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Safehold Sets Third Quarter 2022 Earnings Release Date and Webcast

PR Newswire


NEW YORK
, Oct. 26, 2022 /PRNewswire/ — Safehold Inc. (NYSE: SAFE) announced today that it will release its financial results for the third quarter 2022 on Tuesday, November 1, 2022, prior to market open.

The Company will host an earnings conference call reviewing these results and its operations beginning at 10:00 a.m. ET. This conference call will be broadcast live and can be accessed by all interested parties through Safehold’s website, www.safeholdinc.com, in the “Investors” section.

The dial-in information for the live call is:

Dial-in:

888.506.0062

International:

973.528.0011

Access Code:

432150

A replay of the call will be archived on the Company’s website. Alternatively, the replay can be accessed via dial-in from 2:00 p.m. ET on November 1, 2022 through 12:00 a.m. ET on November 15, 2022 by calling:

Replay:

877.481.4010

International:

919.882.2331

Access Code:

46957

Safehold Inc. (NYSE: SAFE) is revolutionizing real estate ownership by providing a new and better way for owners to unlock the value of the land beneath their buildings. Having created the modern ground lease industry in 2017, Safehold continues to help owners of high quality multifamily, office, industrial, hospitality, student housing, life science and mixed-use properties generate higher returns with less risk. The Company, which is taxed as a real estate investment trust (REIT) and is managed by its largest shareholder, iStar Inc., seeks to deliver safe, growing income and long-term capital appreciation to its shareholders. Additional information on Safehold is available on its website at www.safeholdinc.com.

Company Contact:
Jason Fooks
Senior Vice President
Investor Relations & Marketing
T 212.930.9400
E [email protected] 

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/safehold-sets-third-quarter-2022-earnings-release-date-and-webcast-301659742.html

SOURCE Safehold

Posted on

iStar Sets Third Quarter 2022 Earnings Release Date and Webcast

PR Newswire


NEW YORK
, Oct. 26, 2022 /PRNewswire/ — iStar Inc. (NYSE: STAR) announced today that it will release its financial results for the third quarter 2022 on Thursday, November 3, 2022, prior to the opening of the market.

The Company will host an earnings conference call reviewing these results and its operations beginning at 10:00 a.m. ET. This conference call will be broadcast live and can be accessed by all interested parties through iStar’s website, www.istar.com, in the “Investors” section.

The dial-in information for the live call is:

Dial-in:

877.545.0523

International:

973.528.0016

Access Code:

923085

A replay of the call will be archived on the Company’s website. Alternatively, the replay can be accessed via dial-in from 2:00 p.m. ET on November 3, 2022 through 12:00 a.m. ET on November 17, 2022 by calling:

Replay:

877.481.4010

International:

919.882.2331

Access Code:

46958

*     *     *

iStar Inc. (NYSE: STAR) is focused on reinventing the ground lease sector, unlocking value for real estate owners throughout the country by providing modern, more efficient ground leases on institutional quality properties. As the founder, investment manager and largest shareholder of Safehold Inc. (NYSE: SAFE), the creator of the modern ground lease industry, iStar is using its national investment platform and its historic strengths in finance and net lease to expand the use of modern ground leases within the $7 trillion institutional commercial real estate market. Recognized as a consistent innovator in the real estate markets, iStar specializes in identifying and scaling newly discovered opportunities and has completed more than $40 billion of transactions over the past two decades. Additional information on iStar is available on its website at www.istar.com.

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/istar-sets-third-quarter-2022-earnings-release-date-and-webcast-301659744.html

SOURCE iStar Inc.

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Boeing Reports Third-Quarter Results

PR Newswire


ARLINGTON, Va.
, Oct. 26, 2022 /PRNewswire/ —


Third Quarter 2022

  • Operating cash flow of $3.2 billion; continue to expect positive free cash flow for 2022
  • Resumed 787 deliveries and delivered 9 airplanes
  • Recorded losses on fixed-price defense development programs
  • Revenue of $16.0 billion; GAAP loss per share of ($5.49) and core (non-GAAP)* loss per share of ($6.18)
  • Total backlog of $381 billion; including over 4,300 commercial airplanes


Table 1. Summary Financial Results


Third Quarter


Nine Months


(Dollars in Millions, except per share data)


2022


2021


Change


2022


2021


Change


Revenues


$15,956


$15,278


4 %


$46,628


$47,493


(2) %



GAAP


(Loss)/Earnings From Operations


($2,799)


$329


NM


($3,194)


$1,269


NM


Operating Margin


(17.5)


%


2.2


%


NM


(6.8)


%


2.7


%


NM


Net Loss


($3,308)


($132)


NM


($4,390)


($126)


NM


Loss Per Share


($5.49)


($0.19)


NM


($7.24)


($0.10)


NM


Operating Cash Flow


$3,190


($262)


NM


$55


($4,132)


NM



Non-GAAP*


Core Operating (Loss)/Earnings


($3,078)


$59


NM


($4,040)


$461


NM


Core Operating Margin


(19.3)


%


0.4


%


NM


(8.7)


%


1.0


%


NM


Core Loss Per Share


($6.18)


($0.60)


NM


($9.31)


($1.72)


NM


*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.” 

The Boeing Company [NYSE: BA] reported third-quarter revenue of $16.0 billion, GAAP loss per share of ($5.49) and core loss per share (non-GAAP)* of ($6.18). Third-quarter results reflect higher commercial volume and losses on fixed-price defense development programs (Table 1). Boeing generated operating cash flow of $3.2 billion.

“We continue to make important strides in our turnaround and remain focused on our performance,” said Dave Calhoun, Boeing President and Chief Executive Officer. “We generated strong cash in the quarter and are on a solid path to achieving positive free cash flow for 2022. At the same time, revenue and earnings were significantly impacted by losses on our fixed-price defense development programs. We’re squarely focused on maturing these programs, mitigating risks and delivering for our customers and their important missions. We remain in a challenging environment and have more work ahead to drive stability, improve our performance and ensure we’re consistently delivering on our commitments. Despite the challenges, I’m proud of our team and the progress we’ve made to strengthen our company.”


Table 2. Cash Flow


Third Quarter


Nine Months


(Millions)


2022


2021


2022


2021


Operating Cash Flow


$3,190


($262)


$55


($4,132)

Less Additions to Property, Plant & Equipment


($284)


($245)


($896)


($758)


Free Cash Flow*


$2,906


($507)


($841)


($4,890)


*Non-GAAP measure; complete definitions of Boeing’s non-GAAP measures are on page 5, “Non-GAAP Measures Disclosures.” 

Operating cash flow improved to $3.2 billion in the quarter, reflecting higher commercial deliveries, favorable receipt timing, and a tax refund (Table 2).


Table 3. Cash, Marketable Securities and Debt Balances


Quarter-End


(Billions)


Q3 22


Q2 22


Cash


$13.5


$10.0


Marketable Securities

1


$0.8


$1.4


Total


$14.3


$11.4


Debt Balances:

The Boeing Company, net of intercompany loans to BCC


$55.7


$55.7

Boeing Capital, including intercompany loans


$1.5


$1.5


Total Consolidated Debt


$57.2


$57.2


1 
Marketable securities consist primarily of time deposits due within one year classified as “short-term investments.”

Cash and investments in marketable securities increased to $14.3 billion, compared to $11.4 billion at the beginning of the quarter, primarily driven by cash from operations (Table 3). The company has access to credit facilities of $12.0 billion, which remain undrawn.

Total company backlog at quarter-end was $381 billion.


Segment Results

Commercial Airplanes


Table 4. Commercial Airplanes


Third Quarter


Nine Months


(Dollars in Millions)


2022


2021


Change


2022


2021


Change


Commercial Airplanes Deliveries


112


85


32 %


328


241


36 %


Revenues


$6,263


$4,459


40 %


$16,643


$14,743


13 %


Loss from Operations


($643)


($693)


NM


($1,744)


($2,021)


NM


Operating Margin


(10.3)


%


(15.5)


%


NM


(10.5)


%


(13.7)


%


NM

Commercial Airplanes third-quarter revenue increased to $6.3 billion, driven by the resumption of 787 deliveries and higher 737 deliveries (Table 4). Operating margin of (10.3) percent also reflects lower abnormal costs as compared to the third quarter of 2021, partially offset by higher period expenses, including R&D expense.

The company also resumed 787 deliveries in late August, following comprehensive reviews to ensure each airplane meets the company’s highest standards. The program is producing at a low rate with an expected gradual return to five per month over time.

Since late 2020, the 737 MAX fleet has completed nearly 1 million revenue flights. During the quarter, the company secured net orders for 227 aircraft, including 167 737 airplanes, 27 767 airplanes, 18 777 airplanes, and 15 787 airplanes. Commercial Airplanes delivered 112 airplanes during the quarter and backlog included over 4,300 airplanes valued at $307 billion.

Defense, Space & Security


Table 5. Defense, Space & Security


Third Quarter


Nine Months


(Dollars in Millions)


2022


2021


Change


2022


2021


Change


Revenues


$5,307


$6,617


(20) %


$16,981


$20,678


(18) %


(Loss)/earnings from Operations


($2,798)


$436


NM


($3,656)


$1,799


NM


Operating Margin


(52.7)


%


6.6


%


NM


(21.5)


%


8.7


%


NM

Defense, Space & Security third-quarter revenue decreased to $5.3 billion and third-quarter operating margin decreased to (52.7) percent, primarily due to $2.8 billion of losses on certain fixed-price development programs, driven by higher estimated manufacturing and supply chain costs, as well as technical challenges. These losses were recorded on the KC-46A, VC-25B, MQ-25, T-7A and Commercial Crew programs. Results were also impacted by unfavorable performance on other programs.

During the quarter, Defense, Space & Security captured KC-46A Tanker awards from the U.S. Air Force for 15 aircraft and the Israeli Air Force for four aircraft, and Poland selected the AH-64E Apache as its future attack helicopter. Defense, Space & Security delivered 34 aircraft and two satellites, including the first four MH-139A Grey Wolf helicopters to the U.S. Air Force. Also during the quarter, Defense, Space and Security opened the Advanced Composite Fabrication Center in Mesa, Arizona.

Backlog at Defense, Space & Security was $55 billion, of which 31 percent represents orders from customers outside the U.S.

Global Services


Table 6. Global Services


Third Quarter


Nine Months


(Dollars in Millions)


2022


2021


Change


2022


2021


Change


Revenues


$4,432


$4,221


5 %


$13,044


$12,037


8 %


Earnings from Operations


$733


$644


14 %


$2,093


$1,616


30 %


Operating Margin


16.5


%


15.3


%


8 %


16.0


%


13.4


%


19 %

Global Services third-quarter revenue increased to $4.4 billion and third-quarter operating margin increased to 16.5 percent primarily driven by higher commercial services volume and favorable mix, partially offset by lower government services volume.

During the quarter, Global Services was awarded a follow-on KC-767A Performance Based Logistics support contract for the Italian Air Force and received an F/A-18 depot support order for the U.S. Navy. Global Services also signed a Landing Gear Exchange and Airplane Health Management agreement with Ethiopian Airlines. Also in the quarter, Global Services delivered the 100th contracted 737-800BCF to AerCap.

Additional Financial Information


Table 7. Additional Financial Information


Third Quarter


Nine Months


(Dollars in Millions)


2022


2021


2022


2021


Revenues

Boeing Capital


$52


$71


$150


$209

Unallocated items, eliminations and other


($98)


($90)


($190)


($174)


(Loss)/Earnings from Operations

Boeing Capital


$23


$42


$14


$99

FAS/CAS service cost adjustment


$279


$270


$846


$808

Other unallocated items and eliminations


($393)


($370)


($747)


($1,032)


Other income, net


$288


$30


$722


$419


Interest and debt expense


($621)


($669)


($1,901)


($2,021)


Effective tax rate


(5.6)


%


57.4


%


(0.4)


%


62.2


%

At quarter-end, Boeing Capital’s net portfolio balance was $1.6 billion. The change in other income was driven by the absence of a pension settlement charge recorded in the third quarter of 2021. Interest and debt expense decreased due to lower debt balance. The third quarter effective tax rate primarily reflects tax expense due to an increase in the valuation allowance.


Non-GAAP Measures Disclosures

We supplement the reporting of our financial information determined under Generally Accepted Accounting Principles in the United States of America (GAAP) with certain non-GAAP financial information. The non-GAAP financial information presented excludes certain significant items that may not be indicative of, or are unrelated to, results from our ongoing business operations. We believe that these non-GAAP measures provide investors with additional insight into the company’s ongoing business performance. These non-GAAP measures should not be considered in isolation or as a substitute for the related GAAP measures, and other companies may define such measures differently. We encourage investors to review our financial statements and publicly-filed reports in their entirety and not to rely on any single financial measure. The following definitions are provided:

Core Operating Earnings, Core Operating Margin and Core Loss Per Share

Core operating earnings is defined as GAAP earnings from operations excluding the FAS/CAS service cost adjustment. The FAS/CAS service cost adjustment represents the difference between the Financial Accounting Standards (FAS) pension and postretirement service costs calculated under GAAP and costs allocated to the business segments. Core operating margin is defined as core operating earnings expressed as a percentage of revenue. Core (loss)/earnings per share is defined as GAAP diluted earnings per share excluding the net earnings per share impact of the FAS/CAS service cost adjustment and Non-operating pension and postretirement expenses. Non-operating pension and postretirement expenses represent the components of net periodic benefit costs other than service cost. Pension costs, comprising service and prior service costs computed in accordance with GAAP are allocated to Commercial Airplanes and BGS businesses supporting commercial customers. Pension costs allocated to BDS and BGS businesses supporting government customers are computed in accordance with U.S. Government Cost Accounting Standards (CAS), which employ different actuarial assumptions and accounting conventions than GAAP. CAS costs are allocable to government contracts. Other postretirement benefit costs are allocated to all business segments based on CAS, which is generally based on benefits paid. Management uses core operating earnings, core operating margin and core earnings per share for purposes of evaluating and forecasting underlying business performance. Management believes these core earnings measures provide investors additional insights into operational performance as they exclude non-service pension and post-retirement costs, which primarily represent costs driven by market factors and costs not allocable to government contracts. A reconciliation between the GAAP and non-GAAP measures is provided on pages 12 & 13.

Free Cash Flow

Free cash flow is GAAP operating cash flow reduced by capital expenditures for property, plant and equipment. Management believes free cash flow provides investors with an important perspective on the cash available for shareholders, debt repayment, and acquisitions after making the capital investments required to support ongoing business operations and long term value creation. Free cash flow does not represent the residual cash flow available for discretionary expenditures as it excludes certain mandatory expenditures such as repayment of maturing debt. Management uses free cash flow as a measure to assess both business performance and overall liquidity. Table 2 provides a reconciliation of free cash flow to GAAP operating cash flow.

Caution Concerning Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “should,” “expects,” “intends,” “projects,” “plans,” “believes,” “estimates,” “targets,” “anticipates,” and similar expressions generally identify these forward-looking statements. Examples of forward-looking statements include statements relating to our future financial condition and operating results, as well as any other statement that does not directly relate to any historical or current fact. Forward-looking statements are based on expectations and assumptions that we believe to be reasonable when made, but that may not prove to be accurate. These statements are not guarantees and are subject to risks, uncertainties, and changes in circumstances that are difficult to predict. Many factors could cause actual results to differ materially and adversely from these forward-looking statements. Among these factors are risks related to: (1) the COVID-19 pandemic and related industry impacts, including with respect to our operations, our liquidity, the health of our customers and suppliers, and future demand for our products and services; (2) the 737 MAX, including the timing and conditions of remaining 737 MAX regulatory approvals, lower than planned production rates and/or delivery rates, and additional considerations to customers and suppliers; (3) general conditions in the economy and our industry, including those due to regulatory changes; (4) our reliance on our commercial airline customers; (5) the overall health of our aircraft production system, planned commercial aircraft production rate changes, our commercial development and derivative aircraft programs, and our aircraft being subject to stringent performance and reliability standards; (6) changing budget and appropriation levels and acquisition priorities of the U.S. government; (7) our dependence on U.S. government contracts; (8) our reliance on fixed-price contracts; (9) our reliance on cost-type contracts; (10) uncertainties concerning contracts that include in-orbit incentive payments; (11) our dependence on our subcontractors and suppliers, as well as the availability of raw materials; (12) changes in accounting estimates; (13) changes in the competitive landscape in our markets; (14) our non-U.S. operations, including sales to non-U.S. customers; (15) threats to the security of our, our customers’ and/or our suppliers’ information; (16) potential adverse developments in new or pending litigation and/or government investigations; (17) customer and aircraft concentration in our customer financing portfolio; (18) changes in our ability to obtain debt financing on commercially reasonable terms and at competitive rates; (19) realizing the anticipated benefits of mergers, acquisitions, joint ventures/strategic alliances or divestitures; (20) the adequacy of our insurance coverage to cover significant risk exposures; (21) potential business disruptions, including those related to physical security threats, information technology or cyber-attacks, epidemics, sanctions or natural disasters; (22) work stoppages or other labor disruptions; (23) substantial pension and other postretirement benefit obligations; (24) potential environmental liabilities; and (25) effects of climate change and legal, regulatory or market responses to such change.

Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission, including our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K. Any forward-looking statement speaks only as of the date on which it is made, and we assume no obligation to update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

Contact:

Investor Relations:

Matt Welch or Keely Moos (312) 544-2140

Communications:

Michael Friedman [email protected] 

 


The Boeing Company and Subsidiaries


Consolidated Statements of Operations

(Unaudited)


Nine months ended
September 30


Three months ended
September 30


(Dollars in millions, except per share data)


2022

2021


2022

2021

Sales of products


$38,767

$39,224


$13,331

$12,552

Sales of services


7,861

8,269


2,625

2,726


Total revenues


46,628

47,493


15,956

15,278

Cost of products


(38,237)

(35,166)


(14,541)

(11,271)

Cost of services


(6,725)

(6,771)


(2,230)

(2,288)

Boeing Capital interest expense


(20)

(25)


(7)

(7)


Total costs and expenses


(44,982)

(41,962)


(16,778)

(13,566)


1,646

5,531


(822)

1,712

(Loss)/income from operating investments, net


(27)

195


(24)

120

General and administrative expense


(2,757)

(3,169)


(1,226)

(1,097)

Research and development expense, net


(2,058)

(1,571)


(727)

(575)

Gain on dispositions, net


2

283


0

169


(Loss)/earnings from operations


(3,194)

1,269


(2,799)

329

Other income, net


722

419


288

30

Interest and debt expense


(1,901)

(2,021)


(621)

(669)


Loss before income taxes


(4,373)

(333)


(3,132)

(310)

Income tax (expense)/benefit


(17)

207


(176)

178


Net loss


(4,390)

(126)


(3,308)

(132)

Less: net loss attributable to noncontrolling interest


(89)

(67)


(33)

(23)


Net loss attributable to Boeing Shareholders


($4,301)

($59)


($3,275)

($109)


Basic loss per share


($7.24)

($0.10)


($5.49)

($0.19)


Diluted loss per share


($7.24)

($0.10)


($5.49)

($0.19)


Weighted average diluted shares (millions)


594.0

587.3


596.3

589.0

 


The Boeing Company and Subsidiaries


Consolidated Statements of Financial Position

(Unaudited) 


(Dollars in millions, except per share data)


September 30
2022

December 31
2021


Assets

Cash and cash equivalents


$13,494

$8,052

Short-term and other investments


763

8,192

Accounts receivable, net


2,673

2,641

Unbilled receivables, net


9,316

8,620

Current portion of customer financing, net


155

117

Inventories


79,777

78,823

Other current assets, net


3,073

2,221


Total current assets


109,251

108,666

Customer financing, net


1,513

1,695

Property, plant and equipment, net of accumulated depreciation of $21,208 and
     $20,538


10,508

10,918

Goodwill


8,045

8,068

Acquired intangible assets, net


2,371

2,562

Deferred income taxes


77

77

Investments


979

975

Other assets, net of accumulated amortization of of $897 and $975


4,814

5,591


Total assets


$137,558

$138,552


Liabilities and equity

Accounts payable


$9,793

$9,261

Accrued liabilities


21,217

18,455

Advances and progress billings


53,177

52,980

Short-term debt and current portion of long-term debt


5,431

1,296


Total current liabilities


89,618

81,992

Deferred income taxes


230

218

Accrued retiree health care


3,356

3,528

Accrued pension plan liability, net


7,951

9,104

Other long-term liabilities


2,250

1,750

Long-term debt


51,788

56,806


Total liabilities


155,193

153,398

Shareholders’ equity:

          Common stock, par value $5.00 – 1,200,000,000 shares authorized;
          1,012,261,159 shares issued


5,061

5,061

     Additional paid-in capital


9,705

9,052

          Treasury stock, at cost – 416,639,182 and 423,343,707 shares


(51,054)

(51,861)

     Retained earnings


30,107

34,408

     Accumulated other comprehensive loss


(11,518)

(11,659)


Total shareholders’ deficit


(17,699)

(14,999)

Noncontrolling interests


64

153


Total equity


(17,635)

(14,846)


Total liabilities and equity


$137,558

$138,552

 


The Boeing Company and Subsidiaries


Consolidated Statements of Cash Flows

(Unaudited)


Nine months ended
September 30


(Dollars in millions)


2022

2021


Cash flows – operating activities:

Net loss


($4,390)

($126)

Adjustments to reconcile net loss to net cash provided/(used) by operating activities:

Non-cash items – 

Share-based plans expense


528

677

Treasury shares issued for 401(k) contribution


928

951

Depreciation and amortization


1,477

1,610

Investment/asset impairment charges, net


78

72

Customer financing valuation adjustments


39

(3)

Gain on dispositions, net


(2)

(283)

Other charges and credits, net


388

(82)

Changes in assets and liabilities – 

Accounts receivable


(22)

(280)

Unbilled receivables


(678)

(2,010)

Advances and progress billings


204

781

Inventories


(1,164)

508

Other current assets


(860)

279

Accounts payable


590

(3,565)

Accrued liabilities


2,416

(3,168)

Income taxes receivable, payable and deferred


1,382

1,011

Other long-term liabilities


(114)

(168)

Pension and other postretirement plans


(1,053)

(731)

Customer financing, net


76

170

Other


232

225


Net cash provided/(used) by operating activities


55

(4,132)


Cash flows – investing activities:

Payments to acquire property, plant and equipment


(896)

(758)

Proceeds from disposals of property, plant and equipment


19

385

Acquisitions, net of cash acquired

(6)

Contributions to investments


(2,773)

(27,902)

Proceeds from investments


10,182

35,664

Other


(11)

6


Net cash provided by investing activities


6,521

7,389


Cash flows – financing activities:

New borrowings


19

9,822

Debt repayments


(1,038)

(11,049)

Stock options exercised


39

36

Employee taxes on certain share-based payment arrangements


(36)

(47)


Net cash used by financing activities


(1,016)

(1,238)

Effect of exchange rate changes on cash and cash equivalents


(134)

(34)


Net increase in cash & cash equivalents, including restricted


5,426

1,985

Cash & cash equivalents, including restricted, at beginning of year


8,104

7,835


Cash & cash equivalents, including restricted, at end of period


13,530

9,820

Less restricted cash & cash equivalents, included in Investments


36

56


Cash & cash equivalents at end of period


$13,494

$9,764

 


The Boeing Company and Subsidiaries


Summary of Business Segment Data

(Unaudited)


Nine months ended
September 30


Three months ended
September 30


(Dollars in millions)


2022

2021


2022

2021

Revenues:

Commercial Airplanes


$16,643

$14,743


$6,263

$4,459

Defense, Space & Security


16,981

20,678


5,307

6,617

Global Services


13,044

12,037


4,432

4,221

Boeing Capital


150

209


52

71

Unallocated items, eliminations and other


(190)

(174)


(98)

(90)


Total revenues


$46,628

$47,493


$15,956

$15,278

(Loss)/earnings from operations:

Commercial Airplanes


($1,744)

($2,021)


($643)

($693)

Defense, Space & Security


(3,656)

1,799


(2,798)

436

Global Services


2,093

1,616


733

644

Boeing Capital


14

99


23

42


Segment operating (loss)/earnings


(3,293)

1,493


(2,685)

429

Unallocated items, eliminations and other


(747)

(1,032)


(393)

(370)

FAS/CAS service cost adjustment


846

808


279

270


(Loss)/earnings from operations


(3,194)

1,269


(2,799)

329

Other income, net


722

419


288

30

Interest and debt expense


(1,901)

(2,021)


(621)

(669)


Loss before income taxes


(4,373)

(333)


(3,132)

(310)

Income tax (expense)/benefit


(17)

207


(176)

178


Net loss


(4,390)

(126)


(3,308)

(132)

Less: Net loss attributable to noncontrolling interest


(89)

(67)


(33)

(23)


Net loss attributable to Boeing Shareholders


($4,301)

($59)


($3,275)

($109)


Research and development expense, net:

Commercial Airplanes


$1,102

$817


$409

$293

Defense, Space & Security


706

530


240

193

Global Services


89

80


35

30

Other


161

144


43

59


Total research and development expense, net


$2,058

$1,571


$727

$575


Unallocated items, eliminations and other:

Share-based plans


($64)

($171)


$44

($29)

Deferred compensation


204

(86)


38

8

Amortization of previously capitalized interest


(71)

(66)


(24)

(22)

Research and development expense, net


(161)

(144)


(43)

(59)

Eliminations and other unallocated items


(655)

(565)


(408)

(268)


Sub-total (included in core operating loss)


(747)

(1,032)


(393)

(370)

Pension FAS/CAS service cost adjustment


621

576


208

192

Postretirement FAS/CAS service cost adjustment


225

232


71

78


FAS/CAS service cost adjustment


846

808


$279

$270


Total


$99

($224)


($114)

($100)

 


The Boeing Company and Subsidiaries


Operating and Financial Data

(Unaudited)


Deliveries


Nine months ended
September 30


Three months ended
September 30

Commercial Airplanes


2022

2021


2022

2021

737


277

179


88

66

747


3

4


—

2

767


21

24


9

11

777


18

20


6

6

787


9

14


9

—


Total


328

241


112

85

Defense, Space & Security

AH-64 Apache (New)


20

19


7

4

AH-64 Apache (Remanufactured)


36

42


8

11

CH-47 Chinook (New)


10

12


1

6

CH-47 Chinook (Renewed)


6

5


2

1

F-15 Models


9

11


4

3

F/A-18 Models


11

15


3

4

KC-46 Tanker


9

7


1

3

P-8 Models


10

11


4

5

MH-139


4

—


4

—

Commercial and Civil Satellites


2

—


2

—

Military Satellites


—

—


—

—


Total backlog
(Dollars in millions)


September 30
2022

December 31
2021

Commercial Airplanes


$307,168

$296,882

Defense, Space & Security


54,740

59,828

Global Services


19,072

20,496

Unallocated items, eliminations and other


335

293


Total backlog


$381,315

$377,499

Contractual backlog


$362,926

$356,362

Unobligated backlog


18,389

21,137


Total backlog


$381,315

$377,499

 

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures
(Unaudited)

The tables provided below reconcile the non-GAAP financial measures core operating (loss)/earnings, core operating margin, and core loss per share with the most directly comparable GAAP financial measures, (loss)/earnings from operations, operating margin, and diluted loss per share. See page 5 of this release for additional information on the use of these non-GAAP financial measures.


(Dollars in millions, except per share data)


Third Quarter 2022

Third Quarter 2021


$ millions


Per Share

$ millions

Per Share


Revenues


15,956

15,278


(Loss)/earnings from operations (GAAP)


(2,799)

329


Operating margin (GAAP)



(17.5)



%


2.2


%


FAS/CAS service cost adjustment:

Pension FAS/CAS service cost adjustment


(208)

(192)

Postretirement FAS/CAS service cost adjustment


(71)

(78)


FAS/CAS service cost adjustment


(279)

(270)


Core operating (loss)/earnings (non-GAAP)


($3,078)

$59


Core operating margin (non-GAAP)



(19.3)



%


0.4


%


Diluted loss per share (GAAP)


($5.49)

($0.19)

Pension FAS/CAS service cost adjustment


($208)


(0.35)

($192)

(0.33)

Postretirement FAS/CAS service cost adjustment


(71)


(0.12)

(78)

(0.13)

Non-operating pension expense


(225)


(0.37)

(29)

(0.05)

Non-operating postretirement expense


(15)


(0.03)

(6)

(0.01)

Provision for deferred income taxes on adjustments 1


109


0.18

64

0.11


Subtotal of adjustments


($410)


($0.69)

($241)

($0.41)


Core loss per share (non-GAAP)


($6.18)

($0.60)


Weighted average diluted shares (in millions)


596.3

589.0



1

The income tax impact is calculated using the U.S. corporate statutory tax rate
.

 

The Boeing Company and Subsidiaries

Reconciliation of Non-GAAP Measures
(Unaudited)

The tables provided below reconcile the non-GAAP financial measures core operating (loss)/earnings, core operating margin, and core loss per share with the most directly comparable GAAP financial measures, (loss)/earnings from operations, operating margin, and diluted loss per share. See page 5 of this release for additional information on the use of these non-GAAP financial measures.


(Dollars in millions, except per share data)


Nine Months 2022

Nine Months 2021


$ millions


Per Share

$ millions

Per Share


Revenues


46,628

47,493


(Loss)/earnings from operations (GAAP)


(3,194)

1,269


Operating margin (GAAP)



(6.8)



%


2.7


%


FAS/CAS service cost adjustment:

Pension FAS/CAS service cost adjustment


(621)

(576)

Postretirement FAS/CAS service cost adjustment


(225)

(232)


FAS/CAS service cost adjustment


(846)

(808)


Core operating (loss)/earnings (non-GAAP)


($4,040)

$461


Core operating margin (non-GAAP)



(8.7)



%


1.0


%


Diluted loss per share (GAAP)


($7.24)

($0.10)

Pension FAS/CAS service cost adjustment


($621)


(1.04)

($576)

(0.98)

Postretirement FAS/CAS service cost adjustment


(225)


(0.38)

(232)

(0.40)

Non-operating pension expense


(666)


(1.13)

(381)

(0.64)

Non-operating postretirement expense


(44)


(0.07)

(16)

(0.03)

Provision for deferred income taxes on adjustments 1


327


0.55

253

0.43


Subtotal of adjustments


($1,229)


($2.07)

($952)

($1.62)


Core loss per share (non-GAAP)


($9.31)

($1.72)


Weighted average diluted shares (in millions)


594.0

587.3



1

The income tax impact is calculated using the U.S. corporate statutory tax rate
.

 

Cision View original content:https://www.prnewswire.com/news-releases/boeing-reports-third-quarter-results-301659774.html

SOURCE Boeing

Posted on

Virax Biolabs Group Limited Announces Initiation of its Virax Immune COVID-19 Analytical Performance Study

PR Newswire


LONDON
, Oct. 26, 2022 /PRNewswire/ — Virax Biolabs Group Limited (“Virax” or the “Company”) (Nasdaq: VRAX), an innovative biotechnology company focused on the detection of immune responses and diagnosis of viral diseases, announced today the initiation of its Virax Immune COVID-19 Analytical Performance Study scheduled to take place through Q4 of this year and finishing in Q1 of next year.

The Analytical Performance Study will evaluate the technical performance of the Virax Immune COVID-19 Flow Cytometry Kit and will include specimens from 96 healthy volunteers1. Virax Immune is a proprietary T-Cell In-Vitro Diagnostic (“IVD”) test technology being developed with the intention of providing an immunology profiling platform that assesses each individual’s immune risk profile against major global viral threats.

Unlike antibodies, T-Cells coordinate the immune system against major global viral attacks and have been shown to provide a level of protection against Covid-19 and its variants that is more robust and long-lasting than an antibody mediated response. Their detection can give an indication of inherent protection from disease for those yet to be infected and may be useful to determine the degree of long-term protection an individual has after recovering from major global viral threats. The first test being developed using the Virax Immune platform is for immunity related to COVID-19. Using data from the IVD test, our proprietary mobile application would be set up to offer an algorithmic immunological profile for patients, which would provide information such as if vaccination has been successful in providing protection or if additional vaccination boosters are required. 

Additional tests may be developed in the future for new global pandemics and for such viruses as Human Papillomavirus (better known as HPV), Malaria, Hepatitis B, and Herpes (better known as HSV-1).  Our T-Cell tests have been designed to be as affordable and scalable as possible, by avoiding the requirement for complex processes and expensive lab equipment. The ‘lab agnostic’ nature of the tests is intended to result in penetration of both established and emerging markets in the near term across a variety of pathogens.

Virax’s Chairman of the Board of Directors and Chief Executive Officer, Mr. James Foster, commented “We are excited to be taking the next step to bring Virax Immune to the market by initiating our COVID-19 analytical performance study.  Virax Immune is a cutting edge immunological diagnostic profiling technique that may revolutionize how we manage viral outbreaks.  I look forward to providing our investors with additional updates as we progress.”

About Virax Biolabs Group Limited

Founded in 2013, Virax Biolabs is an Innovative Biotechnology company focused on the diagnosis of and the detection of immune responses to viral diseases.

In addition to distributing an array of viral test kits in unique geographies, Virax Biolabs Group Limited is currently developing a proprietary T-Cell Test technology with the intention of providing an immunology profiling platform that assesses each individual’s immune risk profile against major global viral threats. T-Cell testing can be particularly effective in the management and therapeutics of COVID-19 as well as other threats including Monkeypox, Hepatitis B, Malaria, Herpes and Human Papillomavirus. For more information, please visit www.viraxbiolabs.com.

Safe Harbor Statement

This press release contains forward-looking statements. In addition, from time to time, we or our representatives may make forward-looking statements orally or in writing. We base these forward-looking statements on our expectations and projections about future events, which we derive from the information currently available to us. Such forward-looking statements relate to future events or our future performance, including: our financial performance and projections; our growth in revenue and earnings; and our business prospects and opportunities. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “hopes” or the negative of these or similar terms. In evaluating these forward-looking statements, you should consider various factors, including: our ability to change the direction of the Company; our ability to keep pace with new technology and changing market needs; and the competitive environment of our business. These and other factors may cause our actual results to differ materially from any forward-looking statement. Forward-looking statements are only predictions. The forward-looking events discussed in this press release and other statements made from time to time by us or our representatives, may not occur, and actual events and results may differ materially and are subject to risks, uncertainties, and assumptions about us. We are not obligated to publicly update or revise any forward-looking statement, whether as a result of uncertainties and assumptions, the forward-looking events discussed in this press release and other statements made from time to time by us or our representatives might not occur.

