Brookfield Real Assets Income Fund Inc. Announces Quarterly Webcast
There will be an opportunity to ask questions about the Fund during the call. Questions may also be submitted ahead of the call by sending an e-mail to ir@brookfieldoaktree.com.
Registration and Webcast Link: https://event.webcasts.com/starthere.jsp?ei=1729081&tp_key=7e7e0aa483
ARTICLE CONTINUES BELOW
Audio only: +1 323-794-2442 or 800-289-0462
Event Code: 377740
It is not necessary to dial into the audio conference, unless you are unable to join via the webcast URL.
A replay will be available via this link shortly following the webcast. A transcript of the webcast will also be available by calling 855-777-8001 or by sending an e-mail request to the Fund at ir@brookfieldoaktree.com.
Brookfield Real Assets Income Fund Inc is managed by Brookfield Public Securities Group LLC (PSG). The Fund uses its website as a channel of distribution of material information about the Fund. Financial and other material information regarding the Fund is routinely posted on and accessible at https://www.brookfieldoaktree.com/fund/brookfield-real-assets-income-fund-inc
Contact information:
Investing involves risk; principal loss is possible.
A fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus contains this and other important information about the investment company. Read the prospectus carefully before investing.
Brookfield Real Assets Income Fund Inc. is distributed by Foreside Fund Services, LLC.
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Comvest is a rapidly growing, middle market direct lending private credit manager with US$14.7 billion 4 on its platform. As part of the agreement, Manulife will align its US$3.7 billion Senior Credit team with Comvest, creating a leading US$18.4 billion 1 private credit asset management platform. Manulife intends to co-brand the new platform as Manulife | Comvest. "With a continued focus on disciplined, strategic capital deployment, our acquisition of Comvest Credit Partners further enhances our private markets platform by adding differentiated capabilities in private credit. The transaction is expected to be immediately accretive to core EPS, core ROE and core EBITDA margin, it will contribute to the strong growth trajectory of our broader Global Wealth and Asset Management business." - Phil Witherington, Manulife President & Chief Executive Officer "We are excited to see the continued growth and maturity of private credit as an asset class, providing flexible, tailored financing to businesses that are underserved by traditional lenders, while offering investors attractive, risk-adjusted returns. We are thrilled to welcome Comvest's exceptionally talented team of investment professionals. This acquisition, coupled with our acquisition last year of CQS, demonstrates our commitment to thoughtfully grow our business and offer a broader range of investment solutions to our institutional, retail, and retirement clients." - Paul Lorentz, President & CEO of Manulife Wealth and Asset Management "This partnership is an important step forward for Comvest and will meaningfully strengthen our market position. From the outset, the synergies between Comvest and Manulife have been clear, we share a disciplined approach to credit, a client-first mindset, and a strong focus on team culture. Manulife's deep relationships with private equity sponsors, robust sourcing capabilities, financial strength, and broad distribution platform will help us scale our differentiated private credit strategy and unlock new opportunities." - Robert O'Sullivan, Comvest Credit Partners Chief Executive Officer Transaction Details Comvest Credit Partners has built a differentiated approach to private credit, offering investors a diversified strategy encompassing non-sponsor lending, specialty finance sector exposure and traditional sponsor lending in the core mid-market. The firm has a demonstrated track record of fundraising and a history of delivering strong risk-adjusted returns through market cycles. Manulife's existing Senior Credit business and Comvest are highly complementary given the different areas of the market they focus upon. Comvest is focused on non-sponsor backed middle market direct lending and other specialty lending, while Manulife has built a strong reputation over the last decade serving the private equity sponsor-backed market, and these deep sponsor relationships will benefit the aligned platform going forward. In addition to the upfront consideration, Comvest will be eligible for additional consideration of up to US$337.5 million, contingent on achieving certain performance targets. The agreement provides Manulife the ability to purchase the remaining 25% through a put/call mechanism. The transaction is immediately accretive to core EPS, core ROE and GWAM's core EBITDA margin and will be funded entirely with cash on hand, resulting in less than a 3-point reduction to Manulife's LICAT ratio. Michael Falk, Founder of Comvest, will assume a role as Senior Advisor and Board Member where he will continue to offer strategic advice and guidance. Robert O'Sullivan, Co-Founder and CEO of Comvest, will be appointed Head of the newly aligned business. He will report directly to Anne Valentine Andrews, Global Head of Private Markets, and will join the Private Markets Executive Committee. In addition to significantly enhancing and scaling Manulife's Private Markets business, the new Manulife | Comvest private credit platform will also complement our existing public market alternative credit platform, Manulife | CQS Investment Management, positioning the company to offer the full spectrum of credit solutions to clients. The transaction is expected to close in the fourth quarter of 2025, subject to customary closing conditions and approvals. Morgan Stanley & Co. LLC is acting as exclusive financial advisor to Manulife on the transaction and Skadden, Arps, Slate, Meagher & Flom LLP is serving as legal advisor. 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Media Inquiries Jeff Cathie (857) 944-9017 [email protected] Investor Relations Derek Theobalds (416) 254-1774 [email protected] About Manulife Manulife Financial Corporation is a leading international financial services provider, helping our customers make their decisions easier and lives better. With our global headquarters in Toronto, Canada, we operate as Manulife across Canada, Asia, and Europe, and primarily as John Hancock in the United States, providing financial advice and insurance for individuals, groups and businesses. Through Manulife Wealth & Asset Management, we offer global investment, financial advice, and retirement plan services to individuals, institutions, and retirement plan members worldwide. At the end of 2024, we had more than 37,000 employees, over 109,000 agents, and thousands of distribution partners, serving over 36 million customers. We trade as 'MFC' on the Toronto, New York, and the Philippine stock exchanges, and under '945' in Hong Kong. Not all offerings are available in all jurisdictions. For additional information, please visit About Manulife Wealth & Asset Management As part of Manulife Financial Corporation, Manulife Wealth & Asset Management provides global investment, financial advice, and retirement plan services to 19 million individuals, institutions, and retirement plan members worldwide. Our mission is to make decisions easier and lives better by empowering people today to invest for a better tomorrow. As a committed partner to our clients and as a responsible steward of investor capital, we offer a heritage of risk management, deep expertise across public and private markets, and comprehensive retirement plan services. We seek to provide better investment and impact outcomes and to help people confidently save and invest for a more secure financial future. Not all offerings are available in all jurisdictions. 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TSX/NYSE/PSE: MFC SEHK: 945 C$ unless otherwise stated TORONTO, Aug. 6, 2025 /CNW/ - Manulife Financial Corporation ("Manulife" or the "Company") reported its second quarter results for the period ended June 30, 2025, delivering continued strong momentum in new business growth and strong earnings growth in our highest potential businesses. 1 Key highlights for the second quarter of 2025 ("2Q25") include: Core earnings 2 of $1.7 billion, a 2% decrease on a constant exchange rate basis 3 compared with the second quarter of 2024 ("2Q24") Excluding the impact of the change in expected credit loss ("ECL"), core earnings was $1.8 billion, up 2% from 2Q24 2,3 Net income attributed to shareholders of $1.8 billion, an increase of $0.7 billion compared with 2Q24 Core EPS 4 of $0.95, up 2% 3 from 2Q24. EPS of $0.98, up 88% 3 from 2Q24 Excluding the impact of the change in ECL, core EPS was $0.99, up 7% from 2Q24 3,4 Core ROE 4 of 15.0% and ROE of 15.6% LICAT ratio 5 of 136% APE sales up 15% 6, new business CSM up 37% 3 and new business value ("NBV") up 20% 6 from 2Q24 7,8 Global Wealth and Asset Management ("Global WAM") net inflows 6 of $0.9 billion, up from $0.1 billion in 2Q24 Announced today the agreement to acquire a 75% stake in Comvest Credit Partners, adding US$14.7 billion 9 to our Global WAM platform. The transaction is expected to close in the fourth quarter of 2025 10 "Our second-quarter results underscore the strength and resilience of our global franchise, as we continue to deliver high-quality growth across a diversified portfolio. All three insurance segments achieved over 30% growth year over year in new business CSM, clear evidence of our momentum and future earnings potential. Notably, Asia continued to generate strong APE sales and increased NBV margin sequentially. 6 Global WAM further expanded its core EBITDA margin 4 and delivered double-digit core earnings growth compared with the prior year quarter. 7 "It's an incredible privilege to lead Manulife and I'm energized by the passion and performance of this team. We are building on a strong foundation and are well-positioned to navigate a dynamic macroeconomic landscape with clarity and purpose. As we write Manulife's next chapter, I'm confident our strong commitment to customers, digital and AI-enabled solutions, will set new standards for excellence, efficiency, and sustainable growth across our global franchise. "Investing in our high-potential businesses with strategically focused intent is critical, and I'm excited to announce our acquisition of Comvest Credit Partners, adding highly complementary and scaled capabilities in private credit, an asset-strategy that we believe will contribute to future growth across our Global Wealth and Asset Management lines of business." — Phil Witherington, Manulife President & Chief Executive Officer "While core EPS growth was dampened by headwinds related to unfavourable life insurance claims experience in the U.S. and strengthened expected credit loss provisions, the underlying fundamentals of our businesses remained robust and we are reporting strong earnings growth in Global WAM, Asia and Canada. This is supported by our continued expense discipline which drove a 3% reduction in overall core expenses compared with 2Q24. 