1 DouYu International Holdings Limited Reports Second Quarter 2024 Unaudited Financial Results WUHAN,China,Sept.12,2024/PRNewswire/-DouYu International Holdings Limited(“DouYu”or the“Company”)(Nasdaq:DOYU),a leading game-centric live streaming platform in China and a pioneer in the eSports value chain,today announced its unaudited financial results for the second quarter ended June 30,2024.Second Quarter 2024 Financial and Operational Highlights Total net revenues in the second quarter of 2024 were RMB1,032.0 million(US$142.0 million),compared with RMB1,392.2 million in the same period of 2023.Gross profit in the second quarter of 2024 was RMB84.2 million(US$11.6 million),compared with RMB188.9 million in the same period of 2023.Net loss in the second quarter of 2024 was RMB49.2 million(US$6.8 million),compared with net income of RMB6.8 million in the same period of 2023.Adjusted net loss1 in the second quarter of 2024 was RMB45.5 million(US$6.3 million),compared with adjusted net income of RMB61.4 million in the same period of 2023.Average mobile MAUs2 in the second quarter of 2024 were 44.1 million,compared with 50.3 million in the same period of 2023.The number of quarterly average paying users3 in the second quarter of 2024 was 3.4 million,compared with 4.0 million in the same period of 2023.The interim management committee of DouYu commented,“In the second quarter of 2024,we further enriched our content ecosystem and enhanced our diversified commercialization capabilities.In deepening our collaboration with streamers and game developers on content innovation and product upgrades,we successfully introduced diverse cooperative models that bring DouYu users more exceptional content experiences and an expanded array of gaming services.Our long-term development strategy remains centered on fostering a vibrant,diverse,game-centric content ecosystem by harnessing the strengths of DouYus deep-rooted streamer resources and premium content.We will continue to dynamically adapt our operating strategies amid the evolving macroeconomic and industry shifts,proactively addressing challenges and optimizing our platforms content ecosystem to serve our overarching goal of long-term,sustainable growth.”Mr.Hao Cao,Vice President of DouYu,commented,“Our strategic revenue diversification initiatives yielded encouraging results in the second quarter.Revenue from Innovative business,advertising and others(formerly known as advertising and other revenues)steadily increased to RMB242 million,contributing 23.4%of our total revenue,a significant improvement from 9.6%in the same period of 2023.Despite short-term financial pressure from macroeconomic headwinds and an evolving business landscape,we remain committed to rewarding the trust and support of our shareholders.In addition to our US$20 million share repurchase program announced in December 2023,which was successfully completed in July,we announced a US$300 million special cash dividend in early July.Looking ahead,we will continue to explore commercial diversification pathways,prioritizing the Companys long-term,healthy growth to deliver value to our shareholders.”1“Adjusted net loss”is defined as net loss excluding share of loss in equity method investments,and impairment loss of investments.For more information,please refer to“Use of Non-GAAP Financial Measures”and“Reconciliations of GAAP and Non-GAAP Results”at the end of this press release.2 Refers to the number of mobile devices that launched our mobile apps in a given period.Average mobile MAUs for a given period is calculated by dividing(i)the sum of active mobile users for each month of such period by(ii)the number of months in such period.3“Quarterly average paying users”refers to the average paying users for each quarter during a given period of time calculated by dividing(i)the sum of paying users for each quarter of such period by(ii)the number of quarters in such period.“Paying user”refers to a registered user that has purchased virtual gifts on our platform at least once during the relevant period.2 Second Quarter 2024 Financial Results Total net revenues in the second quarter of 2024 decreased by 25.9%to RMB1,032.0 million(US$142.0 million),compared with RMB1,392.2 million in the same period of 2023.Livestreaming revenues in the second quarter of 2024 decreased by 37.2%to RMB790.1 million(US$108.7 million)from RMB1,258.3 million in the same period of 2023.The decrease was primarily due to the soft macroeconomic environment,in response to which we offered lower-priced products and reduced promotional events focused on paying user acquisition.As a result,there was a year-over-year decrease in both average revenue per paying user and the number of total paying users.Innovative business,advertising and other revenues(formerly known as advertising and other revenues)in the second quarter of 2024 increased by 80.7%to RMB242.0 million(US$33.3 million)from RMB133.9 million in the same period of 2023.The increase was primarily driven by an increase in other revenues generated through our other innovative business,such as the voice-based social networking service.Cost of revenues in the second quarter of 2024 decreased by 21.2%to RMB947.8 million(US$130.4 million)from RMB1,203.3 million in the same period of 2023.Revenue-sharing fees and content costs in the second quarter of 2024 decreased by 18.1%to RMB803.4 million(US$110.6 million)from RMB981.3 million in the same period of 2023.The decrease was primarily due to a decrease in revenue-sharing fees aligned with decreased livestreaming revenues,as well as a decline in content costs resulting from improved cost management in streamer payments and copyrighted content,and partially offset by the increase in costs related to the innovative business.Bandwidth costs in the second quarter of 2024 decreased by 33.0%to RMB79.6 million(US$11.0 million)from RMB118.8 million in the same period of 2023.The decline was primarily due to a year-over-year decrease in peak bandwidth usage.Gross profit in the second quarter of 2024 was RMB84.2 million(US$11.6 million),compared with RMB188.9 million in the same period of 2023.The decline in gross profit was primarily due to the decrease in livestreaming revenues outpacing the decline in cost of revenues.Gross margin in the second quarter of 2024 was 8.2%,compared with 13.6%in the same period of 2023.Sales and marketing expenses in the second quarter of 2024 decreased by 11.5%to RMB77.0 million(US$10.6 million)from RMB87.0 million in the same period of 2023.The decrease was mainly attributable to a decrease in staff-related expenses.Research and development expenses in the second quarter of 2024 decreased by 29.4%to RMB50.1 million(US$6.9 million)from RMB71.0 million in the same period of 2023.The decrease was primarily due to a decrease in staff-related expenses.General and administrative expenses in the second quarter of 2024 increased by 3.4%to RMB48.5 million(US$6.7 million)from RMB46.9 million in the same period of 2023.The increase was primarily due to increased expenses related to our employee streamlining initiatives.3 Other operating expenses,net in the second quarter of 2024 were RMB28.2 million(US$3.9 million),compared with other operating income of RMB8.6 million in the same period of 2023.Loss from operations in the second quarter of 2024 was RMB119.6 million(US$16.5 million),compared with RMB7.5 million in the same period of 2023.Net loss in the second quarter of 2024 was RMB49.2 million(US$6.8 million),compared with net income of RMB6.8 million in the same period of 2023.Adjusted net loss,which excludes the share of loss in equity method investments,and impairment loss of investments,was RMB45.5 million(US$6.3 million)in the second quarter of 2024,compared with adjusted net income of RMB61.4 million in the same period of 2023.Basic and diluted net loss per ADS4 in the second quarter of 2024 were both RMB1.58(US$0.22).Adjusted basic and diluted net loss per ADS in the second quarter of 2024 were both RMB1.46(US$0.20).Cash and cash equivalents,restricted cash and bank deposits As of June 30,2024,the Company had cash and cash equivalents,restricted cash,restricted cash in other non-current assets,and short-term and long-term bank deposits of RMB6,561.3 million(US$902.9 million),compared with RMB6,855.5 million as of December 31,2023.Updates of Share Repurchase Program On December 28,2023,the Company announced that its board of directors had authorized a share repurchase program under which the Company may repurchase up to US$20 million of its ordinary shares in the form of ADSs during a period of up to 12 months commencing on January 1,2024.As of June 30,2024,the Company had repurchased an aggregate of US$11.2 million of its ADSs in the open market under this program.The allotment of US$20 million was used in full by July 18,2024.Conference Call Information The Company will hold a conference call on September 12,2024,at 7:00 a.m.Eastern Time(or 7:00 p.m.Beijing Time on the same day)to discuss the financial results.Listeners may access the call by dialing the following numbers:International: 1-412-317-6061 United States Toll-Free: 1-888-317-6003 Mainland China Toll-Free:4001-206115 Hong Kong Toll Free:800-963976 Singapore Toll Free:800-120-5863 Conference ID:8687804 The replay will be accessible through September 19,2024,by dialing the following numbers:International: 1-412-317-0088 United States Toll Free: 1-877-344-7529 4 Every one ADS represents one ordinary share for the relevant period and calendar year.4 Conference ID:1678388 A live and archived webcast of the conference call will also be available on the Companys investor relations website at http:/.About DouYu International Holdings Limited Headquartered in Wuhan,China,DouYu International Holdings Limited(Nasdaq:DOYU)is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain.DouYu operates its platform on both PC and mobile apps to bring users access to immersive and interactive games and entertainment livestreaming,a wide array of video and graphic contents,as well as opportunities to participate in community events and discussions.By nurturing a sustainable technology-based talent development system and relentlessly producing high-quality content,DouYu consistently delivers premium content through the integration of livestreaming,video,graphics,and virtual communities with a primary focus on games,especially on eSports.This enables DouYu to continuously enhance its user experience and pursue long-term healthy development.For more information,please see http:/.Use of Non-GAAP Financial Measures Adjusted net income(loss)is calculated as net income(loss)adjusted for share of loss in equity method investments,and impairment loss of investments.Adjusted net income(loss)attributable to DouYu is calculated as net income(loss)attributable to DouYu adjusted for share of loss in equity method investments,and impairment loss of investments.Adjusted basic and diluted net income per ordinary share is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share.The Company adjusted the impact of(i)share of loss in equity method investments,(ii)impairment loss of investments to understand and evaluate the Companys core operating performance.The non-GAAP financial measures are presented to enhance investors overall understanding of the Companys financial performance and should not be considered a substitute for,or superior to,the financial information prepared and presented in accordance with U.S.GAAP.Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to its most directly comparable GAAP financial measures.As non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies,they may not be comparable to other similarly titled measures used by other companies.In light of the foregoing limitations,you should not consider non-GAAP financial measures as a substitute for,or superior to,such metrics in accordance with U.S.GAAP.For more information on these non-GAAP financial measures,please see the table captioned“Reconciliations of Non-GAAP Results”near the end of this release.Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S.dollars at a specified rate solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2672 to US$1.00,the noon buying rate in effect on June 28,2024,in the H.10 statistical release of the Federal Reserve Board.The Company makes no representation that the RMB amounts could have been,or could be,converted,realized or settled in U.S.dollars,at that rate on June 28,2024,or at any other rate.5 Safe Harbor Statement This press release contains forward-looking statements.These statements are made under the“safe harbor”provisions of the U.S.Private Securities Litigation Reform Act of 1995.Statements that are not historical facts,including statements about the Companys beliefs and expectations,are forward-looking statements.Forward-looking statements involve inherent risks and uncertainties,and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following:the Companys results of operations and financial condition;the Companys business strategies;general market conditions,in particular,the game live streaming market;the ability of the Company to retain and grow active and paying users;changes in general economic and business conditions in China;the impact of the COVID-19 to the Companys business operations and the economy in China and globally;any adverse changes in laws,regulations,rules,policies or guidelines applicable to the Company;and assumptions underlying or related to any of the foregoing.In some cases,forward-looking statements can be identified by words or phrases such as“may,”“will,”“expect,”“anticipate,”“target,”“aim,”“estimate,”“intend,”“plan,”“believe,”“potential,”“continue,”“is/are likely to”or other similar expressions.Further information regarding these and other risks,uncertainties or factors is included in the Companys filings with the Securities Exchange Commission.All information provided in this press release is as of the date of this press release,and the Company does not undertake any duty to update such information,except as required under applicable law.Investor Relations Contact In China:Lingling Kong DouYu International Holdings Limited Email:irdouyu.tv Tel: 86(10)6508-0677 Andrea Guo Piacente Financial Communications Email:douyutpg- Tel: 86(10)6508-0677 In the United States:Brandi Piacente Piacente Financial Communications Email:douyutpg- Tel: 1-212-481-2050 Media Relations Contact In China:Lingling Kong DouYu International Holdings Limited Email:pr_douyudouyu.tv Tel: 86(10)6508-0677 6 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(All amounts in thousands,except share,ADS,per share and per ADS data)As of December 31 As of June 30 2023 2024 2024 ASSETS RMB RMB US$(1)Current assets:Cash and cash equivalents 4,440,131 4,061,140 558,831 Restricted cash-21 3 Short-term bank deposits 1,716,540 1,974,461 271,695 Accounts receivable,net 73,453 52,279 7,194 Prepayments 38,181 26,085 3,589 Amounts due from related parties 68,994 61,859 8,512 Other current assets,net 348,129 482,012 66,327 Total current assets 6,685,428 6,657,857 916,151 Property and equipment,net 13,808 8,525 1,172 Intangible assets,net 120,694 141,671 19,495 Long-term bank deposits 630,000 450,000 61,922 Investments 436,197 431,112 59,323 Right-of-use assets,net 22,792 5,925 815 Other non-current assets 163,184 138,797 19,099 Total non-current assets 1,386,675 1,176,030 161,826 TOTAL ASSETS 8,072,103 7,833,887 1,077,977 LIABILITIES AND SHAREHOLDERS EQUITY LIABILITIES Current liabilities:Accounts payable 534,428 464,509 63,919 Advances from customers 12,911 10,194 1,403 Deferred revenue 315,969 271,061 37,299 Accrued expenses and other current liabilities 246,601 191,607 26,366 Amounts due to related parties 251,392 382,574 52,644 Lease liabilities due within one year 14,768 4,523 622 Total current liabilities 1,376,069 1,324,468 182,253 Lease liabilities 6,701 563 77 Total non-current liabilities 6,701 563 77 TOTAL LIABILITIES 1,382,770 1,325,031 182,330 (1)Translations of certain RMB amounts into U.S.dollars at a specified rate are solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2672 to US$1.00,the noon buying rate in effect on June 28,2024,in the H.10 statistical release of the Federal Reserve Board.7 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(CONTINUED)(All amounts in thousands,except share,ADS,per share and per ADS data)As of December 31 As of June 30 2023 2024 2024 RMB RMB US$(1)SHAREHOLDERS EQUITY Ordinary shares 23 23 3 Treasury shares (911,217)(991,370)(136,417)Additional paid-in capital 10,670,287 10,670,287 1,468,280 Accumulated deficit(3,485,007)(3,622,129)(498,422)Accumulated other comprehensive income 415,247 452,045 62,203 Total DouYu Shareholders Equity 6,689,333 6,508,856 895,647 Total Shareholders Equity 6,689,333 6,508,856 895,647 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 8,072,103 7,833,887 1,077,977 (1)Translations of certain RMB amounts into U.S.dollars at a specified rate are solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2672 to US$1.00,the noon buying rate in effect on June 28,2024,in the H.10 statistical release of the Federal Reserve Board.8 (1)Translations of certain RMB amounts into U.S.dollars at a specified rate are solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2672 to US$1.00,the noon buying rate in effect on June 28,2024,in the H.10 statistical release of the Federal Reserve Board.(2)Every one ADS represents one ordinary share.UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME(LOSS)(All amounts in thousands,except share,ADS,per share and per ADS data)Three Months Ended Six Months Ended June 30,2023 March 31,2024 June 30,2024 June 30,2024 June 30,2023 June 30,2024 June 30,2024 RMB RMB RMB US$(1)RMB RMB US$(1)Net revenues 1,392,193 1,039,684 1,032,041 142,014 2,875,253 2,071,725 285,079 Cost of revenues(1,203,294)(930,678)(947,823)(130,425)(2,509,888)(1,878,501)(258,490)Gross profit 188,899 109,006 84,218 11,589 365,365 193,224 26,589 Operating income(expense)Sales and marketing expenses(87,047)(75,570)(76,963)(10,590)(177,733)(152,533)(20,989)General and administrative expenses(46,938)(42,797)(48,496)(6,673)(106,731)(91,293)(12,562)Research and development expenses(71,043)(54,150)(50,135)(6,899)(143,354)(104,285)(14,350)Other operating income(expense),net 8,615(103,428)(28,189)(3,879)27,661(131,617)(18,111)Total operating expenses(196,413)(275,945)(203,783)(28,041)(400,157)(479,728)(66,012)Loss from operations(7,514)(166,939)(119,565)(16,452)(34,792)(286,504)(39,423)Other expenses,net(24,431)-(943)(130)(32,431)(943)(130)Interest income 67,252 81,094 75,972 10,454 121,679 157,066 21,613 Foreign exchange gain,net 1,641 153 604 83 245 757 104 Income(loss)before income taxes and share of loss in equity method investments 36,948(85,692)(43,932)(6,045)54,701(129,624)(17,836)Income tax expense-(2,510)(345)-(2,510)(345)Share of loss in equity method investments(30,100)(2,261)(2,727)(375)(33,336)(4,988)(686)Net income(loss)6,848(87,953)(49,169)(6,765)21,365(137,122)(18,867)Net income(loss)attributable to ordinary shareholders of the Company 6,848(87,953)(49,169)(6,765)21,365(137,122)(18,867)Net income(loss)per ordinary share Basic 0.21(2.77)(1.58)(0.22)0.67(4.36)(0.60)Diluted 0.21(2.77)(1.58)(0.22)0.67(4.36)(0.60)Net income(loss)per ADS(2)Basic 0.21(2.77)(1.58)(0.22)0.67(4.36)(0.60)Diluted 0.21(2.77)(1.58)(0.22)0.67(4.36)(0.60)Weighted average number of ordinary shares used in calculating net income(loss)per ordinary share Basic 31,977,665 31,807,180 31,128,544 31,128,544 32,000,608 31,467,862 31,467,862 Diluted 31,977,665 31,807,180 31,128,544 31,128,544 32,000,608 31,467,862 31,467,862 Weighted average number of ADS used in calculating net income(loss)per ADS(2)Basic 31,977,665 31,807,180 31,128,544 31,128,544 32,000,608 31,467,862 31,467,862 Diluted 31,977,665 31,807,180 31,128,544 31,128,544 32,000,608 31,467,862 31,467,862 9 RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS(All amounts in thousands,except share,ADS,per share and per ADS data)(1)Translations of certain RMB amounts into U.S.dollars at a specified rate are solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2672 to US$1.00,the noon buying rate in effect on June 28,2024,in the H.10 statistical release of the Federal Reserve Board.(2)Impairment loss of investments was included in line item“Other expenses,net”of condensed consolidated statements of income(loss).(3)Every one ADS represents one ordinary share.Three Months Ended Six Months Ended June 30,2023 March 31,2024 June 30,2024 June 30,2024 June 30,2023 June 30,2024 June 30,2024 RMB RMB RMB US$(1)RMB RMB US$(1)Loss from operations(7,514)(166,939)(119,565)(16,452)(34,792)(286,504)(39,423)Adjusted operating loss(7,514)(166,939)(119,565)(16,452)(34,792)(286,504)(39,423)Net income(loss)6,848(87,953)(49,169)(6,765)21,365(137,122)(18,867)Add:Share of loss in equity method investments 30,100 2,261 2,727 375 33,336 4,988 686 Impairment loss of investments(2)24,431 -943 130 32,431 943 130 Adjusted net income(loss)61,379(85,692)(45,499)(6,260)87,132(131,191)(18,051)Net income(loss)attributable to DouYu 6,848(87,953)(49,169)(6,765)21,365(137,122)(18,867)Add:Share of loss in equity method investments 30,100 2,261 2,727 375 33,336 4,988 686 Impairment loss of investments 24,431-943 130 32,431 943 130 Adjusted net income(loss)attributable to DouYu 61,379(85,692)(45,499)(6,260)87,132(131,191)(18,051)Adjusted net income(loss)per ordinary share Basic 1.92(2.69)(1.46)(0.20)2.72(4.17)(0.57)Diluted 1.92(2.69)(1.46)(0.20)2.72(4.17)(0.57)Adjusted net income(loss)per ADS(3)Basic 1.92(2.69)(1.46)(0.20)2.72(4.17)(0.57)Diluted 1.92(2.69)(1.46)(0.20)2.72(4.17)(0.57)Weighted average number of ordinary shares used in calculating Adjusted net income(loss)per ordinary share Basic 31,977,665 31,807,180 31,128,544 31,128,544 32,000,608 31,467,862 31,467,862 Diluted 31,977,665 31,807,180 31,128,544 31,128,544 32,000,608 31,467,862 31,467,862 Weighted average number of ADS used in calculating net income(loss)per ADS(2)Basic 31,977,665 31,807,180 31,128,544 31,128,544 32,000,608 31,467,862 31,467,862 Diluted 31,977,665 31,807,180 31,128,544 31,128,544 32,000,608 31,467,862 31,467,862
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Hello Group Inc.Announces Unaudited Financial Results for the First Quarter of 2024May 28,2024BEIJING,May 28,2024/PRNewswire/-Hello Group Inc.(NASDAQ:MOMO)(Hello Group or the Company),a leading player in mainland Chinasonline social networking space,today announced its unaudited financial results for the first quarter of 2024.First Quarter of 2024 HighlightsNet revenues decreased by 9.2%year over year to RMB2,560.4 million(US$354.6 million*)in the first quarter of 2024.Net income attributable to Hello Group Inc.decreased to RMB5.2 million(US$0.7 million)in the first quarter of 2024,fromRMB390.3 million in the same period of 2023.Non-GAAP net income attributable to Hello Group Inc.(note 1)decreased to RMB59.9 million(US$8.3 million)in thefirst quarter of 2024,from RMB471.9 million in the same period of 2023,mainly due to the accrual of withholding incometax of RMB448.6 million(US$62.1 million)on historical undistributed earnings generated by our wholly-foreign ownedenterprise(WFOE).Diluted net income per American Depositary Share(ADS)was RMB0.03(US$0.00)in the first quarter of 2024,comparedto RMB1.96 in the same period of 2023.Non-GAAP diluted net income per ADS(note 1)was RMB0.31(US$0.04)in the first quarter of 2024,compared toRMB2.36 in the same period of 2023.Monthly Active Users(MAU)on Tantan app were 13.7 million in March 2024,compared to 19.5 million in March 2023.For the Momo app total paying users was 7.1 million for the first quarter of 2024,compared to 7.8 million for the sameperiod last year.Tantan had 1.1 million paying users for the first quarter of 2024 compared to 1.6 million from the year agoperiod.We have made steady progress in implementing our strategic priorities for Momo,Tantan,and our new endeavors since the beginning of theyear,commented Yan Tang,Chairman and CEO of Hello Group.Product innovation and our ability to leverage technological advancements haveenabled Momo to play an important role in helping users discover new relationships and build meaningful interactions.This has laid a solid foundationfor us to maintain user and revenue scale over the long term.I am also glad to see that our overseas team has accelerated the localization process todrive continued growth in the new endeavors.We look forward to delivering high quality social and entertainment services to a much broader userbase global wise.*This press release contains translations of certain Renminbi amounts into U.S.dollars at specified rate solely for the convenience of readers.Unless otherwise noted,all translations from Renminbi to U.S.dollars,in this press release,were made at a rate of RMB7.2203 to US$1.00,theeffective noon buying rate for March 29,2024 as set forth in the H.10 statistical release of the Federal Reserve Board.First Quarter of 2024 Financial ResultsNet revenuesTotal net revenues were RMB2,560.4 million(US$354.6 million)in the first quarter of 2024,a decrease of 9.2%from RMB2,818.9 million in thefirst quarter of 2023.Live video service revenues were RMB1,238.5 million(US$171.5 million)in the first quarter of 2024,a decrease of 13.3%from RMB1,429.3 millionduring the same period of 2023.The decrease was primarily attributable to our proactive operational adjustments to de-emphasise large scalecompetition events in the Momo app and a soft consumer sentiment in the current macro environment,and to a lesser degree,Tantan pivoting awayfrom the less dating-centric live video service.Value-added service revenues mainly include virtual gift revenues and membership subscription revenues.Total value-added service revenues wereRMB1,294.4 million(US$179.3 million)in the first quarter of 2024,a decrease of 4.9%from RMB1,361.5 million during the same period of 2023.Thedecrease was primarily due to our product adjustments to improve Momo apps ecosystem as well as the impact of the macro economy on consumersentiment,and to a lesser extent,the decline in Tantans paying users.The decrease was partially offset by the rapid revenue growth from the newstandalone apps.Mobile marketing revenues were RMB26.6 million(US$3.7 million)in the first quarter of 2024,an increase of 26.2%from RMB21.1 million during thesame period of 2023.Mobile games revenues were RMB0.4 million(US$0.1 million)in the first quarter of 2024,a decrease of 88.3%from RMB3.7 million in the first quarterof 2023.Net revenues from the Momo segment decreased from RMB2,510.1 million in the first quarter of 2023 to RMB2,318.9 million(US$321.2 million)in thefirst quarter of 2024,primarily due to the decrease in net revenues from value-added service and live video service on Momo app.The decrease waspartially offset by the revenue growth of the new standalone apps.Net revenues from the Tantan segment decreased from RMB308.6 million in thefirst quarter of 2023 to RMB241.5 million(US$33.4 million)in the first quarter of 2024,mainly due to the decrease in net revenues from live videoservice,and to a lesser extent,the decrease from value-added service.Cost and expensesCost and expenses were RMB2,120.0 million(US$293.6 million)in the first quarter of 2024,a decrease of 12.4%from RMB2,419.1 million in thefirst quarter of 2023.The decrease was primarily attributable to:(a)a decrease in revenue sharing with broadcasters related to live video service onMomo app and Tantan app,and a decrease in revenue sharing with virtual gift recipients of virtual gift service on Momo app.The decrease waspartially offset by an increase in revenue sharing with virtual gift recipients for new standalone apps;(b)a decrease in salary expenses andshare-based compensation expenses,due to our continuous optimization in personnel costs and the newly granted share options which had lower fairvalue;(c)a decrease in sales and marketing expenses due to less marketing and promotional spend on live video service and our strategy to triminefficient channel marketing spend.Non-GAAP cost and expenses(note 1)were RMB2,065.3 million(US$286.0 million)in the first quarter of 2024,a decrease of 11.6%fromRMB2,337.4 million during the same period of 2023.Income from operationsIncome from operations was RMB460.3 million(US$63.8 million)in the first quarter of 2024,compared to RMB436.2 million during the same period of2023.Income from operations of the Momo segment was RMB434.0 million(US$60.1 million)in the first quarter of 2024,which decreased fromRMB435.0 million in the first quarter of 2023.Income from operations of the Tantan segment was RMB28.6 million(US$4.0 million)in the first quarterof 2024,which increased from RMB5.2 million in the first quarter of 2023.Non-GAAP income from operations(note 1)was RMB515.0 million(US$71.3 million)in the first quarter of 2024,compared to RMB517.8 million duringthe same period of 2023.Non-GAAP income from operations of the Momo segment was RMB488.5 million(US$67.7 million)in the first quarter of2024,which decreased from RMB507.5 million in the first quarter of 2023.Non-GAAP income from operations of the Tantan segment was RMB28.8million(US$4.0 million)in the first quarter of 2024,compared to RMB14.5 million in the first quarter of 2023.Income tax expensesIncome tax expenses were RMB557.6 million(US$77.2 million)in the first quarter of 2024,compared to RMB122.6 million in the first quarter of 2023.In the first quarter of 2024,we accrued an income tax expenses of RMB109.0 million(US$15.1 million)associated with the profit generated in thisquarter.Additionally,we accrued a withholding income tax of RMB448.6 million(US$62.1 million)associated with our WFOEs historical undistributedearnings for the potential remittance of earnings from our WFOE to its offshore parent company in the form of dividend distribution.Because webelieve that we might continue to distribute the WFOEs undistributed earnings in the future to fund our demands in overseas business operations,payments of dividends,potential investments,etc,to be prudent,we accrued withholding tax on the total balance of undistributed earnings of ourWFOE as of March 31,2024.From the first quarter of 2024,dividends paid by our wholly foreign-owned subsidiary in the Chinese mainland to itsoffshore parent company in Hong Kong are qualified for the preferential withholding tax rate of 5%under the Arrangement between the PRC and theHong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion with respect to Taxes on Income,instead of the normal withholding tax rate of 10%.Net incomeNet income was RMB5.2 million(US$0.7 million)in the first quarter of 2024,compared to RMB389.5 million during the same period of 2023.Netloss of the Momo segment was RMB20.8 million(US$2.9 million)in the first quarter of 2024,compared to a net income of RMB389.0 million in thesame period of 2023.Net income from the Tantan segment was RMB28.2 million(US$3.9 million)in the first quarter of 2024,compared to RMB4.5million in the first quarter of 2023.Non-GAAP net income(note 1)was RMB59.9 million(US$8.3 million)in the first quarter of 2024,compared to RMB471.1 million during the sameperiod of 2023.Non-GAAP net income from the Momo segment was RMB33.7 million(US$4.7 million)in the first quarter of 2024,which decreasedfrom RMB461.5 million in the first quarter of 2023.Non-GAAP net income of the Tantan segment was RMB28.4 million(US$3.9 million)inthe first quarter of 2024,compared to RMB13.7 million in the first quarter of 2023.Net income attributable to Hello Group Inc.Net income attributable to Hello Group Inc.was RMB5.2 million(US$0.7 million)in the first quarter of 2024,compared to RMB390.3 million during thesame period of 2023.Non-GAAP net income(note 1)attributable to Hello Group Inc.was RMB59.9 million(US$8.3 million)in the first quarter of 2024,compared toRMB471.9 million during the same period of 2023.Net income per ADSDiluted net income per ADS was RMB0.03(US$0.00)in the first quarter of 2024,compared to RMB1.96 in the first quarter of 2023.Non-GAAP diluted net income per ADS(note 1)was RMB0.31(US$0.04)in the first quarter of 2024,compared to RMB2.36 in the first quarter of 2023.Cash and cash flowAs of March 31,2024,the Companys cash,cash equivalents,short-term deposits,long-term deposits,short-term restricted cash and long-termrestricted cash totaled RMB15,115.8 million(US$2,093.5 million),compared to RMB13,478.5 million as of December 31,2023.Net cash provided by operating activities in the first quarter of 2024 was RMB400.2 million(US$55.4 million),compared to RMB451.1 million inthe first quarter of 2023.Recent DevelopmentPayment of a special cash dividendIn March 2024,Hello Groups board of directors declared a special cash dividend in the amount of US$0.54 per ADS,or US$0.27 per ordinary share.The cash dividend was paid on April 30,2024 to shareholders of record at the close of business on April 12,2024.The aggregate amount of cashdividends paid was US$98.9 million.Share repurchase programOn June 7,2022,Hello Groups board of directors authorized a share repurchase program under which the Company may repurchase up to US$200million of its shares up to June 6,2024(the Share Repurchase Program).On March 14,2024,Hello Groups board of directors approved to amendthe Share Repurchase Program to(i)extend the term of the Share Repurchase Program up to June 30,2026,and(ii)upsize the Share RepurchaseProgram so that the Company is authorized to,from time to time,acquire up to an aggregate of US$286.1 million worth of its shares in the form ofADSs and/or the ordinary shares of the Company in the open market and through privately negotiated transactions,in block trades and/or throughother legally permissible means,depending on market conditions and in accordance with applicable rules and regulations.As of May 28,2024,the Company has repurchased 22.3 million ADSs for US$122.6 million on the open market under Share Repurchase Programannounced on June 7,2022 and amended on March 14,2024,at an average purchase price of US$5.48 per ADS.Business OutlookFor the second quarter of 2024,the Company expects total net revenues to be between RMB2.65 billion to RMB2.75 billion,representing a decreaseof 15.5%to 12.4%year over year.This forecast reflects the Companys current and preliminary views on the market and operational conditions,whichare subject to change.Note 1:Non-GAAP measuresTo supplement our consolidated financial statements presented in accordance with U.S.generally accepted accounting principles(GAAP),we,HelloGroup,use various non-GAAP financial measures that are adjusted from the most comparable GAAP results to exclude share-based compensation.Reconciliations of our non-GAAP financial measures to our U.S.GAAP financial measures are shown in tables at the end of this earnings release,which provide more details about the non-GAAP financial measures.Our non-GAAP financial information is provided as additional information to help investors compare business trends among different reporting periodson a consistent basis and to enhance investors overall understanding of the historical and current financial performance of our continuing operationsand our prospects for the future.Our non-GAAP financial information should be considered in addition to results prepared in accordance with GAAP,but should not be considered a substitute for or superior to the GAAP results.In addition,our calculation of the non-GAAP financial measures may bedifferent from the calculation used by other companies,and therefore comparability may be limited.Our non-GAAP information(including non-GAAP cost and operating expenses,income(loss)from operations,net income(loss),net incomeattributable to Hello Group Inc.,and diluted net income per ADS)is adjusted from the most comparable GAAP results to exclude share-basedcompensation.A limitation of using these non-GAAP financial measures is that share-based compensation has been and will continue to be for theforeseeable future significant recurring expenses in our results of operations.We compensate for such limitation by providing reconciliations of ournon-GAAP measures to our U.S.GAAP measures.Please see the reconciliation tables at the end of this earnings release.Conference CallHello Groups management will host an earnings conference call on Tuesday,May 28,2024,at 8:00 a.m.U.S.Eastern Time(8:00 p.m.Beijing/HongKong Time on May 28,2024).Participants can register for the conference call by navigating to:https:/s1.c- registration,each participant will receive details for the conference call,including dial-in numbers,conference call passcode and a uniqueaccess PIN.Please dial in 10 minutes before the call is scheduled to begin.A telephone replay of the call will be available after the conclusion of the conference call through June 4,2024.The dial-in details for the replay are asfollows:U.S./Canada:1-855-883-1031Hong Kong:800-930-639Passcode:10039014Additionally,a live and archived webcast of the conference call will be available on the Investor Relations section of Hello Groups website athttps:/.About Hello Group Inc.We are a leading player in mainland Chinas online social networking space.Through Momo,Tantan and other properties within our product portfolio,we enable users to discover new relationships,expand their social connections and build meaningful interactions.Momo is a mobile application thatconnects people and facilitates social interactions based on location,interests and a variety of online recreational activities.Tantan,which was addedinto our family of applications through acquisition in May 2018,is a leading social and dating application.Tantan is designed to help its users find andestablish romantic connections as well as meet interesting people.Starting from 2019,we have incubated a number of other new apps,such as Hertz,Soulchill,Duidui and Tietie,which target more niche markets and more selective demographics.For investor and media inquiries,please contact:Hello Group Inc.Investor RelationsPhone: 86-10-5731-0538Email: ChristensenIn ChinaMs.Xiaoyan SuPhone: 86-10-5900-1548E-mail:Xiaoyan.S In U.S.Ms.Linda BergkampPhone: 1-480-614-3004Email: Safe Harbor StatementThis news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933,as amended,and Section21E of the Securities Exchange Act of 1934,as amended,and as defined in the Private Securities Litigation Reform Act of 1995.These forward-looking statements include but are not limited to our management quotes,our financial outlook for the second quarter of 2024,as well as the amountof,timing,methods and funding sources for repurchases of our shares under the share repurchase program.Our forward-looking statements are not historical facts but instead represent only our belief regarding expected results and events,many of which,bytheir nature,are inherently uncertain and outside of our control.Our actual results and other circumstances may differ,possibly materially,from theanticipated results and events indicated in these forward-looking statements.Announced results for the first quarter of 2024 are preliminary,unauditedand subject to audit adjustment.In addition,we may not meet our financial outlook for the second quarter of 2024 and may be unable to grow ourbusiness in the manner planned.We may also modify our strategy for growth.Moreover,there are other risks and uncertainties that could cause ouractual results to differ from what we currently anticipate,including those relating to our ability to retain and grow our user base,our ability to attract andretain sufficiently trained professionals to support our operations,our ability to anticipate and develop new services and enhance existing services tomeet the demand of our users or customers,the market price of the Companys stock prevailing from time to time,the nature of other investmentopportunities presented to the Company from time to time,the Companys cash flows from operations,general economic conditions,and otherfactors.For additional information on these and other important factors that could adversely affect our business,financial condition,results ofoperations,and prospects,please see our filings with the U.S.Securities and Exchange Commission.All information provided in this press release and in the attachments is as of the date of the press release.We undertake no obligation to update anyforward-looking statement,whether as a result of new information,future events or otherwise,after the date of this release,except as required by law.Such information speaks only as of the date of this release.Hello Group Inc.Unaudited Condensed Consolidated Statement of Operations(All amounts in thousands,except share and per share data)Three monthsEnded March 31202320242024RMBRMBUS$Net revenues:Live video service1,429,3401,238,541171,536Value-added service1,361,4691,294,376179,269Mobile marketing21,07126,5953,683Mobile games3,69943260Other services3,27947666Total net revenues2,818,8582,560,420354,614Cost and expenses:Cost of revenues(1,664,188)(1,503,008)(208,164)Research and development(236,803)(192,191)(26,618)Sales and marketing(379,786)(293,431)(40,640)General and administrative(138,298)(131,381)(18,196)Total cost and expenses(2,419,075)(2,120,011)(293,618)Other operating income,net36,39419,9062,757Income from operations436,177460,31563,753Interest income99,787121,10716,773Interest expense(10,415)(23,698)(3,282)Other gain or loss,net-(9,245)(1,280)Income before income tax and share of(loss)income on equity methodinvestments525,549548,47975,964Income tax expenses(122,613)(557,613)(77,229)Income(loss)before share of income on equity method investments402,936(9,134)(1,265)Share of(loss)income on equity method investments(13,475)14,3181,983Net income 389,4615,184718Less:net loss attributable to non-controlling interest(828)-Net income attributable to the shareholders of Hello Group Inc.390,2895,184718Net income per share attributable to ordinary shareholdersBasic1.040.010.00Diluted0.980.010.00Weighted average shares used in calculating net income per ordinary shareBasic377,017,080 374,650,649 374,650,649Diluted409,102,277 389,278,806 389,278,806 Hello Group Inc.Unaudited Condensed Consolidated Statement of Comprehensive Income(All amounts in thousands,except share and per share data)Three monthsEnded March 3120232024 2024RMBRMBUS$Net income 389,4615,184718Other comprehensive income,net of tax:Foreign currency translation adjustment2,181 54,894 7,603Comprehensive income 391,642 60,078 8,321Less:comprehensive(loss)income attributed to the non-controlling interest(1,670)3,084427Comprehensive income attributable to Hello Group Inc.393,312 56,994 7,894 Hello Group Inc.Unaudited Condensed Consolidated Balance Sheets(All amounts in thousands,except share and per share data)December 31March 31 March 31202320242024RMBRMBUS$AssetsCurrent assetsCash and cash equivalents5,620,4666,023,224834,207Short-term deposits1,270,6261,129,454156,428Restricted cash10,1471,504,307208,344Accounts receivable,net of allowance for doubtful accounts ofRMB12,780 and RMB12,497 as of December 31,2023 and March 31,2024,respectively201,517189,56126,254Amounts due from related parties7,258-Prepaid expenses and other current assets723,364823,251114,019Total current assets7,833,3789,669,797 1,339,252Long-term deposits3,924,9753,805,075526,997Long-term restricted cash2,652,2992,653,744367,539Right-of-use assets,net109,572116,60716,150Property and equipment,net659,033688,69995,384Intangible assets,net17,08615,8062,189Rental deposits12,96213,7661,907Long-term investments786,911710,55798,411Amounts due from RPT-non current20,000-Other non-current assets180,052200,64927,790Deferred tax assets31,74134,2404,742Total assets16,228,009 17,908,940 2,480,361Liabilities and equityCurrent liabilitiesAccounts payable616,681604,39883,711Deferred revenue442,805459,79763,681Accrued expenses and other current liabilities630,617564,20578,141Amounts due to related parties4,314-Lease liabilities due within one year60,00866,1369,160Income tax payable94,719100,75613,955Deferred consideration in connection with business acquisitions27,26127,7233,840Long-term borrowings,current portion215,615217,09430,067Dividends payable-714,12098,904Short-term borrowings-1,334,664184,849Total current liabilities2,092,0204,088,893566,308Deferred tax liabilities24,987391,50254,222Convertible Senior Notes19,57119,9202,759Long-term borrowings1,938,3851,938,169268,433Lease liabilities52,17152,4877,269Other non-current liabilities114,085139,72119,351Total liabilities4,241,2196,630,692918,342Shareholders equity(i)11,986,790 11,278,248 1,562,019Total liabilities and shareholders equity16,228,009 17,908,940 2,480,361(i):As of March 31,2024,the number of ordinary shares outstanding was 370,162,906.Hello Group Inc.Unaudited Condensed Consolidated Statement of Cash Flows(All amounts in thousands,except share and per share data)Three monthsEnded March 31202320242024RMBRMBUS$Cash flows from operating activities:Net income 389,4615,184718Adjustments to reconcile net income to net cash provided by operating activities:Depreciation of property and equipment22,84414,3101,982Amortization of intangible assets1,2791,279177Share-based compensation81,65754,6707,572Share of loss(income)on equity method investments13,475(14,318)(1,983)Loss on long-term investments-9,2451,280Gain or loss on disposal of property and equipment6725836Provision of loss on receivable and other assets9,1821,776246Changes in operating assets and liabilities:Accounts receivable(548)10,9801,521Prepaid expenses and other current assets24,352(9,677)(1,340)Amounts due from related parties55-Rental deposits-(802)(111)Deferred tax assets440(2,498)(346)Other non-current assets(7,485)(7,597)(1,052)Accounts payable20,379(17,454)(2,417)Income tax payable(6,393)6,036836Deferred revenue(8,811)16,6742,309Accrued expenses and other current liabilities(132,733)(56,800)(7,867)Amount due to related parties3,169-Deferred tax liabilities34,120365,01150,553Other non-current liabilities6,56423,8933,309Net cash provided by operating activities451,074400,17055,423Cash flows from investing activities:Purchase of property and equipment(10,234)(44,176)(6,118)Purchase of short-term deposits(497,342)-Cash received on maturity of short-term deposits900,000300,00041,550Purchase of long-term deposits-(718,860)(99,561)Cash received on maturity of long-term deposits-718,86099,561Cash received from sales of long-term investment-2,000277Other investing activities73838553Net cash provided by investing activities393,162258,20935,762Cash flows from financing activities:Proceeds from exercise of share options3112Payment in relation to the share repurchase program(3,237)(112,261)(15,548)Repurchase of subsidiarys share options(1,539)-Proceeds from short-term borrowings-1,331,635184,429Repayment of long-term borrowings-(215)(30)Payment for redemption of convertible bonds(478,786)-Net cash(used in)provided by financing activities(483,559)1,219,170168,853Effect of exchange rate changes(9,426)20,8142,882Net increase in cash and cash equivalents 351,2511,898,363262,920Cash,cash equivalents and restricted cash at the beginning of period5,198,6018,282,912 1,147,170Cash,cash equivalents and restricted cash at the end of period5,549,852 10,181,275 1,410,090 Hello Group Inc.Reconciliation of Non-GAAP financial measures to comparable GAAP measures(All amounts in thousands,except per share data)1.Reconciliation of Non-GAAP cost and operating expenses,income from operations,and net income to comparable GAAPmeasures.Three monthsThree monthsThree monthsEnded March 31,2023Ended March 31,2024Ended March 31,2024GAAPShare-basedcompensationNon-GAAPGAAPShare-basedcompensationNon-GAAPGAAPShare-basedcompensation Non-GAAPRMBRMBRMBRMBRMB RMBUS$US$US$Cost of revenues(1,664,188)1,635(1,662,553)(1,503,008)1,882(1,501,126)(208,164)261(207,903)Research anddevelopment(236,803)22,372(214,431)(192,191)8,786(183,405)(26,618)1,217(25,401)Sales and marketing(379,786)7,746(372,040)(293,431)6,117(287,314)(40,640)847(39,793)General andadministrative(138,298)49,904(88,394)(131,381)37,885(93,496)(18,196)5,247(12,949)Cost and operatingexpenses(2,419,075)81,657(2,337,418)(2,120,011)54,670(2,065,341)(293,618)7,572(286,046)Income from operations436,17781,657517,834460,31554,670514,98563,7537,57271,325Net income attributable toHello Group Inc.390,28981,657471,9465,18454,67059,8547187,5728,290 Unaudited Condensed Segment Report(All amounts in thousands,except share and per share data)Three months Ended March 31,2024MomoTantan QOOLTotalTotalRMBRMBRMBRMBUS$Net revenues:Live video service1,150,84487,697-1,238,541171,536Value-added service1,149,285145,091-1,294,376179,269Mobile marketing17,8938,702-26,5953,683Mobile games432-43260Other services434-4247666Total net revenues2,318,888241,490422,560,420354,614Cost and expenses(ii):Cost of revenues(1,392,824)(110,184)-(1,503,008)(208,164)Research and development(150,861)(41,330)-(192,191)(26,618)Sales and marketing(236,659)(54,482)(2,290)(293,431)(40,640)General and administrative(123,752)(7,591)(38)(131,381)(18,196)Total cost and expenses(1,904,096)(213,587)(2,328)(2,120,011)(293,618)Other operating income19,1587242419,9062,757Income(loss)from operations433,95028,627(2,262)460,31563,753Interest income120,9581472121,10716,773Interest expense(23,698)-(23,698)(3,282)Other gain or loss,net(9,245)-(9,245)(1,280)Income(loss)before income tax and share of income on equitymethod investments521,96528,774(2,260)548,47975,964Income tax expenses(557,079)(534)-(557,613)(77,229)(Loss)income before share of income on equity methodinvestments(35,114)28,240(2,260)(9,134)(1,265)Share of income on equity method investments14,318-14,3181,983Net(loss)income(20,796)28,240(2,260)5,184718(ii)Share-based compensation was allocated in cost of revenues and operating expenses as follows:Three monthsEnded March 31,2024MomoTantanQOOLTotalTotalRMBRMBRMBRMBUS$Cost of revenues1,8784-1,882261Research and development8,638148-8,7861,217Sales and marketing6,117-6,117847General and administrative37,87411-37,8855,247Total cost and expenses54,507163-54,6707,572 Hello Group Inc.Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report(All amounts in thousands,except share and per share data)Three monthsEnded March 31,2024MomoTantanQOOLTotalTotalRMBRMBRMBRMBUS$Income(loss)from operations433,950 28,627(2,262)460,31563,753Share-based compensation54,507163-54,6707,572Non-GAAP income(loss)from operations 488,457 28,790(2,262)514,98571,325Net(loss)income(20,796)28,240(2,260)5,184718Share-based compensation54,507163-54,6707,572Non-GAAP net income(loss)33,711 28,403(2,260)59,8548,290 Hello Group Inc.Unaudited Condensed Segment Report(All amounts in thousands,except share and per share data)Three months Ended March 31,2023MomoTantanQOOLTotalTotalRMBRMBRMBRMBUS$1Net revenues:Live video service1,289,718139,622-1,429,340208,128Value-added service1,193,544167,925-1,361,469198,246Mobile marketing20,0211,050-21,0713,068Mobile games3,699-3,699539Other services3,137-1423,279477Total net revenues2,510,119308,5971422,818,858410,458Cost and expenses(iii):Cost of revenues(1,500,531)(163,114)(543)(1,664,188)(242,325)Research and development(169,308)(67,495)-(236,803)(34,481)Sales and marketing(312,640)(65,852)(1,294)(379,786)(55,301)General and administrative(128,078)(7,746)(2,474)(138,298)(20,138)Total cost and expenses(2,110,557)(304,207)(4,311)(2,419,075)(352,245)Other operating income,net35,4788546236,3945,299Income(loss)from operations435,0405,244(4,107)436,17763,512Interest income99,5312045299,78714,530Interest expense(10,415)-(10,415)(1,517)Income(loss)before income tax and share of income on equity method investments524,1565,448(4,055)525,54976,525Income tax expenses(121,642)(971)-(122,613)(17,854)Income(loss)before share of income on equity method investments402,5144,477(4,055)402,93658,671Share of loss on equity method investments(13,475)-(13,475)(1,962)Net income(loss)389,0394,477(4,055)389,46156,709(iii)Share-based compensation was allocated in cost of revenues and operating expenses as follows:Three monthsEnded March 31,2023MomoTantanQOOLTotalTotalRMBRMBRMBRMBUS$Cost of revenues1,61817-1,635238Research and development13,1709,202-22,3723,258Sales and marketing7,7415-7,7461,128General and administrative49,8968-49,9047,267Total cost and expenses72,4259,232-81,65711,8911 All translations from RMB to U.S.dollars are made at a rate of RMB6.8676 to US$1.00,the effective noon buying rate for March 31,2023 as setforth in the H.10 statistical release of the Federal Reserve Board.Hello Group Inc.Reconciliation of GAAP and NON-GAAP Results of Unaudited Segment Report(All amounts in thousands,except share and per share data)Three monthsEnded March 31,2023Momo TantanQOOLTotalTotalRMBRMBRMBRMBUS$Income(loss)from operations435,0405,244(4,107)436,17763,512Share-based compensation72,4259,232-81,65711,891Non-GAAP income(loss)from operations 507,465 14,476(4,107)517,83475,403Net income(loss)389,0394,477(4,055)389,46156,709Share-based compensation72,4259,232-81,65711,891Non-GAAP net income(loss)461,464 13,709(4,055)471,11868,600 View original content:https:/ Hello Group Inc.
2024-10-15
10页
5星级
Hello Group Inc.Announces Unaudited Financial Results for the Second Quarter of 2024September 3,2024.