1 A “healthy volunteer” is someone with no known significant health problems who participates in research to test a new drug, device, or intervention

 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/virax-biolabs-group-limited-announces-initiation-of-its-virax-immune-covid-19-analytical-performance-study-301659488.html

SOURCE Virax Biolabs

Posted on

Kura Oncology Reports Preliminary Proof of Mechanism in Phase 1/2 Clinical Trial of Tipifarnib Plus Alpelisib in Head and Neck Squamous Cell Carcinoma

– First demonstration that precision combination therapies can achieve a durable clinical response in PIK3CA-dependent HNSCC –

– Preclinical data support potential to address ~45% of HNSCC tumors that harbor HRAS overexpression and/or PIK3CA mutation –

– Enrollment in the PIK3CA-dependent and HRAS-overexpression cohorts continues –

SAN DIEGO, Oct. 26, 2022 (GLOBE NEWSWIRE) — Kura Oncology, Inc. (Nasdaq: KURA), a clinical-stage biopharmaceutical company committed to realizing the promise of precision medicines for the treatment of cancer, today reported proof of mechanism in KURRENT-HN, the Company’s Phase 1/2 clinical trial of tipifarnib in combination with alpelisib in patients with HRAS- and/or PIK3CA-dependent head and neck squamous cell carcinoma (HNSCC). The preliminary data are being presented at the EORTC-NCI-AACR Molecular Targets and Cancer Therapeutics Symposium in Barcelona.

In a poster entitled, “HNSCCs overexpressing wild-type HRAS are sensitive to combined tipifarnib and alpelisib treatment,” Kura highlights a patient with stage III squamous cell carcinoma of the tonsil, including a PIK3CA mutation and HRAS overexpression, who has achieved a durable partial remission on study. The 35-year-old patient enrolled in KURRENT-HN after failing two prior treatments, experienced an 81% reduction in target lesions after one cycle of tipifarnib and alpelisib and an 84% reduction after three cycles. As of September 14, 2022, the patient continued on study for more than 27 weeks. Treatment-related adverse events in the study have been consistent with the known safety profiles of each drug and are manageable, with no dose-limiting toxicities reported to date. A copy of the poster is available at www.kuraoncology.com.

Although tipifarnib has shown single-agent clinical activity in a highly selected population of HRAS mutant HNSCC1, and alpelisib has shown single-agent clinical activity in patients with PIK3CA-mutant, ER-positive/HER2-negative breast cancer2, no objective responses have been observed with either agent as a monotherapy in patients with PIK3CA-mutant HNSCC.

“These preliminary data from KURRENT-HN are encouraging, supporting the biologic rationale that combining a farnesyl transferase inhibitor with a PI3Kα inhibitor can achieve meaningful clinical responses in PIK3CA-dependent HNSCC,” said Stephen Dale, M.D., Chief Medical Officer of Kura Oncology. “In addition, our new preclinical data support the potential of this combination to address approximately 45% of HNSCC tumors that harbor an actionable HRAS and/or PIK3CA mutation or overexpression. We are now working to identify a recommended Phase 2 dose and schedule for the combination and remain committed to bringing this important new treatment option to patients with recurrent or metastatic HNSCC who are in dire need of better therapies.”

About KURRENT-HN

The KURRENT-HN trial is a biomarker-defined cohort study designed to evaluate the safety, determine the recommended combination dosing and assess early anti-tumor activity of tipifarnib and alpelisib for the treatment of HNSCC patients whose tumors are dependent on HRAS and/or PI3Kα pathways. The initial cohort in the trial is comprised of patients who have PIK3CA-dependent HNSCC. In August, Kura announced the first patient was dosed in a second cohort comprised of patients with HRAS overexpression. For more information about the trial, refer to www.kuraoncology.com/kurrent/.

About HNSCC

Head and neck squamous cell carcinoma (HNSCC) is the seventh most common cancer worldwide, accounting for more than 500,000 new cases each year. Despite advances in immunotherapy, the prognosis for advanced HNSCC patients remains poor, with an estimated median overall survival of 13-15 months in patients when stratified by PD-L1 expression. Although the anti-epidermal growth factor receptor (EGFR) antibody, cetuximab, was approved more than a decade ago, development of biomarker-directed therapies in HNSCC has been stymied by the limited number of druggable targets in the genomic landscape and the challenge of managing drug refractory, recurrent/metastatic HNSCC.

About Kura Oncology

Kura Oncology is a clinical-stage biopharmaceutical company committed to realizing the promise of precision medicines for the treatment of cancer. The Company’s pipeline consists of small molecule drug candidates that target cancer signaling pathways. Ziftomenib (KO-539), a potent and selective menin inhibitor, is currently in a Phase 1b clinical trial (KOMET-001) for patients with relapsed/refractory acute myeloid leukemia, including patients with NPM1 mutations or KMT2A rearrangements. Tipifarnib, a potent, selective and orally bioavailable farnesyl transferase inhibitor (FTI), has received Breakthrough Therapy Designation for the treatment of patients with HRAS mutant HNSCC and is currently in a registration-directed trial (AIM-HN) in patients with this devastating disease. In addition, Kura is conducting a Phase 1/2 trial (KURRENT-HN) of tipifarnib in combination with the PI3Kα inhibitor alpelisib to address larger genetic subsets of HNSCC patients, including those whose tumors are dependent on HRAS and/or PI3Kα pathways. The Company is also preparing to initiate a Phase 1 trial (KURRENT-LUNG) of tipifarnib in combination with osimertinib in treatment-naïve, locally advanced/metastatic, EGFR mutant non-small cell lung cancer. Kura intends to perform initial clinical evaluation with tipifarnib while in parallel advancing KO-2806, the Company’s next-generation FTI, through IND-enabling studies. For additional information, please visit Kura’s website at www.kuraoncology.com.

Forward-Looking Statements

This news release contains certain forward-looking statements that involve risks and uncertainties that could cause actual results to be materially different from historical results or from any future results expressed or implied by such forward-looking statements. Such forward-looking statements include statements regarding, among other things, the efficacy, safety and therapeutic potential of tipifarnib, the opportunity of the KURRENT-HN trial to significantly expand the potential patient population, and the potential that combining tipifarnib with a PI3Kα inhibitor has to provide meaningfully greater antitumor activity. Factors that may cause actual results to differ materially include the risk that compounds that appeared promising in early research or clinical trials do not demonstrate safety and/or efficacy in later preclinical studies or clinical trials, the risk that Kura may not obtain approval to market its product candidates, uncertainties associated with performing clinical trials, regulatory filings, applications and other interactions with regulatory bodies, risks associated with reliance on third parties to successfully conduct clinical trials, the risks associated with reliance on outside financing to meet capital requirements, and other risks associated with the process of discovering, developing and commercializing drugs that are safe and effective for use as human therapeutics, and in the endeavor of building a business around such drugs. You are urged to consider statements that include the words “may,” “will,” “would,” “could,” “should,” “believes,” “estimates,” “projects,” “promise,” “potential,” “expects,” “plans,” “anticipates,” “intends,” “continues,” “designed,” “goal,” or the negative of those words or other comparable words to be uncertain and forward-looking. For a further list and description of the risks and uncertainties the Company faces, please refer to the Company’s periodic and other filings with the Securities and Exchange Commission (SEC), including the Company’s Form 10-Q for the quarter ended June 30, 2022 filed with the SEC on August 3, 2022, which are available at www.sec.gov. Such forward-looking statements are current only as of the date they are made, and Kura assumes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Contacts

Company:
Pete De Spain
Senior Vice President, Investor Relations &
Corporate Communications
(858) 500-8803
[email protected]

Investors:
Robert H. Uhl
Managing Director
Westwicke ICR
(858) 356-5932
[email protected]

Media:
Jason Spark
Managing Director
Canale Communications
(619) 849-6005
[email protected]

1 J Clin Oncol. 2021 Jun 10;39(17):1856-1864
2 J Clin Oncol. 2018 May 1;36(13):1291-1299



Posted on

Stock Yards Bancorp Reports Third Quarter Earnings of $28.5 Million or $0.97 per Diluted Share

Third Quarter Profits Reflect Strong Organic Loan Growth and Net Interest Margin Expansion

LOUISVILLE, Ky., Oct. 26, 2022 (GLOBE NEWSWIRE) — Stock Yards Bancorp, Inc. (NASDAQ: SYBT), parent company of Stock Yards Bank & Trust Company, with offices in Louisville, central, eastern and northern Kentucky, as well as the Indianapolis, Indiana and Cincinnati, Ohio metropolitan markets, today reported earnings for the third quarter ended September 30, 2022, of $28.5 million, or $0.97 per diluted share. This compares to net income of $23.2 million, or $0.87 per diluted share, for the third quarter of 2021. Organic loan growth across all markets and expanded net interest margin (NIM) contributed to strong third quarter 2022 operating results.

       
(dollar amounts in thousands, except per share data) 3Q22


 		  2Q22


 		  3Q21
Net income $ 28,455     $ 26,794     $ 23,162  
Net income per share, diluted   0.97       0.91       0.87  
       
Net interest income $ 62,376     $ 56,984     $ 45,483  
Provision for credit loss expense(6)   4,803       (200 )     (1,525 )
Non-interest income   24,864       21,940       17,614  
Non-interest expenses   44,873       44,675       34,558  
       
Net interest margin   3.46 %     3.20 %     3.14 %
Efficiency ratio(4)   51.30 %     56.42 %     54.63 %
Tangible common equity to tangible assets(1)   6.78 %     7.00 %     8.64 %
Annualized return on average equity(7)   14.85 %     14.34 %     13.92 %
Annualized return on average assets(7)   1.47 %     1.40 %     1.50 %
       

“Stock Yards delivered the best third quarter in our history, highlighted by outstanding quarterly loan production and significant non-interest revenue generation,” said James A. (Ja) Hillebrand, Chairman and Chief Executive Officer. “Record linked third quarter net loan growth (excluding PPP loans) of $213 million was well diversified within all loan categories and across all of our markets. On the linked quarter, non-interest bearing deposit growth of $79 million was offset by seasonal declines in public funds, leading to an overall $48 million contraction in total deposits. While we chose to proactively raise stated deposit rates and time deposit offering rates in July, the decline in total deposits was tied to anticipated time deposit runoff and the previously mentioned decline in public funds. Additionally, our NIM benefitted from the interest rate increases enacted by the Federal Reserve Board (FRB) during the quarter, and we are well-positioned to benefit even further from anticipated future rate increases in the months ahead.

“We continue to make progress with the integration of our merger with Commonwealth Bancshares (Commonwealth) that we closed in March of this year,” Hillebrand continued. “During the quarter, we executed several cost saving measures and disposed of certain overlapping properties, resulting in a non-recurring pre-tax gain of $3.1 million. Although additional work remains to complete the full integration of the two companies and realize all expected operating synergies, we are exceptionally pleased with the progress we have made through the dedicated efforts of our employees.”

At September 30, 2022, the Company had $7.55 billion in assets, $5.07 billion in loans and $6.50 billion in total deposits. The Company’s combined enterprise, which encompasses 73 branch offices across three contiguous states, will continue to benefit from a diversified geographic footprint and provide significant growth opportunities in both the banking and wealth management arenas.

Additional key factors contributing to the third quarter of 2022 results included:

  • Total loans, excluding PPP loans, grew a record $213 million, or 4%, on a linked quarter basis. Excluding the first quarter acquisition, loans grew by $395 million, or 10%, during the first nine months of 2022. Total loan production remained strong for the third consecutive quarter.
  • Deposit balances contracted $48 million, or 1%, on a linked quarter basis. When segmenting the fluctuation by deposit type, the largest declines were in interest bearing demand deposits which were largely influenced by seasonal declines in public funds and time deposits. These declines were offset by over $79 million in growth in non-interest bearings deposits during the quarter.
  • The Company increased all stated interest bearing demand deposit and savings account rates along with time deposit offering rates during the third quarter.
  • Net interest income increased $16.9 million, or 37%, for the third quarter of 2022 compared to the third quarter a year ago, consistent with the $1.42 billion, or 25%, increase in average earning assets and to a lesser extent, the FRB interest rate hikes.
  • NIM improved for the third consecutive quarter, increasing 26 basis points on a linked quarter basis to 3.46%.
  • Current credit quality remains quite solid, however consistent with very strong loan growth and to a lesser extent, the increase in the projected unemployment rate forecast used in modeling, $4.8 million of net credit loss expense(6) was recorded for the third quarter of 2022.
  • Non-interest income increased by $7.3 million, or 41%, over the third quarter of 2021, as customer expansion and recent acquisitions once again drove record quarterly credit card income and treasury management fees. Also, as previously mentioned, the Company disposed of certain overlapping acquired properties, resulting in a non-recurring pre-tax gain of $3.1 million.
  • Despite strong net new business growth, significant declines in both fixed income and equity markets drove linked quarter contraction in wealth management assets under management and asset-based fees, leading to the first quarterly revenue decline in seven consecutive quarters. Additionally, a significant spike in long-term mortgage rates stunted mortgage banking origination volume during the quarter.
  • Total non-interest expenses remained controlled and consistent with management expectations.
  • Tangible book value per share was $16.98(1) at September 30, 2022, compared to $17.59(1) at June 30, 2022, and $19.63(1) at September 30, 2021. During 2022, tangible common equity and tangible book value have been impacted by the marked increase in interest rates and the related negative impact on accumulated other comprehensive income (AOCI). During the first nine months of 2022, equity was reduced by $120 million as a result of unrealized losses in the available for sale debt securities portfolio. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies, and have a long history of no credit losses.

Hillebrand concluded, “The strong results for the third quarter reflect the solid execution of our strategic plan by our dedicated team. I am also pleased to note that during the quarter we were one of only 35 banks in the U.S. to be named a “Sm-All Star” in Piper Sandler’s annual list of top-performing small-cap banks. This elite annual list reflects the top 10% of the industry across a number of metrics including growth, profitability, credit quality and capital strength. We have now been named a Sm-All Star five times – 2008, 2011, 2019, 2020 and now 2022. We are honored to be recognized and are confident in our ability to continue to deliver value to our shareholders.”


Results of Operations – Third Quarter 2022 Compared with Third Quarter 2021

Net interest income, the Company’s largest source of revenue, increased 37%, or $16.9 million, to $62.4 million, primarily due to higher interest income on non-PPP loans. Organic growth, and to a greater extent the recent acquisitions, have boosted net interest income over the past 12 months.

  • Total interest income increased by $20.5 million, or 44%, to $67.4 million.
    • Interest income on loans increased $13.4 million, or 31%, over the prior year quarter. Consistent with the $1.03 billion increase in average non-PPP loans, and to a lesser extent recent interest rate increases, the average quarterly yield earned on non-PPP loans increased 54 basis points over the past 12 months to 4.52%. PPP interest and fee income totaled $703,000 and $4.4 million for the third quarters of 2022 and 2021, respectively.
    • Interest income on debt securities increased $4.7 million compared to the third quarter of 2021, driven by average balance growth of $735 million and significantly improved yields on recent purchases stemming from rising rates.
    • Interest income on overnight funds increased $2.2 million over the prior year quarter. The FRB has increased the rate paid on reserve balances meaningfully during 2022, which has significantly benefitted interest income.
  • Total interest expense increased $3.6 million to $5.0 million, as the cost of interest bearing liabilities increased 27 basis points to 0.43%.
  • NIM increased 32 basis points to 3.46% for the third quarter of 2022, from 3.14% for the third quarter a year ago, primarily due to higher loan yields which more than offset lower fee income recognition from the slowdown of forgiveness within the PPP loan portfolio.

The Company recorded $4.8 million in provision for credit losses(6) during the third quarter of 2022, which included a $4.1 million provision for credit losses on loans and $700,000 provision for credit loss expense for off-balance sheet exposures. Significant loan growth during the quarter and to a lesser extent, the increase in the unemployment projection, drove additional provision expense within the CECL allowance model. The increase in provision for credit loss expense for off-balance sheet exposures was attributed to both increased loan production and credit availability.

Non-interest income increased $7.3 million, or 41%, to $24.9 million, with the recent acquisitions contributing significantly to revenue growth.

  • Wealth management and trust income ended the third quarter of 2022 at $9.2 million, increasing $2.0 million, or 28%, over the third quarter a year ago. Despite growth in net new business, significant declines in both fixed income and equity markets drove linked quarter compression in wealth management assets under management and asset-based fees.
  • Card income increased $823,000, or 21%, over the third quarter of 2021, as card activity continues to benefit from generally strong spending trends and overall inflation in the marketplace.
  • Treasury management fees increased $450,000, or 25%, driven by increased transaction volume, new product sales and both organic and acquisition-related customer base expansion. Continued calling efforts and the Company’s ability to generate new fee income has been the catalyst for this growth trend.
  • Mortgage banking income, which primarily consists of gain on sale of loans, net servicing income and mortgage servicing rights amortization, totaled $703,000 for the third quarter of 2022, down $212,000, or 23%, compared to the third quarter a year ago. Overall volume in 2022 has cooled consistent with rising interest rates, while income levels have benefitted from better loan pricing and increased net servicing income related to the recently acquired loan servicing portfolio.
  • The Company disposed of certain overlapping properties acquired from the March acquisition, resulting in a non-recurring pre-tax gain of $3.1 million during the third quarter of 2022.

Non-interest expenses increased $10.3 million compared to the third quarter of 2021, to $44.9 million.