2 Book value per common share was resilient with a 5% increase year over year, and we continue buying back common shares, including $1.1 billion since the start of the year, demonstrating our steadfast commitment to enhancing shareholder value." — Colin Simpson, Manulife Chief Financial Officer Results by Segment ($ millions, unless otherwise stated) Quarterly Results YTD Results 2Q25 2Q24 Change 6 2025 2024 Change 6 Asia (US$) Net income attributed to shareholders $ 600 $ 424 44 % $ 1,035 $ 694 49 % Core earnings 7 520 449 13 % 1,012 914 10 % APE sales 1,233 920 31 % 2,645 1,870 41 % New business CSM 480 349 34 % 978 713 36 % NBV 7 451 346 28 % 908 669 35 % Canada Net income attributed to shareholders $ 390 $ 79 394 % $ 612 $ 352 74 % Core earnings 419 402 4 % 793 766 4 % APE sales 345 520 (34) % 836 970 (14) % New business CSM 100 76 32 % 191 146 31 % NBV 161 159 1 % 341 316 8 % U.S. (US$) Net income attributed to shareholders $ 26 $ 98 (73) % $ (371) $ 18 – % Core earnings 141 303 (53) % 392 638 (39) % APE sales 130 93 40 % 250 206 21 % New business CSM 86 54 59 % 156 126 24 % NBV 46 41 12 % 94 78 21 % Global WAM Net income attributed to shareholders $ 482 $ 350 36 % $ 925 $ 715 25 % Core earnings 7 463 386 19 % 917 735 22 % Gross flows ($ billions) 6 43.8 41.4 5 % 94.1 86.9 5 % Average AUMA ($ billions) 6 1,005 933 7 % 1,022 917 9 % Core EBITDA margin (%) 30.1 % 26.3 % 380 bps 29.2 % 25.9 % 330 bps Strategic Highlights We are embedding AI across our business, accelerating our journey to become a Digital, Customer Leader and earning the top spot for AI maturity in our industry In Global WAM, we launched an AI-powered sales enablement solution in U.S. Retirement, delivering real-time insights and personalized content to enhance our sales operation and productivity, improve our sales close ratio, and drive revenue growth. This doubled the number of sales opportunities compared with 2Q24 and reduced the time spent on information searches by over 50%. In Asia, we rolled out VOICE in Singapore and Japan, a multi-signal dashboard that includes call trend analysis, net sentiment scores, topic trends and deep dive insights from call center transcripts. VOICE utilizes GenAI to categorize data, find correlations, and customize insights by analyzing near real-time trends from customer interactions. These insights help us to better understand customer sentiment and key interests, enhance services, improve training, and identify opportunities to better deliver value to our customers. In the U.S., we launched a GenAI functionality in long-term care ("LTC") to enhance automated claims processing to strengthen the value of our LTC business and provide insights for future innovations. In Canada, we launched an end-to-end digital travel insurance platform that modernizes the distributor experience and simplifies the purchasing process for Canadians and their families. We were ranked first in the life insurance sector for AI maturity in the inaugural Evident AI Index for Insurance 11, ranking in the top five across the insurance industry overall. Our strong performance, particularly around Leadership and Transparency, is a testament to the multi-year investments in AI across the Company, reflecting our capability in scaling AI effectively. We continue to strengthen our distribution capabilities and expand product offerings to meet evolving customer needs In Asia, we demonstrated the strength of our agency force with a 23% year-over-year increase in the number of Million Dollar Round Table ("MDRT") members for Manulife Asia, positioning us as the third largest globally in 2025 MDRT membership. 12 In addition, we became the first international life insurer to establish an office in the Dubai International Financial Centre 13 dedicated to advising on and offering life insurance contracts to high-net-worth ("HNW") customers. This strategic move deepens our presence in the Middle East and enhances our ability to address the growing wealth and protection needs of HNW and ultra-HNW individuals in the region. In Global WAM, we continued to deliver comprehensive investment solutions by expanding our Global Retail product lineup with the launch of a diversified real assets strategy in Malaysia to help investors navigate market volatility. In addition, we introduced four new actively managed ETF series in Canada, enhancing access to diversified equity and fixed income exposures, to meet evolving investor needs. Furthermore, we enhanced the Manulife iFUNDS platform, making it the first integrated digital wealth solution in Singapore that offers advisors a unified view of clients' Unit Trust and Investment-Linked Plan ("ILP") holdings. By integrating these into a single platform and incorporating AI-powered ILP analytics capabilities, the enhancements streamline portfolio oversight, accelerate transaction execution, and empower advisors to deliver more personalized and insightful financial guidance. In Canada, we partnered with Maven Clinic, the world's largest virtual clinic for women's and family health 14, to offer eligible Group Benefits members 24/7 virtual access to personalized support during some of their most important stages of life, including fertility, maternity, parenting, and menopause. This initiative addresses critical care gaps that impact women's health and workforce participation. In the U.S., we expanded our wholesaling team to pursue more targeted growth strategies and accelerate our penetration within the U.S. HNW and mass affluent markets. Core earnings of $1.7 billion in 2Q25, down 2% from 2Q24 Core earnings decreased as strong business growth in Global WAM, Asia and Canada was offset by unfavourable life insurance claims experience in the U.S. and strengthened ECL provisions. Asia core earnings increased 13%, reflecting continued business growth, favourable claims experience and improved impact of new business, partially offset by strengthened ECL provisions. Global WAM core earnings increased 19%, driven by higher net fee income from favourable market impacts over the past 12 months and positive net flows, higher performance fees and continued expense discipline, partially offset by the impact of lower fee spreads and higher taxes. Canada core earnings were up 4%, as business growth in Group Insurance and higher investment spreads more than offset the impacts of a release in ECL provision in 2Q24 and the RGA Canadian universal life reinsurance transaction. 16 U.S. core earnings decreased 53%, reflecting unfavourable life insurance claims experience, lower investment spreads and strengthened ECL provisions. Corporate and Other core earnings improved by $12 million, primarily driven by lower long-term incentive compensation. Net Income attributed to shareholders of $1.8 billion in 2Q25, $0.7 billion higher compared with 2Q24 The $0.7 billion increase in net income was driven by improved market experience. The net gain from market experience in 2Q25 reflects higher-than-expected returns on public equities and gains from derivatives and hedge accounting ineffectiveness, partially offset by lower-than-expected returns on alternative long-duration assets, mainly related to real estate and private equity investments. APE sales, new business CSM and NBV increased 15%, 37% and 20%, respectively, reflecting continued sales momentum and margin expansions Asia continued to generate strong growth in APE sales, new business CSM and NBV, with a year-over-year increase of 31%, 34% and 28%, respectively, reflecting higher sales volumes in Hong Kong and Asia Other. 17 NBV margin of 40.0% was approximately in line with the prior year quarter and increased sequentially. In Canada, APE sales decreased 34%, as strong participating life insurance sales were more than offset by the non-recurrence of a large-case Group Insurance sale in 2Q24. These sales results, combined with a more favourable product mix, drove a 1% increase in NBV. New business CSM increased 32%, reflecting the strong sales growth in Individual Insurance. U.S. delivered strong new business growth this quarter, increasing APE sales, new business CSM and NBV by 40%, 59% and 12%, respectively, reflecting continued demand for our accumulation insurance products. Global WAM net inflows of $0.9 billion in 2Q25, $0.8 billion higher compared with net inflows of $0.1 billion in 2Q24 Retirement net inflows of $2.0 billion in 2Q25 increased compared with net outflows of $1.3 billion in 2Q24, reflecting higher retirement plan sales across all geographies and a large-case retirement plan redemption in the U.S. in 2Q24. Retail net outflows of $3.2 billion in 2Q25 increased compared with net outflows of $0.1 billion in 2Q24, driven by lower net sales through third-party intermediaries in North America and in money markets funds in mainland China. This is partially offset by higher net sales through our retail wealth platform. Institutional Asset Management net inflows of $2.1 billion in 2Q25 increased compared with net inflows of $1.4 billion in 2Q24, driven by lower redemptions in fixed income mandates, partially offset by higher redemptions in equity mandates. New business growth continued to drive higher organic CSM and CSM balance CSM 18 was $22,316 million as at June 30, 2025 CSM increased $189 million compared with December 31, 2024. Organic CSM movement contributed $1,162 million of the increase for the first half of 2025, representing an 11% 6 growth on an annualized basis, primarily driven by the impact of new business, interest accretion and net favourable insurance experience, partially offset by amortization recognized in core earnings. Inorganic CSM movement was a decrease of $973 million for the same period, primarily driven by the impacts of changes in foreign currency exchange rates. Post-tax CSM net of NCI 2 was $18,527 million as at June 30, 2025. __________ (1) Highest potential businesses include Asia segment, Global Wealth and Asset Management, Canada group benefits and North American behavioural insurance products. (2) Core earnings, core earnings excluding the impact of the change in ECL, core expenses and post-tax contractual service margin net of NCI ("post-tax CSM net of NCI") are non-GAAP financial measures. For more information on non-GAAP and other financial measures, see "Non-GAAP and other financial measures" below and in our 2Q25 Management's Discussion and Analysis ("2Q25 MD&A"). (3) Percentage growth/declines in core earnings, core earnings excluding the impact of the change in ECL, diluted core earnings per common share ("core EPS"), diluted earnings (loss) per share ("EPS"), core EPS excluding the impact of the change in ECL, new business contractual service margin net of NCI ("new business CSM"), and net income attributed to shareholders are stated on a constant exchange rate basis and are non-GAAP ratios. (4) Core EPS, core EPS excluding the impact of the change in ECL, core ROE, core EBITDA margin, financial leverage ratio and adjusted book value per common share ("adjusted BV per common share") are non-GAAP ratios. (5) Life Insurance Capital Adequacy Test ("LICAT") ratio of The Manufacturers Life Insurance Company ("MLI") as at June 30, 2025. LICAT ratio is disclosed under the Office of the Superintendent of Financial Institutions Canada's ("OSFI's") Life Insurance Capital Adequacy Test Public Disclosure Requirements guideline. (6) For more information on annualized premium equivalent ("APE") sales, new business value ("NBV"), net flows, gross flows, average asset under management and administration ("average AUMA") and new business value margin ("NBV margin"), see "Non-GAAP and other financial measures" below. In this news release, percentage growth/decline in APE sales, NBV, net flows, gross flows, average AUMA and organic CSM are stated on a constant exchange rate basis. (7) 2024 quarterly and year-to-date core earnings, NBV, core EPS, core ROE, adjusted BV per common share, and financial leverage ratio have been updated to align with the presentation of Global Minimum Taxes ("GMT") in 2025. See section A7 "Global Minimum Taxes (GMT)" in our 2Q25 MD&A for more information. (8) Refers to "Results at a Glance" for 2Q25 and 2Q24 results. (9) Includes Comvest fee paying AUM of US$11 billion and Comvest committed capital of US$3.7 billion. (10) Subject customary closing conditions and approvals. See "Caution regarding forward-looking statements" below. See the press release announcing the acquisition for further details on the transaction and Comvest Credit Partners. (11) The Evident AI Index for Insurance assesses AI maturity across 30 of the most prominent insurance companies in North America and Europe, measuring progress across four key categories: Talent, Innovation, Leadership, and Transparency. (12) Announced in July 2025, based on 2024 new business sales. (13) The Dubai International Financial Centre is a