   Equivalent   Equivalent
    (In thousands) Balance   Interest   Rate   Balance   Interest   Rate
    Assets                      
    Federal funds sold & interest-bearing bank balances $ 150,500     $ 7,764       5.14 %   $ 40,856     $ 1,809       4.43 %
    Investment securities (1)(2)   690,223       31,817       4.60       520,465       22,414       4.31  
    Loans (1)(3)(4)(5)(6)   3,150,425       210,994       6.68       2,239,574       127,107       5.68  
    Total interest-earning assets   3,991,148       250,575       6.26       2,800,895       151,330       5.40  
    Other assets   330,324               198,632          
    Total assets $ 4,321,472             $ 2,999,527          
    Liabilities and Shareholders’ Equity                      
    Interest-bearing demand deposits(7) $ 1,147,124       21,455       1.87     $ 1,525,204       26,944       1.77  
    Savings deposits(7)   1,153,097       30,193       2.61       198,157       585       0.30  
    Time deposits   732,446       32,586       4.44       338,170       9,981       2.95  
    Total interest-bearing deposits   3,032,667       84,234       2.77       2,061,531       37,510       1.82  
    Securities sold under agreements to repurchase and federal funds purchased   17,543       215       1.22       14,111       114       0.80  
    FHLB advances and other borrowings   120,787       4,945       4.08       123,697       5,350       4.32  
    Subordinated notes and trust preferred debt   50,397       4,285       8.48       32,058       2,017       6.29  
    Total interest-bearing liabilities   3,221,394       93,679       2.91       2,231,397       44,991       2.02  
    Noninterest-bearing demand deposits   625,714               470,349          
    Other liabilities   82,084               54,447          
    Total liabilities   3,929,192               2,756,193          
    Shareholders’ equity   392,280               243,334          
    Total liabilities and shareholders’ equity $ 4,321,472             $ 2,999,527          
    Taxable-equivalent net interest income / net interest spread       156,896       3.36 %         106,339       3.39 %
    Taxable-equivalent net interest margin           3.92 %             3.80 %
    Taxable-equivalent adjustment       (1,642 )             (1,433 )    
    Net interest income     $ 155,254             $ 104,906      
    Ratio of average interest-earning assets to average interest-bearing liabilities           124 %             126 %
                           
    NOTES TO ANALYSIS OF NET INTEREST INCOME:
    (1) Yields and interest income on tax-exempt assets have been computed on a taxable-equivalent basis assuming a 21% tax rate.
    (2) Average balance of investment securities is computed at fair value.
    (3) Average balances include nonaccrual loans.
    (4) Interest income on loans includes prepayment and late fees, where applicable.
    (5) Interest income on loans includes interest recovered of $1.6 million from the payoff of a commercial real estate loan on nonaccrual status for the twelve months ended December 31, 2024.
    (6) Interest income on loans includes accretion on purchase accounting marks of $15.2 million and $0.7 million for the twelve months ended December 31, 2024 and 2023, respectively.
    (7) Changes between average deposit type balances are due to operational updates for deposit sweeps during the three months ended December 31, 2024.
    ORRSTOWN FINANCIAL SERVICES, INC.        
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)        
                       
    (In thousands) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Profitability for the quarter:                  
    Net interest income $ 50,573     $ 51,697     $ 26,103     $ 26,881     $ 26,018  
    Provision for credit losses   1,755       13,681       812       298       418  
    Noninterest income   11,247       12,386       7,172       6,630       6,491  
    Noninterest expenses   42,930       60,299       22,639       22,469       22,392  
    Income (loss) before income taxes   17,135       (9,897 )     9,824       10,744       9,699  
    Income tax expense (benefit)   3,451       (1,994 )     2,086       2,213       2,056  
    Net income (loss) $ 13,684     $ (7,903 )   $ 7,738     $ 8,531     $ 7,643  
                       
    Financial ratios:                  
    Return on average assets (1)   1.00 %     (0.57) %     0.97 %     1.11 %     1.00 %
    Return on average assets, adjusted (1)(2)(3)   1.22 %     1.55 %     1.09 %     1.19 %     1.13 %
    Return on average equity (1)   10.54 %     (5.85) %     11.41 %     12.79 %     12.21 %
    Return on average equity, adjusted (1)(2)(3)   12.86 %     15.85 %     12.88 %     13.79 %     13.77 %
    Net interest margin (1)   4.05 %     4.14 %     3.54 %     3.77 %     3.71 %
    Efficiency ratio   69.4 %     94.1 %     68.0 %     67.0 %     68.9 %
    Efficiency ratio, adjusted (2)(3)   62.3 %     67.2 %     64.6 %     65.0 %     65.6 %
                       
    Per share information:                  
    Income (loss) per common share:                  
    Basic $ 0.72     $ (0.41 )   $ 0.74     $ 0.82     $ 0.74  
    Basic, adjusted (2)(3)   0.87       1.12       0.84       0.89       0.84  
    Diluted   0.71       (0.41 )     0.73       0.81       0.73  
    Diluted, adjusted (2)(3)   0.87       1.11       0.83       0.88       0.83  
    Book value   26.65       26.65       25.97       25.38       24.98  
    Book value, adjusted (2) (3)   28.40       28.24       26.12       25.44       25.07  
    Tangible book value (3)   21.19       21.12       24.08       23.47       23.03  
    Tangible book value, adjusted (2) (3)   22.94       22.72       24.23       23.53       23.12  
    Cash dividends paid   0.23       0.23       0.20       0.20       0.20  
                       
    Average basic shares   19,118       19,088       10,393       10,349       10,321  
    Average diluted shares   19,300       19,226       10,553       10,482       10,419  
                                           
    (1) Annualized.
    (2) Ratio has been adjusted for non-recurring expenses for all periods presented.
    (3) Non-GAAP based financial measure. Please refer to Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations for a discussion of our use of non-GAAP based financial measures, including tables reconciling GAAP and non-GAAP financial measures appearing herein.
    ORRSTOWN FINANCIAL SERVICES, INC.                
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)        
    (continued)                  
    (In thousands) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Noninterest income:                  
    Service charges $ 2,050     $ 2,360     $ 1,283     $ 1,200     $ 1,198  
    Interchange income   1,608       1,779       961       911       952  
    Swap fee income   597       505       375       199       588  
    Wealth management income   4,902       5,037       3,312       3,102       2,945  
    Mortgage banking activities   517       491       369       458       143  
    Other income   1,578       1,943       884       765       704  
    Investment securities (losses) gains   (5 )     271       (12 )     (5 )     (39 )
    Total noninterest income $ 11,247     $ 12,386     $ 7,172     $ 6,630     $ 6,491  
                       
    Noninterest expenses:                  
    Salaries and employee benefits $ 22,444     $ 27,190     $ 13,195     $ 13,752     $ 12,848  
    Occupancy, furniture and equipment   4,893       4,333       2,705       2,639       2,534  
    Data processing   1,540       2,046       1,237       1,265       1,247  
    Advertising and bank promotions   878       537       774       398       501  
    FDIC insurance   955       862       419       441       460  
    Professional services   1,591       1,119       801       631       702  
    Taxes other than income   (312 )     503       49       494       203  
    Intangible asset amortization   2,838       2,464       215       225       236  
    Merger-related expenses   3,887       16,977       1,135       672       1,059  
    Restructuring expenses   39       257       —       —       —  
    Other operating expenses   4,177       4,011       2,109       1,952       2,602  
    Total noninterest expenses $ 42,930     $ 60,299     $ 22,639     $ 22,469     $ 22,392  
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)            
    (continued)                  
    (In thousands) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Balance Sheet at quarter end:                  
    Cash and cash equivalents $ 238,308     $ 236,780     $ 132,509     $ 182,722     $ 65,161  
    Restricted investments in bank stocks   20,232       20,247       11,147       11,453       11,992  
    Securities available for sale   829,711       826,828       529,082       514,909       513,519  
    Loans held for sale, at fair value   6,614       3,561       1,562       535       5,816  
    Loans:                  
    Commercial real estate:                  
    Owner occupied   633,567       622,726       371,301       364,280       373,757  
    Non-owner occupied   1,160,238       1,164,501       710,477       707,871       694,638  
    Multi-family   274,135       276,296       151,542       147,773       150,675  
    Non-owner occupied residential   179,512       190,786       89,156       91,858       95,040  
    Agricultural   125,156       129,486       25,551       25,909       26,847  
    Commercial and industrial   451,384       471,983       349,425       339,615       340,238  
    Acquisition and development:                  
    1-4 family residential construction   47,432       56,383       32,439       22,277       24,516  
    Commercial and land development   241,424       262,317       129,883       118,010       115,249  
    Municipal   30,044       27,960       10,594       10,925       9,812  
    Total commercial loans   3,142,892       3,202,438       1,870,368       1,828,518       1,830,772  
    Residential mortgage:                  
    First lien   460,297       451,195       271,153       270,748       266,239  
    Home equity – term   5,988       6,508       4,633       4,966       5,078  
    Home equity – lines of credit   303,561       303,165       192,736       189,966       186,450  
    Installment and other loans   18,476       18,131       8,713       8,875       9,774  
    Total loans   3,931,214       3,981,437       2,347,603       2,303,073       2,298,313  
    Allowance for credit losses   (48,689 )     (49,630 )     (29,864 )     (29,165 )     (28,702 )
    Net loans held for investment   3,882,525       3,931,807       2,317,739       2,273,908       2,269,611  
    Goodwill   68,106       70,655       18,724       18,724       18,724  
    Other intangible assets, net   47,765       46,144       1,974       2,189       2,414  
    Total assets   5,431,023       5,470,589       3,198,782       3,183,331       3,064,240  
    Total deposits   4,615,706       4,650,853       2,702,884       2,695,951       2,558,814  
    FHLB advances and other borrowings and Securities sold under agreements to repurchase   141,227       137,310       129,625       127,099       147,285  
    Subordinated notes and trust preferred debt   68,680       68,510       32,128       32,111       32,093  
    Total shareholders’ equity   516,682       516,206       278,376       271,682       265,056  
    HISTORICAL TRENDS IN QUARTERLY FINANCIAL DATA (Unaudited)            
    (continued)                  
      December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Capital and credit quality measures (1):                  
    Total risk-based capital:                  
    Orrstown Financial Services, Inc.   12.4 %     12.4 %     13.3 %     13.4 %     13.0 %
    Orrstown Bank   12.4 %     12.2 %     13.1 %     13.1 %     12.8 %
    Tier 1 risk-based capital:                  
    Orrstown Financial Services, Inc.   10.2 %     10.0 %     11.1 %     11.2 %     10.8 %
    Orrstown Bank   11.2 %     11.0 %     12.0 %     11.9 %     11.6 %
    Tier 1 common equity risk-based capital:                  
    Orrstown Financial Services, Inc.   10.0 %     9.8 %     11.1 %     11.2 %     10.8 %
    Orrstown Bank   11.2 %     11.0 %     12.0 %     11.9 %     11.6 %
    Tier 1 leverage capital:                  
    Orrstown Financial Services, Inc.   8.3 %     8.0 %     8.9 %     9.0 %     8.9 %
    Orrstown Bank   9.1 %     8.8 %     9.5 %     9.6 %     9.5 %
                       
    Average equity to average assets   9.45 %     9.75 %     8.50 %     8.66 %     8.18 %
    Allowance for credit losses to total loans   1.24 %     1.25 %     1.27 %     1.27 %     1.25 %
    Total nonaccrual loans to total loans   0.61 %     0.68 %     0.36 %     0.56 %     1.11 %
    Nonperforming assets to total assets   0.45 %     0.49 %     0.26 %     0.40 %     0.83 %
    Allowance for credit losses to nonaccrual loans   202 %     184 %     357 %     226 %     112 %
                       
    Other information:                  
    Net charge-offs (recoveries) $ 3,002     $ 269     $ 113     $ (42 )   $ (6 )
    Classified loans   88,628       105,465       48,722       48,997       55,030  
    Nonperforming and other risk assets:                  
    Nonaccrual loans   24,111       26,927       8,363       12,886       25,527  
    Other real estate owned   138       138       —       —       —  
    Total nonperforming assets   24,249       27,065       8,363       12,886       25,527  
    Financial difficulty modifications still accruing   4,897       9,497       —       —       9  
    Loans past due 90 days or more and still accruing   641       337       187       99       66  
    Total nonperforming and other risk assets $ 29,787     $ 36,899     $ 8,550     $ 12,985     $ 25,602  
     
    (1) Capital ratios are estimated for the current period, subject to regulatory filings. The Company elected the three-year phase in option for the day-one impact of ASU 2016-13 for current expected credit losses (“CECL”) to regulatory capital. Beginning in 2023, the Company adjusted retained earnings, allowance for credit losses includable in tier 2 capital and the deferred tax assets from temporary differences in risk weighted assets by the permitted percentage of the day-one impact from adopting the new CECL standard.


    Appendix A – Supplemental Reporting of Non-GAAP Measures and GAAP to Non-GAAP Reconciliations

    Management believes providing certain other “non-GAAP” financial information will assist investors in their understanding of the effect on recent financial results from non-recurring charges.

    As a result of acquisitions, the Company has intangible assets consisting of goodwill, core deposit and other intangible assets, which totaled $115.9 million and $21.1 million at December 31, 2024 and December 31, 2023, respectively. In addition, during the three months ended December 31, 2024, September 30, 2024, June 30, 2024, March 31, 2024 and December 31, 2023, the Company incurred $3.9 million, $17.0 million, $1.1 million, $0.7 million and $1.1 million in merger-related expenses, respectively. During the three months ended December 31, 2024 and September 30, 2024, the Company incurred other non-recurring charges totaling $0.5 million and $20.2 million, respectively.

    Tangible book value per common share and the impact of the non-recurring expenses on net income and associated ratios, as used by the Company in this earnings release, are determined by methods other than in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”). While we believe this information is a useful supplement to GAAP based measures presented in this earnings release, readers are cautioned that this non-GAAP disclosure has limitations as an analytical tool, should not be viewed as a substitute for financial measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of our results and financial condition as reported under GAAP, nor are such measures necessarily comparable to non-GAAP performance measures that may be presented by other companies. This supplemental presentation should not be construed as an inference that our future results will be unaffected by similar adjustments to be determined in accordance with GAAP.

    The following tables present the computation of each non-GAAP based measure:

    (In thousands)

    Tangible Book Value per Common Share   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Shareholders’ equity (most directly comparable GAAP-based measure)   $ 516,682     $ 516,206     $ 278,376     $ 271,682     $ 265,056  
    Less: Goodwill     68,106       70,655       18,724       18,724       18,724  
    Other intangible assets     47,765       46,144       1,974       2,189       2,414  
    Related tax effect     (10,031 )     (9,690 )     (415 )     (460 )     (507 )
    Tangible common equity (non-GAAP)   $ 410,842     $ 409,097     $ 258,093     $ 251,229     $ 244,425  
                         
    Common shares outstanding     19,390       19,373       10,720       10,705       10,612  
                         
    Book value per share (most directly comparable GAAP-based measure)   $ 26.65     $ 26.65     $ 25.97     $ 25.38     $ 24.98  
    Intangible assets per share     5.46       5.53       1.89       1.91       1.95  
    Tangible book value per share (non-GAAP)   $ 21.19     $ 21.12     $ 24.08     $ 23.47     $ 23.03  
    (In thousands) Three Months Ended   Twelve Months Ended
    Adjusted Ratios for Non-recurring Charges December 31,
    2024    		   September 30, 2024   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Net income (loss) (A) – most directly comparable GAAP-based measure $ 13,684     $ (7,903 )   $ 7,738     $ 8,531     $ 7,643     $ 22,050     $ 35,663  
    Plus: Merger-related expenses (B)   3,887       16,977       1,135       672       1,059       22,671       1,059  
    Plus: Executive retirement expenses (B)   35       4,758       —       —       —       4,793       —  
    Plus: Provision for credit losses on non-PCD loans (B)   —       15,504       —       —       —       15,504       —  
    Plus: Provision for legal settlement (B)   478       —       —       —       —       478       —  
    Less: Related tax effect (C)   (1,386 )     (7,915 )     (139 )     (1 )     (79 )     (9,442 )     (79 )
    Adjusted net income (D=A+B-C) – Non-GAAP $ 16,698     $ 21,421     $ 8,734     $ 9,202     $ 8,623     $ 56,054     $ 36,643  
                               
    Average assets (E) $ 5,464,165     $ 5,515,143     $ 3,211,124     $ 3,098,772     $ 3,037,824     $ 4,321,472     $ 2,999,527  
    Return on average assets (= A / E) – most directly comparable GAAP-based measure (1)   1.00 %      (0.57) %     0.97 %     1.11 %     1.00 %     0.51 %     1.19 %
    Return on average assets, adjusted (= D / E) – Non-GAAP (1)   1.22 %     1.55 %     1.09 %     1.19 %     1.13 %     1.30 %     1.22 %
                               
    Average equity (F) $ 516,399     $ 537,670     $ 272,788     $ 268,289     $ 248,442     $ 392,280     $ 243,334  
    Return on average equity (= A / F) – most directly comparable GAAP-based measure (1)   10.54 %     (5.85) %     11.41 %     12.79 %     12.21 %     5.62 %     14.66 %
    Return on average equity, adjusted (= D / F) – Non-GAAP (1)   12.86 %     15.85 %     12.88 %     13.79 %     13.77 %     14.29 %     15.06 %
                               
    Weighted average shares – basic (G) – most directly comparable GAAP-based measure   19,118       19,088       10,393       10,349       10,321       14,761       10,340  
    Basic earnings (loss) per share (= A / G) – most directly comparable GAAP-based measure $ 0.72     $ (0.41 )   $ 0.74     $ 0.82     $ 0.74     $ 1.49     $ 3.45  
    Basic earnings per share, adjusted (= D / G) – Non-GAAP $ 0.87     $ 1.12     $ 0.84     $ 0.89     $ 0.84     $ 3.80     $ 3.54  
                               
    Weighted average shares – diluted (H) – most directly comparable GAAP-based measure   19,300       19,226       10,553       10,482       10,419       14,914       10,435  
    Diluted earnings (loss) per share (= A / H) – most directly comparable GAAP-based measure $ 0.71     $ (0.41 )   $ 0.73     $ 0.81     $ 0.73     $ 1.48     $ 3.42  
    Diluted earnings per share, adjusted (= D / H) – Non-GAAP $ 0.87     $ 1.11     $ 0.83     $ 0.88     $ 0.83     $ 3.76     $ 3.51  
                               
    continued
    (1) Annualized                          
      Three Months Ended   Twelve Months Ended
      December 31,
    2024    		   September 30, 2024   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023    		   December 31,
    2024    		   December 31,
    2023
    Noninterest expense (I) – most directly comparable GAAP-based measure $ 42,930     $ 60,299     $ 22,639     $ 22,469     $ 22,392     $ 148,337     $ 83,843  
    Less: Merger-related expenses (B)   (3,887 )     (16,977 )     (1,135 )     (672 )     (1,059 )     (22,671 )     (1,059 )
    Less: Executive retirement expenses (B)   (35 )     (4,758 )     —       —       —       (4,793 )     —  
    Less: Provision for legal settlement (B)   (478 )     —       —       —       —       (478 )     —  
    Adjusted noninterest expense (J = I – B) – Non-GAAP $ 38,531     $ 38,564     $ 21,504     $ 21,797     $ 21,333     $ 120,396     $ 82,784  
                               
    Net interest income (K) $ 50,573     $ 51,697     $ 26,103     $ 26,881     $ 26,018     $ 155,254     $ 104,906  
    Noninterest income (L)   11,247       12,386       7,172       6,630       6,491       37,435       25,652  
    Total operating income (M = K + L) $ 61,820     $ 64,083     $ 33,275     $ 33,511     $ 32,509     $ 192,689     $ 130,558  
                               
    Efficiency ratio (= I / M) – most directly comparable GAAP-based measure   69.4 %     94.1 %     68.0 %     67.0 %     68.9 %     77.0 %     64.2 %
    Efficiency ratio, adjusted (= J / M) – Non-GAAP   62.3 %     60.2 %     64.6 %     65.0 %     65.6 %     62.5 %     63.4 %
                               
    (1) Annualized                          


    Appendix B – Investment Portfolio Concentrations

    The following table summarizes the credit ratings and collateral associated with the Company’s investment security portfolio, excluding equity securities, at December 31, 2024:

    (In thousands)

    Sector Portfolio
    Mix    		   Amortized
    Book    		   Fair Value   Credit Enhancement   AAA   AA   A   BBB   NR   Collateral / Guarantee Type
    Unsecured ABS — %   $ 3,073   $ 2,854   27 %   — %   — %   — %   — %   100 %   Unsecured Consumer Debt
    Student Loan ABS 1       4,060     4,035   27     —     —     —     —     100     Seasoned Student Loans
    Federal Family Education Loan ABS 9       80,121     80,063   11     7     81     —     12     —     Federal Family Education Loan (1)
    PACE Loan ABS —       1,985     1,727   7     100     —     —     —     —     PACE Loans (2)
    Non-Agency CMBS 2       15,920     15,901   27     —     —     —     —     100      
    Non-Agency RMBS 2       16,555     14,528   16     100     —     —     —     —     Reverse Mortgages (3)
    Municipal – General Obligation 12       99,515     90,767       11     82     7     —     —      
    Municipal – Revenue 14       120,903     109,261       —     82     12     —     6      
    SBA ReRemic (5) —       2,283     2,278       —     100     —     —     —     SBA Guarantee (4)
    Small Business Administration 1       5,926     6,263       —     100     —     —     —     SBA Guarantee (4)
    Agency MBS 19       160,027     155,778       —     100     —     —     —     Residential Mortgages (4)
    Agency CMO 38       332,380     326,045       —     100     —     —     —      
    U.S. Treasury securities 2       20,043     18,063       —     100     —     —     —     U.S. Government Guarantee (4)
    Corporate bonds —       1,935     1,954       —     —     52     48     —      
      100 %   $ 864,726   $ 829,517       4 %   89 %   3 %   1 %   3 %    
                                           
    (1) 97% guaranteed by U.S. government
    (2) PACE acronym represents Property Assessed Clean Energy loans
    (3) Non-agency reverse mortgages with current structural credit enhancements
    (4) Guaranteed by U.S. government or U.S. government agencies
    (5) SBA ReRemic acronym represents Re-Securitization of Real Estate Mortgage Investment Conduits
                                           
    Note: Ratings in table are the lowest of the six rating agencies (Standard & Poor’s, Moody’s, Fitch, Morningstar, DBRS and Kroll Bond Rating Agency). Standard & Poor’s rates U.S. government obligations at AA+.