  • Compensation expense increased $5.7 million, or 33%, primarily due to the increase in full time equivalent employees associated with the recent acquisitions. Full time equivalent employees increased to 1,028 at September 30, 2022 from 793 at September 30, 2021.
  • Employee benefits increased $517,000, or 14%, compared to the third quarter of 2021, mainly due to the elevated health insurance, 401(k) and payroll tax expenses associated with the above-mentioned increase in full time equivalent employees.
  • Net occupancy and equipment expenses increased $1.0 million, or 38%, compared to the third quarter a year ago. In connection with the recent acquisition, a total of ten branches were added in addition to operational buildings.
  • Technology and communication expenses, which includes computer software amortization, equipment depreciation and expenditures related to investments in technology needed to maintain and improve the quality of customer delivery channels, information security and internal resources, increased $574,000, or 18%, consistent with an increase in customer accounts and core system upgrades.
  • Marketing and business development expense increased $233,000, or 23%, primarily due to increased travel, customer entertainment, community support and advertising expenses associated primarily with sales force expansion.
  • Intangible amortization expense increased $1.3 million consistent with the increase in customer intangible assets related to the first quarter acquisition.
  • Other non-interest expenses increased $507,000, or 26%, primarily due to increased card rewards expense, fraud losses and insurance captive expense.


Financial Condition – September 30, 2022 Compared with September 30, 2021

Total assets increased $1.37 billion, or 22%, year over year to $7.55 billion, boosted by the recent acquisition and strong organic growth.

Total loans increased $884 million year over year, or 21%, to $5.07 billion. Excluding the PPP loan portfolio, total loans increased $1.10 billion, or 28%, over the past 12 months, with approximately $630 million of the growth attributable to the first quarter acquisition. Further, loan pipelines, while not quite at recent levels, remain on target with our projections set for 2022.

Total investment securities have increased $557 million, or 52%, year over prior year, as the Company added $247 million in securities in the first quarter Commonwealth acquisition and deployed a significant amount of excess cash into securities.

Total deposits increased $1.16 billion, or 22%, over the past 12 months, with approximately $1.12 billion of the growth assumed in the recent acquisition.

Asset quality, which has trended within a narrow range over the past several years, has remained solid. During the third quarter of 2022, the Company recorded net loan charge-offs of $382,000, compared to net loan charge-offs of $1.9 million in the third quarter of 2021. Non-performing loans were $10.6 million, or 0.21%(2) of total loans outstanding (excluding PPP) compared to $5.0 million, or 0.13%(2) of total loans (excluding PPP) outstanding at September 30, 2021. The ratio of allowance for credit losses to loans (excluding PPP) ended at 1.39%(2) at September 30, 2022 compared to 1.43%(2) at September 30, 2021.

At September 30, 2022, the Company continued to be “well-capitalized,” the highest regulatory capital rating for financial institutions, with all capital ratios remaining strong. Total equity to assets was 9.63%(1) and the tangible common equity ratio was 6.78%(1) at September 30, 2022, compared to 10.73%(1) and 8.64%(1) at September 30, 2021, respectively. The increase in interest rates during 2022 have led to outsized unrealized losses within the available for sale debt securities portfolio, with the decline in AOCI driving down the tangible common equity ratio.

In August 2022, the board of directors increased the quarterly cash dividend to $0.29 per common share. The dividend was paid October 3, 2022, to shareholders of record as of September 19, 2022.

No shares were repurchased in 2022 or 2021 and approximately 741,000 shares remain eligible for repurchase under the current buy-back plan, which expires in May 2023.


Results of Operations – Third Quarter 2022 Compared with Second Quarter 2022

Net interest income increased $5.4 million, or 9%, over the prior quarter to $62.4 million, led by the increase in earning assets and to a lesser extent rising rates. NIM improved for the second consecutive quarter, increasing 26 basis points on a linked quarter basis to 3.46%.

Despite solid ongoing credit quality statistics, the Company recorded credit loss expense during the third quarter consistent with strong loan growth and to a lesser extent, an increase in the projected unemployment rate forecast used in modeling. During the third quarter, the Company recorded $4.8 million in provision for credit loss expense, which included a $4.1 million provision for credit losses on loans and a $700,000 provision for credit losses expense for off-balance sheet exposures. During the second quarter of 2022, the Company recorded a net benefit of $200,000 for credit losses, which included a $700,000 benefit to provision for credit losses on loans associated with release of specific reserves related to several recently acquired loans and a $500,000 provision for credit losses on off-balance sheet exposures.

Non-interest income increased $2.9 million, or 13%, to $24.9 million. As previously mentioned, the Company disposed of certain overlapping acquired properties, resulting in a non-recurring pre-tax gain of $3.1 million during the third quarter of 2022.

Non-interest expenses increased $198,000 to $44.9 million.


Financial Condition – September 30, 2022, Compared with June 30, 2022

Total assets decreased $29 million on a linked quarter basis to $7.55 billion.

Total loans (excluding PPP) increased a record $213 million, or 4%, on a linked quarter basis, with meaningful increases across all major loan categories. Total line of credit usage declined to 40% as of September 30, 2022, compared to 41% as of June 30, 2022. Commercial and industrial line usage declined to 30% as of September 30, 2022, compared to 31% as of June 30, 2022.

Total deposits decreased $48 million, or 1%, on a linked quarter basis attributable to seasonal reductions in public funds, time deposit maturities and other fluctuations.


About the Company

Louisville, Kentucky-based Stock Yards Bancorp, Inc., with $7.55 billion in assets, was incorporated in 1988 as a bank holding company. It is the parent company of Stock Yards Bank & Trust Company, which was established in 1904. The Company’s common shares trade on The NASDAQ Stock Market under the symbol “SYBT.”

This report contains forward-looking statements under the Private Securities Litigation Reform Act that involve risks and uncertainties. Although the Company’s management believes the assumptions underlying the forward-looking statements contained herein are reasonable, any of these assumptions could be inaccurate. Therefore, there can be no assurance the forward-looking statements included herein will prove to be accurate. Factors that could cause actual results to differ from those discussed in forward-looking statements include, but are not limited to: economic conditions both generally and more specifically in the markets in which the Company and its banking subsidiary operates; competition for the Company’s customers from other providers of financial services; changes in, or forecasts of, future political and economic conditions, inflation and efforts to control it; government legislation and regulation, which change and over which the Company has no control; changes in interest rates; material unforeseen changes in liquidity, results of operations, or financial condition of the Company’s customers; and other risks detailed in the Company’s filings with the Securities and Exchange Commission, all of which are difficult to predict and many of which are beyond the control of the Company. Refer to Stock Yards’ Annual Report on Form 10-K for the year ended December 31, 2021, as well as its other filings with the SEC for a more detailed discussion of risks, uncertainties and factors that could cause actual results to differ from those discussed in the forward-looking statements.

Stock Yards Bancorp, Inc. Financial Information (unaudited)      
Third Quarter 2022 Earnings Release      
(In thousands unless otherwise noted)      
    Three Months Ended   Nine Months Ended      
    September 30,   September 30,      
Income Statement Data   2022   2021   2022   2021      
                       
Net interest income, fully tax equivalent (3)   $                            62,608   $                            45,643   $                          168,797   $                          125,178      
Interest income:                      
Loans   $                            56,750   $                            43,307   $                          152,105   $                          120,402      
Federal funds sold and interest bearing due from banks   2,450   208   3,845   358      
Mortgage loans held for sale   103   53   177   175      
Securities   8,107   3,380   20,375   8,633      
Total interest income   67,410   46,948   176,502   129,568      
Interest expense:                      
Deposits   4,449   1,403   7,390   4,348      
Securities sold under agreements to repurchase and                      
other short-term borrowings   226   11   322   27      
Federal Home Loan Bank advances   –   51   –   301      
Subordinated debentures   359   –   670   –      
Total interest expense   5,034   1,465   8,382   4,676      
Net interest income   62,376   45,483   168,120   124,892      
Provision for credit losses (6)   4,803   (1,525)   6,882   1,147      
Net interest income after provision for credit losses   57,573   47,008   161,238   123,745      
Non-interest income:                      
Wealth management and trust services   9,152   7,128   26,890   20,234      
Deposit service charges   2,179   1,768   6,103   3,945      
Debit and credit card income   4,710   3,887   13,577   9,444      
Treasury management fees   2,221   1,771   6,312   5,041      
Mortgage banking income   703   915   3,001   3,662      
Net investment product sales commissions and fees   892   780   2,230   1,789      
Bank owned life insurance   516   275   1,052   642      
Gain (Loss) on sale of premises and equipment   3,074   –   3,074   –      
Other   1,417   1,090   3,768   2,489      
Total non-interest income   24,864   17,614   66,007   47,246      
Non-interest expenses:                      
Compensation   23,069   17,381   63,242   45,888      
Employee benefits   4,179   3,662   13,147   10,290      
Net occupancy and equipment   3,767   2,732   10,455   7,021      
Technology and communication   3,747   3,173   11,150   8,189      
Debit and credit card processing   1,437   1,479   4,439   3,160      
Marketing and business development   1,244   1,011   3,461   2,357      
Postage, printing and supplies   903   630   2,461   1,499      
Legal and professional   774   700   2,451   1,828      
FDIC Insurance   847   387   2,028   1,141      
Amortization of investments in tax credit partnerships   88   53   265   315      
Capital and deposit based taxes   722   556   1,822   1,541      
Merger expenses   –   525   19,500   19,025      
Federal Home Loan Bank early termination penalty   –   –   –   474      
Intangible amortization   1,610   290   3,934   494      
Other   2,486   1,979   7,490   4,486      
Total non-interest expenses   44,873   34,558   145,845   107,708      
Income before income tax expense   37,564   30,064   81,400   63,283      
Income tax expense   9,024   6,902   18,016   13,227      
Net income   28,540   23,162   63,384   50,056      
Less: income attributed to non-controlling interest   85   –   229   –      
Net income available to stockholders   $                            28,455   $                            23,162   $                            63,155   $                            50,056      
                       
Net income per share – Basic   $                                0.98   $                                0.87   $                                2.22   $                                2.05      
Net income per share – Diluted   0.97   0.87   2.20   2.03      
Cash dividend declared per share   0.29   0.28   0.85   0.82      
                       
Weighted average shares – Basic   29,144   26,485   28,509   24,360      
Weighted average shares – Diluted   29,404   26,726   28,752   24,602      
                       
        September 30,      
Balance Sheet Data           2022   2021      
                       
Investment securities           $                       1,627,298   $                       1,070,148      
Loans           5,072,877   4,189,117      
Allowance for credit losses on loans           70,083   56,533      
Total assets           7,554,210   6,181,188      
Non-interest bearing deposits           2,200,041   1,744,790      
Interest bearing deposits           4,300,732   3,597,234      
Federal Home Loan Bank advances           –   10,000      
Subordinated debentures           26,244   –      
Stockholders’ equity           727,754   663,547      
Total shares outstanding           29,242   26,585      
Book value per share (1)           $                              24.84   $                              24.96      
Tangible common equity per share (1)           16.98   19.63      
Market value per share           68.01   58.65      
                       
                       
Stock Yards Bancorp, Inc. Financial Information (unaudited)              
Third Quarter 2022 Earnings Release              
                       
    Three Months Ended   Nine Months Ended      
    September 30,   September 30,      
Average Balance Sheet Data   2022   2021   2022   2021      
                       
Federal funds sold and interest bearing due from banks   $                          442,880   $                          532,549   $                          557,578   $                          361,713      
Mortgage loans held for sale   8,694   8,875   9,542   10,703      
Investment securities   1,769,597   1,034,712   1,631,212   831,229      
Federal Home Loan Bank stock   11,712   11,364   12,015   11,312      
Loans   4,948,898   4,173,260   4,726,371   3,876,639      
Total interest earning assets   7,181,781   5,760,760   6,936,718   5,091,596      
Total assets   7,661,720   6,139,176   7,398,311   5,364,121      
Interest bearing deposits   4,444,983   3,525,785   4,370,839   3,134,978      
Total deposits   6,614,263   5,297,217   6,409,007   4,652,401      
Securities sold under agreement to repurchase and other short term borrowings   148,734   82,048   133,360   68,485      
Federal Home Loan Bank advances   –   10,000   –   19,398      
Subordinated debentures   26,210   –   20,191   –      
Total interest bearing liabilities   4,619,927   3,617,833   4,524,390   3,222,861      
Total stockholders’ equity   760,322   660,099   738,391   541,238      
                       
Performance Ratios                      
Annualized return on average assets (7)   1.47%   1.50%   1.14%   1.25%      
Annualized return on average equity (7)   14.85%   13.92%   11.44%   12.37%      
Net interest margin, fully tax equivalent   3.46%   3.14%   3.25%   3.29%      
Non-interest income to total revenue, fully tax equivalent   28.43%   27.85%   28.11%   27.40%      
Efficiency ratio, fully tax equivalent (4)   51.30%   54.63%   62.11%   62.47%      
                       
Capital Ratios                      
Total stockholders’ equity to total assets (1)           9.63%   10.73%      
Tangible common equity to tangible assets (1)           6.78%   8.64%      
Average stockholders’ equity to average assets           9.98%   10.09%      
Total risk-based capital           12.16%   12.61%      
Common equity tier 1 risk-based capital           10.69%   11.69%      
Tier 1 risk-based capital           11.13%   11.69%      
Leverage           8.85%   8.98%      
                       
Loan Segmentation                      
Commercial real estate – non-owner occupied           $                       1,415,180   $                       1,142,647      
Commercial real estate – owner occupied           819,727   652,631      
Commercial and industrial           1,170,241   910,923      
Commercial and industrial – PPP           19,469   231,335      
Residential real estate – owner occupied           557,638   398,069      
Residential real estate – non-owner occupied           302,936   277,045      
Construction and land development           414,632   303,642      
Home equity lines of credit           199,485   140,027      
Consumer           138,843   104,629      
Leases           13,959   12,348      
Credit cards           20,767   15,821      
Total loans and leases           $                       5,072,877   $                       4,189,117      
                       
Asset Quality Data                      
Non-accrual loans           $                            10,580   $                              5,036      
Troubled debt restructurings           –   13      
Loans past due 90 days or more and still accruing           32   –      
Total non-performing loans           10,612   5,049      
Other real estate owned           996   7,229      
Total non-performing assets           $                            11,608   $                            12,278      
Non-performing loans to total loans (2)           0.21%   0.12%      
Non-performing assets to total assets           0.15%   0.20%      
Allowance for credit losses on loans to total loans (2)           1.38%   1.35%      
Allowance for credit  losses on loans to average loans           1.48%   1.46%      
Allowance for credit losses on loans to non-performing loans           660%   1120%      
Net (charge-offs) recoveries   $                               (382)   $                            (1,891)   $                                 152   $                            (4,641)      
Net (charge-offs) recoveries to average loans (5)   -0.01%   -0.05%   0.00%   -0.12%      
                       
                       
Stock Yards Bancorp, Inc. Financial Information (unaudited)            
Third Quarter 2022 Earnings Release            
                       
    Quarterly Comparison  
Income Statement Data   9/30/22   6/30/22   3/31/22   12/31/21   9/30/21  
                       
Net interest income, fully tax equivalent  (3)   $                            62,608   $                            57,244   $                            48,944   $                            46,328   $                            45,643  
Net interest income   $                            62,376   $                            56,984   $                            48,760   $                            46,182   $                            45,483  
Provision for credit losses (6)   4,803   (200)   2,279   (1,900)   (1,525)  
Net interest income after provision for credit losses   57,573   57,184   46,481   48,082   47,008  
Non-interest income:                      
Wealth management and trust services   9,152   9,495   8,243   7,379   7,128  
Deposit service charges   2,179   2,061   1,863   1,907   1,768  
Debit and credit card income   4,710   4,748   4,119   4,012   3,887  
Treasury management fees   2,221   2,187   1,904   1,871   1,771  
Mortgage banking income   703   1,295   1,003   1,062   915  
Net investment product sales commissions and fees   892   731   607   764   780  
Bank owned life insurance   516   270   266   272   275  
Gain (Loss) on sale of premises and equipment   3,074   –   –   –   –  
Other   1,417   1,153   1,198   1,337   1,090  
Total non-interest income   24,864   21,940   19,203   18,604   17,614  
Non-interest expenses:                      
Compensation   23,069   22,204   17,969   17,146   17,381  
Employee benefits   4,179   4,429   4,539   3,189   3,662  
Net occupancy and equipment   3,767   3,663   3,025   2,667   2,732  
Technology and communication   3,747   3,984   3,419   2,956   3,173  
Debit and credit card processing   1,437   1,665   1,337   1,334   1,479  
Marketing and business development   1,244   1,445   772   1,793   1,011  
Postage, printing and supplies   903   825   733   714   630  
Legal and professional   774   1,027   650   755   700  
FDIC Insurance   847   536   645   706   387  
Amortization of investments in tax credit partnerships   88   89   88   52   53  
Capital and deposit based taxes   722   582   518   549   556  
Merger expenses   –   –   19,500   –   525  
Intangible amortization   1,610   1,611   713   275   290  
Other   2,486   2,615   2,389   2,436   1,979  
Total non-interest expenses   44,873   44,675   56,297   34,572   34,558  
Income before income tax expense   37,564   34,449   9,387   32,114   30,064  
Income tax expense   9,024   7,547   1,445   7,525   6,902  
Net income   28,540   26,902   7,942   24,589   23,162  
Less: income attributed to non-controlling interest   85   108   36   –   –  
Net income available to stockholders   $                            28,455   $                            26,794   $                              7,906   $                            24,589   $                            23,162  
                       
                       
Net income per share – Basic   $                                0.98   $                                0.92   $                                0.29   $                                0.93   $                                0.87  
Net income per share – Diluted   0.97   0.91   0.29   0.92   0.87  
Cash dividend declared per share   0.29   0.28   0.28   0.28   0.28  
                       
Weighted average shares – Basic   29,144   29,131   27,230   26,492   26,485  
Weighted average shares – Diluted   29,404   29,346   27,485   26,800   26,726  
                       