2024-10-15
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Glencore Q1 2024 Production Report 1 NEWS RELEASE Baar,30 April 2024 First Quarter Production Report 2024 Glencore Chief Executive Officer,Gary Nagle:“Our full year production guidance remains unchanged from that presented at the beginning of the year.First quarter copper,zinc and coal production was broadly in line with the prior year comparable period,while nickel increased 14%,reflecting recovery from the Raglan strike impacts in the base period.Lower year-on-year cobalt and ferrochrome volumes primarily reflect the previously announced market-related production adjustments in the DRC and the decision to idle our Rustenburg ferrochrome smelter in the current price environment.“Basis Marketings performance over the first quarter,we currently expect full year Marketing Adjusted EBIT in the$3.0-$3.5 billion range,being around the top end of our long-term$2.2-3.2 billion p.a.guidance range,reflecting cyclically elevated interest rates.”Production from own sources Total1 Q1 2024 Q1 2023 Change%Copper kt 239.7 244.1 (2)Cobalt kt 6.6 10.5 (37)Zinc kt 205.6 205.3 Lead kt 43.8 39.3 11 Nickel kt 23.8 20.9 14 Gold koz 201 187 7 Silver koz 4,520 4,525 Ferrochrome kt 297 400 (26)Coal mt 26.6 26.9 (1)1.Controlled industrial assets and joint ventures only(excludes Volcan).Production is on a 100sis,except as stated later in this report.Q1 production highlights Own sourced copper production of 239,700 tonnes was 2ove Q1 2023 on a like-for-like basis,removing 8,700 tonnes of Cobar(sold in June 2023)volumes from the prior period.Own sourced cobalt production of 6,600 tonnes was 3,900 tonnes lower than Q1 2023,mainly reflecting planned lower run-rates at Mutanda in the current weak cobalt pricing environment and mill downtime at KCC.Own sourced overall zinc production of 205,600 tonnes was in line with Q1 2023,reflecting the ramp up of Zhairem(14,300 tonnes),offset by lower zinc tonnes from Antamina(10,300 tonnes),on account of its expected mining sequence and zinc Australia(3,500 tonnes),due to a tropical cyclone and flash flooding.Own sourced zinc production from the zinc department itself,excluding Antamina,was 10,600 tonnes(6%)higher than Q1 2023.Own sourced nickel production of 23,800 tonnes was 2,900 tonnes(14%)higher than Q1 2023,largely due to recovery from the INO supply chain constraints seen in the base period.Attributable ferrochrome production of 297,000 tonnes was 103,000 tonnes(26%)below Q1 2023,as the Rustenburg smelter remains idled,pending an improved price/cost environment.Coal production of 26.6 million tonnes was broadly in line with Q1 2023.Production guidance Actual FY Previous guidance Current guidance 2024 weighting 2023 2024 2024 H1 H2 Copper kt 1,010 950-1,010 950-1,010 50P%Cobalt kt 41.3 35-40 35-40 47S%Zinc kt 919 900-950 900-950 1 47S%Nickel kt 98 80-90 80-90 2 48Rrrochrome kt 1,162 1,100-1,200 1,100-1,200 51I%Coal mt 114 105-115 105-115 3 50P%1.Excludes Volcan.2.Koniambo(KNS)transitioned to care and maintenance during February 2024.The nickel production guidance above(consistent with our earlier guidance release)is presented ex-KNS and therefore excludes the 5.0kt produced by KNS in Q1 2024 prior to its transition to care and maintenance.3.Guidance excludes any contribution from the Elk Valley Resources(EVR)steelmaking coal assets,in which Glencore agreed in November 2023 to acquire a 77%interest from Teck Resources Limited,subject to various regulatory approvals.Production guidance is unchanged from that announced in our full year 2023 Production Report released on 1 February 2024.HIGHLIGHTS continued Glencore Q1 2024 Production Report 2 For further information please contact:Investors Martin Fewings t: 41 41 709 2880 m: 41 79 737 5642 Media Charles Watenphul t: 41 41 709 2462 m: 41 79 904 3320 Glencore LEI:2138002658CPO9NBH955 Please refer to the end of this document for disclaimers including on forward-looking statements.Notes for Editors Glencore is one of the worlds largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities that advance everyday life.Through a network of assets,customers and suppliers that spans the globe,we produce,process,recycle,source,market and distribute the commodities that support decarbonisation while meeting the energy needs of today.With over 150,000 employees and contractors and a strong footprint in over 35 countries in both established and emerging regions for natural resources,our marketing and industrial activities are supported by a global network of more than 50 offices.Glencores customers are industrial consumers,such as those in the automotive,steel,power generation,battery manufacturing and oil sectors.We also provide financing,logistics and other services to producers and consumers of commodities.Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals.We are an active participant in the Extractive Industries Transparency Initiative.We will support the global effort to achieve the goals of the Paris Agreement through our efforts to decarbonise our own operational footprint.We believe that we should take a holistic approach and have considered our commitment through the lens of our global industrial emissions.Against a restated 2019 baseline,we are targeting to reduce our Scope 1,2 and 3 industrial emissions by 15%by the end of 2026,25%by the end of 2030,50%by the end of 2035 and we have an ambition to achieve net zero industrial emissions by the end of 2050,subject to a supportive policy environment.For more information see our 2024-2026 Climate Action Transition Plan and the About our emissions calculation and reporting section in our 2023 Annual Report,available on our website at AND MINERALS Glencore Q1 2024 Production Report PRODUCTION DATA Production from own sources Copper assets1 Q1 2024 Q1 2023 Changerican Copper(KCC,Mutanda)Copper metal kt 51.9 61.8 (16)Cobalt2 kt 5.9 9.8 (40)Collahuasi3 Copper in concentrates kt 64.7 57.1 13 Silver in concentrates koz 911 724 26 Gold in concentrates koz 10 9 11 Antamina4 Copper in concentrates kt 35.9 32.0 12 Zinc in concentrates kt 21.5 31.8 (32)Silver in concentrates koz 806 923 (13)South America(Antapaccay,Lomas Bayas)Copper metal kt 18.5 17.9 3 Copper in concentrates kt 42.9 36.8 17 Gold in concentrates and in dor koz 30 21 43 Silver in concentrates and in dor koz 343 251 37 Cobar Copper in concentrates kt 8.7 (100)Silver in concentrates koz 100 (100)Total Copper department Copper kt 213.9 214.3 Cobalt kt 5.9 9.8 (40)Zinc kt 21.5 31.8 (32)Gold koz 40 30 33 Silver koz 2,060 1,998 3 Production from own sources Zinc assets1 Q1 2024 Q1 2023 Change%Kazzinc Zinc metal kt 32.3 24.9 30 Zinc in concentrates kt 16.3 9.4 73 Lead metal kt 8.6 4.8 79 Lead in concentrates kt 1.7 3.5 (51)Copper metal5 kt 4.4 3.4 29 Gold koz 158 154 3 Silver koz 762 693 10 Silver in concentrates koz 27 140 (81)Australia(Mount Isa,Townsville,McArthur River)Zinc in concentrates kt 125.0 128.5 (3)Copper metal kt 13.7 16.5 (17)Lead in concentrates kt 33.5 31.0 8 Silver koz 105 180 (42)Silver in concentrates koz 1,216 1,074 13 North America(Kidd)Zinc in concentrates kt 10.5 10.7 (2)Copper in concentrates kt 4.5 6.8 (34)Silver in concentrates koz 294 392 (25)Total Zinc department Zinc kt 184.1 173.5 6 Lead kt 43.8 39.3 11 Copper kt 22.6 26.7 (15)Gold koz 158 154 3 Silver koz 2,404 2,479 (3)METALS AND MINERALS continued Glencore Q1 2024 Production Report Production from own sources Nickel assets1 Q1 2024 Q1 2023 Change%Integrated Nickel Operations(INO)(Sudbury,Raglan,Nikkelverk)Nickel metal kt 10.6 8.1 31 Copper metal kt 2.4 2.0 20 Copper in concentrates kt 0.8 1.1 (27)Cobalt metal kt 0.2 0.1 100 Gold koz 3 3 Silver koz 56 48 17 Platinum koz 6 6 Palladium koz 15 16 (6)Rhodium koz 1 1 Murrin Murrin Nickel metal kt 8.2 7.8 5 Cobalt metal kt 0.5 0.6 (17)Koniambo Nickel in ferronickel kt 5.0 5.0 Total Nickel department Nickel kt 23.8 20.9 14 Copper kt 3.2 3.1 3 Cobalt kt 0.7 0.7 Gold koz 3 3 Silver koz 56 48 17 Platinum koz 6 6 Palladium koz 15 16 (6)Rhodium koz 1 1 Production from own sources Ferroalloys assets1 Q1 2024 Q1 2023 Changerrochrome6 kt 297 400 (26)Vanadium Pentoxide mlb 5.3 5.4 (2)Total production Custom metallurgical assets1 Q1 2024 Q1 2023 Change%Copper(Altonorte,Pasar,Horne,CCR)Copper metal kt 129.5 128.2 1 Copper anode kt 106.5 119.9 (11)Zinc(Portovesme,Asturiana,Nordenham,Northfleet,CEZ Refinery)Zinc metal kt 210.1 140.6 49 Lead metal kt 48.0 65.0 (26)1 Controlled industrial assets and joint ventures only(excludes Volcan).Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.2 Cobalt contained in concentrates and hydroxides.3 The Groups pro-rata share of Collahuasi production(44%).4 The Groups pro-rata share of Antamina production(33.75%).5 Copper metal includes copper contained in copper concentrates and blister.6 The Groups attributable 79.5%share of the Glencore-Merafe Chrome Venture.METALS AND MINERALS continued Glencore Q1 2024 Production Report OPERATING HIGHLIGHTS Copper assets Own sourced copper production of 239,700 tonnes was 2ove Q1 2023 on a like-for-like basis,removing 8,700 tonnes of Cobar(sold in June 2023)volumes from the prior period.Own sourced cobalt production of 6,600 tonnes was 3,900 tonnes lower than Q1 2023,mainly reflecting planned lower run-rates at Mutanda in the current weak cobalt pricing environment and mill downtime at KCC.African Copper Own sourced copper production of 51,900 tonnes was 9,900 tonnes(16%)lower than Q1 2023,reflecting mill downtime at KCC and planned lower throughput and grades at Mutanda.Own sourced cobalt production of 5,900 tonnes was 3,900 tonnes(40%)lower than Q1 2023,reflecting planned lower run-rates at Mutanda in the current weak cobalt pricing environment and the mill downtime at KCC noted above.Collahuasi Attributable copper production of 64,700 tonnes was 7,600 tonnes(13%)higher than Q1 2023,due to higher grades and throughput resulting from commissioning of the fifth ball mill.Antamina Attributable copper production of 35,900 tonnes was 3,900 tonnes(12%)higher than Q1 2023,reflecting weather-related production interruptions in Q1 2023.Attributable zinc production of 21,500 tonnes was 10,300 tonnes(32%)lower than Q1 2023,reflecting the expected mining sequence,exhibiting higher copper/lower zinc grades.South America Copper production of 61,400 tonnes was 6,700 tonnes(13%)higher than Q1 2023,reflecting higher grades at Antapaccay and a stronger operating performance compared to the mill downtime and civil unrest in Peru that occurred in early 2023.Copper custom metallurgical assets Copper anode production of 106,500 tonnes was 13,400 tonnes(11%)lower than Q1 2023,reflecting lower copper content in feed processed at Horne,and smelter downtime at both Horne and Pasar.Copper cathode production of 129,400 tonnes was in line with Q1 2023 production.Zinc assets Own sourced overall zinc production of 205,600 tonnes was in line with Q1 2023,reflecting the ramp up of Zhairem(14,300 tonnes),offset by lower zinc tonnes from Antamina(10,300 tonnes),on account of its expected mining sequence and zinc Australia(3,500 tonnes),due to a tropical cyclone and flash flooding.Own sourced zinc production from the zinc department itself,excluding Antamina,was 10,600 tonnes(6%)higher than Q1 2023.Kazzinc Own sourced zinc production of 48,600 tonnes was 14,300 tonnes(42%)higher than Q1 2023,reflecting Zhairems ramp up.Own sourced lead production of 10,300 tonnes was 2,000 tonnes(24%)higher than Q1 2023,due to Zhairems ramp up.Own sourced copper production of 4,400 tonnes was 1,000 tonnes(29%)higher than Q1 2023,due to an unscheduled furnace shutdown at the copper smelter in the base period.Own sourced gold production of 158,000 ounces was broadly in line with Q1 2023.Australia Both Q1 2023 and Q1 2024 were impacted by significant adverse weather events.The period-on-period variations were not uniform across products,reflecting the different mining methods and export channels.Zinc production of 125,000 tonnes was 3,500 tonnes(3%)lower than Q1 2023,due to a tropical cyclone in March which significantly impacted McArthur River late in the quarter,partially offset by higher Mount Isa production.Lead production of 33,500 tonnes was 2,500 tonnes(8%)higher than Q1 2023,due to heavy rains impacting Mount Isa production in the base period.Copper production of 13,700 tonnes was 2,800 tonnes(17%)lower than Q1 2023,due to heavy rains which required significant dewatering and mud-rush management.North America Zinc production of 10,500 tonnes was broadly in line with Q1 2023.Zinc custom metallurgical assets Zinc metal production of 210,100 tonnes was 69,500 tonnes(49%)higher than Q1 2023,mainly relating to consolidation of the CEZ business from April 2023 and incremental tonnes from the restart of Nordenham Zinc in February 2024.METALS AND MINERALS continued Glencore Q1 2024 Production Report Lead metal production of 48,000 tonnes was 17,000 tonnes(26%)lower than Q1 2023,reflecting a temporary furnace shutdown at Nordenham Lead and no tonnes from Portovesme in 2024,with the lead line in care and maintenance.Nickel assets Own sourced nickel production of 23,800 tonnes was 2,900 tonnes(14%)higher than Q1 2023,largely due to recovery from the INO supply chain constraints seen in the base period.Integrated Nickel Operations(INO)Own sourced nickel production of 10,600 tonnes was 2,500 tonnes(31%)higher than Q1 2023,reflecting that the base period endured supply chain constraints,including follow-on impacts from the Raglan strike in 2022.Refinery utilisation was consistent period over period at circa 24,000 tonnes for the quarter,including third-party feedstocks.Murrin Murrin Own sourced nickel production of 8,200 tonnes was 400 tonnes(5%)higher than Q1 2023,due to variations in the own sourced/third party feed mix.Total nickel production of 8,900 tonnes was in line with Q1 2023.Koniambo Koniambo transitioned to care and maintenance during February 2024.Ferroalloys assets Attributable ferrochrome production of 297,000 tonnes was 103,000 tonnes(26%)below Q1 2023,as the Rustenburg smelter remains idled,pending an improved price/cost environment.ENERGY PRODUCTS Glencore Q1 2024 Production Report 7 Coal assets1 Q1 2024 Q1 2023 Change%Australian steelmaking coal mt 1.4 2.0 (30)Australian semi-soft coal mt 0.8 1.1 (27)Australian thermal coal(export)mt 13.1 12.9 2 Australian thermal coal(domestic)mt 2.0 1.5 33 South African thermal coal(export)mt 2.8 3.2 (13)South African thermal coal(domestic)mt 1.2 0.8 50 Cerrejn mt 5.3 5.4 (2)Total Coal department mt 26.6 26.9 (1)Oil assets(non-operated)Q1 2024 Q1 2023 Change%Glencore entitlement interest basis Equatorial Guinea kboe 1,072 1,017 5 Cameroon kbbl 81 191 (58)Total Oil department kboe 1,153 1,208 (5)1 Controlled industrial assets and joint ventures only.Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.OPERATING HIGHLIGHTS Coal assets Coal production of 26.6 million tonnes was broadly in line with Q1 2023.Australian steelmaking Production of 1.4 million tonnes was 0.6 million tonnes(30%)lower than Q1 2023.The base period included 0.3 million tonnes from Newlands mine,prior to its closure in February 2023,while the remaining variance mainly related to a longwall move at Oaky Creek.Australian thermal and semi-soft Production of 15.9 million tonnes was 0.4 million tonnes(3%)higher than Q1 2023.South African thermal Production of 4.0 million tonnes was in line with Q1 2023.Cerrejn Production of 5.3 million tonnes was broadly in line with Q1 2023.Oil assets Exploration and production(non-operated)Entitlement interest oil production of 1.2 million barrels of oil equivalent was 5%lower than Q1 2023,largely due to natural field decline at Bolongo in Cameroon.SELECTED AVERAGE COMMODITY PRICES Glencore Q1 2024 Production Report 8 MARKET CONDITIONS Selected average commodity prices Q1 2024 Q1 2023 Change%S&P GSCI Industrial Metals Index 412 460 (10)S&P GSCI Energy Index 260 266 (2)LME(cash)copper price($/t)8,441 8,941 (6)LME(cash)zinc price($/t)2,446 3,132 (22)LME(cash)lead price($/t)2,076 2,137 (3)LME(cash)nickel price($/t)16,604 25,973 (36)Gold price($/oz)2,072 1,892 10 Silver price($/oz)23 23 Fastmarkets cobalt standard grade,Rotterdam($/lb)(low-end)13 16 (19)Ferro-chrome 50%Cr import,CIF main Chinese ports,contained Cr(/lb)96 108 (11)Iron ore(Platts 62R North China)price($/DMT)119 117 2 Coal API4($/t)95 145 (34)Coal Newcastle(6,000)($/t)126 242 (48)Coal HCC($/t)313 345 (9)Oil price Brent($/bbl)82 82 PRODUCTION BY QUARTER Q1 2023 TO Q1 2024 Glencore Q1 2024 Production Report 9 Metals and minerals PRODUCTION FROM OWN SOURCES TOTAL1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Change Q1 24 vs Q1 23%Change Q1 24 vs Q4 23%Copper kt 244.1 243.9 247.8 274.3 239.7 (2)(13)Cobalt kt 10.5 11.2 10.8 8.8 6.6 (37)(25)Zinc kt 205.3 229.4 237.4 246.4 205.6 (17)Lead kt 39.3 48.1 46.2 49.1 43.8 11 (11)Nickel kt 20.9 25.5 22.0 29.2 23.8 14 (18)Gold koz 187 182 175 203 201 7 (1)Silver koz 4,525 4,921 5,064 5,501 4,520 (18)Ferrochrome kt 400 317 156 289 297 (26)3 Coal mt 26.9 27.3 29.7 29.7 26.6 (1)(10)Oil(entitlement interest basis)kboe 1,208 1,142 1,164 1,229 1,153 (5)(6)PRODUCTION FROM OWN SOURCES COPPER ASSETS1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Change Q1 24 vs Q1 23%Change Q1 24 vs Q4 23rican Copper(KCC,Mutanda)KCC Copper metal kt 53.6 48.7 59.9 44.2 46.9 (13)6 Cobalt2 kt 7.0 7.6 7.4 5.6 4.9 (30)(13)Mutanda Copper metal kt 8.2 9.7 9.0 8.2 5.0 (39)(39)Cobalt2 kt 2.8 3.0 3.0 2.4 1.0 (64)(58)Total Copper metal kt 61.8 58.4 68.9 52.4 51.9 (16)(1)Total Cobalt2 kt 9.8 10.6 10.4 8.0 5.9 (40)(26)Collahuasi3 Copper in concentrates kt 57.1 57.3 66.1 71.7 64.7 13 (10)Silver in concentrates koz 724 888 1,242 1,178 911 26 (23)Gold in concentrates koz 9 11 9 12 10 11 (17)Antamina4 Copper in concentrates kt 32.0 36.3 34.5 39.6 35.9 12 (9)Zinc in concentrates kt 31.8 45.3 42.1 37.4 21.5 (32)(43)Silver in concentrates koz 923 1,027 918 1,044 806 (13)(23)South America(Antapaccay,Lomas Bayas)Antapaccay Copper in concentrates kt 36.8 45.9 33.8 56.5 42.9 17 (24)Gold in concentrates koz 21 35 16 25 30 43 20 Silver in concentrates koz 251 358 235 423 343 37 (19)Lomas Bayas Copper metal kt 17.9 11.9 15.5 20.5 18.5 3 (10)Total Copper metal kt 17.9 11.9 15.5 20.5 18.5 3 (10)Total Copper in concentrates kt 36.8 45.9 33.8 56.5 42.9 17 (24)Total Gold in concentrates and in dor koz 21 35 16 25 30 43 20 Total Silver in concentrates and in dor koz 251 358 235 423 343 37 (19)Australia(Cobar)Cobar Copper in concentrates kt 8.7 6.3 (100)n.m Silver in concentrates koz 100 80 (100)n.m.Total Copper department Copper kt 214.3 216.1 218.8 240.7 213.9 (11)Cobalt kt 9.8 10.6 10.4 8.0 5.9 (40)(26)Zinc kt 31.8 45.3 42.1 37.4 21.5 (32)(43)Gold koz 30 46 25 37 40 33 8 Silver koz 1,998 2,353 2,395 2,645 2,060 3 (22)PRODUCTION BY QUARTER Q1 2023 TO Q1 2024 continued Glencore Q1 2024 Production Report 10 Metals and minerals PRODUCTION FROM OWN SOURCES ZINC ASSETS1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Change Q1 24 vs Q1 23%Change Q1 24 vs Q4 23%Kazzinc Zinc metal kt 24.9 24.6 31.6 32.7 32.3 30 (1)Zinc in concentrates kt 9.4 13.1 15.8 21.8 16.3 73 (25)Lead metal kt 4.8 4.0 5.2 4.7 8.6 79 83 Lead in concentrates kt 3.5 4.0 3.3 6.1 1.7 (51)(72)Copper metal5 kt 3.4 1.6 4.4 5.4 4.4 29 (19)Gold koz 154 134 147 163 158 3 (3)Silver koz 693 414 760 860 762 10 (11)Silver in concentrates koz 140 123 143 142 27 (81)(81)Kazzinc total smelter production including third party feed Zinc metal kt 63.5 61.5 66.2 71.1 64.7 2 (9)Lead metal kt 23.9 21.8 27.7 24.6 29.4 23 20 Copper metal kt 11.5 5.8 11.8 13.0 12.8 11 (2)Gold koz 261 270 275 318 273 5 (14)Silver koz 4,861 4,716 4,355 3,634 3,524 (28)(3)Australia(Mount Isa,McArthur River)Mount Isa Zinc in concentrates kt 61.6 68.5 76.0 81.1 63.7 3 (21)Copper metal kt 16.5 18.6 16.1 17.9 13.7 (17)(23)Lead in concentrates kt 18.8 27.8 25.4 24.7 21.2 13 (14)Silver koz 180 158 134 143 105 (42)(27)Silver in concentrates koz 708 1,086 1,056 987 842 19 (15)Mount Isa,Townsville total production including third party feed Copper metal kt 44.3 50.5 53.0 49.4 45.5 3 (8)Gold koz 37 35 46 50 36 (3)(28)Silver koz 408 386 482 475 303 (26)(36)McArthur River Zinc in concentrates kt 66.9 66.4 63.1 65.8 61.3 (8)(7)Lead in concentrates kt 12.2 12.3 12.3 13.6 12.3 1 (10)Silver in concentrates koz 366 261 262 403 374 2 (7)Total Zinc in concentrates kt 128.5 134.9 139.1 146.9 125.0 (3)(15)Total Copper kt 16.5 18.6 16.1 17.9 13.7 (17)(23)Total Lead in concentrates kt 31.0 40.1 37.7 38.3 33.5 8 (13)Total Silver koz 180 158 134 143 105 (42)(27)Total Silver in concentrates koz 1,074 1,347 1,318 1,390 1,216 13 (13)North America Kidd Zinc in concentrates kt 10.7 11.5 8.8 7.6 10.5 (2)38 Copper in concentrates kt 6.8 4.6 5.1 6.1 4.5 (34)(26)Silver in concentrates koz 392 477 254 255 294 (25)15 Total Zinc department Zinc kt 173.5 184.1 195.3 209.0 184.1 6 (12)Lead kt 39.3 48.1 46.2 49.1 43.8 11 (11)Copper kt 26.7 24.8 25.6 29.4 22.6 (15)(23)Gold koz 154 134 147 163 158 3 (3)Silver koz 2,479 2,519 2,609 2,790 2,404 (3)(14)PRODUCTION BY QUARTER Q1 2023 TO Q1 2024 continued Glencore Q1 2024 Production Report 11 Metals and minerals PRODUCTION FROM OWN SOURCES NICKEL ASSETS1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Change Q1 24 vs Q1 23%Change Q1 24 vs Q4 23%Integrated Nickel Operations(Sudbury,Raglan,Nikkelverk)Nickel metal kt 8.1 10.0 7.3 13.7 10.6 31 (23)Nickel in concentrates kt 0.1 0.1 n.m (100)Copper metal kt 2.0 1.9 2.2 2.8 2.4 20 (14)Copper in concentrates kt 1.1 1.1 1.2 1.4 0.8 (27)(43)Cobalt metal kt 0.1 0.1 0.2 0.2 100 Gold koz 3 2 3 3 3 Silver koz 48 49 60 66 56 17 (15)Platinum koz 6 6 5 7 6 (14)Palladium koz 16 17 14 18 15 (6)(17)Rhodium koz 1 1 1 1 Integrated Nickel Operations total production including third party feed Nickel metal kt 23.9 23.2 23.9 24.0 23.8 (1)Nickel in concentrates kt 0.1 0.1 n.m (100)Copper metal kt 5.2 5.0 4.8 5.1 4.3 (17)(16)Copper in concentrates kt 1.6 1.6 1.1 1.9 0.8 (50)(58)Cobalt metal kt 0.9 0.8 0.8 1.0 0.8 (11)(20)Gold koz 6 8 5 8 6 (25)Silver koz 86 89 110 122 108 26 (11)Platinum koz 12 13 11 15 14 17 (7)Palladium koz 46 54 43 58 51 11 (12)Rhodium koz 1 1 1 1 n.m.Murrin Murrin Total Nickel metal kt 7.8 7.8 7.5 8.0 8.2 5 3 Total Cobalt metal kt 0.6 0.5 0.4 0.6 0.5 (17)(17)Murrin Murrin total production including third party feed Total Nickel metal kt 8.9 9.0 8.6 9.9 8.9 (10)Total Cobalt metal kt 0.7 0.6 0.4 0.7 0.7 Koniambo Nickel in ferronickel kt 5.0 7.7 7.1 7.4 5.0 (32)Total Nickel department Nickel kt 20.9 25.5 22.0 29.2 23.8 14 (18)Copper kt 3.1 3.0 3.4 4.2 3.2 3 (24)Cobalt kt 0.7 0.6 0.4 0.8 0.7 (13)Gold koz 3 2 3 3 3 Silver koz 48 49 60 66 56 17 (15)Platinum koz 6 6 5 7 6 (14)Palladium koz 16 17 14 18 15 (6)(17)Rhodium koz 1 1 1 1 PRODUCTION BY QUARTER Q1 2023 TO Q1 2024 continued Glencore Q1 2024 Production Report 12 Metals and minerals PRODUCTION FROM OWN SOURCES FERROALLOYS ASSETS1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Change Q1 24 vs Q1 23%Change Q1 24 vs Q4 23rrochrome6 kt 400 317 156 289 297 (26)3 Vanadium pentoxide mlb 5.4 3.9 5.6 4.6 5.3 (2)15 TOTAL PRODUCTION CUSTOM METALLURGICAL ASSETS1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Change Q1 24 vs Q1 23%Change Q1 24 vs Q4 23%Copper(Altonorte,Pasar,Horne,CCR)Copper metal kt 128.2 123.2 125.7 130.2 129.5 1 (1)Copper anode kt 119.9 105.4 122.8 95.2 106.5 (11)12 Zinc(Portovesme,Asturiana,Nordenham,Northfleet,CEZ Refinery)Zinc metal kt 140.6 204.7 200.5 206.8 210.1 49 2 Lead metal kt 65.0 58.7 60.9 60.0 48.0 (26)(20)1 Controlled industrial assets and joint ventures only(excludes Volcan).Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.2 Cobalt contained in concentrates and hydroxides.3 The Groups pro-rata share of Collahuasi production(44%).4 The Groups pro-rata share of Antamina production(33.75%).5 Copper metal includes copper contained in copper concentrates and blister.6 The Groups attributable 79.5%share of the Glencore-Merafe Chrome Venture.PRODUCTION BY QUARTER Q1 2023 TO Q1 2024 continued Glencore Q1 2024 Production Report 13 Energy products PRODUCTION FROM OWN SOURCES COAL ASSETS1 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Change Q1 24 vs Q1 23%Change Q1 24 vs Q4 23%Australian steelmaking coal mt 2.0 1.7 1.5 2.3 1.4 (30)(39)Australian semi-soft coal mt 1.1 0.8 0.9 1.3 0.8 (27)(38)Australian thermal coal(export)mt 12.9 13.8 14.3 14.2 13.1 2 (8)Australian thermal coal(domestic)mt 1.5 1.7 2.0 1.8 2.0 33 11 South African thermal coal(export)mt 3.2 3.4 3.8 3.3 2.8 (13)(15)South African thermal coal(domestic)mt 0.8 1.1 1.0 1.2 1.2 50 Cerrejn mt 5.4 4.8 6.2 5.6 5.3 (2)(5)Total Coal department mt 26.9 27.3 29.7 29.7 26.6 (1)(10)OIL ASSETS(NON-OPERATED)Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Change Q1 24 vs Q1 23%Change Q1 24 vs Q4 23%Glencore entitlement interest basis Equatorial Guinea kboe 1,017 979 1,030 1,109 1,072 5 (3)Cameroon kbbl 191 163 134 120 81 (58)(33)Total Oil department kboe 1,208 1,142 1,164 1,229 1,153 (5)(6)Gross basis Equatorial Guinea kboe 6,027 5,241 5,680 6,399 5,923 (2)(7)Cameroon kbbl 483 410 367 302 266 (45)(12)Total Oil department kboe 6,510 5,651 6,047 6,701 6,189 (5)(8)1 Controlled industrial assets and joint ventures only.Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.FULL YEAR 2024 PRODUCTION GUIDANCE Glencore Q1 2024 Production Report 14 Actual FY Actual FY Actual FY Previous guidance Current guidance 2024 weighting 2021 2022 2023 2024 2024 H1 H2 Copper kt 1,196 1,058 1,010 950-1,010 950-1,010 50P%Cobalt kt 31.3 43.8 41.3 35-40 35-40 47S%Zinc kt 1,118 939 919 900-950 900-950 1 47S%Nickel kt 102 108 98 80-90 80-90 2 48Rrrochrome kt 1,468 1,488 1,162 1,100-1,200 1,100-1,200 51I%Coal mt 103 110 114 105-115 105-115 3 50P%1 Excludes Volcan.2 KNS transitioned to care and maintenance during February 2024.The nickel production guidance above(consistent with our earlier guidance release)is presented ex-KNS and therefore excludes the 5.0kt produced by KNS in Q1 2024 prior to its transition to care and maintenance.3 Guidance excludes any contribution from the EVR steelmaking coal assets,in which Glencore agreed in November 2023 to acquire a 77%interest from Teck Resources Limited,subject to various regulatory approvals.Production guidance is unchanged from that announced in our full year 2023 Production Report released on 1 February 2024.Glencore Q1 2024 Production Report 15 Important notice This document does not constitute or form part of any offer or invitation to sell or issue,or any solicitation of any offer to purchase or subscribe for any securities.Cautionary statement regarding forward-looking information Certain descriptions in this document are oriented towards future events and therefore contains statements that are,or may be deemed to be,“forward-looking statements”which are prospective in nature.Such statements may include,without limitation,statements in respect of trends in commodity prices and currency exchange rates;demand for commodities;reserves and resources and production forecasts;expectations,plans,strategies and objectives of management;expectations regarding financial performance,results of operations and cash flows,climate scenarios;sustainability performance(including,without limitation,environmental,social and governance)related goals,ambitions,targets,intentions,visions,milestones and aspirations;approval of certain projects and consummation of certain transactions(including,without limitation,acquisitions and disposals,in particular the proposed acquisition of a majority stake of EVR from Teck Resources Limited and potential subsequent demerger of the combined coal and carbon steel materials business);closures or divestments of certain assets,operations or facilities(including,without limitation,associated costs);capital costs and scheduling;operating costs and supply of materials and skilled employees;financings;anticipated productive lives of projects,mines and facilities;provisions and contingent liabilities;and tax,legal and regulatory developments.These forward-looking statements may be identified by the use of forward-looking terminology,or the negative thereof including,without limitation,“outlook”,“guidance”,“trend”,“plans”,“expects”,“continues”,“assumes”,“is subject to”,“budget”,“scheduled”,“estimates”,“aims”,“forecasts”,“risks”,“intends”,“positioned”,“predicts”,“projects”,“anticipates”,“believes”,or variations of such words or comparable terminology and phrases or statements that certain actions,events or results“may”,“could”,“should”,“shall”,“would”,“might”or“will”be taken,occur or be achieved.The information in this document provides an insight into how we currently intend to direct the management of our businesses and assets and to deploy our capital to help us implement our strategy.The matters disclosed in this document are a point in time disclosure only.Forward-looking statements are not based on historical facts,but rather on current predictions,expectations,beliefs,opinions,plans,objectives,goals,intentions and projections about future events,results of operations,prospects,financial conditions and discussions of strategy,and reflect judgments,assumptions,estimates and other information available as at the date of this document or the date of the corresponding planning or scenario analysis process.By their nature,forward-looking statements involve known and unknown risks,uncertainties and other factors which may cause actual results,performance or achievements to differ materially from any future event,results,performance,achievements or other outcomes expressed or implied by such forward-looking statements.Important factors that could impact these uncertainties include(without limitation)those disclosed in the risk management section of our latest Annual Report and Half-Year Report(which can each be found on our website).These risks and uncertainties may materially affect the timing and feasibility of particular developments.Other factors which impact risks and uncertainties include,without limitation:the ability to produce and transport products profitably;demand for our products and commodity prices;development,efficacy and adoption of new or competing technologies;changing or divergent preferences of our stakeholders;changes to the assumptions regarding the recoverable value of our tangible and intangible assets;changes in environmental scenarios and related regulations,including,without limitation,transition risks and the evolution and development of the global transition to a low carbon economy;recovery rates and other operational capabilities;timing,quantum and nature of certain acquisitions and divestments;health,safety,environmental or social performance incidents;labor shortages or workforce disruptions;natural catastrophes or adverse geological conditions,including,without limitation,the physical risks associated with climate change;effects of global pandemics and outbreaks of infectious disease;the outcome of litigation or enforcement or regulatory proceedings;the effect of foreign currency exchange rates on market prices and operating costs;actions by governmental authorities,such as changes in taxation or regulation or changes in the decarbonisation policies and plans of other countries;changes in economic and financial market conditions generally or in various counties or regions;political or geopolitical uncertainty;and wars,political or civil unrest,acts of terrorism,cyber attacks or sabotage.Readers,including,without limitation,investors and prospective investors,should review and consider these risks and uncertainties(as well as the other risks identified in this document)when considering the information contained in this document.Readers should also note that the high degree of uncertainty around the nature,timing and magnitude of climate-related risks,and the uncertainty as to how the energy transition will evolve,makes it difficult to determine all potential risks and opportunities and disclose these and any potential impacts with precision.Neither Glencore nor any of its affiliates,associates,employees,directors,officers or advisers,provides any representation,warranty,assurance or guarantee as to the accuracy,completeness or correctness,likelihood of achievement or reasonableness of any forward-looking information contained in this document or that the events,results,performance,achievements or other outcomes expressed or implied in any forward-looking statements in this document will actually occur.Glencore cautions readers against reliance on any forward-looking statements contained in this document,particularly in light of the long-term time horizon which this document discusses in certain instances and the inherent uncertainty in possible policy,market and technological developments in the future.No statement in this document is intended as any kind of forecast(including,without limitation,a profit forecast or a profit estimate),guarantee or prediction of future events or performance and past performance cannot be relied on as a guide to future performance.Except as required by applicable regulations or by law,Glencore is not under any obligation,and Glencore and its affiliates expressly disclaim any intention,obligation or undertaking,to update or revise any forward-looking statements,whether as a result of new information,future events or otherwise.This document shall not,under any circumstances,create any implication that there has Glencore Q1 2024 Production Report 16 been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is correct as at any time subsequent to its date.Cautionary statement regarding climate strategy Glencore operates in a dynamic and uncertain market and external environment.Plans and strategies can and must adapt in response to dynamic market conditions,changing preference of our stakeholders,joint venture decisions,changing weather and climate patterns,new opportunities that might arise or other changing circumstances.Investors should assume that our climate strategy will evolve and be updated as time passes.Additionally,a number of aspects of our strategy involve developments or workstreams that are complex and may be delayed,more costly than anticipated or unsuccessful for many reasons,including,without limitation,reasons that are outside of Glencores control.Our strategy will also necessarily be impacted by changes in our business,such as the proposed acquisition of EVR and potential demerger of the combined coal and carbon steel materials business.There are inherent limitations to scenario analysis and it is difficult to predict which,if any,of the scenarios might eventuate.Scenario analysis relies on assumptions that may or may not be,or prove to be,correct and that may or may not eventuate and scenarios may also be impacted by additional factors to the assumptions disclosed.Given these limitations we treat these scenarios as one of several inputs that we consider in our climate strategy.Due to the inherent uncertainty and limitations in measuring greenhouse gas(GHG)emissions and operational energy consumption under the calculation methodologies used in the preparation of such data,all CO2e emissions and operational energy consumption data or volume references(including,without limitation,ratios and/or percentages)in this document are estimates.GHG emissions calculation and reporting methodologies may change or be progressively refined over time resulting in the need to restate previously reported data.There may also be differences in the manner that third parties calculate or report such data compared to Glencore,which means that third-party data may not be comparable to Glencores data.For information on how we calculate our emissions and operational energy consumption data,see our latest Basis of Reporting,Climate Report and Extended ESG Data,which is available on our website.Sources Certain statistical and other information included in this document is sourced from publicly available third-party sources.This information has not been independently verified and presents the view of those third parties,and may not necessarily correspond to the views held by Glencore and Glencore expressly disclaims any responsibility for,or liability in respect of,and makes no representation or guarantee in relation to,such information(including,without limitation,as to its accuracy,completeness or whether it is current).Glencore cautions readers against reliance on any of the industry,market or other third-party data or information contained in this document.Information preparation In preparing this document,Glencore has made certain estimates and assumptions that may affect the information presented.Certain information is derived from management accounts,is unaudited and based on information Glencore has available to it at the time.Figures throughout this document are subject to rounding adjustments.The information presented is subject to change at any time without notice and we do not intend to update this information except as required.This document contains alternative performance measures which reflect how Glencores management assesses the performance of the Group,including results that exclude certain items included in our reported results.Further details and information needed to reconcile such information to our reported results can be found in the section of this report entitled Alternative Performance Measures.For further information on how we calculate certain non-financial metrics such as fatalities at our industrial operations,please refer to our latest Basis of Reporting,which is available on our website.Subject to any terms implied by law which cannot be excluded,Glencore accepts no responsibility for any loss,damage,cost or expense(whether direct or indirect)incurred by any person as a result of any error,omission or misrepresentation in information in this document.Other information The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities.In this document,“Glencore”,“Glencore group”and“Group”are used for convenience only where references are made to Glencore plc and its subsidiaries in general.These collective expressions are used for ease of reference only and do not imply any other relationship between the companies.Likewise,the words“we”,“us”and“our”are also used to refer collectively to members of the Group or to those who work for them.These expressions are also used where no useful purpose is served by identifying the particular company or companies.
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UNITED STATES SECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM 10-Q(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30,2024ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from toCommission file number 001-14905BERKSHIRE HATHAWAY INC.(Exact name of registrant as specified in its charter)Delaware47-0813844(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification Number)3555 Farnam Street,Omaha,Nebraska 68131(Address of principal executive office)(Zip Code)(402)346-1400(Registrants telephone number,including area code)(Former name,former address and former fiscal year,if changed since last report)Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbols Name of each exchange on which registered Class A Common StockClass B Common Stock0.000%Senior Notes due 20251.125%Senior Notes due 20272.150%Senior Notes due 20281.500%Senior Notes due 20302.000%Senior Notes due 20341.625%Senior Notes due 20352.375%Senior Notes due 20390.500%Senior Notes due 20412.625%Senior Notes due 2059BRK.ABRK.BBRK25BRK27BRK28BRK30BRK34BRK35BRK39BRK41BRK59New York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeNew York Stock ExchangeIndicate by check mark whether the Registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,smaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“accelerated filer,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the Exchange Act.Indicate by check mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No Number of shares of common stock outstanding as of July 23,2024:Class A 553,234Class B 1,325,192,5081BERKSHIRE HATHAWAY INC.Page No.Part I Financial Information Item 1.Financial Statements Consolidated Balance SheetsJune 30,2024 and December 31,20232 Consolidated Statements of EarningsSecond Quarter and First Six Months 2024 and 20234 Consolidated Statements of Comprehensive IncomeSecond Quarter and First Six Months 2024 and 20235 Consolidated Statements of Changes in Shareholders EquitySecond Quarter and First Six Months 2024 and 20235 Consolidated Statements of Cash FlowsFirst Six Months 2024 and 20236 Notes to Consolidated Financial Statements7Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations29Item 3.Quantitative and Qualitative Disclosures About Market Risk48Item 4.Controls and Procedures48Part II Other Information 48Item 1.Legal Proceedings48Item 1A.Risk Factors48Item 2.Unregistered Sales of Equity Securities and Use of Proceeds and Issuer Repurchases of Equity Securities49Item 3.Defaults Upon Senior Securities49Item 4.Mine Safety Disclosures49Item 5.Other Information49Item 6.Exhibits50Signature 50 2Part I Financial InformationItem 1.Financial StatementsBERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED BALANCE SHEETS(dollars in millions)June 30,2024December 31,2023(Unaudited)ASSETSInsurance and Other:Cash and cash equivalents*$36,884$33,672Short-term investments in U.S.Treasury Bills234,618129,619Investments in fixed maturity securities16,80223,758Investments in equity securities284,871353,842Equity method investments30,06529,066Loans and finance receivables26,08524,681Other receivables45,96744,174Inventories23,49824,159Property,plant and equipment22,14422,030Equipment held for lease17,41816,947Goodwill50,80050,868Other intangible assets28,78829,327Deferred charges-retroactive reinsurance9,0649,495Other20,62919,568 847,633811,206Railroad,Utilities and Energy:Cash and cash equivalents*5,4404,350Receivables6,5027,086Property,plant and equipment179,907177,616Goodwill33,61133,758Regulatory assets5,3925,565Other30,37530,397 261,227258,772$1,108,860$1,069,978*Includes U.S.Treasury Bills with maturities of three months or less when purchased of$4.1 billion at June 30,2024 and$4.8 billion at December 31,2023.See accompanying Notes to Consolidated Financial Statements3BERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED BALANCE SHEETS(dollars in millions)June 30,2024December 31,2023(Unaudited)LIABILITIES AND SHAREHOLDERS EQUITYInsurance and Other:Unpaid losses and loss adjustment expenses$112,804$111,082Unpaid losses and loss adjustment expenses-retroactive reinsurance contracts33,49434,647Unearned premiums32,18530,507Life,annuity and health insurance benefits17,50020,213Other policyholder liabilities10,71911,545Accounts payable,accruals and other liabilities32,40332,402Aircraft repurchase liabilities and unearned lease revenues8,4428,253Notes payable and other borrowings41,94042,692 289,487291,341Railroad,Utilities and Energy:Accounts payable,accruals and other liabilities21,19422,461Regulatory liabilities7,1066,818Notes payable and other borrowings81,68885,579 109,988114,858Income taxes,principally deferred101,41493,009Total liabilities500,889499,208Redeemable noncontrolling interests3,261Shareholders equity:Common stock88Capital in excess of par value34,99134,480Accumulated other comprehensive income(3,855)(3,763)Retained earnings650,273607,350Treasury stock,at cost(79,720)(76,802)Berkshire Hathaway shareholders equity601,697561,273Noncontrolling interests6,2746,236Total shareholders equity607,971567,509$1,108,860$1,069,978See accompanying Notes to Consolidated Financial Statements 4BERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED STATEMENTS OF EARNINGS(dollars in millions except per share amounts)(Unaudited)Second QuarterFirst Six Months2024202320242023Revenues:Insurance and Other:Insurance premiums earned$21,953$20,561$43,427$40,357Sales and service revenues38,89239,12676,36477,514Leasing revenues2,3082,0794,5304,123Interest,dividend and other investment income5,2493,8469,5547,075 68,40265,612133,875129,069Railroad,Utilities and Energy:Freight rail transportation revenues5,7205,80811,35711,809Utility and energy operating revenues18,04819,59335,73834,510Service revenues and other income1,4831,4902,5522,508 25,25126,89149,64748,827Total revenues93,65392,503183,522177,896Investment gains(losses)23,85733,06125,73367,819Costs and expenses:Insurance and Other:Insurance losses and loss adjustment expenses14,10714,08927,55528,310Life,annuity and health benefits9541,1281,8991,913Insurance underwriting expenses4,0463,7297,7997,316Cost of sales and services30,39130,62159,78660,940Cost of leasing1,7391,4573,4302,934Selling,general and administrative expenses5,1955,0059,96810,607Interest expense330314646642 56,76256,343111,083112,662Railroad,Utilities and Energy:Freight rail transportation expenses3,9124,0147,8508,175Utility and energy cost of sales and other expenses16,81918,15933,08732,005Other expenses1,2321,1892,2372,060Interest expense9009351,9001,825 22,86324,29745,07444,065Total costs and expenses79,62580,640156,157156,727Earnings before income taxes and equity method earnings37,88544,92453,09888,988Equity method earnings2525117451,199Earnings before income taxes38,13745,43553,84390,187Income tax expense7,6399,23610,51318,231Net earnings30,49836,19943,33071,956Earnings attributable to noncontrolling interests150287280540Net earnings attributable to Berkshire Hathaway shareholders$30,348$35,912$43,050$71,416Net earnings per average equivalent Class A share$21,122$24,775$29,936$49,152Net earnings per average equivalent Class B share*$14.08$16.52$19.96$32.77Average equivalent Class A shares outstanding1,436,7901,449,5421,438,0801,452,971Average equivalent Class B shares outstanding2,155,185,2832,174,313,6702,157,120,2092,179,456,816*Net earnings per average equivalent Class B share outstanding are equal to one-fifteen-hundredth of the equivalent Class A amount.See Note 19.See accompanying Notes to Consolidated Financial Statements 5BERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(dollars in millions)(Unaudited)Second QuarterFirst Six Months2024202320242023Net earnings$30,498$36,199$43,330$71,956Other comprehensive income:Unrealized gains(losses)on investments10(41)(25)206Applicable income taxes(3)213(32)Foreign currency translation(222)383(761)632Applicable income taxes(8)(21)(8)(15)Long-duration insurance contract discount rate changes508487859120Applicable income taxes(108)(125)(175)(49)Defined benefit pension plans(5)2152Applicable income taxes1(6)(1)(12)Other,net1757(13)(63)Other comprehensive income,net190757(120)839Comprehensive income30,68836,95643,21072,795Comprehensive income attributable to noncontrolling interests145308252567Comprehensive income attributable to Berkshire Hathaway shareholders$30,543$36,648$42,958$72,228CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS EQUITY(dollars in millions)(Unaudited)Berkshire Hathaway shareholders equityCommon stockand capital inexcess of parvalueAccumulatedothercomprehensiveincomeRetainedearningsTreasurystockNon-controllinginterestsTotalFor the second quarter and first six months of 2024Balance at December 31,2023$34,488$(3,763)$607,350$(76,802)$6,236$567,509Net earnings12,70213012,832Adoption of ASU 2023-02(127)(127)Other comprehensive income,net(287)(23)(310)Acquisitions of common stock(2,573)(2,573)Transactions with noncontrolling interests and other502(48)454Balance at March 31,2024$34,990$(4,050)$619,925$(79,375)$6,295$577,785Net earnings30,34815030,498Other comprehensive income,net195(5)190Acquisitions of common stock(345)(345)Transactions with noncontrolling interests and other9(166)(157)Balance at June 30,2024$34,999$(3,855)$650,273$(79,720)$6,274$607,971 For the second quarter and first six months of 2023Balance at December 31,2022$35,175$(5,052)$511,127$(67,826)$8,257$481,681Net earnings35,50425335,757Other comprehensive income,net76682Acquisitions of common stock(4,439)(4,439)Transactions with noncontrolling interests and other(11)7(4)Balance at March 31,2023$35,164$(4,976)$546,631$(72,265)$8,523$513,077Net earnings35,91228736,199Other comprehensive income,net73621757Acquisitions of common stock(1,303)(1,303)Transactions with noncontrolling interests and other(16)(163)(179)Balance at June 30,2023$35,148$(4,240)$582,543$(73,568)$8,668$548,551See accompanying Notes to Consolidated Financial Statements6BERKSHIRE HATHAWAY INC.and SubsidiariesCONSOLIDATED STATEMENTS OF CASH FLOWS(dollars in millions)(Unaudited)First Six Months20242023Cash flows from operating activities:Net earnings$43,330$71,956Adjustments to reconcile net earnings to operating cash flows:Investment(gains)losses(25,733)(67,819)Depreciation and amortization6,3666,147Other(5,474)(3,126)Changes in operating assets and liabilities:Unpaid losses and loss adjustment expenses690275Deferred charges-retroactive reinsurance431416Unearned premiums1,7352,492Receivables and originated loans(1,145)(1,194)Inventories456505Other assets(836)(980)Other liabilities(3,782)(2,721)Income taxes8,13015,176Net cash flows from operating activities24,16821,127Cash flows from investing activities:Purchases of equity securities(4,306)(7,442)Sales of equity securities97,12325,833Purchases of U.S.Treasury Bills and fixed maturity securities(229,505)(99,060)Sales of U.S.Treasury Bills and fixed maturity securities15,01839,991Redemptions and maturities of U.S.Treasury Bills and fixed maturity securities120,48059,815Acquisitions of businesses,net of cash acquired(342)(8,516)Purchases of property,plant and equipment and equipment held for lease(8,928)(8,398)Other(191)513Net cash flows from investing activities(10,651)2,736Cash flows from financing activities:Proceeds from borrowings of insurance and other businesses1,6921,225Repayments of borrowings of insurance and other businesses(1,172)(5,388)Proceeds from borrowings of railroad,utilities and energy businesses6,6172,788Repayments of borrowings of railroad,utilities and energy businesses(7,192)(2,187)Changes in short-term borrowings,net(3,161)582Acquisitions of treasury stock(2,918)(5,850)Other,principally transactions with noncontrolling interests(2,814)(803)Net cash flows from financing activities(8,948)(9,633)Effects of foreign currency exchange rate changes(141)24Increase(decrease)in cash and cash equivalents and restricted cash4,42814,254Cash and cash equivalents and restricted cash at the beginning of the year*38,64336,399Cash and cash equivalents and restricted cash at the end of the second quarter*$43,071$50,653*Cash and cash equivalents and restricted cash are comprised of:Beginning of the yearInsurance and Other$33,672$32,260Railroad,Utilities and Energy4,3503,551Restricted cash included in other assets621588$38,643$36,399End of the second quarterInsurance and Other$36,884$44,611Railroad,Utilities and Energy5,4405,444Restricted cash included in other assets747598$43,071$50,653See accompanying Notes to Consolidated Financial Statements 7BERKSHIRE HATHAWAY INC.and SubsidiariesNOTES TO CONSOLIDATED FINANCIAL STATEMENTSJune 30,2024Note 1.General The accompanying unaudited Consolidated Financial Statements include the accounts of Berkshire Hathaway Inc.(“Berkshire”or“Company”)consolidated with the accounts of all its subsidiaries and affiliates in which Berkshire holds controlling financial interests as of the financial statement date.In these notes,the terms“us,”“we”or“our”refer to Berkshire and its consolidated subsidiaries.Reference is made to Berkshires most recently issued Annual Report on Form 10-K(“Annual Report”),which includes information necessary or useful to understanding Berkshires businesses and financial statement presentations.Our significant accounting policies and practices were presented as Note 1 to the Consolidated Financial Statements included in the Annual Report.Financial information in this Quarterly Report reflects all adjustments that are,in the opinion of management,necessary to a fair statement of results for the interim periods in accordance with accounting principles generally accepted in the United States(“GAAP”).For several reasons,our results for interim periods may not be indicative of results to be expected for the year.The timing and magnitude of catastrophe losses incurred by insurance subsidiaries and the estimation error inherent to the process of determining liabilities for unpaid losses of insurance subsidiaries can be more significant to results of interim periods than to results for a full year.Given the size of our equity security investment portfolio,changes in market prices and the related changes in unrealized gains and losses on equity securities will produce significant volatility in our interim and annual earnings.In addition,gains and losses from the periodic revaluation of certain assets and liabilities denominated in foreign currencies and asset impairment charges may cause significant variations in periodic net earnings.Significant estimates are used in the preparation of our Consolidated Financial Statements,including those associated with evaluations of certain long-lived assets,goodwill and other intangible assets for impairment,expected credit losses on amounts owed to us and the estimation of certain losses assumed under insurance and reinsurance contracts.These estimates may be subject to significant adjustments in future periods due to ongoing macroeconomic and geopolitical events,as well as changes in industry or company-specific factors or events.Note 2.New accounting pronouncements In March 2023,the Financial Accounting Standards Board(“FASB”)issued Accounting Standards Update 2023-02,“Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method”(“ASU 2023-02”).ASU 2023-02 permits reporting entities to elect to account for tax equity investments from which the income tax credits are received using the proportional amortization method at the program level if certain conditions are met.We elected to apply the proportional accounting method to eligible affordable housing tax credit investments using the modified retrospective method.We recorded a charge to retained earnings of$127 million,representing the cumulative effect of applying the proportional method to these investments as of January 1,2024.In November 2023,the FASB issued Accounting Standards Update 2023-07,“Improvements to Reportable Segment Disclosures”(“ASU 2023-07”),which requires disclosures of significant expenses by segment and interim disclosure of certain items that were previously required only on an annual basis.ASU 2023-07 is to be applied on a retrospective basis and is effective for our 2024 annual Consolidated Financial Statements and interim periods beginning in 2025.In December 2023,the FASB issued Accounting Standards Update 2023-09,“Improvements to Income Tax Disclosures”(“ASU 2023-09”),which provides for additional income tax rate reconciliation and income taxes paid disclosures.ASU 2023-09 may be adopted on a prospective or retrospective basis and is effective for fiscal years beginning after December 15,2024,with early adoption permitted.On March 6,2024,the U.S.Securities Exchange Commission(“SEC”)issued Release No.33-11275 and No.34-99678“The Enhancement and Standardization of Climate-Related Disclosures for Investors”(“Climate Disclosure Rules”).Among its provisions,the Climate Disclosure Rules will require certain disclosures related to severe weather events and other natural conditions,and other disclosures about climate-related risks that materially impacted or are reasonably likely to materially impact the business strategy,results of operations or financial condition of the registrant.The Climate Disclosure Rules are currently effective for large-accelerated SEC filers in annual reports for years beginning on or after January 1,2025.However,on April 4,2024,the SEC stayed implementation of the Climate Disclosure Rules,pending the completion of judicial review.We are evaluating the impacts ASUs 2023-07 and 2023-09 and the Climate Disclosure Rules will have on disclosures in our Consolidated Financial Statements.8Notes to Consolidated Financial Statements Note 3.Significant business acquisitions Our long-held acquisition strategy is to acquire businesses that have consistent earning power,good returns on equity and able and honest management.Financial results attributable to business acquisitions are included in our Consolidated Financial Statements beginning on their respective acquisition dates.On January 31,2023,we acquired an additional 41.4%interest in Pilot Travel Centers,LLC(“Pilot”)for approximately$8.2 billion.The acquisition increased our interest to 80%,representing a controlling interest in Pilot for financial reporting purposes as of that date.Accordingly,we began consolidating Pilots financial statements in our Consolidated Financial Statements on February 1,2023.Prior to that date,we accounted for our 38.6%interest in Pilot under the equity method.Pilot operates more than 650 travel center and 75 fuel-only locations across 44 U.S.states and five Canadian provinces,primarily under the names Pilot or Flying J,as well as large wholesale fuel and fuel marketing businesses in the U.S.Pilot also sells diesel fuel at other locations in the U.S.and Canada through various arrangements with third party travel centers and operates a water disposal business in the oil fields sector.Since Pilots most significant business activities involve purchasing and selling fuel(energy)on a wholesale and retail basis,and other energy-related businesses,we include Pilot within the railroad,utilities and energy sections of our Consolidated Balance Sheets and Consolidated Statements of Earnings.In applying the acquisition method of accounting,we remeasured our previously held 38.6%investment in Pilot to fair value as of the acquisition date.We recognized a one-time,non-cash remeasurement gain of approximately$3.0 billion in the first quarter of 2023,representing the excess of the fair value of that interest over the carrying value under the equity method.In January 2024,we acquired the remaining noncontrolling interests in Pilot for$2.6 billion,increasing our ownership of Pilot to 100%.The acquisition of a noncontrolling interest represents an equity transaction and we recorded an increase of$517 million to capital in excess of par for the excess of the carrying value of the noncontrolling interest acquired over the consideration paid,net of deferred income tax liabilities arising from the transaction.A summary of the values of Pilots assets acquired,liabilities assumed and noncontrolling interests as of January 31,2023 follows(in millions).Assets acquiredLiabilities assumed and noncontrolling interestsProperty,plant and equipment$8,015 Notes payable$5,876Goodwill*6,605 Other liabilities4,918Other intangible assets6,853 Liabilities assumed10,794Other assets7,047 Noncontrolling interests,predominantly redeemable3,361 Liabilities assumed and noncontrolling interests$14,155Assets acquired$28,520 Net assets$14,365*Goodwill from this acquisition is expected to be deductible for income tax purposes.Note 4.Investments in fixed maturity securities Investments in fixed maturity securities are summarized as follows(in millions).AmortizedCostUnrealizedGainsUnrealizedLossesFairValueJune 30,2024U.S.Treasury,U.S.government corporations and agencies$4,773$3$(13)$4,763Foreign governments10,43031(42)10,419Corporate bonds1,180211(5)1,386Other22017(3)234$16,603$262$(63)$16,802December 31,2023U.S.Treasury,U.S.government corporations and agencies$10,308$14$(53)$10,269Foreign governments11,78858(41)11,805Corporate bonds1,212241(4)1,449Other21721(3)235$23,525$334$(101)$23,7589Notes to Consolidated Financial StatementsNote 4.Investments in fixed maturity securities As of June 30,2024,approximately 94%of our foreign government holdings were rated AA or higher by at least one of the major rating agencies.The amortized cost and estimated fair value of fixed maturity securities at June 30,2024 are summarized below by contractual maturity dates(in millions).Actual maturities may differ from contractual maturities due to prepayment rights held by issuers.Due in oneyear or lessDue after one year throughfive yearsDue after five years throughten yearsDue afterten yearsMortgage-backedsecuritiesTotalAmortized cost$11,002$4,754$577$129$141$16,603Fair value10,9904,75676613915116,802Note 5.Investments in equity securities Investments in equity securities are summarized as follows(in millions).Cost BasisNet Unrealized GainsFair ValueJune 30,2024*Banks,insurance and finance$28,585$66,341$94,926Consumer products14,86298,407113,269Commercial,industrial and other45,00631,67076,676$88,453$196,418$284,871*Approximately 72%of the aggregate fair value was concentrated in five companies(American Express Company$35.1 billion;Apple Inc.