special economic zone in Dubai designed to facilitate financial and business activities in the Middle East, Africa and South Asia region. (14) Maven Clinic, Meet Maven, 2024. (15) See section A1 "Profitability" in our 2Q25 MD&A for more information on notable items attributable to core earnings and net income attributed to shareholders. (16) The reinsurance transaction with RGA Life Reinsurance Company of Canada ("RGA Canadian Reinsurance transaction") closed April 1, 2024. (17) Asia Other excludes Hong Kong and Japan. (18) Net of non-controlling interests ("NCI"). Earnings Results Conference Call Manulife will host a conference call and live webcast on its Second Quarter 2025 results on August 7, 2025, at 8:00 a.m. (ET). To access the conference call, dial 1-800-806-5484 or 1-416-340-2217 (Passcode: 8528599#). Please call in 15 minutes before the scheduled start time. You will be required to provide your name and organization to the operator. You may access the webcast at The archived webcast will be available following the call at the same URL as above. A replay of the call will also be available until September 6, 2025, by dialing 1-800-408-3053 or 1-905-694-9451 (Passcode: 1098664#). The Second Quarter 2025 Statistical Information Package is also available on the Manulife website at This earnings news release should be read in conjunction with the Company's Second Quarter 2025 Report to Shareholders, including our unaudited interim Consolidated Financial Statements for the three and six months ended June 30, 2025, prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board, which is available on our website at The Company's 2Q25 MD&A and additional information relating to the Company is available on the SEDAR+ website at and on the U.S. Securities and Exchange Commission's ("SEC") website at Any information contained in, or otherwise accessible through, websites mentioned in this news release does not form a part of this document unless it is expressly incorporated by reference. Investor Relations Derek Theobalds (416) 254-1774 [email protected] Earnings The following table presents net income attributed to shareholders, consisting of core earnings and details of the items excluded from core earnings: Quarterly Results YTD Results ($ millions) 2Q25 1Q25 2Q24 2025 2024 Core earnings (1) Asia $ 720 $ 705 $ 616 $ 1,425 $ 1,242 Canada 419 374 402 793 766 U.S. 194 361 415 555 867 Global Wealth and Asset Management 463 454 386 917 735 Corporate and Other (70) (127) (82) (197) (163) Total core earnings $ 1,726 $ 1,767 $ 1,737 $ 3,493 $ 3,447 Items excluded from core earnings Market experience gains (losses) 113 (1,332) (665) (1,219) (1,444) Restructuring charge - - - - - Reinsurance transactions, tax-related items and other (1) (50) 50 (30) - (95) Net income attributed to shareholders $ 1,789 $ 485 $ 1,042 $ 2,274 $ 1,908 (1) 2024 quarterly and year-to-date core earnings by segment, and 1Q24 total core earnings have been updated to align with the presentation of GMT in 2025, with a corresponding offset in items excluded from core earnings. See section A7 "Global Minimum Tax (GMT)" in our 2Q25 MD&A for more information. Global Minimum Taxes ("GMT") On June 20, 2024, the Canadian government passed the Global Minimum Tax Act into law. Canada's GMT is applied retroactively to fiscal periods commencing on or after December 31, 2023. As additional local jurisdictions are expected to enact the GMT in 2025, GMT is now recognized in net income in the reporting segments whose earnings are subject to this tax. GMT is reported in both core earnings and items excluded from core earnings in line with our definition of core earnings in section E3 "Non-GAAP and Other Financial Measures" of the 2Q25 MD&A. To improve the comparability of results between 2025 and 2024, we have updated certain 2024 non-GAAP and other financial measures to reflect the impact of GMT, including quarterly core earnings, core ROE, core EPS, financial leverage ratio, adjusted book value per common share, new business value, and post-tax CSM net of NCI. For further information and a complete list of the impacted financial measures, please see section A7 "Global Minimum Taxes (GMT)" of the 2Q25 MD&A, which is incorporated by reference. Non-GAAP and other financial measures The Company prepares its Consolidated Financial Statements in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board. We use a number of non-GAAP and other financial measures to evaluate overall performance and to assess each of our businesses. This section includes information required by National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure in respect of "specified financial measures" (as defined therein). Non-GAAP financial measures include core earnings (loss); core earnings excluding the impact of the change in ECL; core earnings available to common shareholders excluding the impact of the change in ECL; core earnings available to common shareholders; core earnings before interest, taxes, depreciation and amortization ("core EBITDA"); core expenses; adjusted book value; post-tax contractual service margin; post-tax contractual service margin net of NCI ("post-tax CSM net of NCI"); assets under management ("AUM"); and core revenue. In addition, non-GAAP financial measures include the following stated on a constant exchange rate ("CER") basis: any of the foregoing non-GAAP financial measures; net income attributed to shareholders; and common shareholders' net income. Non-GAAP ratios include core return on common shareholders' equity ("core ROE"); diluted core earnings per common share ("core EPS"); diluted core earnings per common share excluding the impact of the change in ECL ("core EPS excluding the impact of the change in ECL"); expense efficiency ratio; adjusted book value per common share; financial leverage ratio; core EBITDA margin; and percentage growth/decline on a constant exchange rate basis in any of the above non-GAAP financial measures and non-GAAP ratios; net income attributed to shareholders; diluted earnings per common share ("EPS"), CSM, and new business CSM. Other specified financial measures include NBV; APE sales; gross flows; net flows; average assets under management and administration ("average AUMA"); NBV margin; and percentage growth/decline in these foregoing specified financial measures. In addition, explanations of the components of the CSM movement, other than the new business CSM were provided in the 2Q25 MD&A. Non-GAAP financial measures and non-GAAP ratios are not standardized financial measures under GAAP and, therefore, might not be comparable to similar financial measures disclosed by other issuers. Therefore, they should not be considered in isolation or as a substitute for any other financial information prepared in accordance with GAAP. For more information on non-GAAP financial measures, including those referred to above, see the section "Non-GAAP and other financial measures" in our 2Q25 MD&A, which is incorporated by reference. 2Q25 Asia Canada U.S. Global WAM Corporate and Other Total Income (loss) before income taxes $ 1,092 $ 526 $ 31 $ 575 $ 37 $ 2,261 Income tax (expenses) recoveries Core earnings (94) (110) (37) (89) 32 (298) Items excluded from core earnings (55) (5) 42 (4) (18) (40) Income tax (expenses) recoveries (149) (115) 5 (93) 14 (338) Net income (post-tax) 943 411 36 482 51 1,923 Less: Net income (post-tax) attributed to Non-controlling interests 49 - - - - 49 Participating policyholders 64 21 - - - 85 Net income (loss) attributed to shareholders (post-tax) 830 390 36 482 51 1,789 Less: Items excluded from core earnings (post-tax) Market experience gains (losses) 161 (27) (158) 16 121 113 Changes in actuarial methods and assumptions that flow directly through income - - - - - - Restructuring charge - - - - - - Reinsurance transactions, tax related items and other (51) (2) - 3 - (50) Core earnings (post-tax) $ 720 $ 419 $ 194 $ 463 $ (70) $ 1,726 Income tax on core earnings (see above) 94 110 37 89 (32) 298 Core earnings (pre-tax) $ 814 $ 529 $ 231 $ 552 $ (102) $ 2,024 Core earnings, CER basis and U.S. dollars – 2Q25 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) 2Q25 Asia Canada U.S. Global WAM Corporate and Other Total Core earnings (post-tax) $ 720 $ 419 $ 194 $ 463 $ (70) $ 1,726 CER adjustment (1) - - - - - - Core earnings, CER basis (post-tax) $ 720 $ 419 $ 194 $ 463 $ (70) $ 1,726 Income tax on core earnings, CER basis (2) 94 110 37 89 (32) 298 Core earnings, CER basis (pre-tax) $ 814 $ 529 $ 231 $ 552 $ (102) $ 2,024 Core earnings (U.S. dollars) – Asia and U.S. segments Core earnings (post-tax) (3), US $ $ 520 $ 141 CER adjustment US $ (1) - - Core earnings, CER basis (post-tax), US $ $ 520 $ 141 (1) The impact of updating foreign exchange rates to that which was used in 2Q25. (2) Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 2Q25. (3) Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for 2Q25. Reconciliation of core earnings to net income attributed to shareholders – 1Q25 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) 1Q25 Asia Canada U.S. Global WAM Corporate and Other Total Income (loss) before income taxes $ 870 $ 305 $ (731) $ 528 $ (273) $ 699 Income tax (expenses) recoveries Core earnings (101) (89) (84) (86) 29 (331) Items excluded from core earnings (30) 30 246 2 7 255 Income tax (expenses) recoveries (131) (59) 162 (84) 36 (76) Net income (post-tax) 739 246 (569) 444 (237) 623 Less: Net income (post-tax) attributed to Non-controlling interests 67 - - 1 (2) 66 Participating policyholders 48 24 - - - 72 Net income (loss) attributed to shareholders (post-tax) 624 222 (569) 443 (235) 485 Less: Items excluded from core earnings (post-tax) Market experience gains (losses) (77) (152) (930) (11) (162) (1,332) Changes in actuarial methods and assumptions that flow directly through income - - - - - - Restructuring charge - - - - - - Reinsurance transactions, tax related items and other (4) - - - 54 50 Core earnings (post-tax) $ 705 $ 374 $ 361 $ 454 $ (127) $ 1,767 Income tax on core earnings (see above) 101 89 84 86 (29) 331 Core earnings (pre-tax) $ 806 $ 463 $ 445 $ 540 $ (156) $ 2,098 Core earnings, CER basis and U.S. dollars – 1Q25 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) (1) The impact of updating foreign exchange rates to that which was used in 2Q25. (2) Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 2Q25. (3) Core earnings (post-tax) in Canadian $ are translated to US $ using the US $ Statement of Income exchange rate for 1Q25. Reconciliation of core earnings to net income attributed to shareholders – 2Q24 (1) ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) 2Q24 Asia Canada U.S. Global WAM Corporate and Other Total Income (loss) before income taxes $ 763 $ 141 $ 156 $ 383 $ (59) $ 1,384 Income tax (expenses) recoveries Core earnings (95) (107) (95) (59) 36 (320) Items excluded from core earnings (20) 68 74 27 (81) 68 Income tax (expenses) recoveries (115) (39) (21) (32) (45) (252) Net income (post-tax) 648 102 135 351 (104) 1,132 Less: Net income (post-tax) attributed to Non-controlling interests 38 - - 1 - 39 Participating policyholders 28 23 - - - 51 Net income (loss) attributed to shareholders (post-tax) 582 79 135 350 (104) 1,042 Less: Items excluded from core earnings (post-tax) Market experience gains (losses) (58) (364) (280) (7) 44 (665) Changes in actuarial methods and assumptions that flow directly through income - - - - - - Restructuring charge - - - - - - Reinsurance transactions, tax related items and other 24 41 - (29) (66) (30) Core earnings (post-tax) $ 616 $ 402 $ 415 $ 386 $ (82) $ 1,737 Income tax on core earnings (see above) 95 107 95 59 (36) 320 Core earnings (pre-tax) $ 711 $ 509 $ 510 $ 445 $ (118) $ 2,057 (1) This reconciliation and related core earnings reconciliations below have been updated to align with the presentation of GMT in 2025. See section A7 "Global Minimum Taxes (GMT)" in our 2Q25 MD&A for more information. Core earnings, CER basis and U.S. dollars – 2Q24 