    Quarterly Comparison  
Balance Sheet Data   9/30/22   6/30/22   3/31/22   12/31/21   9/30/21  
                       
Cash and due from banks   $                            93,948   $                            88,422   $                          109,799   $                            62,304   $                            84,520  
Federal funds sold and interest bearing due from banks   235,973   485,447   641,892   898,888   500,421  
Mortgage loans held for sale   5,230   10,045   9,323   8,614   10,201  
Investment securities   1,627,298   1,625,488   1,698,546   1,180,298   1,070,148  
Federal Home Loan Bank stock   10,928   13,811   13,811   9,376   9,376  
Loans   5,072,877   4,877,324   4,847,683   4,169,303   4,189,117  
Allowance for credit losses on loans   70,083   66,362   67,067   53,898   56,533  
Goodwill   202,524   202,524   202,524   135,830   135,830  
Total assets   7,554,210   7,583,105   7,777,152   6,646,025   6,181,188  
Non-interest bearing deposits   2,200,041   2,121,304   2,089,072   1,755,754   1,744,790  
Interest bearing deposits   4,300,732   4,427,826   4,656,419   4,031,760   3,597,234  
Securities sold under agreements to repurchase   124,567   161,512   142,146   75,466   74,406  
Federal funds purchased   8,970   8,771   8,920   10,374   10,908  
Subordinated debentures   26,244   26,144   26,045   –   –  
Stockholders’ equity   727,754   747,131   758,143   675,869   663,547  
Total shares outstanding   29,242   29,243   29,220   26,596   26,585  
Book value per share (1)   24.89   $                              25.55   $                              25.95   $                              25.41   $                              24.96  
Tangible common equity per share (1)   16.98   17.59   17.92   20.09   19.63  
Market value per share   68.01   59.82   52.90   63.88   58.65  
                       
Capital Ratios                      
Total stockholders’ equity to total assets (1)   9.63%   9.85%   9.75%   10.17%   10.73%  
Tangible common equity to tangible assets (1)   6.78%   7.00%   6.94%   8.22%   8.64%  
Average stockholders’ equity to average assets   9.92%   9.79%   10.24%   10.43%   10.75%  
Total risk-based capital   12.16%   12.27%   12.14%   12.79%   12.61%  
Common equity tier 1 risk-based capital   10.69%   10.81%   10.66%   11.94%   11.69%  
Tier 1 risk-based capital   11.13%   11.26%   11.12%   11.94%   11.69%  
Leverage   8.85%   8.58%   9.34%   8.86%   8.98%  
                       
                       
Stock Yards Bancorp, Inc. Financial Information (unaudited)            
Third Quarter 2022 Earnings Release            
                       
    Quarterly Comparison  
Average Balance Sheet Data   9/30/22   6/30/22   3/31/22   12/31/21   9/30/21  
                       
Federal funds sold and interest bearing due from banks   $                          442,880   $                          561,101   $                          671,263   $                          699,222   $                          532,549  
Mortgage loans held for sale   8,694   11,303   8,629   12,556   8,875  
Investment securities   1,769,597   1,741,844   1,321,551   1,099,235   1,034,712  
Loans   4,948,898   4,846,013   4,377,930   4,172,676   4,173,260  
Total interest earning assets   7,181,781   7,174,072   6,389,882   5,993,065   5,760,760  
Total assets   7,661,720   7,651,332   6,872,273   6,406,612   6,139,176  
Interest bearing deposits   4,444,983   4,515,563   4,148,716   3,798,666   3,525,785  
Total deposits   6,614,263   6,639,458   5,966,178   5,559,577   5,297,217  
Securities sold under agreement to repurchase and federal funds purchased   148,734   149,747   101,075   86,911   82,048  
Subordinated debentures   26,210   26,111   8,052   –   –  
Total interest bearing liabilities   4,619,927   4,691,421   4,257,843   3,892,751   3,617,833  
Total stockholders’ equity   760,322   749,445   703,929   668,287   660,099  
                       
Performance Ratios                      
Annualized return on average assets (7)   1.47%   1.40%   0.47%   1.52%   1.50%  
Annualized return on average equity (7)   14.85%   14.34%   4.55%   14.60%   13.92%  
Net interest margin, fully tax equivalent   3.46%   3.20%   3.11%   3.07%   3.14%  
Non-interest income to total revenue, fully tax equivalent   28.43%   27.71%   28.18%   28.65%   27.85%  
Efficiency ratio, fully tax equivalent (4)   51.30%   56.42%   82.61%   53.24%   54.63%  
                       
Loans Segmentation                      
Commercial real estate – non-owner occupied   $                       1,415,180   $                       1,397,330   $                       1,397,633   $                       1,128,244   $                       1,142,647  
Commercial real estate – owner occupied   819,727   787,559   803,181   678,405   652,631  
Commercial and industrial   1,170,241   1,090,404   1,083,980   967,022   910,923  
Commercial and industrial – PPP   19,469   36,767   71,361   140,734   231,335  
Residential real estate – owner occupied   557,638   533,577   492,123   400,695   398,069  
Residential real estate – non-owner occupied   302,936   293,852   297,127   281,018   277,045  
Construction and land development   414,632   372,197   346,372   299,206   303,642  
Home equity lines of credit   199,485   192,102   186,024   138,976   140,027  
Consumer   138,843   137,278   135,198   104,294   104,629  
Leases   13,959   14,611   13,952   13,622   12,348  
Credit cards   20,767   21,647   20,732   17,087   15,821  
Total loans and leases   $                       5,072,877   $                       4,877,324   $                       4,847,683   $                       4,169,303   $                       4,189,117  
                       
Asset Quality Data                      
Non-accrual loans   $                            10,580   $                              7,827   $                            12,494   $                              6,712   $                              5,036  
Troubled debt restructurings   –   –   10   12   13  
Loans past due 90 days or more and still accruing   32   1,176   300   684   –  
Total non-performing loans   10,612   9,003   12,804   7,408   5,049  
Other real estate owned   996   7,601   7,156   7,212   7,229  
Total non-performing assets   $                            11,608   $                            16,604   $                            19,960   $                            14,620   $                            12,278  
Non-performing loans to total loans (2)   0.21%   0.18%   0.26%   0.18%   0.12%  
Non-performing assets to total assets   0.15%   0.22%   0.26%   0.22%   0.20%  
Allowance for credit losses on loans to total loans (2)   1.38%   1.36%   1.38%   1.29%   1.35%  
Allowance for credit losses on loans to average loans   1.42%   1.37%   1.53%   1.29%   1.35%  
Allowance for credit losses on loans to non-performing loans   660%   737%   524%   728%   1120%  
Net (charge-offs) recoveries   $                               (382)   $                                   (5)   $                                 540   $                            (1,535)   $                            (1,891)  
Net (charge-offs) recoveries to average loans (5)   -0.01%   0.00%   0.01%   -0.04%   -0.05%  
                       
Other Information                      
Total assets under management (in millions)   $                              6,293   $                              6,555   $                              7,305   $                              4,801   $                              4,506  
Full-time equivalent employees   1,028   1,018   997   820   793  
                       
                       
(1) – The following table provides a reconciliation of total stockholders’ equity in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) to tangible stockholders’ equity, a non-GAAP disclosure. Bancorp provides the tangible book value per share, a non-GAAP measure, in addition to those defined by banking regulators, because of its widespread use by investors as a means to evaluate capital adequacy:  
   
    Quarterly Comparison  
(In thousands, except per share data)   9/30/22   6/30/22   3/31/22   12/31/21   9/30/21  
                       
Total stockholders’ equity – GAAP (a)   $                          727,754   $                          747,131   $                          758,143   $                          675,869   $                          663,547  
Less: Goodwill   (202,524)   (202,524)   (202,524)   (135,830)   (135,830)  
Less: Core deposit and other intangibles   (28,747)   (30,357)   (31,968)   (5,596)   (5,871)  
Tangible common equity – Non-GAAP (c)   $                          496,483   $                          514,250   $                          523,651   $                          534,443   $                          521,846  
                       
Total assets – GAAP (b)   $                       7,554,210   $                       7,583,105   $                       7,777,152   $                       6,646,025   $                       6,181,188  
Less: Goodwill   (202,524)   (202,524)   (202,524)   (135,830)   (135,830)  
Less: Core deposit and other intangibles   (28,747)   (30,357)   (31,968)   (5,596)   (5,871)  
Tangible assets – Non-GAAP (d)   $                       7,322,939   $                       7,350,224   $                       7,542,660   $                       6,504,599   $                       6,039,487  
                       
Total stockholders’ equity to total assets – GAAP (a/b)   9.63%   9.85%   9.75%   10.17%   10.73%  
Tangible common equity to tangible assets – Non-GAAP (c/d)   6.78%   7.00%   6.94%   8.22%   8.64%  
                       
Total shares outstanding (e)   29,242   29,243   29,220   26,596   26,585  
                       
Book value per share – GAAP (a/e)   $                              24.89   $                              25.55   $                              25.95   $                              25.41   $                              24.96  
Tangible common equity per share – Non-GAAP (c/e)   16.98   17.59   17.92   20.09   19.63  
                       
(2) – Allowance for credit losses on loans to total non-PPP loans represents the allowance for credit losses on loans, divided by total loans less PPP loans. Non-performing loans to total non-PPP loans represents non-performing loans, divided by total loans less PPP loans. Bancorp believes these non-GAAP disclosures are important because they provide a comparable ratio after eliminating the PPP loans, which are fully guaranteed by the U.S. SBA and have not been allocated for within the allowance for credit losses on loans and are not at risk of non-performance.  
   
    Quarterly Comparison  
(Dollars in thousands)   9/30/22   6/30/22   3/31/22   12/31/21   9/30/21  
                       
Total Loans – GAAP (a)   $                       5,072,877   $                       4,877,324   $                       4,847,683   $                       4,169,303   $                       4,189,117  
Less: PPP loans   (19,469)   (36,767)   (71,361)   (140,734)   (231,335)  
Total non-PPP Loans – Non-GAAP (b)   $                       5,053,408   $                       4,840,557   $                       4,776,322   $                       4,028,569   $                       3,957,782  
                       
Allowance for credit losses on loans (c)   $                            70,083   $                            66,362   $                            67,067   $                            53,898   $                            56,533  
Total non-performing loans (d)   10,612   9,003   12,804   7,408   5,049  
                       
Allowance for credit losses on loans to total loans – GAAP (c/a)   1.38%   1.36%   1.38%   1.29%   1.35%  
Allowance for credit losses on loans to total loans – Non-GAAP (c/b)   1.39%   1.37%   1.40%   1.34%   1.43%  
                       
Non-performing loans to total loans – GAAP (d/a)   0.21%   0.18%   0.26%   0.18%   0.12%  
Non-performing loans to total loans – Non-GAAP (d/b)   0.21%   0.19%   0.27%   0.18%   0.13%  
                       
(3) – Interest income on a FTE basis includes the additional amount of interest income that would have been earned if investments in certain tax-exempt interest earning assets had been made in assets subject to federal, state and local taxes yielding the same after-tax income.  
   
(4) – The efficiency ratio, a non-GAAP measure, equals total non-interest expenses divided by the sum of net interest income (FTE) and non-interest income. In addition to the efficiency ratio presented, Bancorp considers an adjusted efficiency ratio to be important because it provides a comparable ratio after eliminating net gains (losses) on sales, calls, and impairment of investment securities, as well as net gains (losses) on sales of acquired premises and equipment, if applicable, and the fluctuation in non-interest expenses related to amortization of investments in tax credit partnerships and non-recurring merger expenses.  
   
    Quarterly Comparison  
(Dollars in thousands)   9/30/22   6/30/22   3/31/22   12/31/21   9/30/21  
                       
Total non-interest expenses (a)    $                            44,873   $                            44,675   $                            56,297   $                            34,572   $                            34,558  
Less: Non-recurring merger expenses   –   –   (19,500)   –   (525)  
Less: Amortization of investments in tax credit partnerships   (88)   (89)   (88)   (52)   (53)  
Total non-interest expenses – Non-GAAP (c)   $                            44,785   $                            44,586   $                            36,709   $                            34,520   $                            33,980  
                       
Total net interest income, fully tax equivalent   $                            62,608   $                            57,244   $                            48,944   $                            46,328   $                            45,643  
Total non-interest income   24,864   21,940   19,203   18,604   17,614  
Total revenue – Non-GAAP (b)   87,472   79,184   68,147   64,932   63,257  
Less: Gain/loss on sale of acquired premises and equipment   (3,074)   –   –   –   –  
Less: Gain/loss on sale of securities   –   –   –   –   –  
Total adjusted revenue – Non-GAAP (d)   $                            84,398   $                            79,184   $                            68,147   $                            64,932   $                            63,257  
                       
Efficiency ratio – Non-GAAP (a/b)   51.30%   56.42%   82.61%   53.24%   54.63%  
Adjusted efficiency ratio – Non-GAAP (c/d)   53.06%   56.31%   53.87%   53.16%   53.72%  
                       
                       
(5) – Quarterly net (charge-offs) recoveries to average loans ratios are not annualized.
  
                       
(6) – Detail of Provision for credit losses follows:  
    Quarterly Comparison  
(in thousands)   9/30/22   6/30/22   3/31/22   12/31/21   9/30/21  
                       
Provision for credit losses – loans   $                              4,103   $                               (700)   $                              2,679   $                            (1,100)   $                            (1,000)  
Provision for credit losses – off balance sheet exposures   700   500   (400)   (800)   (525)  
Total provision for credit losses   $                              4,803   $                               (200)   $                              2,279   $                            (1,900)   $                            (1,525)  
                       
(7) – Return on average assets equals net income divided by total average assets, annualized to reflect a full year return on average assets. Similarly, return on average equity equals net income divided by total average equity, annualized to reflect a full year return on average equity.
As a result of the substantial impact of non-recurring items related to the Commonwealth Bancshares and Kentucky Bancshares acquisitions, Bancorp considers adjusted return on average assets and return on average equity ratios important, as they reflect performance after removing certain merger-related sales of premises and equipment, expenses and purchase accounting adjustments. 		 
   
    Quarterly Comparison  
(Dollars in thousands)   9/30/22   6/30/22   3/31/22   12/31/21   9/30/21  
                       
Net income attributable to stockholders – GAAP (a)   $                            28,455   $                            26,794   $                              7,906   $                            24,589   $                            23,162  
Add: Non-recurring merger expenses   –   –   19,500   –   525  
Add: Provision for credit losses on acquired loans   –   –   4,429   –   –  
Less: Gain/loss on sale of premises and equipment   (3,074)   –   –   –   –  
Less: Tax effect of adjustments to net income   738   –   (3,717)   –   (121)  
Total net income – Non-GAAP (b)   $                            26,119   $                            26,794   $                            28,118   $                            24,589   $                            23,577  
                       
Total average assets (c)   $                       7,661,720   $                       7,651,332   $                       6,872,273   $                       6,406,612   $                       6,139,176  
                       
Total average stockholder equity (d )   760,322   749,445   703,929   668,287   660,099  
                       
Return on average assets – GAAP (a/c)   1.47%   1.40%   0.47%   1.52%   1.50%  
Return on average assets – Non-GAAP (b/c)   1.35%   1.40%   1.66%   1.52%   1.52%  
                       
Return on average equity – GAAP (a/d)   14.85%   14.34%   4.55%   14.60%   13.92%  
Return on average equity – Non-GAAP (b/d)   13.63%   14.34%   16.20%   14.60%   14.17%  

 

Contact:   T. Clay Stinnett
    Executive Vice President,
    Treasurer and Chief Financial Officer
    (502) 625-0890



Posted on

Ikena Oncology Presents Preclinical Data at the 34th EORTC-NCI-AACR Symposium on Novel TEAD Inhibitor, IK-930, Combating Therapeutic Resistance

BOSTON, Oct. 26, 2022 (GLOBE NEWSWIRE) — Ikena Oncology, Inc. (Nasdaq: IKNA, “Ikena”), a targeted oncology company forging new territory in patient-directed cancer treatment, today announced a poster presentation highlighting preclinical data on the company’s novel TEAD inhibitor, IK-930, at the 34th EORTC-NCI-AACR Symposium on Molecular Targets and Cancer Therapeutics, taking place October 26-28, 2022, in Barcelona, Spain (www.eortc.org/ena).

The poster (#111) is titled “IK-930, a Novel TEAD-inhibitor, Overcomes Hippo/YAP-mediated Adaptive Response to MEK and EGFR-targeted Therapies” and will be presented by Ikena Senior Scientist, Mihir Rajurkar, Ph.D. in today’s poster session. The results support the potential of TEAD inhibition by IK-930 to enhance anti-tumor activity when combined with EGFR or MEK inhibitors in multiple oncogene-driven solid tumors.

Highlights of the preclinical poster include:

  • Hippo pathway activation is an adaptive response to targeted therapies, including MEK and EGFR inhibitors
  • Addition of IK-930 blocked compensatory TEAD-mediated transcription induced by EGFR or MEK inhibitors
  • The combination of IK-930 with EGFR or MEK inhibitors resulted in apoptosis in vitro and led to strong antitumor activity in vivo in KRAS and EGFR mutant tumor models
  • Combination therapy with IK-930 and EGFR inhibitors reduced the prevalence of refractory persister cells, a subpopulation of cells that can drive resistance to therapies

“We are pleased to share this preclinical update on IK-930 at the EORTC-NCI-AACR triple meeting this year, adding to the foundation we have built around our TEAD program. These data reinforce our belief that the Hippo pathway is often activated as a critical resistance mechanism to other targeted therapies, and that IK-930 has the potential to overcome therapeutic resistance,” said Jeffrey Ecsedy, Ph.D., Chief Development Officer of Ikena. “One of the exciting aspects of these data is the impact IK-930 has on persister cells – showing there is potential for IK-930 to prevent resistance to EGFR inhibitors and even reverse the effect when given after resistance has already emerged. We are forging ahead with our ongoing investigation of IK-930 both as a monotherapy and in combination and look forward to sharing our clinical findings next year.”