$84.2 billion;Bank of America Corporation$41.1 billion;The Coca-Cola Company$25.5 billion and Chevron Corporation$18.6 billion).Cost BasisNet Unrealized GainsFair ValueDecember 31,2023*Banks,insurance and finance$27,136$51,176$78,312Consumer products34,248166,895201,143Commercial,industrial and other48,03226,35574,387$109,416$244,426$353,842*Approximately 79%of the aggregate fair value was concentrated in five companies(American Express Company$28.4 billion;Apple Inc.$174.3 billion;Bank of America Corporation$34.8 billion;The Coca-Cola Company$23.6 billion and Chevron Corporation$18.8 billion).In 2019,we invested$10 billion in non-voting Cumulative Perpetual Preferred Stock of Occidental Petroleum Corporation(“Occidental”)and in Occidental common stock warrants.During 2022,we began acquiring common stock of Occidental.Our aggregate voting interest in Occidental common stock exceeded 20%on August 4,2022,and we adopted the equity method as of that date.See Note 6.Our investments in the Occidental preferred stock and Occidental common stock warrants are recorded at fair value within Commercial,industrial and other in the tables above.Such investments are not in-substance common stock under GAAP and are not eligible for the equity method.The Occidental preferred stock accrues dividends at 8%per annum and is redeemable at the option of Occidental commencing in 2029 at a redemption price equal to 105%of the liquidation value,plus any accumulated and unpaid dividends.As of June 30,2024,our investment in Occidental preferred stock had an aggregate liquidation value of approximately$8.5 billion,which reflected mandatory redemptions by Occidental during 2023 of approximately$1.5 billion.The Occidental common stock warrants allow us to purchase up to 83.86 million shares of Occidental common stock at an exercise price of$59.62 per share.The warrants are exercisable in whole or in part until one year after the date the preferred stock is fully redeemed.On June 30,2024,we owned 151.6 million shares of American Express Company(“American Express”)common stock representing 21.3%of its outstanding common stock.Since 1995,we have been party to an agreement with American Express whereby we agreed to vote a significant portion of our shares in accordance with the recommendations of the American Express Board of Directors.We have also agreed to passivity commitments as requested by the Board of Governors of the Federal Reserve System,which collectively,in our judgment,restrict our ability to exercise significant influence over the operating and financial policies of American Express.Accordingly,we do not use the equity method with respect to our investment in American Express common stock,and we continue to record our investment at fair value.10Notes to Consolidated Financial StatementsNote 6.Equity method investments Berkshire and its subsidiaries hold investments in certain businesses that are accounted for pursuant to the equity method.Currently,the most significant of these are our investments in the common stock of The Kraft Heinz Company(“Kraft Heinz”)and Occidental.As of June 30,2024,we owned 26.9%of the outstanding Kraft Heinz common stock and 28.8%of the outstanding Occidental common stock,which excludes the potential effect of the exercise of the Occidental common stock warrants.Kraft Heinz manufactures and markets food and beverage products,including condiments and sauces,cheese and dairy,meals,meats,refreshment beverages,coffee and other grocery products.Occidental is an international energy company,whose activities include oil and natural gas exploration,development and production and chemicals manufacturing businesses.Occidentals financial information is not available in time for concurrent reporting in our Consolidated Financial Statements.Therefore,we report the equity method effects for Occidental on a one-quarter lag.Kraft Heinz and Occidental common stocks are publicly traded.The fair values and our carrying values of these investments are included in the following table(in millions).Carrying ValueFair ValueJune 30,2024December 31,2023June 30,2024December 31,2023Kraft Heinz$13,161$13,230$10,486$12,035Occidental16,45515,41016,09014,552Other449426$30,065$29,066As of June 30,2024,the excess of the carrying values over the fair values of our investments in Kraft Heinz and Occidental was 20%and 2%,respectively,of the carrying values of each investment.We evaluated these investments for other-than-temporary impairment as of June 30,2024.We considered our ability and intent to hold the investment until the fair value exceeds carrying value,the magnitude and duration of the decline in fair value,the operating results of the company,as well as other factors.Based on the prevailing facts and circumstances,we concluded the recognition of an impairment charge in earnings was not required.We also own a 50%interest in Berkadia Commercial Mortgage LLC(“Berkadia”),which is accounted for under the equity method and is included in other in the preceding table.Jefferies Financial Group Inc.(“Jefferies”)owns the other 50%interest.Berkadia engages in mortgage banking,investment sales and servicing of commercial/multi-family real estate loans.Berkadias commercial paper borrowing capacity(currently limited to$1.5 billion)is supported by a surety policy issued by a Berkshire insurance subsidiary.Jefferies is obligated to indemnify us for one-half of any losses incurred under the policy.As of June 30,2024,the carrying values of our investments in Kraft Heinz and Berkadia approximated our share of shareowners equity of each of these entities.The carrying value of our investment in Occidental common stock exceeded our share of its shareholders equity as of March 31,2024 by approximately$10 billion.Based upon the limited information available to us,we concluded the excess represents goodwill.Our earnings and distributions received from equity method investments are summarized in the following table(in millions).As previously described,on February 1,2023,we ceased accounting for Pilot under the equity method.Equity method earnings attributable to Pilot were$105 million for the month ending January 31,2023.The earnings we recorded in the first six months of 2024 and 2023 for Occidental represented our share of its earnings for the six months ending March 31,2024 and 2023,respectively.Equity in EarningsDistributions ReceivedSecond QuarterFirst Six MonthsSecond QuarterFirst Six Months20242023202420232024202320242023Kraft Heinz$27$265$242$487$130$130$260$260Occidental20023446360455369661Other25124010814211821$252$511$745$1,199$199$187$374$34211Notes to Consolidated Financial Statements Note 6.Equity method investments Summarized consolidated financial information of Kraft Heinz follows(in millions).June 29,2024December 30,2023Assets$88,797$90,339Liabilities39,76640,617Second QuarterFirst Six Months2024202320242023Sales$6,476$6,721$12,887$13,210Net earnings attributable to Kraft Heinz common shareholders1021,0009031,836Summarized consolidated financial information of Occidental follows(in millions).March 31,2024September 30,2023Assets$74,277$71,287Liabilities43,31042,515Quarter ending March 31,Six months ending March 31,2024202320242023Total revenues and other income$6,010$7,258$13,539$15,584Net earnings attributable to Occidental common shareholders7189831,7472,710Note 7.Investment gains(losses)Investment gains(losses)in the second quarter and first six months of 2024 and 2023 are summarized as follows(in millions).Second QuarterFirst Six Months2024202320242023Investment gains(losses):Equity securities:Change in unrealized investment gains(losses)during the period on securities held at the end of the period$17,252$33,046$29,711$63,763Investment gains(losses)on securities sold during the period6,63331(3,948)1,001 23,88533,07725,76364,764Fixed maturity securities:Gross realized gains1814132Gross realized losses(28)(25)(40)(77)Other(1)1(4)3,000$23,857$33,061$25,733$67,819Equity securities gains and losses include unrealized gains and losses from changes in fair values during the period on equity securities we still own,as well as gains and losses on securities we sold during the period.Our proceeds from sales of equity securities were approximately$97.1 billion in the first six months of 2024 and$25.8 billion in 2023.In the preceding table,investment gains and losses on equity securities sold during the period represent the difference between the sales proceeds and the fair value of the equity securities sold at the beginning of the applicable period or,if later,the acquisition date.Taxable gains and losses on equity securities sold are generally the difference between the proceeds from sales and cost.Our sales of equity securities produced taxable gains of$59.6 billion in the second quarter and$73.7 billion in the first six months of 2024 compared to taxable gains of$2.4 billion in the second quarter and$4.6 billion in the first six months of 2023.Other investment gains in the first six months of 2023 included a non-cash gain of approximately$3.0 billion from the remeasurement of our pre-existing 38.6%interest in Pilot through the application of acquisition accounting under GAAP.12Notes to Consolidated Financial Statements Note 8.Loans and finance receivables Loans and finance receivables are summarized as follows(in millions).June 30,2024December 31,2023Loans and finance receivables,before allowances and discounts$27,792$26,289Allowances for credit losses(1,015)(950)Unamortized acquisition discounts and points(692)(658)$26,085$24,681Loans and finance receivables are principally manufactured home loans,and to a lesser extent,commercial loans and site-built home loans.Reconciliations of the allowance for credit losses on loans and finance receivables for the first six months of 2024 and 2023 follow(in millions).First Six Months20242023Balance at the beginning of the year$950$856Provision for credit losses11690Charge-offs,net of recoveries(51)(34)Balance at June 30$1,015$912As of June 30,2024,substantially all manufactured and site-built home loans were evaluated collectively for impairment,and we considered approximately 96%of these loans to be current as to payment status.A summary of performing and non-performing home loans before discounts and allowances by year of loan origination as of June 30,2024 follows(in millions).Origination Year 20242023202220212020PriorTotalPerforming$3,479$5,207$3,814$3,189$2,468$8,715$26,872Non-performing2681084377$3,481$5,213$3,822$3,199$2,476$8,758$26,949We also hold a limited number of commercial loans originated or acquired several years ago.The aggregate carrying value of these loans approximated$725 million at June 30,2024 and$850 million at December 31,2023.The loans are generally secured by real estate properties or by other assets and are individually evaluated for expected credit losses.Note 9.Other receivables Other receivables are comprised of the following(in millions).June 30,2024December 31,2023Insurance and other:Insurance premiums receivable$19,841$19,052Reinsurance recoverables5,2537,060Trade receivables15,56814,449Other5,9794,269Allowances for credit losses(674)(656)$45,967$44,174Railroad,utilities and energy:Trade receivables$5,809$6,034Other8531,228Allowances for credit losses(160)(176)$6,502$7,086Aggregate provisions for credit losses in the first six months with respect to receivables in the preceding table were$233 million in 2024 and$278 million in 2023.Charge-offs,net of recoveries,in the first six months were$230 million in 2024 and$280 million in 2023.13Notes to Consolidated Financial Statements Note 10.InventoriesInventories of our insurance and other businesses are comprised of the following(in millions).June 30,2024December 31,2023Raw materials$5,775$6,026Work in process and other3,4403,345Finished manufactured goods5,0604,969Goods acquired for resale9,2239,819$23,498$24,159Inventories,materials and supplies of our railroad,utilities and energy businesses are included in other assets and were approximately$4.3 billion at June 30,2024 and$4.2 billion as of December 31,2023.Note 11.Property,plant and equipment A summary of property,plant and equipment of our insurance and other businesses follows(in millions).June 30,2024December 31,2023Land,buildings and improvements$15,277$15,058Machinery and equipment28,48328,010Furniture,fixtures and other5,6855,566 49,44548,634Accumulated depreciation(27,301)(26,604)$22,144$22,030A summary of property,plant and equipment of our railroad and utilities and energy businesses follows(in millions).The utility generation,transmission and distribution systems and interstate natural gas pipeline assets are owned by regulated public utility and natural gas pipeline subsidiaries.June 30,2024December 31,2023Railroad:Land,track structure and other roadway$72,725$71,692Locomotives,freight cars and other equipment16,46116,256Construction in progress1,8631,715 91,04989,663Accumulated depreciation(20,401)(19,464)70,64870,199Utilities and energy:Utility generation,transmission and distribution systems97,68296,195Interstate natural gas pipeline assets19,60319,226Independent power plants and other14,89114,781Land,buildings and improvements4,7194,540Machinery,equipment and other4,0403,855Construction in progress10,8499,551 151,784148,148Accumulated depreciation(42,525)(40,731)109,259107,417$179,907$177,616Depreciation expense for the first six months of 2024 and 2023 is summarized below(in millions).First Six Months20242023Insurance and other$1,226$1,158Railroad,utilities and energy3,5533,494$4,779$4,65214Notes to Consolidated Financial Statements Note 12.Equipment held for lease Equipment held for lease includes railcars,aircraft and other equipment,including over-the-road trailers,intermodal tank containers,cranes,storage units and furniture.Equipment held for lease is summarized below(in millions).June 30,2024December 31,2023Railcars$10,148$10,031Aircraft13,34012,537Other5,6835,576 29,17128,144Accumulated depreciation(11,753)(11,197)$17,418$16,947Depreciation expense for equipment held for lease in the first six months was$695 million in 2024 and$623 million in 2023.Fixed and variable operating lease revenues for the second quarter and first six months of 2024 and 2023 are summarized below(in millions).Second QuarterFirst Six Months2024202320242023Fixed lease revenue$1,612$1,478$3,164$2,895Variable lease revenue6966011,3661,228$2,308$2,079$4,530$4,123Note 13.Goodwill and other intangible assets Reconciliations of the changes in the carrying value of goodwill for the first six months of 2024 and for the year ended December 31,2023 follow(in millions).June 30,2024December 31,2023Balance at the beginning of the year$84,626$78,119Business acquisitions107,347Other,including acquisition period remeasurements and foreign currency translation(225)(840)Balance at the end of the period*$84,411$84,626*Net of accumulated goodwill impairments of$11.1 billion as of June 30,2024 and December 31,2023.Other intangible assets are summarized below(in millions).June 30,2024December 31,2023GrosscarryingamountAccumulatedamortizationNetcarryingvalueGrosscarryingamountAccumulatedamortizationNetcarryingvalueInsurance and other:Customer relationships$28,274$8,214$20,060$28,305$7,901$20,404Trademarks and trade names5,6258594,7665,6198464,773Patents and technology5,3544,2941,0605,2384,1091,129Other4,7651,8632,9024,8261,8053,021$44,018$15,230$28,788$43,988$14,661$29,327Railroad,utilities and energy:Customer relationships and contracts$4,093$920$3,173$4,092$791$3,301Trademarks and trade names3,5921613,4313,592983,494Other1,1732099641,1741561,018$8,858$1,290$7,568$8,858$1,045$7,813Other intangible assets of the railroad,utilities and energy businesses are included in other assets.Intangible asset amortization expense in the first six months was$892 million in 2024 and$872 million in 2023.Intangible assets with indefinite lives were$18.9 billion as of June 30,2024 and December 31,2023 and primarily related to certain customer relationships and trademarks and trade names.15Notes to Consolidated Financial Statements Note 14.Unpaid losses and loss adjustment expenses Reconciliations of the changes in unpaid losses and loss adjustment expenses(“claim liabilities”),excluding liabilities under retroactive reinsurance contracts(see Note 15),for each of the six-month periods ended June 30,2024 and 2023 follow(in millions).20242023Balance at the beginning of the year:Gross liabilities$111,082$107,472Reinsurance recoverable on unpaid losses(4,893)(5,025)Net liabilities106,189102,447Incurred losses and loss adjustment expenses:Current accident year28,35929,827Prior accident years(1,167)(1,948)Total27,19227,879Paid losses and loss adjustment expenses:Current accident year(9,491)(9,968)Prior accident years(15,626)(16,664)Total(25,117)(26,632)Foreign currency effect(110)267Balance at June 30:Net liabilities108,154103,961Reinsurance recoverable on unpaid losses4,6505,069Gross liabilities$112,804$109,030Our claim liabilities under property and casualty insurance and reinsurance contracts are based upon estimates of the ultimate claim costs associated with claim occurrences as of the balance sheet date and include estimates for incurred-but-not-reported(“IBNR”)claims.Incurred losses and loss adjustment expenses related to insured events occurring in the current year(“current accident year”)and events occurring in all prior years(“prior accident years”).Incurred and paid losses and loss adjustment expenses are net of reinsurance recoveries.We recorded net reductions of estimated ultimate liabilities for prior accident years of$1.2 billion in the first six months of 2024 and$1.9 billion in 2023,which produced corresponding reductions in incurred losses and loss adjustment expenses in those periods.These reductions,as percentages of the net liabilities at the beginning of each year,were 1.1%in 2024 and 1.9%in 2023.Ultimate liabilities for prior accident years of primary insurance businesses in the first six months were reduced$433 million in 2024 and$1.1 billion in 2023,primarily attributable to lower than expected private passenger auto and medical professional liability losses.In the first six months,ultimate liabilities for prior accident years of property and casualty reinsurance businesses were reduced$734 million in 2024,primarily attributable to lower than expected property losses,and$883 million in 2023,from lower than expected property and casualty losses.16Notes to Consolidated Financial Statements Note 15.Retroactive reinsurance contracts Retroactive reinsurance policies provide indemnification of losses and loss adjustment expenses of short-duration insurance contracts with respect to underlying loss events that occurred prior to the contract inception date and may include significant levels of asbestos,environmental and other mass tort claims.Retroactive reinsurance contracts are generally subject to aggregate policy limits and thus,our exposure to such claims under these contracts is likewise limited.Reconciliations of the changes in estimated liabilities for retroactive reinsurance unpaid losses and loss adjustment expenses for each of the six-month periods ended June 30,2024 and 2023 follow(in millions).20242023Balance at the beginning of the year$34,647$35,415Incurred losses and loss adjustment expenses:Current contract year51Prior contract years(119)15Total(68)15Paid losses and loss adjustment expenses(1,066)(1,033)Foreign currency effect(19)24Balance at June 30$33,494$34,421 Incurred losses and loss adjustment expenses$(68)$15Deferred charge amortization and adjustments431416Incurred losses and loss adjustment expenses included in the Consolidated Statements of Earnings$363$431In the preceding table,the classification of incurred losses and loss adjustment expenses is based on the inception dates of the contracts,which reflect when our exposure to losses began.Incurred losses and loss adjustment expenses in the Consolidated Statements of Earnings include changes in estimated liabilities and related deferred charge asset amortization and adjustments arising from the changes in estimated timing and amount of future loss payments.Unamortized deferred charges on retroactive reinsurance contracts were$9.1 billion at June 30,2024 and$9.5 billion at December 31,2023.Note 16.Long-duration insurance contractsA summary of our long-duration life,annuity and health insurance benefits liabilities as of June 30,2024 and 2023,disaggregated for our two primary product categories,periodic payment annuity and life and health insurance,follows.Other liabilities include incurred-but-not reported claims and claims in the course of settlement.Amounts are in millions.June 30,20242023Periodic payment annuity$10,378$10,820Life and health4,1675,523Other2,9553,292$17,500$19,63517Notes to Consolidated Financial Statements Note 16.Long-duration insurance contractsReconciliations of periodic payment annuity and life and health insurance benefits liabilities for the first six months of 2024 and 2023 follow(in millions).The information reflects the changes in discounted present values of expected future policy benefits and expected future net premiums before reinsurance ceded.Net premiums represent the portion of expected gross premiums that are required to provide for future policy benefits and variable expenses.Periodic payment annuityLife and health2024202320242023Expected future policy benefits:Balance at the beginning of the year$11,212$10,640$52,665$52,008Balance at the beginning of the year-original discount rates11,68111,54965,87163,584Effect of cash flow assumption changes(324)10Effect of actual versus expected experience42(12,836)(411)Change in benefits,net(235)(230)(943)(1,346)Interest accrual273266575852Foreign currency effect1583(459)100Balance at June 30-original discount rates11,73811,67051,88462,789Effect of changes in discount rate assumptions(1,360)(850)(12,739)(12,741)Balance at June 30$10,378$10,820$39,145$50,048Expected future net premiums:Balance at the beginning of the year$46,916$46,129Balance at the beginning of the year-original discount rates58,73156,535Effect of cash flow assumption changes(326)18Effect of actual versus expected experience(11,225)(251)Change in premiums,net(876)(1,222)Interest accrual507745Foreign currency effect(436)83Balance at June 30-original discount rates46,37555,908Effect of changes in discount rate assumptions(11,397)(11,383)Balance at June 30$34,978$44,525Liabilities for future policy benefits:Balance at June 30$10,378$10,820$4,167$5,523Reinsurance recoverables(49)(1,549)Balance at June 30,net of reinsurance recoverables$10,378$10,820$4,118$3,974Liabilities for future life and health policy benefits and reinsurance recoverables declined in the first six months of 2024,primarily attributable to the commutations of certain life reinsurance contracts.The impacts of these contract commutations on expected future policy benefits and future net premiums were reflected in effects of actual versus expected experience.18Notes to Consolidated Financial Statements Note 16.Long-duration insurance contracts Other information relating to our long-duration insurance liabilities as of June 30,2024 and 2023 follows(dollars in millions).Periodic payment annuityLife and health2024202320242023Undiscounted expected future gross premiums$94,942$108,089Discounted expected future gross premiums55,78765,599Undiscounted expected future benefits30,86731,23286,253103,012Weighted average discount rate5.7%5.3%5.2%5.0%Weighted average accretion rate4.8%4.8%2.7%3.3%Weighted average duration16 years18 years13 years14 yearsGross premiums earned and interest expense before reinsurance ceded for the first six months of 2024 and 2023 were as follows(in millions).Gross premiumsInterest expense2024202320242023Periodic payment annuity$273$266Life and health1,8701,64468107Note 17.Notes payable and other borrowings Notes payable and other borrowings of our insurance and other businesses are summarized below(dollars in millions).The weighted average interest rates and maturity date ranges are based on borrowings as of June 30,2024.WeightedAverageInterest RateJune 30,2024December 31,2023Insurance and other:Berkshire Hathaway Inc.(“Berkshire”):U.S.Dollar denominated due 2025-20473.5%$3,745$3,740Euro denominated due 2025-20411.1%4,8956,145Japanese Yen denominated due 2024-20600.9%9,4318,896Berkshire Hathaway Finance Corporation(“BHFC”):U.S.Dollar denominated due 2027-20523.6,46614,463Great Britain Pound denominated due 2039-20592.5%2,1772,191Euro denominated due 2030-20341.8%1,3341,374Other subsidiary borrowings due 2024-20514.5%4,6234,696Subsidiary short-term borrowings7.2%1,2691,187$41,940$42,69219Notes to Consolidated Financial Statements Note 17.Notes payable and other borrowings Berkshire parent company borrowings consist of senior unsecured debt.In the first six months of 2024,Berkshire repaid approximately$1.1 billion of maturing senior notes.In April 2024,Berkshire issued 263.3 billion(approximately$1.7 billion)of senior notes with interest rates ranging from 0.974%to 2.498%and maturity dates ranging from 2027 to 2054.Borrowings of BHFC,a wholly-owned finance subsidiary of Berkshire,consist of senior unsecured notes used to fund manufactured housing loans originated or acquired and equipment held for lease of certain subsidiaries.BHFC borrowings are fully and unconditionally guaranteed by Berkshire.Berkshire also guarantees certain debt of other subsidiaries,aggregating approximately$2.7 billion at June 30,2024.Generally,Berkshires guarantee of a subsidiarys debt obligation is an absolute,unconditional and irrevocable guarantee for the full and prompt payment when due of all payment obligations.The carrying values of Berkshire and BHFC non-U.S.Dollar denominated senior notes(5.85 billion,1.75 billion and 1,522 billion par at June 30,2024)reflect the applicable exchange rates as of each balance sheet date.The effects of changes in foreign currency exchange rates during the period are recorded in earnings as a component of selling,general and administrative expenses.Changes in the exchange rates produced pre-tax gains of$588 million in the second quarter and$1.4 billion in the first six months of 2024 and$555 million in the second quarter and$529 million in the first six months of 2023.Notes payable and other borrowings of our railroad,utilities and energy businesses are summarized below(dollars in millions).The weighted average interest rates and maturity date ranges are based on borrowings as of June 30,2024.WeightedAverageInterest RateJune 30,2024December 31,2023Railroad,utilities and energy:Berkshire Hathaway Energy Company(“BHE”)and subsidiaries:BHE senior unsecured debt due 2025-20534.4%$13,104$13,101Subsidiary and other debt due 2024-20644.6C,36739,072Short-term borrowings6.254,148Pilot Travel Centers(“Pilot”)and subsidiaries5,776Burlington Northern Santa Fe(“BNSF”)and subsidiaries due 2024-20974.7$,23223,482$81,688$85,579BHE subsidiary debt represents amounts issued pursuant to separate financing agreements.Substantially all of the assets of certain BHE subsidiaries are,or may be,pledged or encumbered to support or otherwise secure such debt.These borrowing arrangements generally contain various covenants,including covenants which pertain to leverage ratios,interest coverage ratios and/or debt service coverage ratios.In the first six months of 2024,BHE subsidiaries issued$5.4 billion of term debt with a weighted average interest rate of 5.4%and maturity dates ranging from 2029 to 2055 and BHE and its subsidiaries repaid term debt and short-term borrowings aggregating approximately$4.0 billion.As of December 31,2023,Pilots borrowings primarily represented secured syndicated loans.In March,2024,certain Berkshire insurance subsidiaries loaned$5.7 billion to Pilot,which Pilot used to prepay its then outstanding third-party borrowings.BNSFs borrowings are primarily senior unsecured debentures.In the second quarter of 2024,BNSF issued$1.3 billion of 5.5bentures due in 2055 and repaid$500 million of maturing debentures.As of June 30,2024,BHE,BNSF and their subsidiaries were in compliance with all applicable debt covenants.Berkshire does not guarantee any debt,borrowings or lines of credit of BHE,BNSF or their subsidiaries.Unused lines of credit and commercial paper capacity to support operations and provide additional liquidity for our subsidiaries were approximately$11.3 billion at June 30,2024,of which approximately$10.1 billion related to BHE and its subsidiaries.20Notes to Consolidated Financial Statements Note 18.Fair value measurements Our financial assets and liabilities are summarized below,with fair values shown according to the fair value hierarchy(in millions).The carrying values of cash and cash equivalents,U.S.Treasury Bills,other receivables and accounts payable,accruals and other liabilities are considered to be reasonable estimates of or otherwise approximate the fair values.CarryingValueFair ValueLevel 1Level 2Level 3June 30,2024Investments in fixed maturity securities:U.S.Treasury,U.S.government corporations and agencies$4,763$4,763$4,729$34$Foreign governments10,41910,41910,197222Corporate bonds1,3861,386841545Other234234234Investments in equity securities284,871284,871274,5021010,359Investments in Kraft Heinz&Occidental common stock29,61626,57626,576Loans and finance receivables26,08525,55582424,731Derivative contract assets(1)2412413918418Derivative contract liabilities(1)2812812138141Notes payable and other borrowings:Insurance and other41,94037,20437,17925Railroad,utilities and energy81,68874,06974,069December 31,2023Investments in fixed maturity securities:U.S.Treasury,U.S.government corporations and agencies$10,269$10,269$10,234$35$Foreign governments11,80511,80511,559246Corporate bonds1,4491,449860589Other235235235Investments in equity securities353,842353,842343,3581010,474Investments in Kraft Heinz&Occidental common stock28,64026,58726,587Loans and finance receivables24,68124,19089223,298Derivative contract assets(1)3343343928213Derivative contract liabilities(1)213213711195Notes payable and other borrowings:Insurance and other42,69239,18439,15331Railroad,utilities and energy85,57981,03681,036(1)Assets are included in other assets and liabilities are included in accounts payable,accruals and other liabilities.The fair values of substantially all of our financial instruments were measured using market or income approaches.The hierarchy for measuring fair value consists of Levels 1 through 3,which are described below.Level 1 Inputs represent unadjusted quoted prices for identical assets or liabilities exchanged in active markets.Level 2 Inputs include directly or indirectly observable inputs(other than Level 1 inputs)such as quoted prices for similar assets or liabilities exchanged in active or inactive markets;quoted prices for identical assets or liabilities exchanged in inactive markets;other inputs that may be considered in fair value determinations of the assets or liabilities,such as interest rates and yield curves,volatilities,prepayment speeds,loss severities,credit risks and default rates;and inputs that are derived principally from or corroborated by observable market data by correlation or other means.Pricing evaluations generally reflect discounted expected future cash flows,which incorporate yield curves for instruments with similar characteristics,such as credit ratings,estimated durations and yields for other instruments of the issuer or entities in the same industry sector.21Notes to Consolidated Financial Statements Note 18.Fair value measurements Level 3 Inputs include unobservable inputs used in the measurement of assets and liabilities.Management is required to use its own assumptions regarding unobservable inputs because there is little,if any,market activity in the assets or liabilities and it may be unable to corroborate the related observable inputs.Unobservable inputs require management to make certain projections and assumptions about the information that would be used by market participants in valuing assets or liabilities.Reconciliations of significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs(Level 3)for the six months ended June 30,2024 and 2023 follow(in millions).Balance atJanuary 1Gains(losses)in earningsAcquisitions(dispositions)Balance at June 30Investments in equity securities:2024$10,468$(114)$10,354202312,169(86)(1,286)10,797Quantitative information as of June 30,2024 for the significant assets and liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs(Level 3)follows(dollars in millions).FairValuePrincipal ValuationTechniquesUnobservableInputsWeightedAverageInvestments in equity securities:Preferred stock$8,441Discounted cash flowExpected duration5 years Discounts for liquidity and subordination372 bpsCommon stock warrants1,913Warrant pricing modelExpected duration5 years Volatility41%Investments in equity securities in the preceding table include our investments in certain preferred stock and common stock warrants that do not have readily determinable market values as defined by GAAP.These investments are private placements with contractual terms that restrict transfers and currently prevent us from economically hedging our investments.We applied discounted cash flow techniques in valuing the preferred stock and we made assumptions regarding the expected duration of the investment and the effects of subordination in liquidation.In valuing the common stock warrants,we used a warrant valuation model.While most of the inputs to the warrant model are observable,we made assumptions regarding the expected duration and volatility.Note 19.Common stock Changes in Berkshires issued,treasury and outstanding common stock during the first six months of 2024 are shown in the table below.In addition to our common stock,1,000,000 shares of preferred stock are authorized,but none are issued.Class A,$5 Par Value(1,650,000 shares authorized)Class B,$0.0033 Par Value(3,225,000,000 shares authorized)IssuedTreasuryOutstandingIssuedTreasuryOutstandingBalance at December 31,2023639,328(71,553)567,7751,528,152,352(217,590,844)1,310,561,508Conversions of Class A to Class B common stock(9,686)(9,686)14,529,00014,529,000Treasury stock acquired(4,787)(4,787)Balance at June 30,2024629,642(76,340)553,3021,542,681,352(217,590,844)1,325,090,508Each Class A common share is entitled to one vote per share.Class B common stock possesses dividend and distribution rights equal to one-fifteen-hundredth(1/1,500)of such rights of Class A common stock.Each Class B common share possesses voting rights equal to one-ten-thousandth(1/10,000)of the voting rights of a Class A share.Unless otherwise required under Delaware General Corporation Law,Class A and Class B common shares vote as a single class.Each share of Class A common stock is convertible,at the option of the holder,into 1,500 shares of Class B common stock.Class B common stock is not convertible into Class A common stock.On an equivalent Class A common stock basis,there were 1,436,696 shares outstanding as of June 30,2024 and 1,441,483 shares outstanding as of December 31,2023.22Notes to Consolidated Financial Statements Note 19.Common stock Since we have two classes of common stock,we provide earnings per share data on the Consolidated Statements of Earnings for average equivalent Class A shares outstanding and average equivalent Class B shares outstanding.Class B shares are economically equivalent to one-fifteen-hundredth(1/1,500)of a Class A share.Average equivalent Class A shares outstanding represents average Class A shares outstanding plus one-fifteen-hundredth(1/1,500)of the average Class B shares outstanding.Average equivalent Class B shares outstanding represents average Class B shares outstanding plus 1,500 times the average Class A shares outstanding.Berkshires common stock repurchase program permits Berkshire to repurchase its shares any time that Warren Buffett,Berkshires Chairman of the Board and Chief Executive Officer,believes that the repurchase price is below Berkshires intrinsic value,conservatively determined.The program continues to allow share repurchases in the open market or through privately negotiated transactions and does not specify a maximum number of shares to be repurchased.However,repurchases will not be made if they would reduce the value of Berkshires consolidated cash,cash equivalents and U.S.Treasury Bill holdings below$30 billion.The repurchase program does not obligate Berkshire to repurchase any specific dollar amount or number of Class A or Class B shares and there is no expiration date to the program.Note 20.Income taxes Our consolidated effective income tax rates were 20.0%in the second quarter and 19.5%in the first six months of 2024 compared to 20.3%in the second quarter and 20.2%in the first six months of 2023.Our effective income tax rate normally reflects recurring benefits from dividends-received deductions applicable to investments in certain equity securities and production tax credits related to wind-powered electricity generation placed in service in the U.S.Our periodic effective income tax rate will also vary due to the changes in mix of pre-tax earnings,including realized and unrealized investment gains or losses with respect to our investments in equity securities,the amount of non-deductible goodwill impairment charges and other expenses and the underlying income tax rates applicable in the various taxing jurisdictions.On August 16,2022,the Inflation Reduction Act of 2022(“the 2022 Act”)was signed into law.The 2022 Act contains numerous provisions,including a 15%corporate alternative minimum income tax(“CAMT”)on“adjusted financial statement income,”expanded tax credits for clean energy incentives and a 1%excise tax on corporate stock repurchases.The provisions of the 2022 Act are effective for tax years beginning after December 31,2022.The extent to which the Company incurs CAMT will depend on the facts and circumstances of the given tax year.We do not expect to incur a CAMT liability in 2024.The Internal Revenue Service and the U.S.Department of Treasury may release additional guidance in the future.We will continue to evaluate the impact of the 2022 Act as more guidance becomes available.The Organization for Economic Co-operation and Development has issued Pillar Two model rules introducing a new global minimum tax of 15%intended to be effective on January 1,2024.While the U.S.has not yet adopted the Pillar Two rules,various other governments around the world are enacting legislation.As currently designed,Pillar Two will ultimately apply to our worldwide operations.Considering we do not have material operations in jurisdictions with income tax rates lower than the Pillar Two minimum,these rules are not expected to materially increase our global tax costs.There remains uncertainty as to the final Pillar Two model rules.We will continue to monitor U.S.and global legislative action related to Pillar Two for potential impacts.Note 21.Accumulated other comprehensive income A summary of the net changes in after-tax accumulated other comprehensive income attributable to Berkshire Hathaway shareholders for the six months ending June 30,2024 and 2023 follows(in millions).Unrealizedgains(losses)on investmentsForeign currency translationLong-duration insurance contractsDefined benefit pension plansOtherTotalFirst six months of 2024Balance at the beginning of the year$190$(5,393)$1,353$(97)$184$(3,763)Other comprehensive income(22)(747)684(1)(6)(92)Balance at the end of the period$168$(6,140)$2,037$(98)$178$(3,855)First six months of 2023 Balance at the beginning of the year$(187)$(6,142)$1,541$(552)$288$(5,052)Other comprehensive income1745927141(66)812Balance at the end of the period$(13)$(5,550)$1,612$(511)$222$(4,240)23Notes to Consolidated Financial Statements Note 22.Supplemental cash flow information A summary of supplemental cash flow information follows(in millions).First Six Months20242023Cash paid during the period for:Income taxes$2,159$2,962Interest:Insurance and other671725Railroad,utilities and energy1,7971,857Non-cash investing and financing activities:Liabilities assumed in connection with business acquisitions1910,815Note 23.Contingencies and commitments We are parties in a variety of legal actions that routinely arise out of the normal course of business,including legal actions seeking to establish liability directly through insurance contracts or indirectly through reinsurance contracts issued by Berkshire subsidiaries.Plaintiffs occasionally seek punitive or exemplary damages.We do not believe that such normal and routine litigation will have a material effect on our financial condition or results of operations.PacifiCorp,a wholly-owned subsidiary of Berkshires 92%owned subsidiary,Berkshire Hathaway Energy Company(“BHE”),operates as a regulated electric utility in Oregon and other Western states.HomeServices of America,Inc.is a wholly-owned subsidiary of BHE.Certain legal matters related to these entities are described below.PacifiCorp In September 2020,a severe weather event resulting in high winds,low humidity and warm temperatures,contributed to several major wildfires,which resulted in real and personal property and natural resource damage,personal injuries and loss of life and widespread power outages in Oregon and Northern California.These wildfires spread across certain parts of PacifiCorps service territory and surrounding areas across multiple counties in Oregon and California,including Siskiyou County,California;Jackson County,Oregon;Douglas County,Oregon;Marion County,Oregon;Lincoln County,Oregon;and Klamath County,Oregon,burning over 500,000 acres in aggregate.Third-party reports for these wildfires(the“2020 Wildfires”)indicate over 2,000 structures destroyed,including residences;several other structures damaged;multiple individuals injured;and several fatalities.According to the California Department of Forestry and Fire Protection,a wildfire began on July 29,2022,in the Oak Knoll Ranger District of the Klamath National Forest in Siskiyou County,California located in PacifiCorps service territory(the“2022 Wildfire”)burning over 60,000 acres.Third-party reports indicate that the 2022 Wildfire resulted in 11 structures damaged,185 structures destroyed,12 injuries and four fatalities.The 2020 Wildfires and 2022 Wildfire,together,are referred to as the“Wildfires”.Investigations into the cause and origin of each of the Wildfires are complex and ongoing and have been or are being conducted by various entities,including the U.S.Forest Service,the California Public Utilities Commission,the Oregon Department of Forestry,the Oregon Department of Justice,PacifiCorp and various experts engaged by PacifiCorp.As of the date of this filing,a significant number of complaints and demands alleging similar claims related to the Wildfires have been filed in Oregon and California,including a class action complaint in Oregon associated with the 2020 Wildfires for which certain jury verdicts were issued as described below.The plaintiffs seek damages for economic losses,noneconomic losses,including mental suffering,emotional distress,personal injury and loss of life,as well as punitive damages,other damages and attorneys fees.Several insurance carriers have filed subrogation complaints in Oregon and California with allegations similar to those made in the aforementioned complaints.Additionally,the U.S.and Oregon Departments of Justice have informed PacifiCorp that they are contemplating filing actions against PacifiCorp in connection with certain of the Oregon 2020 Wildfires.PacifiCorp is actively cooperating with the U.S.and Oregon Departments of Justice on resolving these alleged claims through alternative dispute resolution.As of June 30,2024,amounts sought in outstanding complaints and demands filed in Oregon and in certain demands in California approximated$3 billion,excluding any doubling or trebling of damages included in the complaints and the mass complaints described below that seek$43 billion.Generally,the complaints filed in California do not specify damages sought and are excluded from this amount.Based on available information to date,we believe it is probable that losses will be incurred associated with the Wildfires.Final determinations of liability will only be made following the completion of comprehensive investigations,litigation and similar processes.24Notes to Consolidated Financial Statements Note 23.Contingencies and commitmentsOn September 30,2020,a class action complaint against PacifiCorp was filed captioned Jeanyne James et al.v.PacifiCorp et al.(the“James case”),in Oregon Circuit Court in Multnomah County,Oregon(the“Multnomah Court”)in connection with the 2020 Wildfires.In April 2023,a jury trial for the James case with respect to 17 named plaintiffs began in Multnomah Court.In June 2023,the jury issued its verdict finding PacifiCorp liable to the 17 named plaintiffs and to the class with respect to four wildfires.The jury found PacifiCorps conduct grossly negligent,reckless and willful as to each plaintiff and the entire class.The jury awarded the 17 named plaintiffs$90 million of damages,including$4 million of economic damages,$68 million of noneconomic damages and$18 million of punitive damages based on a 0.25 multiplier of the economic and noneconomic damages.In September 2023,the Multnomah Court ordered trial dates for three damages phase trials for the James case,wherein plaintiffs in each of the three damages phase trials would present evidence regarding their damages.In January 2024,the Multnomah Court entered a limited judgment and money award for the June 2023 James case verdict of$92 million based on the amounts awarded by the jury,as well as doubling of the economic damages and offsetting of insurance proceeds received by plaintiffs.In January 2024,PacifiCorp filed a notice of appeal associated with the June 2023 verdict in the James case,including whether the case can proceed as a class action,and filed a motion to stay further damages phase trials.On February 14,2024,the Oregon Court of Appeals denied PacifiCorps request to stay the damages phase trials.On February 13,2024,the 17 named plaintiffs filed a notice of cross-appeal as to the January 2024 limited judgment and money award.The appeals process and further actions could take several years.In January 2024,the jury for the first James case damages phase trial awarded nine plaintiffs$62 million of damages,including$6 million of economic damages and$56 million of noneconomic damages.Subsequently,the Multnomah Court increased the economic damages by$6 million and added$16 million of punitive damages,bringing the aggregate damages awarded to$84 million.In March 2024,the Multnomah Court granted in large part PacifiCorps request to offset the damage awards by deducting insurance proceeds received by any of the nine plaintiffs.In April 2024,the Multnomah Court entered a limited judgment and money award of$80 million for the January 2024 James verdict,based on the aggregate damages awarded,offset by insurance proceeds received by plaintiffs.In March 2024,the jury for the second James case damages phase trial awarded ten plaintiffs$42 million of damages,including$12 million of doubled economic damages and$30 million of noneconomic and punitive damages.In May 2024,the Multnomah Court granted PacifiCorps request to offset the damage awards by deducting insurance proceeds received by any of the ten plaintiffs.In June 2024,the Multnomah Court entered a limited judgment and money award of$38 million for the March 2024 James verdict,based on the aggregate amounts awarded,offset by insurance proceeds received by plaintiffs.The January,April and June 2024 limited judgments created liens against PacifiCorp,attaching a debt for the money awards.In each instance,PacifiCorp posted a supersedeas bond,which stays any effort to seek payment of the judgment pending final resolution of any appeals.Under ORS 82.010,interest at a rate of 9%per annum will accrue on the judgment commencing at the date the judgment was entered until the entire money award is paid,amended or reversed by an appellate court.PacifiCorp amended its January 2024 appeal of the June 2023 James verdict to include the January 2024 jury verdict and further amended its appeal of the June 2023 verdict to include the March 2024 jury verdict.In March 2024,settlement was reached with five commercial timber plaintiffs in the James case,and the jury trial scheduled for April 2024 was cancelled.In April,May and July 2024,four separate mass complaints against PacifiCorp naming 1,443 individual class members were filed in the Multnomah Court referencing the James case as the lead case.These mass complaints make allegations seeking economic,noneconomic and punitive damages,as well as doubling of economic damages.PacifiCorp believes the magnitude of damages sought by the class members in the James case mass complaints to be of remote likelihood of being awarded based on the amounts awarded in the jury verdicts described above that are being appealed.A provision for a loss contingency is recorded when it is probable a liability has been incurred and the amount of loss can be reasonably estimated.PacifiCorp evaluates the related range of reasonably estimated losses and records a loss based on its best estimate within that range or the lower end of the range if there is no better estimate.Estimated probable losses associated with the Wildfires were based on the information available to the date of this filing,including(i)ongoing cause and origin investigations;(ii)ongoing settlement and mediation discussions;(iii)other litigation matters and upcoming legal proceedings;and(iv)the status of the James case.Wildfire estimated losses include estimates for fire suppression costs,real and personal property damages,natural resource damages and noneconomic damages such as personal injury damages and loss of life damages that are considered probable of being incurred and that it is able to reasonably estimate at this time,and which is subject to change as additional relevant information becomes available.25Notes to Consolidated Financial Statements Note 23.Contingencies and commitments Through June 30,2024,PacifiCorp recorded cumulative estimated probable Wildfire losses,before taxes and expected related insurance recoveries,of approximately$2.7 billion,of which$251 million was recorded in the first six months of 2024 and$541 million was recorded in the first six months of 2023.Expected insurance recoveries recorded to date in connection with the Wildfires are$534 million,including$133 million in the first six months of 2023.No further insurance recoveries are expected to be available.Cumulative Wildfire loss payments to date through June 30,2024 were approximately$775 million and an additional$246 million was paid subsequent to June 30,2024.To date,PacifiCorp has reached additional settlements associated with the Wildfires totaling$199 million that have yet to be paid.As a result of the settlements,various scheduled trials have been cancelled.Estimated unpaid liabilities for the Wildfires were approximately$1.9 billion at June 30,2024.It is reasonably possible PacifiCorp will incur significant additional Wildfire losses beyond the amounts currently accrued;however,it is currently unable to reasonably estimate the range of possible additional losses that could be incurred due to the number of properties and parties involved,including claimants in the class to the James case,the variation in those types of properties and the ultimate outcome of legal actions.HomeServices of America,Inc.HomeServices of America,Inc.(“HomeServices”)is currently defending against several antitrust cases,all in federal district courts.In each case,plaintiffs claim HomeServices and certain of its subsidiaries(and in one case BHE)conspired with co-defendants to artificially inflate real estate commissions by following and enforcing multiple listing service(“MLS”)rules that require listing agents to offer a commission split to cooperating agents in order for the property to appear on the MLS(“Cooperative Compensation Rule”).None of the complaints specify damages sought.However,two cases also allege Texas state law deceptive trade practices claims,for which plaintiffs have provided written notice of the damages sought totaling approximately$9 billion by separate notice as required by Texas law.In one of these cases,Burnett(formerly Sitzer)et al.v.HomeServices of America,Inc.et al.