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) 2Q24 Asia Canada U.S. Global WAM Corporate and Other Total Core earnings (post-tax) $ 616 $ 402 $ 415 $ 386 $ (82) $ 1,737 CER adjustment (1) 19 - 4 3 - 26 Core earnings, CER basis (post-tax) $ 635 $ 402 $ 419 $ 389 $ (82) $ 1,763 Income tax on core earnings, CER basis (2) 96 107 97 59 (36) 323 Core earnings, CER basis (pre-tax) $ 731 $ 509 $ 516 $ 448 $ (118) $ 2,086 Core earnings (U.S. dollars) – Asia and U.S. segments Core earnings (post-tax) (3), US $ $ 449 $ 303 CER adjustment US $ (1) 10 - Core earnings, CER basis (post-tax), US $ $ 459 $ 303 (1) The impact of updating foreign exchange rates to that which was used in 2Q25. (2) Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 2Q25. (3) Core earnings (post-tax) in Canadian $ are translated to US $ using the US $ Statement of Income exchange rate for 2Q24. Reconciliation of core earnings to net income attributed to shareholders – YTD 2025 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) YTD 2025 Asia Canada U.S. Global WAM Corporate and Other Total Income (loss) before income taxes $ 1,962 $ 831 $ (700) $ 1,103 $ (236) $ 2,960 Income tax (expenses) recoveries Core earnings (195) (199) (121) (175) 61 (629) Items excluded from core earnings (85) 25 288 (2) (11) 215 Income tax (expenses) recoveries (280) (174) 167 (177) 50 (414) Net income (post-tax) 1,682 657 (533) 926 (186) 2,546 Less: Net income (post-tax) attributed to Non-controlling interests 116 - - 1 (2) 115 Participating policyholders 112 45 - - - 157 Net income (loss) attributed to shareholders (post-tax) 1,454 612 (533) 925 (184) 2,274 Less: Items excluded from core earnings (post-tax) Market experience gains (losses) 84 (179) (1,088) 5 (41) (1,219) Changes in actuarial methods and assumptions that flow directly through income - - - - - - Restructuring charge - - - - - - Reinsurance transactions, tax related items and other (55) (2) - 3 54 - Core earnings (post-tax) $ 1,425 $ 793 $ 555 $ 917 $ (197) $ 3,493 Income tax on core earnings (see above) 195 199 121 175 (61) 629 Core earnings (pre-tax) $ 1,620 $ 992 $ 676 $ 1,092 $ (258) $ 4,122 Core earnings, CER basis and U.S. dollars – YTD 2025 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) YTD 2025 Asia Canada U.S. Global WAM Corporate and Other Total Core earnings (post-tax) $ 1,425 $ 793 $ 555 $ 917 $ (197) $ 3,493 CER adjustment (1) (16) - (13) (11) - (40) Core earnings, CER basis (post-tax) $ 1,409 $ 793 $ 542 $ 906 $ (197) $ 3,453 Income tax on core earnings, CER basis (2) 193 199 118 173 (61) 622 Core earnings, CER basis (pre-tax) $ 1,602 $ 992 $ 660 $ 1,079 $ (258) $ 4,075 Core earnings (U.S. dollars) – Asia and U.S. segments Core earnings (post-tax) (3), US $ $ 1,012 $ 392 CER adjustment US $ (1) 6 - Core earnings, CER basis (post-tax), US $ $ 1,018 $ 392 (1) The impact of updating foreign exchange rates to that which was used in 2Q25. (2) Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 2Q25. (3) Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for the respective quarters that make up 2025 year-to-date core earnings. Reconciliation of core earnings to net income attributed to shareholders – YTD 2024 (1) ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) YTD 2024 Asia Canada U.S. Global WAM Corporate and Other Total Income (loss) before income taxes $ 1,357 $ 522 $ 2 $ 809 $ (54) $ 2,636 Income tax (expenses) recoveries Core earnings (193) (198) (198) (125) 64 (650) Items excluded from core earnings (72) 76 223 32 (141) 118 Income tax (expenses) recoveries (265) (122) 25 (93) (77) (532) Net income (post-tax) 1,092 400 27 716 (131) 2,104 Less: Net income (post-tax) attributed to Non-controlling interests 93 - - 1 - 94 Participating policyholders 54 48 - - - 102 Net income (loss) attributed to shareholders (post-tax) 945 352 27 715 (131) 1,908 Less: Items excluded from core earnings (post-tax) Market experience gains (losses) (308) (455) (814) (1) 134 (1,444) Changes in actuarial methods and assumptions that flow directly through income - - - - - - Restructuring charge - - - - - - Reinsurance transactions, tax related items and other 11 41 (26) (19) (102) (95) Core earnings (post-tax) $ 1,242 $ 766 $ 867 $ 735 $ (163) $ 3,447 Income tax on core earnings (see above) 193 198 198 125 (64) 650 Core earnings (pre-tax) $ 1,435 $ 964 $ 1,065 $ 860 $ (227) $ 4,097 (1) This reconciliation and related core earnings reconciliations below have been updated to align with the presentation of GMT in 2025. See section A7 "Global Minimum Taxes (GMT)" in our 2Q25 MD&A for more information. Core earnings, CER basis and U.S. dollars – YTD 2024 ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) YTD 2024 Asia Canada U.S. Global WAM Corporate and Other Total Core earnings (post-tax) $ 1,242 $ 766 $ 867 $ 735 $ (163) $ 3,447 CER adjustment (1) 38 - 16 10 1 65 Core earnings, CER basis (post-tax) $ 1,280 $ 766 $ 883 $ 745 $ (162) $ 3,512 Income tax on core earnings, CER basis (2) 197 198 202 126 (63) 660 Core earnings, CER basis (pre-tax) $ 1,477 $ 964 $ 1,085 $ 871 $ (225) $ 4,172 Core earnings (U.S. dollars) – Asia and U.S. segments Core earnings (post-tax) (3), US $ $ 914 $ 638 CER adjustment US $ (1) 11 - Core earnings, CER basis (post-tax), US $ $ 925 $ 638 (1) The impact of updating foreign exchange rates to that which was used in 2Q25. (2) Income tax on core earnings adjusted to reflect the foreign exchange rates for the Statement of Income in effect for 2Q25. (3) Core earnings (post-tax) in Canadian $ is translated to US $ using the US $ Statement of Income exchange rate for the respective quarters that make up 2025 year-to-date core earnings. Core earnings available to common shareholders (1) ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) (1) 2024 reconciliations have been updated to align with the presentation of GMT in 2025. (2) The impact of updating foreign exchange rates to which was used in 2Q25. Core ROE (1) ($ millions, unless otherwise stated) Quarterly Results YTD Results Full Year Results 2Q25 1Q25 4Q24 3Q24 2Q24 2025 2024 2024 Core earnings available to common shareholders $ 1,623 $ 1,710 $ 1,806 $ 1,772 $ 1,638 $ 3,333 $ 3,293 $ 6,871 Annualized core earnings available to common shareholders (post-tax) $ 6,510 $ 6,935 $ 7,185 $ 7,049 $ 6,588 $ 6,721 $ 6,622 $ 6,871 Average common shareholders' equity (see below) $ 43,448 $ 44,394 $ 43,613 $ 42,609 $ 41,947 $ 43,921 $ 41,466 $ 42,288 Core ROE (annualized) (%) 15.0 % 15.6 % 16.5 % 16.6 % 15.7 % 15.3 % 16.0 % 16.2 % Average common shareholders' equity Total shareholders' and other equity $ 49,080 $ 51,135 $ 50,972 $ 49,573 $ 48,965 $ 49,080 $ 48,965 $ 50,972 Less: Preferred shares and other equity 6,660 6,660 6,660 6,660 6,660 6,660 6,660 6,660 Common shareholders' equity $ 42,420 $ 44,475 $ 44,312 $ 42,913 $ 42,305 $ 42,420 $ 42,305 $ 44,312 Average common shareholders' equity $ 43,448 $ 44,394 $ 43,613 $ 42,609 $ 41,947 $ 43,921 $ 41,466 $ 42,288 (1) 2024 reconciliations have been updated to align with the presentation of GMT in 2025. See section A7 "Global Minimum Taxes (GMT)" in our 2Q25 MD&A for more information. CSM and post-tax CSM information (1) ($ millions pre-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) As at Jun 30, 2025 Mar 31, 2025 Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 CSM $ 23,722 $ 23,713 $ 23,425 $ 22,213 $ 21,760 Less: CSM for NCI 1,406 1,417 1,298 1,283 1,002 CSM, net of NCI $ 22,316 $ 22,296 $ 22,127 $ 20,930 $ 20,758 CER adjustment (2) - (737) (582) 50 277 CSM, net of NCI, CER basis $ 22,316 $ 21,559 $ 21,545 $ 20,980 $ 21,035 CSM by segment Asia $ 15,786 $ 15,904 $ 15,540 $ 14,715 $ 13,456 Asia NCI 1,406 1,417 1,298 1,283 1,002 Canada 4,133 4,052 4,109 4,036 3,769 U.S. 2,386 2,329 2,468 2,171 3,522 Corporate and Other 11 11 10 8 11 CSM $ 23,722 $ 23,713 $ 23,425 $ 22,213 $ 21,760 CSM, CER adjustment (2) Asia $ - $ (617) $ (453) $ 30 $ 288 Asia NCI - (55) (40) (14) 17 Canada - - - - - U.S. - (121) (128) 20 (12) Corporate and Other - - - - - Total $ - $ (793) $ (621) $ 36 $ 293 CSM, CER basis Asia $ 15,786 $ 15,287 $ 15,087 $ 14,745 $ 13,744 Asia NCI 1,406 1,362 1,258 1,269 1,019 Canada 4,133 4,052 4,109 4,036 3,769 U.S. 2,386 2,208 2,340 2,191 3,510 Corporate and Other 11 11 10 8 11 Total CSM, CER basis $ 23,722 $ 22,920 $ 22,804 $ 22,249 $ 22,053 Post-tax CSM CSM $ 23,722 $ 23,713 $ 23,425 $ 22,213 $ 21,760 Marginal tax rate on CSM (3,940) (3,929) (3,928) (3,719) (3,718) Post-tax CSM $ 19,782 $ 19,784 $ 19,497 $ 18,494 $ 18,042 CSM, net of NCI $ 22,316 $ 22,296 $ 22,127 $ 20,930 $ 20,758 Marginal tax rate on CSM net of NCI (3,789) (3,772) (3,774) (3,566) (3,608) Post-tax CSM net of NCI $ 18,527 $ 18,524 $ 18,353 $ 17,364 $ 17,150 New business CSM (1) detail, CER basis ($ millions pre-tax, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Quarterly Results YTD Results Full Year Results 2Q25 1Q25 4Q24 3Q24 2Q24 2025 2024 2024 New business CSM Hong Kong $ 286 $ 316 $ 299 $ 254 $ 200 $ 602 $ 368 $ 921 Japan 74 81 66 86 90 155 138 290 Asia Other (2) 303 318 221 253 188 621 463 937 International High Net Worth 187 Mainland China 270 Singapore 391 Vietnam 17 Other Emerging Markets 72 Asia 663 715 586 593 478 1,378 969 2,148 Canada 100 91 116 95 76 191 146 357 U.S. 119 101 140 71 74 220 171 382 Total new business CSM $ 882 $ 907 $ 842 $ 759 $ 628 $ 1,789 $ 1,286 $ 2,887 New business CSM, CER adjustment (3) Hong Kong - $ (11) $ (3) $ 4 $ 1 (11) $ 6 $ 6 Japan - 2 3 5 9 2 11 19 Asia Other (2) - (6) (1) 5 6 (6) 15 20 International High Net Worth 2 Mainland China 2 Singapore 15 Vietnam (1) Other Emerging Markets 2 Asia - (15) (1) 14 16 (15) 32 45 Canada - - - - - - - (1) U.S. - (4) (1) 1 1 (4) 4 3 Total new business CSM $ - $ (19) $ (2) $ 15 $ 17 $ (19) $ 36 $ 47 New business CSM, CER basis Hong Kong $ 286 $ 305 $ 296 $ 258 $ 201 $ 591 $ 374 $ 927 Japan 74 83 69 91 99 157 149 309 Asia Other (2) 303 312 220 258 194 615 478 957 International High Net Worth 189 Mainland China 272 Singapore 406 Vietnam 16 Other Emerging Markets 74 Asia 663 700 585 607 494 1,363 1,001 2,193 Canada 100 91 116 95 76 191 146 356 U.S. 119 97 139 72 75 216 175 385 Total new business CSM, CER basis $ 882 $ 888 $ 840 $ 774 $ 645 $ 1,770 $ 1,322 $ 2,934 (1) New business CSM is net of NCI. (2) New business CSM for Asia Other is reported by country annually, on a full year basis. Other Emerging Markets within Asia Other include Indonesia, the Philippines, Malaysia, Thailand, Cambodia and Myanmar. (3) The impact of updating foreign exchange rates to that which was used in 2Q25. Net income financial measures on a CER basis ($ Canadian millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Quarterly Results YTD Results Full Year Results 2Q25 1Q25 4Q24 3Q24 2Q24 2025 2024 2024 Net income (loss) attributed to shareholders: Asia $ 830 $ 624 $ 583 $ 827 $ 582 $ 1,454 $ 945 $ 2,355 Canada 390 222 439 430 79 612 352 1,221 U.S. 36 (569) 103 5 135 (533) 27 135 Global WAM 482 443 384 498 350 925 715 1,597 Corporate and Other 51 (235) 129 79 (104) (184) (131) 77 Total net income (loss) attributed to shareholders 1,789 485 1,638 1,839 1,042 2,274 1,908 5,385 Preferred share dividends and other equity distributions (103) (57) (101) (56) (99) (160) (154) (311) Common shareholders' net income (loss) $ 1,686 $ 428 $ 1,537 $ 1,783 $ 943 $ 2,114 $ 1,754 $ 5,074 CER adjustment (1) Asia $ - $ (33) $ (9) $ 8 $ (6) $ (33) $ 9 $ 8 Canada - 1 (4) (1) 2 1 6 2 U.S. - 19 (3) 2 1 19 9 8 Global WAM - (16) (4) 4 4 (16) 11 11 Corporate and Other - 5 (1) (3) (3) 5 (7) (12) Total net income (loss) attributed to shareholders - (24) (21) 10 (2) (24) 28 17 Preferred share dividends and other equity distributions - - - - - - - - Common shareholders' net income (loss) $ - $ (24) $ (21) $ 10 $ (2) $ (24) $ 28 $ 17 Net income (loss) attributed to shareholders, CER basis Asia $ 830 $ 591 $ 574 $ 835 $ 576 $ 1,421 $ 954 $ 2,363 Canada 390 223 435 429 81 613 358 1,223 U.S. 36 (550) 100 7 136 (514) 36 143 Global WAM 482 427 380 502 354 909 726 1,608 Corporate and Other 51 (230) 128 76 (107) (179) (138) 65 Total net