IK-930 is currently being studied in a first-in-human Phase 1 clinical trial in patients with advanced solid tumors (NCT05228015). Multiple combination cohorts are planned, the first of which will be assessing IK-930’s impact on resistance to EGFR inhibitors.

More details on the conference program can be found on the conference website. Ikena’s poster presentation will be available on the Events & Presentations section of the company’s website following the conference.

About IK-930

IK-930 is an oral, paralog-selective TEAD inhibitor targeting the Hippo signaling pathway. IK-930 binds to TEAD transcription factors and prevents transcription of multiple genes that drive cancer progression. By targeting the Hippo pathway, a key driver of cancer pathogenesis that is genetically altered in approximately 10% of all cancer types, IK-930 could have a differentiating impact across many cancers with high unmet need. Ikena is advancing IK-930 both as a monotherapy in patients with Hippo pathway mutated cancers and in combination with other approved targeted therapies to combat therapeutic resistance. IK-930 is currently being studied in a Phase 1 clinical trial as a monotherapy in patients with advanced solid tumors with or without gene alterations in the Hippo pathway, including NF2-deficient malignant mesothelioma, Epithelioid Hemangioendothelioma (EHE) with documented TAZ/CAMTA1 fusion genes as well as other solid tumors with either NF2 deficiency or with YAP/TAZ genetic fusions (ClinicalTrials.gov Identifier: NCT05228015).

About Ikena Oncology

Ikena Oncology™ is focused on developing novel therapies targeting key signaling pathways that drive the formation and spread of cancer. The Company’s lead targeted oncology program, IK-930, is a TEAD inhibitor addressing the Hippo signaling pathway, a known tumor suppressor pathway that also drives resistance to multiple targeted therapies. The Company’s ongoing discovery research spans other targets in the Hippo pathway as well as the RAS signaling pathway. Additional programs targeting the tumor microenvironment and immune signaling are in the clinic, including IK-175, an AHR antagonist, which is being developed in collaboration with Bristol Myers Squibb. Ikena’s pipeline is built on addressing genetically defined or biomarker-driven cancers and developing therapies that can serve specific patient populations in need of new therapeutic options. To learn more, visit www.ikenaoncology.com or follow us on Twitter and LinkedIn.

Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, as amended, including, without limitation, statements regarding: the timing and advancement of our targeted oncology programs, including the timing of updates; our expectations regarding the therapeutic benefit of our targeted oncology programs; our ability to efficiently discover and develop product candidates; our ability to obtain and maintain regulatory approval of our product candidates; the implementation of our business model, and strategic plans for our business and product candidates. The words “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “predict,” “project,” “potential,” “continue,” “target” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Any forward-looking statements in this press release are based on management’s current expectations and beliefs and are subject to a number of risks, uncertainties and important factors that may cause actual events or results to differ materially from those expressed or implied by any forward-looking statements contained in this press release, including, without limitation, those risks and uncertainties related to the timing and advancement of our targeted oncology programs; our expectations regarding the therapeutic benefit of our targeted oncology programs; expectations regarding our new executive officer; our ability to efficiently discover and develop product candidates; the implementation of our business model, and strategic plans for our business and product candidates, and other factors discussed in the “Risk Factors” section of Ikena’s Form 10-Q for the quarter ended June 30, 2022, which is on file with the SEC, as updated by any subsequent SEC filings. We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date they are made. We disclaim any obligation to publicly update or revise any such statements to reflect any change in expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking statements. Any forward-looking statements contained in this press release represent our views only as of the date hereof and should not be relied upon as representing its views as of any subsequent date. We explicitly disclaim any obligation to update any forward-looking statements.


Investor Contact:

Rebecca Cohen
Ikena Oncology
[email protected]

Media Contact:

Luke Shiplo
LifeSci Communications
[email protected]



Posted on

Arbutus to Report Third Quarter 2022 Financial Results and Provide Corporate Update

WARMINSTER, Pa., Oct. 26, 2022 (GLOBE NEWSWIRE) — Arbutus Biopharma Corporation (Nasdaq: ABUS), a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop novel therapeutics that target specific viral diseases, today announced that it has scheduled its third quarter 2022 financial results and corporate update for Wednesday, November 9, 2022. The schedule for the press release and conference call/webcast are as follows:

• Q3/2022 Press Release: Wednesday, November 9, 2022 at 7:30 a.m. ET
• Q3/2022 Conference Call/Webcast: Wednesday, November 9, 2022 at 8:45 a.m. ET
     

To dial-in for the conference call by phone, please register using the following link: Registration Link. A live webcast of the conference call can be accessed through the Investors section of Arbutus’ website at www.arbutusbio.com.  

An archived webcast will be available on the Arbutus website after the event.

About Arbutus

Arbutus Biopharma Corporation (Nasdaq: ABUS) is a clinical-stage biopharmaceutical company leveraging its extensive virology expertise to develop novel therapeutics that target specific viral diseases. Our current focus areas include Hepatitis B virus (HBV), SARS-CoV-2, and other coronaviruses. In HBV, we are developing a RNAi therapeutic, an oral capsid inhibitor, an oral PD-L1 inhibitor, and oral RNA destabilizer that we intend to combine with the aim of providing a functional cure for patients with chronic HBV by suppressing viral replication, reducing surface antigen and reawakening the immune system. We believe our lead compound, AB-729, is the only RNAi therapeutic with evidence of immune re-awakening. It is currently being evaluated in multiple phase 2 clinical trials. We also have an ongoing drug discovery and development program directed to identifying novel, orally active agents for treating coronavirus (including SARS-CoV-2). In addition, we are exploring oncology applications for our internal PD-L1 portfolio. For more information, visit www.arbutusbio.com.

Contact Information


Investors and Media

William H. Collier
President and CEO
Phone: 267-469-0914
Email: [email protected]

Lisa M. Caperelli
Vice President, Investor Relations
Phone: 215-206-1822
Email: [email protected]



Posted on

InMed Pharmaceuticals Supports Epidermolysis Bullosa Awareness Week

VANCOUVER, British Columbia, Oct. 26, 2022 (GLOBE NEWSWIRE) — InMed Pharmaceuticals Inc. (“InMed” or the “Company”) (Nasdaq: INM), a leader in the research, development and manufacturing of rare cannabinoids, announces it is supporting initiatives to raise awareness of epidermolysis bullosa, a group of rare genetic connective tissue disorders. Epidermolysis Bullosa Global Awareness Week is October 25-31, 2022.

Alexandra Mancini, Senior Vice President of Clinical and Regulatory Affairs for InMed commented, “In severe cases of epidermolysis bullosa, or EB, the very fragile skin tears easily and forms painful blisters and open wounds that do not heal quickly. EB is a very important but rare disease that does not get the attention it deserves. EB Awareness Week is an opportunity for the community to come together to raise awareness about epidermolysis bullosa to foster the necessary research and resources to work towards better treatments and, eventually, a cure to improve the lives of those with EB. InMed has undertaken a Phase 2 study in patients with EB in the hope that its cannabinol cream will provide important symptom benefit.”

Throughout EB Awareness Week, InMed will be raising awareness and supporting the EB community through education and sharing personal EB stories via its social media channels. Help InMed support EB patients, families and advocate organizations by spreading awareness and following the work of important organizations such as DEBRA of America, DEBRA Canada, DEBRA International and EB Research Partnership.

What is epidermolysis bullosa?

Epidermolysis bullosa, or EB, is a group of rare genetic skin diseases characterized by fragile skin that can lead to extensive blistering and wounding. It affects skin and mucous membranes, particularly of the gastrointestinal tract, genitourinary and respiratory systems. It is a debilitating disease affecting a small number of people, thus earning it an orphan-disease status. The disease has no definitive cure and all currently approved treatments are directed towards symptom relief. Learn more: https://www.inmedpharma.com/learn/what-is-epidermolysis-bullosa/.

Learn more about InMed’s INM-755 EB study:

https://www.inmedpharma.com/pharmaceutical/inm-755-for-epidermolysis-bullosa/

About InMed: InMed Pharmaceuticals is a global leader in the pharmaceutical research, development and manufacturing of rare cannabinoids and cannabinoid analogs, including clinical and preclinical programs targeting the treatment of diseases with high unmet medical needs. We also have significant know-how in developing proprietary manufacturing approaches to produce cannabinoids for various market sectors. For more information, visit www.inmedpharma.com.

Investor Contact:

Colin Clancy
Vice President, Investor Relations & Corporate Communications
T: +1.604.416.0999
E: [email protected]

Cautionary Note Regarding Forward-Looking Information:
This news release contains “forward-looking information” and “forward-looking statements” (collectively, “forward-looking information”) within the meaning of applicable securities laws. Forward-looking information is based on management’s current expectations and beliefs and is subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Forward-looking information in this news release includes statements about: undertaking a Phase 2 study in patients with EB in the hope that its cannabinol cream will provide important symptom benefit; being a global leader in the research, development, manufacturing and commercialization of rare cannabinoids; and delivering new treatment alternatives to patients that may benefit from cannabinoid-based pharmaceutical drugs.

With respect to the forward-looking information contained in this news release, InMed has made numerous assumptions regarding, among other things: the ability to obtain all necessary regulatory approvals on a timely basis, or at all; and continued economic and market stability. While InMed considers these assumptions to be reasonable, these assumptions are inherently subject to significant business, economic, competitive, market and social uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause InMed’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A complete discussion of the risks and uncertainties facing InMed’s stand-alone business is disclosed in InMed’s Annual Report on Form 10-K and other filings with the Security and Exchange Commission on www.sec.gov.

All forward-looking information herein is qualified in its entirety by this cautionary statement, and InMed disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.



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Hess Reports Estimated Results for the Third Quarter of 2022

Hess Reports Estimated Results for the Third Quarter of 2022

Key Developments:

  • Announced Yarrow-1 and Sailfin-1 as the 8th and 9th discoveries this year on the Stabroek Block, offshore Guyana; adds to the previous gross discovered recoverable resource estimate for the Block of approximately 11 billion barrels of oil equivalent (boe)
  • Total cash returned to stockholders in the quarter through share repurchases and dividends amounted to $265 million; approximately 1.4 million shares of common stock were repurchased for $150 million in the quarter

Third Quarter Financial and Operational Highlights:

  • Net income was $515 million, or $1.67 per common share, compared with net income of $115 million, or $0.37 per common share, in the third quarter of 2021
  • Adjusted net income1 was $583 million or $1.89 per common share, compared with net income of $86 million, or $0.28 per common share in the prior-year quarter
  • Oil and gas net production, excluding Libya, was 351,000 barrels of oil equivalent per day (boepd), up 32 percent from265,000boepd in the third quarter of 2021
  • Bakken net production was 166,000 boepd, up 12 percent from 148,000 boepd in the third quarter of 2021; Guyana net production was 98,000 barrels of oil per day (bopd), compared with 32,000 bopd in the prior-year quarter
  • E&P capital and exploratory expenditures were $701 million compared with $498 million in the prior-year quarter
  • Cash and cash equivalents, excluding Midstream, were $2.38 billion at September 30, 2022

2022 Updated Guidance:

  • Net production, excluding Libya, is forecast to be approximately 370,000 boepd in the fourth quarter and approximately 325,000 boepd for the full year
  • Full year E&P capital and exploratory expenditures are expected to be approximately $2.7 billion, unchanged from previous guidance

NEW YORK–(BUSINESS WIRE)–
   Hess Corporation (NYSE: HES) today reported net income of $515 million, or $1.67 per common share, in the third quarter of 2022, compared with net income of $115 million, or $0.37 per common share, in the third quarter of 2021. On an adjusted basis, the Corporation had net income of $583 million or $1.89 per common share, compared with $86 million, or $0.28 per common share, in the third quarter of 2021.The improvement in adjusted after-tax earnings compared with the prior-year period was primarily due to higher realized selling prices and sales volumes in the third quarter of 2022.

   “We continue to successfully execute our strategy and deliver strong operational and ESG performance,” CEO John Hess said. “We offer a unique value proposition – to grow both our intrinsic value and our cash returns by increasing our resource base, delivering a lower cost of supply and generating industry leading cash flow growth. As our portfolio becomes increasingly free cash flow positive, we will continue to prioritize the return of capital to our shareholders through further dividend increases and share repurchases.”

1.

“Adjusted net income” is a non-GAAP financial measure. The definition of this non-GAAP measure and a reconciliation to its nearest GAAP equivalent measure appears on pages 6 and 7 .

   After-tax income (loss) by major operating activity was as follows:

 

Three Months Ended

September 30,

(unaudited)

 

Nine Months Ended

September 30,

(unaudited)

 

2022

 

2021

 

2022

 

2021

 

 

(In millions, except per share amounts)

Net Income Attributable to Hess Corporation

 

 

 

 

 

 

Exploration and Production

$

572

 

$

178

 

$

1,755

 

$

461

Midstream

 

68

 

 

61

 

 

205

 

 

212

Corporate, Interest and Other

 

(125)

 

 

(124)

 

 

(361)

 

 

(379)

Net income attributable to Hess Corporation

$

515

 

$

115

 

$

1,599

 

$

294

Net income per common share (diluted)

$

1.67

 

$

0.37

 

$

$ 5.16

 

$

0.95

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted Net Income Attributable to Hess Corporation

 

 

 

 

 

 

Exploration and Production

$

626

 

$

149

 

$

1,809

 

$

579

Midstream

 

68

 

 

61

 

 

205

 

 

212

Corporate, Interest and Other

 

(111)

 

 

(124)

 

 

(360)

 

 

(379)

Adjusted net income attributable to Hess Corporation

$

583

 

$

86

 

$

1,654

 

$

412

Adjusted net income per common share (diluted)

$

1.89

 

$

0.28

 

$

5.33

 

$

1.33

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of shares (diluted)

 

308.9

 

 

309.9

 

 

310.1

 

 

309.1

Exploration and Production:

   E&P net income was $572 million in the third quarter of 2022, compared with $178 million in the third quarter of 2021. On an adjusted basis, third quarter 2022 E&P net income was $626 million, compared with $149 million in the prior-year quarter. The Corporation’s average realized crude oil selling price, including the effect of hedging, was $85.32 per barrel in the third quarter of 2022, compared with $63.17 per barrel in the prior-year quarter. The average realized natural gas liquids (NGL) selling price in the third quarter of 2022 was $35.44 per barrel, compared with $32.88 per barrel in the prior-year quarter, while the average realized natural gas selling price was $5.85 per mcf, compared with $4.71 per mcf in the third quarter of 2021.

   Net production, excluding Libya, was 351,000 boepd in the third quarter of 2022, compared with 265,000 boepd in the third quarter of 2021, due to higher production in Guyana and the Bakken.

   Cash operating costs, which include operating costs and expenses, production and severance taxes, and E&P general and administrative expenses, were $13.19 per boe (excluding Libya: $13.64 per boe) in the third quarter of 2022, compared with $12.76 per boe (excluding Libya: $13.45 per boe) in the prior-year quarter. The increase in cash operating costs in the third quarter of this year, compared with the third quarter of last year, reflects higher production and severance taxes in North Dakota due to higher realized selling prices, and increased workover activity in the Gulf of Mexico.

Operational Highlights for the Third Quarter of 2022:

   Bakken (Onshore U.S.): Net production from the Bakken was 166,000 boepd compared with 148,000 boepd in the prior-year quarter, primarily due to increased drilling and completion activity and a curtailment of production in the third quarter of 2021 resulting from a planned maintenance turnaround at the Tioga Gas Plant. The Corporation added a third drilling rig in September 2021 and a fourth drilling rig in July 2022. During the third quarter of 2022, the Corporation drilled 20 wells, completed 20 wells, and brought 22 new wells online. Bakken net production is forecast to be in the range of 165,000 boepd to 170,000 boepd in the fourth quarter and approximately 155,000 boepd for the full year 2022.

   Gulf of Mexico (Offshore U.S.): Net production from the Gulf of Mexico was 30,000 boepd, compared with 32,000 boepd in the prior-year quarter.

   Guyana (Offshore): At the Stabroek Block (Hess – 30%), net production from the Liza Destiny and the Liza Unity floating production, storage and offloading vessels (FPSOs) totaled 98,000 bopd in the third quarter of 2022 compared with 32,000 bopd in the prior-year quarter. Net production from Guyana in the third quarter of 2022 included 7,000 bopd of tax barrels. There were no tax barrels in the third quarter of 2021. The Liza Unity FPSO, which commenced production in February 2022, reached its production capacity of 220,000 gross bopd in July 2022. In the third quarter, we sold eight cargos of crude oil from Guyana compared with three cargos in the prior year quarter. In the fourth quarter of 2022, we expect to sell nine cargos of crude oil. Guyana net production is forecast to be approximately 110,000 bopd in the fourth quarter, which includes approximately 20,000 bopd of tax barrels. For the full year 2022, Guyana net production is forecast to be approximately 77,000 bopd, which includes approximately 7,000 bopd of tax barrels.

   The third development, Payara, will utilize the Prosperity FPSO with an expected capacity of 220,000 gross bopd, with first production expected at the end of 2023. The fourth development, Yellowtail, was sanctioned in April 2022 and will utilize the ONE GUYANA FPSO with an expected capacity of 250,000 gross bopd, with first production expected in 2025.