    About the Company

    With $5.4 billion in assets, Orrstown Financial Services, Inc. and its wholly-owned subsidiary, Orrstown Bank, provide a wide range of consumer and business financial services in Berks, Cumberland, Dauphin, Franklin, Lancaster, Perry, and York Counties, Pennsylvania and Anne Arundel, Baltimore, Harford, Howard, and Washington Counties, Maryland, as well as Baltimore City, Maryland. The Company’s lending area also includes adjacent counties in Pennsylvania and Maryland, as well as Loudon County, Virginia and Berkeley, Jefferson and Morgan Counties, West Virginia. Orrstown Bank is an Equal Housing Lender and its deposits are insured up to the legal maximum by the FDIC. Orrstown Financial Services, Inc.’s common stock is traded on Nasdaq (ORRF). For more information about Orrstown Financial Services, Inc. and Orrstown Bank, visit www.orrstown.com.

    Cautionary Note Regarding Forward-Looking Statements

    This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward-looking statements reflect the current views of the Company’s management with respect to, among other things, future events and the Company’s financial performance. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “continue,” “will,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “project,” “forecast,” “goal,” “target,” “would” and “outlook,” or the negative variations of those words or other comparable words of a future or forward-looking nature. These forward-looking statements are not historical facts, and are based on current expectations, estimates, predictions or projections about events or the Company’s industry, management’s beliefs and certain assumptions made by management, many of which, by their nature, are inherently uncertain and beyond the Company’s control. Accordingly, the Company cautions you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions and uncertainties that are difficult to predict. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements and there can be no assurances that the Company will achieve the desired level of new business development and new loans, growth in the balance sheet and fee-based revenue lines of business, cost savings initiatives and continued reductions in risk assets or mitigation of losses in the future. Factors which could cause the actual results of the Company’s operations to differ materially from expectations include, but are not limited to: general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which the Company operates; ineffectiveness of the Company’s strategic growth plan due to changes in current or future market conditions; changes in interest rates; the diversion of management’s attention from ongoing business operations and opportunities; the effects of competition and how it may impact our community banking model, including industry consolidation and development of competing financial products and services; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in laws and regulations; changes in credit quality; inability to raise capital, if necessary, under favorable conditions; volatility in the securities markets; the demand for our products and services; deteriorating economic conditions; geopolitical tensions; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics; expenses associated with litigation and legal proceedings; the possibility that the anticipated benefits of the merger with Codorus (the “Merger”) are not realized when expected or at all; the possibility that the Merger may be more expensive to complete than anticipated; the possibility that revenues following the Merger may be lower than expected; potential adverse reactions or changes to business or employee relationships, including those resulting from the completion of the Merger; the ability to complete the integration of the two companies successfully; the dilution caused by the Company’s issuance of additional shares of its capital stock in connection with the Merger; and other risks and uncertainties, including those detailed in our Annual Report on Form 10-K for the year ended December 31, 2023 under the sections titled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and in subsequent filings made with the Securities and Exchange Commission.

    The foregoing list of factors is not exhaustive. If one or more events related to these or other risks or uncertainties materializes, or if the Company’s underlying assumptions prove to be incorrect, actual results may differ materially from what the Company anticipates. Accordingly, you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made, and the Company disclaims any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. New risks and uncertainties arise from time to time, and it is not possible for the Company to predict those events or how they may affect it. In addition, the Company cannot assess the impact of each factor on its 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. All forward-looking statements, expressed or implied, included in this press release are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that the Company or persons acting on the Company’s behalf may issue.

    The review period for subsequent events extends up to and includes the filing date of a public company’s financial statements, when filed with the Securities and Exchange Commission. Accordingly, the consolidated financial information presented in this announcement is subject to change. Annualized, pro forma, projected and estimated numbers in this document are used for illustrative purposes only and are not forecasts and may not reflect actual results.

    The MIL Network –

  • MIL-OSI Economics: Phillips 66 Reports Fourth-Quarter Results and Announces Next Phase of Strategic Initiatives

    Source: Phillips

    Fourth Quarter
    Reported fourth-quarter earnings of $8 million or $0.01 per share; adjusted loss of $61 million or $0.15 per share
    Earnings impacted by $230 million pre-tax of accelerated depreciation related to Los Angeles Refinery
    Returned $1.1 billion to shareholders through dividends and share repurchases
    Record NGL fractionation and LPG export volumes in Midstream
    Record clean product yield in Refining
    Surpassed targeted $3 billion in announced asset dispositions
    Full-Year 2024
    Earnings of $2.1 billion or $4.99 per share and adjusted earnings of $2.6 billion or $6.15 per share
    $4.2 billion of operating cash flow, $4.8 billion excluding working capital
    $5.3 billion returned to shareholders through dividends and share repurchases
    Second consecutive year above industry-average crude utilization
    Achieved $1.5 billion in run-rate business transformation savings and $500 million in synergy capture from successful DCP integration

    HOUSTON–(BUSINESS WIRE)– Phillips 66 (NYSE: PSX), a leading integrated downstream energy provider, announced fourth-quarter earnings.
    “During the fourth quarter, we achieved our strategic priority targets for shareholder distributions and asset dispositions,” said Mark Lashier, chairman and CEO. “We also delivered on our goal of improving Refining performance by continuing to run above industry-average crude utilization, setting record clean product yields and achieving our targeted cost reductions of $1 per barrel.
    “In support of our Midstream wellhead-to-market strategy, we recently announced an agreement to acquire EPIC’s NGL business, bolstering our Permian and Gulf Coast footprint,” said Lashier. “Upon closing, these assets will be accretive to earnings and highly integrated with our existing infrastructure, providing additional opportunities to enhance returns and shareholder value.”
    Lashier added, “Building on our successes, I am pleased to announce that we have set new financial and operational targets that prioritize debt reduction, a lowered cost structure and EBITDA growth. Supported by world-class operations, we are committed to returning over 50% of operating cash flow to shareholders.”
    On behalf of the Board of Directors, Glenn Tilton, lead independent director, remarked, “2024 was a pivotal year for Phillips 66. The team executed well on an ambitious set of strategic priorities, substantially improving the company’s competitiveness, and is well positioned to successfully deliver on a new set of targets through 2027.”
    Financial Results Summary (in millions of dollars, except as indicated)

     

     

    4Q 2024

    3Q 2024

    Earnings

    $

    8

    346

    Adjusted Earnings (Loss)1

     

    (61)

    859

    Adjusted EBITDA1

     

    1,130

    1,998

    Earnings (Loss) Per Share

     

     

    Earnings Per Share – Diluted

     

    0.01

    0.82

    Adjusted Earnings (Loss) Per Share – Diluted1

     

    (0.15)

    2.04

    Cash Flow From Operations

     

    1,198

    1,132

    Cash Flow From Operations, Excluding Working Capital1

     

    901

    1,513

    Capital Expenditures & Investments2

     

    506

    358

    Return of Capital to Shareholders

     

    1,119

    1,277

    Repurchases of common stock

     

    647

    800

    Dividends paid on common stock

     

    472

    477

    Cash

     

    1,738

    1,637

    Debt

     

    20,062

    19,998

    Debt-to-capital ratio

     

    41%

    40%

    Net debt-to-capital ratio1

     

    39%

    38%

    1Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.

    2Excludes net acquisitions of $58 million and $567 million in the fourth and third quarters of 2024, respectively, and purchases of government obligations of $1.1 billion in the third quarter of 2024.

    Segment Financial and Operating Highlights (in millions of dollars, except as indicated)

     

     

    4Q 2024

    3Q 2024

    Change

     

    Earnings (Loss)1

    $

    8

    346

    (338)

    Midstream

     

    673

    644

    29

    Chemicals

     

    107

    342

    (235)

    Refining

     

    (775)

    (108)

    (667)

    Marketing and Specialties

     

    252

    (22)

    274

    Renewable Fuels

     

    28

    (116)

    144

    Corporate and Other

     

    (298)

    (327)

    29

    Income tax (expense) benefit

     

    38

    (44)

    82

    Noncontrolling interests

     

    (17)

    (23)

    6

     

     

     

     

    Adjusted Earnings (Loss)1,2

    $

    (61)

    859

    (920)

    Midstream

     

    708

    672

    36

    Chemicals

     

    72

    342

    (270)

    Refining

     

    (759)

    (67)

    (692)

    Marketing and Specialties

     

    185

    583

    (398)

    Renewable Fuels

     

    28

    (116)

    144

    Corporate and Other

     

    (294)

    (327)

    33

    Income tax (expense) benefit

     

    16

    (205)

    221

    Noncontrolling interests

     

    (17)

    (23)

    6

     

     

     

     

    Adjusted EBITDA2

    $

    1,130

    1,998

    (868)

    Midstream

     

    938

    892

    46

    Chemicals

     

    209

    466

    (257)

    Refining

     

    (298)

    188

    (486)

    Marketing and Specialties

     

    307

    656

    (349)

    Renewable Fuels

     

    50

    (92)

    142

    Corporate and Other

     

    (76)

    (112)

    36

     

     

     

     

    Operating Highlights

     

     

     

    Pipeline Throughput – Y-Grade to Market (MB/D)3

     

    759

    762

    (3)

    Chemicals Global O&P Capacity Utilization

     

    98%

    98%

    —%

    Refining

     

     

     

    Turnaround Expense

     

    123

    137

    (14)

    Realized Margin ($/BBL)2

     

    6.08

    8.31

    (2.23)

    Crude Capacity Utilization

     

    94%

    94%

    —%

    Clean Product Yield

     

    88%

    87%

    1%

    Renewable Fuels Produced (MB/D)

     

    42

    44

    (2)

    1Segment reporting is pre-tax.

     

     

     

    2Represents a non-GAAP financial measure. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.

    3Represents volumes delivered to major fractionation hubs, including Mont Belvieu, Sweeny and Conway. Includes 100% of DCP Midstream Class A Segment and Phillips 66’s direct interest in DCP Sand Hills Pipeline, LLC and DCP Southern Hills Pipeline, LLC

    Fourth-Quarter 2024 Financial Results
    Reported earnings were $8 million for the fourth quarter of 2024 versus $346 million in the third quarter. Fourth-quarter earnings included pre-tax special item adjustments of $67 million in the Marketing and Specialties segment, $35 million in the Chemicals segment, $(35) million in the Midstream segment, $(16) million in the Refining segment, and $(4) million impacting the Corporate and Other segment. Adjusted losses for the fourth quarter were $61 million versus earnings of $859 million in the third quarter.
    Midstream fourth-quarter 2024 adjusted pre-tax income increased compared with the third quarter mainly due to higher NGL margins and volumes.
    Chemicals adjusted pre-tax income decreased mainly due to lower margins, as well as higher turnaround and maintenance costs.
    Refining adjusted pre-tax loss increased primarily due to a decline in realized margins largely driven by lower market crack spreads and accelerated depreciation associated with the planned ceasing of operations at the Los Angeles Refinery, partially offset by a higher clean product yield.
    Marketing and Specialties adjusted pre-tax income decreased primarily due to seasonally lower margins.
    Renewable Fuels pre-tax results increased primarily due to higher margins at the Rodeo Complex and stronger international results.
    Corporate and Other adjusted pre-tax loss decreased mainly due to lower net interest expense and employee-related costs, partially offset by depreciation expense.
    As of Dec. 31, 2024, the company had $1.7 billion of cash and cash equivalents and $4.6 billion of committed capacity available under credit facilities.
    Strategic Priorities Update
    Phillips 66 successfully delivered on its strategic priorities first announced in October 2022. The company remains committed to leveraging its integrated portfolio to enhance long-term shareholder value and is announcing its next phase of priorities through 2027. Highlights include:
    Delivering shareholder returns by returning greater than 50% of operating cash flow to shareholders;
    Executing world-class operations by achieving 2% higher than industry-average crude utilization and targeting annual adjusted controllable costs of $5.50 per barrel in Refining, excluding adjusted turnaround expense;
    Delivering disciplined growth and returns by growing Midstream and Chemicals mid-cycle adjusted EBITDA $1 billion in total by 2027; and
    Maintaining financial strength and flexibility by reducing total debt to $17 billion.
    Additional details will be covered in our investor webcast.
    Investor Webcast
    Members of Phillips 66 executive management will host a webcast at noon ET to provide an update on the company’s strategic initiatives and discuss the company’s fourth-quarter performance. To access the webcast and view related presentation materials, go to phillips66.com/investors and click on “Events & Presentations.” For detailed supplemental information, go to phillips66.com/supplemental.
    About Phillips 66
    Phillips 66 (NYSE: PSX) is a leading integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The company’s portfolio includes Midstream, Chemicals, Refining, Marketing and Specialties, and Renewable Fuels businesses. Headquartered in Houston, Phillips 66 has employees around the globe who are committed to safely and reliably providing energy and improving lives while pursuing a lower-carbon future. For more information, visit phillips66.com or follow @Phillips66Co on LinkedIn.
    Use of Non-GAAP Financial Information —This news release includes the terms “adjusted earnings (loss),” “adjusted pre-tax income (loss),” “adjusted EBITDA,” “adjusted earnings (loss) per share,” “refining realized margin per barrel,” “cash from operations, excluding working capital,” and “net debt-to-capital ratio.” These are non-GAAP financial measures that are included to help facilitate comparisons of operating performance across periods and to help facilitate comparisons with other companies in our industry. Where applicable, these measures exclude items that do not reflect the core operating results of our businesses in the current period or other adjustments to reflect how management analyzes results. Reconciliations of these non-GAAP financial measures to the most comparable GAAP financial measure are included within this release.
    References in the release to earnings refer to net income attributable to Phillips 66. References to run-rate business transformation savings include cost savings and other benefits that will be captured in the sales and other operating revenues impacting gross margin; purchased crude oil and products costs impacting gross margin; operating expenses; selling, general and administrative expenses; and equity in earnings of affiliates lines on our consolidated statement of income when realized. Run-rate savings include run-rate sustaining capital savings. Run-rate sustaining capital savings include savings that will be captured in the capital expenditures and investments on our consolidated statement of cash flows when realized.
    Basis of Presentation — Effective April 1, 2024, we changed the internal financial information reviewed by our chief executive officer to evaluate performance and allocate resources to our operating segments. This included changes in the composition of our operating segments, as well as measurement changes for certain activities between our operating segments. The primary effects of this realignment included establishment of a Renewable Fuels operating segment, which includes renewable fuels activities and assets historically reported in our Refining, Marketing and Specialties (M&S), and Midstream segments; change in method of allocating results for certain Gulf Coast distillate export activities from our M&S segment to our Refining segment; reclassification of certain crude oil and international clean products trading activities between our M&S segment and our Refining segment; and change in reporting of our investment in NOVONIX from our Midstream segment to Corporate and Other. Accordingly, prior period results have been recast for comparability.
    In the third quarter of 2024, we began presenting the line item “Capital expenditures and investments” on our consolidated statement of cash flows exclusive of acquisitions, net of cash acquired. Accordingly, prior period information has been reclassified for comparability.
    Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 —This news release contains forward-looking statements within the meaning of the federal securities laws relating to Phillips 66’s operations, strategy and performance. Words such as “anticipated,” “estimated,” “expected,” “planned,” “scheduled,” “targeted,” “believe,” “continue,” “intend,” “will,” “would,” “objective,” “goal,” “project,” “efforts,” “strategies” and similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. However, the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements included in this news release are based on management’s expectations, estimates and projections as of the date they are made. These statements are not guarantees of future events or performance, and you should not unduly rely on them as they involve certain risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially from those described in the forward-looking statements include: changes in governmental policies or laws that relate to our operations, including regulations that seek to limit or restrict refining, marketing and midstream operations or regulate profits, pricing, or taxation of our products or feedstocks, or other regulations that restrict feedstock imports or product exports; our ability to timely obtain or maintain permits necessary for projects; fluctuations in NGL, crude oil, refined petroleum, renewable fuels and natural gas prices, and refining, marketing and petrochemical margins; the effects of any widespread public health crisis and its negative impact on commercial activity and demand for refined petroleum or renewable fuels products; changes to worldwide government policies relating to renewable fuels and greenhouse gas emissions that adversely affect programs including the renewable fuel standards program, low carbon fuel standards and tax credits for renewable fuels; potential liability from pending or future litigation; liability for remedial actions, including removal and reclamation obligations under existing or future environmental regulations; unexpected changes in costs for constructing, modifying or operating our facilities; our ability to successfully complete, or any material delay in the completion of, any asset disposition, acquisition, shutdown or conversion that we have announced or may pursue, including receipt of any necessary regulatory approvals or permits related thereto; unexpected difficulties in manufacturing, refining or transporting our products; the level and success of drilling and production volumes around our midstream assets; risks and uncertainties with respect to the actions of actual or potential competitive suppliers and transporters of refined petroleum products, renewable fuels or specialty products; lack of, or disruptions in, adequate and reliable transportation for our products; failure to complete construction of capital projects on time or within budget; our ability to comply with governmental regulations or make capital expenditures to maintain compliance with laws; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets, which may also impact our ability to repurchase shares and declare and pay dividends; potential disruption of our operations due to accidents, weather events, including as a result of climate change, acts of terrorism or cyberattacks; general domestic and international economic and political developments, including armed hostilities (such as the Russia-Ukraine war), expropriation of assets, and other diplomatic developments; international monetary conditions and exchange controls; changes in estimates or projections used to assess fair value of intangible assets, goodwill and property and equipment and/or strategic decisions with respect to our asset portfolio that cause impairment charges; investments required, or reduced demand for products, as a result of environmental rules and regulations; changes in tax, environmental and other laws and regulations (including alternative energy mandates); political and societal concerns about climate change that could result in changes to our business or increase expenditures, including litigation-related expenses; the operation, financing and distribution decisions of equity affiliates we do not control; and other economic, business, competitive and/or regulatory factors affecting Phillips 66’s businesses generally as set forth in our filings with the Securities and Exchange Commission. Phillips 66 is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

    Earnings (Loss)

     

     

     

     

     

     

     

    Millions of Dollars

     

    2024

     

    2023

     

    4Q

    3Q

    Year

     

    4Q

    Year

    Midstream

    $

    673

     

    644

     

    2,638

     

     

    759

     

    2,819

     

    Chemicals

     

    107

     

    342

     

    876

     

     

    106

     

    600

     

    Refining

     

    (775

    )

    (108

    )

    (365

    )

     

    859

     

    5,340

     

    Marketing and Specialties

     

    252

     

    (22

    )

    1,011

     

     

    396

     

    1,897

     

    Renewable Fuels

     

    28

     

    (116

    )

    (198

    )

     

    (11

    )

    153

     

    Corporate and Other

     

    (298

    )

    (327

    )

    (1,287

    )

     

    (348

    )

    (1,340

    )

    Pre-Tax Income (Loss)

     

    (13

    )

    413

     

    2,675

     

     

    1,761

     

    9,469

     

    Less: Income tax expense (benefit)

     

    (38

    )

    44

     

    500

     

     

    476

     

    2,230

     

    Less: Noncontrolling interests

     

    17

     

    23

     

    58

     

     

    25

     

    224

     

    Phillips 66

    $

    8

     

    346

     

    2,117

     

     

    1,260

     

    7,015

     

     

     

     

     

     

     

     

    Adjusted Earnings (Loss)

     

     

     

     

     

     

     

    Millions of Dollars

     

    2024

     

    2023

     

    4Q

    3Q

    Year

     

    4Q

    Year

    Midstream

    $

    708

     

    672

     

    2,746

     

     

    757

     

    2,672

     

    Chemicals

     

    72

     

    342

     

    841

     

     

    106

     

    600

     

    Refining

     

    (759

    )

    (67

    )

    (211

    )

     

    842

     

    5,367

     

    Marketing and Specialties

     

    185

     

    583

     

    1,490

     

     

    396

     

    1,897

     

    Renewable Fuels

     

    28

     

    (116

    )

    (198

    )

     

    (11

    )

    153

     

    Corporate and Other

     

    (294

    )

    (327

    )

    (1,283

    )

     

    (298

    )

    (1,110

    )

    Pre-Tax Income (Loss)

     

    (60

    )

    1,087

     

    3,385

     

     

    1,792

     

    9,579

     

    Less: Income tax expense (benefit)

     

    (16

    )

    205

     

    693

     

     

    405

     

    2,173

     

    Less: Noncontrolling interests

     

    17

     

    23

     

    88

     

     

    25

     

    243

     

    Phillips 66

    $

    (61

    )

    859

     

    2,604

     

     

    1,362

     

    7,163

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    Millions of Dollars

     

    Except as Indicated

     

    2024

     

    2023

     

    4Q

    3Q

    Year

     

    4Q

    Year

    Reconciliation of Consolidated Earnings to Adjusted Earnings (Loss)

     

     

     

     

     

     

    Consolidated Earnings

    $

    8

     

    346

     

    2,117

     

     

    1,260

     

    7,015

     

    Pre-tax adjustments:

     

     

     

     

     

     

    Certain tax impacts

     

    (9

    )

    —

     

    (9

    )

     

    (19

    )

    (19

    )

    Impairments1

     

    35

     

    28

     

    450

     

     

    —

     

    —

     

    Net gain on asset dispositions2

     

    (67

    )

    —

     

    (305

    )

     

    —

     

    (123

    )

    Change in inventory method for acquired business

     

    —

     

    —

     

    —

     

     

    —

     

    (46

    )

    Winter-storm-related costs (recovery)

     

    (35

    )

    —

     

    (35

    )

     

    —

     

    —

     

    Los Angeles Refinery cessation costs3

     

    7

     

    41

     

    48

     

     

    —

     

    —

     

    Legal accrual4

     

    22

     

    605

     

    627

     

     

    —

     

    30

     

    Legal settlement

     

    —

     

    —

     

    (66

    )

     

    —

     

    —

     

    Business transformation restructuring costs

     

    —

     

    —

     

    —

     

     

    50

     

    177

     

    Loss on early redemption of DCP debt

     

    —

     

    —

     

    —

     

     

    —

     

    53

     

    DCP integration restructuring costs

     

    —

     

    —

     

    —

     

     

    —

     

    38

     

    Tax impact of adjustments5

     

    9

     

    (161

    )

    (162

    )

     

    (12

    )

    (26

    )

    Other tax impacts

     

    (31

    )

    —

     

    (31

    )

     

    83

     

    83

     

    Noncontrolling interests

     

    —

     

    —

     

    (30

    )

     

    —

     

    (19

    )