(the“Burnett case”),a jury trial in the U.S.District Court for the Western District of Missouri commenced on October 16,2023,and the jury returned a verdict for the plaintiffs on October 31,2023,finding that the named defendants participated in a conspiracy to follow and enforce the Cooperative Compensation Rule,which conspiracy had the purpose or effect of raising,inflating,or stabilizing broker commission rates paid by home sellers.The jury further found that the class plaintiffs had proved damages in the amount of$1.8 billion.Joint and several liability applies for the co-defendants.Federal law authorizes trebling of damages and the award of pre-judgment interest and attorney fees.To date,all co-defendants have reached settlements with the plaintiffs.The U.S District Court approved certain of these settlements in May 2024,which has been appealed to the U.S.Court of Appeals for the Eighth Circuit.In April 2024,HomeServices agreed to terms with the plaintiffs to settle all claims asserted against HomeServices and its subsidiaries in the Burnett case as part of a proposed nationwide class settlement.The final settlement agreement,which includes scheduled payments over the next four years aggregating$250 million,has yet to be filed with the court and is ultimately subject to court approval.If the settlement is not approved by the court,HomeServices intends to vigorously appeal on multiple grounds the jurys findings and damage award in the Burnett case,including whether the case can proceed as a class action.The appeals process and further actions could take several years.Berkshire and certain of its subsidiaries are also involved in other kinds of legal actions,some of which assert or may assert claims or seek to impose fines and penalties.We currently believe that liabilities that may arise as a result of such other pending legal actions will not have a material effect on our consolidated financial condition or results of operations.26Notes to Consolidated Financial Statements Note 24.Revenues from contracts with customers The following tables summarize customer contract revenues disaggregated by reportable segment and the source of the revenue for the second quarter and first six months of 2024 and 2023(in millions).Other revenues,which are not considered to be revenues from contracts with customers under GAAP,are primarily insurance premiums earned,interest,dividend and other investment income and leasing revenues.ManufacturingMcLaneServiceandRetailingBNSFBerkshireHathawayEnergyPilotInsurance,Corporateand otherTotalThree months ending June 30,2024Manufactured products:Industrial and commercial$7,459$55$7,514Building5,2335,233Consumer4,5884,588Grocery and convenience store distribution7,5007,500Food and beverage distribution4,4784,478Auto sales2,7142,714Other retail and wholesale distribution8433,7417165,300Service4022451,4375,6981,204689,054Electricity,natural gas and fuel4,97712,16117,138Total18,52512,2237,9475,6986,18112,94563,519Other revenues1,282481,975892993926,40230,134$19,807$12,271$9,922$5,787$6,480$12,984$26,402$93,653Six months ending June 30,2024Manufactured products:Industrial and commercial$14,669$107$14,776Building9,9079,907Consumer8,7818,781Grocery and convenience store distribution15,10215,102Food and beverage distribution8,9148,914Auto sales5,2665,266Other retail and wholesale distribution1,6627,5091,33010,501Service7794662,81411,3162,01013217,517Electricity,natural gas and fuel10,10623,94034,046Total35,79824,48215,69611,31612,11625,402124,810Other revenues2,520893,8981086297651,39258,712$38,318$24,571$19,594$11,424$12,745$25,478$51,392$183,52227Notes to Consolidated Financial Statements Note 24.Revenues from contracts with customers ManufacturingMcLaneServiceandRetailingBNSFBerkshireHathawayEnergyPilotInsurance,Corporateand otherTotalThree months ending June 30,2023Manufactured products:Industrial and commercial$7,221$54$7,275Building5,1785,178Consumer4,3434,343Grocery and convenience store distribution7,5357,535Food and beverage distribution4,9024,902Auto sales2,7892,789Other retail and wholesale distribution8144,1386815,633Service3472131,3905,7911,217889,046Electricity,natural gas and fuel4,77913,90318,682Total17,90312,6508,3715,7915,99614,67265,383Other revenues1,171471,738173546123,73227,120$19,074$12,697$10,109$5,808$6,350$14,733$23,732$92,503Six months ending June 30,2023*Manufactured products:Industrial and commercial$14,450$119$14,569Building9,9369,936Consumer8,3788,378Grocery and convenience store distribution15,32815,328Food and beverage distribution9,6649,664Auto sales5,3545,354Other retail and wholesale distribution1,6138,3681,10311,084Service7014972,71611,7762,02810917,827Electricity,natural gas and fuel10,07022,91832,988Total35,07825,48916,55711,77612,09824,130125,128Other revenues2,261893,454336919946,14152,768$37,339$25,578$20,011$11,809$12,789$24,229$46,141$177,896*Revenues from Pilot are for the five months ending June 30,2023.A summary of the transaction price allocated to the significant unsatisfied remaining performance obligations related to contracts with expected durations exceeding one year as of June 30,2024 and the timing of when the performance obligations are expected to be satisfied follows(in millions).Less than12 monthsGreater than12 monthsTotalElectricity,natural gas and fuel$3,099$19,398$22,497Other sales and service contracts3,3335,5298,86228Notes to Consolidated Financial Statements Note 25.Business segment data Our operating businesses include a large and diverse group of insurance,freight rail transportation,utilities and energy,manufacturing,service and retailing businesses.We organize our reportable business segments in a manner that reflects how management views those business activities.Certain businesses are grouped together for segment reporting based upon similar products or product lines and marketing,selling and distribution characteristics,even though those business units are operated under separate local management.We acquired control of Pilot on January 31,2023.In this presentation,revenues and pre-tax earnings of the Pilot segment in 2023 are for the five months ending June 30.Prior to January 31,2023,our earnings from Pilot were determined under the equity method and were included in earnings from non-controlled businesses.Revenues and earnings before income taxes by segment for the second quarter and first six months of 2024 and 2023 were as follows(in millions).Second QuarterFirst Six Months2024202320242023Revenues of Operating BusinessesInsurance:Underwriting:GEICO$10,469$9,714$20,703$19,340Berkshire Hathaway Primary Group4,6564,2339,1978,194Berkshire Hathaway Reinsurance Group6,8286,61413,52712,823Investment income4,0772,9187,2415,310Total insurance26,03023,47950,66845,667BNSF5,8055,82811,46511,847BHE6,4926,36212,76912,813Pilot12,99914,75425,50224,262Manufacturing19,84019,10238,36937,391McLane12,45812,88324,93325,942Service and retailing9,94710,14119,65020,072 93,57192,549183,356177,994Reconciliation to consolidated amountCorporate,eliminations and other82(46)166(98)$93,653$92,503$183,522$177,896Second QuarterFirst Six Months2024202320242023Earnings Before Income Taxes of Operating BusinessesInsurance:Underwriting:GEICO$1,786$514$3,714$1,217Berkshire Hathaway Primary Group279272765540Berkshire Hathaway Reinsurance Group7828271,6941,058Investment income4,0682,9127,2205,297Total insurance6,9154,52513,3938,112BNSF1,6221,6153,1413,264BHE326624758847Pilot199186269322Manufacturing3,1293,1036,0435,714McLane142129307242Service and retailing9691,2621,8772,483 13,30211,44425,78820,984Reconciliation to consolidated amountInvestment gains(losses)23,85733,06125,73367,819Interest expense,not allocated to segments(119)(103)(215)(217)Non-controlled businesses2525117451,199Corporate,eliminations and other8455221,792402$38,137$45,435$53,843$90,18729Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Net earnings attributable to Berkshire Hathaway shareholders for the second quarter and first six months ended June 30,2024 and 2023 are disaggregated in the table that follows.Amounts are after deducting income taxes and exclude earnings attributable to noncontrolling interests(in millions).Second QuarterFirst Six Months2024202320242023Insurance underwriting$2,263$1,247$4,861$2,158Insurance investment income3,3202,3695,9184,338BNSF1,2271,2642,3702,511Berkshire Hathaway Energy(“BHE”)6557851,3721,201Pilot Travel Centers(“Pilot”)171114238197Manufacturing,service and retailing3,2093,3896,2306,371Non-controlled businesses*2205356251,103Investment gains18,75025,86920,23053,308Other5333401,206229Net earnings attributable to Berkshire Hathaway shareholders$30,348$35,912$43,050$71,416*Includes certain businesses in which Berkshire had between a 20%and 50%ownership interest.Through our subsidiaries,we engage in numerous diverse business activities.We manage our operating businesses on an unusually decentralized basis.There are few centralized or integrated business functions.Our senior corporate management team participates in and is ultimately responsible for significant capital allocation decisions,investment activities and the selection of the Chief Executive to head each of the operating businesses.The business segment data(Note 25 to the accompanying Consolidated Financial Statements and Note 26 to the Consolidated Financial Statements included in Form 10-K for the year ended December 31,2023)should be read in conjunction with this discussion.Our periodic operating results may be affected in future periods due to impacts of ongoing macroeconomic and geopolitical events,as well as changes in industry or company-specific factors or events.We cannot reliably predict the future economic effects of these factors or events on our businesses.Insurance underwriting after-tax earnings increased$1.0 billion in the second quarter and$2.7 billion in the first six months of 2024 compared to 2023.Earnings in 2024 benefited from improved operating results at GEICO.We also experienced no significant catastrophe events in the first six months of 2024,while after-tax losses from significant catastrophe events during the first six months of 2023 were approximately$450 million.After-tax earnings from insurance investment income increased$951 million in the second quarter and$1.6 billion in the first six months of 2024 compared to 2023,driven by higher interest income from our short-term investments in U.S.Treasury Bills.After-tax earnings of BNSF declined 2.9%in the second quarter and 5.6%in the first six months of 2024 compared to 2023.Earnings in 2024 reflected litigation-related charges but benefited from improved employee productivity and lower costs.After-tax earnings of BHE declined$130 million in the second quarter and increased$171 million in the first six months of 2024 compared to 2023.The earnings decrease in the second quarter reflected lower earnings from the U.S.utilities and higher earnings from natural gas pipelines,whereas in the first six months of 2024,earnings increases were generated in the U.S.utilities,natural gas pipelines and other energy businesses,partly offset by lower earnings from the real estate brokerage businesses.BHEs results in 2024 and 2023 were negatively affected by litigation-related costs.As disclosed in Note 3 to the accompanying Consolidated Financial Statements,we increased our ownership in Pilot from 38.6%to 80%on January 31,2023,and further increased our ownership in Pilot to 100%on January 16,2024.We began consolidating Pilots results of operations on February 1,2023.For the month ended January 31,2023,earnings from Pilot on our 38.6%interest were determined under the equity method and were included in earnings from non-controlled businesses in the preceding table.After-tax earnings from our manufacturing,service and retailing businesses decreased 5.3%in the second quarter and 2.2%in the first six months of 2024 compared to 2023.Earnings in 2024 reflected increases at several of our manufacturing businesses,which were more than offset by lower earnings from our service and retailing businesses.30Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations Results of Operations Investment gains predominantly derive from our investments in equity securities and include significant net unrealized gains and losses from market price changes.We believe that investment gains and losses on these investments,whether realized from dispositions or unrealized from changes in market prices,are generally meaningless in understanding our reported periodic results or evaluating the economic performance of our operating businesses.These gains and losses have caused and will continue to cause significant volatility in our periodic earnings.Investment gains in the first six months of 2023 also included an after-tax non-cash remeasurement gain of approximately$2.4 billion related to our previously held 38.6%interest in Pilot through the application of the acquisition accounting method.Other earnings included after-tax foreign currency exchange rate gains of$446 million in the second quarter and$1.0 billion in the first six months of 2024 and$465 million in the second quarter and$448 million in the first six months of 2023 related to the non-U.S.Dollar denominated debt issued by Berkshire and Berkshire Hathaway Finance Corporation(“BHFC”).The gains reflected strengthening of the U.S.Dollar.InsuranceUnderwriting Our management views our insurance business as possessing two distinct activities underwriting and investing.Underwriting decisions are the responsibility of the unit managers,while investing decisions are the responsibility of Berkshires Chairman and CEO,Warren E.Buffett and Berkshires corporate investment managers.Accordingly,we evaluate performance of underwriting operations without any allocation of investment income or investment gains and losses.We consider investment income as an integral component of our overall insurance operating results.However,we consider investment gains and losses,whether realized or unrealized,as non-operating.We believe that such gains and losses are not meaningful in understanding the periodic operating results of our insurance businesses.The timing and magnitude of catastrophe losses can produce significant volatility in our periodic underwriting results,particularly with respect to our property and casualty reinsurance businesses.We currently consider pre-tax incurred losses exceeding$150 million from a current year catastrophic event to be significant.We experienced no significant catastrophe events during the first six months of 2024,while significant events in 2023 derived from a cyclone and floods in New Zealand.Changes in estimates for unpaid losses and loss adjustment expenses,including amounts established for occurrences in prior years,can also significantly affect our periodic underwriting results.Our periodic underwriting earnings may also be impacted by foreign currency transaction gains and losses arising from the changes in the valuation of non-U.S.Dollar denominated liabilities of our U.S.-based subsidiaries due to foreign currency exchange rate fluctuations.We provide primary insurance and reinsurance products covering property and casualty risks,as well as life and health risks.Our insurance and reinsurance businesses are GEICO,Berkshire Hathaway Primary Group(“BH Primary”)and Berkshire Hathaway Reinsurance Group(“BHRG”).We strive to produce pre-tax underwriting earnings(defined as premiums earned less insurance losses/benefits incurred and underwriting expenses)over the long term in all business categories,except in our retroactive reinsurance and periodic payment annuity businesses.Time-value-of-money is an important element in establishing prices for retroactive reinsurance and periodic payment annuity policies.We normally receive premiums at the contract inception date,which are then available for investment.Ultimate claim payments can extend for decades and are expected to exceed premiums,producing underwriting losses over the claim settlement periods through deferred charge asset amortization and liability discount accretion charges.Underwriting results of our insurance businesses are summarized below(dollars in millions).Second QuarterFirst Six Months2024202320242023Pre-tax underwriting earnings:GEICO$1,786$514$3,714$1,217Berkshire Hathaway Primary Group279272765540Berkshire Hathaway Reinsurance Group7828271,6941,058Pre-tax underwriting earnings2,8471,6136,1732,815Income taxes5843661,312657Net underwriting earnings$2,263$1,247$4,861$2,158Effective income tax rate20.5.6!.3#.41Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations InsuranceUnderwriting GEICO GEICO writes property and casualty policies,primarily private passenger automobile insurance,in all 50 states and the District of Columbia.GEICO markets its policies mainly by direct response methods where most customers apply for coverage directly to the company via the Internet or over the telephone.GEICO also operates an insurance agency that offers primarily homeowners and renters insurance to its auto policyholders.A summary of GEICOs underwriting results follows(dollars in millions).Second QuarterFirst Six Months2024202320242023Amount%Amount%Amount%Amount%Premiums written$10,458$9,449$21,254$19,509Premiums earned$10,469100.0$9,714100.0$20,703100.0$19,340100.0Losses and loss adjustment expenses7,75574.18,19284.315,16973.316,18483.7Underwriting expenses9288.81,00810.41,8208.81,93910.0Total losses and expenses8,68382.99,20094.716,98982.118,12393.7Pre-tax underwriting earnings$1,786$514$3,714$1,217 GEICOs pre-tax underwriting earnings in the first six months of 2024 reflected higher average premiums per auto policy,lower claims frequencies and improved operating efficiencies compared to 2023,partially offset by a rise in average claims severities and less favorable development of prior accident years claims estimates.Premiums written increased$1.0 billion(10.7%)in the second quarter and$1.7 billion(8.9%)in the first six months of 2024 compared to 2023,reflecting an increase in average written premiums per auto policy of 11.3%,primarily attributable to rate increases,partially offset by a 4.3crease in policies-in-force over the past year.The rate of decline in policies-in-force slowed in the first half of 2024,driven by increased new business and higher retention rates.Premiums earned increased$755 million(7.8%)in the second quarter and$1.4 billion(7.0%)in the first six months of 2024 compared to 2023.Losses and loss adjustment expenses declined$437 million(5.3%)in the second quarter and$1.0 billion(6.3%)in the first six months of 2024 compared to 2023.GEICOs loss ratio(losses and loss adjustment expenses to premiums earned)was 74.1%in the second quarter and 73.3%in the first six months of 2024,decreases of 10.2 percentage points and 10.4 percentage points,respectively,compared to 2023.The loss ratio declines reflected the impact of higher average earned premium per auto policy and lower claims frequencies,partially offset by increases in average claims severities and less favorable development of prior accident years claims estimates.Claims frequencies in 2024 declined for property damage(two to three percent range)and collision(six to seven percent range)coverages versus 2023,with bodily injury coverage down slightly.Average claims severities in 2024 increased for property damage(eight to ten percent range),collision(six to eight percent range)and bodily injury(seven to nine percent range)coverages compared to 2023.Losses and loss adjustment expenses in the first six months included reductions in the ultimate loss estimates for prior accident years claims of$205 million in 2024 and$888 million in 2023.Underwriting expenses declined$80 million(7.9%)in the second quarter and$119 million(6.1%)in the first six months of 2024 compared to 2023.GEICOs expense ratio(underwriting expenses to premiums earned)in the first six months of 2024 was 8.8%,a decrease of 1.2 percentage points compared to 2023.The decline was attributable to improved operating efficiencies and increased operating leverage,partially offset by increased advertising expenses.The earnings from GEICOs insurance agency(third-party commissions,net of operating expenses)are included as a reduction of underwriting expenses.Berkshire Hathaway Primary Group The Berkshire Hathaway Primary Group consists of several independently managed businesses that provide a variety of primarily commercial insurance solutions,including healthcare professional liability,workers compensation,automobile,general liability,property and specialty coverages for small,medium and large clients.BH Primarys insurers include Berkshire Hathaway Specialty Insurance(“BHSI”),RSUI Group Inc.and CapSpecialty,Inc.(“RSUI and CapSpecialty”),Berkshire Hathaway Homestate Companies(“BHHC”),MedPro Group,Berkshire Hathaway GUARD Insurance Companies(“GUARD”),National Indemnity Company(“NICO Primary”),Berkshire Hathaway Direct Insurance Company(“BH Direct”)and U.S.Liability Insurance Company(“USLI”).32Item 2.Managements Discussion and Analysis of Financial Condition and Results of Operations InsuranceUnderwriting Berkshire Hathaway Primary Group A summary of BH Primarys underwriting results follows(dollars in millions).Second QuarterFirst Six Months2024202320242023Amount%Amount%Amount%Amount%Premiums written$4,931$4,757$9,424$8,915Premiums earned$4,656100.0$4,233100.0$9,197100.0$8,194100.0Losses and loss adjustment expenses3,09366.42,86167.65,90564.25,51767.3Underwriting expenses1,28427.61,10026.02,52727.52,13726.1Total losses and expenses4,37794.03,96193.68,43291.77,65493.4Pre-tax underwriting earnings$279$272$765$540Premiums written increased$174 million(3.7%)in the second quarter and$509 million(5.7%)in the first six months of 2024 compared to 2023,primarily due to comparative increases across several of the businesses,partially offset by lower volumes at GUARD.Premiums earned increased 10.0%in the second quarter and 12.2%in the first six months of 2024 versus 2023.Losses and loss adjustment expenses rose$232 million(8.1%)in the second quarter and$388 million(7.0%)in the first six months of 2024 compared to 2023,reflecting the increases in earned premiums.The loss ratio decreased 1.2 percentage points in the second quarter and 3.1 percentage points in the first six months of 2024 compared to 2023,reflecting lower incurred losses from significant catastrophes and changes in business mix.Incurred losses from significant catastrophes in the first six months of 2023 were approximately$40 million versus none in 2024.Additionally,reductions of liabilities for losses and loss adjustment expenses attributable to prior accident years in the first six months of 2024 were$51 million greater than in 2023.BH Primary insurers write significant levels of workers compensation,commercial and professional liability insurance and the related claim costs may be subject to high severity
2024-10-15
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Aramco announces second quarter and half year 2024 resultsCompany delivers strong performance as key milestones advance long-term growth strategy Net income:$29.1 billion(Q2)/$56.3 billion(H1)Cash flow from operating activities:$31.1 billion(Q2)/$64.7 billion(H1)Free cash flow1:$19.0 billion(Q2)/$41.7 billion(H1)Gearing ratio1:-0.5%as at June 30,2024,compared to-6.3%at December 31,2023 Q2 2024 base dividend of$20.3 billion and performance-linked dividend distribution of$10.8 billion to be paid in the third quarter Company expects to declare industry-leading total dividends of$124.2 billion2 in 2024 Secondary public offering of Aramco shares and$6.0 billion bond offering receive strong demand from investors worldwide Company advances strategic gas expansion with announcement of contract awards worth more than$25.0 billion as it targets sales gas production growth of more than 60%by 2030,compared to 2021 levels Company agrees to acquire 10%equity interest in HORSE Powertrain Limited,the global powertrain solutions company established by Renault Group and Geely International retail expansion progresses with successful acquisition of 40%equity stake in Gas&Oil Pakistan Ltd Agreement with Pasqal to install first quantum computer in the Kingdom of Saudi ArabiaKey financial results“We have delivered market-leading performance once again,with strong earnings and cash flows in the first half of the year.Leveraging these strong earnings,we continued to deliver a base dividend that is sustainable and progressive,and a performance-linked dividend that shares the upside with our shareholders.“We have also continued to create and deliver both value and growth,as demonstrated by the positive investor response to the Governments secondary public offering of Aramco shares and our recent$6.0 billion bond issuance.Our drive to create value is supported by our distinctive long-term competitive advantages,our exceptional financial resilience through cycles,and our strong balance sheet.“Building on these strengths,we also made significant progress in key strategic areas during the second quarter from advancing our gas program and expanding our new energies portfolio,to partnering with leading car manufacturers on lower-emission vehicle technologies and growing our global retail network.“These are exciting times for Aramco as we continue to seek new opportunities to enhance our portfolio and our capabilities to enable a secure and more sustainable energy future.”Second quarter ended June 30Half year ended June 30SARUSD*SARUSD*All amounts in millions unless otherwise stated20242023202420232024202320242023Net income 109,010112,81029,07030,083211,281232,35256,34261,961EBIT1 207,009212,16255,20356,577408,393433,710108,905115,656Capital expenditures45,49139,23912,13110,46386,11272,03622,96319,209Free cash flow171,09586,83618,95923,157156,443202,68641,71954,051Dividends paid116,51773,16031,07219,509233,020146,31062,13939,016ROACE1,3 21.8%.9!.8%.9!.8%.9!.8%.9%Average realized crude oil price($/barrel)n/an/a85.778.8n/an/a84.379.9*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.1.Non-IFRS measure:refer to Non-IFRS measures reconciliations and definitions section for further details.2.Includes dividends already declared in Q1 2024,Q2 2024,and Q3 2024.Exact amounts and eligibility dates for the remaining dividends to be declared in 2024 will be announced,if and when declared,at the Boards sole discretion after considering the Companys financial position and ability to fund commitments,including growth capital plans,in accordance with the Companys dividend distribution policy.3.Calculated on a 12-month rolling basis.Amin H.NasserPresident and CEO2Saudi AramcoSecond quarter and half year interim report 2024Global crude oil prices improved in the second quarter of 2024 compared to the previous quarter,driven by easing inflationary pressures,expected seasonal demand growth,and falling global crude oil inventory stocks.Within this environment,Aramco continued to deliver strong earnings and free cash flow through its low-cost Upstream production and strategically integrated Downstream business.In support of its focus on maximizing shareholder returns,the Board declared a base dividend of SAR 76.1 billion($20.3 billion)and the fifth distribution of performance-linked dividends of SAR 40.4 billion($10.8 billion),bringing the total declared dividends for the second quarter to SAR 116.5 billion($31.1 billion).Aramco remains confident in its forecasts for medium-and long-term demand growth,and the Company continues to execute its growth strategy.During the quarter,capital expenditures were SAR 45.5 billion($12.1 billion),reflecting Aramcos intention to capture growth opportunities and deliver value through its integrated portfolio.In June 2024,the Government completed a secondary public offering of ordinary shares of Aramco,resulting in the sale of approximately 1.7 billion shares representing 0.7%of the Companys issued shares,for a final offer price of SAR 27.25 per share.The offering attracted strong participation from both international and domestic investors,broadening the Companys shareholder base and increasing the liquidity of its shares.The Government remains Aramcos largest shareholder,retaining an 81.48%direct shareholding.In July 2024,Aramco announced the completion of an international bond offering through its Global Medium Term Note Programme,successfully raising SAR 22.5 billion($6.0 billion).The USD-denominated notes were issued in 10,30,and 40-year maturities and attracted strong demand from investors,reflecting the markets belief in Aramcos longevity and the strength of its balance sheet.The notes were listed on the London Stock Exchanges main market,and the proceeds from the issuance will be utilized for general corporate purposes.UpstreamIn the second quarter,Aramco achieved total hydrocarbon production of 12.3 mmboed,demonstrating continued safe,reliable,and efficient operations.In addition,exploration activities resulted in seven oil and gas discoveries in the Kingdoms Eastern Province and Empty Quarter,consisting of two unconventional oil fields,one Arabian light oil reservoir,two natural gas fields,and two natural gas reservoirs.The following projects continued to progress in support of maintaining MSC at 12.0 mmbpd and preserving Aramcos distinct operational flexibility:The Dammam development project,which is expected to add crude oil production of 25 mbpd later this year and 50 mbpd in 2027,progressed construction;The Marjan and Berri crude oil increments,which are expected to add production capacity of 300 mbpd and 250 mbpd,respectively,by 2025,continued with procurement and construction activities;and,The Zuluf crude oil increment,which is expected to provide a central facility to process a total of 600 mbpd of crude oil from the Zuluf field by 2026,moved forward with engineering,procurement,and construction activities.Aramco furthered several developments during the quarter to support the Companys strategy of increasing gas production by more than 60%1:Design,procurement,and construction activities continued at the Jafurah Gas Plant,part of the Jafurah unconventional gas field development.Phase one is expected to commence production in 2025 and phase two is underway with the announcement of contract awards worth approximately SAR 46.5 billion($12.4 billion).Production from the Jafurah gas development is expected to reach a sustainable sales gas rate of 2.0 bscfd by 2030,in addition to significant volumes of ethane,NGL,and condensate;The Tanajib Gas Plant,part of the Marjan development program,continued with construction and procurement activities.The Plant is expected to be onstream by 2025 and add 2.6 bscfd of additional processing capacity from the Marjan and Zuluf fields;Hawiyah Unayzah Gas Reservoir Storage,the first underground natural gas storage in the Kingdom,commenced reproduction of stored gas into the Master Gas System.This reproduction flow can provide up to 2.0 bscfd of natural gas into the Master Gas System based on demand;and,Announced the awarding of several gas contracts including 23 unconventional rig contracts valued at SAR 9.0 billion($2.4 billion)and two directional drilling contracts worth SAR 2.3 billion($0.6 billion).Aramco also successfully deployed the Tuwaiq-1 high performance computing system which enables advanced seismic imaging and provides significant uplift in seismic trace computational capability.The addition of Tuwaiq-1 increases Upstream computing power,which is expected to double within two years with the planned addition of the Ghawar-2 and Dammam-7 Plus supercomputers.DownstreamAramco continued to develop a globally recognized Downstream business in the second quarter through the expansion of its global retail presence and investing in the development and commercialization of more efficient mobility solutions.The Company also maintained its remarkable reputation for dependable operations with supply reliability of 99.7%.In the first half of the year,Downstream utilized approximately 52%of Aramcos crude oil production.Second quarter highlights1.Over 2021 production levels by 2030,subject to domestic demand.3Saudi AramcoSecond quarter and half year interim report 2024Key Downstream developments include the following:Aramco made significant strides in its global retail growth strategy with the successful acquisition of a 40%equity stake in Gas&Oil Pakistan Limited(GO).GO operates as a diverse downstream business in the fuels,lubricants,and convenience stores sector,with an extensive network of over 1,200 retail fuel stations and a total storage capacity of approximately 200,000 metric tons.This strategic investment marks Aramcos first Downstream retail venture in Pakistan,further expanding its global retail footprint in high-value markets.Through securing outlets for its refined products and creating a platform to launch the Aramco brand,this acquisition aligns with Aramcos Downstream expansion strategy,ultimately strengthening its downstream value chain and unlocking new market opportunities for its Valvoline-branded lubricants;SABIC announced the transfer of its ownership of the Saudi Iron and Steel Company(Hadeed)to PIF.This transaction enables SABIC to optimize its portfolio,focus on its core business,and support its vision to become the preferred world leader in chemicals;Aramco signed definitive agreements,subject to closing conditions and regulatory approvals,to acquire a 10%equity interest in HORSE Powertrain Limited(HORSE)alongside RenaultS.A.S.,Zhejiang Geely Holding Group Co.Ltd.,and Geely Automobile Holdings Limited.HORSE is expected to have annual production of five million powertrain units,encompassing a complete portfolio of advanced powertrain technologies for partners around the world.This investment is expected to support the development of affordable,efficient,and lower-carbon emission internal combustion engines globally.The agreements also include collaboration arrangements for Aramco and Valvoline on technologies,fuels,and lubricants to collectively improve the performance of HORSE internal combustion engines;and,Aramco announced the awarding of 15lump sum turnkey contracts worth atotal of approximately SAR 33.0 billion($8.8 billion)to commence the phasethree expansion of the Master GasSystem,which delivers natural gas tocustomers across the Kingdom.Theexpansion is expected to increase thesize of the network and raise its totalcapacity by an additional 3.15 bscfd by2028 through the installation of around4,000 kilometer of pipelines and 17new gas compression trains.SustainabilityIn May 2024,Aramco published its 2023 Sustainability Report which sets out the Companys sustainability strategy and performance,its progress,and achievements made across its four sustainability focus areas.In alignment with its continued efforts on sustainability reporting,Aramco increased the number of reported sustainability metrics to 74 in 2023(from 61 metrics in 2022),with 18 metrics undergoing external assurance compared to 16 metrics in 2022.Aramco seeks to mitigate GHG emissions through lower-carbon emissions solutions.The Company delivered its first independently-verified carbon offset crude cargo through a pilot shipment of two million barrels of Arabian Light crude oil,with a carbon intensity of 2.42 kgCO2e/boe for the production and loading stages and a total carbon intensity of 6.39 kgCO2e/boe.Contributing to the lower carbon intensity of the shipment were emissions reduction initiatives across relevant facilities and the use of offsets for residual emissions sourced from the Saudi-based Regional Voluntary Carbon Market.New energiesIn June 2024,Aramco,along with partners ACWA Power and PIF,announced the signing of power purchase agreements with the Saudi Power Procurement Company for the development and operation of three new solar photovoltaic(PV)projects.The solar PV facilities are expected to contribute an additional 5.5 GW2 of renewable energy to the national power grid once operational,which is anticipated in the first half of 2027.The investment is expected to deliver significant growth in lower-emission power to the national grid and provide an opportunity for Aramco to lower its Scope 2 GHG emissions.In line with its efforts to develop a lower-carbon hydrogen business and expand its New Energies portfolio,in July Aramco signed definitive agreements to acquire a 50%equity interest in Blue Hydrogen Industrial Gases Company(BHIG),a wholly-owned subsidiary of Air Products Qudra.Through BHIG,Aramco and Air Products Qudra plan to develop a lower-carbon hydrogen network in the Kingdoms Eastern Province,serving both domestic and regional customers.Completion of the transaction is subject to standard closing conditions.Other business highlightsDuring the quarter,Aramco signed an agreement with Pasqal,a global leader in neutral atom quantum computing,to deploy the first in-Kingdom quantum computer.The agreement will see Pasqal install,maintain,and operate the 200-qubit quantum computer,which isscheduled for deployment in the secondhalf of 2025.The quantum computer willoffer highly-advanced technology tosolve complex problems,and supportsAramcos aim to pioneer the use ofquantum computing in the energy sector.At Aramcos Extraordinary General Assembly Meeting in May,the assembly approved the election of the members of the Board of Directors for a three-year term beginning July 1,2024,including new Board members His Excellency Faisal F.Alibrahim,Minister of Economy and Planning of Saudi Arabia,and Mr.Robert W.Dudley,former CEO of BP Plc.2.The combined 5.5 GW AC capacity of the facilities is equivalent to 6.3 GW DC.4Saudi AramcoSecond quarter and half year interim report 2024All amounts in millions unless otherwise statedFinancial performance Summary of financial performanceFinancial ResultsKey factors affecting Aramcos financial results Aramcos results of operations and cash flows are primarily driven by market prices and volumes sold of hydrocarbons as well as refined and chemicals products.During the first half of 2024,the Company paid total base dividends of SAR 152.2 billion($40.6 billion).In addition,the Company made the third and fourth performance-linked dividend distributions totaling SAR 80.8 billion($21.5 billion).These dividend payments,aggregating to SAR 233.0 billion($62.1 billion),resulted in a decrease in cash and cash equivalents and a corresponding reduction in shareholders equity in the consolidated balance sheet and statement of changes in equity.In April 2024,the Company repaid SAR 7.5 billion($2.0 billion)associated with the second tranche of its five-year USD-denominated unsecured notes issued in 2019.In addition,in June 2024 the Company repaid SAR 3.75 billion($1.0 billion)relating to the first tranche of its three-year international Sukuk trust certificates issued in 2021.These repayments resulted in a decrease in cash and cash equivalents and a corresponding decrease in borrowings during the period.In June 2024,as part of the secondary public offering,the Company acquired 137.6 million ordinary shares from the Government for a cash payment of SAR 3.75 billion($1.0 billion).These shares,classified as treasury shares,will be used by the Company for its employee share plans.This transaction resulted in a decrease in cash and cash equivalents and a corresponding reduction in shareholders equity in the consolidated balance sheet and statement of changes in equity.In March 2024,Aramco completed the acquisition of a 100%equity stake in Esmax for a purchase consideration of SAR 1.4 billion($0.37 billion),subject to customary adjustments.This resulted in a decrease in cash and cash equivalents and a corresponding increase in net assets in the consolidated balance sheet as a result of the first-time consolidation of the acquired entity.In May 2024,SABIC announced the transfer of its ownership of Hadeed to PIF.As part of the transfer,SABIC received cash consideration of SAR 1.2 billion($0.32 billion)in June 2024,with the remaining amount of SAR 4.9 billion($1.31 billion)recognized as deferred consideration within other assets and receivables.This resulted in derecognition of Hadeeds total assets and liabilities of SAR 19.1 billion($5.1 billion)and SAR 9.8 billion($2.6 billion),respectively,from the consolidated balance sheet.Second quarterIncome before income taxes and zakat for the second quarter of 2024 was SAR 209,604($55,895),compared to SAR 217,431($57,982)for the same quarter in 2023.The decrease mainly reflects the impact of lower crude oil volumes sold and weakening refining margins,partially offset by an increase in crude oil prices compared to the same quarter last year.Income taxes and zakat for the second quarter of 2024 was SAR 100,594($26,825),compared to SAR 104,621($27,899)for the same quarter in 2023.This decrease was in line with lower earnings in the second quarter of 2024.Half yearIncome before income taxes and zakat for the first half of 2024 was SAR 414,618($110,565),compared to SAR 446,665($119,111)for the same period in 2023.The decrease was primarily a result of lower crude oil volumes sold,weakening refining margins,and lower finance and other income.This was partially offset by higher crude oil prices and lower production royalties compared to the same period last year.Income taxes and zakat for the first half of 2024 was SAR 203,337($54,223),compared to SAR 214,313($57,150)for the same period in 2023.The decrease was in line with lower earnings in the first half of 2024.For non-IFRS measures,refer to the Non-IFRS measures reconciliations and definitions section.Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated2024202320242023%change2024202320242023%changeIncome before income taxes and zakat209,604217,43155,89557,982(3.6)A4,618446,665110,565119,111(7.2)%Income taxes and zakat(100,594)(104,621)(26,825)(27,899)(3.8)%(203,337)(214,313)(54,223)(57,150)(5.1)%Net income109,010112,81029,07030,083(3.4)!1,281232,35256,34261,961(9.1)%*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.5Saudi AramcoSecond quarter and half year interim report 2024 All amounts in millions unless otherwise statedUpstream financial performanceSecond quarterEarnings before interest,income taxes and zakat(EBIT)for the second quarter of 2024 were relatively consistent with the same quarter in 2023,largely due to higher crude oil prices which offset lower crude oil volumes sold.Capital expenditures for the second quarter of 2024 were SAR 37,277($9,941),an increase of 19.0%compared to SAR 31,319($8,352)for the same period in 2023.This increase reflects progress associated with crude oil increments to maintain MSC at 12.0 mmbpd and increased development activity to support strategic expansion of the Companys gas business.Half year EBIT for the first half of 2024 totaled SAR 414,435($110,516),compared to SAR 427,734($114,062)for the same period in 2023.This reduction was largely due to lower crude oil volumes sold,partially offset by higher crude oil prices and decreased production royalties.Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated2024202320242023%change2024202320242023%changeEarnings before interest,income taxes and zakat209,093212,45655,75856,655(1.6)A4,435427,734110,516114,062(3.1)pital expenditures-cash basis37,27731,3199,9418,35219.0p,39156,65118,77115,10724.3%*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.Capital expenditures for the first half of 2024 were SAR 70,391($18,771),compared to SAR 56,651($15,107)for the same period in 2023,an increase of 24.3%.The increase was principally attributable to the progress of crude oil increments related to maintaining crude oil MSC and continued development of multiple gas projects.Downstream financial performance Second quarterEBIT for the second quarter of 2024 was a loss of SAR 981($262),compared to a profit of SAR 2,956($788)in the same period of 2023.This decrease was predominantly driven by weakening refining margins and inventory valuation movement.Capital expenditures for the second quarter of 2024 were SAR 7,493($1,998),compared to SAR 7,580($2,021)for the second quarter of 2023,remaining relatively consistent with the prior period.Half year In the first half of 2024,EBIT was SAR 3,634($969),compared to SAR 15,786($4,210)in the same period of 2023.Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated2024202320242023%change2024202320242023%changeEarnings(losses)before interest,income taxes and zakat(981)2,956(262)788(133.2)%3,63415,7869694,210(77.0)pital expenditures-cash basis7,4937,5801,9982,021(1.1),37514,7273,8333,927(2.4)%*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.This decrease was primarily attributed to weakening refining margins,partially offset by inventory valuation movement compared to the first half of 2023.Capital expenditures for the first half of 2024 were SAR 14,375($3,833),primarily in line with the first half of 2023 of SAR 14,727($3,927).6Saudi AramcoSecond quarter and half year interim report 2024All amounts in millions unless otherwise statedNon-IFRS measures reconciliations and definitionsTwelve months ended June 30SARUSD*All amounts in millions unless otherwise stated2024202320242023Net income433,693506,688115,652135,117Finance costs,net of income taxes and zakat4,1054,4681,0951,192Net income before finance costs,net of income taxes and zakat437,798511,156116,747136,309As at period start:Non-current borrowings227,649323,39760,70686,239Current borrowings57,64169,69215,37118,585Total equity1,741,8821,530,823464,502408,220Capital employed 2,027,1721,923,912540,579513,044As at period end:Non-current borrowings229,341227,64961,15860,706Current borrowings49,84157,64113,29015,371Total equity1,705,3041,741,882454,748464,502Capital employed1,984,4862,027,172529,196540,579Average capital employed2,005,8291,975,542534,888526,812ROACE21.8%.9!.8%.9%*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.ROACEROACE measures the efficiency of Aramcos utilization of capital.Aramco defines ROACE as net income before finance costs,net of income taxes and zakat,as a percentage of average capital employed,calculated on a 12-month rolling basis.Average capital employed is the average of total borrowings plus total equity at the beginning and end of the applicable period.Aramco utilizes ROACE to evaluate managements performance and demonstrate to its shareholders that capital has been used effectively.ROACE for the 12 months ended June 30,2024,was 21.8%,compared to 25.9%for the same period in 2023.The decrease in ROACE,calculated on a 12-month rolling basis,was largely driven by lower earnings primarily due to lower crude oil prices and volumes sold,and weakening refining and chemicals margins.This was partially offset by lower production royalties compared to the same period last year.This Interim Report includes certain non-IFRS financial measures(ROACE,free cash flow,gearing,and EBIT),which Aramco uses to make informed decisions about its financial position and operating performance or liquidity.These non-IFRS financial measures have been included in this Interim Report to facilitate a better understanding of Aramcos historical trends of operation and financial position.Aramco uses non-IFRS financial measures as supplementary information to its IFRS-based operating performance and financial position.The non-IFRS financial measures are not defined by,or presented in accordance with,IFRS.The non-IFRS financial measures are not measurements of Aramcos operating performance or liquidity under IFRS and should not be used instead of,or considered as alternatives to,any measures of performance or liquidity under IFRS.The non-IFRS financial measures relate to the reporting periods described in this Interim Report and are not intended to be predictive of future results.In addition,other companies,including those in Aramcos industry,may calculate similarly titled non-IFRS financial measures differently from Aramco.Because companies do not necessarily calculate these non-IFRS financial measures in the same manner,Aramcos presentation of such non-IFRS financial measures may not be comparable to other similarly titled non-IFRS financial measures used by other companies.7Saudi AramcoSecond quarter and half year interim report 2024 All amounts in millions unless otherwise statedFree cash flowGearingGearing is a measure of the degree to which Aramcos operations are financed by debt and reflects available liquidity held in current and non-current investments and cash management instruments.Aramco defines gearing as the ratio of net(cash)/debt(total borrowings less cash and cash equivalents,short-term investments,investment in debt securities(current and non-current),and non-current cash investments)to total equity and net(cash)/debt.Management believes that gearing is widely used by analysts and investors in the oil and gas industry to indicate a companys financial health and flexibility.Aramcos gearing ratio as at June 30,2024,was(0.5)%compared to(6.3)%as at December 31,2023.The increase in gearing was mainly driven by a lower net cash position largely due to lower short-term investments and cash and cash equivalents.The cash and cash equivalents balance reflects operating cash inflows and a reduction in short-term investments,partially offset by dividend payments and capital expenditures during the period.Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated20242023202420232024202320242023Net cash provided by operating activities116,586126,07531,09033,620242,555274,72264,68273,260Capital expenditures(45,491)(39,239)(12,131)(10,463)(86,112)(72,036)(22,963)(19,209)Free cash flow71,09586,83618,95923,157156,443202,68641,71954,051*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.SARUSD*All amounts in millions unless otherwise statedJune 30,2024December 31,2023June 30,2024December 31,2023Total borrowings(current and non-current)279,182290,14774,44877,373Cash and cash equivalents(170,806)(198,973)(45,548)(53,059)Short-term investments(107,078)(184,343)(28,554)(49,158)Investments in debt securities(current and non-current)1(9,992)(9,584)(2,664)(2,556)Non-current cash investments-Net(cash)(8,694)(102,753)(2,318)(27,400)Total equity1,705,3041,737,092454,748463,225Total equity and net(cash)1,696,6101,634,339452,430435,825Gearing(0.5)%(6.3)%(0.5)%(6.3)%*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.1.As at June 30,2024,investments in debt securities(current and non-current)are comprised of SAR 1,195($319)and SAR 8,797($2,345)which form part of other assets and receivables under current assets,and investments in securities under non-current assets,respectively.As at December 31,2023,the investments in debt securities(current and non-current)are comprised of SAR 1,249($333)and SAR 8,335($2,223)which form part of other assets and receivables under current assets,and investments in securities under non-current assets,respectively.Aramco uses free cash flow to evaluate its cash available for financing activities,including dividend payments.Aramco defines free cash flow as net cash provided by operating activities less capital expenditures.Free cash flow for the second quarter of 2024 was SAR 71,095($18,959),compared to SAR 86,836($23,157)for the same quarter in 2023.This decrease of SAR 15,741($4,198)was mainly due to lower operating cash flows as a result of lower earnings and unfavorable movements in working capital,partially offset by a reduction in cash paid for the settlement of income,zakat and other taxes.Capital expenditures increased by SAR 6,252($1,668)in the second quarter of 2024 compared to the same quarter in 2023,mainly attributable to the progress associated with crude oil increments to maintain MSC at 12.0 mmbpd and increased development activity to support strategic expansion of the Companys gas business.Free cash flow for the first half of 2024 was SAR 156,443($41,719),compared to SAR 202,686($54,051)for the same period in 2023.The decrease of SAR 46,243($12,332)was largely attributable to lower operating cash flows as a result of lower earnings and unfavorable movements in working capital,partially offset by a reduction in cash paid for the settlement of income,zakat and other taxes.Capital expenditures for the first half of 2024 increased by SAR 14,076($3,754)compared to the same period in 2023,principally driven by the progress of crude oil increments related to maintaining crude oil MSC and continued development of multiple gas projects.8Saudi AramcoSecond quarter and half year interim report 2024All amounts in millions unless otherwise statedEarnings before interest,income taxes and zakat(EBIT)Aramco defines EBIT as net income plus finance costs and income taxes and zakat,less finance income.Aramco believes EBIT provides useful information regarding its financial performance to analysts and investors.EBIT for the second quarter ended June 30,2024,was SAR 207,009($55,203),compared to SAR 212,162($56,577)for the same quarter in 2023.This decrease of SAR 5,153($1,374)mainly represents the impact of lower crude oil volume sold and weakening refining margins,partially offset by an increase in crude oil prices compared to the same quarter last year.EBIT for the half year of 2024 was SAR 408,393($108,905),compared to SAR 433,710($115,656)for the same period in 2023.The decrease of SAR 25,317($6,751)was principally due to lower crude oil volumes sold and weakening refining margins,partially offset by higher crude oil prices and lower production royalties compared to the same period last year.Second quarterHalf yearSARUSD*SARUSD*All amounts in millions unless otherwise stated20242023202420232024202320242023Net income 109,010112,81029,07030,083211,281232,35256,34261,961Finance income(4,927)(7,425)(1,314)(1,980)(11,582)(18,288)(3,089)(4,877)Finance costs2,3322,1566225755,3575,3331,4291,422Income taxes and zakat100,594104,62126,82527,899203,337214,31354,22357,150Earnings before interest,income taxes and zakat207,009212,16255,20356,577408,393433,710108,905115,656*Supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only.9Saudi AramcoSecond quarter and half year interim report 2024Terms and abbreviations Currencies SAR/Saudi RiyalSaudi Arabian Riyal,the lawful currency of the Kingdom$/USD/Dollar U.S.dollarUnits of measurement Barrel(bbl)Barrels of crude oil,condensate or refined products boe Barrels of oil equivalent bpd Barrels per day bscf Billion standard cubic feet bscfd Billion standard cubic feet per day GWGigawatts kgCO2e/boeKilograms of carbon dioxide equivalent per barrel of oil equivalentmboed Thousand barrels of oil equivalent per day mbpd Thousand barrels per day mmbbl Million barrels mmboe Million barrels of oil equivalent mmboed Million barrels of oil equivalent per day mmbpd Million barrels per day mmBTU Million British thermal unitsmmscf Million standard cubic feet mmscfd Million standard cubic feet per daymmtpa Million metric tonnes per annumper day Volumes are converted into a daily basis using a calendar year(Gregorian)scf Standard cubic feettscf Trillion standard cubic feetTechnical termsACAlternating current.CO2Carbon dioxide.CondensateLight hydrocarbon substances produced with raw gas which condenses into liquid at normal temperatures and pressures associated with surface production equipment.DCDirect current.HydrocarbonsCrude oil and other hydrogen and carbon compounds in liquid or gaseous state.LiquidsCrude oil,condensate,and NGL.LNGLiquefied natural gas.MSC Maximum Sustainable Capacity the average maximum number of barrels per day of crude oil that can be produced for one year during any future planning period,after taking into account all planned capital expenditures and maintenance,repair and operating costs,and after being given three months to make operational adjustments.The MSC excludes AGOCs crude oil production capacity.Natural gasMethane produced at Aramcos gas plants and sold within the Kingdom as sales gas.NGLNatural gas liquids,which are liquid orliquefied hydrocarbons produced in themanufacture,purification,andstabilization of natural gas.For thereporting of reserves,ethane is included in NGL.For the reporting of production,NGL is included in total liquids,andethane is reported as a component oftotal gas.ReliabilityTotal products volume shipped/delivered within 24 hours of the scheduled time,divided by the total products volume committed.Any delays caused by factors that are under the Companys control(e.g.terminal,pipeline,stabilization,or production)negatively affect the score,whereas delays caused by conditions that are beyond the Companys control,such as adverse weather,are not considered.A score of less than 100 percent indicates there were issues that negatively impacted reliability.10Saudi AramcoSecond quarter and half year interim report 2024GlossaryAffiliate Except with respect to financial information,the term affiliate means a person who controls another person or is controlled by that other person,or who is under common control with that person by a third person.In any of the preceding,control could be direct or indirect.With respect to financial information,the term affiliate means the Companys subsidiaries,joint arrangements and associates,each as defined by IFRS.AGOCAramco Gulf Operations Company Ltd.AssociateWith respect to financial information,the term Associate,as defined by IFRS,means an entity over which the Company has significant influence but not control,generally reflected by a shareholding of between 20%and 50%of the voting rights.Significant influence is the power to participate in the financial and operating policy decisions of the investee but is not control or joint control over those policies.AuditorAn auditor is a person or entity authorized to review and verify the accuracy of financial records and ensure that companies comply with tax laws.Aramco is audited by an independent external auditor,PricewaterhouseCoopers(PwC)Public Accountants,the independent external auditor of Aramco.BoardThe Board of Directors of the Company.CompanySaudi Arabian Oil Company.ControlExcept with respect to financial information,the term“Control”means the ability to influence the actions or decisions of another person through,whether directly or indirectly,alone or with a relative or affiliate(a)holding 30%or more of the voting rights in a company,or(b)having the right to appoint 30%or more of the Board of a company;“controller”shall be construed accordingly.With respect to financial information,the term“Control”is defined by IFRS:The Company controls an entity when it is exposed to,or has rights to,variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.EBITEarnings(losses)before interest,income taxes and zakat.ESGEnvironmental,social,and governance.EsmaxEsmax Distribucin SpA.GovernmentThe Government of the Kingdom(and“Governmental”shall be interpreted accordingly).HHijri calendar.IAS International Accounting Standard(s).IFRS International Financial Reporting Standard(s)that are endorsed in the Kingdom and other standards and pronouncements endorsed by SOCPA.Joint arrangementThe term joint arrangement,as defined by IFRS,refers to either a joint operation or a joint venture.Joint operation The term joint operation,as defined by IFRS,means a type of joint arrangement whereby the parties that have joint control of the agreement have rights to the assets and obligations for the liabilities relating to the arrangement.Joint ventureThe term joint venture,as defined by IFRS,means a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement.KingdomKingdom of Saudi Arabia.MENAMiddle East and North Africa.MidOceanMidOcean Holdings II,L.P.MotivaMotiva Enterprises LLC.PIFPublic Investment Fund of Saudi Arabia.ROACEReturn on average capital employed.SABICSaudi Basic Industries Corporation.Saudi Aramco/Aramco/GroupSaudi Arabian Oil Company,together with its consolidated subsidiaries,and where the context requires,its joint operations,joint ventures and associates.Any reference to“us”,“we”or“our”refers to Saudi Aramco/Aramco except where otherwise stated.Unless otherwise stated,the text does not distinguish between the activities and operations of the Company and those of its subsidiaries.ShareholderAny holder of shares.SOCPA Saudi Organization for Chartered and Professional Accountants.SubsidiariesExcept with respect to financial information,the term subsidiaries mean the companies that Aramco controls through its ability to influence the actions or decisions of another person through,whether directly or indirectly,alone or with a relative or affiliate(i)holding 30%or more of the voting rights in a company or(ii)having the right to appoint 30%or more of the Board of a company.With respect to financial information,the term subsidiaries is defined by IFRS,meaning entities over which the Company has control.11Saudi AramcoSecond quarter and half year interim report 2024Disclaimer This Interim Report may contain certain forward-looking statements with respect to Aramcos financial position,results of operations and business and certain of Aramcos plans,intentions,expectations,assumptions,goals and beliefs regarding such items.These statements include all matters that are not historical fact and generally,but not always,may be identified by the use of words such as“believes”,“expects”,“are expected to”,“anticipates”,“intends”,“estimates”,“should”,“will”,“shall”,“may”,“is likely to”,“plans”,“outlook”or similar expressions,including variations and the negatives thereof or comparable terminology.Investors and prospective investors should be aware that forward-looking statements are not guarantees of future performance and that Aramcos actual financial position,results of operations and business and the development of the industries in which it operates may differ significantly from those made in or suggested by these forward-looking statements.In addition,even if Aramcos financial position,results of operations and business and the development of the industries in which it operates are consistent with these forward-looking statements,those results or developments may not be indicative of results or developments in subsequent periods.Factors that could cause actual results to differ materially from Aramcos expectations are contained in cautionary statements in this Interim Report and include,among other things,the following:Global supply,demand and price fluctuations of oil,gas and petrochemicals;Global economic conditions;Competition in the industries in which Aramco operates;Climate change concerns,weather conditions and related impacts on the global demand for hydrocarbons and hydrocarbon-based products,as well as risks related to Aramcos ESG goals and targets;Conditions affecting the transportation of products;Operational risk and hazards common in the oil and gas,refining and petrochemicals industries;The cyclical nature of the oil and gas,refining and petrochemicals industries;Political and social instability and unrest,and actual or potential armed conflicts in the MENA region and other areas;Natural disasters and public health pandemics or epidemics;The management of Aramcos growth;The management of the Companys subsidiaries,joint operations,joint ventures,associates and entities in which it holds a minority interest;Aramcos exposure to inflation,interest rate risk and foreign exchange risk;Risks related to operating in a regulated industry and changes to oil,gas,environmental or other regulations that impact the industries in which Aramco operates;Legal proceedings,international trade matters,and other disputes or agreements;and Risks related to the Kingdom.For a discussion of our risk factors,please see Aramcos Annual Report 2023,available through the investor relations section of Aramcos website at forward-looking statements speak as of the date of this report or the date they are made,and we undertake no obligation to update or revise any forward-looking statement,whether as a result of new information,future events or otherwise.All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by the cautionary statements referred to above and our risk factors in our Annual Report and statements contained elsewhere in this Interim Report.Aramcos financial information herein has been extracted from Aramcos condensed consolidated interim financial report for the six month period ended June 30,2024,which is prepared and presented in accordance with IAS 34,that is endorsed in the Kingdom of Saudi Arabia and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants(“SOCPA”).In addition,this document includes certain“non-IFRS financial measures”.These measures are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS.Rather,these measures are provided as additional information to complement IFRS measures by providing further understanding of Aramcos results of operations,cash flow and financial position from managements perspective.Accordingly,they should not be considered in isolation or as a substitute for analysis of Aramcos financial information reported under IFRS.A reconciliation of non-IFRS measures is included in the Non-IFRS measures reconciliations and definitions section of this Interim Report.12Saudi AramcoSecond quarter and half year interim report 2024Independent auditors review report.13Condensed consolidated statement of income.14 Condensed consolidated statement of comprehensive income.15 Condensed consolidated balance sheet.16Condensed consolidated statement of changes in equity.17 Condensed consolidated statement of cash flows.18 Notes to the condensed consolidated interim financial report.19Condensed consolidated interim financial reportFor the three-month and six-month periods ended June 30,2024(unaudited)Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 14 Condensed consolidated statement of income SAR USD*2nd quarter 2nd quarter Six months Six months 2nd quarter 2nd quarter Six months Six months Note 2024 2023 2024 2023 2024 2023 2024 2023 Revenue 10 425,711 402,564 827,748 820,024 113,523 107,350 