   The eighth and ninth discoveries of this year were announced at Yarrow-1 and Sailfin-1, which adds to the previously announced gross discovered recoverable resource estimate for the Stabroek Block of approximately 11 billion boe. The Yarrow-1 well encountered approximately 75 feet of high quality oil bearing sandstone reservoirs. The well was drilled in 3,560 feet of water and is located approximately 9 miles southeast of the Barreleye-1 discovery. The Sailfin-1 well encountered approximately 312 feet of high quality hydrocarbon bearing sandstone reservoirs. The well was drilled in 4,616 feet of water and is located approximately 15 miles southeast of the Turbot-1 discovery.

   The Banjo-1 exploration well was drilled during the quarter and did not encounter commercial quantities of hydrocarbons.

   Southeast Asia (Offshore): Net production at North Malay Basin and JDA was 57,000 boepd in the third quarter of 2022 compared with 50,000 boepd in the prior-year quarter, primarily due to higher buyer nominations.

Midstream:

   The Midstream segment had net income of $68 million in the third quarter of 2022, compared with net income of $61 million in the prior-year quarter.

Corporate, Interest and Other:

   After-tax expense for Corporate, Interest and Other was $125 million in the third quarter of 2022, compared with $124 million in the third quarter of 2021.

Capital and Exploratory Expenditures:

   E&P capital and exploratory expenditures were $701 million in the third quarter of 2022 compared with $498 million in the prior-year quarter, primarily due to higher drilling and development activities in the Bakken, Malaysia and JDA, Gulf of Mexico and Guyana. Midstream capital expenditures were $60 million in the third quarter of 2022 and $59 million in the prior-year quarter.

Liquidity:

   Excluding the Midstream segment, Hess Corporation had cash and cash equivalents of $2.38 billion and debt and finance lease obligations totaling $5.60 billion at September 30, 2022. The Midstream segment had cash and cash equivalents of $3 million and total debt of $2.9 billion at September 30, 2022. The Corporation’s debt to capitalization ratio as defined in its debt covenants was 36.8% at September 30, 2022 and 42.3% at December 31, 2021.

   Net cash provided by operating activities was $1,339 million in the third quarter of 2022, up from $615 million in the third quarter of 2021. Net cash provided by operating activities before changes in operating assets and liabilities2 was $1,405 million in the third quarter of 2022, compared with $631 million in the prior-year quarter primarily due to higher realized selling prices and sales volumes.

   Total cash returned to stockholders in the third quarter through common stock repurchases and dividends amounted to $265 million. The Corporation repurchased approximately 1.4 million shares of common stock for $150 million during the third quarter and intends to acquire the remaining available Board authorized amount of $310 million in the fourth quarter.

2.

“Net cash provided by (used in) operating activities before changes in operating assets and liabilities” is a non-GAAP financial measure. The definition of this non-GAAP measure and a reconciliation to its nearest GAAP equivalent measure appears on pages 6 and 7 .

   Items Affecting Comparability of Earnings Between Periods:

   The following table reflects the total after-tax income (expense) of items affecting comparability of earnings between periods:

 

Three Months Ended

September 30,

(unaudited)

 

Nine Months Ended

September 30,

(unaudited)

 

2022

 

2021

 

2022

2021

 

(In millions)

Exploration and Production

$

(54)

 

$

29

 

$

(54)

$

(118)

Midstream

—

 

—

 

—

 

—

Corporate, Interest and Other

(14)

 

—

 

(1)

 

—

Total items affecting comparability of earnings between periods

$

(68)

 

$

29

 

$

(55)

$

(118)

   Third Quarter 2022: E&P results include impairment charges of $28 million ($28 million after income taxes) that resulted from updates to the Corporation’s estimated abandonment liabilities for non-producing properties in the Gulf of Mexico and $26 million ($26 million after income taxes) related to the Penn State Field in the Gulf of Mexico. Results for Corporate, Interest and Other include a charge of $14 million ($14 million after income taxes) for legal costs related to a former downstream business.

   Third Quarter 2021: E&P results include a pre-tax gain of $29 million ($29 million after income taxes) associated with the sale of the Corporation’s interests in Denmark.

Reconciliation of U.S. GAAP to Non-GAAP Measures:

   The following table reconciles reported net income attributable to Hess Corporation and adjusted net income:

 

Three Months Ended

September 30,

(unaudited)

 

Nine Months Ended

September 30,

(unaudited)

 

2022

 

2021

 

2022

 

2021

 

(In millions)

Net income attributable to Hess Corporation

$

515

 

$

115

 

$

1,599

 

$

294

Less: Total items affecting comparability of earnings

between periods

(68)

 

29

 

(55)

 

(118)

Adjusted net income attributable to Hess Corporation

$

583

 

$

86

 

$

1,654

 

$

412

The following table reconciles reported net cash provided by (used in) operating activities from net cash provided by (used in) operating activities before changes in operating assets and liabilities:

 

Three Months Ended

September 30,

(unaudited)

 

Nine Months Ended

September 30,

(unaudited)

 

2022

 

2021

 

2022

 

2021

 

(In millions)

Net cash provided by (used in) operating activities before changes in operating assets and liabilities

$

1,405

 

$

631

 

$

3,820

 

$

2,105

Changes in operating assets and liabilities

(66)

 

(16)

 

(1,128)

 

(114)

Net cash provided by (used in) operating activities

$

1,339

 

$

615

 

$

2,692

 

$

1,991

   Hess Corporation will review third quarter financial and operating results and other matters on a webcast at 10 a.m. today (EDT). For details about the event, refer to the Investor Relations section of our website at www.hess.com.

   Hess Corporation is a leading global independent energy company engaged in the exploration and production of crude oil and natural gas. More information on Hess Corporation is available at www.hess.com.

Forward-looking Statements

   This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as “anticipate,” “estimate,” “expect,” “forecast,” “guidance,” “could,” “may,” “should,” “would,” “believe,” “intend,” “project,” “plan,” “predict,” “will,” “target” and similar expressions identify forward-looking statements, which are not historical in nature. Our forward-looking statements may include, without limitation: our future financial and operational results; our business strategy; estimates of our crude oil and natural gas reserves and levels of production; benchmark prices of crude oil, NGL and natural gas and our associated realized price differentials; our projected budget and capital and exploratory expenditures; expected timing and completion of our development projects; and future economic and market conditions in the oil and gas industry.

   Forward-looking statements are based on our current understanding, assessments, estimates and projections of relevant factors and reasonable assumptions about the future. Forward-looking statements are subject to certain known and unknown risks and uncertainties that could cause actual results to differ materially from our historical experience and our current projections or expectations of future results expressed or implied by these forward-looking statements. The following important factors could cause actual results to differ materially from those in our forward-looking statements: fluctuations in market prices of crude oil, NGL and natural gas and competition in the oil and gas exploration and production industry, including as a result of COVID-19; reduced demand for our products, including due to COVID-19, perceptions regarding the oil and gas industry, competing or alternative energy products and political conditions and events; potential failures or delays in increasing oil and gas reserves, including as a result of unsuccessful exploration activity, drilling risks and unforeseen reservoir conditions, and in achieving expected production levels; changes in tax, property, contract and other laws, regulations and governmental actions applicable to our business, including legislative and regulatory initiatives regarding environmental concerns, such as measures to limit greenhouse gas emissions and flaring, fracking bans as well as restrictions on oil and gas leases; operational changes and expenditures due to climate change and sustainability related initiatives; disruption or interruption of our operations due to catastrophic events, such as accidents, severe weather, geological events, shortages of skilled labor, cyber-attacks, health measures related to COVID-19, or climate change; the ability of our contractual counterparties to satisfy their obligations to us, including the operation of joint ventures under which we may not control and exposure to decommissioning liabilities for divested assets in the event the current or future owners are unable to perform; unexpected changes in technical requirements for constructing, modifying or operating exploration and production facilities and/or the inability to timely obtain or maintain necessary permits; availability and costs of employees and other personnel, drilling rigs, equipment, supplies and other required services; any limitations on our access to capital or increase in our cost of capital, including as a result of limitations on investment in oil and gas activities or negative outcomes within commodity and financial markets; liability resulting from environmental obligations and litigation, including heightened risks associated with being a general partner of Hess Midstream LP; and other factors described in Item 1A—Risk Factors in our Annual Report on Form 10-K and any additional risks described in our other filings with the Securities and Exchange Commission (SEC).

   As and when made, we believe that our forward-looking statements are reasonable. However, given these risks and uncertainties, caution should be taken not to place undue reliance on any such forward-looking statements since such statements speak only as of the date when made and there can be no assurance that such forward-looking statements will occur and actual results may differ materially from those contained in any forward-looking statement we make. Except as required by law, we undertake no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events or otherwise.

Non-GAAP financial measures

   The Corporation has used non-GAAP financial measures in this earnings release. “Adjusted net income” presented in this release is defined as reported net income attributable to Hess Corporation excluding items identified as affecting comparability of earnings between periods. “Net cash provided by (used in) operating activities before changes in operating assets and liabilities” presented in this release is defined as Net cash provided by (used in) operating activities excluding changes in operating assets and liabilities. Management uses adjusted net income to evaluate the Corporation’s operating performance and believes that investors’ understanding of our performance is enhanced by disclosing this measure, which excludes certain items that management believes are not directly related to ongoing operations and are not indicative of future business trends and operations. Management believes that net cash provided by (used in) operating activities before changes in operating assets and liabilities demonstrates the Corporation’s ability to internally fund capital expenditures, pay dividends and service debt. These measures are not, and should not be viewed as, a substitute for U.S. GAAP net income or net cash provided by (used in) operating activities. A reconciliation of reported net income attributable to Hess Corporation (U.S. GAAP) to adjusted net income, and a reconciliation of net cash provided by (used in) operating activities (U.S. GAAP) to net cash provided by (used in) operating activities before changes in operating assets and liabilities are provided in the release.

Cautionary Note to Investors

   We use certain terms in this release relating to resources other than proved reserves, such as unproved reserves or resources. Investors are urged to consider closely the oil and gas disclosures in Hess Corporation’s Form 10-K, File No. 1-1204, available from Hess Corporation, 1185 Avenue of the Americas, New York, New York 10036 c/o Corporate Secretary and on our website at www.hess.com. You can also obtain this form from the SEC on the EDGAR system.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)
 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Income Statement

 

 

 

 

 

Revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

3,122

 

$

1,759

 

$

2,955

Gains on asset sales, net

—

 

29

 

3

Other, net

35

 

23

 

30

Total revenues and non-operating income

3,157

 

1,811

 

2,988

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas

982

 

522

 

843

Operating costs and expenses

398

 

333

 

356

Production and severance taxes

72

 

42

 

67

Exploration expenses, including dry holes and lease impairment

58

 

36

 

33

General and administrative expenses

109

 

76

 

95

Interest expense

125

 

125

 

121

Depreciation, depletion and amortization

471

 

349

 

391

Impairment and other

54

 

—

 

—

Total costs and expenses

2,269

 

1,483

 

1,906

Income before income taxes

888

 

328

 

1,082

Provision for income taxes

282

 

143

 

328

Net income

606

 

185

 

754

Less: Net income attributable to noncontrolling interests

91

 

70

 

87

Net income attributable to Hess Corporation

 $

515

 

$

115

 

$

667

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)
 

 

Nine Months Ended

September 30,

 

2022

 

2021

Income Statement

 

 

 

Revenues and non-operating income

 

 

 

Sales and other operating revenues

$

8,390

 

$

5,236

Gains on asset sales, net

25

 

29

Other, net

101

 

63

Total revenues and non-operating income

8,516

 

5,328

Costs and expenses

 

 

 

Marketing, including purchased oil and gas

2,507

 

1,362

Operating costs and expenses

1,067

 

913

Production and severance taxes

200

 

123

Exploration expenses, including dry holes and lease impairment

134

 

117

General and administrative expenses

314

 

254

Interest expense

369

 

360

Depreciation, depletion and amortization

1,199

 

1,130

Impairment and other

54

 

147

Total costs and expenses

5,844

 

4,406

Income before income taxes

2,672

 

922

Provision for income taxes

807

 

388

Net income

1,865

 

534

Less: Net income attributable to noncontrolling interests

266

 

240

Net income attributable to Hess Corporation

$

1,599

 

$

294

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)
 

 

September 30,

2022

 

December 31,

2021

Balance Sheet Information

 

 

 

Assets

 

 

 

Cash and cash equivalents

$

2,384

 

$

2,713

Other current assets

1,739

 

1,633

Property, plant and equipment – net

15,092

 

14,182

Operating lease right-of-use assets – net

461

 

352

Finance lease right-of-use assets – net

131

 

144

Other long-term assets

1,836

 

1,491

Total assets

$

21,643

 

$

20,515

Liabilities and equity

 

 

 

Current maturities of long-term debt

$

—

 

$

517

Current portion of operating and finance lease obligations

121

 

89

Other current liabilities

2,191

 

2,458

Long-term debt

8,303

 

7,941

Long-term operating lease obligations

461

 

394

Long-term finance lease obligations

185

 

200

Other long-term liabilities

2,188

 

1,890

Total equity excluding other comprehensive loss

7,889

 

6,706

Accumulated other comprehensive loss

(330)

 

(406)

Noncontrolling interests

635

 

726

Total liabilities and equity

$

21,643

 

$

20,515

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)
 

 

September 30,

2022

December 31,

2021

Total Debt

 

 

 

Hess Corporation

$

5,394

$

5,894

Midstream (a)

2,909

 

2,564

Hess Consolidated

 $

8,303

$

8,458

(a) Midstream debt is non-recourse to Hess Corporation.
 

 

September 30,

2022

December 31,

2021

Debt to Capitalization Ratio (a)

 

 

 

Hess Consolidated

50.9 %

 

55.3 %

Hess Corporation as defined in debt covenants

36.8 %

 

42.3 %

(a) Includes finance lease obligations.
 

 

Three Months Ended

September 30,

 

Nine Months Ended

September 30,

 

2022

 

2021

 

2022

2021

Interest Expense

 

 

 

 

 

 

 

Gross interest expense – Hess Corporation

$

88

 

$

97

 

$

266

$

286

Less: Capitalized interest – Hess Corporation

(3)

 

—

 

(6)

 

—

Interest expense – Hess Corporation

85

 

97

 

260

 

286

Interest expense – Midstream (a)

40

 

28

 

109

 

74

Interest expense – Hess Consolidated

 $

125

 

$

125

 

$

369

$

360

(a) Midstream interest expense is reported in the Midstream operating segment.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)
 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Cash Flow Information

 

 

 

 

 

Cash Flows from Operating Activities

 

 

 

 

 

Net income

$

606

 

$

185

 

$

754

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

 

 

(Gains) losses on asset sales, net

—

 

(29)

 

(3)

Depreciation, depletion and amortization

471

 

349

 

391

Impairment and other

54

 

—

 

—

Exploratory dry hole costs

19

 

2

 

—

Exploration lease and other impairment

4

 

5

 

4

Pension settlement loss

—

 

1

 

2

Stock compensation expense

17

 

17

 

16

Noncash (gains) losses on commodity derivatives, net

165

 

64

 

163

Provision for deferred income taxes and other tax accruals

69

 

37

 

136

Net cash provided by (used in) operating activities before changes in operating assets and liabilities

1,405

 

631

 

1,463

Changes in operating assets and liabilities

(66)

 

(16)

 

46

Net cash provided by (used in) operating activities

1,339

 

615

 

1,509

Cash Flows from Investing Activities

 

 

 

 

 

Additions to property, plant and equipment – E&P

(657)

 

(431)

 

(607)

Additions to property, plant and equipment – Midstream

(66)

 

(67)

 

(56)

Proceeds from asset sales, net of cash sold

—

 

130

 

4

Other, net

(4)

 

(2)

 

—

Net cash provided by (used in) investing activities

(727)

 

(370)

 

(659)

Cash Flows from Financing Activities

 

 

 

 

 

Net borrowings (repayments) of debt with maturities of 90 days or less

(48)

 

43

 

(14)

Debt with maturities of greater than 90 days:

 

 

 

 

 

Borrowings

20

 

750

 

400

Repayments

—

 

(503)

 

(5)

Cash dividends paid

(115)

 

(77)

 

(116)

Common stock acquired and retired

(150)

 

—

 

(190)

Proceeds from sale of Class A shares of Hess Midstream LP

—

 

—

 

146

Noncontrolling interests, net

(79)

 

(452)

 

(277)

Employee stock options exercised

4

 

—

 

7

Payments on finance lease obligations

(1)

 

(3)

 

(2)

Other, net

(18)

 

(14)

 

(10)

Net cash provided by (used in) financing activities

(387)

 

(256)

 

(61)

Net Increase (Decrease) in Cash and Cash Equivalents

225

 

(11)

 

789

Cash and Cash Equivalents at Beginning of Period

2,159

 

2,430

 

1,370

Cash and Cash Equivalents at End of Period

$

2,384

 

$

2,419

 

$

2,159

 

 

 

 

 

 

Additions to Property, Plant and Equipment included within Investing Activities

Capital expenditures incurred

$

(726)

 

$

(528)

 

$

(665)

Increase (decrease) in related liabilities

3

 

30

 

2

Additions to property, plant and equipment

$

(723)

 

$

(498)

 

$

(663)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)
 

 

Nine Months Ended

September 30,

 

2022

 

2021

Cash Flow Information

 

 

 

Cash Flows from Operating Activities

 

 

 

Net income

$

1,865

 

$

534

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

 

 

 

(Gains) losses on asset sales, net

(25)