    Adjusted earnings (loss)

    $

    (61

    )

    859

     

    2,604

     

     

    1,362

     

    7,163

     

    Earnings per share of common stock ( dollars )

    $

    0.01

     

    0.82

     

    4.99

     

     

    2.86

     

    15.48

     

    Adjusted earnings (loss) per share of common stock ( dollars )6

    $

    (0.15

    )

    2.04

     

    6.15

     

     

    3.09

     

    15.81

     

     

     

     

     

     

     

     

    Reconciliation of Segment Pre-Tax Income

     

     

     

     

     

     

    (Loss) to Adjusted Pre-Tax Income (Loss)

    Midstream Pre-Tax Income

    $

    673

     

    644

     

    2,638

     

     

    759

     

    2,819

     

    Pre-tax adjustments:

     

     

     

     

     

     

    Impairments1

     

    35

     

    28

     

    346

     

     

    —

     

    —

     

    Certain tax impacts

     

    —

     

    —

     

    —

     

     

    (2

    )

    (2

    )

    Net gain on asset disposition

     

    —

     

    —

     

    (238

    )

     

    —

     

    (137

    )

    Change in inventory method for acquired business

     

    —

     

    —

     

    —

     

     

    —

     

    (46

    )

    DCP integration restructuring costs

     

    —

     

    —

     

    —

     

     

    —

     

    38

     

    Adjusted pre-tax income

    $

    708

     

    672

     

    2,746

     

     

    757

     

    2,672

     

    Chemicals Pre-Tax Income

    $

    107

     

    342

     

    876

     

     

    106

     

    600

     

    Pre-tax adjustments:

     

     

     

     

     

     

    Winter-storm-related costs (recovery)

     

    (35

    )

    —

     

    (35

    )

     

    —

     

    —

     

    Adjusted pre-tax income

    $

    72

     

    342

     

    841

     

     

    106

     

    600

     

    Refining Pre-Tax Income (Loss)

    $

    (775

    )

    (108

    )

    (365

    )

     

    859

     

    5,340

     

    Pre-tax adjustments:

     

     

     

     

     

     

    Impairments1

     

    —

     

    —

     

    104

     

     

    —

     

    —

     

    Los Angeles Refinery cessation costs3

     

    3

     

    41

     

    44

     

     

    —

     

    —

     

    Certain tax impacts

     

    (9

    )

    —

     

    (9

    )

     

    (17

    )

    (17

    )

    Net loss on asset disposition

     

    —

     

    —

     

    —

     

     

    —

     

    14

     

    Legal accrual

     

    22

     

    —

     

    22

     

     

    —

     

    30

     

    Legal settlement

     

    —

     

    —

     

    (7

    )

     

    —

     

    —

     

    Adjusted pre-tax income (loss)

    $

    (759

    )

    (67

    )

    (211

    )

     

    842

     

    5,367

     

    Marketing and Specialties Pre-Tax Income (Loss)

    $

    252

     

    (22

    )

    1,011

     

     

    396

     

    1,897

     

    Pre-tax adjustments:

     

     

     

     

     

     

    Legal accrual4

     

    —

     

    605

     

    605

     

     

    —

     

    —

     

    Net gain on asset disposition2

     

    (67

    )

    —

     

    (67

    )

     

    —

     

    —

     

    Legal settlement

     

    —

     

    —

     

    (59

    )

     

    —

     

    —

     

    Adjusted pre-tax income

    $

    185

     

    583

     

    1,490

     

     

    396

     

    1,897

     

    Renewable Fuels Pre-Tax Income (Loss)

    $

    28

     

    (116

    )

    (198

    )

     

    (11

    )

    153

     

    Pre-tax adjustments:

     

     

     

     

     

     

    None

     

    —

     

    —

     

    —

     

     

    —

     

    —

     

    Adjusted pre-tax income (loss)

    $

    28

     

    (116

    )

    (198

    )

     

    (11

    )

    153

     

    Corporate and Other Pre-Tax Loss

    $

    (298

    )

    (327

    )

    (1,287

    )

     

    (348

    )

    (1,340

    )

    Pre-tax adjustments:

     

     

     

     

     

     

    Business transformation restructuring costs

     

    —

     

    —

     

    —

     

     

    50

     

    177

     

    Loss on early redemption of DCP debt

     

    —

     

    —

     

    —

     

     

    —

     

    53

     

    Los Angeles Refinery cessation costs3

     

    4

     

    —

     

    4

     

     

    —

     

    —

     

    Adjusted pre-tax loss

    $

    (294

    )

    (327

    )

    (1,283

    )

     

    (298

    )

    (1,110

    )

     

     

     

     

     

     

     

    1Impairments primarily related to certain gathering and processing assets in the Midstream segment, as well as certain crude oil processing and logistics assets in California, reported in the Refining segment.

    2In connection with the asset sale of our 49% non-operated equity interest in Coop Mineraloel AG closing early 2025, a before-tax unrealized gain was recognized from a foreign currency derivative in the Marketing & Specialties segment.

    3Cessation costs include pre-tax charges for severance costs.

    4Third-quarter legal accrual primarily related to ongoing litigation.

    5We generally tax effect taxable U.S.-based special items using a combined federal and state statutory income tax rate of approximately 24%. Taxable special items attributable to foreign locations likewise use a local statutory income tax rate. Nontaxable events reflect zero income tax. These events include, but are not limited to, most goodwill impairments, transactions legislatively exempt from income tax, transactions related to entities for which we have made an assertion that the undistributed earnings are permanently reinvested, or transactions occurring in jurisdictions with a valuation allowance.

    6YTD 2024, Q4 2024, Q3 2024 and Q4 2023 are based on adjusted weighted-average diluted shares of 422,538 thousand, 411,687 thousand, 419,827 thousand and 440,582 thousand, respectively. Other periods are based on the same weighted-average diluted shares outstanding as that used in the GAAP diluted earnings per share calculation. Income allocated to participating securities, if applicable, in the adjusted earnings per share calculation is the same as that used in the GAAP diluted earnings per share calculation.

     

    Millions of Dollars

     

    Except as Indicated

     

    2024

     

    4Q

    3Q

    Reconciliation of Consolidated Net Income to Adjusted EBITDA

     

     

    Net Income

    $

    25

     

    369

     

    Plus:

     

     

    Income tax expense

     

    (38

    )

    44

     

    Net interest expense

     

    168

     

    191

     

    Depreciation and amortization

     

    819

     

    543

     

    Phillips 66 EBITDA

    $

    974

     

    1,147

     

    Special Item Adjustments (pre-tax):

     

     

    Certain tax impacts

     

    (9

    )

    —

     

    Impairments

     

    35

     

    28

     

    Winter-storm-related costs (recovery)

     

    (35

    )

    —

     

    Net gain on asset disposition

     

    (67

    )

    —

     

    Los Angeles Refinery cessation costs

     

    7

     

    41

     

    Legal accrual

     

    22

     

    605

     

    Total Special Item Adjustments (pre-tax)

     

    (47

    )

    674

     

    Change in Fair Value of NOVONIX Investment

     

    1

     

    —

     

    Phillips 66 EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment

    $

    928

     

    1,821

     

    Other Adjustments (pre-tax):

     

     

    Proportional share of selected equity affiliates income taxes

     

    17

     

    24

     

    Proportional share of selected equity affiliates net interest

     

    14

     

    12

     

    Proportional share of selected equity affiliates depreciation and amortization

     

    209

     

    188

     

    Adjusted EBITDA attributable to noncontrolling interests

     

    (38

    )

    (47

    )

    Phillips 66 Adjusted EBITDA

    $

    1,130

     

    1,998

     

     

     

     

    Reconciliation of Segment Income before Income Taxes to Adjusted EBITDA

     

     

    Midstream Income before income taxes

    $

    673

     

    644

     

    Plus:

     

     

    Depreciation and amortization

     

    234

     

    233

     

    Midstream EBITDA

    $

    907

     

    877

     

    Special Item Adjustments (pre-tax):

     

     

    Impairments

     

    35

     

    28

     

    Midstream EBITDA, Adjusted for Special Items

    $

    942

     

    905

     

    Other Adjustments (pre-tax):

     

     

    Proportional share of selected equity affiliates income taxes

     

    3

     

    5

     

    Proportional share of selected equity affiliates net interest

     

    3

     

    3

     

    Proportional share of selected equity affiliates depreciation and amortization

     

    28

     

    26

     

    Adjusted EBITDA attributable to noncontrolling interests

     

    (38

    )

    (47

    )

    Midstream Adjusted EBITDA

    $

    938

     

    892

     

    Chemicals Income before income taxes

    $

    107

     

    342

     

    Plus:

     

     

    None

     

    —

     

    —

     

    Chemicals EBITDA

    $

    107

     

    342

     

    Special Item Adjustments (pre-tax):

     

     

    Winter-storm-related costs (recovery)

     

    (35

    )

    —

     

    Chemicals EBITDA, Adjusted for Special Items

    $

    72

     

    342

     

    Other Adjustments (pre-tax):

     

     

    Proportional share of selected equity affiliates income taxes

     

    11

     

    13

     

    Proportional share of selected equity affiliates net interest

     

    —

     

    (2

    )

    Proportional share of selected equity affiliates depreciation and amortization

     

    126

     

    113

     

    Chemicals Adjusted EBITDA

    $

    209

     

    466

     

    Refining Loss before income taxes

    $

    (775

    )

    (108

    )

    Plus:

     

     

    Depreciation and amortization

     

    435

     

    230

     

    Refining EBITDA

    $

    (340

    )

    122

     

    Special Item Adjustments (pre-tax):

     

     

    Certain tax impacts

     

    (9

    )

    —

     

    Los Angeles Refinery cessation costs

     

    3

     

    41

     

    Legal accrual

     

    22

     

    —

     

    Refining EBITDA, Adjusted for Special Items

    $

    (324

    )

    163

     

    Other Adjustments (pre-tax):

     

     

    Proportional share of selected equity affiliates income taxes

     

    (1

    )

    (1

    )

    Proportional share of selected equity affiliates net interest

     

    —

     

    (1

    )

    Proportional share of selected equity affiliates depreciation and amortization

     

    27

     

    27

     

    Refining Adjusted EBITDA

    $

    (298

    )

    188

     

    Marketing and Specialties Income (loss) before income taxes

    $

    252

     

    (22

    )

    Plus:

     

     

    Depreciation and amortization

     

    79

     

    32

     

    Marketing and Specialties EBITDA

    $

    331

     

    10

     

    Special Item Adjustments (pre-tax):

     

     

    Legal accrual

     

    —

     

    605

     

    Net gain on asset disposition

     

    (67

    )

    —

     

    Marketing and Specialties EBITDA, Adjusted for Special Items

    $

    264

     

    615

     

    Other Adjustments (pre-tax):

     

     

    Proportional share of selected equity affiliates income taxes

     

    4

     

    7

     

    Proportional share of selected equity affiliates net interest

     

    11

     

    12

     

    Proportional share of selected equity affiliates depreciation and amortization

     

    28

     

    22

     

    Marketing and Specialties Adjusted EBITDA

    $

    307

     

    656

     

    Renewable Fuels Income (loss) before income taxes

    $

    28

     

    (116

    )

    Plus:

     

     

    Depreciation and amortization

     

    22

     

    24

     

    Renewable Fuels EBITDA

    $

    50

     

    (92

    )

    Special Item Adjustments (pre-tax):

     

     

    None

     

    —

     

    —

     

    Renewable Fuels EBITDA, Adjusted for Special Items

    $

    50

     

    (92

    )

    Corporate and Other Loss before income taxes

    $

    (298

    )

    (327

    )

    Plus:

     

     

    Net interest expense

     

    168

     

    191

     

    Depreciation and amortization

     

    49

     

    24

     

    Corporate and Other EBITDA

    $

    (81

    )

    (112

    )

    Special Item Adjustments (pre-tax):

     

     

    Los Angeles Refinery cessation costs

     

    4

     

    —

     

    Total Special Item Adjustments (pre-tax)

     

    4

     

    —

     

    Change in Fair Value of NOVONIX Investment

     

    1

     

    —

     

    Corporate EBITDA, Adjusted for Special Items and Change in Fair Value of NOVONIX Investment

    $

    (76

    )

    (112

    )

     

     

     

     

     

     

     

     

    Millions of Dollars

     

    Except as Indicated

     

    December 31, 2024

    Debt-to-Capital Ratio

     

    Total Debt

    $

    20,062

     

    Total Equity

     

    28,463

     

    Debt-to-Capital Ratio

     

    41

    %

    Total Cash

     

    1,738

     

    Net Debt-to-Capital Ratio

     

    39

    %

     

     

     

     

     

     

     

     

    Millions of Dollars

     

    December 31, 2024

    Reconciliation of Net Cash Provided by Operating Activities to Operating Cash Flow, Excluding Working Capital

     

    Net Cash Provided by Operating Activities

    $

    1,198

     

    Less: Net Working Capital Changes

     

    297

     

    Operating Cash Flow, Excluding Working Capital

    $

    901

     

     

     

     

    Millions of Dollars

     

    Except as Indicated

     

    2024

     

    4Q

    3Q

    Reconciliation of Refining Loss Before Income Taxes to Realized Refining Margins

     

     

    Loss before income taxes

    $

    (775

    )

    (108

    )

    Plus:

     

     

    Taxes other than income taxes

     

    92

     

    100

     

    Depreciation, amortization and impairments

     

    436

     

    230

     

    Selling, general and administrative expenses

     

    60

     

    60

     

    Operating expenses

     

    968

     

    922

     

    Equity in earnings of affiliates

     

    79

     

    12

     

    Other segment expense, net

     

    58

     

    (4

    )

    Proportional share of refining gross margins contributed by equity affiliates

     

    132

     

    193

     

    Special items:

     

     

    Certain tax impacts

     

    (9

    )

    —

     

    Realized refining margins

    $

    1,041

     

    1,405

     

    Total processed inputs ( thousands of barrels )

     

    147,880

     

    145,440

     

    Adjusted total processed inputs ( thousands of barrels )*

     

    171,031

     

    168,951

     

    Loss before income taxes ( dollars per barrel )**

    $

    (5.24

    )

    (0.74

    )

    Realized refining margins ( dollars per barrel )***

    $

    6.08

     

    8.31

     

    *Adjusted total processed inputs include our proportional share of processed inputs of an equity affiliate.

     

    **Income before income taxes divided by total processed inputs.

     

    ***Realized refining margins per barrel, as presented, are calculated using the underlying realized refining margin amounts, in dollars, divided by adjusted total processed inputs, in barrels. As such, recalculated per barrel amounts using the rounded margins and barrels presented may differ from the presented per barrel amounts.

    Source: Phillips 66

    MIL OSI Economics –

  • MIL-OSI Africa: South African troops are dying in the DRC: why they’re there and what’s going wrong

    Source: The Conversation – Africa – By Lindy Heinecken, Professor of Sociology in the Department of Sociology and Social Anthropology., Stellenbosch University

    The death of South African soldiers on a Southern African Development Community (SADC) mission in the Democratic Republic of Congo (DRC) has sparked fierce debate about the deployment of South African National Defence Force (SANDF) soldiers there. Some, including political parties, have questioned whether the soldiers were adequately trained, equipped and supported. Lindy Heinecken has spent decades researching the South African military in peacekeeping operations and has interviewed hundreds of soldiers about their experiences and the challenges during deployment. We asked her for her insights.

    What is South Africa doing in the DRC?

    The country is part of the Southern African Development Community Mission in the Democratic Republic of Congo (SAMIDRC), which includes troops from Malawi and Tanzania. This deployment followed approval by the Southern African Development Community in May 2023, in response to the deteriorating security situation in eastern DRC. The South African National Defence Force is leading the mission.

    Their mandate is to support the DRC government, a member of the 16-member SADC group, in restoring peace, security and stability. The fact that the mandate states that it is to support the DRC government in combating armed groups that threaten peace and security in the eastern DRC implies that this is not a peacekeeping mission.

    The legal basis for the deployment lies in the SADC Mutual Defence Pact, (2003), which states that

    Any armed attack perpetrated against one of the States Parties shall be considered a threat to regional peace and security and shall be met with immediate collective action.

    The mandate gives them the responsibility to protect civilians, disarm armed groups, and help implement the August 2024 ceasefire agreement between the DRC and Rwanda, brokered by Angola as part of the Luanda Process. This agreement aimed to provide a more secure environment, and protect critical infrastructure to ensure the safe delivery of humanitarian aid. This is in line with the United Nations’ responsibility to protect victims of genocide, war crimes, ethnic cleansing and crimes against humanity.

    Read more: South Africa to lead new military force in the DRC: an expert on what it’s up against

    The M23 rebel group, which is supported by Rwanda, has committed a wide range of atrocities in the eastern DRC which can be traced back to the 1994 genocide.

    The impact on civilians has been devastating. While pinning down an exact number is difficult, it’s clear that the rebel forces operating in the eastern DRC, particularly the M23, pose a significant challenge to the stability of the region, and the safety and security of civilians.

    The rebels are implicated in mass killings of civilians, rape and other forms of sexual violence and attacks on camps for internally displaced persons. The M23’s atrocities have been condemned by the international community. The United Nations and human rights bodies have called for an end to the violence. They also demand accountability for the perpetrators.

    In sum, South African soldiers – alongside Malawians and Tanzanians – are in the DRC to assist the Congolese army in combating the armed groups and to protect civilians from violence and human rights abuses.

    Are the soldiers adequately prepared and equipped?

    Many questions have been asked about whether South African troops on the mission forces are adequately trained and equipped. Critics claim this deployment is suicidal.

    South African soldiers are well-trained and have served in numerous peace operations. Their extensive deployment means that they have accumulated valuable experience. They have been part of the UN Stabilisation Mission in the DR Congo, Monusco, almost since inception in 1999.

    Monusco forces are still present in the DRC, but in the process of withdrawing. Congolese president Félix Tshisekedi requested they leave because of their perceived ineffectiveness.

    Nonetheless, there are some valid concerns about the South Africans’ current level of preparedness for the DRC mission. Not least given the complex political situation. There are over 100 diverse armed groups involved. And the terrain is difficult.

    The combination of budget cuts, resource limitations, and the complex nature of the conflict raises questions about the South African National Defence Force’s ability to effectively achieve its objectives, and ensure the safety of its personnel.

    The force takes its own equipment on missions to ensure it is self-sufficient and can meet its specialised needs. The problem is that this equipment is old, leading to shortages due to maintenance problems. This affects the force’s ability to carry out its duties.

    Budget cuts for defence over the years, to less than 1% of GDP compared to the global average of 2%, have severely affected the military’s ability to maintain equipment, conduct training exercises and modernise its force. This has led to a decline in overall readiness.

    South African troops in the DRC lack essential resources, including adequate air support, attack helicopters and modern equipment. This limits their ability to respond quickly to threats and provide close air support for ground troops.

    Despite having one of the most capable air forces in Africa, it is unable to deploy its Gripen and Rooivalk helicopters because they have not been serviced and lack spare parts.

    The use of older equipment has also been less effective against the well-equipped M23.

    Besides being outgunned, the regional mission is also out-manned.

    The SADC mission in the DRC was authorised to have 5,000 troops from Malawi, South Africa and Tanzania. The actual deployment has fallen far short of this number. As of late January 2025, only about 1,300 troops had been deployed.

    Read more: Rwanda’s role in eastern DRC conflict: why international law is failing to end the fighting

    Where to from here?

    There are concerns in the DRC about the presence of multiple foreign forces, given the relative ineffectiveness of these interventions.

    There are also questions about the legitimacy of the mission. Rwanda has opposed the deployment, saying that the SAMIDRC, and specifically South Africa’s involvement, undermines regional unity and cooperation.

    The best approach to peace and stability in the DRC requires a concerted effort by regional actors – the DRC, Rwanda, Uganda, Burundi, Kenya and the Southern African Development Community – to address the underlying causes of the conflict. This requires political dialogue with the regional actors, the UN, the international community and, most importantly, the Congolese people.

    Read more: DRC conflict risks spreading: African leaders must push for solutions beyond military intervention

    As for South Africa, it is time for some critical reflection on the future roles of its military. The equipment shortages and challenges it faces raise serious concerns about the defence force’s ability to carry out its core mandate of protecting South Africa, its territorial integrity and its people in accordance with the constitution.

    The tragedy in the DRC highlights the dire need for the South African National Defence Force to be redesigned, modernised and funded to become more effective and capable, ready to meet the immediate challenges it faces (like ageing equipment) and ensure the security of South Africa.

    – South African troops are dying in the DRC: why they’re there and what’s going wrong
    – https://theconversation.com/south-african-troops-are-dying-in-the-drc-why-theyre-there-and-whats-going-wrong-248696

    MIL OSI Africa –

  • MIL-OSI Global: South African troops are dying in the DRC: why they’re there and what’s going wrong

    Source: The Conversation – Africa – By Lindy Heinecken, Professor of Sociology in the Department of Sociology and Social Anthropology., Stellenbosch University

    The death of South African soldiers on a Southern African Development Community (SADC) mission in the Democratic Republic of Congo (DRC) has sparked fierce debate about the deployment of South African National Defence Force (SANDF) soldiers there. Some, including political parties, have questioned whether the soldiers were adequately trained, equipped and supported. Lindy Heinecken has spent decades researching the South African military in peacekeeping operations and has interviewed hundreds of soldiers about their experiences and the challenges during deployment. We asked her for her insights.

    What is South Africa doing in the DRC?

    The country is part of the Southern African Development Community Mission in the Democratic Republic of Congo (SAMIDRC), which includes troops from Malawi and Tanzania. This deployment followed approval by the Southern African Development Community in May 2023, in response to the deteriorating security situation in eastern DRC. The South African National Defence Force is leading the mission.

    Their mandate is to support the DRC government, a member of the 16-member SADC group, in restoring peace, security and stability. The fact that the mandate states that it is to support the DRC government in combating armed groups that threaten peace and security in the eastern DRC implies that this is not a peacekeeping mission.

    The legal basis for the deployment lies in the SADC Mutual Defence Pact, (2003), which states that

    Any armed attack perpetrated against one of the States Parties shall be considered a threat to regional peace and security and shall be met with immediate collective action.

    The mandate gives them the responsibility to protect civilians, disarm armed groups, and help implement the August 2024 ceasefire agreement between the DRC and Rwanda, brokered by Angola as part of the Luanda Process. This agreement aimed to provide a more secure environment, and protect critical infrastructure to ensure the safe delivery of humanitarian aid. This is in line with the United Nations’ responsibility to protect victims of genocide, war crimes, ethnic cleansing and crimes against humanity.