220,733 218,673 Other income related to sales 44,900 45,754 80,710 88,127 11,974 12,202 21,523 23,501 Revenue and other income related to sales 470,611 448,318 908,458 908,151 125,497 119,552 242,256 242,174 Royalties and other taxes(54,797)(52,094)(107,029)(120,336)(14,613)(13,892)(28,541)(32,090)Purchases(134,256)(119,064)(244,267)(225,433)(35,802)(31,751)(65,138)(60,116)Producing and manufacturing(25,366)(24,132)(49,637)(47,265)(6,764)(6,435)(13,237)(12,604)Selling,administrative and general(21,478)(14,370)(43,587)(29,617)(5,727)(3,832)(11,623)(7,898)Exploration(1,856)(2,361)(4,449)(4,113)(495)(629)(1,186)(1,096)Research and development(1,259)(1,052)(2,415)(1,983)(336)(280)(644)(528)Depreciation and amortization 5,6(25,148)(22,692)(48,575)(44,667)(6,706)(6,052)(12,953)(11,912)Operating costs(264,160)(235,765)(499,959)(473,414)(70,443)(62,871)(133,322)(126,244)Operating income 206,451 212,553 408,499 434,737 55,054 56,681 108,934 115,930 Share of results of joint ventures and associates(841)(790)(1,619)(1,531)(224)(210)(432)(408)Finance and other income 6,326 7,824 13,095 18,792 1,687 2,086 3,492 5,011 Finance costs(2,332)(2,156)(5,357)(5,333)(622)(575)(1,429)(1,422)Income before income taxes and zakat 209,604 217,431 414,618 446,665 55,895 57,982 110,565 119,111 Income taxes and zakat 7(100,594)(104,621)(203,337)(214,313)(26,825)(27,899)(54,223)(57,150)Net income 109,010 112,810 211,281 232,352 29,070 30,083 56,342 61,961 Net income attributable to Shareholders equity 106,158 108,881 209,514 226,352 28,309 29,035 55,871 60,361 Non-controlling interests 2,852 3,929 1,767 6,000 761 1,048 471 1,600 109,010 112,810 211,281 232,352 29,070 30,083 56,342 61,961 Earnings per share(basic and diluted)0.44 0.45 0.87 0.94 0.12 0.12 0.23 0.25*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 15 Condensed consolidated statement of comprehensive income SAR USD*2nd quarter 2nd quarter Six months Six months 2nd quarter 2nd quarter Six months Six months Note 2024 2023 2024 2023 2024 2023 2024 2023 Net income 109,010 112,810 211,281 232,352 29,070 30,083 56,342 61,961 Other comprehensive income(loss),net of tax 8 Items that will not be reclassified to net income Remeasurement of post-employment benefits 1,182 2,363 3,480 210 315 630 928 56 Share of post-employment benefits remeasurement from joint ventures and associates 6 11(51)111 1 2(14)29 Changes in fair value of equity investments classified as fair value through other comprehensive income(1,792)(332)(682)(579)(478)(89)(182)(155)Items that may be reclassified subsequently to net income Cash flow hedges and other(123)(887)(84)(912)(32)(236)(22)(243)Changes in fair value of debt securities classified as fair value through other comprehensive income 20 95 50 158 5 25 13 42 Share of other comprehensive(loss)income of joint ventures and associates(164)(283)(1,397)730(44)(75)(373)195 Currency translation differences(1,166)(411)(1,990)(1,346)(311)(109)(530)(358)(2,037)556(674)(1,628)(544)148(180)(434)Total comprehensive income 106,973 113,366 210,607 230,724 28,526 30,231 56,162 61,527 Total comprehensive income attributable to Shareholders equity 104,451 109,445 209,747 225,022 27,854 29,185 55,933 60,006 Non-controlling interests 2,522 3,921 860 5,702 672 1,046 229 1,521 106,973 113,366 210,607 230,724 28,526 30,231 56,162 61,527*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 16 Condensed consolidated balance sheet SAR USD*At June 30,At December 31,At June 30,At December 31,Note 2024 2023 2024 2023 Assets Non-current assets Property,plant and equipment 5 1,436,364 1,384,717 383,030 369,258 Intangible assets 6 166,738 164,554 44,463 43,881 Investments in joint ventures and associates 67,579 69,474 18,021 18,526 Deferred income tax assets 20,681 20,560 5,515 5,483 Post-employment benefits 29,468 24,661 7,858 6,576 Other assets and receivables 56,828 48,265 15,155 12,871 Investments in securities 34,826 33,974 9,287 9,060 1,812,484 1,746,205 483,329 465,655 Current assets Inventories 92,159 85,951 24,576 22,920 Trade receivables 179,470 163,919 47,859 43,712 Due from the Government 45,053 49,378 12,014 13,168 Other assets and receivables 37,406 33,747 9,975 8,999 Short-term investments 107,078 184,343 28,554 49,158 Cash and cash equivalents 170,806 198,973 45,548 53,059 631,972 716,311 168,526 191,016 Assets classified as held for sale 17 1,069 15,424 285 4,113 633,041 731,735 168,811 195,129 Total assets 2,445,525 2,477,940 652,140 660,784 Equity and liabilities Shareholders equity Share capital 90,000 90,000 24,000 24,000 Additional paid-in capital 26,981 26,981 7,195 7,195 Treasury shares(4,445)(1,362)(1,185)(363)Retained earnings:Unappropriated 1,390,929 1,411,474 370,914 376,394 Appropriated 6,000 6,000 1,600 1,600 Other reserves 8(1,242)1,514(331)403 1,508,223 1,534,607 402,193 409,229 Non-controlling interests 197,081 202,485 52,555 53,996 1,705,304 1,737,092 454,748 463,225 Non-current liabilities Borrowings 9 229,341 226,481 61,158 60,395 Deferred income tax liabilities 151,497 142,449 40,399 37,986 Post-employment benefits 26,307 26,147 7,015 6,973 Provisions and other liabilities 29,045 28,205 7,745 7,521 436,190 423,282 116,317 112,875 Current liabilities Trade payables and other liabilities 155,486 151,553 41,463 40,414 Obligations to the Government:Income taxes and zakat 7 83,028 82,539 22,141 22,010 Royalties 15,422 14,107 4,113 3,762 Borrowings 9 49,841 63,666 13,290 16,978 303,777 311,865 81,007 83,164 Liabilities directly associated with assets classified as held for sale 17 254 5,701 68 1,520 304,031 317,566 81,075 84,684 Total liabilities 740,221 740,848 197,392 197,559 Total equity and liabilities 2,445,525 2,477,940 652,140 660,784*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 17 Condensed consolidated statement of changes in equity SAR USD*Shareholders equity Retained earnings Share capital Additional paid-in capital Treasury shares Unappropriated Appropriated Other reserves(Note 8)Non-controlling interests Total Total Balance at January 1,2023 75,000 26,981(2,236)1,339,892 6,000 3,279 217,231 1,666,147 444,306 Net income 226,352 6,000 232,352 61,961 Other comprehensive loss (1,330)(298)(1,628)(434)Total comprehensive income(loss)226,352 (1,330)5,702 230,724 61,527 Transfer of post-employment benefits remeasurement 176 (176)Transfer of share of post-employment benefits remeasurement from joint ventures and associates 111 (111)Treasury shares issued to employees 524(172)(29)323 86 Share-based compensation (2)303 301 80 Dividends(Note 18)(146,310)(146,310)(39,016)Bonus shares issued 15,000 (15,000)Dividends to non-controlling interests and other 119 (9,422)(9,303)(2,481)Balance at June 30,2023 90,000 26,981(1,712)1,405,166 6,000 1,936 213,511 1,741,882 464,502 Balance at January 1,2024 90,000 26,981(1,362)1,411,474 6,000 1,514 202,485 1,737,092 463,225 Net income 209,514 1,767 211,281 56,342 Other comprehensive income(loss)233(907)(674)(180)Total comprehensive income 209,514 233 860 210,607 56,162 Transfer of post-employment benefits remeasurement(Note 8)3,259 (3,259)Transfer of share of post-employment benefits remeasurement from joint ventures and associates(Note 8)(51)51 Acquisition of treasury shares (3,750)(3,750)(1,000)Treasury shares issued to employees 667(245)(32)390 104 Share-based compensation (2)251 249 67 Dividends(Note 18)(233,020)(233,020)(62,139)Dividends to non-controlling interests and other (6,264)(6,264)(1,671)Balance at June 30,2024 90,000 26,981(4,445)1,390,929 6,000(1,242)197,081 1,705,304 454,748*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated Amin H.Nasser Director,President&Chief Executive Officer Ziad T.Al Murshed Executive Vice President&Chief Financial Officer Bassam M.Asiri Senior Vice President&Controller 18 Condensed consolidated statement of cash flows SAR USD*2nd quarter 2nd quarter Six months Six months 2nd quarter 2nd quarter Six months Six months Note 2024 2023 2024 2023 2024 2023 2024 2023 Income before income taxes and zakat 209,604 217,431 414,618 446,665 55,895 57,982 110,565 119,111 Adjustments to reconcile income before income taxes and zakat to net cash provided by operating activities Depreciation and amortization 5,6 25,148 22,692 48,575 44,667 6,706 6,052 12,953 11,912 Exploration and evaluation costs written off 304 1,058 1,043 1,574 81 282 278 420 Loss on disposal of property,plant and equipment 660 457 1,024 1,077 176 121 273 287 Loss on fair value measurement of assets classified as held for sale(184)182 (49)48 Inventory movement 189 336 754 1,272 50 89 201 339 Share of results of joint ventures and associates 841 790 1,619 1,531 224 210 432 408 Finance and other income(6,326)(7,824)(13,095)(18,792)(1,687)(2,086)(3,492)(5,011)Finance costs 2,332 2,156 5,357 5,333 622 575 1,429 1,422 Change in fair value of investments through profit or loss 3(59)(95)(152)1(15)(25)(40)Change in joint ventures and associates inventory profit elimination(330)(203)260(195)(88)(54)69(52)Other(573)(537)(478)333(153)(144)(127)88 Change in working capital Inventories 1,533 2,773(6,939)16,666 409 740(1,851)4,445 Trade receivables 736 5,194(10,957)6,907 196 1,386(2,922)1,842 Due from the Government(6,579)(1,985)4,325 7,900(1,754)(530)1,154 2,106 Other assets and receivables(4,213)(1,957)(1,062)(28)(1,124)(521)(283)(7)Trade payables and other liabilities 2,756 4,976(980)(3,251)735 1,326(261)(867)Royalties payable(4,417)(2,644)1,315(1,403)(1,177)(705)351(374)Other changes Other assets and receivables(4,364)(1,193)(8,214)(5,541)(1,164)(319)(2,191)(1,478)Provisions and other liabilities 571 578 510 810 152 155 136 216 Post-employment benefits 1,426 141 1,455 446 381 37 388 119 Settlement of income,zakat and other taxes(102,531)(116,105)(196,662)(231,097)(27,342)(30,961)(52,443)(61,626)Net cash provided by operating activities 116,586 126,075 242,555 274,722 31,090 33,620 64,682 73,260 Capital expenditures 4(45,491)(39,239)(86,112)(72,036)(12,131)(10,463)(22,963)(19,209)Acquisition of affiliates,net of cash acquired 16(266)(1,533)(9,886)(71)(409)(2,636)Additional investments in joint ventures and associates(319)(2,054)(1,867)(2,158)(85)(547)(498)(575)Proceeds from sale of a subsidiary 17 1,163 1,163 310 310 Distributions from joint ventures and associates 612 1,006 1,621 2,328 163 268 432 620 Dividends from investments in securities 400 341 412 362 107 90 110 96 Interest received 5,457 5,985 12,673 12,798 1,455 1,596 3,380 3,412 Investments in securities-net(1,251)(304)(1,607)(960)(334)(81)(429)(256)Net(purchases)maturities of short-term investments(6,320)(38,019)77,265 87,592(1,685)(10,139)20,604 23,358 Net cash(used in)provided by investing activities(46,015)(72,284)2,015 18,040(12,271)(19,276)537 4,810 Dividends paid to shareholders of the Company 18(116,517)(73,160)(233,020)(146,310)(31,072)(19,509)(62,139)(39,016)Dividends paid to non-controlling interests in subsidiaries(1,916)(5,656)(6,130)(7,512)(511)(1,508)(1,635)(2,003)Acquisition of treasury shares(3,750)(3,750)(1,000)(1,000)Proceeds from issue of treasury shares 203 165 389 320 54 44 104 85 Proceeds from borrowings 4,240 2,089 7,028 17,797 1,131 557 1,874 4,745 Repayments of borrowings(16,642)(61,058)(21,480)(120,909)(4,438)(16,282)(5,728)(32,242)Principal portion of lease payments(3,912)(3,079)(7,553)(6,225)(1,043)(821)(2,014)(1,660)Interest paid(5,443)(4,875)(8,221)(7,079)(1,451)(1,300)(2,192)(1,887)Net cash used in financing activities(143,737)(145,574)(272,737)(269,918)(38,330)(38,819)(72,730)(71,978)Net(decrease)increase in cash and cash equivalents(73,166)(91,783)(28,167)22,844(19,511)(24,475)(7,511)6,092 Cash and cash equivalents at beginning of the period 243,972 340,674 198,973 226,047 65,059 90,846 53,059 60,279 Cash and cash equivalents at end of the period 170,806 248,891 170,806 248,891 45,548 66,371 45,548 66,371*This supplementary information is converted at a fixed rate of U.S.dollar 1.00=SAR 3.75 for convenience only,and is presented in millions of U.S.dollars.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 19 Notes to the condensed consolidated interim financial report 1.General information The Saudi Arabian Oil Company(the“Company”),with headquarters located in Dhahran,Kingdom of Saudi Arabia(the“Kingdom”),is engaged in prospecting,exploring,drilling and extracting hydrocarbon substances(“Upstream”)and processing,manufacturing,refining and marketing these hydrocarbon substances(“Downstream”).The Company was formed on November 13,1988 by Royal Decree No.M/8;however,its history dates back to May 29,1933 when the Saudi Arabian Government(the“Government”)granted a concession to the Companys predecessor for the right to,among other things,explore the Kingdom for hydrocarbons.Effective January 1,2018,the Council of Ministers Resolution No.180,dated 1/4/1439H(December 19,2017),converted the Company to a Saudi Joint Stock Company with new Bylaws.On December 11,2019,the Company completed its Initial Public Offering(“IPO”)and its ordinary shares were listed on the Saudi Exchange.In connection with the IPO,the Government,being the sole owner of the Companys shares at such time,sold an aggregate of 3.45 billion ordinary shares,or 1.73%of the Companys share capital.On February 13,2022,the Government transferred 4%of the Companys issued shares to the Public Investment Fund(PIF),the sovereign wealth fund of the Kingdom,followed by another transfer of 4%on April 16,2023 to Saudi Arabian Investment Company(Sanabil Investments),a wholly-owned company of PIF.Further,on March 7,2024,the Government announced the transfer of an additional 8%of the Companys issued shares to PIFs wholly-owned companies.On June 11,2024,the Government completed a secondary public offering of the Companys ordinary shares.In connection with the offering,the Government sold an aggregate of approximately 1.7 billion shares,representing 0.7%of the Companys issued shares.This includes 137.6 million ordinary shares acquired by the Company from the Government for a cash payment of SAR 3,750,which have been classified as treasury shares.These treasury shares will be used by the Company for its employee share plans.Following the completion of the offering,the Government remains the Companys largest shareholder,retaining an 81.48%direct shareholding.The condensed consolidated interim financial report of the Company and its subsidiaries(together“Saudi Aramco”)was approved by the Board of Directors on August 5,2024.2.Basis of preparation and material accounting policy information The condensed consolidated interim financial report has been prepared in accordance with International Accounting Standard 34(“IAS 34”),Interim Financial Reporting,that is endorsed in the Kingdom,and other standards and pronouncements issued by the Saudi Organization for Chartered and Professional Accountants(“SOCPA”).The accounting policies used in the preparation of this condensed consolidated interim financial report are consistent with those set out in Saudi Aramcos consolidated financial statements for the year ended December 31,2023.The results for the interim periods are unaudited and include all adjustments necessary for a fair presentation of the results for the periods presented.This condensed consolidated interim financial report should be read in conjunction with the consolidated financial statements and related notes for the year ended December 31,2023,which have been prepared in accordance with International Financial Reporting Standards(“IFRS”)that are endorsed in the Kingdom,and other standards and pronouncements issued by SOCPA.The consolidated financial statements for the year ended December 31,2023 are also in compliance with IFRS as issued by the International Accounting Standards Board(“IASB”).Translations from SAR to USD presented as supplementary information in the condensed consolidated statement of income,condensed consolidated statement of comprehensive income,condensed consolidated balance sheet,condensed consolidated statement of changes in equity,and condensed consolidated statement of cash flows at June 30,2024 and December 31,2023 and for the three-month and six-month periods ended June 30,2024 and 2023,are for convenience and were calculated at the rate of USD 1.00=SAR 3.75 representing the exchange rate at the balance sheet dates.New or amended standards There are no amendments or interpretations that are effective for annual periods beginning on or after January 1,2024 that have a material impact on the condensed consolidated interim financial report.Saudi Aramco has not early adopted any new accounting standards,interpretations or amendments that are issued but not yet effective.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 20 3.Fair value estimation Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or,in the absence of a principal market,in the most advantageous market for the asset or liability.Management believes that the fair values of Saudi Aramcos financial assets and liabilities that are measured and recognized at amortized cost are not materially different from their carrying amounts at the end of the reporting period.The following table presents Saudi Aramcos assets and liabilities measured and recognized at fair value at June 30,2024 and December 31,2023,based on the prescribed fair value measurement hierarchy on a recurring basis.Saudi Aramco did not measure any financial assets or financial liabilities at fair value on a non-recurring basis at June 30,2024 and December 31,2023.There were no changes made to any of the valuation techniques and valuation processes applied as of December 31,2023 and changes in unobservable inputs are not expected to materially impact the fair values.Assets Level 1i Level 2ii Level 3iii Total At June 30,2024 Investments in securities:Equity securities at Fair Value Through Other Comprehensive Income(FVOCI)12,591 39 2,132 14,762 Debt securities at FVOCI 93 9,237 9,330 Equity securities at Fair Value Through Profit or Loss(FVPL)553 1,773 8,942 11,268 Debt securities at FVPL 207 207 13,237 11,256 11,074 35,567 Other assets and receivables:Interest rate swaps 760 760 Commodity derivative contracts 3,299 3,299 Currency forward contracts 36 36 Financial assets-option rights 4,281 4,281 4,095 4,281 8,376 Trade receivables related to contracts with provisional pricing arrangements 131,075 131,075 Total assets 13,237 15,351 146,430 175,018 At December 31,2023 Investments in securities:Equity securities at FVOCI 13,376 36 2,143 15,555 Debt securities at FVOCI 75 8,884 8,959 Equity securities at FVPL 548 1,628 7,908 10,084 Debt securities at FVPL 176 176 13,999 10,724 10,051 34,774 Other assets and receivables:Interest rate swaps 556 556 Commodity derivative contracts 3,651 486 4,137 Currency forward contracts 80 80 Financial assets-option rights 3,745 3,745 4,287 4,231 8,518 Trade receivables related to contracts with provisional pricing arrangements 98,978 98,978 Total assets 13,999 15,011 113,260 142,270 Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 21 3.Fair value estimation continued Liabilities Level 1i Level 2ii Level 3iii Total At June 30,2024 Trade payables and other liabilities:Interest rate swaps 8 8 Commodity derivative contracts 3,141 3,141 Currency forward contracts 72 72 Trade payables related to contracts with provisional pricing arrangements 38,523 38,523 3,221 38,523 41,744 Provisions and other liabilities:Financial liabilities-options and forward contracts 2,298 2,298 Total liabilities 3,221 40,821 44,042 At December 31,2023 Trade payables and other liabilities:Interest rate swaps 21 21 Commodity derivative contracts 225 2,776 126 3,127 Currency forward contracts 49 49 Trade payables related to contracts with provisional pricing arrangements 35,598 35,598 225 2,846 35,724 38,795 Provisions and other liabilities:Financial liabilities-options and forward contracts 2,011 2,011 Total liabilities 225 2,846 37,735 40,806 i.Quoted prices(unadjusted)in active markets for identical assets or liabilities.ii.Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.iii.Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.The changes in Level 3 investments in securities for the six-month period ended June 30,2024 and the year ended December 31,2023 are as follows:June 30,December 31,2024 2023 Beginning 10,051 8,490 Net additions 1,014 1,633 Net unrealized fair value gain(loss)30(64)Realized loss(21)(8)Ending 11,074 10,051 The movement in trade receivables and trade payables related to contracts with provisional pricing arrangements mainly arises from sales and purchase transactions made during the period,net of settlements.Unrealized fair value movements on these trade receivables and trade payables are not significant.The change in the carrying amount of commodity derivative contracts primarily relates to purchase and sales of derivative contracts,including recognition of a gain or loss that results from adjusting a derivative to fair value.Fair value movements on commodity derivative contracts are not significant.The movements in financial assets option rights and financial liabilities options and forward contracts,being put,call and forward contracts on equity instruments of certain non-wholly-owned subsidiaries,are mainly due to changes in the unrealized fair values of those contracts during the period.4.Operating segments Saudi Aramco is engaged in prospecting,exploring,drilling,extracting,processing,manufacturing,refining and marketing hydrocarbon substances within the Kingdom and has interests in refining,petrochemical,distribution,marketing and storage facilities outside the Kingdom.Saudi Aramcos operating segments are established on the basis of those components that are evaluated regularly by the President&CEO,considered to be the Chief Operating Decision Maker.The Chief Operating Decision Maker monitors the operating results of Saudi Aramcos operating segments separately for the purpose of making decisions about resource allocation and performance assessment.Segment performance is evaluated based on revenues,costs and a broad range of key performance indicators in addition to segment profitability.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 22 4.Operating segments continued For management purposes,Saudi Aramco is organized into business units based on the main types of activities.At June 30,2024,Saudi Aramco had two reportable segments,Upstream and Downstream,with all other supporting functions aggregated into a Corporate segment.Upstream activities include crude oil,natural gas and natural gas liquids exploration,field development and production.Downstream activities consist primarily of refining and petrochemical manufacturing,supply and trading,base oils and lubricants,retail,distribution and power generation,logistics,and marketing of crude oil and related services to international and domestic customers.Corporate activities include primarily supporting services including Human Resources,Finance and IT,that are not allocated to Upstream and Downstream.Transfer prices between operating segments are on an arms length basis in a manner similar to transactions with third parties.There are no differences from the consolidated financial statements for the year ended December 31,2023 in the basis of segmentation or in the basis of measurement of segment earnings before interest,income taxes and zakat.Information by segments for the three-month period ended June 30,2024 is as follows:Upstream Downstream Corporate Eliminations Consolidated External revenue 188,933 236,107 671 425,711 Other income related to sales 14,360 30,540 44,900 Inter-segment revenue 97,566 8,709 63(106,338)Earnings(losses)before interest,income taxes and zakat 209,093(981)(5,158)4,055 207,009 Finance income 4,927 Finance costs (2,332)Income before income taxes and zakat 209,604 Capital expenditures-cash basis 37,277 7,493 721 45,491 Information by segments for the three-month period ended June 30,2023 is as follows:Upstream Downstream Corporate Eliminations Consolidated External revenue 192,585 209,446 533 402,564 Other income related to sales 16,587 29,167 45,754 Inter-segment revenue 84,285 8,833 65(93,183)Earnings(losses)before interest,income taxes and zakat 212,456 2,956(4,211)961 212,162 Finance income 7,425 Finance costs (2,156)Income before income taxes and zakat 217,431 Capital expenditures-cash basis 31,319 7,580 340 39,239 Information by segments for the six-month period ended June 30,2024 is as follows:Upstream Downstream Corporate Eliminations Consolidated External revenue 375,348 450,995 1,405 827,748 Other income related to sales 24,782 55,928 80,710 Inter-segment revenue 192,249 17,797 140(210,186)Earnings(losses)before interest,income taxes and zakat 414,435 3,634(8,883)(793)408,393 Finance income 11,582 Finance costs (5,357)Income before income taxes and zakat 414,618 Capital expenditures-cash basis 70,391 14,375 1,346 86,112 Information by segments for the six-month period ended June 30,2023 is as follows:Upstream Downstream Corporate Eliminations Consolidated External revenue 393,824 425,224 976 820,024 Other income related to sales 29,483 58,644 88,127 Inter-segment revenue 172,064 17,540 126(189,730)Earnings(losses)before interest,income taxes and zakat 427,734 15,786(7,060)(2,750)433,710 Finance income 18,288 Finance costs (5,333)Income before income taxes and zakat 446,665 Capital expenditures-cash basis 56,651 14,727 658 72,036 Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 23 5.Property,plant and equipment Land and land improvements Buildings Oil and gas properties Plant,machinery and equipment Depots,storage tanks and pipelines Fixtures,IT and office equipment Construction-in-progress Total Cost January 1,2024 52,179 91,438 693,089 979,354 109,506 20,935 305,724 2,252,225 Additions1 547 867 13 11,847 794 129 88,862 103,059 Acquisition(Note 16(a)1,187 129 473 24 72 1,885 Construction completed 293 2,090 24,727 25,771 3,854 357(57,092)Currency translation differences(425)(419)(3,682)(447)(95)(734)(5,802)Transfers and adjustments2(64)(441)(1,000)(1,166)153 27(473)(2,964)Transfer of exploration and evaluation assets 330 330 Retirements and sales(31)(125)(25)(2,904)(304)(142)(25)(3,556)June 30,2024 53,686 93,539 716,804 1,009,693 113,556 21,235 336,664 2,345,177 Accumulated depreciation January 1,2024(21,148)(43,341)(266,274)(474,771)(48,597)(13,377)(867,508)Charge for the period2(756)(1,569)(11,620)(30,668)(1,793)(811)(47,217)Currency translation differences(5)225 2,184 213 69 2,686 Transfers and adjustments(207)156(10)688(29)(29)569 Retirements and sales 16 102 7 2,160 194 178 2,657 June 30,2024(22,100)(44,427)(277,897)(500,407)(50,012)(13,970)(908,813)Property,plant and equipment-net,June 30,2024 31,586 49,112 438,907 509,286 63,544 7,265 336,664 1,436,364 1.Additions include borrowing costs capitalized during the six-month period ended June 30,2024,amounting to SAR 4,338,which were calculated using an average annualized capitalization rate of 5.21%.2.Saudi Aramco recognized a write-down of SAR 551 relating to certain downstream facilities,including facilities under construction of SAR 392.Additions to right-of-use assets during the three-month and six-month periods ended June 30,2024 were SAR 4,988 and SAR 12,807,respectively.Acquisition of right-of-use assets during the three-month and six-month periods ended June 30,2024 were SAR 43 and SAR 1,024,respectively.The following table presents depreciation charges and net carrying amounts of right-of-use assets by class of assets.Depreciation expense for the six-month period ended June 30,2024 Net carrying amount at June 30,2024 Land and land improvements 125 6,534 Buildings 249 3,684 Oil and gas properties 8 4 Plant,machinery and equipment 6,936 55,482 Depots,storage tanks and pipelines 248 2,610 Fixtures,IT and office equipment 62 210 7,628 68,524 Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 24 6.Intangible assets Goodwill Exploration and evaluation Brands and trademarks Franchise/customer relationships Computer software Other1 Total Cost January 1,2024 101,010 20,013 24,982 21,701 4,233 3,876 175,815 Additions 4,054 123 81 4,258 Acquisition(Note 16(a)254 1 55 3 313 Currency translation differences(12)(149)(79)(10)(6)(256)Transfers and adjustments 1(36)20 (15)Transfer of exploration and evaluation assets (330)(330)Retirements and write offs (1,043)(798)(76)(1,917)June 30,2024 101,252 22,694 24,834 21,678 3,515 3,895 177,868 Accumulated amortization January 1,2024 (2,795)(4,465)(2,681)(1,320)(11,261)Charge for the period (91)(573)(159)(143)(966)Currency translation differences 95 75 10 61 241 Transfers and adjustments 2 2 Retirements and write offs 798 56 854 June 30,2024 (2,791)(4,963)(2,030)(1,346)(11,130)Intangible assets-net,June 30,2024 101,252 22,694 22,043 16,715 1,485 2,549 166,738 1.Other intangible assets with a net book value of SAR 2,549 as at June 30,2024 comprise processing and offtake agreements,licenses,technology,usage rights,patents and intellectual property.7.Income taxes and zakat(a)Kingdom income tax rates The Company is subject to an income tax rate of 20%on its Downstream activities and on the activities of exploration and production of non-associated natural gas,including gas condensates,as well as the collection,treatment,processing,fractionation and transportation of associated and non-associated natural gas and their liquids,gas condensates and other associated elements.All other activities are subject to an income tax rate of 50%,in accordance with the Saudi Arabian Income Tax Law of 2004 and its amendments(the“Tax Law”).The 20%income tax rate applicable to the Companys Downstream activities,which came into effect on January 1,2020,is conditional on the Company separating its Downstream activities under the control of one or more separate wholly-owned subsidiaries before December 31,2024,unless an extension of such deadline is provided;otherwise the Companys Downstream activities will be retroactively taxed at 50%.Additionally,according to the Tax Law,shares held directly or indirectly in listed companies on the Saudi Exchange by taxpayers engaged in oil and hydrocarbon activities are exempt from the application of corporate income tax.As a result,the Companys ownership interests in such companies are subject to zakat.The reconciliation of tax charge at the Kingdoms statutory rates to consolidated tax and zakat expense is as follows:2nd quarter 2nd quarter Six months Six months 2024 2023 2024 2023 Income before income taxes and zakat 209,604 217,431 414,618 446,665 Less:Income subject to zakat (2,002)(3,236)(3,357)(6,177)Income subject to income tax 207,602 214,195 411,261 440,488 Income taxes at the Kingdoms statutory tax rates 101,730 103,830 201,053 215,929 Tax effect of:(Income)loss not subject to tax at statutory rates and other(611)291 2,434(2,642)Income tax expense 101,119 104,121 203,487 213,287 Zakat(benefit)expense(525)500(150)1,026 Total income tax and zakat expense 100,594 104,621 203,337 214,313 Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 25 7.Income taxes and zakat continued(b)Income tax and zakat expense 2nd quarter 2nd quarter Six months Six months 2024 2023 2024 2023 Current income tax-Kingdom 98,222 101,411 195,032 205,811 Current income tax-Foreign 747 639 2,047 2,476 Deferred income tax-Kingdom 2,352 2,321 7,020 5,392 Deferred income tax-Foreign(202)(250)(612)(392)Zakat-Kingdom(525)500(150)1,026 100,594 104,621 203,337 214,313 (c)Income tax and zakat obligation to the Government 2024 2023 January 1 82,539 104,978 Provided during the period 194,882 206,837 Payments during the period by the Company(Note 14)(95,023)(116,171)Payments during the period by subsidiaries and joint operations(6,740)(9,171)Settlements of due from the Government(88,919)(98,472)Other settlements(3,711)(2,449)June 30 83,028 85,552 8.Other reserves Share of other comprehensive income(loss)of joint ventures and associates Currency translation differences Investments in securities at FVOCI Post-employment benefits Share-based compensation reserve Cash flow hedges and other Foreign currency translation gains(losses)Cash flow hedges and other Total January 1,2024(3,840)3,979 331 25 1,172(153)1,514 Current period change(1,990)(762)251(84)(1,453)56 (3,982)Remeasurement gain(loss)1 6,084 (51)6,033 Transfer to retained earnings (3,259)(32)51 (3,240)Tax effect 130(2,604)(2,474)Less:amounts related to non-controlling interests 697 5(221)(6)432 907 June 30,2024(5,133)3,352 550(65)151(97)(1,242)1.The remeasurement gain(loss)is primarily due to the net impact arising from changes in discount rates used to determine the present value of the post-employment benefit obligations and changes in the fair value of post-employment benefit plan assets.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 26 9.Borrowings At June 30,2024 At December 31,2023 Non-current Current Total Non-current Current Total Conventional:Debentures 80,811 2,200 83,011 81,092 9,683 90,775 Bank borrowings 25,250 3,816 29,066 22,853 3,630 26,483 Short-term borrowings 15,314 15,314 18,378 18,378 Revolving credit facilities 1,237 1,237 Export credit agencies 558 703 1,261 941 656 1,597 Public Investment Fund 217 404 621 455 365 820 Other financing arrangements 35,454 570 36,024 36,070 200 36,270 142,290 23,007 165,297 141,411 34,149 175,560 Sharia compliant:Sukuk(Note 9(a)18,698 11,250 29,948 18,689 15,000 33,689 Murabaha(Note 9(b)12,063 1,984 14,047 13,830 2,089 15,919 Saudi Industrial Development Fund 2,748 386 3,134 3,057 281 3,338 Ijarah/Procurement 3,531 13 3,544 3,499 13 3,512 Wakala 771 10 781 771 27 798 37,811 13,643 51,454 39,846 17,410 57,256 Borrowings other than leases 180,101 36,650 216,751 181,257 51,559 232,816 Lease liabilities 49,240 13,191 62,431 45,224 12,107 57,331 Total borrowings 229,341 49,841 279,182 226,481 63,666 290,147 (a)Sukuk On March 28,2024,the maturity date of the Sukuk issued on April 10,2017,with a par value of SAR 11,250,was extended by one year from its original maturity date of April 10,2024,subject to an early redemption option.(b)Murabaha Murabaha borrowings of a subsidiary amounting to SAR 938,repayable in semi-annual installments until 2029,were early settled by the subsidiary on March 28,2024.10.Revenue 2nd quarter 2nd quarter Six months Six months 2024 2023 2024 2023 Revenue from contracts with customers 423,134 401,636 820,415 817,573 Movement between provisional and final prices(118)(1,771)2,004(2,628)Other revenue 2,695 2,699 5,329 5,079 425,711 402,564 827,748 820,024 Disaggregation of revenue from contracts with customers Saudi Aramcos revenue from contracts with customers according to product type and source is as follows:2nd quarter 2024 Upstream Downstream Corporate Total Crude oil 177,914 33,578 211,492 Refined and chemical products 197,951 197,951 Natural gas and NGLs 11,017 751 11,768 Metal products 1,923 1,923 Revenue from contracts with customers 188,931 234,203 423,134 Movement between provisional and final prices(80)(38)(118)Other revenue 82 1,942 671 2,695 External revenue 188,933 236,107 671 425,711 Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 27 10.Revenue continued 2nd quarter 2023 Upstream Downstream Corporate Total Crude oil 185,311 24,275 209,586 Refined and chemical products 179,112 179,112 Natural gas and NGLs 8,875 994 9,869 Metal products 3,069 3,069 Revenue from contracts with customers 194,186 207,450 401,636 Movement between provisional and final prices(1,714)(57)(1,771)Other revenue 113 2,053 533 2,699 External revenue 192,585 209,446 533 402,564 Six months 2024 Upstream Downstream Corporate Total Crude oil 351,694 59,632 411,326 Refined and chemical products 380,182 380,182 Natural gas and NGLs 21,540 2,156 23,696 Metal products 5,211 5,211 Revenue from contracts with customers 373,234 447,181 820,415 Movement between provisional and final prices 1,937 67 2,004 Other revenue 177 3,747 1,405 5,329 External revenue 375,348 450,995 1,405 827,748 Six months 2023 Upstream Downstream Corporate Total Crude oil 377,139 45,613 422,752 Refined and chemical products 367,424 367,424 Natural gas and NGLs 18,938 2,129 21,067 Metal products 6,330 6,330 Revenue from contracts with customers 396,077 421,496 817,573 Movement between provisional and final prices(2,463)(165)(2,628)Other revenue 210 3,893 976 5,079 External revenue 393,824 425,224 976 820,024 11.Non-cash investing and financing activities Investing and financing activities for the three-month and six-month periods ended June 30,2024 include the sale of the Saudi Iron and Steel Company(“Hadeed”)for deferred consideration of SAR 4,948(Note 17(a),additions to right-of-use assets of SAR 4,988 and SAR 12,807(June 30,2023:SAR 2,628 and SAR 5,937),respectively,asset retirement provisions of nil and nil(June 30,2023:SAR 91 and SAR 186),respectively,and equity awards issued to employees of SAR 111 and SAR 278(June 30,2023:SAR 54 and SAR 203),respectively.12.Commitments Capital commitments Capital expenditures contracted for but not yet incurred were SAR 281,029 and SAR 222,938 at June 30,2024 and December 31,2023,respectively.In addition,leases contracted for but not yet commenced were SAR 33,387 and SAR 26,369 at June 30,2024 and December 31,2023,respectively.13.Contingencies Saudi Aramco has contingent assets and liabilities with respect to certain disputed matters,including claims by and against contractors and lawsuits and arbitrations involving a variety of issues.These contingencies arise in the ordinary course of business.It is not anticipated that any material adjustments will result from these contingencies.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 28 14.Payments to the Government by Saudi Arabian Oil Company 2nd quarter 2nd quarter Six months Six months 2024 2023 2024 2023 Income taxes(Note 7(c)56,448 59,443 95,023 116,171 Royalties 57,284 52,042 101,943 103,051 Dividends 95,766 65,999 191,532 134,917 15.Related party transactions and balances(a)Transactions 2nd quarter 2nd quarter Six months Six months 2024 2023 2024 2023 Joint ventures:Revenue from sales 6,289 5,467 12,094 11,036 Other revenue 34 7 64 11 Interest income 52 60 105 98 Purchases 5,419 5,843 12,945 12,353 Service expenses 26 4 Associates:Revenue from sales 22,301 16,954 42,041 35,629 Other revenue 34 22 98 90 Interest income 94 22 210 105 Purchases 14,265 13,965 25,515 28,958 Service expenses 22 23 86 49 Government,semi-Government and other entities with Government ownership or control:Revenue from sales 11,787 5,389 18,398 10,875 Other income related to sales 44,900 45,754 80,710 88,127 Other revenue 176 244 360 454 Purchases 2,602 4,923 4,980 7,556 Service expenses 109 116 233 214 Lease expenses 300 270 619 514 (b)Balances At June 30,At December 31,2024 2023 Joint ventures:Other assets and receivables 4,961 5,378 Trade receivables 5,501 4,976 Interest receivable 581 581 Trade payables and other liabilities 6,536 6,236 Associates:Other assets and receivables 5,880 4,882 Trade receivables 12,229 12,971 Trade payables and other liabilities 6,604 6,139 Government,semi-Government and other entities with Government ownership or control:Other assets and receivables 10,399 1,151 Trade receivables 5,625 2,606 Due from the Government 45,053 49,378 Trade payables and other liabilities 1,286 1,448 Borrowings 7,061 7,736 (c)Compensation of key management personnel Compensation policies for and composition of key management personnel remain consistent with 2023.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 29 16.Investments in affiliates(a)Esmax Distribucin SpA(“Esmax”)On March 1,2024,the Company announced the completion of the acquisition of a 100%equity stake in Esmax Distribucin SpA(“Esmax”),through its wholly-owned subsidiary,Aramco Overseas Company B.V.(“AOC”),from Southern Cross Group,a Latin America-focused private equity company,for a purchase consideration of SAR 1,373,subject to customary adjustments.Esmax is one of the leading diversified downstream fuels and lubricants retailers in Chile,and its operations include retail fuel stations,airport operations,fuel distribution terminals and a lubricant blending plant.The transaction represents Saudi Aramcos first downstream retail investment in South America and enables it to secure outlets for its refined products,including fuel placement from Motiva.It also creates a platform to launch the Aramco brand in South America while strengthening its downstream value chain and unlocks new market opportunities for its Valvoline-branded lubricants.The transaction resulted in Saudi Aramco obtaining control of Esmax.Saudi Aramco accounts for acquisitions of subsidiaries using the acquisition method of accounting.This requires recognition of the assets acquired and liabilities assumed at fair value as of the acquisition date.The purchase price allocation,as performed by an independent valuer,has not been concluded.During the current quarter,based on the updated preliminary purchase price allocation,the revised total identifiable net assets and goodwill carrying amounts are SAR 1,119 and SAR 254,respectively.Post-acquisition,Esmax contributed revenues of SAR 3,203 and net income of SAR 45,which are included in the condensed consolidated statement of income.If the acquisition had occurred on January 1,2024,management estimates that consolidated revenue and net income for the six-month period ended June 30,2024 would have been higher by SAR 1,564 and SAR 15,respectively.(b)MidOcean Holdings II,L.P.(“MidOcean”)On September 27,2023,AOC,a wholly-owned subsidiary of the Company,entered into definitive agreements to acquire a strategic minority stake in MidOcean Holdings II,L.P.,(“MidOcean”)which in turn owns MidOcean Energy,LLC(“MidOcean Energy”).MidOcean Energy is a Liquefied Natural Gas(“LNG”)company,formed and managed by EIG Global Energy Partners with the objective of building a high-quality,long term LNG portfolio,and has recently acquired interests in a portfolio of LNG projects in Australia and Peru.This strategic partnership marks Saudi Aramcos first international investment in LNG.The transaction closed on March 21,2024,with Saudi Aramco investing SAR 195,which has been accounted for as an investment in associate.Saudi Aramcos equity interest and associated rights in MidOcean can vary depending upon the future investments MidOcean makes and the extent of Saudi Aramcos capital contribution to those investments.(c)Gas&Oil Pakistan Limited(“GO”)On May 31,2024,Aramco Asia Singapore Pte.Ltd.,a wholly owned subsidiary of the Company,completed the acquisition of a 40%equity stake in Gas&Oil Pakistan Limited(“GO”),for a purchase consideration of SAR 279.GO is a diversified downstream fuels,lubricants and convenience stores operator in Pakistan,with a network of more than 1,200 retail fuel stations.The transaction represents Saudi Aramcos first downstream retail investment in Pakistan,advancing the Companys strategy to strengthen its downstream value chain internationally.The investment in GO has been accounted for as a joint venture.(d)HORSE Powertrain Limited(“HORSE”)On June 28,2024,Aramco Asia Singapore Pte.Ltd.,a wholly owned subsidiary of the Company,entered into definitive agreements to acquire a 10%equity interest in HORSE Powertrain Limited(“HORSE”)alongside Renault S.A.S.,Zhejiang Geely Holding Group Co.,Ltd.and Geely Automobile Holdings Limited.The price to be paid at closing,which is subject to customary closing conditions including the receipt of regulatory approvals,will be based on a Euro 7.4 billion(approximately SAR 29,700)enterprise valuation.HORSE develops,manufactures and supplies energy-efficient internal combustion and hybrid powertrains and transmissions to partners around the world.Saudi Aramcos investment in HORSE would enhance the Companys contribution to the global energy transition through the development and commercialization of more efficient mobility solutions.The transaction is expected to close by the end of 2024.17.Assets held for sale(a)Saudi Iron and Steel Company(“Hadeed”)On September 3,2023,SABIC,a subsidiary of Saudi Aramco,announced the signing of an agreement to sell its 100%shareholding in the Saudi Iron and Steel Company(“Hadeed”)to PIF.This transaction enables SABIC,which is part of the Downstream segment,to optimize its portfolio and focus on its core business.Following the signing of the agreement,assets and liabilities of Hadeed were classified as held for sale,and were presented separately on the consolidated balance sheet.On May 31,2024,SABIC obtained all approvals from the relevant authorities and satisfied all conditions in addition to the transfer of ownership of Hadeed to PIF.The final sale price will be determined once the completion accounts are finalised,in line with the agreement,which is expected during the second half of 2024.SABIC received cash consideration of SAR 1,163 in June 2024,and recognized deferred consideration on the date of the sale within current and non-current other assets and receivables,amounting to SAR 3,314 and SAR 1,634,respectively.Saudi Aramco Second quarter and half year interim report 2024 All amounts in millions of Saudi Riyals unless otherwise stated 30 17.Assets held for sale continued Hadeeds total assets and liabilities derecognized on the date of the sale were SAR 19,072 and SAR 9,848,respectively.These comprised property,plant and equipment and intangible assets of SAR 8,270,other assets of SAR 10,802,post-employment benefit obligations of SAR 2,901,and other liabilities of SAR 6,947.A loss on fair value measurement of SAR 3,219,to reduce the carrying amount of the assets to their fair value less costs to sell,was recognized in the 2023 consolidated financial statements.In addition,a fair value loss of SAR 182 was recognized during the six-month period ended June 30,2024.(b)Film&Sheet business SABIC is in the process of divesting its Film&Sheet business,which is expected to be completed over the next twelve months.At June 30,2024,the carrying values of the total assets and liabilities of the Film&Sheet business amounted to SAR 1,069 and SAR 254,respectively,and were classified as held for sale and presented separately on the condensed consolidated balance sheet.18.Dividends Dividends declared and paid on ordinary shares are as follows:SAR per share Six months Six months Six months Six months 2024 2023 2024 2023 Dividends declared and paid in each quarter:March 116,503 73,150 0.4815 0.3326 June 116,517 73,160 0.4815 0.3024 Total dividends declared and paid1 233,020 146,310 0.9630 0.6350 Dividends declared on August 5,2024 and August 6,20232 116,447 110,181 0.4815 0.4554 1.Includes SAR 80,816(SAR 0.3340 per share)of performance-linked dividends,which were first declared and paid in the third quarter of 2023.2.Dividends of SAR 116,447(SAR 0.4815 per share)represent a base dividend of SAR 76,059(SAR 0.3145 per share)and a performance-linked dividend of SAR 40,388(SAR 0.1670 per share).These dividends are not reflected in the condensed consolidated interim financial report and will be deducted from unappropriated retained earnings in the third quarter of 2024.19.Events after the reporting period(a)Post-employment benefit plans Royal Decree No.M/273 was issued on 26/12/1445H(corresponding to July 2,2024)approving the new Social Insurance Law(“the Law”);effective on July 3,2024.The Law,among other provisions,extends the statutory and early retirement ages.Such extension applies on new contributors joining the workforce in the public and private sectors in the Kingdom.As for existing contributors,such extension depends on their contribution periods under the Civil Pension Law and the previous Social Insurance Law,in addition to their age on the Laws effective date.Saudi Aramco is currently assessing the impact of the Law on its post-employment benefit plans.(b)Blue Hydrogen Industrial Gases Company(“BHIG”)On July 16,2024,Saudi Aramco Development Company(“SADCO”),a wholly owned subsidiary of the Company,entered into definitive agreements to acquire an equity interest in Blue Hydrogen Industrial Gases Company(“BHIG”),a wholly-owned subsidiary of Air Products Qudra for Energy(“APQ”).The completion of the transaction is subject to standard closing conditions and is expected to occur by the end of 2024.Upon completion,SADCO and APQ are expected to each own a 50%stake in BHIG.The project is designed to produce lower-carbon hydrogen while capturing and storing CO2 and is intended to commence commercial operations in coordination with Saudi Aramcos carbon capture and storage activities.This investment highlights Saudi Aramcos ambition to expand its new energies portfolio.(c)Borrowings On July 17,2024,the Company issued three tranches of USD denominated senior unsecured notes,aggregating to an equivalent of SAR 22,500($6,000),under its Global Medium Term Note Programme.These tranches consist of 10-year maturities for SAR 7,500($2,000)with a coupon rate of 5.250%,30-year maturities for SAR 7,500($2,000)with a coupon rate of 5.750%,and 40-year maturities for SAR 7,500($2,000)with a coupon rate of 5.875%.The notes were issued and sold in accordance with Rule 144A/Regulation S under the U.S.Securities Act of 1933,as amended.Interest is payable semi-annually in arrears on January 17 and July 17.The notes are listed on the London Stock Exchanges Main Market and the proceeds are used for general corporate purposes.31Saudi AramcoSecond quarter and half year interim report 2024About Aramco Aramco,headquartered in the city of Dhahran,is one of the worlds largest integrated energy and chemicals companies;its Upstream operations are primarily based in the Kingdom of Saudi Arabia while the Downstream business is Investor overview: media:Domestic media:Investor relations:
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UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549_FORM 10-Q_(Mark One)QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the quarterly period ended June 30,2024ORTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period from _ to _Commission file number:001-37580_Alphabet Inc.(Exact name of registrant as specified in its charter)_Delaware61-1767919(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification Number)1600 Amphitheatre ParkwayMountain View,CA 94043(Address of principal executive offices,including zip code)(650)253-0000(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each classTrading Symbol(s)Name of each exchange on whichregisteredClass A Common Stock,$0.001 par valueGOOGLNasdaq Stock Market LLC(Nasdaq Global Select Market)Class C Capital Stock,$0.001 par valueGOOGNasdaq Stock Market LLC(Nasdaq Global Select Market)_Indicate by check mark whether the registrant:(1)has filed all reports required to be filed by Section 13 or 15(d)of theSecurities Exchange Act of 1934 during the preceding 12 months(or for such shorter period that the registrant was requiredto file such reports),and(2)has been subject to such filing requirements for the past 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to besubmitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for suchshorter period that the registrant was required to submit such files).Yes No Indicate by check mark whether the registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,asmaller reporting company,or an emerging growth company.See the definitions of“large accelerated filer,”“acceleratedfiler,”“smaller reporting company,”and emerging growth company in Rule 12b-2 of the Exchange Act.Large accelerated filer Accelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf an emerging growth company,indicate by check mark if the registrant has elected not to use the extended transition periodfor complying with any new or revised financial accounting standards provided pursuant to Section 13(a)of the ExchangeAct.Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Exchange Act).Yes No As of July 16,2024,there were 5,859 million shares of Alphabets Class A stock outstanding,866 million shares ofAlphabets Class B stock outstanding,and 5,585 million shares of Alphabets Class C stock outstanding.Table of ContentsAlphabet Inc.Alphabet Inc.Form 10-QFor the Quarterly Period Ended June 30,2024TABLE OF CONTENTS Page No.Note About Forward-Looking Statements3PART I.FINANCIAL INFORMATIONItem 1Financial Statements5Consolidated Balance Sheets-December 31,2023 and June 30,20245Consolidated Statements of Income-Three and Six Months Ended June 30,2023 and20246Consolidated Statements of Comprehensive Income-Three and Six Months Ended June30,2023 and 20247Consolidated Statements of Stockholders Equity-Three and Six Months Ended June 30,2023 and 20248Consolidated Statements of Cash Flows-Six Months Ended June 30,2023 and 202410Notes to Consolidated Financial Statements11Item 2Managements Discussion and Analysis of Financial Condition and Results of Operations33Item 3Quantitative and Qualitative Disclosures About Market Risk47Item 4Controls and Procedures47PART II.OTHER INFORMATIONItem 1Legal Proceedings49Item 1A Risk Factors49Item 2Unregistered Sales of Equity Securities and Use of Proceeds49Item 5Other Information50Item 6Exhibits51Signatures522Table of ContentsAlphabet Inc.Note About Forward-Looking StatementsThis Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the PrivateSecurities Litigation Reform Act of 1995.These include,among other things,statements regarding:the growth of our business and revenues and our expectations about the factors that influence oursuccess and trends in our business;fluctuations in our revenues and margins and various factors contributing to such fluctuations;our expectation that the continuing shift from an offline to online world will continue to benefit ourbusiness;our expectation that the portion of our revenues that we derive beyond advertising will continue toincrease and may affect our margins;our expectation that our traffic acquisition costs(TAC)and the associated TAC rate will fluctuate,whichcould affect our overall margins;our expectation that our monetization trends will fluctuate,which could affect our revenues and margins;fluctuations in paid clicks and cost-per-click as well as impressions and cost-per-impression,and variousfactors contributing to such fluctuations;our expectation that we will continue to periodically review,refine,and update our methodologies formonitoring,gathering,and counting the number of paid clicks and impressions;our expectation that our results will be affected by our performance in international markets as users indeveloping economies increasingly come online;our expectation that our foreign exchange risk management program will not fully offset our netexposure to fluctuations in foreign currency exchange rates;the expected variability of gains and losses related to hedging activities under our foreign exchange riskmanagement program;the amount and timing of revenue recognition from customer contracts with commitments forperformance obligations,including our estimate of the remaining amount of commitments and when weexpect to recognize revenue;our expectation that our capital expenditures will increase,including the expected increase in ourtechnical infrastructure investment to support the growth of our business and our long-term initiatives,inparticular in support of artificial intelligence(AI)products and services;our plans to continue to invest in new businesses,products,services and technologies,and systems,aswell as to continue to invest in acquisitions and strategic investments;our pace of hiring and our plans to provide competitive compensation programs;our expectation that our cost of revenues,research and development(R&D)expenses,sales andmarketing expenses,and general and administrative expenses may increase in amount and/or mayincrease as a percentage of revenues and may be affected by a number of factors;estimates of our future compensation expenses;our expectation that our other income(expense),net(OI&E),will fluctuate in the future,as it is largelydriven by market dynamics;our expectation that our effective tax rate and cash tax payments could increase in future years;seasonal fluctuations in internet usage and advertiser expenditures,underlying business trends such astraditional retail seasonality,which are likely to cause fluctuations in our quarterly results;the sufficiency of our sources of funding;our potential exposure in connection with new and pending investigations,proceedings,and othercontingencies,including the possibility that certain legal proceedings to which we are a party could harmour business,financial condition,and operating results;our expectation that we will continue to face heightened regulatory scrutiny,and changes in regulatoryconditions,laws,and public policies,which could affect our business practices and financial results;3Table of ContentsAlphabet Inc.the expected timing,amount,and effect of Alphabet Inc.s share repurchases and dividends;our long-term sustainability and diversity goals;as well as other statements regarding our future operations,financial condition and prospects,and businessstrategies.Forward-looking statements may appear throughout this report and other documents we file with theSecurities and Exchange Commission(SEC),including without limitation,the following sections:Part I,Item 2,Managements Discussion and Analysis of Financial Condition and Results of Operations in this QuarterlyReport on Form 10-Q and Part I,Item 1A,“Risk Factors”in our Annual Report on Form 10-K for the fiscal yearended December 31,2023,as updated in our subsequent Quarterly Reports on Form 10-Q,including in thisQuarterly Report on Form 10-Q.Forward-looking statements generally can be identified by words such asanticipates,believes,could,estimates,expects,intends,may,plans,predicts,projects,will be,will continue,will likely result,and similar expressions.These forward-looking statements are based oncurrent expectations and assumptions that are subject to risks and uncertainties,which could cause our actualresults to differ materially from those reflected in the forward-looking statements.Factors that could cause orcontribute to such differences include,but are not limited to,those discussed in this Quarterly Report on Form10-Q;the risks discussed in Part I,Item 1A,Risk Factors in our Annual Report on Form 10-K for the fiscal yearended December 31,2023,as updated in our subsequent Quarterly Reports on Form 10-Q,including in thisQuarterly Report on Form 10-Q;the trends discussed in Part II,Item 7,Managements Discussion and Analysisof Financial Condition and Results of Operations in our Annual Report on Form 10-K for the fiscal year endedDecember 31,2023;and those discussed in other documents we file with the SEC.We undertake no obligationto revise or publicly release the results of any revision to these forward-looking statements,except as requiredby law.Given these risks and uncertainties,readers are cautioned not to place undue reliance on such forward-looking statements.As used herein,Alphabet,the company,we,us,our,and similar terms include Alphabet Inc.and itssubsidiaries,unless the context indicates otherwise.Alphabet,Google,and other trademarks of ours appearing in this report are our property.We do notintend our use or display of other companies trade names or trademarks to imply an endorsement orsponsorship of us by such companies,or any relationship with any of these companies.4Table of ContentsAlphabet Inc.PART I.FINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTSAlphabet Inc.CONSOLIDATED BALANCE SHEETS(in millions,except par value per share amounts)As of December 31,2023As ofJune 30,2024(unaudited)AssetsCurrent assets:Cash and cash equivalents$24,048$27,225 Marketable securities86,868 73,500 Total cash,cash equivalents,and marketable securities110,916 100,725 Accounts receivable,net47,964 47,087 Other current assets12,650 14,183 Total current assets171,530 161,995 Non-marketable securities31,008 34,172 Deferred income taxes12,169 14,958 Property and equipment,net134,345 151,155 Operating lease assets14,091 13,606 Goodwill29,198 29,185 Other non-current assets10,051 9,699 Total assets$402,392$414,770 Liabilities and Stockholders EquityCurrent liabilities:Accounts payable$7,493$6,092 Accrued compensation and benefits15,140 11,373 Accrued expenses and other current liabilities46,168 47,298 Accrued revenue share8,876 8,899 Deferred revenue4,137 4,251 Total current liabilities81,814 77,913 Long-term debt13,253 13,238 Deferred revenue,non-current911 985 Income taxes payable,non-current8,474 7,703 Deferred income taxes485 717 Operating lease liabilities12,460 11,708 Other long-term liabilities1,616 1,753 Total liabilities119,013 114,017 Commitments and Contingencies(Note 8)Stockholders equity:Preferred stock,$0.001 par value per share,100 shares authorized;no shares issued and outstanding0 0 Class A,Class B,and Class C stock and additional paid-in capital,$0.001 par value per share:300,000 shares authorized(Class A180,000,Class B 60,000,Class C 60,000);12,460(Class A 5,899,Class B 870,Class C 5,691)and 12,322(Class A 5,860,Class B 866,Class C 5,596)shares issued and outstanding76,534 79,732 Accumulated other comprehensive income(loss)(4,402)(5,012)Retained earnings211,247 226,033 Total stockholders equity283,379 300,753 Total liabilities and stockholders equity$402,392$414,770 See accompanying notes.5Table of ContentsAlphabet Inc.Alphabet Inc.CONSOLIDATED STATEMENTS OF INCOME(in millions,except per share amounts;unaudited)Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Revenues$74,604$84,742$144,391$165,281 Costs and expenses:Cost of revenues31,916 35,507 62,528 69,219 Research and development10,588 11,860 22,056 23,763 Sales and marketing6,781 6,792 13,314 13,218 General and administrative3,481 3,158 7,240 6,184 Total costs and expenses52,766 57,317 105,138 112,384 Income from operations21,838 27,425 39,253 52,897 Other income(expense),net65 126 855 2,969 Income before income taxes21,903 27,551 40,108 55,866 Provision for income taxes3,535 3,932 6,689 8,585 Net income$18,368$23,619$33,419$47,281 Basic net income per share(Note 10)$1.45$1.91$2.63$3.82 Diluted net income per share(Note 10)$1.44$1.89$2.61$3.78 See accompanying notes.6Table of ContentsAlphabet Inc.Alphabet Inc.CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME(in millions;unaudited)Three Months EndedSix Months Ended June 30,June 30,2023202420232024Net income$18,368$23,619$33,419$47,281 Other comprehensive income(loss):Change in foreign currency translation adjustment,net ofincome tax benefit(expense)of$13,$(26),$60 and$(44)235(447)831(950)Available-for-sale investments:Change in net unrealized gains(losses)(570)(93)296(453)Less:reclassification adjustment for net(gains)lossesincluded in net income198 230 490 541 Net change,net of income tax benefit(expense)of$106,$(40),$(224)and$(26)(372)137 786 88 Cash flow hedges:Change in net unrealized gains(losses)151 232 77 418 Less:reclassification adjustment for net(gains)lossesincluded in net income(5)(95)(82)(166)Net change,net of income tax benefit(expense)of$(11),$(27),$19 and$(50)146 137(5)252 Other comprehensive income(loss)9(173)1,612(610)Comprehensive income$18,377$23,446$35,031$46,671 See accompanying notes.7Table of ContentsAlphabet Inc.Alphabet Inc.CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY(in millions;unaudited)Three Months Ended June 30,2023 Class A,Class B,Class C Stockand Additional Paid-In CapitalAccumulatedOther Comprehensive Income(Loss)RetainedEarningsTotalStockholders Equity SharesAmountBalance as of March 31,202312,722$70,269$(6,000)$196,625$260,894 Stock issued38 0 0 0 0 Stock-based compensationexpense0 5,815 0 0 5,815 Tax withholding related to vestingof restricted stock units and other0(2,831)0 0(2,831)Repurchases of stock(131)(1,005)0(14,109)(15,114)Net income0 0 0 18,368 18,368 Other comprehensive income(loss)0 0 9 0 9 Balance as of June 30,202312,629$72,248$(5,991)$200,884$267,141 Six Months Ended June 30,2023 Class A,Class B,Class C Stockand Additional Paid-In CapitalAccumulated Other Comprehensive Income(Loss)Retained EarningsTotal Stockholders Equity SharesAmountBalance as of December 31,202212,849$68,184$(7,603)$195,563$256,144 Stock issued68 0 0 0 0 Stock-based compensationexpense0 11,128 0 0 11,128 Tax withholding related to vestingof restricted stock units and other0(4,924)0 0(4,924)Repurchases of stock(288)(2,140)0(28,098)(30,238)Net income0 0 0 33,419 33,419 Other comprehensive income(loss)0 0 1,612 0 1,612 Balance as of June 30,202312,629$72,248$(5,991)$200,884$267,141 8Table of ContentsAlphabet Inc.Three Months Ended June 30,2024 Class A,Class B,Class C Stockand Additional Paid-In CapitalAccumulatedOther Comprehensive Income(Loss)RetainedEarningsTotalStockholders Equity SharesAmountBalance as of March 31,202412,381$77,913$(4,839)$219,770$292,844 Stock issued33 0 0 0 0 Stock-based compensationexpense0 5,908 0 0 5,908 Tax withholding related to vestingof restricted stock units and other0(3,304)0 0(3,304)Repurchases of stock(92)(789)0(14,809)(15,598)Dividends and dividendequivalents declared($0.20 pershare)0 4 0(2,547)(2,543)Net income0 0 0 23,619 23,619 Other comprehensive income(loss)0 0(173)0(173)Balance as of June 30,202412,322$79,732$(5,012)$226,033$300,753 Six Months Ended June 30,2024 Class A,Class B,Class C Stockand Additional Paid-In CapitalAccumulated Other Comprehensive Income(Loss)Retained EarningsTotal Stockholders Equity SharesAmountBalance as of December 31,202312,460$76,534$(4,402)$211,247$283,379 Stock issued65 0 0 0 0 Stock-based compensationexpense0 11,201 0 0 11,201 Tax withholding related to vestingof restricted stock units and other0(6,300)0 0(6,300)Repurchases of stock(203)(1,707)0(29,948)(31,655)Dividends and dividendequivalents declared($0.20 pershare)0 4 0(2,547)(2,543)Net income0 0 0 47,281 47,281 Other comprehensive income(loss)0 0(610)0(610)Balance as of June 30,202412,322$79,732$(5,012)$226,033$300,753 See accompanying notes.9Table of ContentsAlphabet Inc.Alphabet Inc.CONSOLIDATED STATEMENTS OF CASH FLOWS(in millions;unaudited)Six Months EndedJune 30,20232024Operating activitiesNet income$33,419$47,281 Adjustments:Depreciation of property and equipment5,459 7,121 Stock-based compensation expense11,058 11,129 Deferred income taxes(4,269)(2,738)Loss(gain)on debt and equity securities,net425(757)Other1,774 1,185 Changes in assets and liabilities,net of effects of acquisitions:Accounts receivable,net1,506 110 Income taxes,net8,520(889)Other assets(1,259)(1,532)Accounts payable14(563)Accrued expenses and other liabilities(4,037)(5,176)Accrued revenue share(418)97 Deferred revenue(17)220 Net cash provided by operating activities52,175 55,488 Investing activitiesPurchases of property and equipment(13,177)(25,198)Purchases of marketable securities(35,589)(43,011)Maturities and sales of marketable securities37,049 58,577 Purchases of non-marketable securities(1,513)(2,199)Maturities and sales of non-marketable securities181 605 Acquisitions,net of cash acquired,and purchases of intangible assets(340)(87)Other investing activities(357)(32)Net cash used in investing activities(13,746)(11,345)Financing activitiesNet payments related to stock-based award activities(4,725)(6,138)Repurchases of stock(29,526)(31,380)Dividend payments0(2,466)Proceeds from issuance of debt,net of costs8,050 4,875 Repayments of debt(8,207)(5,502)Proceeds from sale of interest in consolidated entities,net5 8 Net cash used in financing activities(34,403)(40,603)Effect of exchange rate changes on cash and cash equivalents24(363)Net increase(decrease)in cash and cash equivalents4,050 3,177 Cash and cash equivalents at beginning of period21,879 24,048 Cash and cash equivalents at end of period$25,929$27,225 See accompanying notes.10Table of ContentsAlphabet Inc.Alphabet Inc.