 

(29)

Depreciation, depletion and amortization

1,199

 

1,130

Impairment and other

54

 

147

Exploratory dry hole costs

19

 

11

Exploration lease and other impairment

14

 

15

Pension settlement loss

2

 

5

Stock compensation expense

66

 

61

Noncash (gains) losses on commodity derivatives, net

383

 

152

Provision for deferred income taxes and other tax accruals

243

 

79

Net cash provided by (used in) operating activities before changes in operating assets and liabilities

3,820

 

2,105

Changes in operating assets and liabilities

(1,128)

 

(114)

Net cash provided by (used in) operating activities

2,692

 

1,991

Cash Flows from Investing Activities

 

 

 

Additions to property, plant and equipment – E&P

(1,755)

 

(1,118)

Additions to property, plant and equipment – Midstream

(177)

 

(120)

Proceeds from asset sales, net of cash sold

28

 

427

Other, net

(4)

 

(4)

Net cash provided by (used in) investing activities

(1,908)

 

(815)

Cash Flows from Financing Activities

 

 

 

Net borrowings (repayments) of debt with maturities of 90 days or less

(61)

 

(32)

Debt with maturities of greater than 90 days:

 

 

 

Borrowings

420

 

750

Repayments

(510)

 

(508)

Cash dividends paid

(350)

 

(234)

Common stock acquired and retired

(340)

 

—

Proceeds from sale of Class A shares of Hess Midstream LP

146

 

70

Noncontrolling interests, net

(430)

 

(589)

Employee stock options exercised

44

 

75

Payments on finance lease obligations

(5)

 

(7)

Other, net

(27)

 

(21)

Net cash provided by (used in) financing activities

(1,113)

 

(496)

Net Increase (Decrease) in Cash and Cash Equivalents

(329)

 

680

Cash and Cash Equivalents at Beginning of Period

2,713

 

1,739

Cash and Cash Equivalents at End of Period

$

2,384

 

$

2,419

 

 

 

 

Additions to Property, Plant and Equipment included within Investing Activities

Capital expenditures incurred

$

(1,971)

 

$

(1,274)

Increase (decrease) in related liabilities

39

 

36

Additions to property, plant and equipment

$

(1,932)

 

$

(1,238)

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

SUPPLEMENTAL FINANCIAL DATA (UNAUDITED)

(IN MILLIONS)
 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Capital and Exploratory Expenditures

 

 

 

 

 

E&P Capital and exploratory expenditures

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

226

 

$

169

 

$

188

Offshore and Other

57

 

16

 

72

Total United States

283

 

185

 

260

Guyana

301

 

264

 

286

Malaysia and JDA

92

 

42

 

66

Other

25

 

7

 

10

E&P Capital and exploratory expenditures

$

701

 

$

498

 

$

622

 

 

 

 

 

 

Total exploration expenses charged to income included above

$

35

 

$

29

 

$

29

 

 

 

 

 

 

Midstream Capital expenditures

$

60

 

$

59

 

$

72

 
 

 

Nine Months Ended

September 30,

 

2022

 

2021

Capital and Exploratory Expenditures

 

 

 

E&P Capital and exploratory expenditures

 

 

 

United States

 

 

 

North Dakota

$

549

 

$

369

Offshore and Other

185

 

72

Total United States

734

 

441

Guyana

906

 

686

Malaysia and JDA

217

 

91

Other

46

 

18

E&P Capital and exploratory expenditures

$

1,903

 

$

1,236

 

 

 

 

Total exploration expenses charged to income included above

 $

101

 

$

91

 

 

 

 

Midstream Capital expenditures

$

169

 

$

129

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)
 

 

Third Quarter 2022

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

2,022

 

$

1,100

 

$

3,122

Other, net

16

 

6

 

22

Total revenues and non-operating income

2,038

 

1,106

 

3,144

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

972

 

27

 

999

Operating costs and expenses

194

 

128

 

322

Production and severance taxes

67

 

5

 

72

Midstream tariffs

313

 

—

 

313

Exploration expenses, including dry holes and lease impairment

33

 

25

 

58

General and administrative expenses

45

 

9

 

54

Depreciation, depletion and amortization

208

 

217

 

425

Impairment and other

54

 

—

 

 

54

Total costs and expenses

1,886

 

411

 

 

2,297

Results of operations before income taxes

152

 

695

 

847

Provision for income taxes

—

 

275

 

 

275

Net income attributable to Hess Corporation

$ 152

(b)

$

420

(c)

$

572

 

 

 

 

 

 

 

Third Quarter 2021

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

1,280

 

$

479

 

$

1,759

Gains on asset sales, net

—

 

29

 

29

Other, net

12

 

7

 

19

Total revenues and non-operating income

1,292

 

515

 

1,807

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

542

 

—

 

542

Operating costs and expenses

150

 

99

 

249

Production and severance taxes

41

 

1

 

42

Midstream tariffs

270

 

—

 

270

Exploration expenses, including dry holes and lease impairment

21

 

15

 

36

General and administrative expenses

35

 

7

 

42

Depreciation, depletion and amortization

229

 

79

 

308

Total costs and expenses

1,288

 

201

 

1,489

Results of operations before income taxes

4

 

314

 

318

Provision for income taxes

—

 

140

 

140

Net income attributable to Hess Corporation

 $

4

(d)

$

174

(e)

$

178

  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $100 million (noncash premium amortization: $100 million; cash settlement: $0 million).
  3. Includes after-tax losses from realized crude oil hedging activities of $65 million (noncash premium amortization: $65 million; cash settlement: $0 million).
  4. Includes after-tax losses from realized crude oil hedging activities of $50 million (noncash premium amortization: $50 million; cash settlement: $0 million).
  5. Includes after-tax losses from realized crude oil hedging activities of $14 million (noncash premium amortization: $14 million; cash settlement: $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)
 

 

Second Quarter 2022

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

1,860

 

$

1,095

 

$

2,955

Other, net

25

 

1

 

26

Total revenues and non-operating income

1,885

 

1,096

 

2,981

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

827

 

31

 

858

Operating costs and expenses

175

 

116

 

291

Production and severance taxes

65

 

2

 

67

Midstream tariffs

296

 

—

 

296

Exploration expenses, including dry holes and lease impairment

24

 

9

 

33

General and administrative expenses

40

 

7

 

47

Depreciation, depletion and amortization

192

 

153

 

345

Total costs and expenses

1,619

 

318

 

1,937

Results of operations before income taxes

266

 

778

 

1,044

Provision for income taxes

—

 

321

 

321

Net income attributable to Hess Corporation

 $

266

(b) $

457

(c)

$

723

  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $99 million (noncash premium amortization: $99 million; cash settlement: $0 million).
  3. Includes after-tax losses from realized crude oil hedging activities of $64 million (noncash premium amortization: $64 million; cash settlement: $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION EARNINGS (UNAUDITED)

(IN MILLIONS)
 

 

Nine Months Ended September 30, 2022

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

5,586

 

$

2,804

 

$

8,390

Other, net

68

 

13

 

81

Total revenues and non-operating income

5,654

 

2,817

 

8,471

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

2,500

 

60

 

2,560

Operating costs and expenses

513

 

351

 

864

Production and severance taxes

190

 

10

 

200

Midstream tariffs

896

 

—

 

896

Exploration expenses, including dry holes and lease impairment

89

 

45

 

134

General and administrative expenses

134

 

24

 

158

Depreciation, depletion and amortization

595

 

467

 

1,062

Impairment and other

54

 

—

 

54

Total costs and expenses

4,971

 

957

 

5,928

Results of operations before income taxes

683

 

1,860

 

2,543

Provision for income taxes

—

 

788

 

788

Net income attributable to Hess Corporation

 $

683

(b)

 

$

1,072

(c)

 

$

1,755

 

 

 

 

 

 

 

Nine Months Ended September 30, 2021

Income Statement

United States

 

International

 

Total

Total revenues and non-operating income

 

 

 

 

 

Sales and other operating revenues

$

3,766

 

$

1,470

 

$

5,236

Gains on asset sales, net

—

 

29

 

29

Other, net

35

 

14

 

49

Total revenues and non-operating income

3,801

 

1,513

 

5,314

 

 

 

 

 

 

Costs and expenses

 

 

 

 

 

Marketing, including purchased oil and gas (a)

1,397

 

30

 

1,427

Operating costs and expenses

443

 

268

 

711

Production and severance taxes

119

 

4

 

123

Midstream tariffs

802

 

—

 

802

Exploration expenses, including dry holes and lease impairment

77

 

40

 

117

General and administrative expenses

118

 

22

 

140

Depreciation, depletion and amortization

757

 

250

 

1,007

Impairment and other

147

 

—

 

147

Total costs and expenses

3,860

 

614

 

4,474

Results of operations before income taxes

(59)

 

899

 

840

Provision for income taxes

—

 

379

 

379

Net income (loss) attributable to Hess Corporation

 $

(59)

(d)

 

$

520

(e)

 

$

461

  1. Includes amounts charged from the Midstream segment.
  2. Includes after-tax losses from realized crude oil hedging activities of $256 million (noncash premium amortization: $233 million; cash settlement: $23 million).
  3. Includes after-tax losses from realized crude oil hedging activities of $164 million (noncash premium amortization: $150 million; cash settlement: $14 million).
  4. Includes after-tax losses from realized crude oil hedging activities of $140 million (noncash premium amortization: $140 million; cash settlement: $0 million).
  5. Includes after-tax losses from realized crude oil hedging activities of $35 million (noncash premium amortization: $35 million; cash settlement: $0 million).

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA
 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Net Production Per Day (in thousands)

 

 

 

 

 

Crude oil – barrels

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

79

 

78

 

68

Offshore

21

 

20

 

20

Total United States

100

 

98

 

88

Guyana (a)

98

 

32

 

67

Malaysia and JDA

4

 

3

 

4

Other (b)

15

 

20

 

17

Total

217

 

153

 

176

 

 

 

 

 

 

Natural gas liquids – barrels

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

58

 

44

 

47

Offshore

2

 

3

 

2

Total United States

60

 

47

 

49

 

 

 

 

 

 

Natural gas – mcf

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

176

 

158

 

147

Offshore

41

 

52

 

41

Total United States

217

 

210

 

188

Malaysia and JDA

320

 

284

 

381

Other (b)

10

 

9

 

11

Total

547

 

503

 

580

 

 

 

 

 

 

Barrels of oil equivalent

368

 

284

 

322

  1. Production from Guyana includes 7,000 bopd of tax barrels in the third quarter of 2022. There were no tax barrels in the third quarter of 2021 or the second quarter of 2022.
  2. Other includes production from Libya and the Corporation’s former interests in Denmark, which were sold in the third quarter of 2021. Libya net production was 17,000 boepd in the third quarter of 2022, 19,000 boepd in the third quarter of 2021 and 19,000 boepd in the second quarter of 2022. Denmark net production was 3,000 boepd in the third quarter of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA
 

 

Nine Months Ended

September 30,

 

2022

 

2021

Net Production Per Day (in thousands)

 

 

 

Crude oil – barrels

 

 

 

United States

 

 

 

North Dakota

75

 

80

Offshore

20

 

30

Total United States

95

 

110

Guyana (a)

65

 

30

Malaysia and JDA

4

 

4

Other (b)

17

 

22

Total

181

 

166

 

 

 

 

Natural gas liquids – barrels

 

 

 

United States

 

 

 

North Dakota

51

 

48

Offshore

2

 

4

Total United States

53

 

52

 

 

 

 

Natural gas – mcf

 

 

 

United States

 

 

 

North Dakota

160

 

159

Offshore

42

 

77

Total United States

202

 

236

Malaysia and JDA

355

 

339

Other (b)

11

 

9

Total

568

 

584

 

 

 

 

Barrels of oil equivalent

329

 

315

  1. Production from Guyana includes 2,000 bopd of tax barrels in the first nine months of 2022. There were no tax barrels in the first nine months of 2021.
  2. Other includes production from Libya and the Corporation’s former interests in Denmark, which were sold in the third quarter of 2021. Libya net production was 19,000 boepd in the first nine months of 2022 and 19,000 boepd in the first nine months of 2021. Denmark net production was 4,000 boepd in the first nine months of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA
 

 

Third

Quarter

2022

Third

Quarter

2021

Second

Quarter

2022

Sales Volumes Per Day (in thousands) (a)

 

 

Crude oil – barrels

208

148

173

Natural gas liquids – barrels

58

47

46

Natural gas – mcf

547

503

580

Barrels of oil equivalent

357

279

316

 

 

 

Sales Volumes (in thousands) (a)

 

 

Crude oil – barrels

19,118

13,627

15,763

Natural gas liquids – barrels

5,299

4,338

4,180

Natural gas – mcf

50,343

46,317

52,811

Barrels of oil equivalent

32,807

25,685

28,745

 
 

 

Nine Months Ended

September 30,

 

2022

2021

Sales Volumes Per Day (in thousands) (a)

Crude oil – barrels

174

177

Natural gas liquids – barrels

51

52

Natural gas – mcf

568

584

Barrels of oil equivalent

320

326

 

 

Sales Volumes (in thousands) (a)

 

Crude oil – barrels (b)

47,461

48,315

Natural gas liquids – barrels

14,018

14,282

Natural gas – mcf

155,052

159,387

Barrels of oil equivalent

87,321

89,162

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA
 

 

Third

Quarter

2022

 

Third

Quarter

2021

 

Second

Quarter

2022

Average Selling Prices

 

 

 

 

 

Crude oil – per barrel (including hedging)

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

79.04

 

$

59.65

 

$

93.60

Offshore

78.80

 

62.23

 

95.22

Total United States

79.00

 

60.14

 

93.96

Guyana

92.02

 

70.05

 

104.19

Malaysia and JDA

85.23

 

69.87

 

106.21

Other (a)

87.90

 

68.36

 

105.21

Worldwide

85.32

 

63.17

 

99.16

 

 

 

 

 

 

Crude oil – per barrel (excluding hedging)

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

89.80

 

$

65.11

 

$

106.01

Offshore

89.47

 

67.88

 

107.58

Total United States

89.74

 

65.64

 

106.37

Guyana

98.91

 

73.12

 

112.57

Malaysia and JDA

85.23

 

69.87

 

106.21

Other (a)

94.96

 

71.43

 

114.93

Worldwide

93.95

 

67.88

 

109.51

 

 

 

 

 

 

Natural gas liquids – per barrel

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

35.41

 

$

32.94

 

$

40.96

Offshore

36.30

 

32.00

 

39.88

Worldwide

35.44

 

32.88

 

40.92

 

 

 

 

 

 

Natural gas – per mcf

 

 

 

 

 

United States

 

 

 

 

 

North Dakota

$

6.67

 

$

3.75

 

$

6.89

Offshore

8.12

 

3.76

 

7.63

Total United States

6.94

 

3.75

 

7.06

Malaysia and JDA

5.07

 

5.45

 

6.18

Other (a)

7.03

 

3.62

 

5.36

Worldwide

5.85

 

4.71

 

6.45

  1. Other includes prices related to production from Libya and the Corporation’s former interests in Denmark, which were sold in the third quarter of 2021.

HESS CORPORATION AND CONSOLIDATED SUBSIDIARIES

EXPLORATION AND PRODUCTION OPERATING DATA
 

 

Nine Months Ended

September 30,

 

2022

 

2021

Average Selling Prices

 

 

 

Crude oil – per barrel (including hedging)

 

 

 

United States

 

 

 

North Dakota (a)

$

85.39

 

$

52.27

Offshore

86.13

 

57.36

Total United States

85.56

 

53.46

Guyana

96.24

 

65.31

Malaysia and JDA

93.16

 

64.94

Other (b)

95.49

 

62.93

Worldwide

90.30

 

56.62

 

 

 

 

Crude oil – per barrel (excluding hedging)

 

 

 

United States

 

 

 

North Dakota (a)

$

95.33

 

$

56.37

Offshore

95.96

 

61.91

Total United States

95.47

 

57.66

Guyana

103.94

 

67.72

Malaysia and JDA

93.16

 

64.94

Other (b)

104.67

 

65.91

Worldwide

99.14

 

60.33

 

 

 

 

Natural gas liquids – per barrel

 

 

 

United States

 

 

 

North Dakota

$

38.51

 

$

28.59

Offshore

37.86

 

24.08

Worldwide

38.48

 

28.23

 

 

 

 

Natural gas – per mcf

 

 

 

United States

 

 

 

North Dakota

$

5.97

 

$

3.96

Offshore

6.71

 

2.91

Total United States

6.13

 

3.62

Malaysia and JDA

5.72

 

5.22

Other (b)

5.65

 

3.05

Worldwide

5.86

 

4.54

  1. Excluding the two VLCC cargo sales totaling 4.2 million barrels sold in the first quarter of 2021, the North Dakota crude oil price excluding hedging was $59.99 per barrel and $55.29 per barrel including hedging.
  2. Other includes prices related to production from Libya and the Corporation’s former interests in Denmark, which were sold in the third quarter of 2021.

   The following is a summary of the Corporation’s outstanding commodity hedging program for the remainder of calendar 2022:

 

WTI

 

Brent

Barrels of oil per day

90,000

 

60,000

Average monthly floor price

$

60

 

$

65

 

For Hess Corporation

Investors:

Jay Wilson

(212) 536-8940

Media:

Lorrie Hecker

(212) 536-8250

Jamie Tully

Sard Verbinnen & Co

(917) 679-7908

KEYWORDS: Europe United States United Kingdom North America New York

INDUSTRY KEYWORDS: Finance Oil/Gas Banking Energy Professional Services

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