    Read more:
    South Africa to lead new military force in the DRC: an expert on what it’s up against

    The M23 rebel group, which is supported by Rwanda, has committed a wide range of atrocities in the eastern DRC which can be traced back to the 1994 genocide.

    The impact on civilians has been devastating. While pinning down an exact number is difficult, it’s clear that the rebel forces operating in the eastern DRC, particularly the M23, pose a significant challenge to the stability of the region, and the safety and security of civilians.

    The rebels are implicated in mass killings of civilians, rape and other forms of sexual violence and attacks on camps for internally displaced persons. The M23’s atrocities have been condemned by the international community. The United Nations and human rights bodies have called for an end to the violence. They also demand accountability for the perpetrators.

    In sum, South African soldiers – alongside Malawians and Tanzanians – are in the DRC to assist the Congolese army in combating the armed groups and to protect civilians from violence and human rights abuses.

    Are the soldiers adequately prepared and equipped?

    Many questions have been asked about whether South African troops on the mission forces are adequately trained and equipped.
    Critics claim this deployment is suicidal.

    South African soldiers are well-trained and have served in numerous peace operations. Their extensive deployment means that they have accumulated valuable experience. They have been part of the UN Stabilisation Mission in the DR Congo, Monusco, almost since inception in 1999.

    Monusco forces are still present in the DRC, but in the process of withdrawing. Congolese president Félix Tshisekedi requested they leave because of their perceived ineffectiveness.

    Nonetheless, there are some valid concerns about the South Africans’ current level of preparedness for the DRC mission. Not least given the complex political situation. There are over 100 diverse armed groups involved. And the terrain is difficult.

    The combination of budget cuts, resource limitations, and the complex nature of the conflict raises questions about the South African National Defence Force’s ability to effectively achieve its objectives, and ensure the safety of its personnel.

    The force takes its own equipment on missions to ensure it is self-sufficient and can meet its specialised needs. The problem is that this equipment is old, leading to shortages due to maintenance problems. This affects the force’s ability to carry out its duties.

    Budget cuts for defence over the years, to less than 1% of GDP compared to the global average of 2%, have severely affected the military’s ability to maintain equipment, conduct training exercises and modernise its force. This has led to a decline in overall readiness.

    South African troops in the DRC lack essential resources, including adequate air support, attack helicopters and modern equipment. This limits their ability to respond quickly to threats and provide close air support for ground troops.

    Despite having one of the most capable air forces in Africa, it is unable to deploy its Gripen and Rooivalk helicopters because they have not been serviced and lack spare parts.

    The use of older equipment has also been less effective against the well-equipped M23.

    Besides being outgunned, the regional mission is also out-manned.

    The SADC mission in the DRC was authorised to have 5,000 troops from Malawi, South Africa and Tanzania. The actual deployment has fallen far short of this number. As of late January 2025, only about 1,300 troops had been deployed.



    Read more:
    Rwanda’s role in eastern DRC conflict: why international law is failing to end the fighting

    Where to from here?

    There are concerns in the DRC about the presence of multiple foreign forces, given the relative ineffectiveness of these interventions.

    There are also questions about the legitimacy of the mission. Rwanda has opposed the deployment, saying that the SAMIDRC, and specifically South Africa’s involvement, undermines regional unity and cooperation.

    The best approach to peace and stability in the DRC requires a concerted effort by regional actors – the DRC, Rwanda, Uganda, Burundi, Kenya and the Southern African Development Community – to address the underlying causes of the conflict. This requires political dialogue with the regional actors, the UN, the international community and, most importantly, the Congolese people.



    Read more:
    DRC conflict risks spreading: African leaders must push for solutions beyond military intervention

    As for South Africa, it is time for some critical reflection on the future roles of its military. The equipment shortages and challenges it faces raise serious concerns about the defence force’s ability to carry out its core mandate of protecting South Africa, its territorial integrity and its people in accordance with the constitution.

    The tragedy in the DRC highlights the dire need for the South African National Defence Force to be redesigned, modernised and funded to become more effective and capable, ready to meet the immediate challenges it faces (like ageing equipment) and ensure the security of South Africa.

    Lindy Heinecken 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. South African troops are dying in the DRC: why they’re there and what’s going wrong – https://theconversation.com/south-african-troops-are-dying-in-the-drc-why-theyre-there-and-whats-going-wrong-248696

    MIL OSI – Global Reports –

  • MIL-OSI United Kingdom: Anthony Rogers appointed new Chief Inspector of HMCPSI

    Source: United Kingdom – Executive Government & Departments

    The Attorney General Lord Hermer KC has announced that Anthony Rogers has been appointed to the role of His Majesty’s Chief Inspector of HMCPSI.

    Portrait of HMCPSI Chief Inspector Anthony Rogers

    The Attorney General Lord Hermer KC has today announced that Anthony Rogers has been appointed to the role of Chief Inspector of His Majesty’s Crown Prosecution Service Inspectorate (HMCPSI).

    The appointment follows Anthony Rogers’ selection as the government’s preferred candidate in December 2024 and his appearance before the Justice Select Committee for a pre-appointment hearing on 28 January 2025. The committee recommended Anthony Rogers’ appointment.

    Anthony Rogers has served as interim Chief Inspector since February 2024 and he was selected following a fair and open assessment process conducted in accordance with the Governance Code on Public Appointments.

    The Attorney General Lord Hermer KC said:

    I would like to congratulate Anthony on his appointment as the next Chief Inspector of HMCPSI. Anthony brings extensive experience to this important role, having delivered some of HMCPSI’s most significant inspections in recent years and served expertly in the role in an interim capacity since last year.

    His support and insight will be invaluable as we work to improve the performance of the organisations HMCPSI inspects and rebuild people’s trust in the rule of law as part of this government’s Plan for Change.

    Chief Inspector Anthony Rogers said:  

    I am extremely proud to be appointed as Chief Inspector of HMCPSI. The work of the inspectorate strengthens the criminal justice system and lets the public know how the CPS and SFO are performing.

    I have a clear vision of how HMCPSI will build on its 25 years of experience to continue to make a real difference. Our work will continue to drive improvement and deliver a fairer and more effective justice system for all.

    Anthony Rogers’ Biography

    Since February 2024, Anthony Rogers has been Interim HM Chief Inspector of HMCPSI. He was Deputy Chief Inspector of HMCPSI between April 2018 and February 2024, during which he was seconded for six months to the Independent Review of the SFO’s handling of the Unaoil Case, giving evidence to the Justice Select Committee.

    While interim Chief Inspector, Anthony has overseen the publication of five inspection reports, including the review into CPS’s actions in the Valdo Calocane case and an inspection by invitation of the Services Prosecuting Authority.

    October 2025 will see HMCPSI mark its 25th anniversary and Anthony has set an ambitious programme of inspections for 2025, including an inspection on handling of rape cases in the CPS and an inspection by invitation of the Health and Safety Executive.

    Anthony has extensive Civil Service experience going back to 1989 and has worked in a number of different government departments. Between 2013 and 2016 he worked for the Crown Prosecution Service including as an Area Business Manager, jointly responsible for the senior leadership of the Crown Prosecution Service London and Head of Profession for operational delivery; and Head of Compliance, Assurance and Support, responsible for the development, design and implementation of a new Crown Prosecution Service national strategy.

    Anthony has extensive experience outside the Civil Service as a management consultant and non-executive director. Anthony was previously a non-executive director of the Yorkshire Sport Foundation and former chair of trustees of SportsAid Yorkshire and Humberside.

    Role of Chief Inspector of HMCPSI

    His Majesty’s Chief Inspector of HMCPSI is appointed by the Attorney General. This is a public appointment for a fixed term of five years and the Chief Inspector acts independently of the Attorney General and of government.

    HMCPSI has a statutory duty to inspect the Crown Prosecution Service and the Serious Fraud Office and report to the Law Officers, who superintends both those organisations. HMCPSI’s reports play an important role in effective superintendence of CPS and SFO, as well as improving the performance of the organisations HMCPSI inspects, strengthening the criminal justice system, and increasing public trust. HMCPSI is also able to inspect other organisations if invited to do so.

    The operational relationship between the Attorney General and the Chief Inspector is set out in a protocol agreed between the Law Officers and the Chief Inspector.

    Updates to this page

    Published 31 January 2025

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: Civil Service course gets digital refresh to help civil servants

    Source: United Kingdom – Executive Government & Departments

    The popular online writing course Foundations of Writing in Government has been updated, to help more civil servants improve essential communication skills.

    Jonathan Marshall, Government Skills

    The free course which learners can do at their own pace, was launched in 2022 and now includes new animations on effective sentence and paragraph structuring. It also has an updated section on digital editing tools.

    “Writing well is one of the stand-out skills which civil servants need to have in their jobs and to progress in their careers,” said Jonathan Marshall, Government Skills learning expert. “Whether it’s a simple email to a colleague or a detailed briefing paper for ministers, how you express yourself and your ideas in writing is crucial.”

    The four hour online course takes participants through the JASPER principles: 

    • Jargon-free
    • Acronyms explained
    • Short sentences
    • Plain English
    • Editors
    • Readers

    “The ultimate aim of our writing is to communicate effectively,” Jonathan explained. “From the beginning to the end of the writing process, we should think about who our audience is and what they need.”

    The course forms part of the Civil Service recommended learning curriculum which includes further training on drafting, briefing, and advanced writing techniques. 

    Read more about the course and Jonathan Marshall’s top tips on writing  here. 

    Civil servants can now access the updated Foundations of Writing in Government (JASPER) course on Civil Service Learning.

    Updates to this page

    Published 31 January 2025

    MIL OSI United Kingdom –

  • MIL-OSI Russia: Conversation between Mikhail Mishustin and the Chairman of the Cabinet of Ministers of Kyrgyzstan – Head of the Administration of the President of Kyrgyzstan Adylbek Kasymaliev

    Translartion. Region: Russians Fedetion –

    Source: Government of the Russian Federation – An important disclaimer is at the bottom of this article.

    Mikhail Mishustin with the Chairman of the Cabinet of Ministers of Kyrgyzstan – Head of the Administration of the President of Kyrgyzstan Adylbek Kasymaliev

    January 31, 2025

    Conversation between Mikhail Mishustin and the Chairman of the Cabinet of Ministers of Kyrgyzstan – Head of the Administration of the President of Kyrgyzstan Adylbek Kasymaliev

    January 31, 2025

    Conversation between Mikhail Mishustin and the Chairman of the Cabinet of Ministers of Kyrgyzstan – Head of the Administration of the President of Kyrgyzstan Adylbek Kasymaliev

    January 31, 2025

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    Mikhail Mishustin with the Chairman of the Cabinet of Ministers of Kyrgyzstan – Head of the Administration of the President of Kyrgyzstan Adylbek Kasymaliev

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    From the transcript:

    M. Mishustin: Greetings to you, esteemed Adylbek Aleshovich! This is your first time participating in a meeting of the Eurasian Intergovernmental Council as the head of the Government of Kyrgyzstan. And taking this opportunity, I would like to ask you to convey the best wishes to the President of the Kyrgyz Republic Sadyr Nurgozhoevich Japarov from the President of Russia Vladimir Vladimirovich Putin. We hope that under your leadership the Government of Kyrgyzstan will continue its course to strengthen cooperation with Russia in all areas.

    Our country is the leading economic partner of Kyrgyzstan. Our mutual trade turnover is steadily growing. Our intergovernmental commission is actively working. Russian companies supply energy resources, industrial and agricultural products to Kyrgyzstan. We also provide support to our partners in the field of tax administration.

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

    MIL OSI Russia News –

  • MIL-OSI Europe: Press release – Polish Presidency debriefs EP committees on priorities

    Source: European Parliament

    Poland holds the Presidency of the Council until the end of June 2025. This text will be updated regularly as the hearings take place.

    Environment, Climate and Food Safety

    On 23 January, Paulina Hennig-Kloska, Minister of Climate and Environment, highlighted the need for climate adaptation measures, combating climate disinformation, and to advance key legislative files such as the waste framework directive on textiles and food, the European soil monitoring law, and the “One Substance, One Assessment” chemicals package. The Presidency also plans to secure agreement with Parliament on plastic pellet losses, water pollutants, and detergents rules.

    MEPs asked about the Presidency’s stance on the new emissions trading system ETS II, the 2040 emissions target, renewable energy, and soil monitoring. They also debated the impact of climate regulations on competitiveness, and raised concerns about agricultural pollution and the role of genomic technologies.

    Security and defence

    On 27 January, Secretary of State at the Ministry of National Defence Paweł Zalewski said the Presidency’s first priority is to strengthen EU support for Ukraine by using all the tools at the EU’s disposal, including the European Peace Facility and the profits from frozen Russian assets or loans guaranteed from Moscow. He also highlighted the need to reinforce the EU’s defence industries by ensuring adequate financing as well as deepening EU-U.S. cooperation, including between the EU and NATO.

    MEPs quizzed Mr Zalewski on several issues, including the EU’s role in possible future peace talks between Ukraine and Russia, developing an EU defence pillar, reforming the EU Investment Bank to allow for more investment in the defence sector and establishing viable “European champions” (i.e. large corporations) in the defence sector.

    Women’s rights and gender equality

    On 28 January, Minister for Equality Katarzyna Kotula emphasised enhancing digital security for women and girls, particularly in the context of the rapid development of AI, as a Presidency priority. She pledged to follow up on the Digital Services Act to make sure that AI accelerates rather than undermines gender equality. The Presidency is also determined to advance the work on the Anti-discrimination Directive.

    MEPS welcomed her commitment on strengthening the digital protection of women and girls, particularly concerning deepfakes, revenge porn and hate speech. They also raised women’s sexual and reproductive health and rights, the protection of LGBTQI+ communities, the challenges faced by ageing women and the prospect for an EU-wide definition of rape including the notion of consent.

    Internal market and consumer protection

    On 28 January, Economic Development and Technology Minister Krzysztof Paszyk focused on the need to eliminate the remaining barriers in the single market, as well as highlighting issues around security, competitiveness, and reducing red tape. The Presidency will look for a compromise on the e-declaration of posted workers file, on late payments, and on the travel package proposals. They will also, he said, try to reach political agreements on toy safety, the Green Claims Directive and on the alternative dispute resolution file.

    On digital policy, Secretary of State, Ministry of Digitalisation Dariusz Standerski outlined plans for an informal meeting on cybersecurity to focus on defence, the application of the Artificial Intelligence Act, and new initiatives on AI factories and the “AI Apply Strategy”. On customs, Undersecretary of State, Ministry of Finance Małgorzata Krok stated the Presidency’s intention was to reach a common position in the Council on the reform of the Union Customs Code.

    MEPs asked about reducing reporting obligations, e-declarations of posted workers, the implementation of digital services act and the AI Act, including in the context of EU-US relations. Several members wanted to hear more about cutting red tape, unblocking progress on late payments, and the need for an AI liability act. Questions also focused on issues around unfair trading practices, single market on defence and climate disinformation.

    Fisheries

    On 28 January, Jacek Czerniak, Secretary of State at the Ministry of Agriculture and Rural Development, which includes fisheries, identified improving EU fisheries competitiveness and defending EU interests in regional fisheries organisations and international agreements as Presidency priorities. Poland will also launch discussions on the review of the Common Fisheries Policy (CFP) and start negotiations to introduce measures against non-EU countries that allow unsustainable fishing practices.

    MEPs questioned Mr Czerniak on addressing the critical state of fish stocks in the Baltic Sea, in addition to issues of security and reducing the complexity of regulations. Others supported a reform of the CFP to better balance the interests of the fishery sector with the EU’s environmental goals. MEPs also argued that trade policies should be aligned with fisheries policies.

    Employment and social affairs

    On 28 January, Minister of Family, Labour and Social Policy Agnieszka Dziemianowicz-Bąk and Minister of Senior Policy Marzena Okła-Drewnowicz said the Presidency would focus on the future of employment in the digital transformation, a Europe of equality, cohesion and inclusion, and the challenges prompted by the EU’s aging population.

    MEPs quizzed the ministers on their plans for the regulation on the coordination of social security systems, emphasising the importance of finalising negotiations on the file. They also raised the impact of AI in the workplace, and the importance of addressing demographic issues in the EU. MEPs also raised the importance of social dialogue, upcoming negotiations on European Work Councils, and the expected Commission initiative on the “Right to Disconnect”.

    Transport and tourism

    On 29 January, Dariusz Klimczak, Minister of Infrastructure, said the Presidency will focus on resilience and competitiveness in the transport sector, the protection of transport operators, dual use infrastructure, and military mobility. He committed to reaching a deal with Parliament on new railway infrastructure, road and maritime safety rules as well advancing negotiations on air passenger rights rules that have been stalled in the Council since 2013. Piotr Borys, Secretary of State at the Ministry of Sport and Tourism added that the Presidency will focus on making Europe a safe and more popular destination for tourism despite Russia’s war in Ukraine and the challenges posed by climate change.

    MEPs asked the Presidency to secure adequate financing for transport policies within the next EU long-term budget, and want them to secure a Council position on the maximum weights and dimensions directive, and address labour shortages and working conditions in all transport modes. Completing Trans-European transport networks, developing high speed rail, and ensuring connectivity for Europe’s islands were also raised.

    Constitutional affairs

    On 29 January, Minister for European Affairs Adam Szłapka said the Presidency wants to promote institutional reforms, stressing at the same time that EU Treaties could prove difficult to revise. The Presidency wants to complete work on the new rules on European political parties and foundations and the electoral rights of mobile citizens. They will work on the transparency of interest representation and on the EU’s accession to the European Convention on Human Rights.

    Most MEPs asked questions about the need to reform the EU’s institutional architecture, especially in light of imminent enlargement, with many of them highlighting the need to overcome what they saw as the obstacle of unanimity in key policy areas either through Treaty revision or using existing rules. Some called for progress on Parliament’s right of initiative, its right of inquiry, and rules on European elections.

    Agriculture and Rural Development

    On 29 January, Czesław Siekierski, Minister of Agriculture and Rural Development said that the Council will discuss the future shape of the Common Agricultural Policy (CAP) beyond 2027. The Presidency wants to simplify the green architecture of the CAP and assess the impact of current EU trade agreements on agriculture.

    Questions from MEPs focused on ensuring fair income for farmers and adapting the CAP to the future enlargement of the EU. A number of MEPs also asked about the position of the Presidency on the EU-Mercosur Partnership Agreement and stressed the need to invest in European food sovereignty.

    International trade

    On 29 January, Krzysztof Paszyk, Minister of Economic Development and Technology, said the Presidency will continue working on ambitious, sustainable and mutually profitable trade agreements. He hopes to finalise the legislation on the screening of foreign direct investment and resume talks on the Generalised System of Preferences (GSP) scheme, the EU’s preferential trade arrangement with developing countries. On Ukraine, Mr Paszyk said support for Ukraine remains steadfast, while the Presidency prefers not to extend the current temporary trade liberalisation measures with the country, but rather reach a new agreement.

    MEPs asked about possible timelines for the adoption of trade deals with Mercosur and Mexico, possible shift in US trade policy as well as on trade with Ukraine and safeguards for the agricultural market. Some MEPs argued that GSP should not be a migration tool, others demanded a clear link between migration and the scheme.

    Industry, Research and Energy

    On 29 January, Minister of Economics, Development and Technology, Krzysztof Paszyk said the Presidency’s priorities include boosting Europe’s industrial competitiveness with a new instrument and advancing the Clean Industry Act to support businesses, address high energy prices, and cut red tape and tax burdens for SMEs. They also plan to maximize the use of spaceimaging and AI algorithms for crisis management, and improve cooperation during natural disasters.

    During the debate, MEPs stressed the need to support innovative businesses through a unified capital market, and to combine environmental policies with industrial policies to achieve the ecological transition. Others focused on the importance of transatlantic relations and the need to secure European tech sovereignty.

    Dariusz Stenderski, Secretary of State in the Ministry of Digital Affairs, said that his key focus areas would be cyber security, with a revised blueprint for coordinated EU response to cyber attacks and an informal Council on its civilian and military aspects.He also referred to the boosting of AI development through shared investment and simplified rules to support startups.

    On 30 January Marcin Kulasek, Minister of Science and Higher Education, outlined three main focus areas: openness and inclusivity, synergies between EU and national programs, and AI and science.He stressed the need to develop EU cooperation networks without losing top talents, and the value of synergies between EU and national research programs.

    MEPs called for the full implementation of the 5G toolbox and for the simplification of administrative procedures to foster innovation. Others highlighted the need to improve EU cooperation in research and innovation, retain top talent, and ensure an inclusive access to funds. The discussions also covered the need for ethical standards in AI, a strong support for scientists, as well as academic freedom and the free flow of scientific knowledge.

    Culture, Education, Youth and Sport

    On 30 January, Education Minister Barbara Nowacka said the Presidency wants to include young people – as part of a new cycle of the EU Youth Dialogue – in EU-level debates and projects to strengthen EU values of democracy, freedom and rule of law, thereby making them more resilient against the risk of disinformation and manipulation. Providing better support to teachers is also a priority, she said, and EU education ministers will gather in May to discuss what they can do to improve this.

    The Presidency wants to advance work on the “European degree” – a degree awarded jointly by several universities in different EU countries – by adopting a roadmap to implement it. A European quality assurance system to guarantee trust among universities and improve the recognition of higher education diplomas will also be discussed, Minister of Science and High Education Marcin Kulasek said.

    Culture Minister Hanna Wróblewska said the Presidency will present proposals to support young artists and creators, and will launch discussions on the future of the Creative Europe programme beyond 2027. Audiovisual and intellectual property rights, security and AI, and a possible revision of the Audiovisual Media Services Directive are also among the Presidency’s priorities, she said.

    Piotr Borys, Secretary of State of Sport, will focus on pushing EU countries to better promote sport in schools, address mental health, and adopt a common methodology to gather statistics on sport.

    MEPs questioned the ministers on countering Russian disinformation under the European Media Freedom Act, as well as on delays in the creation of the European degree, pleading for EU-wide recognition of diplomas, including Erasmus+ and vocational education training. MEPs also raised concerns about possible reductions in Erasmus+ funding, which ensures the financial sustainability of the European Education Area, which in turn is essential for the “Union of Skills”.