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)Note 1.Summary of Significant Accounting PoliciesNature of OperationsGoogle was incorporated in California in September 1998 and re-incorporated in the State of Delaware inAugust 2003.In 2015,we implemented a holding company reorganization,and as a result,Alphabet Inc.(Alphabet)became the successor issuer to Google.We generate revenues by delivering relevant,cost-effective online advertising;cloud-based solutions thatprovide enterprise customers with infrastructure and platform services as well as communication andcollaboration tools;sales of other products and services,such as fees received for subscription-based products,apps and in-app purchases,and devices.Basis of ConsolidationThe consolidated financial statements of Alphabet include the accounts of Alphabet and entitiesconsolidated under the variable interest and voting models.Intercompany balances and transactions have beeneliminated.Unaudited Interim Financial InformationThese unaudited interim consolidated financial statements have been prepared in accordance withgenerally accepted accounting principles in the United States(GAAP),and in our opinion,include alladjustments of a normal recurring nature necessary for fair financial statement presentation.Interim results arenot necessarily indicative of the results to be expected for the full year ending December 31,2024.We havemade estimates and assumptions that affect the amounts reported and disclosed in the financial statements andthe accompanying notes.Actual results could differ materially from these estimates.These consolidated financial statements and other information presented in this Form 10-Q should be readin conjunction with the consolidated financial statements and the related notes included in our Annual Report onForm 10-K for the fiscal year ended December 31,2023 filed with the SEC.Recent Accounting PronouncementsIn November 2023,the Financial Accounting Standards Board(FASB)issued Accounting StandardsUpdate(ASU)2023-07 Segment Reporting(Topic 280):Improvements to Reportable Segment Disclosureswhich expands annual and interim disclosure requirements for reportable segments,primarily through enhanceddisclosures about significant segment expenses.ASU 2023-07 is effective for our annual periods beginningJanuary 1,2024,and for interim periods beginning January 1,2025,with early adoption permitted.We arecurrently evaluating the potential effect that the updated standard will have on our financial statementdisclosures.In December 2023,the FASB issued ASU 2023-09 Income Taxes(Topics 740):Improvements to IncomeTax Disclosures to expand the disclosure requirements for income taxes.Upon adoption we will be required todisclose standardized categories in the rate reconciliation in both percentage and dollar amounts.ASU 2023-09will also require income taxes paid to be disaggregated by jurisdiction,among other disclosure requirements.Wewill adopt ASU 2023-09 for our annual periods beginning January 1,2025.Prior Period ReclassificationsCertain amounts in prior periods have been reclassified to conform with current period presentation.11Table of ContentsAlphabet Inc.Note 2.RevenuesDisaggregated RevenuesThe following table presents revenues disaggregated by type(in millions):Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Google Search&other$42,628$48,509$82,987$94,665 YouTube ads7,665 8,663 14,358 16,753 Google Network7,850 7,444 15,346 14,857 Google advertising58,143 64,616 112,691 126,275 Google subscriptions,platforms,and devices8,142 9,312 15,555 18,051 Google Services total66,285 73,928 128,246 144,326 Google Cloud8,031 10,347 15,485 19,921 Other Bets285 365 573 860 Hedging gains(losses)3 102 87 174 Total revenues$74,604$84,742$144,391$165,281 The following table presents revenues disaggregated by geography,based on the addresses of ourcustomers(in millions):Three Months EndedSix Months EndedJune 30,June 30,2023202420232024United States$35,073 47%$41,196 49%$67,937 47%$79,933 48%EMEA22,289 30 24,683 29 43,367 30 48,471 29 APAC12,728 17 13,823 16 24,409 17 27,112 17 Other Americas4,511 6 4,938 6 8,591 6 9,591 6 Hedging gains(losses)3 0 102 0 87 0 174 0 Total revenues$74,604 100%$84,742 100%$144,391 100%$165,281 100%Regions represent Europe,the Middle East,and Africa(EMEA);Asia-Pacific(APAC);and Canada and Latin America(Other Americas).Revenue BacklogAs of June 30,2024,we had$78.8 billion of remaining performance obligations(“revenue backlog”),primarily related to Google Cloud.Our revenue backlog represents commitments in customer contracts for futureservices that have not yet been recognized as revenue.The estimated revenue backlog and timing of revenuerecognition for these commitments is largely driven by our ability to deliver in accordance with relevant contractterms and when our customers utilize services.We expect to recognize approximately half of the revenuebacklog as revenues over the next 24 months with the remaining to be recognized thereafter.Revenue backlogincludes related deferred revenue currently recorded as well as amounts that will be invoiced in future periods,and excludes contracts with an original expected term of one year or less and cancellable contracts.Deferred RevenuesWe record deferred revenues when cash payments are received or due in advance of our performance,including amounts which are refundable.Deferred revenues primarily relate to Google Cloud and Googlesubscriptions,platforms,and devices.Total deferred revenue as of December 31,2023 was$5.0 billion,of which$2.9 billion was recognized as revenues during the six months ended June 30,2024.Note 3.Financial InstrumentsFair Value MeasurementsInvestments Measured at Fair Value on a Recurring BasisCash,cash equivalents,and marketable equity securities are measured at fair value and classified withinLevel 1 and Level 2 in the fair value hierarchy,because we use quoted prices for identical assets in activemarkets(1)(1)(1)(1)12Table of ContentsAlphabet Inc.or inputs that are based upon quoted prices for similar instruments in active markets.Debt securities are measured at fair value and classified within Level 2 in the fair value hierarchy,becausewe use quoted market prices to the extent available or alternative pricing sources and models utilizing marketobservable inputs to determine fair value.For certain marketable debt securities,we have elected the fair valueoption for which changes in fair value are recorded in OI&E.The fair value option was elected for thesesecurities to align with the unrealized gains and losses from related derivative contracts.The following tables summarize our cash,cash equivalents,and marketable securities measured at fairvalue on a recurring basis(in millions):As of December 31,2023Fair ValueHierarchyAdjustedCostGrossUnrealizedGainsGrossUnrealizedLossesFair ValueCash andCashEquivalentsMarketableSecuritiesFair value changesrecorded in othercomprehensiveincomeTime depositsLevel 2$2,628$0$0$2,628$2,628$0 Government bondsLevel 238,106233(679)37,660 1,993 35,667 Corporate debtsecuritiesLevel 222,457112(637)21,932 0 21,932 Mortgage-backedand asset-backedsecuritiesLevel 217,24388(634)16,697 0 16,697 Total investmentswith fair valuechange reflectedin othercomprehensiveincome$80,434$433$(1,950)$78,917$4,621$74,296 Fair valueadjustmentsrecorded in netincomeMoney market fundsLevel 1$6,480$6,480$0 Current marketableequity securitiesLevel 14,282 0 4,282 Mutual fundsLevel 2311 0 311 Government bondsLevel 21,952 347 1,605 Corporate debtsecuritiesLevel 23,782 91 3,691 Mortgage-backedand asset-backedsecuritiesLevel 22,683 0 2,683 Total investmentswith fair valuechange recordedin net income$19,490$6,918$12,572 Cash0 12,509 0 Total$80,434$433$(1,950)$98,407$24,048$86,868 Represents gross unrealized gains and losses for debt securities recorded to accumulated other comprehensiveincome(AOCI).The long-term portion of marketable equity securities(subject to long-term lock-up restrictions)of$1.4 billion as ofDecember 31,2023 is included within other non-current assets.(1)(2)(1)(2)13Table of ContentsAlphabet Inc.As of June 30,2024Fair ValueHierarchyAdjustedCostGrossUnrealizedGainsGrossUnrealizedLossesFair ValueCash andCashEquivalentsMarketableSecuritiesFair value changesrecorded in othercomprehensiveincomeTime depositsLevel 2$2,784$0$0$2,784$2,784$0 Government bondsLevel 233,002 60(447)32,615 5,268 27,347 Corporate debtsecuritiesLevel 218,856 40(437)18,459 0 18,459 Mortgage-backedand asset-backedsecuritiesLevel 214,806 30(578)14,258 0 14,258 Total investmentswith fair valuechange reflectedin othercomprehensiveincome$69,448$130$(1,462)$68,116$8,052$60,064 Fair valueadjustmentsrecorded in netincomeMoney market fundsLevel 1$7,061$7,061$0 Current marketableequity securitiesLevel 14,683 0 4,683 Mutual fundsLevel 22760 276Government bondsLevel 22,162152 2,010Corporate debtsecuritiesLevel 23,69489 3,605Mortgage-backedand asset-backedsecuritiesLevel 22,8620 2,862Total investmentswith fair valuechange recordedin net income$20,738$7,302$13,436 Cash0 11,871 0 Total$69,448$130$(1,462)$88,854$27,225$73,500 Represents gross unrealized gains and losses for debt securities recorded to AOCI.The long-term portion of marketable equity securities(subject to long-term lock-up restrictions)of$276 million as ofJune 30,2024 is included within other non-current assets.Investments Measured at Fair Value on a Nonrecurring BasisOur non-marketable equity securities are investments in privately held companies without readilydeterminable market values.The carrying value of our non-marketable equity securities is adjusted to fair valueupon observable transactions for identical or similar investments of the same issuer or impairment.Non-marketable equity securities that have been remeasured during the period based on observable transactions areclassified within Level 2 or Level 3 in the fair value hierarchy.Non-marketable equity securities that have beenremeasured due to impairment are classified within Level 3.Our valuation methods include option pricingmodels,market comparable approach,and common stock equivalent method,which may include a combinationof the observable transaction price at the transaction date and other unobservable inputs including volatility,expected time to exit,risk free rate,and the rights,and obligations of the securities we hold.These inputssignificantly vary based on investment type.As of June 30,2024,the carrying value of our non-marketable equity securities was$31.6 billion,of which$2.2 billion were remeasured at fair value during the three months ended June 30,2024 and classified withinLevel 2 and Level 3 of the fair value hierarchy at the time of measurement.(1)(2)(1)(2)14Table of ContentsAlphabet Inc.Debt SecuritiesThe following table summarizes the estimated fair value of investments in available-for-sale marketabledebt securities by effective contractual maturity dates(in millions):As ofJune 30,2024Due in 1 year or less$7,234 Due in 1 year through 5 years36,666 Due in 5 years through 10 years11,977 Due after 10 years12,664 Total$68,541 The following tables present fair values and gross unrealized losses recorded to AOCI,aggregated byinvestment category and the length of time that individual securities have been in a continuous loss position(inmillions):As of December 31,2023 Less than 12 Months12 Months or GreaterTotal Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized LossGovernment bonds$1,456$(22)$13,897$(657)$15,353$(679)Corporate debt securities827(5)15,367(592)16,194(597)Mortgage-backed and asset-backedsecurities2,945(26)7,916(608)10,861(634)Total$5,228$(53)$37,180$(1,857)$42,408$(1,910)As of June 30,2024 Less than 12 Months12 Months or GreaterTotal Fair ValueUnrealized LossFair ValueUnrealized LossFair ValueUnrealized LossGovernment bonds$13,602$(99)$6,385$(348)$19,987$(447)Corporate debt securities3,456(8)10,636(394)14,092(402)Mortgage-backed and asset-backedsecurities4,534(43)6,887(535)11,421(578)Total$21,592$(150)$23,908$(1,277)$45,500$(1,427)We determine realized gains or losses on the sale or extinguishment of debt securities on a specificidentification method.The following table summarizes gains and losses for debt securities,reflected as acomponent of OI&E(in millions):Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Unrealized gain(loss)on fair value option debtsecurities$(24)$(23)$121$(69)Gross realized gain on debt securities28 161 85 229 Gross realized loss on debt securities(303)(455)(795)(935)(Increase)decrease in allowance for credit losses(5)7(8)3 Total gain(loss)on debt securities recognized inother income(expense),net$(304)$(310)$(597)$(772)15Table of ContentsAlphabet Inc.Equity InvestmentsThe carrying value of equity securities is measured as the total initial cost plus the cumulative net gain(loss).Gains and losses,including impairments,are included as a component of OI&E in the ConsolidatedStatements of Income.See Note 6 for further details on OI&E.The carrying values for marketable and non-marketable equity securities are summarized below(inmillions):As of December 31,2023As of June 30,2024MarketableEquitySecuritiesNon-MarketableEquitySecuritiesTotalMarketableEquitySecuritiesNon-MarketableEquitySecuritiesTotalTotal initial cost$5,418$17,616$23,034$5,107$19,219$24,326 Cumulative net gain(loss)555 11,150 11,705 128 12,370 12,498 Carrying value$5,973$28,766$34,739$5,235$31,589$36,824 Non-marketable equity securities cumulative net gain(loss)is comprised of$18.1 billion gains and$6.9 billion losses(including impairments)as of December 31,2023 and$20.6 billion gains and$8.2 billion losses(including impairments)as of June 30,2024.Gains and Losses on Marketable and Non-marketable Equity SecuritiesGains and losses(including impairments),net,for marketable and non-marketable equity securitiesincluded in OI&E are summarized below(in millions):Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Realized net gain(loss)on equity securities soldduring the period$87$64$292$184 Unrealized net gain(loss)on marketable equitysecurities397(350)349(214)Unrealized net gain(loss)on non-marketable equitysecurities(689)(428)(469)1,559 Total gain(loss)on equity securities in otherincome(expense),net$(205)$(714)$172$1,529 Unrealized gain(loss)on non-marketable equity securities accounted for under the measurement alternative iscomprised of$75 million and$319 million of upward adjustments and$789 million and$745 million of downwardadjustments(including impairments)for the three months ended June 30,2023 and 2024,respectively,and$989million and$3.1 billion of upward adjustments and$1.5 billion and$1.6 billion of downward adjustments(includingimpairments)for the six months ended June 30,2023 and 2024,respectively.In the table above,realized net gain(loss)on equity securities sold during the period reflects the differencebetween the sale proceeds and the carrying value of the equity securities at the beginning of the period or thepurchase date,if later.Cumulative net gains(losses)on equity securities sold during the period,which is summarized in thefollowing table(in millions),represents the total net gains(losses)recognized after the initial purchase date ofthe equity security sold during the period.While these net gains(losses)may have been reflected in periodsprior to the period of sale,we believe they are important supplemental information as they reflect the economicnet gains(losses)on the securities sold during the period.Cumulative net gains(losses)are calculated as thedifference between the sale price and the initial purchase price for the equity security sold during the period.Equity Securities SoldThree Months EndedSix Months EndedJune 30,June 30,2023202420232024Total sale price$427$583$739$1,673 Total initial cost156 303 367 964 Cumulative net gains(losses)$271$280$372$709(1)(1)(1)(1)16Table of ContentsAlphabet Inc.Equity Securities Accounted for Under the Equity MethodAs of December 31,2023 and June 30,2024,equity securities accounted for under the equity method hada carrying value of approximately$1.7 billion and$2.1 billion,respectively.Our share of gains and losses,including impairments,are included as a component of OI&E,in the Consolidated Statements of Income.See Note 6 for further details on OI&E.Derivative Financial InstrumentsWe use derivative instruments to manage risks relating to our ongoing business operations.The primaryrisk managed is foreign exchange risk.We use foreign currency contracts to reduce the risk that our cash flows,earnings,and investment in foreign subsidiaries will be adversely affected by foreign currency exchange ratefluctuations.We also enter into derivative instruments to partially offset our exposure to other risks and enhanceinvestment returns.We recognize derivative instruments in the Consolidated Balance Sheets at fair value and classify thederivatives primarily within Level 2 in the fair value hierarchy.We present our collar contracts(an option strategycomprised of a combination of purchased and written options)at net fair values and present all other derivativesat gross fair values.The accounting treatment for derivatives is based on the intended use and hedgedesignation.Cash Flow HedgesWe designate foreign currency forward and option contracts(including collars)as cash flow hedges tohedge certain forecasted revenue transactions denominated in currencies other than the United States(U.S.)dollar.These contracts have maturities of 24 months or less.Cash flow hedge amounts included in the assessment of hedge effectiveness are deferred in AOCI andsubsequently reclassified to revenue when the hedged item is recognized in earnings.We exclude forwardpoints and time value from our assessment of hedge effectiveness and amortize them on a straight-line basisover the life of the hedging instrument in revenues.The difference between fair value changes of the excludedcomponent and the amount amortized to revenues is recorded in AOCI.As of June 30,2024,the net accumulated gain on our foreign currency cash flow hedges before tax effectwas$300 million,which is expected to be reclassified from AOCI into revenues within the next 12 months.Fair Value HedgesWe designate foreign currency forward contracts as fair value hedges to hedge foreign currency risks forour marketable securities denominated in currencies other than the U.S.dollar.Fair value hedge amountsincluded in the assessment of hedge effectiveness are recognized in OI&E,along with the offsetting gains andlosses of the related hedged items.We exclude forward points from the assessment of hedge effectiveness andrecognize changes in the excluded component in OI&E.Net Investment HedgesWe designate foreign currency forward contracts as net investment hedges to hedge the foreign currencyrisks related to our investment in foreign subsidiaries.Net investment hedge amounts included in theassessment of hedge effectiveness are recognized in AOCI along with the foreign currency translationadjustment.We exclude forward points from the assessment of hedge effectiveness and recognize changes inthe excluded component in OI&E.Other DerivativesWe enter into foreign currency forward and option contracts that are not designated as hedging instrumentsto hedge intercompany transactions and other monetary assets or liabilities denominated in currencies otherthan the functional currency of a subsidiary.Gains and losses on these derivatives that are not designated asaccounting hedges are primarily recorded in OI&E along with the foreign currency gains and losses on monetaryassets and liabilities.We also use derivatives not designated as hedging instruments to manage risks relating to interest rates,commodity prices,and credit exposures,and to enhance investment returns.From time to time,we enter intoderivatives to hedge the market price risk on certain of our marketable equity securities.Gains and lossesarising from other derivatives are primarily reflected within the“other”component of OI&E.See Note 6 for furtherdetails.17The gross notional amounts of outstanding derivative instruments were as follows(in millions):As of December 31,2023As of June 30,2024Derivatives designated as hedging instruments:Foreign exchange contractsCash flow hedges$18,039$18,803 Fair value hedges$2,065$1,649 Net investment hedges$9,472$9,355 Derivatives not designated as hedging instruments:Foreign exchange contracts$39,722$42,006 Other contracts$10,818$11,542 The fair values of outstanding derivative instruments were as follows(in millions):As of December 31,2023As of June 30,2024 AssetsLiabilitiesAssetsLiabilitiesDerivatives designated as hedging instruments:Foreign exchange contracts$205$242$365$22 Derivatives not designated as hedginginstruments:Foreign exchange contracts13415626171Other contracts1144717226Total derivatives not designated as hedginginstruments248 203 198 197 Total$453$445$563$219 Derivative assets are recorded as other current and non-current assets in the Consolidated Balance Sheets.Derivative liabilities are recorded as accrued expenses and other liabilities,current and non-current in the ConsolidatedBalance Sheets.The gains(losses)on derivatives in cash flow hedging and net investment hedging relationshipsrecognized in other comprehensive income(OCI)are summarized below(in millions):Three Months EndedSix Months Ended June 30,June 30,2023202420232024Derivatives in cash flow hedging relationship:Foreign exchange contractsAmount included in the assessment of effectiveness$77$277$(61)$432 Amount excluded from the assessment ofeffectiveness80(7)127 51 Derivatives in net investment hedging relationship:Foreign exchange contractsAmount included in the assessment of effectiveness(59)120(274)202 Total$98$390$(208)$685(1)(2)(1)(2)(1)(2)18 The table below presents the gains(losses)of our derivatives on the Consolidated Statements of Income:(in millions):Gains(Losses)Recognized in IncomeThree Months Ended June 30,20232024RevenuesOther income(expense),netRevenuesOther income(expense),netTotal amounts in the Consolidated Statements ofIncome$74,604$65$84,742$126 Effect of cash flow hedges:Foreign exchange contractsAmount reclassified from AOCI to income$(2)$0$106$0 Amount excluded from the assessment ofeffectiveness(amortized)6 0(4)0 Effect of fair value hedges:Foreign exchange contractsHedged items0 22 0(9)Derivatives designated as hedging instruments0(22)0 9 Amount excluded from the assessment ofeffectiveness0 5 0 3 Effect of net investment hedges:Foreign exchange contractsAmount excluded from the assessment ofeffectiveness0 72 0 31 Effect of non designated hedges:Foreign exchange contracts0 124 0(22)Other contracts0(4)0 26 Total gains(losses)$4$197$102$38 19Gains(Losses)Recognized in IncomeSix Months Ended June 30,20232024RevenuesOther income(expense),netRevenuesOther income(expense),netTotal amounts in the Consolidated Statements ofIncome$144,391$855$165,281$2,969 Effect of cash flow hedges:Foreign exchange contractsAmount of gains(losses)reclassified from AOCI toincome$86$0$180$0 Amount excluded from the assessment ofeffectiveness(amortized)2 0(6)0 Effect of fair value hedges:Foreign exchange contractsHedged items0 54 0(25)Derivatives designated as hedging instruments0(54)0 24 Amount excluded from the assessment ofeffectiveness0 10 0 6 Effect of net investment hedges:Foreign exchange contractsAmount excluded from the assessment ofeffectiveness0 123 0 67 Effect of non designated hedges:Foreign exchange contracts0 154 0(1)Other contracts0(1)0 102 Total gains(losses)$88$286$174$173 Offsetting of DerivativesWe enter into master netting arrangements and collateral security arrangements to reduce credit risk.Cash collateral received related to derivative instruments under our collateral security arrangements areincluded in other current assets with a corresponding liability.Cash and non-cash collateral pledged related toderivative instruments under our collateral security arrangements are included in other current assets.The gross amounts of derivative instruments subject to master netting arrangements with variouscounterparties,and cash and non-cash collateral received and pledged under such agreements were as follows(in millions):As of December 31,2023Gross Amounts Not Offset inthe Consolidated BalanceSheets,but Have Legal Rightsto OffsetGrossAmountsRecognizedGrossAmountsOffset in theConsolidatedBalanceSheetsNet AmountsPresented intheConsolidatedBalanceSheetsFinancialInstrumentsCash andNon-CashCollateralReceived orPledgedNet AmountsDerivatives assets$535$(82)$453$(213)$(75)$165 Derivatives liabilities$527$(82)$445$(213)$(16)$216(1)20As of June 30,2024Gross Amounts Not Offset inthe Consolidated BalanceSheets,but Have Legal Rightsto OffsetGrossAmountsRecognizedGrossAmountsOffset in theConsolidatedBalanceSheetsNet AmountsPresented intheConsolidatedBalanceSheetsFinancialInstrumentsCash and Non-CashCollateralReceived orPledgedNet AmountsDerivatives assets$648$(85)$563$(103)$(268)$192 Derivatives liabilities$304$(85)$219$(103)$(5)$111(1)The balances as of December 31,2023 and June 30,2024 were related to derivatives allowed to be net settled inaccordance with our master netting agreements.Note 4.Variable Interest Entities(VIE)Consolidated VIEsWe consolidate VIEs in which we hold a variable interest and are the primary beneficiary.The results ofoperations and financial position of these VIEs are included in our consolidated financial statements.For certain consolidated VIEs,their assets are not available to us,and their creditors do not have recourseto us.As of December 31,2023 and June 30,2024,assets that can only be used to settle obligations of theseVIEs were$4.9 billion and$3.7 billion,respectively,and the liabilities for which creditors only have recourse tothe VIEs were$2.5 billion and$2.3 billion,respectively.We may continue to fund ongoing operations of certainVIEs that are included within Other Bets.In July 2024,Alphabet committed to fund up to$5.0 billion for the ongoing operations of Waymo,a fullyautonomous driving technology company and a consolidated VIE.Total noncontrolling interests(NCI)in our consolidated subsidiaries were$3.4 billion and$3.3 billion as ofDecember 31,2023 and June 30,2024,respectively,of which$1.1 billion is redeemable noncontrolling interest(RNCI)for both periods.NCI and RNCI are included within additional paid-in capital.Net loss attributable tononcontrolling interests was not material for any period presented and is included within the other componentof OI&E.See Note 6 for further details on OI&E.Unconsolidated VIEsWe have investments in VIEs in which we are not the primary beneficiary.These VIEs include privatecompanies that are primarily early stage companies and certain renewable energy entities in which activitiesinvolve power generation using renewable sources.We have determined that the governance structures of these entities do not allow us to direct the activitiesthat would significantly affect their economic performance.Therefore,we are not the primary beneficiary,and theresults of operations and financial position of these VIEs are not included in our consolidated financialstatements.We account for these investments primarily as non-marketable equity securities or equity methodinvestments.The maximum exposure of these unconsolidated VIEs is generally based on the current carrying value ofthe investments and any future funding commitments.The maximum exposure and carrying value of theseunconsolidated VIEs were$5.7 billion and$4.0 billion,respectively,as of December 31,2023 and$6.9 billionand$5.4 billion,respectively,as of June 30,2024.The difference between the maximum exposure and thecarrying value relates primarily to future funding commitments.Note 5.DebtShort-Term DebtWe have a debt financing program of up to$10.0 billion through the issuance of commercial paper.Netproceeds from this program are used for general corporate purposes.We had no commercial paper outstandingas of December 31,2023 and June 30,2024.Our short-term debt balance also includes the current portion of certain long-term debt.(1)21Long-Term DebtTotal outstanding debt is summarized below(in millions,except percentages):MaturityCoupon RateEffective InterestRateAs ofDecember 31,2023As ofJune 30,2024Debt2016-2020 Notes issuances2025-20600.45%-2.25%0.57%-2.33%$13,000$12,000 Future finance lease payments,net and other debt 1,746 2,280 Total debt14,746 14,280 Unamortized discount and debtissuance costs(130)(124)Less:Current portion of long-termnotes(1,000)0 Less:Current portion of futurefinance lease payments,net andother current debt(363)(918)Total long-term debt$13,253$13,238 Future finance lease payments are net of imputed interest.Total current portion of long-term debt is included within accrued expenses and other current liabilities.See Note 6 forfurther details.The notes in the table above are fixed-rate senior unsecured obligations and rank equally with each other.We may redeem the notes at any time in whole or in part at specified redemption prices.The effective interestrates are based on proceeds received with interest payable semi-annually.The total estimated fair value of the outstanding notes was approximately$10.3 billion and$8.9 billion as ofDecember 31,2023 and June 30,2024,respectively.The fair value was determined based on observablemarket prices of identical instruments in less active markets and is categorized accordingly as Level 2 in the fairvalue hierarchy.Credit FacilityAs of June 30,2024,we had$10.0 billion of revolving credit facilities,of which$4.0 billion expires in April2025 and$6.0 billion expires in April 2028.The interest rates for all credit facilities are determined based on aformula using certain market rates,as well as our progress toward the achievement of certain sustainabilitygoals.No amounts were outstanding under the credit facilities as of December 31,2023 and June 30,2024.Note 6.Supplemental Financial Statement InformationAccounts ReceivableThe allowance for credit losses on accounts receivable was$771 million and$850 million as ofDecember 31,2023 and June 30,2024,respectively.Property and Equipment,NetProperty and equipment,net,consisted of the following(in millions):As of December 31,2023As of June 30,2024Land and buildings$74,083$78,641 Information technology assets80,594 91,994 Construction in progress35,229 40,742 Leasehold improvements11,425 12,010 Furniture and fixtures472 584 Property and equipment,gross201,803 223,971 Less:accumulated depreciation(67,458)(72,816)Property and equipment,net$134,345$151,155(1)(2)(1)(2)(1)(2)22Accrued Expenses and Other Current LiabilitiesAccrued expenses and other current liabilities consisted of the following(in millions):As of December 31,2023As ofJune 30,2024European Commission fines$9,525$9,376 Accrued purchases of property and equipment4,679 5,364 Accrued customer liabilities4,140 3,871 Current operating lease liabilities2,791 2,855 Income taxes payable,net2,748 3,297 Other accrued expenses and current liabilities22,285 22,535 Accrued expenses and other current liabilities$46,168$47,298 While each European Commission(EC)decision is under appeal,the fines are included in accrued expenses and othercurrent liabilities on our Consolidated Balance Sheets,as we provided bank guarantees(in lieu of a cash payment)forthe fines.Amounts include the effects of foreign exchange and interest.See Note 8 for further details.Accumulated Other Comprehensive Income(Loss)Components of AOCI,net of income tax,were as follows(in millions):ForeignCurrencyTranslationAdjustmentsUnrealizedGains(Losses)on Available-for-SaleInvestmentsUnrealizedGains(Losses)on Cash FlowHedgesTotalBalance as of December 31,2022$(4,142)$(3,477)$16$(7,603)Other comprehensive income(loss)beforereclassifications831 296(50)1,077 Amounts excluded from the assessment of hedgeeffectiveness recorded in AOCI0 0 127 127 Amounts reclassified from AOCI0 490(82)408 Other comprehensive income(loss)831 786(5)1,612 Balance as of June 30,2023$(3,311)$(2,691)$11$(5,991)ForeignCurrencyTranslationAdjustmentsUnrealizedGains(Losses)on Available-for-SaleInvestmentsUnrealizedGains(Losses)on Cash FlowHedgesTotalBalance as of December 31,2023$(3,407)$(965)$(30)$(4,402)Other comprehensive income(loss)beforereclassifications(950)(453)367(1,036)Amounts excluded from the assessment of hedgeeffectiveness recorded in AOCI0 0 51 51 Amounts reclassified from AOCI0 541(166)375 Other comprehensive income(loss)(950)88 252(610)Balance as of June 30,2024$(4,357)$(877)$222$(5,012)(1)(1)23The effects on net income of amounts reclassified from AOCI were as follows(in millions):Three Months EndedSix Months Ended June 30,June 30,AOCI ComponentsLocation2023202420232024Unrealized gains(losses)on available-for-saleinvestmentsOther income(expense),net$(254)$(295)$(628)$(694)Benefit(provision)for income taxes56 65 138 153 Net of income tax(198)(230)(490)(541)Unrealized gains(losses)on cash flow hedgesForeignexchangecontractsRevenue(2)106 86 180 Interest ratecontractsOther income(expense),net1 0 3 1 Benefit(provision)for income taxes6(11)(7)(15)Net of income tax5 95 82 166 Total amount reclassified,net of income tax$(193)$(135)$(408)$(375)Other Income(Expense),NetComponents of OI&E were as follows(in millions):Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Interest income$892$1,090$1,689$2,151 Interest expense(43)(67)(123)(161)Foreign currency exchange gain(loss),net(268)(173)(478)(411)Gain(loss)on debt securities,net(304)(310)(597)(772)Gain(loss)on equity securities,net(205)(714)172 1,529 Performance fees5 128 123 232 Income(loss)and impairment from equity methodinvestments,net(106)32(157)6 Other94 140 226 395 Other income(expense),net$65$126$855$2,969 Interest expense is net of interest capitalized of$47 million and$43 million for the three months ended June 30,2023and 2024,respectively,and$87 million and$86 million for the six months ended June 30,2023 and 2024,respectively.Note 7.GoodwillGoodwillChanges in the carrying amount of goodwill for the six months ended June 30,2024 were as follows(inmillions):GoogleServicesGoogle CloudOther BetsTotalBalance as of December 31,2023$21,118$7,199$881$29,198 Acquisitions31 0 0 31 Foreign currency translation and other adjustments(39)(3)(2)(44)Balance as of June 30,2024$21,110$7,196$879$29,185(1)(1)24Note 8.Commitments and ContingenciesCommitmentsWe have content licensing agreements with future fixed or minimum guaranteed commitments of$9.7 billion as of June 30,2024,of which the majority is paid quarterly through the first quarter of 2030.IndemnificationsIn the normal course of business,including to facilitate transactions in our services and products andcorporate activities,we indemnify certain parties,including advertisers,Google Network partners,distributionpartners,customers of Google Cloud offerings,lessors,and service providers with respect to certain matters.We have agreed to defend and/or hold certain parties harmless against losses arising from a breach ofrepresentations or covenants,or out of intellectual property infringement or other claims made against certainparties.Several of these agreements limit the time within which an indemnification claim can be made and theamount of the claim.In addition,we have entered into indemnification agreements with our officers anddirectors,and our bylaws contain similar indemnification obligations to our agents.It is not possible to make a reasonable estimate of the maximum potential amount under theseindemnification agreements due to the unique facts and circumstances involved in each particular agreement.Additionally,the payments we have made under such agreements have not had a material adverse effect on ourresults of operations,cash flows,or financial position.However,to the extent that valid indemnification claimsarise in the future,future payments by us could be significant and could have a material adverse effect on ourresults of operations or cash flows in a particular period.As of June 30,2024,we did not have any material indemnification claims that were probable or reasonablypossible.Legal MattersWe record a liability when we believe that it is probable that a loss has been incurred,and the amount canbe reasonably estimated.If we determine that a loss is reasonably possible and the loss or range of loss can beestimated,we disclose the reasonably possible loss.We evaluate developments in our legal matters that couldaffect the amount of liability that has been previously accrued,and the matters and related reasonably possiblelosses disclosed,and make adjustments as appropriate.Certain outstanding matters seek speculative,substantial or indeterminate monetary amounts,substantialchanges to our business practices and products,or structural remedies.Significant judgment is required todetermine both the likelihood of there being a loss and the estimated amount of a loss related to such matters,and we may be unable to estimate the reasonably possible loss or range of losses.The outcomes of outstandinglegal matters are inherently unpredictable and subject to significant uncertainties,and could,either individually orin aggregate,have a material adverse effect.We expense legal fees in the period in which they are incurred.Antitrust MattersOn November 30,2010,the ECs Directorate General for Competition opened an investigation into variousantitrust-related complaints against us.On June 27,2017,the EC announced its decision that certain actions taken by Google regarding itsdisplay and ranking of shopping search results and ads infringed European competition law.The ECdecision imposed a 2.4 billion($2.7 billion as of June 27,2017)fine.On September 11,2017,weappealed the EC decision to the General Court,and on September 27,2017,we implemented productchanges to bring shopping ads into compliance with the ECs decision.We recognized a charge of$2.7billion for the fine in the second quarter of 2017.On November 10,2021,the General Court rejected ourappeal,and we subsequently filed an appeal with the European Court of Justice on January 20,2022.On July 18,2018,the EC announced its decision that certain provisions in Googles Android-relateddistribution agreements infringed European competition law.The EC decision imposed a 4.3 billion($5.1 billion as of June 30,2018)fine and directed the termination of the conduct at issue.On October 9,2018,we appealed the EC decision,and on October 29,2018,we implemented changes to certain ofour Android distribution practices.On September 14,2022,the General Court reduced the fine from4.3 billion to 4.1 billion.We subsequently filed an appeal with the European Court of Justice.In 2018,we recognized a charge of$5.1 billion for the fine,which we reduced by$217 million in 2022.25On March 20,2019,the EC announced its decision that certain contractual provisions in agreementsthat Google had with AdSense for Search partners infringed European competition law.The EC decisionimposed a fine of 1.5 billion($1.7 billion as of March 20,2019)and directed actions related to AdSensefor Search partners agreements,which we implemented prior to the decision.On June 4,2019,weappealed the EC decision.We recognized a charge of$1.7 billion for the fine in the first quarter of 2019.In addition,on July 7,2021,a number of state Attorneys General filed an antitrust complaint in the U.S.District Court for the Northern District of California,alleging that Googles operation of Android and Google Playviolated U.S.antitrust laws and state antitrust and consumer protection laws.In September 2023,we reached asettlement in principle with 50 state Attorneys General and three territories.The U.S.District Court subsequentlyvacated the trial date with the states,and we expect any final approval of the settlement would come in 2024.InMay 2024,we funded the settlement amount to an escrow agent.In December 2023,a California jury delivered a verdict in a similar lawsuit in Epic Games v.Google.Thejury found that Google violated antitrust laws related to Google Plays business.Epic did not seek monetarydamages.The presiding judge will determine non-monetary remedies in 2024,and the range of potentialremedies vary widely.We plan to appeal.From time to time we are subject to formal and informal inquiries and investigations on various competitionmatters by regulatory authorities in the U.S.,Europe,and other jurisdictions globally.Examples,for which giventheir nature we cannot estimate a possible loss include:In August 2019,we began receiving civil investigative demands from the U.S.Department of Justice(DOJ)requesting information and documents relating to our prior antitrust investigations and certainaspects of our business.The DOJ and a number of state Attorneys General filed a lawsuit in the U.S.District Court for the District of Columbia on October 20,2020 alleging that Google violated U.S.antitrustlaws relating to Search and Search advertising.The trial ended on November 16,2023,and we expect adecision in 2024.Further,in June 2022,the Australian Competition and Consumer Commission(ACCC)and the United Kingdoms Competition and Markets Authority(CMA)each opened an investigation intoSearch distribution practices.On December 16,2020,a number of state Attorneys General filed an antitrust complaint in the U.S.District Court for the Eastern District of Texas,alleging that Google violated U.S.antitrust laws as well asstate deceptive trade laws relating to its advertising technology,and a trial is scheduled for March 2025.Additionally,on January 24,2023,the DOJ,along with a number of state Attorneys General,filed anantitrust complaint in the U.S.District Court for the Eastern District of Virginia alleging that Googlesdigital advertising technology products violate U.S.antitrust laws,and on April 17,2023,a number ofadditional state Attorneys General joined the complaint.A trial is scheduled for September 2024.TheEC,the CMA,and the ACCC each opened a formal investigation into Googles advertising technologybusiness practices on June 22,2021,May 25,2022,and June 29,2022,respectively.On June 14,2023,the EC issued a Statement of Objections(SO)informing Google of its preliminary view thatGoogle violated European antitrust laws relating to its advertising technology.We responded to the SOon December 1,2023.In May 2022,the EC and the CMA each opened investigations into Google Plays business practices.Korean regulators are investigating Google Plays billing practices,including a formal review in May2022 of Googles compliance with the new app store billing regulations.We believe we have strong arguments against these claims and will defend ourselves vigorously.Wecontinue to cooperate with federal and state regulators in the U.S.,the EC,and other regulators around theworld.Privacy MattersWe are subject to a number of privacy-related laws and regulations,and we currently are party to a numberof privacy investigations and lawsuits ongoing in multiple jurisdictions.For example,there are ongoinginvestigations and litigation in the U.S.and the European Union,including those relating to our collection anduse of location information,the choices we offer users,and advertising practices,which could result in significantfines,judgments,and product changes.Patent and Intellectual Property ClaimsWe have had patent,copyright,trade secret,and trademark infringement lawsuits filed against us claimingthat certain of our products,services,and technologies infringe others intellectual property rights.Adverseresults in these lawsuits may include awards of substantial monetary damages,costly royalty or licensingagreements,or orders preventing us from offering certain features,functionalities,products,or services.As aresult,we may have to change our business practices and develop non-infringing products or technologies,which could result in a loss26of revenues for us and otherwise harm our business.In addition,the U.S.International Trade Commission(ITC)has increasingly become an important forum to litigate intellectual property disputes because an ultimate loss inan ITC action can result in a prohibition on importing infringing products into the U.S.Because the U.S.is animportant market,a prohibition on importation could have an adverse effect on us,including preventing us fromimporting many important products into the U.S.or necessitating workarounds that may limit certain features ofour products.Furthermore,many of our agreements with our customers and partners require us to indemnify themagainst certain intellectual property infringement claims,which would increase our costs as a result of defendingsuch claims,and may require that we pay significant damages if there were an adverse ruling in any suchclaims.In addition,our customers and partners may discontinue the use of our products,services,andtechnologies,as a result of injunctions or otherwise,which could result in loss of revenues and adversely affectour business.OtherWe are subject to claims,lawsuits,regulatory and government investigations,other proceedings,andconsent orders involving competition,intellectual property,data security,tax and related compliance,labor andemployment,commercial disputes,content generated by our users,goods and services offered by advertisers orpublishers using our platforms,personal injury,consumer protection,and other matters.For example,weperiodically have data incidents that we report to relevant regulators as required by law.Such claims,consentorders,lawsuits,regulatory and government investigations,and other proceedings could result in substantialfines and penalties,injunctive relief,ongoing monitoring and auditing obligations,changes to our products andservices,alterations to our business models and operations,and collateral related civil litigation or other adverseconsequences,all of which could harm our business,reputation,financial condition,and operating results.We have ongoing legal matters relating to Russia.For example,civil judgments that include compoundingpenalties have been imposed upon us in connection with disputes regarding the termination of accounts,including those of sanctioned parties.We do not believe these ongoing legal matters will have a materialadverse effect.Non-Income TaxesWe are under audit by various domestic and foreign tax authorities with regards to non-income tax matters.The subject matter of non-income tax audits primarily arises from disputes on the tax treatment and tax rateapplied to the sale of our products and services in these jurisdictions and the tax treatment of certain employeebenefits.We accrue non-income taxes that may result from examinations by,or any negotiated agreements with,these tax authorities when a loss is probable and reasonably estimable.If we determine that a loss is reasonablypossible and the loss or range of loss can be estimated,we disclose the reasonably possible loss.Due to theinherent complexity and uncertainty of these matters and judicial process in certain jurisdictions,the finaloutcome may be materially different from our expectations.See Note 12 for information regarding income tax contingencies.Note 9.Stockholders EquityShare RepurchasesIn the three and six months ended June 30,2024,we continued to repurchase both Class A and Class Cshares in a manner deemed in the best interest of the company and its stockholders,taking into account theeconomic cost and prevailing market conditions,including the relative trading prices and volumes of the Class Aand Class C shares.During the three and six months ended June 30,2024,we repurchased$15.6 billion and$31.7 billion,respectively,of Alphabets Class A and Class C shares.In April 2023,the Board of Directors of Alphabet authorized the company to repurchase up to$70.0 billionof its Class A and Class C shares.In April 2024,the Board of Directors of Alphabet authorized the company torepurchase up to an additional$70.0 billion of its Class A and Class C shares.As of June 30,2024,$74.9 billionremained available for Class A and Class C share repurchases.The following table presents Class A and Class C shares repurchased and subsequently retired(inmillions):Three Months Ended June 30,2024Six Months Ended June 30,2024SharesAmountSharesAmountClass A share repurchases19$3,265 43$6,615 Class C share repurchases73 12,333 160 25,040 Total share repurchases92$15,598 203$31,655(1)2727Shares repurchased include unsettled repurchases as of June 30,2024.Repurchases are executed from time to time,subject to general business and market conditions and otherinvestment opportunities,through open market purchases or privately negotiated transactions,including throughRule 10b5-1 plans.The repurchase program does not have an expiration date.DividendsOn April 25,2024,the Board of Directors of Alphabet declared a cash dividend of$0.20 per share tostockholders of record as of June 10,2024,on each of the companys Class A,Class B,and Class C shares.These dividends were paid on June 17,2024,totaling to$1.2 billion,$173 million,and$1.1 billion for Class A,Class B,and Class C shares,respectively.The company intends to pay quarterly cash dividends in the future,subject to review and approval by thecompanys Board of Directors in its sole discretion.(1)28Note 10.Net Income Per ShareThe following table sets forth the computation of basic and diluted net income per share of Class A,ClassB,and Class C stock(in millions,except per share amounts):Three Months Ended June 30,20232024 Class AClass BClass CConsolidatedClass AClass BClass CConsolidatedBasic net income pershare:NumeratorAllocation ofdistributed earnings(cash dividends paid)$0$0$0$0$1,173$173$1,120$2,466 Allocation ofundistributedearnings8,600 1,275 8,493 18,368 10,046 1,484 9,623 21,153 Net income$8,600$1,275$8,493$18,368$11,219$1,657$10,743$23,619 DenominatorNumber of sharesused in per sharecomputation5,931 879 5,858 12,668 5,862 866 5,615 12,343 Basic net income pershare$1.45$1.45$1.45$1.45$1.91$1.91$1.91$1.91 Diluted net income pershare:NumeratorAllocation of totalearnings for basiccomputation$8,600$1,275$8,493$18,368$11,219$1,657$10,743$23,619 Reallocation of totalearnings as a result ofconversion of Class Bto Class A shares1,275 0 0 _1,657 0 0 _Reallocation ofundistributedearnings(75)(10)75 _(140)(18)140 _Net income$9,800$1,265$8,568$18,368$12,736$1,639$10,883 23,619 DenominatorNumber of sharesused in basiccomputation5,931 879 5,858 12,668 5,862 866 5,615 12,343 Weighted-averageeffect of dilutivesecuritiesAdd:Conversion ofClass B to Class Ashares outstanding879 0 0 _866 0 0 _Restricted stockunits and othercontingentlyissuable shares0 0 96 96 0 0 152 152 Number of sharesused in per sharecomputation6,810 879 5,954 12,764 6,728 866 5,767 12,495 Diluted net income pershare$1.44$1.44$1.44$1.44$1.89$1.89$1.89$1.89 Not applicable for consolidated net income per share.(1)(1)(1)(1)(1)(1)(1)29Six Months Ended June 30,20232024 Class AClass BClass CConsolidatedClass AClass BClass CConsolidatedBasic net income pershare:NumeratorAllocation ofdistributed earnings(cash dividendspaid)$0$0$0$0$1,173$173$1,120$2,466 Allocation ofundistributedearnings15,597 2,311 15,511 33,419 21,254 3,142 20,419 44,815 Net income$15,597$2,311$15,511$33,419$22,427$3,315$21,539$47,281 DenominatorNumber of sharesused in per sharecomputation5,939 880 5,906 12,725 5,871 868 5,640 12,379 Basic net income pershare$2.63$2.63$2.63$2.63$3.82$3.82$3.82$3.82 Diluted net income pershare:NumeratorAllocation of totalearnings for basiccomputation$15,597$2,311$15,511$33,419$22,427$3,315$21,539$47,281 Reallocation of totalearnings as a resultof conversion ofClass B to Class Ashares2,311 0 0 _3,315 0 0 _Reallocation ofundistributedearnings(96)(12)96 _(257)(33)257 _Net income$17,812$2,299$15,607$33,419$25,485$3,282$21,796$47,281 DenominatorNumber of sharesused in basiccomputation5,939 880 5,906 12,725 5,871 868 5,640 12,379 Weighted-averageeffect of dilutivesecuritiesAdd:Conversion ofClass B toClass A sharesoutstanding880 0 0 _868 0 0 _Restricted stockunits and othercontingentlyissuable shares0 0 69 69 0 0 132 132 Number of sharesused in per sharecomputation6,819 880 5,975 12,794 6,739 868 5,772 12,511 Diluted net income pershare$2.61$2.61$2.61$2.61$3.78$3.78$3.78$3.78 Not applicable for consolidated net income per share.For the periods presented above,the holders of each class are entitled to equal per share dividends ordistributions in liquidation in accordance with the Amended and Restated Certificate of Incorporation of AlphabetInc.Holders of Alphabet unvested stock units are awarded dividend equivalents,which are subject to the samevesting conditions as the underlying award,and settled in Class C shares.