income (loss) attributed to shareholders, CER basis 1,789 461 1,617 1,849 1,040 2,250 1,936 5,402 Preferred share dividends and other equity distributions, CER basis (103) (57) (101) (56) (99) (160) (154) (311) Common shareholders' net income (loss), CER basis $ 1,686 $ 404 $ 1,516 $ 1,793 $ 941 $ 2,090 $ 1,782 $ 5,091 Asia net income attributed to shareholders, U.S. dollars Asia net income (loss) attributed to shareholders, US $ (2) $ 600 $ 435 $ 417 $ 606 $ 424 $ 1,035 $ 694 $ 1,717 CER adjustment, US $ (1) - (8) (2) (3) (7) (8) (5) (10) Asia net income (loss) attributed to shareholders, U.S. $, CER basis (1) $ 600 $ 427 $ 415 $ 603 $ 417 $ 1,027 $ 689 $ 1,707 Net income (loss) attributed to shareholders (pre-tax) Net income (loss) attributed to shareholders (post-tax) $ 1,789 $ 485 $ 1,638 $ 1,839 $ 1,042 $ 2,274 $ 1,908 $ 5,385 Tax on net income attributed to shareholders 307 47 388 229 238 354 485 1,102 Net income (loss) attributed to shareholders (pre-tax) 2,096 532 2,026 2,068 1,280 2,628 2,393 6,487 CER adjustment (1) - (3) 1 23 24 (3) 31 56 Net income (loss) attributed to shareholders (pre-tax), CER basis $ 2,096 $ 529 $ 2,027 $ 2,091 $ 1,304 $ 2,625 $ 2,424 $ 6,543 (1) The impact of updating foreign exchange rates to that which was used in 2Q25. (2) Asia net income attributed to shareholders (post-tax) in Canadian dollars is translated to U.S. dollars using the U.S. dollar Statement of Income rate for the reporting period. Adjusted book value (1) ($ millions) (1) 2024 reconciliations have been updated to align with the presentation of GMT in 2025. See section A7 "Global Minimum Taxes (GMT)" in our 2Q25 MD&A for more information. Reconciliation of Global WAM core earnings to core EBITDA ($ millions, pre-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) (1) The impact of updating foreign exchange rates to that which was used in 2Q25. Core EBITDA margin and core revenue ($ millions, unless otherwise stated) Quarterly Results YTD Results Full Year Results 2Q25 1Q25 4Q24 3Q24 2Q24 2025 2024 2024 Core EBITDA margin Core EBITDA $ 623 $ 608 $ 611 $ 572 $ 513 $ 1,231 $ 990 $ 2,173 Core revenue $ 2,069 $ 2,140 $ 2,140 $ 2,055 $ 1,948 $ 4,209 $ 3,821 $ 8,016 Core EBITDA margin 30.1 % 28.4 % 28.6 % 27.8 % 26.3 % 29.2 % 25.9 % 27.1 % Global WAM core revenue Other revenue per financial statements $ 1,851 $ 1,986 $ 2,003 $ 1,928 $ 1,849 $ 3,837 $ 3,657 $ 7,588 Less: Other revenue in segments other than Global WAM (48) 11 (2) 53 40 (37) 98 149 Other revenue in Global WAM (fee income) $ 1,899 $ 1,975 $ 2,005 $ 1,875 $ 1,809 $ 3,874 $ 3,559 $ 7,439 Investment income per financial statements $ 4,740 $ 4,234 $ 5,250 $ 4,487 $ 4,261 $ 8,974 $ 8,512 $ 18,249 Realized and unrealized gains (losses) on assets supporting insurance and investment contract liabilities per financial statements 2,377 (992) (622) 1,730 564 1,385 1,102 2,210 Total investment income 7,117 3,242 4,628 6,217 4,825 10,359 9,614 20,459 Less: Investment income in segments other than Global WAM 6,924 3,089 4,550 5,991 4,687 10,013 9,336 19,877 Investment income in Global WAM $ 193 $ 153 $ 78 $ 226 $ 138 $ 346 $ 278 $ 582 Total other revenue and investment income in Global WAM $ 2,092 $ 2,128 $ 2,083 $ 2,101 $ 1,947 $ 4,220 $ 3,837 $ 8,021 Less: Total revenue reported in items excluded from core earnings Market experience gains (losses) 20 (14) (28) 33 (9) 6 (1) 4 Revenue related to integration and acquisitions 3 2 (29) 13 8 5 17 1 Global WAM core revenue $ 2,069 $ 2,140 $ 2,140 $ 2,055 $ 1,948 $ 4,209 $ 3,821 $ 8,016 Core earnings excluding the change in ECL ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) For the three months ended June 30, 2025 2024 Core earnings $ 1,726 $ 1,737 Less: (Increase) recovery in the ECL (1) (83) (4) Core earnings, excluding change in ECL 1,809 1,741 CER adjustment (2) - 26 Core earnings, excluding change in ECL, CER basis $ 1,809 $ 1,767 (1) 2Q24 excludes the change in ECL related to the RGA Canadian Reinsurance Transaction. (2) The impact of updating foreign exchange rates to that which was used in 2Q25. Core earnings available to common shareholders excluding the change in ECL ($ millions, post-tax and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) (1) 2Q24 excludes the change in ECL related to the RGA Canadian Reinsurance transaction. Core expenses ($ millions, and based on actual foreign exchange rates in effect in the applicable reporting period, unless otherwise stated) Quarterly Results YTD Results Full Year Results 2Q25 1Q25 4Q24 3Q24 2Q24 2025 2024 2024 Core expenses General expenses – Statements of Income $ 1,140 $ 1,202 $ 1,328 $ 1,204 $ 1,225 $ 2,342 $ 2,327 $ 4,859 Directly attributable acquisition expense for contracts measured using the PAA method (1) 40 42 43 36 39 82 77 156 Directly attributable maintenance expense (1) 514 532 517 509 509 1,046 1,048 2,074 Total expenses 1,694 1,776 1,888 1,749 1,773 3,470 3,452 7,089 Less: General expenses included in items excluded from core earnings Restructuring charge - - 67 25 - - - 92 Integration and acquisition - - - - 57 - 57 57 Legal provisions and Other expenses 5 - 24 8 3 5 9 41 Total 5 - 91 33 60 5 66 190 Core expenses $ 1,689 $ 1,776 $ 1,797 $ 1,716 $ 1,713 $ 3,465 $ 3,386 $ 6,899 CER adjustment (2) - (29) (5) 15 19 (29) 47 58 Core expenses, CER basis $ 1,689 $ 1,747 $ 1,792 $ 1,731 $ 1,732 $ 3,436 $ 3,433 $ 6,957 Total expenses $ 1,694 $ 1,776 $ 1,888 $ 1,749 $ 1,773 $ 3,470 $ 3,452 $ 7,089 CER adjustment (2) - (30) (5) 15 20 (30) 48 58 Total expenses, CER basis $ 1,694 $ 1,746 $ 1,883 $ 1,764 $ 1,793 $ 3,440 $ 3,500 $ 7,147 (1) Expenses are components of insurance service expenses on the Statements of Income that flow directly through income. (2) The impact of updating foreign exchange rates to that which was used in 2Q25. CAUTION REGARDING FORWARD-LOOKING STATEMENTS From time to time, Manulife makes written and/or oral forward-looking statements, including in this document. In addition, our representatives may make forward-looking statements orally to analysts, investors, the media and others. All such statements are made pursuant to the "safe harbour" provisions of Canadian provincial securities laws and the U.S. Private Securities Litigation Reform Act of 1995. The forward-looking statements in this document include, but are not limited to, statements with respect to our ability to achieve our medium-term financial and operating targets, continued share buybacks, Comvest's expected contribution to our future growth, the expected timing of the closing of the Comvest acquisition and also relate to, among other things, our objectives, goals, strategies, intentions, plans, beliefs, expectations and estimates, and can generally be identified by the use of words such as "may", "will", "could", "should", "would", "likely", "suspect", "outlook", "expect", "intend", "estimate", "anticipate", "believe", "plan", "forecast", "objective", "seek", "aim", "continue", "goal", "restore", "embark" and "endeavour" (or the negative thereof) and words and expressions of similar import, and include statements concerning possible or assumed future results. Although we believe that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements and they should not be interpreted as confirming market or analysts' expectations in any way. Certain material factors or assumptions are applied in making forward-looking statements and actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from expectations include but are not limited to: general business and economic conditions (including but not limited to the performance, volatility and correlation of equity markets, interest rates, credit and swap spreads, inflation rates, currency rates, investment losses and defaults, market liquidity and creditworthiness of guarantors, reinsurers and counterparties); changes in laws and regulations; changes in accounting standards applicable in any of the territories in which we operate; changes in regulatory capital requirements; our ability to obtain premium rate increases on in-force policies; our ability to execute strategic plans and changes to strategic plans; downgrades in our financial strength or credit ratings; our ability to maintain our reputation; impairments of goodwill or intangible assets or the establishment of provisions against future tax assets; the accuracy of estimates relating to morbidity, mortality and policyholder behaviour; the accuracy of other estimates used in applying accounting policies and actuarial methods and embedded value methods; our ability to implement effective hedging strategies and unforeseen consequences arising from such strategies; our ability to source appropriate assets to back our long-dated liabilities; level of competition and consolidation; our ability to market and distribute products through current and future distribution channels; unforeseen liabilities or asset impairments arising from acquisitions and dispositions of businesses; the realization of losses arising from the sale of investments classified fair value through other comprehensive income; our liquidity, including the availability of financing to satisfy existing financial liabilities on expected maturity dates when required; obligations to pledge additional collateral; the availability of letters of credit to provide capital management flexibility; accuracy of information received from counterparties and the ability of counterparties to meet their obligations; the availability, affordability and adequacy of reinsurance; legal and regulatory proceedings, including tax audits, tax litigation or similar proceedings; our ability to adapt products and services to the changing market; our ability to attract and retain key executives, employees and agents; the appropriate use and interpretation of complex models or deficiencies in models used; political, legal, operational and other risks associated with our operations; geopolitical uncertainty, including international conflicts and trade disputes; acquisitions and our ability to complete acquisitions including the availability of equity and debt financing for this purpose; the disruption of or changes to key elements of the Company's or public infrastructure systems; environmental concerns, including climate change; our ability to protect our intellectual property and exposure to claims of infringement; our inability to withdraw cash from subsidiaries; the timing to close the Comvest acquisition and the fact that the amount and timing of any future common share repurchases will depend on the earnings, cash requirements and financial condition of Manulife, market conditions, capital requirements (including under LICAT capital standards), common share issuance requirements, applicable law and regulations (including Canadian and U.S. securities laws and Canadian insurance company regulations), and other factors deemed relevant by Manulife, and may be subject to regulatory approval or conditions. Additional information about material risk factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found under "Risk Management and Risk Factors" and "Critical Actuarial and Accounting Policies" in the Management's Discussion and Analysis in our most recent annual report, under "Risk Management and Risk Factors Update" and "Critical Actuarial and Accounting Policies" in the Management's Discussion and Analysis in our most recent interim report, and in the "Risk Management" note to the Consolidated Financial Statements in our most recent annual and interim reports, as well as elsewhere in our filings with Canadian and U.S. securities regulators. The forward-looking statements in this document are, unless otherwise indicated, stated as of the date hereof and are presented for the purpose of assisting investors and others in understanding our financial position and results of operations, our future operations, as well as our objectives and strategic priorities, and may not be appropriate for other purposes. We do not undertake to update any forward-looking statements, except as required by law.