    MIL OSI Europe News –

  • MIL-OSI Europe: Federal Councillor Ignazio Cassis to visit Paraguay, Bolivia and Brazil

    Source: Switzerland – Federal Administration in English

    Federal Councillor Ignazio Cassis will visit Paraguay, Bolivia and Brazil from 3 to 7 February 2025. As part of its Americas Strategy 2022–25, Switzerland aims to strengthen its political relations with the countries of the Americas in the areas of foreign policy, the economy, innovation and culture. The agenda for the trip includes the finalisation of the EFTA-Mercosur free trade agreement, Switzerland’s economic interests, and bilateral relations between Switzerland and these three Latin American countries.

    MIL OSI Europe News –

  • MIL-OSI Europe: Jakob Forssmed appointed Vice-Chair of the Global Leaders Group on Antimicrobial Resistance

    Source: Government of Sweden

    Jakob Forssmed appointed Vice-Chair of the Global Leaders Group on Antimicrobial Resistance – Government.se

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    Press release from Ministry of Health and Social Affairs

    Published

    Minister for Social Affairs and Public Health Jakob Forssmed has been appointed Vice-Chair of the Global Leaders Group (GLG) on Antimicrobial Resistance, a UN body made up of politicians and experts.

    Jakob Forssmed has been a GLG member since February 2023. Foto: Fotograf Kristian Pohl AB/Government offices of Sweden

    “I am delighted to have the opportunity to continue working with the GLG, now in the role of Vice-Chair. Global leadership on this issue is needed more than ever – it is now time to begin the work to achieve the goals that world leaders agreed on at last autumn’s high-level meeting on antimicrobial resistance, but also to push ahead with other issues where agreement was not possible,” says Minister of Social Affairs Jakob Forssmed. 

    The GLG includes world leaders and experts from across sectors working together to accelerate political action on antimicrobial resistance. The GLG was established in 2020 under the United Nations and meets quarterly. The Group is also supported by four UN organisations: the Food and Agriculture Organisation of the United Nations, the United Nations Environment Programme, the World Health Organization and the World Organisation for Animal Health.

    Jakob Forssmed has been a GLG member since February 2023.

    Antimicrobial resistance

    In brief, antimicrobial resistance (AMR) means that infectious agents (bacteria, viruses, parasites and fungi) develop resistance to treatment. In particular, bacteria that are resistant to antibiotics are a growing threat to health and food production worldwide. Just like other bacteria, resistant bacteria can be transmitted between people, animals and food, and can spread in our environment. This means that a number of areas, including human and animal health, the environment, research, education, trade and international development cooperation need to be involved to combat AMR using a cross-sectoral, One Health approach. Resistance to antimicrobials in general, including antibiotics, is a global problem.

    Minister for Social Affairs and Public Health Jakob Forssmed is the government minister with responsibility for AMR issues.

    MIL OSI Europe News –

  • MIL-OSI: Brookfield Business Partners Reports 2024 Year End Results

    Source: GlobeNewswire (MIL-OSI)

    BROOKFIELD, News, Jan. 31, 2025 (GLOBE NEWSWIRE) — Brookfield Business Partners (NYSE: BBU, BBUC; TSX: BBU.UN, BBUC) announced today financial results for the year ended December 31, 2024.

    “Our business had another successful year in 2024. We generated over $2 billion from our capital recycling initiatives, acquired two market-leading operations and achieved solid financial results,” said Anuj Ranjan, CEO of Brookfield Business Partners. “The enhanced strength of our balance sheet and substantial liquidity provides us optionality to meaningfully advance our capital allocation priorities with a focus on increasing the intrinsic value of our business for our unitholders.”

           
      Three Months Ended
    December 31,    		   Year Ended
    December 31,
    US$ millions (except per unit amounts), unaudited   2024       2023       2024       2023  
    Net income (loss) attributable to Unitholders1 $ (438 )   $ 1,423     $ (109 )   $ 1,405  
    Net income (loss) per limited partnership unit2 $ (2.02 )   $ 6.57     $ (0.50 )   $ 6.49  
               
    Adjusted EBITDA3 $ 653     $ 608     $ 2,565     $ 2,491  
                                   

    Net loss attributable to Unitholders for the year ended December 31, 2024 was $109 million (loss of $0.50 per limited partnership unit) compared to net income of $1,405 million ($6.49 per limited partnership unit) in the prior year. Net loss attributable to Unitholders includes a one-time non-cash expense at our healthcare services operation, combined with provisions at our construction operation. Prior year included net gains primarily related to the sale of our nuclear technology services operation.

    Adjusted EBITDA for the year ended December 31, 2024 was $2,565 million compared to $2,491 million for the year ended December 31, 2023, reflecting improved performance of operations and tax benefits recorded at our advanced energy storage operation. Prior year results included $308 million of contribution from operations which have been sold.

    Operational Update

    The following table presents Adjusted EBITDA by segment:

      Three Months Ended
    December 31,    		   Year Ended
    December 31,
    US$ millions, unaudited   2024       2023       2024       2023  
    Industrials $ 306     $ 222     $ 1,247     $ 855  
    Business Services   217       227       832       900  
    Infrastructure Services   160       184       606       853  
    Corporate and Other   (30 )     (25 )     (120 )     (117 )
    Adjusted EBITDA $ 653     $ 608     $ 2,565     $ 2,491  

    Our Industrials segment generated Adjusted EBITDA of $1,247 million in 2024, compared to $855 million in 2023. Current year results included $371 million of tax benefits at our advanced energy storage operation. Strong underlying performance at our advanced energy storage operation and growing contribution from water and wastewater services offset reduced performance at our engineered components manufacturing operation due to weak market conditions. Prior year results included contribution from disposed operations including our Canadian aggregates production operation which was sold in June 2024.

    Our Business Services segment generated Adjusted EBITDA of $832 million in 2024, compared to $900 million in 2023. Strong performance at our residential mortgage insurer was primarily offset by the impact of a cyber incident at our dealer software and technology services operation and reduced performance at our construction and healthcare services operations during the year. Prior year results included contribution from our road fuels operation which was sold in July 2024.

    Our Infrastructure Services segment generated Adjusted EBITDA of $606 million in 2024, compared to $853 million in 2023. Prior year results included $236 million of contribution from our nuclear technology services operation which was sold in November 2023. Current year results benefited from improved performance of offshore oil services, offset by reduced contribution at work access services.

    The following table presents Adjusted EFO4 by segment:

      Three Months Ended
    December 31,    		   Year Ended
    December 31,
    US$ millions, unaudited   2024       2023       2024       2023  
    Adjusted EFO          
    Industrials $ 193     $ 115     $ 935     $ 492  
    Business Services   142       181       641       636  
    Infrastructure Services   78       1,790       287       2,070  
    Corporate and Other   (83 )     (77 )     (331 )     (335 )

    Adjusted EFO for the year ended December 31, 2024 included $306 million in net gains primarily related to the dispositions of our road fuels operation and Canadian aggregates production operation, the sale of public securities and the deconsolidation of our payment processing services operation. Infrastructure Services Adjusted EFO reflected the impact of the prior year disposition of our nuclear technology services operation. Prior year results included $2,006 million in after-tax net gains primarily related to the sale of our nuclear technology services operation.

    Strategic Initiatives

    • Advanced Energy Storage Operation
      In January, our advanced energy storage operation raised $5 billion of new first lien debt – $4.5 billion of the proceeds are not required in the business and therefore were used to fund a special distribution to owners, of which Brookfield Business Partners’ share was approximately $1.2 billion. This represented a multiple of 1.5x of our initial equity investment and we still own our entire share of the business.
    • Offshore Oil Services
      In January, we completed the previously announced sale of our offshore oil services’ shuttle tanker operation. Cash proceeds to Brookfield Business Partners for the sale of its interest after the repayment of debt are expected to be approximately $250 million.
    • Unit Repurchase Program and Capital Deployment
      We are allocating up to $250 million of capital to accelerate the repurchase of Brookfield Business Partners’ securities under our existing and future normal course issuer bids (NCIB).

      In January, we completed the acquisition of Chemelex, a leading manufacturer of electric heat tracing systems, through a carve-out from a larger industrial company for total enterprise value of $1.7 billion. Brookfield Business Partners invested $212 million for an approximate 25% economic interest in the business, with the balance funded by institutional partners.

    Liquidity

    We ended the year with approximately $1.3 billion of liquidity at the corporate level including $91 million of cash and liquid securities, $25 million of remaining preferred equity commitment from Brookfield Corporation and $1.2 billion of availability on our corporate credit facilities. Pro forma for announced and recently closed transactions, corporate liquidity is $2.7 billion.

    Distribution

    The Board of Directors has declared a quarterly distribution in the amount of $0.0625 per unit, payable on March 31, 2025 to unitholders of record as at the close of business on February 28, 2025.

    Additional Information

    The Board has reviewed and approved this news release, including the summarized unaudited consolidated financial statements contained herein.

    Brookfield Business Partners’ Letter to Unitholders and the Supplemental Information are available on our website https://bbu.brookfield.com under Reports & Filings.

       
    Notes:  
    1 Attributable to limited partnership unitholders, general partnership unitholders, redemption-exchange unitholders, special limited partnership unitholders and BBUC exchangeable shareholders.
    2 Net income (loss) per limited partnership unit calculated as net income (loss) attributable to limited partners divided by the average number of limited partnership units outstanding for the three and twelve months ended December 31, 2024 which were 74.3 million and 74.3 million, respectively (December 31, 2023: 74.3 million and 74.5 million, respectively).
    3 Adjusted EBITDA is a non-IFRS measure of operating performance presented as net income and equity accounted income at the partnership’s economic ownership interest in consolidated subsidiaries and equity accounted investments, respectively, excluding the impact of interest income (expense), net, income taxes, depreciation and amortization expense, gains (losses) on acquisitions/dispositions, net, transaction costs, restructuring charges, revaluation gains or losses, impairment expenses or reversals, other income or expenses, and preferred equity distributions. The partnership’s economic ownership interest in consolidated subsidiaries and equity accounted investments excludes amounts attributable to non-controlling interests consistent with how the partnership determines net income attributable to non-controlling interests in its IFRS consolidated statements of operating results. The partnership believes that Adjusted EBITDA provides a comprehensive understanding of the ability of its businesses to generate recurring earnings which allows users to better understand and evaluate the underlying financial performance of the partnership’s operations and excludes items that the partnership believes do not directly relate to revenue earning activities and are not normal, recurring items necessary for business operations. Please refer to the reconciliation of net income (loss) to Adjusted EBITDA included elsewhere in this news release.
    4 Adjusted EFO is the partnership’s segment measure of profit or loss and is presented as net income and equity accounted income at the partnership’s economic ownership interest in consolidated subsidiaries and equity accounted investments, respectively, excluding the impact of depreciation and amortization expense, deferred income taxes, transaction costs, restructuring charges, unrealized revaluation gains or losses, impairment expenses or reversals and other income or expense items that are not directly related to revenue generating activities. The partnership’s economic ownership interest in consolidated subsidiaries excludes amounts attributable to non-controlling interests consistent with how the partnership determines net income attributable to non-controlling interests in its IFRS consolidated statements of operating results. In order to provide additional insight regarding the partnership’s operating performance over the lifecycle of an investment, Adjusted EFO includes the impact of preferred equity distributions and realized disposition gains or losses recorded in net income, other comprehensive income, or directly in equity, such as ownership changes. Adjusted EFO does not include legal and other provisions that may occur from time to time in the partnership’s operations and that are one-time or non-recurring and not directly tied to the partnership’s operations, such as those for litigation or contingencies. Adjusted EFO includes expected credit losses and bad debt allowances recorded in the normal course of the partnership’s operations. Adjusted EFO allows the partnership to evaluate its segments on the basis of return on invested capital generated by its operations and allows the partnership to evaluate the performance of its segments on a levered basis.
       

    Brookfield Business Partners is a global business services and industrials company focused on owning and operating high-quality businesses that provide essential products and services and benefit from a strong competitive position. Investors have flexibility to invest in our company either through Brookfield Business Partners L.P. (NYSE: BBU; TSX: BBU.UN), a limited partnership or Brookfield Business Corporation (NYSE, TSX: BBUC), a corporation. For more information, please visit https://bbu.brookfield.com.

    Brookfield Business Partners is the flagship listed vehicle of Brookfield Asset Management’s Private Equity Group. Brookfield Asset Management is a leading global alternative asset manager with over $1 trillion of assets under management.

    Please note that Brookfield Business Partners’ previous audited annual and unaudited quarterly reports have been filed on SEDAR+ and EDGAR and are available at https://bbu.brookfield.com under Reports & Filings. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.

    For more information, please contact:

    Conference Call and 2024 Earnings Webcast Details

    Investors, analysts and other interested parties can access Brookfield Business Partners’ 2024 results as well as the Letter to Unitholders and Supplemental Information on our website https://bbu.brookfield.com under Reports & Filings.

    The results call can be accessed via webcast on January 31, 2025 at 10:00 a.m. Eastern Time at BBU2024Q4Webcast or participants can pre-register at BBU2024Q4ConferenceCall. Upon registering, participants will be emailed a dial-in number and unique PIN. A replay of the webcast will be available at https://bbu.brookfield.com.

     
    Brookfield Business Partners L.P.
    Consolidated Statements of Financial Position
     
      As at
    US$ millions, unaudited December 31, 2024   December 31, 2023
                         
    Assets                    
    Cash and cash equivalents         $ 3,239             $ 3,252  
    Financial assets           12,371               13,176  
    Accounts and other receivable, net           6,279               6,563  
    Inventory and other assets           5,728               5,321  
    Property, plant and equipment           13,232               15,724  
    Deferred income tax assets           1,744               1,220  
    Intangible assets           18,317               20,846  
    Equity accounted investments           2,325               2,154  
    Goodwill           12,239               14,129  
    Total Assets         $ 75,474             $ 82,385  
                         
    Liabilities and Equity                    
    Liabilities                    
    Corporate borrowings         $ 2,142             $ 1,440  
    Accounts payable and other           16,691               18,378  
    Non-recourse borrowings in subsidiaries of Brookfield Business Partners           36,720               40,809  
    Deferred income tax liabilities           2,613               3,226  
                         
    Equity                    
    Limited partners $ 1,752         $ 1,909    
    Non-controlling interests attributable to:          
    Redemption-exchange units   1,644           1,792    
    Special limited partner   —           —    
    BBUC exchangeable shares   1,721           1,875    
    Preferred securities   740           740    
    Interest of others in operating subsidiaries   11,451           12,216    
          17,308           18,532  
    Total Liabilities and Equity   $ 75,474         $ 82,385  
     
    Brookfield Business Partners L.P.
    Consolidated Statements of Operating Results
     
    US$ millions, unaudited Three Months Ended
    December 31,    		   Year Ended
    December 31,
      2024       2023       2024       2023  
               
    Revenues $ 7,427     $ 13,405     $ 40,620     $ 55,068  
    Direct operating costs   (6,008 )     (12,209 )     (34,883 )     (50,021 )
    General and administrative expenses   (324 )     (336 )     (1,267 )     (1,538 )
    Interest income (expense), net   (752 )     (858 )     (3,104 )     (3,596 )
    Equity accounted income (loss), net   35       48       90       132  
    Impairment reversal (expense), net   (991 )     (780 )     (981 )     (831 )
    Gain (loss) on acquisitions/dispositions, net   —       4,477       692       4,686  
    Other income (expense), net   (360 )     (344 )     (573 )     (178 )
    Income (loss) before income tax   (973 )     3,403       594       3,722  
    Income tax (expense) recovery          
    Current   (158 )     (171 )     (646 )     (775 )
    Deferred   23       252       947       830  
    Net income (loss) $ (1,108 )   $ 3,484     $ 895     $ 3,777  
    Attributable to:          
    Limited partners $ (150 )   $ 488     $ (37 )   $ 482  
    Non-controlling interests attributable to:          
    Redemption-exchange units   (141 )     457       (35 )     451  
    Special limited partner   —       —       —       —  
    BBUC exchangeable shares   (147 )     478       (37 )     472  
    Preferred securities   13       17       52       83  
    Interest of others in operating subsidiaries   (683 )     2,044       952       2,289  
     
    Brookfield Business Partners L.P.
    Reconciliation of Non-IFRS Measures
     
    US$ millions, unaudited  Three Months Ended December 31, 2024
        Business Services       Infrastructure Services       Industrials       Corporate and Other       Total  
                         
    Net income (loss)   $ (955 )   $ (72 )   $ (31 )   $ (50 )   $ (1,108 )
                         
    Add or subtract the following:                    
    Depreciation and amortization expense     223       228       328       —       779  
    Impairment reversal (expense), net     690       1       300       —       991  
    Gain (loss) on acquisitions/dispositions, net     —       —       —       —       —  
    Other income (expense), net1     312       4       47       (3 )     360  
    Income tax (expense) recovery     28       9       115       (17 )     135  
    Equity accounted income (loss), net     (4 )     (12 )     (19 )     —       (35 )
    Interest income (expense), net     233       166       313       40       752  
    Equity accounted Adjusted EBITDA2     25       47       17       —       89  
    Amounts attributable to non-controlling interests3     (335 )     (211 )     (764 )     —       (1,310 )
    Adjusted EBITDA   $ 217     $ 160     $ 306     $ (30 )   $ 653  
     Notes:  
     1 Other income (expense), net corresponds to amounts that are not directly related to revenue earning activities and are not normal, recurring income or expenses necessary for business operations. The components of other income (expense), net include $407 million related to a provision for payment of a litigation settlement at our dealer software and technology services operation, $116 million of net gains on the sale of property, plant and equipment and other assets, $57 million related to provisions recorded at our construction operation, $52 million of business separation expenses, stand-up costs and restructuring charges, $27 million of net gains on debt modification and extinguishment, $16 million of net revaluation gains and $3 million in transaction costs.
     2 Equity accounted Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to the partnership that is generated by its investments in associates and joint ventures accounted for using the equity method.
     3 Amounts attributable to non-controlling interests are calculated based on the economic ownership interests held by the non-controlling interests in consolidated subsidiaries.
     
    Brookfield Business Partners L.P.
    Reconciliation of Non-IFRS Measures
         
    US$ millions, unaudited Year Ended December 31, 2024
        Business Services       Infrastructure Services       Industrials       Corporate and Other       Total  
                         
    Net income (loss)   $ (169 )   $ (347 )   $ 1,654     $ (243 )   $ 895  
                         
    Add or subtract the following:                    
    Depreciation and amortization expense     961       888       1,355       —       3,204  
    Impairment reversal (expense), net     686       (11 )     306       —       981  
    Gain (loss) on acquisitions/dispositions, net     (608 )     —       (84 )     —       (692 )
    Other income (expense), net1     365       32       164       12       573  
    Income tax (expense) recovery     75       6       (341 )     (41 )     (301 )
    Equity accounted income (loss), net     (4 )     (23 )     (63 )     —       (90 )
    Interest income (expense), net     972       701       1,279       152       3,104  
    Equity accounted Adjusted EBITDA2     79       168       61       —       308  
    Amounts attributable to non-controlling interests3     (1,525 )     (808 )     (3,084 )     —       (5,417 )
    Adjusted EBITDA   $ 832     $ 606     $ 1,247     $ (120 )   $ 2,565  
    Notes:  
    1 Other income (expense), net corresponds to amounts that are not directly related to revenue earning activities and are not normal, recurring income or expenses necessary for business operations. The components of other income (expense), net include $407 million related to a provision for payment of a litigation settlement at our dealer software and technology services operation, $251 million related to provisions recorded at our construction operation, $168 million of net revaluation gains, $158 million of business separation expenses, stand-up costs and restructuring charges, $108 million of net gains on the sale of property, plant and equipment and other assets, $52 million of net gains on debt modification and extinguishment, $50 million of other income related to a distribution at our entertainment operation, $35 million in transaction costs and $100 million of other expenses.
    2 Equity accounted Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to the partnership that is generated by its investments in associates and joint ventures accounted for using the equity method.
    3 Adjusted EBITDA that is attributable to non-controlling interests in consolidated subsidiaries.
     
    Brookfield Business Partners L.P.
    Reconciliation of Non-IFRS Measures
     
    US$ millions, unaudited Three Months Ended December 31, 2023
        Business Services       Infrastructure Services       Industrials       Corporate and Other       Total  
                         
    Net income (loss)   $ 51     $ 3,744     $ (264 )   $ (47 )   $ 3,484  
                         
    Add or subtract the following:                    
    Depreciation and amortization expense     287       257       347       —       891  
    Impairment reversal (expense), net     650       33       97       —       780  
    Gain (loss) on acquisitions/dispositions, net     (566 )     (3,902 )     (9 )     —       (4,477 )
    Other income (expense), net1     (24 )     46       317       5       344  
    Income tax (expense) recovery     18       (10 )     (68 )     (21 )     (81 )
    Equity accounted income (loss), net     (6 )     (22 )     (20 )     —       (48 )
    Interest income (expense), net     259       225       336       38       858  
    Equity accounted Adjusted EBITDA2     17       51       17       —       85  
    Amounts attributable to non-controlling interests3     (459 )     (238 )     (531 )     —       (1,228 )
    Adjusted EBITDA   $ 227     $ 184     $ 222     $ (25 )   $ 608  
    Notes:  
    1 Other income (expense), net corresponds to amounts that are not directly related to revenue earning activities and are not normal, recurring income or expenses necessary for business operations. The components of other income (expense), net include $247 million loss related to the reclassification of our graphite electrode operations as a financial asset, $96 million of net gains on debt extinguishment/modifications, $80 million of business separation expenses, stand-up costs and restructuring charges, $37 million in transaction costs and $76 million of other expenses.
    2 Equity accounted Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to the partnership that is generated by its investments in associates and joint ventures accounted for using the equity method.
    3 Adjusted EBITDA that is attributable to non-controlling interests in consolidated subsidiaries.
     