(1)(1)(1)(1)(1)(1)(1)30Note 11.Compensation PlansStock-Based CompensationFor the three months ended June 30,2023 and 2024,total stock based compensation(SBC)expense was$5.4 billion and$5.9 billion,including amounts associated with awards we expect to settle in Alphabet stock of$5.6 billion and$5.7 billion,respectively.For the six months ended June 30,2023 and 2024,total SBC expensewas$10.7 billion and$11.2 billion,including amounts associated with awards we expect to settle in Alphabetstock of$10.7 billion and$10.7 billion,respectively.Stock-Based Award ActivitiesThe following table summarizes the activities for unvested Alphabet restricted stock units(RSUs),whichinclude dividend equivalents awarded to holders of unvested stock,for the six months ended June 30,2024(inmillions,except per share amounts):Number ofSharesWeighted-Average Grant-Date Fair ValueUnvested as of December 31,2023338$104.93 Granted169$135.64 Vested(101)$109.05 Forfeited/canceled(19)$109.92 Unvested as of June 30,2024387$117.01 As of June 30,2024,there was$43.9 billion of unrecognized compensation cost related to unvested RSUs.This amount is expected to be recognized over a weighted-average period of 2.7 years.Note 12.Income TaxesThe following table presents provision for income taxes(in millions,except for effective tax rate):Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Income before provision for income taxes$21,903$27,551$40,108$55,866 Provision for income taxes$3,535$3,932$6,689$8,585 Effective tax rate16.1.3.7.4%We are subject to income taxes in the U.S.and foreign jurisdictions.Significant judgment is required inevaluating our uncertain tax positions and determining our provision for income taxes.The total amount of grossunrecognized tax benefits was$9.4 billion and$10.7 billion,of which$7.4 billion and$8.6 billion,if recognized,would affect our effective tax rate,as of December 31,2023 and June 30,2024,respectively.Note 13.Information about Segments and Geographic AreasWe report our segment results as Google Services,Google Cloud,and Other Bets:Google Services includes products and services such as ads,Android,Chrome,devices,Google Maps,Google Play,Search,and YouTube.Google Services generates revenues primarily from advertising;fees received for consumer subscription-based products such as YouTube TV,YouTube Music andPremium,and NFL Sunday Ticket,as well as Google One;the sale of apps and in-app purchases anddevices.Google Cloud includes infrastructure and platform services,collaboration tools,and other services forenterprise customers.Google Cloud generates revenues primarily from consumption-based fees andsubscriptions received for Google Cloud Platform services,Google Workspace communication andcollaboration tools,and other enterprise services.Other Bets is a combination of multiple operating segments that are not individually material.Revenuesfrom Other Bets are generated primarily from the sale of healthcare-related services and internetservices.Revenues,certain costs,such as costs associated with content and traffic acquisition,certain engineeringactivities,and devices,as well as certain operating expenses are directly attributable to our segments.Due tothe integrated nature of Alphabet,other costs and expenses,such as technical infrastructure and office facilities,are31managed centrally at a consolidated level.These costs,including the associated depreciation and impairment,are allocated to operating segments as a service cost generally based on usage,headcount,or revenue.As announced on April 18,2024,we further consolidated teams that focus on building AI models acrossGoogle Research and Google DeepMind to further accelerate our progress in AI.AI model development teamspreviously under Google Research in our Google Services segment are included as part of Google DeepMind,reported within Alphabet-level activities,prospectively beginning in the second quarter of 2024.Certain costs are not allocated to our segments because they represent Alphabet-level activities.Thesecosts primarily include AI-focused shared R&D activities,including development costs of our general AI models;corporate initiatives such as our philanthropic activities;corporate shared costs such as certain finance,humanresource,and legal costs,including certain fines and settlements.Charges associated with employee severanceand office space reductions during 2023 and employee severance in 2024 were also not allocated to oursegments.Additionally,hedging gains(losses)related to revenue are not allocated to our segments.Our operating segments are not evaluated using asset information.The following table presents information about our segments(in millions):Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Revenues:Google Services$66,285$73,928$128,246$144,326 Google Cloud8,031 10,347 15,485 19,921 Other Bets285 365 573 860 Hedging gains(losses)3 102 87 174 Total revenues$74,604$84,742$144,391$165,281 Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Operating income(loss):Google Services$23,454$29,674$45,191$57,571 Google Cloud395 1,172 586 2,072 Other Bets(813)(1,134)(2,038)(2,154)Alphabet-level activities(1,198)(2,287)(4,486)(4,592)Total income from operations$21,838$27,425$39,253$52,897 See Note 2 for information relating to revenues by geography.The following table presents long-lived assets by geographic area,which includes property and equipment,net and operating lease assets(in millions):As of December 31,2023As of June 30,2024Long-lived assets:United States$110,053$122,463 International38,383 42,298 Total long-lived assets$148,436$164,761 32ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONSPlease read the following discussion and analysis of our financial condition and results of operationstogether with Note About Forward-Looking Statements and our consolidated financial statements and relatednotes included under Item 1 of this Quarterly Report on Form 10-Q as well as our Annual Report on Form 10-Kfor the fiscal year ended December 31,2023,including Part I,Item 1A Risk Factors,as updated in ourQuarterly Report on Form 10-Q for the quarter ended March 31,2024 and in this Quarterly Report on Form 10-Q.Understanding Alphabets Financial ResultsAlphabet is a collection of businesses the largest of which is Google.We report Google in two segments,Google Services and Google Cloud;we also report all non-Google businesses collectively as Other Bets.Forfurther details on our segments,see Note 13 of the Notes to Consolidated Financial Statements included in Item1 of this Quarterly Report on Form 10-Q.Revenues and Monetization MetricsWe generate revenues by delivering relevant,cost-effective online advertising;cloud-based solutions thatprovide enterprise customers of all sizes with infrastructure and platform services as well as communication andcollaboration tools;sales of other products and services,such as fees received for subscription-based products,apps and in-app purchases,and devices.For additional information on how we recognize revenue,see Note 1of the Notes to Consolidated Financial Statements included in Part II,Item 8 in our Annual Report on Form 10-Kfor the fiscal year ended December 31,2023.In addition to the long-term trends and their financial effect on our business discussed in Trends in OurBusiness and Financial Effect in Part II,Item 7 of our Annual Report on Form 10-K for the fiscal year endedDecember 31,2023,fluctuations in our revenues have been and may continue to be affected by a combinationof factors,including:changes in foreign currency exchange rates;changes in pricing,such as those resulting from changes in fee structures,discounts,and customerincentives;general economic conditions and various external dynamics,including geopolitical events,regulations,and other measures and their effect on advertiser,consumer,and enterprise spending;new product and service launches;andseasonality.Additionally,fluctuations in our revenues generated from advertising(Google advertising),revenues fromother sources(Google subscriptions,platforms,and devices revenues),Google Cloud,and Other Betsrevenues have been,and may continue to be,affected by other factors unique to each set of revenues,asdescribed below.Google ServicesGoogle Services revenues consist of Google advertising as well as Google subscriptions,platforms,anddevices revenues.Google AdvertisingGoogle advertising revenues are comprised of the following:Google Search&other,which includes revenues generated on Google search properties(includingrevenues from traffic generated by search distribution partners who use G as their defaultsearch in browsers,toolbars,etc.),and other Google owned and operated properties like Gmail,GoogleMaps,and Google Play;YouTube ads,which includes revenues generated on YouTube properties;andGoogle Network,which includes revenues generated on Google Network properties participating inAdMob,AdSense,and Google Ad Manager.We use certain metrics to track how well traffic across various properties is monetized as it relates to ouradvertising revenues:paid clicks and cost-per-click pertain to traffic on Google Search&other properties,whileimpressions and cost-per-impression pertain to traffic on our Google Network properties.33Paid clicks represent engagement by users and include clicks on advertisements by end-users on Googlesearch properties and other Google owned and operated properties including Gmail,Google Maps,and GooglePlay.Cost-per-click is defined as click-driven revenues divided by our total number of paid clicks and representsthe average amount we charge advertisers for each engagement by users.Impressions include impressions displayed to users on Google Network properties participating primarily inAdMob,AdSense,and Google Ad Manager.Cost-per-impression is defined as impression-based and click-based revenues divided by our total number of impressions,and represents the average amount we chargeadvertisers for each impression displayed to users.As our business evolves,we periodically review,refine,and update our methodologies for monitoring,gathering,and counting the number of paid clicks and the number of impressions,and for identifying therevenues generated by the corresponding click and impression activity.Fluctuations in our advertising revenues,as well as the change in paid clicks and cost-per-click on GoogleSearch&other properties and the change in impressions and cost-per-impression on Google Network propertiesand the correlation between these items have been,and may continue to be,affected by factors in addition tothe general factors described above,such as:advertiser competition for keywords;changes in advertising quality,formats,delivery or policy;changes in device mix;seasonal fluctuations in internet usage,advertising expenditures,and underlying business trends,suchas traditional retail seasonality;andtraffic growth in emerging markets compared to more mature markets and across various verticals andchannels.Google subscriptions,platforms,and devicesGoogle subscriptions,platforms,and devices revenues are comprised of the following:consumer subscriptions,which primarily include revenues from YouTube services,such as YouTube TV,YouTube Music and Premium,and NFL Sunday Ticket,as well as Google One;platforms,which primarily include revenues from Google Play from the sales of apps and in-apppurchases;devices,which primarily include sales of the Pixel family of devices;andother products and services.Fluctuations in our Google subscriptions,platforms,and devices revenues have been,and may continue tobe,affected by factors in addition to the general factors described above,such as changes in customer usageand demand,number of subscribers,and fluctuations in the timing of product launches.Google CloudGoogle Cloud revenues are comprised of the following:Google Cloud Platform,which generates consumption-based fees and subscriptions for infrastructure,platform,and other services.These services provide access to solutions such as cybersecurity,databases,analytics,and AI offerings including our AI infrastructure,Vertex AI platform,and Gemini forGoogle Cloud;Google Workspace,which includes subscriptions for cloud-based communication and collaboration toolsfor enterprises,such as Calendar,Gmail,Docs,Drive,and Meet,with integrated features like Gemini forGoogle Workspace;andother enterprise services.Fluctuations in our Google Cloud revenues have been,and may continue to be,affected by factors inaddition to the general factors described above,such as customer usage.Other BetsRevenues from Other Bets are generated primarily from the sale of healthcare-related services and internetservices.34Costs and ExpensesOur cost structure has two components:cost of revenues and operating expenses.Our operating expensesinclude costs related to R&D,sales and marketing,and general and administrative functions.Certain of ourcosts and expenses,including those associated with the operation of our technical infrastructure as well ascomponents of our operating expenses,are generally less variable in nature and may not correlate to changes inrevenue.Additionally,fluctuations in compensation expenses may not directly correlate with changes inheadcount,in particular due to annual SBC awards that generally vest over four years.Cost of RevenuesCost of revenues is comprised of TAC and other costs of revenues.TAC includes:amounts paid to our distribution partners who make available our search access points andservices.Our distribution partners include browser providers,mobile carriers,original equipmentmanufacturers,and software developers;andamounts paid to Google Network partners primarily for ads displayed on their properties.Other cost of revenues primarily includes:compensation expense related to our technical infrastructure and other operations such ascontent review and customer and product support;content acquisition costs,which are payments to content providers from whom we license videoand other content for distribution on YouTube and Google Play(we pay fees to these contentproviders based on revenues generated or a flat fee);depreciation expense related to our technical infrastructure;inventory and other costs related to the devices we sell;andother technical infrastructure operations costs,including bandwidth,energy,and equipmentcosts.TAC as a percentage of revenues generated from ads placed on Google Network properties aresignificantly higher than TAC as a percentage of revenues generated from ads placed on Google Search&otherproperties,because most of the advertiser revenues from ads served on Google Network properties are paid asTAC to our Google Network partners.Operating ExpensesOperating expenses are generally incurred during our normal course of business,which we categorize aseither R&D,sales and marketing,or general and administrative.The main components of our R&D expenses are:compensation expenses for engineering and technical employees responsible for R&D related to ourexisting and new products and services;depreciation;andthird-party services fees primarily relating to consulting and outsourced services in support of ourengineering and product development efforts.The main components of our sales and marketing expenses are:compensation expenses for employees engaged in sales and marketing,sales support,and certaincustomer service functions;andspending relating to our advertising and promotional activities in support of our products and services.The main components of our general and administrative expenses are:compensation expenses for employees in finance,human resources,information technology,legal,andother administrative support functions;expenses relating to legal matters,including certain fines and settlements;andthird-party services fees,including audit,consulting,outside legal,and other outsourced administrativeservices.35Other Income(Expense),NetOI&E,net primarily consists of interest income(expense),the effect of foreign currency exchange gains(losses),net gains(losses)and impairment on our marketable and non-marketable securities,performance fees,and income(loss)and impairment from our equity method investments.For additional information,including how we account for our investments and factors that can drivefluctuations in the value of our investments,see Note 1 of the Notes to Consolidated Financial Statementsincluded in Part II,Item 8 and Item 7A,“Quantitative and Qualitative Disclosures About Market Risk”in ourAnnual Report on Form 10-K for the fiscal year ended December 31,2023 as well as Note 3 of the Notes toConsolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.Provision for Income TaxesProvision for income taxes represents the estimated amount of federal,state,and foreign income taxesincurred in the U.S.and the many jurisdictions in which we operate.The provision includes the effect of reserveprovisions and changes to reserves that are considered appropriate as well as the related net interest andpenalties.For additional information,see Note 1 of the Notes to Consolidated Financial Statements included in Part II,Item 8 in our Annual Report on Form 10-K for the fiscal year ended December 31,2023 as well as Note 12 ofthe Notes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.Executive OverviewThe following table summarizes our consolidated financial results(in millions,except per share informationand percentages):Three Months EndedJune 30,20232024$Change%ChangeConsolidated revenues$74,604$84,742$10,138 14%Change in consolidated constant currencyrevenues15%Cost of revenues$31,916$35,507$3,591 11%Operating expenses$20,850$21,810$960 5%Operating income$21,838$27,425$5,587 26%Operating margin292%3%Other income(expense),net$65$126$61 94%Net Income$18,368$23,619$5,251 29%Diluted EPS$1.44$1.89$0.45 31%See Use of Non-GAAP Constant Currency Measures below for details relating to our use of constant currencyinformation.For additional information on the calculation of diluted EPS,see Note 10 of the Notes to Consolidated FinancialStatements included in Item 1 of this Quarterly Report on Form 10-Q.Revenues were$84.7 billion,an increase of 14%year over year,primarily driven by an increase inGoogle Services revenues of$7.6 billion,or 12%,and an increase in Google Cloud revenues of$2.3billion,or 29%.Total constant currency revenues,which exclude the effect of hedging,increased 15%year over year.Cost of revenues was$35.5 billion,an increase of 11%year over year,primarily driven by increases incontent acquisition costs,TAC,depreciation expense,digital services tax related to the recently enactedlaw in Canada,which is applied retroactively,and other technical infrastructure operations costs.Operating expenses were$21.8 billion,an increase of 5%year over year,primarily driven by increasesin compensation expenses,depreciation expense,and third-party services fees.The increase incompensation expenses was largely due to an increase in SBC expenses,which primarily reflects the(1)(2)(1)(2)36reduction in valuation-based compensation liabilities related to certain Other Bets recognized in the prioryear comparable period.These increases were partially offset by a reduction in charges related to legalmatters.Other InformationDividend payments to stockholders of Class A,Class B,and Class C shares were$1.2 billion,$173million,and$1.1 billion,respectively,totaling$2.5 billion for the three months ended June 30,2024.OnJuly 23,2024,Alphabet announced a cash dividend of$0.20 per share that will be paid on September16,2024,to stockholders of record as of September 9,2024,on each of the companys Class A,ClassB,and Class C shares.For additional information,see Note 9 of the Notes to Consolidated FinancialStatements included in Item 1 of this Quarterly Report on Form 10-Q.Repurchases of Class A and Class C shares were$3.3 billion and$12.3 billion,respectively,totaling$15.6 billion for the three months ended June 30,2024.For additional information,see Note 9 of theNotes to Consolidated Financial Statements included in Item 1 of this Quarterly Report on Form 10-Q.Operating cash flow was$26.6 billion for the three months ended June 30,2024.Capital expenditures,which primarily reflected investments in technical infrastructure,were$13.2 billionfor the three months ended June 30,2024.As of June 30,2024,we had 179,582 employees.Financial ResultsRevenuesThe following table presents revenues by type(in millions):Three Months EndedSix Months EndedJune 30,June 30,2023202420232024Google Search&other$42,628$48,509$82,987$94,665 YouTube ads7,665 8,663 14,358 16,753 Google Network7,850 7,444 15,346 14,857 Google advertising58,143 64,616 112,691 126,275 Google subscriptions,platforms,and devices8,142 9,312 15,555 18,051 Google Services total66,285 73,928 128,246 144,326 Google Cloud8,031 10,347 15,485 19,921 Other Bets285 365 573 860 Hedging gains(losses)3 102 87 174 Total revenues$74,604$84,742$144,391$165,281 Google ServicesGoogle advertising revenuesGoogle Search&otherGoogle Search&other revenues increased$5.9 billion and$11.7 billion from the three and six monthsended June 30,2023 to the three and six months ended June 30,2024,respectively.The overall growth wasdriven by interrelated factors including increases in search queries resulting from growth in user adoption andusage on mobile devices;growth in advertiser spending;and improvements we have made in ad formats anddelivery.YouTube adsYouTube ads revenues increased$998 million and$2.4 billion from the three and six months ended June30,2023 to the three and six months ended June 30,2024,respectively.The growth was driven by our brandadvertising products followed by our direct response advertising products,both of which benefited fromincreased spending by our advertisers.37Google NetworkGoogle Network revenues decreased$406 million from the three months ended June 30,2023 to the threemonths ended June 30,2024,primarily driven by a decrease in AdMob revenues.Additionally,Google Networkrevenues were adversely affected by changes in foreign currency exchange rates for the three months endedJune 30,2024.Google Network revenues decreased$489 million from the six months ended June 30,2023 to the sixmonths ended June 30,2024 primarily driven by a decrease in AdSense revenues.Additionally,Google Networkrevenues were adversely affected by changes in foreign currency exchange rates for the six months ended June30,2024.Monetization MetricsThe following table presents changes in monetization metrics for Google Search&other revenues(paidclicks and cost-per-click)and Google Network revenues(impressions and cost-per-impression),expressed as apercentage,from three and six months ended June 30,2023 to three and six months ended June 30,2024:Three MonthsEnded June 30,Six Months EndedJune 30,20242024Google Search&otherPaid clicks change6%5%Cost-per-click change7%8%Google NetworkImpressions change(17)%(15)%Cost-per-impression change13%Changes in paid clicks and impressions are driven by a number of interrelated factors,including changes inadvertiser spending;ongoing product and policy changes;and,as it relates to paid clicks,fluctuations in searchqueries resulting from changes in user adoption and usage,primarily on mobile devices.Changes in cost-per-click and cost-per-impression are driven by a number of interrelated factors includingchanges in device mix,geographic mix,advertiser spending,ongoing product and policy changes,product mix,property mix,and changes in foreign currency exchange rates.Google subscriptions,platforms,and devicesGoogle subscriptions,platforms,and devices revenues increased$1.2 billion and$2.5 billion from the threeand six months ended June 30,2023 to the three and six months ended June 30,2024,respectively.The growthwas primarily driven by an increase in subscription revenues,largely from growth in the number of paidsubscribers for YouTube services.Google CloudGoogle Cloud revenues increased$2.3 billion and$4.4 billion from the three and six months ended June30,2023 to the three and six months ended June 30,2024,respectively.The growth was primarily driven byGoogle Cloud Platform followed by Google Workspace offerings.Google Clouds infrastructure and platformservices were the largest drivers of growth in Google Cloud Platform.Revenues by GeographyThe following table presents revenues by geography as a percentage of revenues,determined based onthe addresses of our customers:Three Months EndedSix Months Ended June 30,June 30,2023202420232024United States47IGH%EMEA30)0)%APAC17%Other Americas6%6%6%6%Hedging gains(losses)0%0%0%08For additional information,see Note 2 of the Notes to Consolidated Financial Statements included in Item 1of this Quarterly Report on Form 10-Q.Use of Non-GAAP Constant Currency InformationInternational revenues,which represent a significant portion of our revenues,are generally transacted inmultiple currencies and therefore are affected by fluctuations in foreign currency exchange rates.The effect of currency exchange rates on our business is an important factor in understanding period-to-period comparisons.We use non-GAAP constant currency revenues(constant currency revenues)and non-GAAP percentage change in constant currency revenues(percentage change in constant currency revenues)for financial and operational decision-making and as a means to evaluate period-to-period comparisons.Webelieve the presentation of results on a constant currency basis in addition to GAAP results helps improve theability to understand our performance,because it excludes the effects of foreign currency volatility that are notindicative of our core operating results.Constant currency information compares results between periods as if exchange rates had remainedconstant period over period.We define constant currency revenues as revenues excluding the effect of foreigncurrency exchange rate movements(FX Effect)as well as hedging activities,which are recognized at theconsolidated level.We use constant currency revenues to determine the constant currency revenue percentagechange on a year-on-year basis.Constant currency revenues are calculated by translating current periodrevenues using prior year comparable period exchange rates,as well as excluding any hedging effects realizedin the current period.Constant currency revenue percentage change is calculated by determining the change in current periodrevenues over prior year comparable period revenues where current period foreign currency revenues aretranslated using prior year comparable period exchange rates and hedging effects are excluded from revenuesof both periods.These results should be considered in addition to,not as a substitute for,results reported in accordancewith GAAP.Results on a constant currency basis,as we present them,may not be comparable to similarly titledmeasures used by other companies and are not a measure of performance presented in accordance with GAAP.The following table presents the foreign currency exchange effect on international revenues and totalrevenues(in millions,except percentages):Three Months Ended June 30,2024%Change from Prior PeriodThree Months EndedJune 30,Less FXEffectConstantCurrencyRevenuesAsReportedLessHedgingEffectLess FXEffectConstantCurrencyRevenues20232024United States$35,073$41,196$0$41,196 17%0%EMEA22,289 24,683(367)25,050 11%(1)%APAC12,728 13,823(595)14,418 9%(4)%Other Americas4,511 4,938(305)5,243 9%(7)%Revenues,excludinghedging effect74,601 84,640(1,267)85,907 13%(2)%Hedging gains(losses)3 102 Total revenues$74,604$84,742$85,907 14%1%(2)%Total constant currency revenues of$85.9 billion for the three months ended June 30,2024 increased$11.3 billioncompared to$74.6 billion in revenues,excluding hedging effect,for the three months ended June 30,2023.EMEA revenue growth was unfavorably affected by changes in foreign currency exchange rates,primarilydue to the U.S.dollar strengthening relative to the Turkish lira.APAC revenue growth was unfavorably affected by changes in foreign currency exchange rates,primarilydue to the U.S.dollar strengthening relative to the Japanese yen.Other Americas revenue growth was unfavorably affected by changes in foreign currency exchange rates,primarily due to the U.S.dollar strengthening relative to the Argentine peso.(1)(1)39Six Months Ended June 30,2024%Change from Prior PeriodSix Months Ended June30,Less FXEffectConstantCurrencyRevenuesAsReportedLessHedgingEffectLess FXEffectConstantCurrencyRevenues20232024United States$67,937$79,933$0$79,933 18%0%EMEA43,367 48,471(163)48,634 12%0%APAC24,409 27,112(1,034)28,146 11%(4)%Other Americas8,591 9,591(457)10
2024-10-15
57页
5星级
1 DouYu International Holdings Limited Reports First Quarter 2024 Unaudited Financial Results WUHAN,China,June 5,2024/PRNewswire/-DouYu International Holdings Limited(DouYu or the Company)(Nasdaq:DOYU),a leading game-centric live streaming platform in China and a pioneer in the eSports value chain,today announced its unaudited financial results for the first quarter ended March 31,2024.First Quarter 2024 Financial and Operational Highlights Total net revenues in the first quarter of 2024 were RMB1,039.7million(US$144.0 million),compared with RMB1,483.1 million in the same period of 2023.Gross profit in the first quarter of 2024 was RMB109.0 million(US$15.1million),compared with RMB176.5 million in the same period of 2023.Net loss in the first quarter of 2024 was RMB88.0 million(US$12.2 million),compared with net income of RMB14.5 million in the same period of 2023.Adjusted net loss1 in the first quarter of 2024 was RMB 85.7 million(US$11.9 million),compared with adjusted net income of RMB25.8 million in the same period of 2023.Average mobile MAUs2 in the first quarter of 2024 were 45.3 million,compared with 50.2 million in the same period of 2023.The number of quarterly average paying users3 in the first quarter of 2024 was 3.4 million,compared with 4.5 million in the same period of 2023.The interim management committee of DouYu commented,“In the first quarter of 2024,we continued to work on the diversification of our commercialization capabilities and streamlined operations by optimizing our organizational structure and fine-tuning operating strategies.Our priority is elevating user experience and meeting our core users needs with a steady stream of premium content.We are doing this by harnessing the power of our streamer resources and content ecosystem and actively exploring cooperation opportunities with more game developers to enrich our gaming service lineup.However,we continue to face macroeconomic headwinds and challenging industry dynamics,and remain dedicated to protecting our shareholders long-term interests by executing our long-term strategy for developing a vibrant,diverse,game-centric content ecosystem.We consistently maximize the competitive edges of our extensive gaming ecosystem,agile operational mechanisms and close cooperation with game developers to propel our platforms long-term,sustainable growth.”Mr.Hao Cao,Vice President of DouYu,commented,“We reinforced our streamlined operations,ensuring the financial health of our business.While we shore up our fundamentals,we continue to face revenue pressures from soft macroeconomic conditions and ongoing adjustments to the livestreaming business,as well as operating uncertainties.In the first quarter of 2024,we made encouraging developments across our commercial diversification initiatives that improved our revenue mix.Revenue from advertising and others amounted to RMB 238.8 million,contributing 23.0%of our total revenue,a significant increase from 7.7%in the same period of 2023.Moving forward,we will increase our efforts to diversify our revenue streams and strengthen our solid foundation to drive 1“Adjusted net loss”is defined as net loss excluding share of income(loss)in equity method investments,gain on disposal of investment,impairment loss of investments and impairment loss of goodwill and intangible assets.For more information,please refer to“Use of Non-GAAP Financial Measures”and“Reconciliations of GAAP and Non-GAAP Results”at the end of this press release.2 Refers to the number of mobile devices that launched our mobile apps in a given period.Average mobile MAUs for a given period is calculated by dividing(i)the sum of active mobile users for each month of such period,by(ii)the number of months in such period.3“Quarterly average paying users”refers to the average paying users for each quarter during a given period of time calculated by dividing(i)the sum of paying users for each quarter of such period,by(ii)the number of quarters in such period.“Paying user”refers to a registered user that has purchased virtual gifts on our platform at least once during the relevant period.2 the Companys healthy growth and deliver enduring value to our shareholders.”In connection with investigations by relevant government authorities against certain third-party streamers for their historical illegal activities,the Company voluntarily returned RMB111.7 million of gain that was related to these streamers historical illegal activities to the relevant government authorities(the“Voluntary Return”)this week.Pursuant to PRC law,the Company is not entitled to retain gains related to streamers illegal activities.As a result,the Company elected to make the Voluntary Return,which has been recorded as an operating expense.The Voluntary Return has no material impact on our business operations and we continue to maintain normal business operations.The Company is not the target of any legal proceedings or investigations in connection with the historical illegal activities of these third-party streamers.There remain uncertainties regarding future developments or regulatory investigations into streamers historical illegal activities.The Company will continue to fully cooperate with authorities and remains committed to upholding regulatory compliance on its platform.First Quarter 2024 Financial Results Total net revenues in the first quarter of 2024 decreased by 29.9%to RMB1,039.7million(US$144.0 million),compared with RMB1,483.1 million in the same period of 2023.Livestreaming revenues in the first quarter of 2024 decreased by 41.5%to RMB800.9 million(US$110.9 million)from RMB1,369.0 million in the same period of 2023.The decrease was primarily due to the soft macroeconomic condition and our planned reduction in revenue-generating promotions during the first quarter in light of the seasonality,leading to a year-over-year decrease in total paying users.Advertising and other revenues in the first quarter of 2024 increased by 109.3%to RMB238.8 million(US$33.1 million)from RMB114.1 million in the same period of 2023.The increase was primarily driven by an increase in other revenues generated through our other innovative business,such as voice-based social networking service.Cost of revenues in the first quarter of 2024 decreased by 28.8%to RMB930.7 million(US$128.9 million)from RMB1,306.6 million in the same period of 2023.Revenue-sharing fees and content costs in the first quarter of 2024 decreased by 37.7%to RMB675.1 million(US$93.5 million)from RMB1,084.4 million in the same period of 2023.The decrease was primarily due to a decrease in revenue-sharing fees aligned with decreased livestreaming revenues,as well as a decline in content costs resulting from improved cost management in streamer payments and self-produced content.Bandwidth costs in the first quarter of 2024 decreased by 33.7%to RMB82.5 million(US$11.4 million)from RMB124.5 million in the same period of 2023.The decline was primarily due to a year-over-year decrease in peak bandwidth usage.Gross profit in the first quarter of 2024 was RMB109.0 million(US$15.1 million),compared with RMB176.5 million in the same period of 2023.The decline in gross profit was primarily attributable to a decrease in livestreaming revenues and an increase in other costs related to the development of innovative business.Gross margin in the first quarter of 2024 was 10.5%,compared with 11.9%in the same period of 2023.Sales and marketing expenses in the first quarter of 2024 decreased by 16.6%to RMB75.6 million(US$10.5 million)from RMB90.7 million in the same period of 2023.The decrease was mainly attributable to a decrease in staff-related expenses.3 Research and development expenses in the first quarter of 2024 decreased by 25.0%to RMB54.2 million(US$7.5 million)from RMB72.3 million in the same period of 2023.The decrease was primarily due to a decrease in staff-related expenses.General and administrative expenses in the first quarter of 2024 decreased by 28.4%to RMB42.8 million(US$5.9 million)from RMB59.8 million in the same period of 2023.The decrease was primarily due to a decrease in staff-related expenses.Other operating expenses,net in the first quarter of 2024 were RMB103.4 million(US$14.3 million)and included a RMB111.7 million of the Voluntary Return,compared with other operating income of RMB19.0 million in the same period of 2023.Loss from operations in the first quarter of 2024 was RMB166.9 million(US$23.1 million),compared with RMB27.3 million in the same period of 2023.Net loss in the first quarter of 2024 was RMB88.0 million(US$12.2 million),compared with net income of RMB14.5 million in the same period of 2023.Adjusted net loss,which excludes the share of income(loss)in equity method investments,gain on disposal of investment and impairment loss of investments,was RMB85.7 million(US$11.9 million)in the first quarter of 2024,compared with adjusted net income of RMB25.8 million in the same period of 2023.Basic and diluted net loss per ADS4 in the first quarter of 2024 were both RMB2.77(US$0.38).Adjusted basic and diluted net loss per ADS in the first quarter of 2024 were both RMB2.69(US$0.37).Cash and cash equivalents,restricted cash and bank deposits As of March 31,2024,the Company had cash and cash equivalents,restricted cash,restricted cash in other non-current assets,and short-term and long-term bank deposits of RMB6,762.2 million(US$936.6 million),compared with RMB6,855.5 million as of December 31,2023.Updates of Share Repurchase Program On December 28,2023,the Company announced that its board of directors had authorized a share repurchase program under which the Company may repurchase up to US$20 million of its ordinary shares in the form of ADSs during a period of up to 12 months commencing on January 1,2024.As of March 31,2024,the Company had repurchased an aggregate of US$2.7 million of its ADSs in the open market under this program,and we expect to expedite the repurchase activity in the second quarter of 2024.Renewal of Framework Agreement with Tencent On June 4,2024,the Company and Tencent further renewed our strategic cooperation agreement(the“SCFM”),which initially became effective on January 31,2018 and was subsequently replaced by the Amended and Restated SCFM dated April 1,2019.The renewed SCFM had substantially the same terms as the Amended and Restated SCFM and extended the term for another three years.Conference Call Information 4 Every one ADS represents one ordinary share for the relevant period and calendar year.4 The Company will hold a conference call on June 5,2024,at 7:00 a.m.Eastern Time(or 7:00 p.m.Beijing Time on the same day)to discuss the financial results.Listeners may access the call by dialing the following numbers:International: 1-412-317-6061 United States Toll Free: 1-888-317-6003 Mainland China Toll Free:4001-206115 Hong Kong Toll Free:800-963976 Singapore Toll Free:800-120-5863 Conference ID:3768185 The replay will be accessible through June 12,2024,by dialing the following numbers:International: 1-412-317-0088 United States Toll Free: 1-877-344-7529 Conference ID:5832581 A live and archived webcast of the conference call will also be available at the Companys investor relations website at http:/.About DouYu International Holdings Limited Headquartered in Wuhan,China,DouYu International Holdings Limited(Nasdaq:DOYU)is a leading game-centric live streaming platform in China and a pioneer in the eSports value chain.DouYu operates its platform on both PC and mobile apps to bring users access to immersive and interactive games and entertainment livestreaming,a wide array of video and graphic contents,as well as opportunities to participate in community events and discussions.By nurturing a sustainable technology-based talent development system and relentlessly producing high-quality content,DouYu consistently delivers premium content through the integration of livestreaming,video,graphics,and virtual communities with a primary focus on games,especially on eSports.This enables DouYu to continuously enhance its user experience and pursue long-term healthy development.For more information,please see http:/.Use of Non-GAAP Financial Measures Adjusted operating income(loss)is calculated as operating income(loss)adjusted for impairment loss of goodwill and intangible assets.Adjusted net income(loss)is calculated as net income(loss)adjusted for share of income(loss)in equity method investments,gain on disposal of investment,impairment loss of investments,and impairment loss of goodwill and intangible assets.Adjusted net income(loss)attributable to DouYu is calculated as net income(loss)attributable to DouYu adjusted for share of income(loss)in equity method investments,gain on disposal of investment,impairment loss of investments,and impairment loss of goodwill and intangible assets.Adjusted basic and diluted net income per ordinary share is non-GAAP net income attributable to ordinary shareholders divided by weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share.The Company adjusted the impact of(i)share of income(loss)in equity method investments,(ii)gain on disposal of investment,(iii)impairment loss of investments,(iv)impairment loss of goodwill and intangible assets to understand and evaluate the Companys core operating performance.The non-GAAP financial measures are presented to enhance investors overall understanding of the Companys financial performance and should not be considered a substitute for,or superior to,the financial information prepared and presented in accordance with U.S.5 GAAP.Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to its most directly comparable GAAP financial measures.As non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies,they may not be comparable to other similarly titled measures used by other companies.In light of the foregoing limitations,you should not consider non-GAAP financial measures as a substitute for,or superior to,such metrics in accordance with U.S.GAAP.For more information on these non-GAAP financial measures,please see the table captioned“Reconciliations of Non-GAAP Results”near the end of this release.Exchange Rate Information This announcement contains translations of certain RMB amounts into U.S.dollars at a specified rate solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2203 to US$1.00,the noon buying rate in effect on March 29,2024,in the H.10 statistical release of the Federal Reserve Board.The Company makes no representation that the RMB amounts could have been,or could be,converted,realized or settled in U.S.dollars,at that rate on March 29,2024,or at any other rate.Safe Harbor Statement This press release contains forward-looking statements.These statements are made under the“safe harbor”provisions of the U.S.Private Securities Litigation Reform Act of 1995.Statements that are not historical facts,including statements about the Companys beliefs and expectations,are forward-looking statements.Forward-looking statements involve inherent risks and uncertainties,and a number of factors could cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following:the Companys results of operations and financial condition;the Companys business strategies;general market conditions,in particular,the game live streaming market;the ability of the Company to retain and grow active and paying users;changes in general economic and business conditions in China;the impact of the COVID-19 to the Companys business operations and the economy in China and globally;any adverse changes in laws,regulations,rules,policies or guidelines applicable to the Company;and assumptions underlying or related to any of the foregoing.In some cases,forward-looking statements can be identified by words or phrases such as“may,”“will,”“expect,”“anticipate,”“target,”“aim,”“estimate,”“intend,”“plan,”“believe,”“potential,”“continue,”“is/are likely to”or other similar expressions.Further information regarding these and other risks,uncertainties or factors is included in the Companys filings with the Securities Exchange Commission.All information provided in this press release is as of the date of this press release,and the Company does not undertake any duty to update such information,except as required under applicable law.Investor Relations Contact In China:Lingling Kong DouYu International Holdings Limited Email:irdouyu.tv Tel: 86(10)6508-0677 Andrea Guo Piacente Financial Communications Email:douyutpg- Tel: 86(10)6508-0677 In the United States:Brandi Piacente Piacente Financial Communications 6 Email:douyutpg- Tel: 1-212-481-2050 Media Relations Contact In China:Lingling Kong DouYu International Holdings Limited Email:pr_douyudouyu.tv Tel: 86(10)6508-0677 7 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(All amounts in thousands,except share,ADS,per share and per ADS data)As of December 31 As of March 31 2023 2024 2024 ASSETS RMB RMB US$(1)Current assets:Cash and cash equivalents 4,440,131 3,683,872 510,211 Short-term bank deposits 1,716,540 2,391,070 331,159 Accounts receivable,net 73,453 54,247 7,514 Prepayments 38,181 31,698 4,390 Amounts due from related parties 68,994 88,312 12,231 Other current assets 348,129 538,805 74,624 Total current assets 6,685,428 6,788,004 940,129 Property and equipment,net 13,808 9,218 1,277 Intangible assets,net 120,694 131,164 18,166 Long-term bank deposits 630,000 610,000 84,484 Investments 436,197 434,254 60,143 Right-of-use assets,net 22,792 9,686 1,341 Other non-current assets 163,184 158,324 21,928 Total non-current assets 1,386,675 1,352,646 187,339 TOTAL ASSETS 8,072,103 8,140,650 1,127,468 LIABILITIES AND SHAREHOLDERS EQUITY LIABILITIES Current liabilities:Accounts payable 534,428 522,091 72,309 Advances from customers 12,911 8,962 1,241 Deferred revenue 315,969 292,346 40,489 Accrued expenses and other current liabilities 246,601 281,834 39,034 Amounts due to related parties 251,392 434,698 60,205 Lease liabilities due within one year 14,768 7,411 1,026 Total current liabilities 1,376,069 1,547,342 214,304 Deferred revenue 6,701-Lease liabilities-1,176 163 Total non-current liabilities 6,701 1,176 163 TOTAL LIABILITIES 1,382,770 1,548,518 214,467 (1)Translations of certain RMB amounts into U.S.dollars at a specified rate are solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2203 to US$1.00,the noon buying rate in effect on March 29,2024,in the H.10 statistical release of the Federal Reserve Board.8 UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS(CONTINUED)(All amounts in thousands,except share,ADS,per share and per ADS data)As of December 31 As of March 31 2023 2024 2024 RMB RMB US$(1)SHAREHOLDERS EQUITY Ordinary shares 23 23 3 Treasury shares (911,217)(930,830)(128,918)Additional paid-in capital 10,670,287 10,670,287 1,477,818 Accumulated deficit(3,485,007)(3,572,960)(494,849)Accumulated other comprehensive income 415,247 425,612 58,947 Total DouYu Shareholders Equity 6,689,333 6,592,132 913,001 Total Shareholders Equity 6,689,333 6,592,132 913,001 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 8,072,103 8,140,650 1,127,468 (1)Translations of certain RMB amounts into U.S.dollars at a specified rate are solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2203 to US$1.00,the noon buying rate in effect on March 29,2024,in the H.10 statistical release of the Federal Reserve Board.9 UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME(LOSS)(All amounts in thousands,except share,ADS,per share and per ADS data)(1)Translations of certain RMB amounts into U.S.dollars at a specified rate are solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2203 to US$1.00,the noon buying rate in effect on March 29,2024,in the H.10 statistical release of the Federal Reserve Board.(2)Every one ADS represents one ordinary share.Three Months Ended March 31,December 31,March 31,March 31,2023 2023 2024 2024 RMB RMB RMB US$(1)Net revenues 1,483,060 1,295,962 1,039,684 143,995 Cost of revenues(1,306,594)(1,169,712)(930,678)(128,897)Gross profit 176,466 126,250 109,006 15,098 Operating income(expense)Sales and marketing expenses(90,686)(83,998)(75,570)(10,466)General and administrative expenses(59,793)(80,031)(42,797)(5,927)Research and development expenses(72,311)(59,072)(54,150)(7,500)Other operating income(expense),net 19,046 (9,618)(103,428)(14,325)Impairment of goodwill-(13,967)-Total operating expenses(203,744)(246,686)(275,945)(38,218)Loss from operations(27,277)(120,436)(166,939)(23,120)Other expenses,net(8,000)(21,844)-Interest income 54,426 82,556 81,094 11,231 Foreign exchange(loss)income(1,396)(122)153 21 Income(loss)before income taxes and share of(loss)income in equity method investments 17,753 (59,846)(85,692)(11,868)Income tax expenses-(1,069)-Share of(loss)income in equity method investments(3,236)(1,310)(2,261)(313)Net income(loss)14,517 (62,225)(87,953)(12,181)Net income(loss)attributable to ordinary shareholders of the Company 14,517 (62,225)(87,953)(12,181)Net income(loss)per ordinary share Basic 0.45 (1.95)(2.77)(0.38)Diluted 0.45 (1.95)(2.77)(0.38)Net income(loss)per ADS(2)Basic 0.45 (1.95)(2.77)(0.38)Diluted 0.45 (1.95)(2.77)(0.38)Weighted average number of ordinary shares used in calculating net income(loss)per ordinary share Basic 32,023,551 31,977,665 31,807,180 31,807,180 Diluted 32,023,551 31,977,665 31,807,180 31,807,180 Weighted average number of ADS used in calculating net income(loss)per ADS(2)Basic 32,023,551 31,977,665 31,807,180 31,807,180 Diluted 32,023,551 31,977,665 31,807,180 31,807,180 10 RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS(All amounts in thousands,except share,ADS,per share and per ADS data)(1)Translations of certain RMB amounts into U.S.dollars at a specified rate are solely for the convenience of the reader.Unless otherwise noted,all translations from RMB to U.S.dollars are made at a rate of RMB7.2203 to US$1.00,the noon buying rate in effect on March 29,2024,in the H.10 statistical release of the Federal Reserve Board.(2)Every one ADS represents one ordinary share.Three Months Ended March 31,December 31,March 31,March 31,2023 2023 2024 2024 RMB RMB RMB US$(1)Loss from operations(27,277)(120,436)(166,939)(23,120)Add:Impairment of goodwill and intangible assets-34,035-Adjusted Operating Loss(27,277)(86,401)(166,939)(23,120)Net income(loss)14,517 (62,225)(87,953)(12,181)Add:Share of loss in equity method investments 3,236 1,310 2,261 313 Impairment losses of investments 8,000 21,844 -Impairment losses of goodwill and intangible assets-34,035 -Adjusted net income(loss)25,753 (5,036)(85,692)(11,868)Net income(loss)attributable to DouYu 14,517 (62,225)(87,953)(12,181)Add:Share of loss in equity method investments 3,236 1,310 2,261 313 Impairment losses of investments 8,000 21,844 -Impairment losses of goodwill and intangible assets-34,035-Adjusted net income(loss)attributable to DouYu 25,753 (5,036)(85,692)(11,868)Adjusted net income(loss)per ordinary share Basic 0.80 (0.16)(2.69)(0.37)Diluted 0.80 (0.16)(2.69)(0.37)Adjusted net income(loss)per ADS(2)Basic 0.80 (0.16)(2.69)(0.37)Diluted 0.80 (0.16)(2.69)(0.37)Weighted average number of ordinary shares used in calculating adjusted net income(loss)per ordinary share Basic 32,023,551 31,977,665 31,807,180 31,807,180 Diluted 32,023,551 31,977,665 31,807,180 31,807,180 Weighted average number of ordinary shares used in calculating adjusted net income(loss)per ADS(2)Basic 32,023,551 31,977,665 31,807,180 31,807,180 Diluted 32,023,551 31,977,665 31,807,180 31,807,180
2024-10-15
10页
5星级