Globe and Mail
7 minutes ago
- Globe and Mail
Vital Energy Reports Second-Quarter 2025 Financial and Operating Results
TULSA, OK, Aug. 06, 2025 (GLOBE NEWSWIRE) -- Vital Energy, Inc. (NYSE: VTLE) ("Vital Energy" or the "Company") today reported second-quarter 2025 financial and operating results. Supplemental slides have been posted to the Company's website and can be found at A conference call is planned for 7:30 a.m. CT, Thursday, August 7, 2025. A webcast will be available through the Company's website. Second-Quarter 2025 Highlights Reported a net loss of $582.6 million, Adjusted Net Income 1 of $76.1 million and cash flow from operating activities of $252.3 million Generated Consolidated EBITDAX 1 of $338.1 million and Adjusted Free Cash Flow 1 of $36.1 million Reported capital investments of $257.0 million, excluding non-budgeted acquisitions and leasehold expenditures, above guidance of $215-$245 million Reported lease operating expense ("LOE") of $107.8 million, below guidance of $112-$118 million Reported total general and administrative expenses ("G&A") of $23.8 million, below guidance of $24.6-$26.7 million Produced 137.9 thousand barrels of oil equivalent per day ("MBOE/d") and oil of 62.1 thousand barrels of oil per day ("MBO/d"), within guidance of 133.0-139.0 MBOE/d and 61.0-65.0 MBO/d, respectively Commenced production from the Company's first two J-Hook wells On schedule to TIL all 38 second-half 2025 wells by early October Divested 3,800 net non-core acres in Crane and Upton counties, Texas, for $6.5 million in July 2025, with proceeds allocated to debt reduction 1 Non-GAAP financial measure; please see supplemental reconciliations of GAAP to non-GAAP financial measures at the end of this release. "Our second quarter results demonstrate our ongoing efforts to lower costs and optimize our assets, with the ultimate goal of enhancing returns," stated Jason Pigott, President and CEO. "We have made substantial progress to sustainably reduce operating, personnel and corporate costs as we streamline our business and strengthen our balance sheet. Additionally, we continue to lead the industry in the application of optimized well designs, completing our first J-Hook wells and commencing drilling on a section to be fully developed with 12 horseshoe wells. We remain committed to the capital and cost discipline that will allow us to generate sustainable Adjusted Free Cash Flow from our high-quality asset base." Second-Quarter 2025 Financial and Operations Summary Financial Results. The Company had a net loss of $582.6 million, or $(15.43) per diluted share. Results were impacted by a non-cash pre-tax impairment loss on oil and gas properties of $427.0 million and a valuation allowance against the Company's federal net deferred tax asset of $237.9 million. Adjusted Net Income was $76.1 million, or $2.02 per adjusted diluted share. Cash flows from operating activities were $252.3 million and Consolidated EBITDAX was $338.1 million. The impairment was related to the full cost ceiling limitation, driven primarily by the decline in the trailing 12-month SEC mandated oil price calculation, and excludes the value of the Company's commodity derivative positions and only includes the 171 proved undeveloped locations in the Company's current proved reserves out of approximately 920 inventory locations at the beginning of the year, net of divestitures. Additionally, as a result of the full cost ceiling impairment and the expectation of future impairments, a valuation allowance against the Company's net deferred tax asset was recorded. Production. Vital Energy's total and oil production averaged 137,864 BOE/d and 62,140 BO/d, respectively. Weather and temporary curtailments related to the installation of additional production equipment negatively impacted average daily production by 780 BOE/d, 500 BO/d of which was oil. Capital Investments. Total capital investments, excluding non-budgeted acquisitions and leasehold expenditures, were $257 million, including approximately $13 million related to drilling cost overruns and $11 million to accelerate development activity into the second quarter. Second quarter investments included $216 million in drilling and completions, $27 million in infrastructure investments, $8 million in other capitalized costs and $6 million in land, exploration and data-related costs. Operating Expenses. LOE was 6% lower than the midpoint of guidance at $107.8 million, driven by lower than expected costs on the recently acquired Point Energy assets and ongoing cost optimization across the Midland and Delaware basins that reduced field power generation and chemicals costs. G&A Expenses. Total G&A expenses were 7% below the midpoint of guidance at $23.8 million as the Company continued to reduce employee and professional costs. Adjusted Free Cash Flow and Net Debt. Adjusted Free Cash Flow was $36 million, with sustainable expense reductions largely offsetting drilling outspend. Net Debt 1 increased by $8 million during the quarter as the Company's net changes in operating assets and liabilities decreased by $41 million. Liquidity. At June 30, 2025, the Company had $745 million outstanding on its $1.4 billion senior secured credit facility and cash and cash equivalents of $30 million. 1 Non-GAAP financial measure; please see supplemental reconciliations of GAAP to non-GAAP financial measures at the end of this release. 2025 Outlook Production. Planned completion of 38 wells in late third quarter/early fourth quarter is expected to meaningfully increase production volumes. Total and oil production ranges for full-year 2025 were narrowed to account for actual second-quarter 2025 volumes and are expected to be 136.5-139.5 MBOE/d and 63.3-65.3 MBO/d, respectively. Capital Investments. Vital Energy reduced expectations for third quarter investments by $25 million to $235-$265 million, in part reflecting the acceleration of capital into the second quarter. Guidance for the fourth quarter is unchanged. Full-year 2025 capital expectations were narrowed to $850-$900 million. Operating Expenses. The Company expects recent improvements in operating expenses to be sustainable. Third quarter LOE is expected to be $109-$115 million and decline to $107-$113 million in the fourth quarter of 2025. G&A Expenses. In June, Vital Energy reduced its combined employee and contractor headcount by approximately 10%, resulting in sustainably lower G&A expense. Total G&A for both the third and fourth quarters of 2025 is expected to decline approximately 12% from second-quarter 2025 to a range of $20.0-$22.0 million. Non-core Divestitures. In July 2025, Vital Energy closed on the sale of approximately 3,800 net acres in Crane and Upton counties for $6.5 million. The sale included five of the Company's inventory locations in the Barnett formation with no impact to production. Year-to-date, Vital Energy has closed on non-core asset sales totaling $27 million. Adjusted Free Cash Flow and Net Debt. For full-year 2025, the Company expects to generate approximately $305 million of Adjusted Free Cash Flow at current oil prices of ~$67 per barrel WTI, inclusive of hedging proceeds, and reduce Net Debt by approximately $310 million. The estimated Net Debt reduction includes proceeds from non-core asset sales and increases in debt from working capital changes and organizational restructuring expenses. Through the first half of 2025, Vital Energy reduced Net Debt by $125 million. The Company expects to reduce Net Debt by approximately $25 million in the third quarter of 2025 and approximately $160 million in the fourth quarter. Third-Quarter 2025 Guidance The table below reflects the Company's guidance for production and capital investments. 3Q-25E Total production (MBOE/d) 128.0 - 134.0 Oil production (MBO/d) 58.0 - 62.0 Capital investments, excluding non-budgeted acquisitions ($ MM) $235 - $265 The table below reflects the Company's guidance for select revenue and expense items. 3Q-25E Average sales price realizations (excluding derivatives): Oil (% of WTI) 101% NGL (% of WTI) 21% Natural gas (% of Henry Hub) 23% Net settlements received (paid) for matured commodity derivatives ($ MM): Oil $11 NGL $5 Natural gas $20 Selected average costs & expenses: Lease operating expenses ($ MM) $109 - $115 Production and ad valorem taxes (% of oil, NGL and natural gas sales revenues) 6.40% Oil transportation and marketing expenses ($ MM) $10.7 - $11.7 Gas gathering, processing and transportation expenses ($ MM) $5.5 - $6.5 General and administrative expenses (excluding LTIP and transaction expenses, $ MM) $16.9 - $18.4 General and administrative expenses (LTIP cash, $ MM) $0.4 - $0.5 General and administrative expenses (LTIP non-cash, $ MM) $2.7 - $3.1 Depletion, depreciation and amortization ($ MM) $168 - $178 Conference Call Details Vital Energy plans to host a conference call at 7:30 a.m. CT on Thursday, August 7, 2025, to discuss its second-quarter 2025 financial and operating results. Supplemental slides will be posted to the Company's website. Interested parties are invited to listen to the call via the Company's website at under the tab for "Investor Relations | News & Presentations | Upcoming Events." About Vital Energy Vital Energy, Inc. is an independent energy company with headquarters in Tulsa, Oklahoma. Vital Energy's business strategy is focused on the acquisition, exploration and development of oil and natural gas properties in the Permian Basin of West Texas. Additional information about Vital Energy may be found on its website at Forward-Looking Statements This press release and any oral statements made regarding the contents of this release, including in the conference call referenced herein, contain forward-looking statements as defined under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, that address activities that Vital Energy assumes, plans, expects, believes, intends, projects, indicates, enables, transforms, estimates or anticipates (and other similar expressions) will, should or may occur in the future are forward-looking statements. The forward-looking statements are based on management's current belief, based on currently available information, as to the outcome and timing of future events. Such statements are not guarantees of future performance and involve risks, assumptions and uncertainties. General risks relating to Vital Energy include, but are not limited to: the volatility of oil, NGL and natural gas prices, including the Company's area of operation in the Permian Basin; changes, uncertainty and instability in domestic and global production, supply and demand for oil, NGL and natural gas, and actions by the Organization of the Petroleum Exporting Countries members and other oil exporting nations ("OPEC+"); changes in general economic, business or industry conditions and market volatility, including as a result of slowing growth, inflationary pressures, monetary policy, tariffs, trade barriers, price and exchange controls and other regulatory requirements, including such changes that may be implemented by the United States ("U.S.") and foreign governments; the Company's ability to execute its strategies, including its ability to successfully identify and consummate strategic acquisitions at purchase prices that are accretive to its financial results and to successfully integrate acquired businesses, assets and properties; the Company's ability to optimize spacing, drilling and completions techniques in order to maximize its rate of return, cash flows from operations and stockholder value; the ongoing instability and uncertainty in the U.S. and international energy, financial and consumer markets that could adversely affect the liquidity available to the Company and its customers and the demand for commodities, including oil, NGL and natural gas; competition in the oil and gas industry; the Company's ability to discover, estimate, develop and replace oil, NGL and natural gas reserves and inventory; insufficient transportation capacity in the Permian Basin and challenges associated with such constraint, and the availability and costs of sufficient gathering, processing, storage and export capacity; a decrease in production levels which may impair the Company's ability to meet its contractual obligations and ability to retain its leases; risks associated with the uncertainty of potential drilling locations and plans to drill in the future; the inability of significant customers to meet their obligations; revisions to the Company's reserve estimates as a result of changes in commodity prices, decline curves and other uncertainties; the availability and costs of drilling and production