    Brookfield Business Partners L.P.
    Reconciliation of Non-IFRS Measures
     
    US$ millions, unaudited Year Ended December 31, 2023
        Business Services       Infrastructure Services       Industrials       Corporate and Other       Total  
                         
    Net income (loss)   $ 602     $ 3,616     $ (245 )   $ (196 )   $ 3,777  
                         
    Add or subtract the following:                    
    Depreciation and amortization expense     1,045       1,174       1,373       —       3,592  
    Impairment reversal (expense), net     656       (13 )     188       —       831  
    Gain (loss) on acquisitions/dispositions, net     (720 )     (3,916 )     (50 )     —       (4,686 )
    Other income (expense), net1     (138 )     (90 )     396       10       178  
    Income tax (expense) recovery     245       (6 )     (218 )     (76 )     (55 )
    Equity accounted income (loss), net     (25 )     (51 )     (56 )     —       (132 )
    Interest income (expense), net     1,031       1,051       1,369       145       3,596  
    Equity accounted Adjusted EBITDA2     61       183       63       —       307  
    Amounts attributable to non-controlling interests3     (1,857 )     (1,095 )     (1,965 )     —       (4,917 )
    Adjusted EBITDA   $ 900     $ 853     $ 855     $ (117 )   $ 2,491  
    Notes:  
    1 Other income (expense), net corresponds to amounts that are not directly related to revenue earning activities and are not normal, recurring income or expenses necessary for business operations. The components of other income (expense), net include $446 million of net gains on debt modification and extinguishment, $247 million loss related to the reclassification of our graphite electrode operations as a financial asset, $246 million of business separation expenses, stand-up costs and restructuring charges, $116 million in transaction costs, $93 million of net revaluation gains and $108 million of other expenses.
    2 Equity accounted Adjusted EBITDA corresponds to the Adjusted EBITDA attributable to the partnership that is generated by its investments in associates and joint ventures accounted for using the equity method.
    3 Adjusted EBITDA that is attributable to non-controlling interests in consolidated subsidiaries.
       

    Brookfield Business Corporation Reports 2024 Year End Results

    Brookfield, News, January 31, 2025 – Brookfield Business Corporation (NYSE, TSX: BBUC) announced today its net income (loss) for the year ended December 31, 2024.

      Three Months Ended
    December 31,    		   Year Ended
    December 31,
    US$ millions, unaudited   2024       2023       2024       2023  
               
    Net income (loss) attributable to Brookfield Business Partners $ (396 )   $ 454     $ (888 )   $ 519  

    Net loss attributable to Brookfield Business Partners for the year ended December 31, 2024 was $888 million compared to net income of $519 million in 2023 which included net gains primarily related to the sale of our nuclear technology services operation. Current year results included $208 million of remeasurement loss on our exchangeable and class B shares that are classified as liabilities under IFRS. As at December 31, 2024, the exchangeable and class B shares were remeasured to reflect the closing price of $23.42 per unit.

    Dividend

    The Board of Directors has declared a quarterly dividend in the amount of $0.0625 per share, payable on March 31, 2025 to shareholders of record as at the close of business on February 28, 2025.

    Additional Information

    Each exchangeable share of Brookfield Business Corporation has been structured with the intention of providing an economic return equivalent to one unit of Brookfield Business Partners L.P. Each exchangeable share will be exchangeable at the option of the holder for one unit. Brookfield Business Corporation will target that dividends on its exchangeable shares will be declared and paid at the same time as distributions are declared and paid on the Brookfield Business Partners’ units and that dividends on each exchangeable share will be declared and paid in the same amount as distributions are declared and paid on each unit to provide holders of exchangeable shares with an economic return equivalent to holders of units.

    In addition to carefully considering the disclosures made in this news release in its entirety, shareholders are strongly encouraged to carefully review the Letter to Unitholders, Supplemental Information and other continuous disclosure filings which are available at https://bbu.brookfield.com.

    Please note that Brookfield Business Corporation’s previous audited annual and unaudited quarterly reports have been filed on SEDAR+ and EDGAR and are available at https://bbu.brookfield.com/bbuc under Reports & Filings. Hard copies of the annual and quarterly reports can be obtained free of charge upon request.

     
    Brookfield Business Corporation
    Consolidated Statements of Financial Position
     
      As at
    US$ millions, unaudited December 31, 2024   December 31, 2023
                           
    Assets                      
    Cash and cash equivalents         $ 1,008             $ 772  
    Financial assets           353               224  
    Accounts and other receivable, net           3,229               3,569  
    Inventory, net           52               61  
    Other assets           627               737  
    Property, plant and equipment           2,480               2,743  
    Deferred income tax assets           197               221  
    Intangible assets           5,966               6,931  
    Equity accounted investments           198               222  
    Goodwill           4,988               5,702  
    Total Assets         $ 19,098             $ 21,182  
                           
    Liabilities and Equity                      
    Liabilities                      
    Accounts payable and other         $ 5,276             $ 4,818  
    Non-recourse borrowings in subsidiaries of Brookfield Business Corporation           8,490               8,823  
    Exchangeable and class B shares           1,709               1,501  
    Deferred income tax liabilities           988               1,280  
                           
    Equity                      
    Brookfield Business Partners $ (59 )       $ 880      
    Non-controlling interests   2,694           3,880      
          2,635         4,760  
    Total Liabilities and Equity   $ 19,098       $ 21,182  
     
    Brookfield Business Corporation
    Consolidated Statements of Operating Results
     
    US$ millions, unaudited Three Months Ended
    December 31,    		   Year Ended
    December 31,
      2024       2023       2024       2023  
    Continuing operations          
    Revenues $ 2,209     $ 1,946     $ 8,208     $ 7,683  
    Direct operating costs   (2,041 )     (1,749 )     (7,568 )     (6,794 )
    General and administrative expenses   (107 )     (78 )     (326 )     (268 )
    Interest income (expense), net   (212 )     (206 )     (832 )     (878 )
    Equity accounted income (loss), net   2       2       8       3  
    Impairment reversal (expense), net   (689 )     (599 )     (691 )     (606 )
    Gain (loss) on acquisitions/dispositions, net   —       —       —       87  
    Remeasurement of exchangeable and class B shares   (9 )     (392 )     (208 )     (264 )
    Other income (expense), net   (469 )     44       (666 )     126  
    Income (loss) before income tax from continuing operations   (1,316 )     (1,032 )     (2,075 )     (911 )
    Income tax (expense) recovery          
    Current   (8 )     (5 )     (50 )     (167 )
    Deferred   42       1       198       95  
    Net income (loss) from continuing operations $ (1,282 )   $ (1,036 )   $ (1,927 )   $ (983 )
    Discontinued operations          
    Net income (loss) from discontinued operations   —       3,885       —       3,812  
    Net income (loss) $ (1,282 )   $ 2,849     $ (1,927 )   $ 2,829  
    Attributable to:          
    Brookfield Business Partners $ (396 )   $ 454     $ (888 )   $ 519  
    Non-controlling interests   (886 )     2,395       (1,039 )     2,310  


    Cautionary Statement Regarding Forward-looking Statements and Information

    Note: This news release contains “forward-looking information” within the meaning of Canadian provincial securities laws and “forward-looking statements” within the meaning of applicable Canadian and U.S. securities laws. Forward-looking statements include statements that are predictive in nature, depend upon or refer to future events or conditions, include statements regarding the operations, business, financial condition, expected financial results, performance, prospects, opportunities, priorities, targets, goals, ongoing objectives, strategies and outlook of Brookfield Business Partners, as well as regarding recently completed and proposed acquisitions, dispositions, and other transactions, and the outlook for North American and international economies for the current fiscal year and subsequent periods, and include words such as “expects”, “anticipates”, “plans”, “believes”, “estimates”, “seeks”, “intends”, “targets”, “projects”, “forecasts”, “views”, “potential”, “likely” or negative versions thereof and other similar expressions, or future or conditional verbs such as “may”, “will”, “should”, “would” and “could”.

    Although we believe that our anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, investors and other readers should not place undue reliance on forward-looking statements and information because they involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, which may cause the actual results, performance or achievements of Brookfield Business Partners to differ materially from anticipated future results, performance or achievements expressed or implied by such forward-looking statements and information. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within our control. If a change occurs, our business, financial condition, liquidity and results of operations and our plans and strategies may vary materially from those expressed in the forward-looking statements and forward-looking information herein.

    Factors that could cause actual results to differ materially from those contemplated or implied by forward-looking statements include, but are not limited to: the cyclical nature of our operating businesses and general economic conditions and risks relating to the economy, including unfavorable changes in interest rates, foreign exchange rates, inflation and volatility in the financial markets; global equity and capital markets and the availability of equity and debt financing and refinancing within these markets; strategic actions including our ability to complete dispositions and achieve the anticipated benefits therefrom; the ability to complete and effectively integrate acquisitions into existing operations and the ability to attain expected benefits; changes in accounting policies and methods used to report financial condition (including uncertainties associated with critical accounting assumptions and estimates); the ability to appropriately manage human capital; the effect of applying future accounting changes; business competition; operational and reputational risks; technological change; changes in government regulation and legislation within the countries in which we operate; changes to U.S. laws or policies, including changes in U.S. domestic economic policies and foreign trade policies and tariffs; governmental investigations; litigation; changes in tax laws; ability to collect amounts owed; catastrophic events, such as earthquakes, hurricanes and pandemics/epidemics; cybersecurity incidents; the possible impact of international conflicts, wars and related developments including terrorist acts and cyber terrorism; and other risks and factors detailed from time to time in our documents filed with the securities regulators in Canada and the United States including those set forth in the “Risk Factors” section in our annual report for the year ended December 31, 2024 to be filed on Form 20-F.

    Statements relating to “reserves” are deemed to be forward-looking statements as they involve the implied assessment, based on certain estimates and assumptions, that the reserves described herein can be profitably produced in the future. We qualify any and all of our forward-looking statements by these cautionary factors.

    We caution that the foregoing list of important factors that may affect future results is not exhaustive. When relying on our forward-looking statements and information, investors and others should carefully consider the foregoing factors and other uncertainties and potential events. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements or information, whether written or oral, that may be as a result of new information, future events or otherwise.

    Cautionary Statement Regarding the Use of a Non-IFRS Measure

    This news release contains references to a Non-IFRS measure. Adjusted EBITDA is not a generally accepted accounting measure under IFRS and therefore may differ from definitions used by other entities. We believe this is a useful supplemental measure that may assist investors in assessing the financial performance of Brookfield Business Partners and its subsidiaries. However, Adjusted EBITDA should not be considered in isolation from, or as a substitute for, analysis of our financial statements prepared in accordance with IFRS.

    References to Brookfield Business Partners are to Brookfield Business Partners L.P. together with its subsidiaries, controlled affiliates and operating entities. Unitholders’ results include limited partnership units, redemption-exchange units, general partnership units, BBUC exchangeable shares and special limited partnership units. More detailed information on certain references made in this news release will be available in our Management’s Discussion and Analysis of Financial Condition and Results of Operations in our annual report for the year ended December 31, 2024 to be filed on Form 20-F.

    The MIL Network –

  • MIL-OSI United Kingdom: Environment Secretary announces Land Use Framework

    Source: United Kingdom – Government Statements

    Steve Reed sets out how the most sophisticated land use data ever published will support decision-making by local government, landowners, businesses and farmers

    Thanks to Tim for the introduction, and to the Royal Geographical Society for hosting us here today.

    I want to start by celebrating the work of the late Sir Dudley Stamp, President of the Royal Geographical Society from 1963 – 1966.

    In the 1930s, Sir Dudley carried out the Land Utilisation Survey of Great Britain, the first-of-its-kind nation-wide survey of how land was then being used in our country.

    He recruited the help of thousands of schoolchildren and their teachers, who embarked on a trip right around Britain to map mountains, rivers, fields, back gardens, forests, covering every piece of land across the country.

    You can see examples of these maps can be found in this room today.

    Across the survey, some maps were clearly done quickly as a pupil ran out of time, or perhaps even lost interest, others are coloured meticulously with additional notes and labels for good measure.

    Yet, whether they were rushed or done in painstaking detail, Sir Dudley’s maps are invaluable, providing a comprehensive record of how land was being used across England, Wales and Scotland.

    These maps were quickly put to use with the dawn of the Second World War, used by the local War Agricultural Committees to identify land that could maximise food production.

    Sir Dudley’s maps are a snapshot in history – a fascinating insight into how the countryside has changed over time.

    But the story of our land goes much deeper even than that.

    Our landscape embodies our lives, our culture, our celebrations, and our tragedies.

    How it looks has changed as our population has grown and shrunk, through wars, in times of disease and hardship, through changing industries and shifting habits. The stories of our ancestors are embedded in the rich heritage of our land.

    In the woodlands of the New Forest where, in 1697, trees were protected by law to supply timber for the Royal Navy’s growing fleet.

    In the ridges and furrows in our fields, and the stone walls of enclosures, that give a glimpse into the lives of millions of farmers who’ve worked our land for tens of thousands of years.

    In the parkland designed by ‘Capability’ Brown across England’s glorious Georgian Estates, visited by millions of us to this day.

    Our landscape reflects generations of innovators.

    In the emergence of new terraced houses in the industrial towns of Lancashire and West Yorkshire, remnants of the late 18th century textile revolution.

    In the creation of our transport system, from canals to the railways through the 19th century, to the opening of England’s first motorway in 1958.

    From the world’s first public electricity supply in Surrey in 1851, to the UK producing its trillionth kilowatt hour of electricity from renewable sources in May 2023.

    It’s the fabric of Stevenage and Harlow, created under the New Towns Act of 1946 to meet the urgent need for housing in the post war years, and in the opening of our National Parks during that same period, representing the desire of a nation to get out and enjoy the great outdoors.

    It tells the story of farmers who have changed how they farm time and again to grow the food we need and steward our countryside, embracing mechanisation in the 20th century, automation in more recent decades, and the nature-friendly practices we’re seeing emerge today.

    Wherever you are in England, the history of our landscape is ever present. The distinctive features that make up the nation we know and love are never far away.

    Two hours from the room we’re all in right now, I could be at Stonehenge. Go the other way, I’m in the Norfolk Broads or on the beach at Margate. I can easily get to the canals of Birmingham, the uplands of the Yorkshire Dales or the sparkling white cliffs of Dover.

    This is one of England’s greatest joys. But also one of its challenges. Because England’s land area is small. To put it in perspective, France is four times bigger than England but our population is around the same.

    And there are more demands and more opportunities on our land than ever before.

    To grow the economy and deliver the change that this Government was elected to do, we must make the best use of the land around us. But we need better data and tools to inform decision making. 

    So we can grow the food to feed the nation. Build 1.5 million new homes to address the housing crisis. Construct the energy infrastructure to secure home-grown clean power. And, underpinning all these ambitions, protect and restore nature here in one of the most nature-depleted countries on Earth. 

    In the years since Sir Dudley’s work, we’ve seen subsequent land use surveys, and advances in spatial data science and earth observation means we have detailed land analysis at our fingertips, including that used by Tim in Land App, to help people plan how we use our land better.

    But, until now, there has been no clear direction set by Government on how our land could best be used across England. How to support those who make decisions about the land. How to minimise trade-offs and maximise its potential.

    Today, following Sir Dudley’s groundbreaking survey almost 100 years ago, I’m asking for your help to shape the first-ever comprehensive Land Use Framework for England.

    This will be the most sophisticated land use data and toolkit ever published in our country’s history.

    This Government has a cast-iron commitment to maintain long-term food security.

    The primary purpose of farming will always be to produce the food that feeds the nation.

    This framework will give decision makers the toolkit they need to protect our highest quality agricultural land, and make decisions about the long term future of farm businesses.

    Farming faces a rapidly changing climate. More severe flooding and droughts are damaging food production, hitting yields and hitting profits. At the same time our natural environment is in decline. Much-loved British birds and wildlife are at risk of national extinction.

    Our rivers, lakes and seas are choked by unacceptable levels of pollution.

    Some of our most treasured landscapes are in a very poor condition.

    This is the scale of the challenge we face.  And we must do more to restore our natural world while maintaining and strengthening food production. 

    That is why the Government must go further and faster to support farmers through the transition to a more sustainable way of farming.

    But there’s good news too.  That transition is already underway. Embracing innovation that will boost long-term food production. Restoring habitats and supporting once-endangered species. Doing things like planting orchards alongside cropland, or restoring and maintaining peatland.

    I know from conversations with farmers and landowners that they not only understand the need for change, they are already making change happen. 

    They know their land best, and it is only right that they lead this transition.

    We can make the most of food production, nature’s restoration and economic growth if we support farmers and landowners with better information to help them navigate their way into the future. 

    That may mean doing things differently, and I know that can be worrying, but the decision on how to manage land will and must always rest with the individual farmer or landowner.

    We will work with farmers to shape the framework and support them in making their businesses more sustainable, productive and profitable by opening up Government data so innovators like Tim can put new insights into the hands of farmers, planners and developers when taking their own decisions about the best use for their land.

    It will look at how we create the certainty that private investors need to invest in farming businesses, and consider how best to use public funding to secure the most benefits for food production and for nature.

    We are working on common sense changes that create a win-win for nature and the economy, and the Land Use Framework is a significant part of that.

    Nature is the common thread that runs through the Government’s missions. It is healthy soils and abundant pollinators that enable us to grow the food we need despite the changing climate. It’s a resilient water supply that is essential to building the homes, schools, hospitals, and datacentres that we need. And trees and vegetation that help the land hold more water and give us better protection from flooding.

    It’s the biodiversity and wildlife that safeguards our ecosystems to fight off animal and plant diseases, while access to our wild landscapes and green spaces helps improve mental and physical health and reduce the burden on our NHS.

    Beyond nature and the farming sector, this Framework will unlock growth through better spatial planning.

    It will work hand in hand with our housing and our energy plans, so we can meet our ambitious housing targets and achieve Clean Power by 2030, without jeopardising food production or nature.

    This land use data will shape decision-making about where and how we build things in this country so we can grow the economy and meet the challenges of future decades.

    Major infrastructure will be built with sensitivity to our landscapes, by ensuring our strategic spatial energy plan and 10 year infrastructure strategy draw from the land use framework.

    And by linking the Framework with our spatial approach to housing, we can develop new settlements that make space for nature and allow access to our beautiful green countryside.

    This is about creating a coherent set of policies that work together, rather than against each other.

    We have taken on recommendations from Henry Dimbleby’s Food Strategy, the Food Farming and Countryside Commission, a House of Lords Committee, and a range of other voices – many who I see in front of me in this room, to consult on a Land Use Framework for England.

    Starting a national conversation on the vast opportunities for how we use land in this country.  

    It won’t tell anyone what to do with their land, it will help them take better decisions shaped by the life experiences of farmers, landowners and planners.

    Using the most sophisticated land use data ever published, we will boost food production, protect the best agricultural land, restore our natural world and drive economic growth.

    This is not a set of rules. This is providing better data and information to make sure the farming transition that is already happening is fair and just.

    Ensuring the evidence gathered here will also feed into the wider reform that we are delivering through our Farming Roadmap and Food Strategy.

    So just as Sir Dudley asked schoolteachers and their pupils for help all those years ago, I am asking for your help.

    I won’t be giving out mapping sheets and testing your colouring skills you’ll be pleased to hear.

    But I do want to hear your views and draw from your expertise on what a Land Use Framework for England should look like and – importantly – how we get there.

    Today we are launching a 12-week consultation, that will be supported by workshops and roundtables around the country.

    Bringing together farmers, landowners, businesses, planners – everyone involved in how we use our land.

    We’ll be asking for your views on a future vision for the land, what our policies on land use need to include, and what you need to realise that vision.

    Tell us how can we change the way our spatial data is presented and shared so it’s more valuable in decision making and can be used to drive economic growth.

    Tell us where the skills gaps are, and what skills we need to transition our land.

    Tell us how we can best help landowners, land managers and communities understand and prepare for the challenges of climate change,

    Or support farmers to make land-use changes while boosting food production.

    If we get that right, the prize is huge.

    We can have a multifunctional landscape that delivers economic growth and puts money back in the pockets of hardworking people.

    Where farmers continue to produce the food we need, working with nature and maximising the potential of their land to strengthen food security in the face of climate change and geopolitical shocks. 

    We can have healthy ecosystems, abundant habitats and species, clean waterways and beautiful countryside for everyone to enjoy.

    We can have families living in well-designed homes, with green spaces, amenities and protection from flooding.

    We can lower energy bills and increase national energy security by generating more homegrown, clean energy.

    This is about shaping the future England we want to see.

    The consultation may be just 12 weeks – but the conversation will be ongoing.

    Just as it has throughout history, our landscape will continue to change – and we will work with you so that the Land Use Framework evolves to reflect this. 

    Our landscape is shaped by those who’ve lived and worked it for generations.

    This is England’s next chapter. We are the authors. Let’s write it together.

    Updates to this page

    Published 31 January 2025

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: Rail fare hikes will cause misery for workers and commuters

    Source: Scottish Greens

    31 Jan 2025 Transport End Peak Rail Fares

    Inflation-busting increases are inaccessible and unaffordable for everyone.

    More in Transport

    Rail travel must be accessible and affordable for all, says Scottish Green MSP Mark Ruskell, following the announcement that ScotRail fares will increase by an inflation-busting 3.8% from April 1st.
     
    When in government the Scottish Greens secured a landmark scheme to remove peak rail fares for 12 months, with the SNP reintroducing them last year.
     
    The Greens have joined trade unions in calling for cheaper public transport through ending peak rail fares and introducing a £2 bus fare cap, to ensure that cleaner, greener travel is more available, affordable and accessible for all.
     
    In this year’s budget the Scottish Greens secured  the regional trial of a £2 bus fare cap beginning in January 2026, a move that they want to see extended across the country.
     

    The Scottish Greens’ spokesperson for transport, Mark Ruskell MSP, said:

    “These hikes will cause misery for commuters. If we want rail to be the first and best option for regular journeys then it has to be affordable and accessible for all.
     
    “When the Scottish Greens were in government we secured the removal of peak rail fares, only for the SNP to bring them back as soon as we were out of the room.
     
    “With household budgets being stretched to their limits, workers and regular commuters across our country are looking to find the cheapest ways to travel. These hikes will only deter people from using trains.
     
    “If we want safer and cleaner communities and less cars on our roads then we need to cut the cost of public transport. That is how we will encourage more commuters to leave their cars at home and hop on the train or bus, while benefiting people and planet.”

    Mr Ruskell added:

    “It was right to take ScotRail into public ownership, but we have a long way to go in building a modern and affordable rail network.
     
    “It shouldn’t have to cost a fortune to get to work, to hospital appointments or even to explore Scotland. We must end peak rail fares and stop financially penalising those who have no say on when they have to travel.”

    MIL OSI United Kingdom –

  • MIL-OSI USA: Governor Newsom proclaims Fred Korematsu Day 2025

    Source: US State of California 2

    Jan 30, 2025

    Sacramento, California – Governor Gavin Newsom today issued a proclamation declaring January 30, 2025, as Fred Korematsu Day.

    The text of the proclamation and a copy can be found below:

    PROCLAMATION

    Fred Korematsu did not set out to become a civil rights hero, but at the age of 23, he made the bold choice to challenge the policy of Japanese internment – and forever altered the course of history. This year, as we commemorate the 106th anniversary of his birth, we reflect on his courageous crusade for civil rights.

    When the United States entered World War II, Korematsu tried to enlist and fight for his country but was turned away. Not long after, under Executive Order 9066, he was one of the more than 120,000 Japanese Americans ordered to report to internment camps. Korematsu defied the order, a brave act of protest that led to his arrest and conviction, which he fought all the way to the Supreme Court.

    Though the Court ultimately ruled against him, Korematsu found vindication forty years later, when a federal court overturned his criminal conviction. In that courtroom, Korematsu said, regarding his case, that “being an American citizen was not enough…you have to look like one, otherwise they say you can’t tell a difference between a loyal and a disloyal American,” asking the government to ensure that such wrongs never happen again.  In 1998, President Bill Clinton awarded Korematsu the Presidential Medal of Freedom.

    Throughout his life, Korematsu worked tirelessly to ensure Americans understood the lessons learned from a dark chapter of our history. Today, as we confront attacks on our fundamental rights and freedoms and hate-fueled violence across the country, it is clear that Korematsu’s extraordinary fight for civil rights is far from over. His legacy is an inspiration and reminder to all of us that we must continue to stand against injustice in our daily lives.

    NOW THEREFORE I, GAVIN NEWSOM, Governor of the State of California, do hereby proclaim January 30, 2025, as “Fred Korematsu Day.”

    IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 30th day of January 2025.

    GAVIN NEWSOM

    Governor of California

    ATTEST:

    SHIRLEY N. WEBER, Ph.D.

    Secretary of State                     

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    MIL OSI USA News –

  • MIL-OSI United Kingdom: New Honorary King’s Counsel welcomed by Lord Chancellor

    Source: United Kingdom – Executive Government & Departments

    His Majesty The King has approved the award of 9 new Honorary King’s Counsel (KC Honoris Causa) in England and Wales.

    His Majesty The King has approved the award of nine new Honorary King’s Counsel (KC Honoris Causa). Their biographies are listed below. Honorary KC is awarded to those who have made a major contribution to the law of England and Wales, outside practice in the courts. 

    The Lord Chancellor will preside over the award ceremony at Westminster Hall in March 2025, where she will formally award the Honorary KC to the successful nominees. 

    Honorary King’s Counsel biographies 

    Professor Martin Dixon  

    Professor Dixon is a legal scholar specialising in real property law. He is the Professor of the Law of Real Property at the University of Cambridge, where he is also Director of the Cambridge Centre for Property Law (CCPL) and a Fellow of Queens’ College. 

    He was nominated for his work on property law through his scholarship, co-authorship of leading practitioner texts, and participation in Law Commission projects. Additionally, for his co-founding of the Modern Studies in Property Law Conference and for his Editorship of The Conveyancer. 

    Rebecca Hilsenrath 

    Rebecca Hilsenrath is a lawyer and public servant with a career spanning corporate law, human rights, and strategic leadership. Currently the interim Parliamentary and Health Service Ombudsman (PHSO), she has served as Chief Executive of the PHSO, Legal Adviser to the Attorney General, and Chief Executive of LawWorks. Previously, she was the Chief Executive Officer and Chief Legal Officer of the Equality and Human Rights Commission (EHRC), where she championed equality and tackled human rights issues.   

    She was nominated for her efforts in promoting diversity in panel counsel appointments for the government and at the EHRC, increasing pro bono contributions in the legal sector, and leading international legal engagement in equality and human rights. 

    Rachel Horman-Brown 

    Rachel Horman-Brown is a solicitor focused on cases involving domestic abuse, stalking, coercive control, and forced marriage. As Director, she leads the Family Department at Watson Ramsbottom Solicitors. She is also the Chair of Paladin, the National Stalking Advocacy Service.   

    She was nominated for her campaigning for policy and legislative changes around stalking, domestic abuse, and violence against women and girls. In addition, for her work with Paladin, where she shaped legislation, including for the creation of coercive control as a specific criminal offence. She has also provided evidence to parliamentary committees and advisory groups, thereby influencing police practices and approaches to trauma. 

    Dr Laura Janes  

    Dr Laura Janes is a solicitor specialising in complex cases involving people detained in the criminal justice and mental health systems. As Legal Director at the Howard League for Penal Reform from 2016 to 2022, she led a legal service for young people in custody and spearheaded challenges against practices such as solitary confinement. She is a consultant solicitor at GT Stewart Solicitors and Scott-Moncrieff and Associates. Laura Janes is an advocate for access to justice, having founded Young Legal Aid Lawyers and held leadership roles in several legal organisations. She holds a professional doctorate in youth justice and teaches law at London South Bank University.  

    She was nominated for her contributions to the legal profession promoting access to justice, her work to drive policy changes, representing vulnerable individuals in prison, advocating for the rights of children and young people in custody and reforms to the IPP sentence.   

    Susanna McGibbon  

    Susanna McGibbon is an employed barrister and the current Treasury Solicitor, HM Procurator General and Permanent Secretary of the Government Legal Department (GLD). As the most senior Civil Service lawyer she is head of the Government Legal Profession. Her previous roles include serving as Director of GLD Litigation Group, Legal Director at the Department for Communities and Local Government and Legal Director at the Department for Business, Innovation and Skills. She is a Bencher of Lincoln’s Inn and this year holds the office of Keeper of the Walks. 

    Ms McGibbon was nominated for her legal advice on complex and sensitive issues within government especially in public and administrative law and national security. Also, for her leadership in a range of high-profile cases and inquiries and for her advocacy for diversity and inclusion across the legal profession.   

    Professor Renato Nazzini  

    Professor Nazzini is a legal scholar focusing on competition law, commercial arbitration, and construction law. He is the Director of the Centre of Construction Law and Dispute Resolution at King’s College London and a partner at LMS Legal LLP.   

    He was nominated for his contributions to competition law by developing policies on collective actions and abuse of dominance, influencing the Consumer Rights Act 2015 and the 2008 European Commission Guidance on Article 102. He has also contributed to construction law, including by leading the Centre of Construction Law and Dispute Resolution at King’s College London, producing reports on construction adjudication and promoting diversity within the field.    

    Susan Willman  

    Susan Willman (known as Sue Willman) is a solicitor specialising in public interest litigation, focusing on human rights, environmental justice, and migrants’ rights. She is a senior consultant at legal aid firm, Deighton Pierce Glynn, and has led cases addressing systemic social and environmental injustices. She is also employed by the Dickson Poon School of Law, King’s College, London as a Senior Lecturer, and Assistant Director of the King’s Legal Clinic. She has held key leadership roles, including Chair of the Law Society Human Rights Committee.    

    She was nominated for founding the Asylum Support Appeals Project (ASAP), providing free representation to destitute asylum-seekers. As well as for publishing articles, authoring a series of textbooks on asylum support, and advising a parliamentary committee on an inquiry to drive legislative reforms. 

    Douglas Wilson OBE 

    Douglas Wilson is a government lawyer currently serving as Director General and Head of the Attorney General’s Office. He has previously held positions such as Director of Legal Affairs and International Relations at GCHQ, Legal Director at the Foreign and Commonwealth Office, and has served in legal and diplomatic roles at UK posts overseas. 

    He was nominated for advising on issues such as Brexit, military operations, and intelligence cooperation, which shaped the law on the use of military force, cyberspace, and investigatory powers. Furthermore, he has promoted effective and inclusive legal practice within government.  

    Professor Adrian Zuckerman 

    Professor Zuckerman is a scholar in civil procedure and evidence law. He is Emeritus Professor of Civil Procedure at the University of Oxford and Emeritus Fellow of University College, Oxford. He is Editor-in-Chief of the Civil Justice Quarterly and a Consultant Editor of Halsbury’s Laws of England. 

    Professor Zuckerman is a prominent commentator on the administration of civil justice. He has influenced legislative policy and judicial practice, notably through contributions to the Woolf Report on Access to Justice, and the Jackson Review of Civil Litigation Costs. He has campaigned for improving access to court and for making justice available to all at proportionate cost. His work on criminal evidence refocused evidence scholarship around fundamental normative principles. 

    He was nominated for his contributions to the Civil Procedure Rules in England and Wales. His academic work, particularly “Zuckerman on Civil Procedure,” is cited in courts across the common law world. 

    Further information 

    Honorary KC is awarded by HM The King, on the advice of the Lord Chancellor. The Lord Chancellor is advised by a selection panel of senior representatives from across the legal sector, civil service, judiciary, and academia. More information about the purpose of the award can be found on GOV.UK. 

    For further information, please contact the Ministry of Justice press office. Follow us @MoJGovUK. 

    Updates to this page

    Published 31 January 2025

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: New parking charges to help safeguard frontline services to residents

    Source: City of Norwich

    Published on Friday, 31st January 2025

    Fees for parking in the city’s surface and multi-storey parking facilities will change at the end of March.

    The increase will generate an additional £300,000, enabling the council to continue investing in vital frontline services that our residents rely on us to provide. The money raised from these car parks has helped the council to avoid making cuts to services in the next financial year.

    Based on a typical parking stay of between one and two hours, the increase will be 10-20 pence.

    Season ticket prices will also increase, but on-street residential parking permits will remail unchanged. Blue Badge holders will continue to receive a 50% discount.

    As non-residents travelling from outside the city are subject to the same charges, it means they also contribute to the running costs of the city council’s services.

    Next year the council will spend around £100 million on vital services across the city. While funding from central government has gone down, the cost of things like energy and materials has gone up due to inflation.

    Councillor Emma Hampton, cabinet member for a climate responsive Norwich, said: “Increasing fees for our services is always a last resort. With funding from central government dwindling, and the cost of things like energy and materials going up due to inflation, we are under financial pressure to do more with less – like all local council up and down the country.

    “The cost-of-living crisis has also meant more people need our help, creating extra demand for council services. 

    “Despite these really difficult budget challenges, the city council has a strong record of sound financial management and that means we’ve been able to find a way to ensure that there will be no cuts to frontline services in the next financial year.”

    MIL OSI United Kingdom –

  • MIL-OSI United Kingdom: North Cornwall coast path improvements completed

    Source: United Kingdom – Government Statements

    The path around the South West’s glorious coastline is further enhanced thanks to improvements to the Marsland Mouth to Newquay section in Cornwall.

    Walking the coast path from Pentire Point towards Polzeath

    These works form part of a national programme to create a coastal path around the whole of England. Once completed this will be the longest managed coastal walking route in the world and the UK’s longest National Trail.

    Stretching from Marsland Mouth on the North Cornwall coast down to Newquay, some 75 miles in total, the path follows the route of the existing South West Coast Path (SWCP) National Trail, beginning at the border with Devon and stretching to the railway station in Newquay.

    For anyone walking the path, there is plenty to see, with towns and villages such as Bude, Boscastle, Tintagel, Port Isaac, Polzeath, Padstow and Mawgan Porth.  Plus, the path passes by the historic highlights of Crackington Haven, Tintagel Castle, the Rumps at Pentire with its Bronze age burial mounds, the Camel Estuary (including the ferry), Trevose Head and its lighthouse and Bedruthan Steps.  In addition, there are glorious sandy beaches to stop off throughout the route.

    Making the path line up with the sea

    In establishing the new trail, Natural England has sought to improve the alignment of the SWCP where possible or move it closer to the sea. For example, at Penhalt Cliff it has been taken off road on to farmland, improving safety for walkers and drivers. For the first time wider coastal access rights on foot have been established between the trail and the sea, including cliff tops and beaches.  

    It also brings legal provision for the trail to ‘roll back’ in response to coastal erosion, thereby securing people’s rights into the future and protecting the investment being made now. You will still encounter steep climbs and descents as well as gently undulating walking along the cliff tops.

    Boscastle harbour viewed from the coast path

    Better alignment, better surfacing, better drainage

    Andrea Ayres, Deputy Area Director for Natural England said:

    This improved stretch of path takes in some of the best views in the South West and much-loved places that have been attracting visitors for many years.

    With the improvements to the path and the additional access rights, we hope it will continue to give people the chance to get out and enjoy nature, as well as continue to bring visitors to the county, since tourism is so vital to the local economy.

    While much of Cornwall’s 300-mile section of the South West Coast Path is owned by private landowners and organisations, the path is managed by Cornwall Council. The council and Cormac have worked to deliver the improvements on this stretch.

    Martyn Alvey, Cornwall Council cabinet portfolio holder for environment, said:

    The South West Coast Path is a wonderful asset popular with local residents and visitors alike, but by its very nature, is susceptible to the elements and coastal erosion.

    This funding has meant we have been able to make significant improvements to the path in Cornwall, bringing forward many projects which may otherwise have been many years away from happening.

    We’ve been able to move inland sections closer to the coast, improve surfacing and drainage, repair paths and realign hazardous sections. It is fantastic to see completion of the Marsland Mouth to Newquay section and I’m sure it will be enjoyed by all for many years to come.

    Julian Gray, Director, South West Coast Path Association (SWCPA) said:

    The King Charles III England Coast Path creates new open access rights around the coast to help connect people to nature. It also gives us new powers to manage the National Trail in the face of coastal erosion, helping us continue to improve the South West Coast Path as one of the world’s great trails.

    What is the King Charles III England Coast Path?

    The King Charles III England Coast Path (KCIIIECP) is a National Trail around the entire coast of England. Existing coastal national trails and other regional walks make up parts of the KCIIIECP and this newly improved stretch of the South West Coast Path forms part of the KCIIIECP.

    You can plan your walk on the KCIIIECP, which follows the enhanced route of the SWCP between Marsland Mouth to Newquay, by visiting the KCIIIECP or the South West Coast Path pages of the National Trails website.

    Background

    The Marine and Coastal Access Act 2009 places a duty on the Secretary of State and Natural England to secure a long-distance walking trail around the open coast of England, together with public access rights to a wider area of land along the way for people to enjoy. 

    Natural England is working at pace to ensure completion of the KCIIIECP. By the end of 2024 it had opened 1,400 miles. Subject to resources we expect to complete the KCIIIECP by spring 2026.

    To plan their visit walkers can access route maps of all opened sections of the King Charles III England Coast Path and any local diversions on the National Trails website. And can check for any restrictions to access on Natural England’s Open Access maps.

    You can promote your business, service, event or place of interest for free on the National Trails website, inspire people to spend more time in your area and benefit from the economic impact of visitors.

    National Trails, marked by the acorn symbol, pass through spectacular scenery, support local tourism and offer a range of routes from short circular walks to long distance challenges.

    King Charles III England Coast Path: 

    We have a map showing progress to complete the King Charles III England Coast Path.

    The King Charles III England Coast Path will be our longest, National Trail, passing through some of our finest countryside, maritime and industrial heritage, coastal settlements and rural locations.

    It will also be the world’s longest managed coastal trail (i.e. the trail is maintained to National Trail standards). It will secure legal rights of public access for the first time to typical coastal land including foreshore, beaches, dunes and cliffs that lies between the trail and the sea.

    Improvements to existing access to the coastline include: 

    • a clear and continuous way-marked walking route along this part of the coast, bringing some sections of the existing coastal footpath closer to the sea and linking some places together for the first time

    • targeted adjustments to make the trail more accessible for people with reduced mobility, where reasonable

    • uniquely amongst our National Trails the KCIIIECP may be moved in response to natural coastal changes, through ‘roll back’ if the coastline erodes or slips, solving the long-standing difficulties of maintaining a continuous route along the coast – and making a true coastal path practicable

    • the legal provision for roll back is proposed to sections of the trail where a need has been foreseen but can be retrospectively applied to other parts of the route if deemed necessary

    • the route of the trail can also be altered through planning proposals and where coastal and flood defence works or habitat creation would impact on the proposed or open route of the KCIIIECP

    • we have a webpage showing progress near you to create the King Charles III England Coast path

    • we work closely with a broad range of national and regional stakeholders around the country including wildlife trusts, National Trust, RSPB, NFU, CLA, RA, OSS, Environment Agency and local authorities

    The Countryside Code is the official guide on how to enjoy nature and treat both it, and the people who live and work there, with respect.  

    For landowners

    Landowners who have KCIIIECP coastal access rights on their land enjoy the lowest liabilities in England. Here is our guidance on managing your land in the coastal margin.

    About Natural England  

    Established in 2006, Natural England is the government’s independent adviser on the natural environment. Our work is focused on enhancing England’s wildlife and landscapes and maximising the benefits they bring to the public. 

    We establish and care for England’s main wildlife and geological sites, ensuring that over 4,000 National Nature Reserves (NNRs) and Sites of Special Scientific Interest are looked after and improved,

    We work to ensure that England’s landscapes are effectively protected, designating England’s National Parks and National Landscapes , and advising widely on their conservation.

    We run Environmental Stewardship and other green farming schemes that deliver over £400 million a year to farmers and landowners, enabling them to enhance the natural environment across two thirds of England’s farmland.

    We fund, manage, and provide scientific expertise for hundreds of conservation projects each year, improving the prospects for thousands of England’s species and habitats.

    We promote access to the wider countryside, helping establish National Trails and coastal trails and ensuring that the public can enjoy and benefit from them.

    For more information, visit our page on how the King Charles III England Coast Path is improving public access to England’s coast. 

    About the South West Coast Path Association

    The South West Coast Path Association is a charity (Registered Charity Number 1163422) that works to ensure the South West Coast Path is one of the best walks in the world and protects it for all to enjoy. Supporting the charity helps the South West Coast Path Association to improve the South West Coast Path and keeps the way open to beautiful coastal places.

    For more information visit the South West Coast Path Association website.

    Updates to this page

    Published 31 January 2025

    MIL OSI United Kingdom –

  • MIL-OSI: Navatar’s A-Game Podcast: Navigating Alternative Investments and the Impact of the Latest Election with New Republic Partners

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK and LONDON, Jan. 31, 2025 (GLOBE NEWSWIRE) — Navatar is pleased to announce the latest episode of the A-Game podcast for private markets. In this episode, Alok Misra, CEO of Navatar, and New Republic Partners delve into the evolving landscape of alternative investments, offering valuable insights for family offices and investment professionals. Their discussion covers the impact of the recent election and the new regime on investment strategies.

    New Republic Partners shares their team’s extensive experience in alternative asset funds, discussing the importance of understanding various asset classes and the challenges family offices face in building scalable and sophisticated investment models.
    Listeners will gain a deeper understanding of the operational challenges in managing alternative investments, the potential opportunities in private credit, secondary markets, and venture capital, and the importance of collaboration and partnerships in navigating the alternative investment landscape.

    Don’t miss this opportunity to learn from industry leaders. The entire episode can be viewed here:

    https://www.youtube.com/watch?v=ID7UmNB7hd0&t=2s

    About Navatar
    Navatar (@navatargroup), the CRM platform for alternative assets and investment banking firms, enables investment professionals make informed decisions based on superior proprietary intelligence. Navatar is used by hundreds of firms including private equity funds, M&A boutiques and bulge brackets, fund of funds, multi-asset credit, hedge funds, real estate funds, venture capital firms, corporate development groups, family offices, private placement and other financial services companies. For more information, visit www.navatargroup.com.

    About New Republic Partners
    New Republic Partners (“NRP”) is an innovative investment management and wealth advisory firm serving families, business owners, endowments and foundations. We believe clients benefit from access to investment opportunities usually reserved for large institutional investors and the expertise and experience of a successful and seasoned investment management, wealth advisory and family office solutions team. NRP is headquartered in Charlotte, North Carolina, and serves clients across the U.S. with regional offices. More information is available at New Republic Partners.
    New Republic Capital, LLC (which does business as New Republic Partners) is an investment adviser with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about New Republic Capital’s advisory services can be found in its Form ADV Part 2 and/or Form CRS, both of which are available upon request.

    Sales Team
    Navatar
    sales@navatargroup.com

    The MIL Network –

  • MIL-OSI: Speakers at Biz2X Frontiers of Digital Finance Conference Kick Off 2025 and Predict What’s Next in Fintech and Business Finance

    Source: GlobeNewswire (MIL-OSI)

    NEW YORK and MIAMI, Jan. 31, 2025 (GLOBE NEWSWIRE) — The Biz2X 2025 Frontiers of Digital Finance (FDF) Conference at University of Miami’s Business School, held on January 14, brought together top global leaders in technology, business and government to examine the rapidly changing digital finance landscape, particularly AI’s transformative impact on small business lending. For video highlights, click here.

    FDF assembled a ‘Who’s Who’ of digital finance experts who delved into major issues, such as potential changes in regulation in the new Trump administration, increased use of AI in lending, and the rise of alternative lenders. Speakers from over 25 organizations were represented, in an invite-only audience of more than 200 delegates. Among the A-List speakers were:

    • Former Congressman Patrick McHenry, who served as Chair of the House Financial Services Committee for the past two years. His keynote address, The Future of Fintech Regulation, drew upon his more than two-decades in Congress. The session was moderated by Charlie Gasparino of Fox Business News.
    • USAA President & CEO Wayne Peacock spoke about Leadership in Fintech in The Next Decade. Under Peacock’s visionary leadership, USAA has become a household name. At FDF, he shared insights from his expertise in mission-driven leadership to navigate the evolving financial services landscape.
    • Jim Esposito, President of Citadel Securities, led a discussion entitled Building the Future: Technology in Financial Markets in which he shared his insights for driving long-term growth and building global client and partner relationships.
    • Miami Mayor Francis X. Suarez examined Where Innovation Meets Opportunity – A Legal and Economic Vision, together with legendary litigator Marc Kasowitz from Kasowitz Benson Torres. They shared their perspectives on the legal and economic forces shaping today’s business landscape, and Mayor Suarez explored how cities like Miami can become innovation hubs for the private sector.

    BCG & Biz2X Launch New SMB Finance White Paper at FDF Miami

    Biz2X partnered with Boston Consulting Group (BCG), one of the world’s top business consulting firms, to unveil a brand-new proprietary white paper entitled, The Forthcoming Revolution in Small Business Lending.

    The study examines the rapidly changing dynamics of small business lending. Biz2X and BCG analyzed the reasons why banks — particularly the country’s largest institutions — place limitations on lending to small and medium-sized businesses. BCG identifies a global small business funding gap that exceeds $5 trillion.

    Biz2X and BCG conclude that SMB lending must be fundamentally altered through technology such as digital lending platforms to achieve lower risk, broader access to capital, and a significantly-improved digital experience for both borrowers and lenders. To download the full report, click here.

    Looking Ahead to Future FDF Conferences

    “FDF Miami 2025 was the highest-attended conference yet in our continuing series of these events. Our goal with FDF is to create a platform that drives the finance industry forward by bringing together the right people from all sides of industry and policy,” said Conference Chair and the CEO & Co-Founder of Biz2X, Rohit Arora.