equipment, supplies, labor and oil and natural gas processing and other services; ongoing war and political instability in Ukraine, Israel and the Middle East and the effects of such conflicts on the global hydrocarbon market and supply chains; risks related to the geographic concentration of the Company's assets; the Company's ability to hedge commercial risk, including commodity price volatility, and regulations that affect the Company's ability to hedge such risks; the Company's ability to continue to maintain the borrowing capacity under its Senior Secured Credit Facility or access other means of obtaining capital and liquidity, especially during periods of sustained low commodity prices; the Company's ability to comply with restrictions contained in its debt agreements, including its Senior Secured Credit Facility and the indentures governing its senior unsecured notes, as well as debt that could be incurred in the future; the Company's ability to generate sufficient cash to service its indebtedness, fund its capital requirements and generate future profits; drilling and operating risks, including but not limited to, risks related to hydraulic fracturing, securing sufficient electricity to produce its wells without limitation, natural disasters and other matters beyond the Company's control; U.S. and international economic conditions and legal, tax, political and administrative developments, including the effects of energy, trade and environmental policies and existing and future laws and government regulations; the Company's ability to comply with federal, state and local regulatory requirements, including the One Big Beautiful Bill Act (the "OBBB Act") and any impact thereon by the OBBB Act taxes, tariffs and international trade; the impact of repurchases, if any, of securities from time to time; the Company's ability to maintain the health and safety of, as well as recruit and retain, qualified personnel, including senior management or other key personnel, necessary to operate its business; evolving cybersecurity risks such as those involving unauthorized access, denial-of-service attacks, third-party service provider failures, malicious software, data privacy breaches by employees, insiders or others with authorized access, cyber or phishing attacks, ransomware, social engineering, physical breaches or other actions; and the Company's belief that the outcome of any current legal proceedings will not materially affect its financial results and operations, and other factors, including those and other risks described in its Annual Report on Form 10-K for the year ended December 31, 2024 (the "2024 Annual Report"), subsequent Quarterly Reports on Form 10-Q and those set forth from time to time in other filings with the Securities and Exchange Commission ("SEC"). These documents are available through Vital Energy's website at under the tab "Investor Relations" or through the SEC's Electronic Data Gathering and Analysis Retrieval System at Any of these factors could cause Vital Energy's actual results and plans to differ materially from those in the forward-looking statements. Therefore, Vital Energy can give no assurance that its future results will be as estimated. Any forward-looking statement speaks only as of the date on which such statement is made. Vital Energy does not intend to, and disclaims any obligation to, correct, update or revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law. This press release and any accompanying disclosures include financial measures that are not in accordance with generally accepted accounting principles ("GAAP"), such as Adjusted Free Cash Flow, Adjusted Net Income, Net Debt and Consolidated EBITDAX. While management believes that such measures are useful for investors, they should not be used as a replacement for financial measures that are in accordance with GAAP. For a reconciliation of such non-GAAP financial measures to the nearest comparable measure in accordance with GAAP, please see the supplemental financial information at the end of this press release. Unless otherwise specified, references to "average sales price" refer to average sales price excluding the effects of the Company's derivative transactions. All amounts, dollars and percentages presented in this press release are rounded and therefore approximate. Vital Energy, Inc. Selected operating data Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 (unaudited) (unaudited) Sales volumes: Oil (MBbl) 5,655 5,388 11,495 10,715 NGL (MBbl) 3,573 3,173 7,057 6,107 Natural gas (MMcf) 19,908 19,264 39,650 37,798 Oil equivalent (MBOE) (1) 12,546 11,771 25,160 23,121 Average daily oil equivalent sales volumes (BOE/d) (1) 137,864 129,356 139,005 127,038 Average daily oil sales volumes (Bbl/d) (1) 62,140 59,209 63,509 58,872 Average sales prices (1): Oil ($/Bbl) (2) $ 64.65 $ 81.97 $ 68.55 $ 80.03 NGL ($/Bbl) (2) $ 14.29 $ 12.57 $ 15.98 $ 14.24 Natural gas ($/Mcf) (2) $ 0.53 $ (0.28) $ 0.96 $ 0.34 Average sales price ($/BOE) (2) $ 34.06 $ 40.45 $ 37.31 $ 41.40 Oil, with commodity derivatives ($/Bbl) (3) $ 74.12 $ 76.90 $ 74.96 $ 75.93 NGL, with commodity derivatives ($/Bbl) (3) $ 14.93 $ 12.33 $ 16.00 $ 14.05 Natural gas, with commodity derivatives ($/Mcf) (3) $ 1.73 $ 0.70 $ 1.62 $ 1.05 Average sales price, with commodity derivatives ($/BOE) (3) $ 40.40 $ 39.66 $ 41.29 $ 40.61 Selected average costs and expenses per BOE sold (1): Lease operating expenses $ 8.59 $ 9.66 $ 8.40 $ 9.49 Production and ad valorem taxes 2.10 2.30 2.37 2.50 Oil transportation and marketing expenses 0.85 1.04 0.83 0.95 Gas gathering, processing and transportation expenses 0.43 0.43 0.48 0.32 General and administrative (excluding LTIP and transaction expenses) 1.68 1.67 1.62 1.89 Total selected operating expenses $ 13.65 $ 15.10 $ 13.70 $ 15.15 General and administrative (LTIP): LTIP cash $ (0.01) $ 0.03 $ (0.01) $ 0.10 LTIP non-cash $ 0.23 $ 0.30 $ 0.24 $ 0.29 Depletion, depreciation and amortization $ 14.86 $ 14.81 $ 14.96 $ 14.72 _______________________________________________________________________________ (1) The numbers presented are calculated based on actual amounts and may not recalculate using the rounded numbers presented in the table above. (2) Price reflects the average of actual sales prices received when control passes to the purchaser/customer adjusted for quality, certain transportation fees, geographical differentials, marketing bonuses or deductions and other factors affecting the price received at the delivery point. (3) Price reflects the after-effects of the Company's commodity derivative transactions on its average sales prices. The Company's calculation of such after-effects includes settlements of matured commodity derivatives during the respective periods. Vital Energy, Inc. Consolidated balance sheets (in thousands, except share data) June 30, 2025 December 31, 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 30,194 $ 40,179 Accounts receivable, net 242,956 299,698 Derivatives 129,444 101,474 Other current assets 27,836 25,205 Total current assets 430,430 466,556 Property and equipment: Oil and natural gas properties, full cost method: Evaluated properties 14,136,321 13,587,040 Unevaluated properties not being depleted 176,117 242,792 Less: accumulated depletion and impairment (9,915,495) (8,966,200) Oil and natural gas properties, net 4,396,943 4,863,632 Midstream and other fixed assets, net 122,022 134,265 Property and equipment, net 4,518,965 4,997,897 Derivatives 33,165 34,564 Operating lease right-of-use assets 82,049 104,329 Deferred income taxes 3,396 239,685 Other noncurrent assets, net 32,446 35,915 Total assets $ 5,100,451 $ 5,878,946 Liabilities and stockholders' equity Current liabilities: Accounts payable and accrued liabilities $ 158,125 $ 185,115 Accrued capital expenditures 109,844 95,593 Undistributed revenue and royalties 172,415 187,563 Operating lease liabilities 45,778 73,143 Other current liabilities 59,341 59,725 Total current liabilities 545,503 601,139 Long-term debt, net 2,321,294 2,454,242 Derivatives 19,466 5,814 Asset retirement obligations 75,620 82,941 Operating lease liabilities 27,941 26,733 Other noncurrent liabilities 5,049 7,506 Total liabilities 2,994,873 3,178,375 Commitments and contingencies Stockholders' equity: Preferred stock, $0.01 par value, 50,000,000 shares authorized and zero issued and outstanding as of June 30, 2025 and December 31, 2024 — — Common stock, $0.01 par value, 80,000,000 shares authorized, and 38,687,645 and 38,144,248 issued and outstanding as of June 30, 2025 and December 31, 2024, respectively 387 381 Additional paid-in capital 3,829,651 3,823,241 Accumulated deficit (1,724,460) (1,123,051) Total stockholders' equity 2,105,578 2,700,571 Total liabilities and stockholders' equity $ 5,100,451 $ 5,878,946 Vital Energy, Inc. Consolidated statements of operations Three months ended June 30, Six months ended June 30, (in thousands, except per share data) 2025 2024 2025 2024 (unaudited) (unaudited) Revenues: Oil sales $ 365,605 $ 441,667 $ 787,937 $ 857,451 NGL sales 51,046 39,870 112,785 86,945 Natural gas sales 10,631 (5,371) 37,969 12,874 Other operating revenues 2,345 205 3,116 1,440 Total revenues 429,627 476,371 941,807 958,710 Costs and expenses: Lease operating expenses 107,750 113,742 211,235 219,470 Production and ad valorem taxes 26,356 27,079 59,581 57,693 Oil transportation and marketing expenses 10,649 12,199 20,769 22,032 Gas gathering, processing and transportation expenses 5,380 5,088 12,136 7,464 General and administrative 23,791 23,573 46,471 52,929 Organizational restructuring expenses 4,627 — 4,627 — Depletion, depreciation and amortization 186,424 174,298 376,324 340,405 Impairment expense 427,046 — 585,287 — Other operating expenses, net 2,263 2,593 4,176 3,611 Total costs and expenses 794,286 358,572 1,320,606 703,604 Gain (loss) on disposal of assets, net 1,255 36 1,365 166 Operating income (loss) (363,404) 117,835 (377,434) 255,272 Non-operating income (expense): Gain (loss) on derivatives, net 68,993 7,658 113,164 (144,489) Interest expense (49,854) (40,690) (100,234) (84,111) Loss on extinguishment of debt, net — (40,301) — (66,115) Other income (expense), net 863 2,609 1,216 4,674 Total non-operating income (expense), net 20,002 (70,724) 14,146 (290,041) Income (loss) before income taxes (343,402) 47,111 (363,288) (34,769) Income tax benefit (expense) (239,170) (10,409) (238,121) 5,340 Net income (loss) (582,572) 36,702 (601,409) (29,429) Preferred stock dividends — (303) — (652) Net income (loss) available to common stockholders $ (582,572) $ 36,399 $ (601,409) $ (30,081) Net income (loss) per common share: Basic $ (15.43) $ 1.00 $ (15.97) $ (0.84) Diluted $ (15.43) $ 0.98 $ (15.97) $ (0.84) Weighted-average common shares outstanding: Basic 37,761 36,381 37,670 35,973 Diluted 37,761 37,605 37,670 35,973 Vital Energy, Inc. Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 (unaudited) (unaudited) Cash flows from operating activities: Net income (loss) $ (582,572) $ 36,702 $ (601,409) $ (29,429) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Share-settled equity-based compensation, net 3,233 3,934 6,837 7,435 Depletion, depreciation and amortization 186,424 174,298 376,324 340,405 Impairment expense 427,046 — 585,287 — Mark-to-market on derivatives: (Gain) loss on derivatives, net (68,993) (7,658) (113,164) 144,489 Settlements received (paid) for matured derivatives, net 79,558 (9,262) 100,245 (18,262) Loss on extinguishment of debt, net — 40,301 — 66,115 Deferred income tax (benefit) expense 238,100 9,347 236,289 (7,577) Other, net 10,319 7,027 19,870 12,429 Changes in operating assets and liabilities: Accounts receivable, net 11,387 65,137 56,742 13,662 Other current assets (3,078) (1,961) (3,068) (7,607) Other noncurrent assets, net (675) 1,906 (4,309) 1,549 Accounts payable and accrued liabilities (5,236) (7,803) (26,990) (16,867) Undistributed revenue and royalties (20,760) 29,133 (15,148) 16,268 Other current liabilities (15,081) 964 1,018 (20,383) Other noncurrent liabilities (7,331) (3,664) (15,198) (5,236) Net cash provided by (used in) operating activities 252,341 338,401 603,326 496,991 Cash flows from investing activities: Acquisitions of oil and natural gas properties, net — (299) (1,636) (4,679) Capital expenditures: Oil and natural gas properties (258,929) (222,334) (488,541) (417,706) Midstream and other fixed assets (2,850) (4,093) (4,675) (9,178) Proceeds from dispositions of capital assets, net of selling costs 1,245 55 22,289 180 Other investing activities 1,233 — 1,140 (952) Net cash provided by (used in) investing activities (259,301) (226,671) (471,423) (432,335) Cash flows from financing activities: Borrowings on Senior Secured Credit Facility 215,000 275,000 365,000 405,000 Payments on Senior Secured Credit Facility (205,000) (450,000) (500,000) (450,000) Issuance of senior unsecured notes — 201,500 — 1,001,500 Extinguishment of debt — (498,696) — (952,214) Stock exchanged for tax withholding (33) (9) (3,956) (3,420) Payments for debt issuance costs — (4,564) — (20,285) Other, net (1,462) (1,722) (2,932) (2,734) Net cash provided by (used in) financing activities 8,505 (478,491) (141,888) (22,153) Net increase (decrease) in cash and cash equivalents 1,545 (366,761) (9,985) 42,503 Cash and cash equivalents, beginning of period 28,649 423,325 40,179 14,061 Cash and cash equivalents, end of period $ 30,194 $ 56,564 $ 30,194 $ 56,564 Vital Energy, Inc. Supplemental reconciliations of GAAP to non-GAAP financial measures Non-GAAP financial measures The non-GAAP financial measures of Adjusted Free Cash Flow, Adjusted Net Income, Consolidated EBITDAX, Net Debt and Net Debt to Consolidated EBITDAX, as defined by the Company, may not be comparable to similarly titled measures used by other companies. Furthermore, these non-GAAP financial measures should not be considered in isolation or as a substitute for GAAP measures of liquidity or financial performance, but rather should be considered in conjunction with GAAP measures, such as net income or loss, operating income or loss or cash flows from operating activities. Adjusted Free Cash Flow Adjusted Free Cash Flow is a non-GAAP financial measure that the Company defines as net cash provided by (used in) operating activities (GAAP) before net changes in operating assets and liabilities and transaction expenses related to non-budgeted acquisitions, less capital investments, excluding non-budgeted acquisition costs. Management believes Adjusted Free Cash Flow is useful to management and investors in evaluating operating trends in its business that are affected by production, commodity prices, operating costs and other related factors. There are significant limitations to the use of Adjusted Free Cash Flow as a measure of performance, including the lack of comparability due to the different methods of calculating Adjusted Free Cash Flow reported by different companies. This release also includes certain forward-looking non-GAAP measures. Due to the forward-looking nature of such measures, no reconciliations of these non-GAAP measures to their respective most directly comparable GAAP measure are available without unreasonable efforts. This is due to the inherent difficulty of forecasting the timing or amount of various reconciling items that would impact the most directly comparable forward-looking GAAP financial measure, that have not yet occurred, are out of the Company's control and/or cannot be reasonably predicted. Accordingly, such reconciliations are excluded from this release. Forward-looking non-GAAP financial measures provided without the most directly comparable GAAP financial measures may vary materially from the corresponding GAAP financial measures. The following table presents a reconciliation of net cash provided by (used in) operating activities (GAAP) to Adjusted Free Cash Flow (non-GAAP) for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 (unaudited) (unaudited) Net cash provided by (used in) operating activities $ 252,341 $ 338,401 $ 603,326 $ 496,991 Less: Net changes in operating assets and liabilities (40,774) 83,712 (6,953) (18,614) General and administrative (transaction expenses) — (15) — (347) Cash flows from operating activities before net changes in operating assets and liabilities and transaction expenses related to non-budgeted acquisitions 293,115 254,704 610,279 515,952 Less capital investments, excluding non-budgeted acquisition costs: Oil and natural gas properties (1) 254,195 205,521 505,459 418,786 Midstream and other fixed assets (1) 2,830 4,489 4,237 9,124 Total capital investments, excluding non-budgeted acquisition costs 257,025 210,010 509,696 427,910 Adjusted Free Cash Flow (non-GAAP) $ 36,090 $ 44,694 $ 100,583 $ 88,042 (1) Includes capitalized share-settled equity-based compensation and asset retirement costs. Adjusted Net Income Adjusted Net Income is a non-GAAP financial measure that the Company defines as net income or loss (GAAP) plus adjustments for mark-to-market on derivatives, premiums paid or received for commodity derivatives that matured during the period, organizational restructuring expenses, impairment expense, gains or losses on disposal of assets, income taxes, other non-recurring income and expenses and adjusted income tax expense. Management believes Adjusted Net Income helps investors in the oil and natural gas industry to measure and compare the Company's performance to other oil and natural gas companies by excluding from the calculation items that can vary significantly from company to company depending upon accounting methods, the book value of assets and other non-operational factors. The following table presents a reconciliation of net income (loss) (GAAP) to Adjusted Net Income (non-GAAP) for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands, except per share data) 2025 2024 2025 2024 (unaudited) (unaudited) Net income (loss) $ (582,572) $ 36,702 $ (601,409) $ (29,429) Plus: Mark-to-market on derivatives: (Gain) loss on derivatives, net (68,993) (7,658) (113,164) 144,489 Settlements received (paid) for matured derivatives, net 79,558 (9,262) 100,245 (18,262) Organizational restructuring expenses 4,627 — 4,627 — Impairment expense 427,046 — 585,287 — (Gain) loss on disposal of assets, net (1,255) (36) (1,365) (166) Loss on extinguishment of debt, net — 40,301 — 66,115 Income tax (benefit) expense 239,170 10,409 238,121 (5,340) General and administrative (transaction expenses) — 15 — 347 Adjusted income before adjusted income tax expense 97,581 70,471 212,342 157,754 Adjusted income tax expense (1) (21,468) (15,504) (46,715) (34,706) Adjusted Net Income (non-GAAP) $ 76,113 $ 54,967 $ 165,627 $ 123,048 Net income (loss) per common share: Basic $ (15.43) $ 1.00 $ (15.97) $ (0.84) Diluted $ (15.43) $ 0.98 $ (15.97) $ (0.84) Adjusted Net Income per common share: Basic $ 2.02 $ 1.51 $ 4.40 $ 3.42 Diluted $ 2.02 $ 1.46 $ 4.40 $ 3.42 Adjusted diluted $ 2.02 $ 1.46 $ 4.39 $ 3.30 Weighted-average common shares outstanding: Basic 37,761 36,381 37,670 35,973 Diluted 37,761 37,605 37,670 35,973 Adjusted diluted 37,762 37,605 37,749 37,264 (1) Adjusted income tax expense is calculated by applying a statutory tax rate of 22% for each of the periods ended June 30, 2025 and 2024. Consolidated EBITDAX Consolidated EBITDAX is a non-GAAP financial measure defined in the Company's Senior Secured Credit Facility as net income or loss (GAAP) plus adjustments for share-settled equity-based compensation, depletion, depreciation and amortization, impairment expense, organizational restructuring expenses, gains or losses on disposal of assets, mark-to-market on derivatives, accretion expense, interest expense, income taxes and other non-recurring income and expenses. Consolidated EBITDAX provides no information regarding a company's capital structure, borrowings, interest costs, capital expenditures, working capital movement or tax position. Consolidated EBITDAX does not represent funds available for future discretionary use because it excludes funds required for debt service, capital expenditures, working capital, income taxes, franchise taxes and other commitments and obligations. However, management believes Consolidated EBITDAX is useful to an investor because this measure: is used by investors in the oil and natural gas industry to measure a company's operating performance without regard to items that can vary substantially from company to company depending upon accounting methods, the book value of assets, capital structure and the method by which assets were acquired, among other factors; helps investors to more meaningfully evaluate and compare the results of the Company's operations from period to period by removing the effect of the Company's capital structure from the Company's operating structure; and is used by management for various purposes, including (i) as a measure of operating performance, (ii) as a measure of compliance under the Senior Secured Credit Facility, (iii) in presentations to the board of directors and (iv) as a basis for strategic planning and forecasting. There are significant limitations to the use of Consolidated EBITDAX as a measure of performance, including the inability to analyze the effect of certain recurring and non-recurring items that materially affect the Company's net income or loss and the lack of comparability of results of operations to different companies due to the different methods of calculating Consolidated EBITDAX, or similarly titled measures, reported by different companies. The Company is subject to financial covenants under the Senior Secured Credit Facility, one of which establishes a maximum permitted ratio of Net Debt, as defined in the Senior Secured Credit Facility, to Consolidated EBITDAX. See Note 7 in the 2024 Annual Report for additional discussion of the financial covenants under the Senior Secured Credit Facility. Additional information on Consolidated EBITDAX can be found in the Company's Eleventh Amendment to the Senior Secured Credit Facility, as filed with the SEC on September 13, 2023. The following table presents a reconciliation of net income (loss) (GAAP) to Consolidated EBITDAX (non-GAAP) for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 (unaudited) (unaudited) Net income (loss) $ (582,572) $ 36,702 $ (601,409) $ (29,429) Plus: Share-settled equity-based compensation, net 3,233 3,934 6,837 7,435 Depletion, depreciation and amortization 186,424 174,298 376,324 340,405 Impairment expense 427,046 — 585,287 — Organizational restructuring expenses 4,627 — 4,627 — (Gain) loss on disposal of assets, net (1,255) (36) (1,365) (166) Mark-to-market on derivatives: (Gain) loss on derivatives, net (68,993) (7,658) (113,164) 144,489 Settlements received (paid) for matured derivatives, net 79,558 (9,262) 100,245 (18,262) Accretion expense 977 1,036 2,011 2,056 Interest expense 49,854 40,690 100,234 84,111 Loss extinguishment of debt, net — 40,301 — 66,115 Income tax (benefit) expense 239,170 10,409 238,121 (5,340) General and administrative (transaction expenses) — 15 — 347 Consolidated EBITDAX (non-GAAP) $ 338,069 $ 290,429 $ 697,748 $ 591,761 The following table presents a reconciliation of net cash provided by (used in) operating activities (GAAP) to Consolidated EBITDAX (non-GAAP) for the periods presented: Three months ended June 30, Six months ended June 30, (in thousands) 2025 2024 2025 2024 (unaudited) (unaudited) Net cash provided by (used in) operating activities $ 252,341 $ 338,401 $ 603,326 $ 496,991 Plus: Interest expense 49,854 40,690 100,234 84,111 Organizational restructuring expenses 4,627 — 4,627 — Current income tax (benefit) expense 1,070 1,062 1,832 2,237 Net changes in operating assets and liabilities 40,774 (83,712) 6,953 18,614 General and administrative (transaction expenses) — 15 — 347 Other, net (10,597) (6,027) (19,224) (10,539) Consolidated EBITDAX (non-GAAP) $ 338,069 $ 290,429 $ 697,748 $ 591,761 Net Debt Net Debt is a non-GAAP financial measure defined in the Company's Senior Secured Credit Facility as the face value of long-term debt plus any outstanding letters of credit, less cash and cash equivalents, where cash and cash equivalents are capped at $100 million when there are borrowings on the Senior Secured Credit Facility. Management believes Net Debt is useful to management and investors in determining the Company's leverage position since the Company has the ability, and may decide, to use a portion of its cash and cash equivalents to reduce debt. (in thousands) June 30, 2025 December 31, 2024 (unaudited) Total senior unsecured notes $ 1,600,578 $ 1,600,578 Senior Secured Credit Facility 745,000 880,000 Total long-term debt $ 2,345,578 $ 2,480,578 Less: cash and cash equivalents 30,194 40,179 Net Debt (non-GAAP) $ 2,315,384 $ 2,440,399 Net Debt to Consolidated EBITDAX Net Debt to Consolidated EBITDAX is a non-GAAP financial measure defined in the Company's Senior Secured Credit Facility as Net Debt divided by Consolidated EBITDAX for the previous four quarters, which requires various treatment of asset transaction impacts. Net Debt to Consolidated EBITDAX is used by the Company's management for various purposes, including as a measure of operating performance, in presentations to its board of directors and as a basis for strategic planning and forecasting.