    Future editions of FDF in 2025 are being planned in Riyadh and Mumbai, along with a likely return to Miami, with dates to be announced. For more information about FDF sponsors, speakers, and to see exclusive content from FDF Miami and previous FDF events, visit frontiersofdigitalfinance.com.

    About Frontiers of Digital Finance (FDF)
    FDF is an invitation only, global conference series that assembles global experts in the field. These include top financial institutions, innovative startups, investors, policy makers, technologists, and other leaders to learn about trends in digital finance and build relationships with key executives in the fintech industry.

    Attendees gain valuable insights from distinguished speakers and forge meaningful connections with key industry executives through curated networking events. Previous conferences have been held in some of the world’s most dynamic financial hubs: Dubai, Riyadh, Abu Dhabi, Mumbai, New York (at Columbia Business School) and Miami. Visit frontiersofdigitalfinance.com and LinkedIn for more information and highlights from the conferences.

    About Biz2X 
    Biz2X® is the digital lending platform chosen by successful business lenders, with more than $10 billion funded globally to businesses through the company’s innovative technology. The platform has been chosen for business lending at banks and financial institutions around the world. Lenders choose the platform because they want to transform their lending practices digitally. Biz2X makes this possible through best-in-class technology and AI-powered underwriting models. Biz2X LLC is a subsidiary of Biz2Credit. Visit Biz2X.com for more information.

    Contact: John Mooney, Over The Moon PR, 908-720-6057, john@overthemoonpr.com

    The MIL Network –

  • MIL-OSI Economics: Efficiency, resilience and digital horizons: perspectives and challenges for the public sector | Keynote statement at the Digital Excellence Forum

    Source: Bundesbank

    Check against delivery.

    1 Introduction

    Against the backdrop of a changing geopolitical environment, the relevance of digital advances and innovations has further increased. 

    I have just returned from a discussion among policy makers and researchers in Washington D.C., and many of the exchanges touched on the economic outlook in a potentially more fragmented world economy. 

    For both reasons, I am delighted to be part of this conference about digital excellence here in Berchtesgaden. 

    Representing the Bundesbank on this panel, I would like to contribute three considerations from a public sector perspective.

    While there is a lot of discussion about digitalisation in Germany and the need to catch up in particular in the public sector, there are encouraging examples. The Bundesbank is at the forefront of public sector digitalisation: it is using artificial intelligence in multiple ways and is among the first public institutions to move seriously into the public cloud. 

    International financial architecture, markets and instruments are changing due to ongoing economic fragmentation and technological advances. Working on the digital euro is a way for the European Central Bank System to prepare for those changes and to take an active role. 

    Given the geopolitical environment and growing cyber risks, the Bundesbank is investing in its cyber resilience, including the setting up of a new governance model for IT security.

    Allow me to expand on that.

    2 Innovation

    The Bundesbank is breaking new ground by proactively using the public cloud. This is a significant step forward for a public sector institution. As a first step, our innovative, high-performance and secure eBusiness portal for our currently over 180,000 customers – NExt – went “live” in the cloud. Customers are banks, insurances, corporates or other public sector institutions.

    At the same time, we built up a Bundesbank-owned private cloud in our computer centres for particularly sensitive data. Through our hybrid cloud strategy and investments in technological trends like artificial intelligence, we are ensuring our readiness for the challenges of today and tomorrow.

    Artificial intelligence will help us to expand our economic analyses and improve our understanding of the effects of various policy measures on inflation, employment and economic growth. 

    It also plays a pivotal role in our risk analysis efforts. 

    Take, for example, the risk controlling function and its analysis related to the many counterparties with whom the Bundesbank conducts financial transactions or purchases securities. By combining diverse sets of data and information, artificial intelligence helps us identify potential financial difficulties of a counterparty at an early stage. Given the sheer volume and complexity of the data involved, collecting and evaluating this information manually would be nearly impossible. 

    Through the strategic application of artificial intelligence, we can detect risks more quickly and with greater precision, allowing us to take timely and informed action. 

    We are also using an artificial intelligence platform that allows access to the latest language models in a secure environment. It is a chatbot that works in a very similar way to ChatGPT – only ours has different requirements, for example in terms of data governance. The requests are neither stored in the cloud nor used for training purposes.

    3 Future of Finance

    The international financial architecture, markets and instruments are currently changing due to ongoing economic fragmentation and technological advances. 

    Against this backdrop, there are several reasons in favour of the digital euro.

    The first reason is related to autonomy and sovereignty. So far, there is no sovereign pan-European solution for payment in the digital space. As a result, there is a risk that Europe will become overly dependent on US providers for critical infrastructure. A digital version of the euro renders the currency more attractive as means of payment internationally and will facilitate a start-up ecosystem around it.

    Another reason is related to efficiency. We are seeing very strong fragmentation in the European payment market and increasing concentration through international card systems that are all US–based. The digital euro establishes standards that simplify competition.

    Lastly, we also have to consider resilience. With the digital euro, we are safeguarding ourselves against competing currencies and stablecoins. The digital euro would be the next step in the development of the euro and would bring central bank money into the digital age.

    The Bundesbank is a key player in the development of a digital euro thanks, amongst other things, to its IT expertise in payment systems and in the area of tech trends. 

    4 Cybersecurity

    Cybersecurity is a decisive factor for the stability of the global economy and the functioning of our modern society. Operators of critical infrastructure, such as the Bundesbank, are under growing pressure from targeted cyber attacks.

    Of course, the Bundesbank, too, is subject to the most common types of attacks like phishing or denial of service attacks. To give you an example: on average, we receive a phishing attack every 5 minutes. 

    That’s why the principle “Secure by Design” is of crucial importance from the very beginning when developing and operating IT solutions and services.

    The Bundesbank has just rolled out a new governance model for IT security in order to create the basis for effectively counteracting growing threats. 

    Concretely, we are appointing a designated “security architect” in each Bundesbank department who serves as the go-to person for all architecture-related security concerns. The security architect will support product owners and agile teams in implementing security processes and regularly evaluating the impact of security-relevant information.

    This role is complemented by “security champions” within each product team. These champions will help maintain the required level of information security throughout the entire product lifecycle, including regular checks for new vulnerabilities.

    The governance model includes not only dedicated roles and responsibilities but also professional development and training measures for all staff in order to sensitise them to the fact that IT security is a critical discipline for everyone.

    5 Conclusion

    To conclude: By keeping up with technological developments, playing an active role in providing future forms of payment and of course safeguarding our security, the Bundesbank contributes to the competiveness of the German and European economy. 

    This is more relevant than ever in the current geopolitical context. 

    That’s why I’m thrilled to participate in this excellent conference and exchange.

    MIL OSI Economics –

  • MIL-OSI Economics: Results of the ECB Survey of Professional Forecasters for the first quarter of 2025

    Source: European Central Bank

    31 January 2025

    • Headline inflation expectations revised up for 2025 but otherwise unchanged; longer-term expectations (for 2029) remain at 2.0%
    • Expectations for HICP inflation excluding energy and food unchanged for 2025 and 2026; longer-term expectations revised down slightly to 1.9%
    • Real GDP growth expectations revised down by 0.2 and 0.1 percentage points for 2025 and 2026 respectively, but longer-term expectations unrevised
    • Unemployment rate expectations unchanged for 2025 and 2026, but longer-term expectations revised down slightly

    Respondents’ expectations for headline inflation, as measured by the Harmonised Index of Consumer Prices (HICP), were 2.1% for 2025, 1.9% for 2026 and 2.0% for 2027. Expectations were revised up from the previous survey (conducted in the fourth quarter of 2024) by 0.2 percentage points for 2025 but unchanged for 2026. Expectations for core HICP inflation, which excludes energy and food, were unchanged for 2025 and 2026. Longer-term expectations for headline inflation were unchanged at 2.0%, while those for core HICP inflation were revised down slightly to 1.9%.

    Respondents expected real GDP growth of 1.0% in 2025 and 1.3% in both 2026 and 2027. Compared with the previous survey, expectations were revised down by 0.2 percentage points for 2025 and 0.1 percentage points for 2026. Economic policy and political uncertainty contributed to these revisions. Longer-term growth expectations remained unchanged at 1.3%.

    The expected profile of the unemployment rate was largely unchanged. Respondents continued to expect the unemployment rate to average 6.5% in 2025 but to decline to 6.4% in 2026, and then to fall further to 6.3% in 2027 and to remain there in the longer term.

    MIL OSI Economics –

  • MIL-OSI Economics: One policy to rule them all

    Source: Securelist – Kaspersky

    Headline: One policy to rule them all

    Windows group policies are a powerful management tool that allows administrators to define and control user and computer settings within a domain environment in a centralized manner. While group policies offer functionality and utility, they are unfortunately a prime target for attackers. In particular, attackers are increasingly using group policies to distribute malware, execute hidden scripts and deploy ransomware.

    These attacks can range from simple configuration changes that could result in data breaches to more complex scenarios where attackers gain complete control over the corporate network. To ensure the security of your IT infrastructure, it is crucial to understand the vulnerabilities in group policies and the tactics used by attackers. This story examines how cybercriminals exploit group policies as an attack vector, what risks attacks like these pose, and what measures can be taken to protect against potential threats.

    Group Policy Object

    A Group Policy Object (GPO) includes two key components: a Group Policy Container (GPC) and a Group Policy Template (GPT). A GPC is an Active Directory container that holds information about the GPO version, its status and so on.

    Example of Group Policy Container contents

    A GPT is a collection of files and folders kept on the SYSVOL system volume of every domain controller within a domain. These files hold a variety of settings, scripts and presets for users and workstations.

    Group Policy Templates on SYSVOL

    The path to each template is specified in the attribute of the group policy container named gPCFileSysPath.

    Contents of the gPCFileSysPath attribute

    Next, gPCMachineExtensionNames and gPCUserExtensionNames are important attributes in each policy. Each of these attributes contains a GUID for Client Side Extensions (CSE) that will be distributed to user and/or computer settings. Extensions themselves are most often implemented using libraries that contain a set of functions necessary for applying extension settings to users or computers. So, the GUID provides information about which exact library needs to be loaded. A list of all CSE GUIDs can be found in the following registry key:

    Contents of one of the GUIDs in GPExtensions

    To determine which policies a client will apply, it makes an LDAP query to the domain controller, which returns a set of policies for a specific user and/or computer. This set is called SOM (Scope of Management). A key attribute of a SOM is gpLink, which connects organizational units (OUs) to the GPOs that apply to them.

    Policy application process

    How attackers exploit group policies

    In this story, we will not delve into the specifics of how attackers gain access to Group Policies. We will only note that to modify policies, attackers need only have WriteProperty permissions on the gPCFileSysPath attribute within the GPO. This has been described in more detail in SpecterOps’ study, An ACE Up The Sleeve: Designing Active Directory DACL Backdoors. Let’s focus on examples of how attackers specifically use these very policies for their own purposes.

    The most common policy abuse tactic used by malicious actors is to deploy ransomware across multiple hosts. Our Global Emergency Response Team (GERT) regularly encounters its consequences in their work. However, group policies can also be used to covertly gain a foothold in a domain, where attackers can do virtually anything they want:

    • Create new local users/administrators;
    • Create malicious scheduler tasks;
    • Create various services;
    • Run tasks on behalf of the system and/or user;
    • Change the registry configuration and much more.

    Modifying the gPCMachineExtensionNames and gPCUserExtensionNames attributes

    There are several tools designed to compromise GPOs. While they are all functionally similar, we will focus on the most popular one (after the built-in Windows MMC tool) SharpGPOAbuse. This utility provides a step-by-step guide to modifying Group Policy Objects (GPOs), making it convenient for analyzing the specific changes involved. As an example, let’s create a user-defined scheduler task that will run under the account labdomain.localadmin.

    Adding a scheduled task to launch cmd.exe on behalf of a specific user

    As seen in the screenshot above, during GPO modification, a new task is first added to the GPT on SYSVOL as an XML file. After that, the versionNumber attribute is changed, and the version number in the GPT.ini file is increased. This is necessary so that when checking for GPO updates, the client can detect that there is a newer version than the one in the cache and download the modified policy. Such changes can be tracked using event 5136, which is generated whenever an AD object is modified.

    Event 5136, which reflects a change in GPO attributes

    As we were creating a custom policy, we modified the gPCUserExtensionNames attribute, which now includes the following CSE GUID values:

    • {00000000-0000-0000-0000-000000000000} — Core GPO Engine;
    • {CAB54552-DEEA-4691-817E-ED4A4D1AFC72} — Preference Tool CSE GUID Scheduled Tasks;
    • {AADCED64-746C-4633-A97C-D61349046527} — Preference CSE GUID Scheduled Tasks.

    After the policy is applied, a scheduled task will start:

    Scheduled task start events

    Each function within the SharpGPOAbuse tool (such as creating scheduled tasks, adding users, granting privileges and so on) has a unique set of CSEs that will be recorded in the user or computer attributes.

    CSE toolkit for adding a local administrator, new privileges and an autostart script in the SharpGPOAbuse code

    These CSEs can serve as the basis for developing rules for detecting similar policies:

    Detecting the addition of new privileges through GPOs

    Detecting the addition of new autorun scripts through GPOs

    Detecting the addition of a new scheduler task using GPOs

    Modifying the gPCFileSysPath attribute

    In some scenarios, the adversary can modify the GPC but cannot access the directory where the GPTs are located. This is because different methods are used to manage different GPO entities: A GPC is stored in the LDAP directories of Active Directory, while a GPT is stored in a system folder on the domain controller: SYSVOL. Consequently, a user may have permissions to modify the GPC LDAP container, but not have permissions to modify or add files in SYSVOL. In this case, when attempting to modify the policy, the user will see the following error:

    Permissions mismatch between LDAP and SMB

    An attacker without SYSVOL access can modify the GPC attribute gPCFileSysPath, specifying a path to a network resource they control. As a result, all clients subject to the policy will retrieve templates from this resource. Let’s consider this scenario using the example of a GPOddity attack. The tool spins up its own SMB server, where it creates malicious policies, then changes the path to the GPT, and after applying the modified policies, restores them to their original state from its backup.

    Example of using GPOddity

    The technique of modifying the gPCFileSysPath attribute was highlighted back in 2020 in a blog post by researcher Mark Gamache, who was working at Microsoft at the time. However, the company believes that the ability to store GPTs outside of the SYSVOL system folder is a feature rather than a bug. At the same time, Microsoft does not recommend storing GPTs on third-party resources, as this can break certain Windows mechanisms.

    The possibility of storing policy data on third-party resources as mentioned in Microsoft documentation

    To detect this technique, we can once again utilize event 5136, where we will monitor the modification of the attribute we are interested in.

    Example of changing the gPCFileSysPath attribute in the Windows event log

    It’s possible to automatically detect an event 5136, related to changes in gPCFileSysPath, in logs by using the following rule:

    To eliminate the risk of false positives, we added to exceptions events that are generated when creating a new GPO where the attribute specifies the normal path to the GPT:

    Changing the gPCFileSysPath attribute when creating a new GPO

    How we search for “bad” policies in Compromise Assessment projects

    One of the items on the checklist for each of our Compromise Assessment projects is searching for compromise via group policies, as attackers often rely on this method both to distribute malicious software, scripts, vulnerable settings and so on, and to secretly gain a foothold in the domain. We use the Group3r tool to analyze a large volume of policies. It helps us quickly find all policies and run them through our detection rules to identify suspicious ones, as well as find various vulnerabilities that an attacker could exploit.

    Example of a suspicious policy

    Example of a vulnerable policy

    Since Group3r only searches for policies located on the SYSVOL domain volume, it is important to determine which of them have the gPCFileSysPath attribute changed. To do this, you can use the following script:

    Example of the script’s operation

    In addition to Group3r, SharpHound is an excellent tool for finding various GPO configuration errors. It allows you to find potential GPO attack vectors.

    An example of a misconfiguration that grants write permissions for policies to users who do not need them

    How we monitor group policies in MDR

    Organizations often fail to log many events on hosts. To ensure security and proactive monitoring of group policies in our MDR service, we have developed several improvements to our telemetry. Firstly, since Windows advanced auditing is disabled on some hosts, we try to use ETW providers (Event Tracing for Windows) wherever possible to replace the events needed to understand what happened in the system. Where ETW alone is not enough, we improve our technology and expand telemetry coverage. For instance, to detach from event 5136, monitoring of which requires configuring Directory Service Changes audit, our SOC R&D team developed the GCNet tool based on Microsoft’s PoC for monitoring directory service changes. The tool connects to the LDAP database where we specify a search for a particular distinguishedName attribute value (in our case, CN=Policies) and subscribe to any changes to it. If we receive a notification about a policy change, we request detailed information about the corresponding GPO, including GPC and GPT data.

    Example of an event with GPO output

    Detected events are run through our detection rules, allowing us to identify various malicious policies. One of the important attributes of a policy is GPLink options and policy flags. Policies flagged as Enforced take precedence over other policies and will be applied before them, and they cannot be overwritten by another policy. Additionally, GPOs have several flags that, when known, can help us determine whether a policy is enabled or not. The combination of all attributes provides us with additional information about how much time we have to respond to an incident before the next group policy is applied, and where and how it is applied, significantly broadening the investigation scope. By default, policies are updated every 90 minutes +/– 30 minutes on client machines and every 5 minutes on the domain controller.

    Conclusion

    Group policies (GPOs) are a versatile tool that, in the hands of malicious actors, can pose a serious threat to a corporate network. Their compromise allows attackers to perform covert actions, modify configurations and spread malware to multiple hosts simultaneously. For this reason, group policies must be closely monitored and constantly secured. Tracking changes in group policies and responding to detected threats is part of our Managed Detection and Response (MDR) service.

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  • MIL-OSI Europe: Answer to a written question – Polish Government’s social agreement with mining unions – E-002854/2024(ASW)

    Source: European Parliament

    The Commission is aware of the economic and social challenges that coal regions, including in Poland, face in view of the transition towards climate neutrality.

    The Just Transition Mechanism accompanied with the Just Transition Fund[1] or the Coal regions in transition Initiative[2], among other initiatives, aim to ensure that the transition leaves no one behind and to support the economic diversification and reconversion of the territories concerned by the transition.

    The mentioned report has been written by external authors as part of the Commission’s Coal regions in transition Initiative[3]. As a general rule, such reports, if written by consultants, cannot be considered as representing the views of the Commission or its official position.

    As regards public support for the Polish mining industry, the Commission is in close and constructive contact with the Polish authorities. The Commission is neither in a position to comment further on the content of such discussion, nor can it predict the timing or outcome.

    Pursuant to Article 263 of the Treaty on the Functioning of the European Union, the Court of Justice has jurisdiction to review the legality of acts of the Commission.

    • [1] Regulation (EU) 2021/1056 of the European Parliament and of the Council of 24 June 2021 establishing the Just Transition Fund (OJ L 231, 30.6.2021, p. 1).
    • [2] For more information see: https://energy.ec.europa.eu/topics/clean-energy-transition/eu-coal-regions-transition_en
    • [3] The Secretariat for Technical Assistance to Regions in Transition, which is made up of a consortium of external actors, listed here: https://energy.ec.europa.eu/topics/carbon-management-and-fossil-fuels/eu-coal-regions-transition_en#the-secretariat
    Last updated: 31 January 2025

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  • MIL-OSI Europe: Answer to a written question – Grants paid to suspended Eramet Group project – E-002578/2024(ASW)

    Source: European Parliament

    The Commission attaches utmost importance to ensuring that EU funding supports sustainable industrial development, job creation, and Europe’s strategic autonomy, whilst guaranteeing an effective use of the funds.

    The specific project mentioned has been selected for funding under the Innovation Fund, which is financed through revenues from the European Union Emissions Trading System and supports innovative low-carbon technologies.

    The Innovation Fund awards projects based on five award criteria. ‘Project maturity’ is an important one of them.

    Here, the project’s technical, financial and operational feasibility is assessed. The project in question scored highly on this metric, as well as on the other award criteria, and was thus selected as part of the 2021 Innovation Fund’s call for proposals for large-scale projects. You are invited to consult the press release[1] and Innovation Fund project dashboard[2].

    Payments from the Innovation Fund are provided subject to the project reaching pre-defined milestones. So far, no funding has been paid to the mentioned project.

    The Innovation Fund aims to support high-risk, first-of-a-kind and very innovative projects, some of which may also fail. The Commission is closely monitoring the projects that the Innovation Fund supports and aims to be a partner to industry and project developers.

    The Commission continually reflects on the effectiveness of project selection criteria, safeguards, and monitoring systems to minimise risks while ensuring that EU funding delivers its intended benefits.

    • [1] https://ec.europa.eu/commission/presscorner/detail/en/ip_22_4402
    • [2] https://dashboard.tech.ec.europa.eu/qs_digit_dashboard_mt/public/sense/app/6e4815c8-1f4c-4664-b9ca-8454f77d758d/sheet/bac47ac8-b5c7-4cd1-87ad-9f8d6d238eae/state/analysis

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  • MIL-OSI Europe: Answer to a written question – Reconsideration of the Rail Baltica project – E-002657/2024(ASW)

    Source: European Parliament

    1. The main source of European funding for the Rail Baltica project in the current multiannual financial framework ( MFF) period 2021-2027 is the Connecting Europe Facility (CEF). The maximum co-funding rates and the costs eligible for funding are set out in the CEF Regulation[1] and under certain conditions it can be up to 85%. The funding that can be provided also depends on the budget available in the facility.

    The Rail Baltica project is the biggest recipient of CEF funding. The Commission encourages all beneficiaries, including the Latvian authorities, to make best use of the resources available and progress on the implementation of the projects as set up in the respective grant agreements within the legal limits set therein. Other sources of funding, including private capital and state funding, should be explored as well.

    2. The Commission is aware of the political discussions in Latvia on financing of the project. The European Coordinator and the Commission have in their exchanges with the Latvian authorities underlined that the project needs to be planned and implemented in a way that is cost effective and sustainable for Latvia’s state budget while ensuring that Latvia meets its commitments to Estonia and Lithuania. The cost-benefit analyses of the project show a positive long-term socioeconomic return for the three Baltic countries.

    3. The Commission is committed to support the national authorities to complete the Rail Baltica project, which continues to have very high EU added value. The current geopolitical situation underlines the urgent need to connect the three Baltic states to the European rail network. A swift implementation is required.

    • [1] Regulation (EU) 2021/1153 of the European Parliament and of the Council of 7 July 2021 establishing the Connecting Europe Facility and repealing Regulations (EU) No 1316/2013 and (EU) No 283/2014.
    Last updated: 31 January 2025

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