GLENCOE Glencore Half-Year Report 2024 NEWS RELEASE Baar,7 August 2024 Glencores Chief Executive Officer,Gary Nagle,commented:“We are pleased to report strong strategic achievements for the Group over the year to date.Our Industrial portfolio has been further streamlined with the sale of our Volcan stake and strengthened with the addition of a 77%interest in Elk Valley Resources(EVR).Our updated Climate Action Transition Plan(CATP)received more than 90%shareholder support at our 2024 AGM,the Swiss and Dutch government investigations have been resolved and our 2024 production guidance has been maintained and enhanced,with a skew to the second half of 2024.“Critically,we have also clarified the immediate future of our coal and carbon steel materials business.Following completion of the acquisition of EVR in early July,we undertook an extensive consultation with shareholders and based on the outcome of that process and the Groups own analysis,Glencores Board,considering both risk and opportunity scenarios,endorsed the retention,rather than demerger,of the coal and carbon steel materials business,as currently providing the optimal pathway for demonstrable and realisable value creation for Glencore shareholders.“Some shareholders stated that this was a decision for the Board alone to make,but of the others,the overwhelming majority had a clear preference for retention.This was primarily on the basis that retention should enhance Glencores cash-generating capacity to fund opportunities in our transition metals portfolio,such as our copper growth project pipeline,as well as accelerate and optimise the return of excess cash flows to shareholders.“Against the backdrop of lower average prices for many of our key commodities during the period,particularly thermal coal,our overall Group Adjusted EBITDA of$6.3 billion was 33low the comparable prior year period,however Funds from Operations were up 9%,due to the timing of income tax payments.We reported a Net loss attributable to equity holders of$233 million,after recognising$1.7 billion of significant items,including c.$1.0 billion of impairment charges.“Reflecting healthy cash generation and after funding$2.9 billion of net capital expenditure and$1.0 billion of shareholder returns,Net debt,including Marketing-related lease liabilities,finished the first half at$3.6 billion,down$1.3 billion compared to$4.9 billion at the end of 2023.“From Net debt of$3.6 billion,accounting for Marketing-related lease liabilities of$1.0 billion,H2 cash outflows of$6.9 billion for the EVR acquisition and the$0.8 billion for the 2nd tranche of the shareholder distribution due,all else being equal deleveraging of just$0.3 billion would be required to reach the reset c.$10 billion net debt cap under our framework for excess return top-up payments,compared to at least$5.3 billion of deleveraging that would have been required under the original demerger scenario.“This relatively modest gap of$0.3 billion,together with the$1 billion Viterra cash disposal proceeds expected to be received over the next several months and noting the healthy current spot illustrative annualised free cash flow generation of c.$6.1 billion,augers well for potential top-up shareholder returns,above our base cash distribution,in February 2025.“The strength of our diversified business model across marketing and industrial has proven itself adept in a range of market conditions,giving us a solid foundation to successfully navigate the near-term macroeconomic uncertainty.We continue to remain focused on operating safely,responsibly and ethically and creating sustainable long-term value for all our stakeholders.”US$million H1 2024 H1 2023 Change 23 Key statement of income and cash flows highlights1:Revenue 117,091 107,415 9 217,829 Adjusted EBITDA 6,335 9,397 (33)17,102 Adjusted EBIT 2,850 6,305 (55)10,392 Net(loss)/income for the period attributable to equity holders (233)4,568 n.m.4,280(Loss)/earnings per share(Basic)(US$)(0.02)0.36 n.m.0.34 Funds from operations(FFO)2 4,037 3,712 9 9,452 HIGHLIGHTS Glencore Half-Year Report 2024 US$million 30.06.2024 31.12.2023 Change%Key financial position highlights:Total assets 120,690 123,869 (3)Total equity 35,763 38,237 (6)Net funding2,3 29,360 31,062 (5)Net debt2,3 3,648 4,917 (26)Ratios:Net debt to Adjusted EBITDA4 0.26 0.29 (10)1 Refer to basis of presentation on page 6.2 Refer to page 10.3 Includes$952 million(2023:$705 million)of Marketing-related lease liabilities.4 H1 2024 ratio based on last 12 months Adjusted EBITDA,refer to APMs section for reconciliation.Adjusted measures referred to as Alternative performance measures(APMs)which are not defined or specified under the requirements of International Financial Reporting Standards;refer to APMs section on page 70 for definitions and reconciliations and to note 3 of the condensed consolidated interim financial statements for reconciliation of Adjusted EBIT/EBITDA.$6.3 billion Adjusted EBITDA,down 33%,primarily reflecting the normalisation of energy markets from the severe disruptions and volatilities seen over 2022/23 Marketing Adjusted EBIT of$1.5 billion,down 16%period-on-period,tracking on an annualised basis at$3.0 billion.The lower energy contribution,reflecting prior period elevated volatilities,was partially offset by a strong metals performance in H1 2024 Industrial Assets Adjusted EBITDA of$4.5 billion,down 39%,primarily driven by a$2.7 billion lower contribution from our coal operations,owing to the substantial average period-over-period declines in key thermal coal pricing benchmarks 2024 full year(ex-EVR)production guidance has been maintained,with production expected to be second-half weighted.EVR steelmaking coal volumes now incorporated into H2 guidance Net cash purchase and sale of PP&E:$2.9 billion,up 15%Net income attributable to equity holders pre significant items:$1.5 billion;Net loss attributable to equity holders:$233 million Adjusted EBITDA mining margins were 28%in our metals operations and 31%in our energy operations Healthy H1 cash generation:after funding$2.9 billion of net capital expenditure and$1.0 billion of shareholder returns,Net debt finished the first half at$3.6 billion compared to$4.9 billion at the end of 2023 Net funding,including lease liabilities,decreased to$29.4 billion,aided by a$0.4 billion reduction in readily marketable inventories Available committed liquidity of$16.6 billion;bond maturities maintained around a cap of$3 billion in any given year Net debt/Adjusted EBITDA of 0.26x(c.0.75x proforma for EVR)provides significant financial headroom and strength In June 2023,Glencore agreed to dispose of its interest in Viterra in a cash and shares transaction with Bunge.For its c.50%stake,Glencore will receive$1.0 billion in cash and c.$3.1 billion in Bunge stock(reflecting Bunges stock price at the date of announcement and also currently as of 5 August 2024).The merger,which remains subject to regulatory approvals,is expected to close within the next several months Spot illustrative annualised free cash flow generation,including EVR,of c.$6.1 billion from Adjusted EBITDA of c.$17.3 billion For further information please contact:Investors Martin Fewings t: 41 41 709 2880 m: 41 79 737 5642 Media Charles Watenphul t: 41 41 709 2462 m: 41 79 904 3320 Glencore LEI:2138002658CPO9NBH955 Please refer to the end of this document for disclaimers including on forward-looking statements.HIGHLIGHTS Glencore Half-Year Report 2024 Notes for Editors Glencore is one of the worlds largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities that advance everyday life.Through a network of assets,customers and suppliers that spans the globe,we produce,process,recycle,source,market and distribute the commodities that support decarbonisation while meeting the energy needs of today.With over 150,000 employees and contractors and a strong footprint in over 35 countries in both established and emerging regions for natural resources,our marketing and industrial activities are supported by a global network of more than 50 offices.Glencores customers are industrial consumers,such as those in the automotive,steel,power generation,battery manufacturing and oil sectors.We also provide financing,logistics and other services to producers and consumers of commodities.Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals.We are an active participant in the Extractive Industries Transparency Initiative.We will support the global effort to achieve the goals of the Paris Agreement through our efforts to decarbonise our own operational footprint.We believe that we should take a holistic approach and have considered our commitment through the lens of our global industrial emissions.Against a restated 2019 baseline,we are targeting to reduce our Scope 1,2 and 3 industrial emissions by 15%by the end of 2026,25%by the end of 2030,50%by the end of 2035 and we have an ambition to achieve net zero industrial emissions by the end of 2050,subject to a supportive policy environment.For more information see our 2024-2026 Climate Action Transition Plan and the About our emissions calculation and reporting section in our 2023 Annual Report,available on our website at Half-Year Report 2024 We are pleased to report strong strategic achievements for the Group over the year to date.Our Industrial portfolio has been further streamlined with the sale of our Volcan stake and strengthened with the addition of a 77%interest in Elk Valley Resources(EVR).Our updated Climate Action Transition Plan(CATP)received more than 90%shareholder support at our 2024 AGM,the Swiss and Dutch government investigations have been resolved and our 2024 production guidance has been maintained and enhanced,with a skew to the second half of 2024.Critically,we have also clarified the immediate future of our coal and carbon steel materials business.Following completion of the acquisition of EVR in early July,we undertook an extensive consultation with shareholders and based on the outcome of that process and the Groups own analysis,Glencores Board,considering both risk and opportunity scenarios,endorsed the retention,rather than demerger,of the coal and carbon steel materials business,as currently providing the optimal pathway for demonstrable and realisable value creation for Glencore shareholders.The overwhelming majority of shareholders consulted expressed this preference,primarily on the basis that retention should enhance Glencores cash-generating capacity to fund opportunities in our transition metals portfolio,such as our copper growth project pipeline,as well as accelerate and optimise the return of excess cash flows to shareholders.Operationally,as anticipated,2024 is expected to be a year of two halves for Glencore.The most material H2 over H1 expected production increase is due to the addition of EVR,adding 12Mt to lift full year steelmaking coal guidance to 19-21Mt in 2024,compared to 3.4Mt in H1 2024.Copper,zinc and nickel volumes are expected to recover in the second half with higher planned production at African Copper,Antapaccay,and Murrin Murrin.Average prices for our key commodities benchmarks were mostly lower during the period.The progressive normalisation of energy markets over the last year or so,saw average H1 2024 Newcastle and API4 thermal coal prices lower by 36%and 22%respectively compared to H1 2023,while key battery metals prices also declined due to market oversupply,with cobalt and nickel metal prices falling 20%and 28%respectively.Average copper prices were 4%higher period-on-period,supported by tight concentrate availability,while zinc was 7%lower,though also supported by concentrate tightness that saw smelter treatment charges(TCs)reach historically low levels.Against this backdrop,Group Adjusted EBITDA was down 33%to$6.3 billion for the first half of 2024.Net income before significant items declined 65%to$1.5 billion,while significant items generated a Net loss attributable to equity holders of$233 million,including c.$1.0 billion of impairment charges,mainly relating to our South African coal operations,as well as the transition of Koniambo to care and maintenance during the first half.Marketing again posted strong results,with Adjusted EBIT of$1.5 billion tracking on an annualised basis at$3.0 billion.The progressive normalisation of energy markets,from the severe disruption and extreme volatilities seen in 2022/23,saw Energy and steelmaking coal Adjusted EBIT fall 68%to$0.3 billion,while generally more favourable trading conditions for most of our significant metals commodities lifted Metals and Minerals Adjusted EBIT 55%to$1.2 billion.In our Industrial assets,Adjusted EBITDA declined by$2.9 billion(39%)to$4.5 billion,primarily driven by a$2.7 billion lower contribution from our coal operations,owing to the substantial average period-over-period declines in key thermal coal pricing benchmarks.In our metals business,Adjusted EBITDA fell 9%to$2.8 billion,impacted by the lower contribution from our custom metallurgical assets,reflecting the markedly lower TC realisations over H1 2024,while lower nickel and cobalt prices also weighed on our results.Cash generation during the half remained healthy.After funding$2.9 billion of net capital expenditure and$1.0 billion of shareholder returns,Net debt,including finance lease liabilities,finished the first half at$3.6 billion compared to$4.9 billion at the end of 2023.Net funding decreased by$1.7 billion to$29.4 billion,owing to a$0.4 billion reduction in readily marketable inventories.With a Net debt/Adjusted EBITDA of 0.26x(c.0.75x proforma for the EVR transaction),we continue to enjoy significant financial headroom and strength.Retention of the coal and carbon steel materials offers larger scale and diversification by commodity and geography,which is expected to provide the ability to accelerate and optimise the return of excess cashflow to shareholders and support stability of returns through the cycle.The Net debt cap guiding our shareholder returns framework is reset at c.$10 billion(excluding Marketing-related lease liabilities),along with our continued commitment to minimum strong BBB/Baa ratings.Basis 30 June 2024 Net debt of$3.6 billion,accounting for Marketing-related lease liabilities of$1.0 billion,and the H2 cash outflows of$6.9 billion for the EVR acquisition and the$0.8 billion 2nd tranche of the shareholder distribution due,all else being equal deleveraging of just$0.3 billion would be required to reach the c.$10 billion threshold for excess return top-up payments,compared to at least$5.3 billion deleveraging that would have been required under the original demerger scenario.This relatively modest gap of$0.3 billion,together with the$1 billion Viterra cash disposal proceeds expected to be received over the next several months and noting the healthy current spot illustrative annualised free cash flow generation of c.$6.1 billion,augers well for potential top-up shareholder returns,above our base cash distribution,in February 2025.We strive not only to deliver financial performance but also to make a positive contribution to society and create lasting benefits for stakeholders in a manner that is responsible,transparent and respectful of human rights.CHIEF EXECUTIVE OFFICERS REVIEW Glencore Half-Year Report 2024 The implementation of our SafeWork framework has been a key focus for our industrial assets.While progress continues to be made,I am saddened to report that we recorded the loss of three lives in work-related incidents at our industrial assets in the first half of 2024.We believe that consistent application and reinforcement of our SafeWork framework,through strong visible leadership,can drive and deliver the safety culture and operating discipline we are looking for,and get all our people home safe.Alongside the decision to retain the coal and carbon steel materials business,the Board is pleased to note the greater than 90%approval at Glencores recent AGM for its 2024-2026 CATP.We will continue to manage a responsible decline of our thermal coal operations in line with our ambition to achieve net zero industrial emissions by 2050,subject to a supportive policy environment.Glencore will also assess how best to integrate the EVR assets into our climate transition strategy,having regard to our Investment Canada Act(ICA)commitment to develop and adopt a climate transition strategy for EVR,and recognising that the transition away from steelmaking coal for steel production will be slower than thermal coal.The two independent compliance monitors mandated by our resolutions with the Department of Justice completed their first review period.We have had constructive engagement with them throughout the process and are now implementing the recommendations made.The last of the previously disclosed government investigations,being those of the Office of the Attorney General of Switzerland(OAG)and Dutch Prosecution Service,were resolved in early August with a summary penalty order and abandonment order by the OAG.Glencore was held liable for failing to take all necessary and reasonable organisational measures to prevent the bribery of a Congolese public official by a business partner in 2011.The OAG imposed a fine of CHF 2 million and a compensation claim of$150 million on Glencore,in respect of the estimated benefit obtained by the business partner.The OAG stated in the summary penalty order that it did not identify that any Glencore employees had any knowledge of the bribery by the business partner,nor did Glencore benefit financially from the conduct of the business partner.The Board and management of Glencore are clear acting in accordance with our Values,our Code of Conduct,and the law is non-negotiable.Over the last number of years,we have invested heavily to improve our Ethics and Compliance Programme.We are committed to continuing to enhance the Programme and are working to embed ethics and compliance in each facet of our business,no matter where in the world we operate.The current macroeconomic environment remains uncertain,with a meaningful manufacturing recovery in the US,China,and Europe yet to emerge.Sluggish Chinese growth and some disappointment around lower-than-expected policy stimulus,have also weighed on sentiment,along with reduced optimism around AI in the short term.However,cooling inflation in various major economies,provides a backdrop for potential interest rate cuts in the second half which could help stimulate global growth.Supply constraints and energy transition demand remain key drivers for many metal markets,leaving these commodities well-positioned for price appreciation with higher demand.This is particularly the case for copper,where ongoing cuts to production continue to highlight the persistent supply challenges facing the industry.The strength of our diversified business model across industrial and marketing,focusing on transition-enabling commodities and energy,has proved itself adept in a range of market conditions,giving us a solid foundation to successfully navigate the near-term macroeconomic uncertainty,as well as meet the resource needs of the future.I would like to thank all our employees for their efforts and significant contribution during the year as well as welcome our new colleagues from EVR.As always,we remain focused on operating safely,responsibly and ethically,and creating sustainable long-term value for all our stakeholders.Gary Nagle Chief Executive Officer Glencore Half-Year Report 2024 The financial information in the Financial and Operational Review is presented on a segmental measurement basis,including all references to revenue(see note 3)and has been prepared on the basis as outlined in note 2 of the condensed consolidated interim financial statements,with the exception of the accounting treatment applied to relevant material associates and joint ventures for which Glencores attributable share of revenues and expenses are presented.In addition,Glencore disposed of its 23.3%interest in the Peruvian listed Volcan(see note 24)in May 2024.Prior to its disposal,the Group accounted for Volcan using the equity method for internal reporting and analysis due to the relatively low economic interest it held.Certain results are presented on an“adjusted”basis,using alternative performance measures(APMs)which are not defined or specified under the requirements of IFRS,but are derived from the financial statements,prepared in accordance with IFRS,reflecting how Glencores management assesses the performance of the Group.The APMs are provided in addition to IFRS measures to aid in the comparability of information between reporting periods and segments and to aid in the understanding of the activities taking place across the Group by adjusting for Significant items and by aggregating or disaggregating(notably in the case of relevant material associates and joint ventures accounted for on an equity basis)certain IFRS measures.APMs are also used to approximate the underlying operating cash flow generation of the operations(Adjusted EBITDA).Significant items(see reconciliation below)are items of income and expense,which,due to their nature and variable financial impact or the expected infrequency of the events giving rise to them,are separated for internal reporting,and analysis of Glencores results,to aid in providing an understanding and comparative basis of the underlying financial performance.APMs used by Glencore may not be comparable with similarly titled measures and disclosures by other companies.APMs have limitations as an analytical tool,and a user of the financial statements should not consider these measures in isolation from,or as a substitute for,analysis of the Groups results of operations;and they may not be indicative of the Groups historical operating results,nor are they meant to be a projection or forecast of its future results.Alternative performance measures are denoted by the symbol and are further defined and reconciled to the underlying IFRS measures in the APMs section on page 70.Select average commodity prices Spot 30 Jun 2024 Spot 31 Dec 2023 Average H1 2024 Average H1 2023 Change in average%S&P GSCI Industrial Metals Index 460 423 441 443 S&P GSCI Energy Index 271 245 265 258 3 LME(cash)copper price($/t)9,456 8,464 9,093 8,709 4 LME(cash)zinc price($/t)2,879 2,640 2,640 2,839 (7)LME(cash)lead price($/t)2,177 2,035 2,121 2,127 LME(cash)nickel price($/t)17,040 16,375 17,517 24,185 (28)Gold price($/oz)2,327 2,063 2,207 1,934 14 Silver price($/oz)29 24 26 23 13 Fastmarkets cobalt standard grade,Rotterdam($/lb)(low-end)11 13 12 15 (20)Ferro-chrome 50%Cr import,CIF main Chinese ports,contained Cr(/lb)100 96 98 106 (8)Iron ore(Platts 62R North China)price($/DMT)101 130 112 112 Coal API4(FOB South Africa)($/t)106 98 101 129 (22)Coal Newcastle(6,000 kcal/kg)($/t)132 149 131 204 (36)Coal HCC(Aus premium hard coking coal)($/t)249 326 277 297 (7)Dutch TTF Natural Gas 1-Month Forward($/MWh)37 35 32 48 (33)Oil price Brent($/bbl)86 77 83 80 4 Currency table Spot 30 Jun 2024 Spot 31 Dec 2023 Average H1 2024 Average H1 2023 Change in average%AUD:USD 0.67 0.68 0.66 0.68 (3)USD:CAD 1.37 1.32 1.36 1.35 1 EUR:USD 1.08 1.10 1.09 1.08 1 GBP:USD 1.27 1.27 1.27 1.23 3 USD:CHF 0.90 0.84 0.89 0.91 (2)USD:KZT 473 456 449 452 (1)USD:ZAR 18.19 18.36 18.73 18.22 3 FINANCIAL AND OPERATIONAL REVIEW Glencore Half-Year Report 2024 H1 2024 reflected the normalisation of energy markets from the severe disruptions and elevated market volatilities seen over 2022-23,with thermal coal and gas prices materially declining(average period-over-period key benchmark thermal coal and gas prices saw falls of c.22-36%).On the contrary,certain metals markets saw favourable physical market conditions,for example copper and zinc concentrates,with smelter treatment and refining charges(TC/RCs)for both commodities reaching historically low levels during the period.Other metal markets,however,remained in oversupply,such as nickel(continued strong supply growth from Indonesia)and cobalt(continued supply growth),resulting in average period-over-period declines of 28%and 20%,respectively.In this context,largely reflecting the lower commodity prices and market volatility,Adjusted EBITDA was$6,335 million and Adjusted EBIT was$2,850 million in H1 2024,decreases of 33%and 55%respectively compared to H1 2023.Income for the period attributable to equity holders decreased from$4,568 million in H1 2023 to a loss of$233 million in H1 2024,after recognising various significant items,particularly impairments in our South African Coal operations where our lower forecast price assumptions had the largest impact,and in Koniambo,which transitioned to care and maintenance,as discussed below.EPS decreased from$0.36 per share to a loss of$0.02 per share.H1 2024 Adjusted EBIT contribution from the Marketing segment was$1,481 million,a decrease of 16%from the prior period,reflecting the return to a more stable market environment,following normalisation of energy market conditions.The Adjusted EBITDA contribution from the Industrial segment was$4,549 million,a decrease of 39%period-over-period,largely due to lower thermal coal prices,where average Newc and API4 index prices were down 36%and 22%respectively from H1 2023.Adjusted EBITDA was supported by a 4%higher average period-over-period copper price,however historically low TC/RCs over H1 2024 weighed significantly on our custom copper and zinc metallurgical operations,while the lower nickel and cobalt prices also pressured earnings.Notwithstanding these macro headwinds,our weighted average Adjusted EBITDA metals mining margin was consistent with the prior period at 28%,while our equivalent energy and steelmaking coal operations benchmark declined to 31%,compared to 50%during H1 2023.See pages 18 and 19.Adjusted EBITDA/EBIT Adjusted EBITDA by business segment is as follows:H1 2024 H1 2023 US$million Marketing activities Industrial activities Adjusted EBITDA Marketing activities Industrial activities Adjusted EBITDA Change%Metals and minerals 1,272 2,792 4,064 833 3,056 3,889 4 Energy and steelmaking coal 601 2,105 2,706 1,193 4,658 5,851 (54)Corporate and other1 (87)(348)(435)(39)(304)(343)27 Total 1,786 4,549 6,335 1,987 7,410 9,397 (33)Adjusted EBIT by business segment is as follows:H1 2024 H1 2023 US$million Marketing activities Industrial activities Adjusted EBIT Marketing activities Industrial activities Adjusted EBIT Change%Metals and minerals 1,242 759 2,001 803 1,301 2,104 (5)Energy and steelmaking coal 326 971 1,297 1,009 3,557 4,566 (72)Corporate and other1 (87)(361)(448)(39)(326)(365)23 Total 1,481 1,369 2,850 1,773 4,532 6,305 (55)1 Corporate and other Marketing activities includes$55 million pre-significant items(2023:$132 million)of Glencores equity accounted share of Viterra.Marketing activities Marketing delivered solid results,in a return to a more normal backdrop,following the elevated levels of energy market volatility and disruption which characterised much of 2022 and extended somewhat into H1 2023.Such calmer markets can be seen in our lower reported VaR levels,discussed below.Marketing Adjusted EBITDA and EBIT,at$1,786 million and$1,481 million respectively,were lower by 10%and 16%compared to H1 2023,mainly driven by our coal departments especially high base period.Metals and minerals Adjusted EBIT was up 55%over H1 2023,largely reflecting a tight physical market and drawdown of inventories in various commodities,including copper and zinc concentrates and aluminium.The higher interest rate environment and generally tighter credit conditions also presented favourable commercial opportunities.Our 50%share of Viterra earnings(captured within Corporate and Other)was$55 million(post-interest and tax and pre-significant items)compared to$132 million in the comparable period.In June 2023,Glencore agreed to dispose of its interest in Viterra in a cash-and-shares transaction with Bunge,which transaction remains subject to regulatory approvals(see note 16).FINANCIAL AND OPERATIONAL REVIEW Glencore Half-Year Report 2024 Industrial activities Industrial Adjusted EBITDA declined by 39%to$4,549 million(Adjusted EBIT was$1,369 million,compared to$4,532 million in 2023),primarily driven by a$2.7 billion lower contribution from our coal operations,owing to the substantial average period-over-period declines in key thermal coal pricing benchmarks.Significantly lower nickel and cobalt prices also impacted our results,while markedly lower TC/RC realisations impacted our custom copper and zinc metallurgical operations,as noted above.Earnings A summary of the differences between Adjusted EBIT and income/(loss)attributable to equity holders,including significant items,is set out in the following table:US$million H1 2024 H1 2023 Adjusted EBIT 2,850 6,305 Net finance and income tax expense in relevant material associates and joint ventures1 (357)(269)Proportionate adjustment Volcan1 48 91 Net finance costs (1,108)(839)Income tax expense2 (235)(1,364)Non-controlling interests 259 281 Income attributable to equity holders of the Parent pre-significant items 1,457 4,205 Earnings per share(Basic)pre-significant items(US$)3 0.12 0.33 Significant items Share of Associates significant items4 113 (79)Viterra share in earnings post held for sale classification (55)Movement in unrealised inter-segment profit elimination5 (98)176(Loss)/gain on disposals of non-current assets6 (353)679 Other expense net7 (413)(18)Impairments8 (997)(47)Income tax expense2 (297)(367)Non-controlling interests share of significant items9 410 19 Total significant items (1,690)363(Loss)/income attributable to equity holders of the Parent (233)4,568(Loss)/earnings per share(Basic)(US$)(0.02)0.36 1 Refer to note 3 of the condensed consolidated interim financial statements and to APMs section for reconciliations.2 Refer to other reconciliations section for the allocation of the total income tax expense between pre-significant and significant items.3 Based on weighted average number of shares,refer to note 18 of the condensed consolidated interim financial statements.4 Recognised within share of income from associates and joint ventures,see note 3 of the condensed consolidated interim financial statements.5 Recognised within cost of goods sold,see note 3 of the condensed consolidated interim financial statements.6 Refer to note 5 of the condensed consolidated interim financial statements and to APMs section for reconciliations.7 Recognised within other income/(expense)net,see note 6 of the condensed consolidated interim financial statements and to APMs section for reconciliations.8 Refer to note 8 of the condensed consolidated interim financial statements and to APMs section for reconciliations.9 Recognised within non-controlling interests,refer to APMs section.Significant items Significant items are items of income and expense,which,due to their nature and variable financial impact or the expected infrequency of the events giving rise to them,are separated for internal reporting,and analysis of Glencores results,to aid in providing an understanding and comparative basis of the underlying financial performance.In H1 2024,Glencore recognised a net expense,after tax and non-controlling interests,of$1,690 million(2023:$363 million income)in significant items comprised primarily of:Movement in unrealised inter-segment profit elimination of$98 million(2023:$176 million gain).See note 3.Loss on disposals of non-current assets of$353 million(2023:$679 million gain).The 2024 loss resulted mainly from the recycling to the statement of income of Volcans non-controlling interests($282 million)upon disposal.The 2023 gain resulted primarily from the disposal of Cobar in June 2023.See note 5.Other net expense net expense of$413 million(2023:$18 million)see note 6.Balance primarily comprises:$75 million(2023:net gain of$190 million)of net foreign exchange losses.$211 million(2023:$81 million)relating to various legal matters and related costs(legal,expert and compliance),including in respect of the government investigations(see notes 22 and 28)and monitorships.$109 million(2023:loss of$87 million)of mark-to-market gains on equity investments/derivative positions accounted for as held for trading,including the ARM Coal non-discretionary dividend obligation.$76 million income(2023:$Nil)of closed site rehabilitation provisioning,being the movements in restoration,rehabilitation and decommissioning estimates related to sites that are no longer operational.$209 million(2023:$Nil)of termination and severance related costs resulting from the decision to transition the Koniambo nickel operations to care and maintenance.Also see below.FINANCIAL AND OPERATIONAL REVIEW Glencore Half-Year Report 2024 Impairments of net$997 million(2023:$47 million),see note 8.The current period charge primarily relates to:South African Coal operations($611 million),due to lower thermal coal price assumptions and the ongoing export logistics challenges in South Africa.Koniambo($417 million),following the announcement in February 2024 that operations would transition to care and maintenance and the continuing challenging nickel market environment,exacerbated by civil unrest in New Caledonia.The 2023 charges related to advances and loans,with no individually material item.Income tax expenses of$297 million(2023:$367 million)see income taxes below.Net finance costs Net finance costs were$1,108 million during H1 2024,up$269 million compared to$839 million in the comparable reporting period.Interest expense for 2024 was$1,412 million,up 22%compared to H1 2023,due primarily to higher average floating base rates(mainly SOFR).Interest income was$304 million,broadly consistent with the prior period.Income taxes An income tax expense of$532 million was recognised during H1 2024,compared to an expense of$1,731 million during H1 2023.Adjusting for$297 million of income tax expenses(2023:$367 million)relating to significant items(primarily on account of foreign exchange fluctuations and tax losses not recognised),the H1 2024 pre-significant items income tax expense was$235 million(2023:$1,364 million).The 2024 calculated effective tax rate,pre-significant items,was 33.9%,compared to 31.9%in H1 2023.Current and non-current assets Total assets were$120,690 million as at 30 June 2024,compared to$123,869 million as at 31 December 2023.Current assets decreased from$64,042 million to$62,572 million,primarily due to a decrease in assets held for sale following the disposal of Volcan in May 2024(see note 16).Decreases in inventories,reflecting a reduction in physical metal units held,were offset by higher cash levels and increased margin calls paid in respect of the Groups hedging activities,mainly on account of higher copper and zinc prices at period end relative to 31 December 2023.Non-current assets decreased from$59,827 million to$58,118 million,primarily due to a net decrease in property,plant and equipment with capital expenditure over the period being below depreciation and amortisation expense and the recognition of the above noted impairments.Current and non-current liabilities Total liabilities were$84,927 million as at 30 June 2024,compared to$85,632 million as at 31 December 2023.Current liabilities decreased from$49,478 million to$48,130 million,primarily,on a net basis,due to a decrease in liabilities held for sale related to the Volcan disposal as noted above.Separately,increases in the fair values of our derivative hedging instruments(other financial liabilities),on account of the higher copper and zinc prices as noted above,higher trade payables and the accrual of dividends to be settled in H2 2024,were offset by lower current borrowings(see note 20).Non-current liabilities as at period end were$36,797 million,modestly ahead of the prior year,due to an increase in non-current borrowings(see note 20),partially offset by lower provisions,mainly in respect of rehabilitation provisioning.Movements relating to current and non-current borrowings are set out below in the net funding and net debt movement reconciliation and in note 20.Equity Total equity was$35,763 million as at 30 June 2024,compared to$38,237 million as at 31 December 2023,the movements being primarily the loss for the period of$902 million and$1,824 million of approved shareholder distributions and buybacks concluded during the period,offset by non-controlling interests recycled to the statement of income on disposal of Volcan of$282 million.Other comprehensive income/(loss)A loss of$18 million was recognised during H1 2024,compared to a loss of$285 million during H1 2023,relating to net mark-to-market losses of$6 million(2023:$23 million)with respect to various minority investments(see note 12)and foreign exchange translation losses of foreign operations of$17 million(2023:$315 million loss),primarily relating to our South African ZAR-denominated subsidiaries.FINANCIAL AND OPERATIONAL REVIEW Glencore Half-Year Report 2024 Cash flow and net funding/debt Net funding US$million 30.06.2024 31.12.2023 Total borrowings as per financial statements 31,377 32,241 Proportionate adjustment net funding2 760 746 Cash and cash equivalents (2,777)(1,925)Net funding 29,360 31,062 Cash and non-cash movements in net funding US$million H1 2024 H1 2023 H2 2023 Cash generated by operating activities before working capital changes 4,995 8,408 6,709 Proportionate adjustment Adjusted EBITDA1 1,273 1,011 1,057 Non-cash adjustments included within EBITDA (10)24 22 Net interest paid1 (783)(631)(647)Tax paid1 (1,567)(5,462)(1,607)Dividends received from associates1 129 362 206 Funds from operations 4,037 3,712 5,740 Net working capital changes2 2,150 3,651 454 Increase in long-term advances and loans (75)Acquisition and disposal of subsidiaries net2 (22)571 (227)Purchase and sale of investments net2 144 (33)(857)Purchase and sale of property,plant and equipment net2 (2,862)(2,478)(3,083)Margin(payments)/receipts in respect of financing related hedging activities (482)258 639 Proceeds received/(paid)on acquisition of non-controlling interests in subsidiaries 9 (77)Distributions paid and transactions of own shares net (1,035)(5,181)(4,949)Cash movement in net funding 1,855 509 (2,360)Net funding acquired in business combinations (6)(10)Change in lease obligations (614)(341)(500)Foreign currency revaluation of borrowings and other non-cash items 461 (195)(659)Total movement in net funding 1,702 (33)(3,529)Net funding,beginning of period (31,062)(27,500)(27,533)Net funding,end of period3 (29,360)(27,533)(31,062)Less:Readily marketable inventories1 25,712 25,991 26,145 Net debt,end of period3 (3,648)(1,542)(4,917)1 Refer to APMs section for definition and reconciliations.2 Refer to Other reconciliations section.3 Includes$952 million(H2 2023:$705 million;H1 2023:$680 million)of Marketing-related lease liabilities The reconciliation in the table above is the method by which management reviews movements in net funding and net debt and comprises key movements in cash and any significant non-cash items.Net funding as at 30 June 2024 was$29,360 million,down$1.7 billion since December 2023 and net debt(net funding less readily marketable inventories)decreased by$1.3 billion to$3,648 million.Funds from operations were$4,037 million,up 9%over the prior period,a period that was heavily impacted by the lag effect of settlement in H1 2023,of 2022 final income tax payments.These inflows along with$2.2 billion of net working capital inflows,comfortably covered$2,862 million of net capital expenditure and$1,035 million of shareholder distributions and buybacks,which led to the reduction in net funding and net debt over the period.Business and investment acquisitions and disposals Net inflows from business acquisitions and long-term advances and loans were$47 million over the period,compared to an inflow of$547 million in H1 2023.The net inflow in 2023 comprised proceeds from the sale of Cobar($761 million),offset by the purchase of the remaining 75%interest,not previously owned,in the Noranda Income Fund(Canadian electrolytic zinc refinery)for$199 million(including assumed debt).Liquidity and funding activities In H1 2024,the following significant financing activities took place:In January 2024,issued:6-year CHF 150 million,2.215%coupon bond In April 2024,issued:7-year EUR 600 million,4.154%coupon bond 3-year$800 million,5.338%coupon bond 5-year$1,100 million,5.371%coupon bond 10-year$1,250 million,5.634%coupon bond FINANCIAL AND OPERATIONAL REVIEW Glencore Half-Year Report 2024 30-year$500 million,5.893%coupon bond 3-year$350 million,variable coupon bond In March 2024(effective May 2024),Glencore extended its core syndicated revolving credit facilities and also concluded an additional$1.5 billion liquidity facility during the reporting period.As at 30 June 2024,the facilities comprise:$9,010 million one-year revolving credit facility with a one-year borrowers term-out option(to May 2026);$1,500 million one-year revolving credit facility(to April 2025);and$3,900 million medium-term revolving credit facility(to May 2029).As in previous years,these committed unsecured facilities contain no financial covenants,no rating triggers,no material adverse change clauses and no external factor clauses.As at 30 June 2024,Glencore had available committed liquidity amounting to$16.6 billion(31 December 2023:$12.9 billion).In light of the Groups extensive funding activities,maintaining investment grade credit rating status is a financial priority.The Groups credit ratings are currently Baa1 from Moodys and BBB from Standard&Poors.Glencores publicly stated objective,as part of its overall financial policy package,is to seek and maintain a minimum of strong Baa/BBB credit ratings from Moodys and Standard&Poors respectively.In support thereof,Glencore targets a maximum 2x Net debt/Adjusted EBITDA ratio through the cycle,augmented by a Net debt cap of c.$10 billion(excluding Marketing-related lease liabilities),which is now reset,following the announcement of our decision to retain our coal and carbon steel materials businesses.The Group is exposed to a number of risks and uncertainties in its business which could impact its ability to effectively execute its strategy over the remaining six months of the year and cause actual results to differ materially from expected and/or historical results.The Directors consider that the principal risks and uncertainties as summarised below and detailed in the Glencore 2023 Annual Report on pages 111 to 118,available at ,remain appropriate for the remainder of 2024,when read together with the information provided in this report.We are subject to the inherent risk of sustained low prices for our main commodities,particularly affecting our industrial business.The revenue and earnings of substantial parts of our industrial asset activities and,to a lesser extent,our marketing activities,are dependent upon prevailing commodity prices.We control and operate assets in many countries across the globe,some of which are categorised as developing,complex or having unstable political or social environments.As a result,we are exposed to a wide range of political,economic,regulatory,social and tax environments.Regulatory regimes applicable to resource companies can often be subject to adverse and unexpected changes.Our industrial activities are subject to significant risks throughout each operations life cycle,from project planning through initiation,development,operation and/or expansion and ultimate closure.The global transition to a low-carbon economy may affect our business through regulations to reduce emissions,carbon pricing mechanisms,reduced access to capital,permitting risks and fluctuating energy costs,as well as changing demand for the commodities we produce and market.Industrial operations are inherently hazardous.The success of our business is dependent on a safe and healthy workforce and work environment.Our operations around the world can have direct or indirect impacts on the environment and host communities.Our ability to manage and mitigate these may impact maintenance of our operating licences as well as affect future projects,acquisitions and our reputation.We have a geographically diverse business,operating in both developed and developing countries in an array of different contexts.A perception that we are not respecting human rights or generating local sustainable benefits could have a negative impact on our ability to operate FINANCIAL AND OPERATIONAL REVIEW Glencore Half-Year Report 2024 effectively,our reputation with stakeholders,our ability to secure access to new resources,our capacity to attract and retain the best talent and ultimately,our financial performance.Catastrophic or natural disaster events at the Groups industrial assets can have disastrous impacts on workers,communities and the environment,while also impacting production and resulting in substantial financial costs and harm to our reputation.These events may arise due to natural causes(flood,earthquake,drought)or due to infrastructure(including underground mines or open-pits or tailings storage facility failure)or equipment failure(such as shafts and winders).Climate change may increase physical risks to our assets and related infrastructure,largely driven from extreme weather events and water-related risks such as flooding or water scarcity.FX changes affect us as a global company usually selling in US dollars but having costs in a large variety of other currencies.The main currency exchange rate exposure is through our industrial assets,as a large proportion of the costs incurred by these operations,which are spread across many different countries,is denominated in the currency of the country in which each industrial asset is located,the currencies of which fluctuate against the US dollar.The vast majority of our sales transactions are denominated in US dollars.We are subject to the risk of non-performance by our suppliers,customers and hedging counterparties,in particular in respect of our marketing activities.Liquidity risk is the risk that we are unable to meet our payment obligations when due,or are unable,on an ongoing basis,to borrow funds in the market at an acceptable cost to fund our commitments.We are exposed to extensive laws and regulations,including those relating to bribery and corruption,sanctions,taxation,anti-trust,financial and commodity markets regulation and rules,environmental protection,use of hazardous substances,product safety and dangerous goods regulations,post-closure reclamation,employment of labour and occupational health and safety standards.In addition,there are a number of high expectations regarding the need to act ethically in our business and we are exposed to the risk that unethical business practices may,by themselves,harm our ability to engage with certain business partners,and/or give rise to questions as to whether we are committed to complying with applicable laws.The ever-increasing reliance on digital technologies has brought with it a corresponding rise in cyber-related risks,ranging from the proliferation of ransomware to nation-state activity and the monetisation of cyber crime.Our marketing activities and industrial production,operations,environmental management,health and safety management,communications,transaction processing,and risk management all rely on information technologies,while our long supply chains involve numerous third parties that are exposed to the same cyber risks.As at 30 June 2024,Glencore had available committed liquidity amounting to$16,634 million.Based on these available liquidity resources,including accounting for completion of the EVR acquisition in July 2024,and the Groups financial forecasts and projections,which take into account reasonably possible changes in performance and consideration of the principal risks and uncertainties noted above,the Directors believe the Group can continue as a going concern for the foreseeable future,a period not less than 12 months from the date of this report.On 5 August 2024,the Group announced that the investigations by the Office of Attorney General of Switzerland(OAG)and the Dutch authorities had been resolved,with the Group being ordered to pay an aggregate amount of$152 million by the OAG.FINANCIAL AND OPERATIONAL REVIEW Glencore Half-Year Report 2024 One of the tools used by Glencore to monitor and limit its primary market risk exposure,principally commodity price risk related to its physical marketing activities,is a value at risk(VaR)computation.VaR is a risk measurement technique which estimates a threshold for potential loss that could occur on risk positions as a result of movements in risk factors over a specified time horizon,given a specific level of confidence and based on a specific price history.The VaR methodology is a statistically defined,probability-based approach that takes into account market volatilities,as well as risk diversification by recognising offsetting positions and correlations between commodities and markets.In this way,risks can be measured consistently across markets and commodities and risk measures can be aggregated to derive a single risk value.Glencore uses a VaR approach based on Monte Carlo simulations computed at a 95%confidence level and utilising a weighted data history for a one-day horizon.Glencores Board,as part of its annual review process in H2 2023,approved a Group VaR limit(including LNG)of$200 million.The Groups market risk VaR(one day 95%)as at 30 June 2024 was$50 million,comfortably within the Groups$200 million limit.Average market risk VaR(one day 95%)during H1 2024,was$59 million,with an observable high of$76 million and a low of$45 million,while the equivalent average VaR during H1 2023 was$115 million.There were no limit breaches during the period.Earlier in 2024,the Directors recommended a cash distribution,in respect of the 2023 financial year,of$0.13 per share amounting to some$1.6 billion,accounting for own shares held as at 31 December 2023,which was approved at the Companys AGM.The first tranche of the distribution of$0.065 per ordinary share amounting to$790 million was paid on 5 June 2024.The second tranche of$0.065 per ordinary share is due on 20 September 2024,in accordance with the Companys announcement of the 2024 Distribution timetable made on 21 February 2024.The cash distribution is to be effected as a reduction of the capital contribution reserves of the Company.As such,this distribution will be exempt from Swiss withholding tax.As at 30 June 2024,Glencore plc had CHF7.3 billion of such capital contribution reserves in its statutory accounts.The distribution is ordinarily paid in US dollars.Shareholders on the Jersey register may elect to receive the distribution in sterling,euros or Swiss francs,the exchange rates of which will be determined by reference to the rates applicable to the US dollar at the time.Shareholders on the Johannesburg register will receive their distribution in South African rand.Further details on distribution payments,together with currency election and distribution mandate forms,are available from the Groups website()or from the Companys Registrars.In May 2024,Peter Coates retired from the Board and John Wallington was appointed as Independent Non-Executive Director,with effect from 1 June 2024.Glencore Half-Year Report 2024 Marketing Adjusted EBIT of$1,481 million,down 16%on the comparable period,reflected the progressive normalisation of energy markets from the severe disruptions and elevated market volatilities seen in 2022-23,partially offset by generally more favourable trading conditions for most of our significant metals commodities.Metals and minerals Adjusted EBIT was$1,242 million,an increase of 55%compared to H1 2023,reflecting a tight physical market environment and drawdown of inventories in various commodities,including copper and zinc concentrates and aluminium.The higher interest rate environment and generally tighter credit conditions also presented favourable commercial opportunities.Adjusted EBIT from the Energy and steelmaking coal business was$326 million,a 68crease from the prior period,owing primarily to the continued rebalancing and normalisation of international energy trade flows,where thermal coal prices in particular,trended materially lower compared to H1 2023,on account of weak European demand and high gas inventories.Viterra(reported within corporate and other)contributed$55 million on an attributable,after-tax basis,which was$77 million(58%)lower than in H1 2023.Glencores interest in Viterra remains in the held for sale category,following its execution last year of an agreement to be acquired by Bunge in a cash-and-shares transaction(see note 16 and the Alternative Performance Measures section on page 70).US$million Metals and minerals Energy and steel-making coal Corporate and other1 H1 2024 Metals and minerals Energy and steel-making coal Corporate and other1 H1 2023 Revenue 41,180 62,290 103,470 34,952 56,479 91,431 Adjusted EBITDA 1,272 601 (87)1,786 833 1,193 (39)1,987 Adjusted EBIT 1,242 326 (87)1,481 803 1,009 (39)1,773 Adjusted EBITDA margin 3.1%1.0%n.m.1.7%2.4%2.1%n.m.2.2%1 Corporate and other Marketing activities includes$55 million pre-significant items(H1 2023:$132 million)of Glencores equity accounted share of Viterra.Selected marketing volumes sold Units H1 2024 H1 2023 Change%Copper metal and concentrates1 mt 1.8 1.7 6 Zinc metal and concentrates1 mt 1.5 1.2 25 Lead metal and concentrates1 mt 0.6 0.4 50 Gold toz 1,105 992 11 Silver toz 21,105 26,177 (19)Nickel kt 129 174 (26)Ferroalloys(incl.agency)2 mt 5.1 4.6 11 Alumina/aluminium mt 5.6 4.8 17 Iron ore mt 36.2 41.1 (12)Thermal coal2 mt 30 36 (17)Steelmaking coal2 mt 0.5 1.2 (58)Crude oil mbbl 358 307 17 Oil products mbbl 345 272 27 1 Estimated metal unit contained.2 Includes agency volumes.The LME copper cash price started the year at$8,464/t,in line with the average over 2023.The demand outlook for North America and Europe has generally improved,while refined demand in China remained healthy,supported by the energy transition sectors and related infrastructure investments.Prices remained stable until mid-March when the China Smelters Purchasing Team(CSPT)announced that smelter production cuts would be considered to limit further declines in treatment and refining charges(TC/RCs).Prices moved rapidly to the$10,000/t level in April and rallied further during May,where regional supply imbalances in North America took prices to a record high of$10,900/t,with speculative positioning moving to the largest net long in recent years.The rapid price rise induced weakness in demand from fabricators in China,resulting in a consequent increase in visible inventories during the reporting period.LME cash copper prices ended the half year around the$9,500/t level.Coming into 2024,CSPT set its Q1 2024 buying guidance at$80/8.0c for TC/RCs,however continued growth in smelter capacity,together with mine supply underperformance in late 2023,resulted in spot TC/RCs moving to their lowest levels in nearly 15 years.Due to prevailing tightness for concentrates,CSPT revised its Q1 2024 buying guidance to$50/5.0c in January,and did not set buying guidance for Q2 2024.Spot TC/RCs for China smelter buying have remained in the low single digits since March,a stark contrast to the 7-year high reached in October 2023.Looking forward,we continue to expect mine supply growth to be constrained by aging assets,a diminished project pipeline and geopolitical factors,with new projects likely to experience delays.In the near term,global demand sentiment continues to be dependent on the outlook for,and implications of,fiscal policies and stimulus measures taken by China to support its economic growth.In the longer term,demand is expected to be driven by population growth and anticipated rising living standards in MARKETING ACTIVITIES Glencore Half-Year Report 2024 emerging economies,supported by climate change policies and decarbonisation measures,which are expected to result in increased copper usage,given its role in accelerating the renewable energy transition,from renewable power generation and distribution,to energy storage and electric vehicles.Cobalt metal prices averaged$12.22/lb in H1 2024,20%lower than H1 2023.Pricing commenced the year at$12.80/lb and,other than a short-term boost with news of significant Chinese strategic stockpiling in May,continued in a downward trend to$11.30/lb by the end of June.In the lithium-ion battery sector,comprising approximately two-thirds of cobalt demand,consumer goods demand continued to recovery.Electric vehicle(EV)demand was healthy for most of the period,but showed signs of slowing in Q2,consistent with weakness in Western EV sales markets.On the supply side,most producers maintained output at lower levels in response to market conditions,while one producer ramped up significantly,more than offsetting cuts elsewhere,maintaining net market oversupply.The majority of anticipated supply growth should complete this year,with lower growth rates expected in the coming years.Demand in key metal sectors,such as aerospace,continued to grow.Chinese metal capacity expanded rapidly in order to arbitrage the price delta between metal/sulphate prices and while US markets are somewhat insulated from excess Chinese metal,given tariffs and consumer preferences,Europe is a key outlet.Cobalt hydroxide payabilities commenced the year at 53-54%,reflecting the persistent hydroxide stock overhang.This range saw a modest improvement to 57-61%by the end of June with support from declining metal prices.We believe that solid structural cobalt demand fundamentals remain intact.Consumer goods demand should continue to recover,with the outlook bolstered by AI-enabled product upgrade cycles.Furthermore,Western EV growth is expected to be cobalt-intensive.Excess hydroxide stocks are therefore expected to erode,accelerated by strategic and proactive stockpiling of critical minerals.In addition to government stockpiling programs,certain funds have also begun building positions in cobalt to take advantage of expected trading opportunities resulting from lower spot prices and longer term positive cobalt fundamentals.Zinc prices exhibited support over H1 2024,reflecting current tightness in the concentrates market,the potential for additional disruptions in supply,and visible metal stocks continuing to linger below historical averages.Global zinc demand growth remained relatively steady,driven by Chinese buying,with net imports of zinc metal at 180kt Jan-May 2024,supported by a positive arbitrage.European demand has likely bottomed,showing signs of a nascent recovery,while North American demand remained healthy.In the concentrates market,the 2024 annual TC benchmark was agreed at$165/dmt,down$109/dmt(40%)from 2023,with no price participation.This reflected tight concentrate availability,due to mines previously put into care and maintenance and underperformance year-to-date from existing mines.This shortage was compounded by increased metal production capacity,due to smelter restarts in Europe and capacity expansions in China.Published spot TCs fell from an average of$238/dmt in H1 2023,to$53/dmt in H1 2024,recently being reported at record low levels(range from$Nil to$20/dmt for June 2024),with premium qualities trading as low as minus$30/dmt.In the lead market,the LME price remained steady year-on-year,averaging approximately$2,120/t in H1 2024,despite LME stocks rebounding from the low levels recorded in 2023.Annual 2024 benchmark terms for lead concentrates were agreed at$91/dmt(-18%versus H1 2023),while recent published spot TCs are similar to zinc noted above.Nickel prices gained 4%in H1 2024 compared to the end of 2023,albeit this was below the broader base metals complex which rose 9%over the same period(GSCI Industrial Metals Subindex).Strong supply growth,mainly from Indonesia,and related processing into metal and other finished forms continued to exceed nickel demand growth,keeping the physical market in surplus.Seven new brands were listed for LME delivery in the past 12 months,contributing visible surplus evidence,whereby exchange stocks increased by 40kt in H1 2024 compared to the end of 2023.At current prices we estimate that a large portion of global nickel production is operating at negative margins,with significant closures already announced.This is in addition to a period of heightened supply disruption,including from slower approvals of Indonesian mine permits and unrest in New Caledonia.Nickel demand remains robust,with an estimated growth of 5%this year,supported by increased usage in many battery types and strong stainless output,especially in China.Ferrochrome production in China is estimated to have increased by approximately 30%during H1 2024 compared to H1 2023,as new low-cost capacity was brought online.This significant growth in Chinese alloy production continued to put pressure on global ferrochrome production margins.Chrome ore prices remained elevated due to strong demand and no meaningful supply growth.The ferrovanadium market remained oversupplied in H1 2024,due to weak demand from rebar producers in China.High-purity vanadium pentoxide demand from the aerospace sector remained stable,while the use of vanadium for energy storage is estimated to have increased by 80%year-on-year and account for c.10%of annual demand.MARKETING ACTIVITIES Glencore Half-Year Report 2024 Iron ore was in oversupply during H1 2024.With prices remaining above cost-support levels,estimated seaborne supply remained robust( 4%year-on-year),with a particularly strong performance from Brazil( 12mt)and Ukraine recovering lost volumes( 10mt).On the demand side,global pig iron production dropped by c.2%year-on-year,with China reducing the most(-9mt).Crude steel demand in China remained weak.Real estate,in particular,continued to perform poorly(c.20%year-on-year decline in new starts),and negatively impacted domestic steel demand,however more favourable international prices contributed to higher steel exports.China is actively planning a new round of steel production cuts,which should protect steel mills margins and support high grade iron ore products in the near term.Aluminium markets began 2024 with prices range-bound between$2,150/t and$2,350/t.In April,the UK and US announced tighter restrictions on the trade and use of Russian metal,including prohibiting metal exchanges from allowing physical delivery for settlement,triggering a price rally,supported by momentum short covering and a stronger overall bid for base metals.By the end of May,the aluminium price peaked at$2,798/t,where signs of technical exhaustion led a pullback towards the$2,500/t level.During H1 2024,Fastmarkets European In-Warehouse premium rose from$202/t to$338/t,as a heavily de-stocked market sought units from the Middle East and Asia(Platts Japan premium increased from$77/t to$163/t).The Platts mid-west premium rose from$414/t to$429/t,albeit on much quieter demand.Operational issues at a number of large refineries reduced the ex-China alumina surplus for 2024 from an expected 1 million tonnes to approximately zero.This significantly tightened the spot market and by the end of June,the Platts Alumina FOB Australia price increased by 44%compared to the end of 2023,closing at$505/t.Global seaborne thermal coal volumes increased c.3%year-on-year during H1 2024,with lower exports from Russia,South Africa and the US being offset by export growth from Indonesia.Increased demand in China,India,Vietnam and Turkey offset the continued decline of European demand,as well as weaker demand in Japan,Korea and Taiwan.Average thermal coal index prices for the period were:GCNewc($131/t),API4($101/t)and API2($109/t),down 36%,22%and 20%respectively from their H1 2023 averages.Global production of blast furnace pig iron,the main driver of steelmaking coal demand decreased by c.2%year-on-year,with growth in India and Europe being offset by reduced demand from Korea and Japan.Global seaborne steelmaking coal supply volumes declined c.1.5%year-on-year,with lower exports from Australia,Russia and Canada offsetting an increase from the US.Premium HCC prices averaged$275/t in H1 2024,7low the$296/t average in H1 2023.Brent crude oil prices rallied in Q1 2024 from a low of$76/bbl to over$90/bbl in early April,largely driven by the widening conflict in the Middle East and speculative positioning.Market sentiment was also bolstered by positive economic data from the US,raising expectations for increased demand,amidst already falling oil product inventories.In Q2,oil prices saw steep declines,amid speculative selloffs and mixed economic indicators.Brent hit a low of$77/bbl in early June,with OPEC announcing plans to gradually unwind its prior voluntary cuts starting in Q4 2024.Prices bounced back quickly after OPEC reassurances that the rollback of cuts would be contingent on market conditions,with Brent ending H1 2024 at$86/bbl.In gas markets,the mild northern hemisphere 2023/24 winter,together with higher gas production and elevated gas inventory levels,saw Asian and European spot gas prices falling to pre energy-crisis levels in Q1 2024,with the European TTF natural gas price benchmark reaching a low of$7/mmbtu in February.The softer prices then supported higher gas consumption/improved industrial demand in Q2.Oil refining margins registered positive gains at the start of the year as refinery outages restricted product output.Margins retreated from March as processing rates recovered,leading to rising refined product inventories.In shipping,overall tanker freight rates increased sharply in Q1,especially for product shipments,as the Red Sea tensions disrupted supply chains,forcing many shipments to divert via the Cape Peninsula.Freight rates then softened somewhat,but remained elevated,compared to the prior period,for the rest of H1 2024.Glencore Half-Year Report 2024 H1 2024 Industrial Adjusted EBITDA of$4,549 million was 39low the$7,410 million recorded in H1 2023,substantially relating to the lower period-on-period coal Adjusted EBITDA.The lower coal contribution reflects the significant reductions in average realised thermal coal prices,noting the earlier heavily disrupted energy market dislocations seen over 2022 and part of 2023.Adjusted EBITDA from Metals and minerals assets of$2,792 million decreased by 9%compared to the prior period,heavily impacted by the significantly lower contribution from our custom metallurgical assets(down$180 million in copper and$107 million in European zinc),reflecting their tight physical concentrate markets,with historically low TC/RC conditions materialising over H1 2024.Substantially lower nickel and cobalt prices also weighed on our Murrin Murrin nickel operations in Australia during the period.Away from these macro headwinds impacting our processing operations,our weighted average Adjusted EBITDA metals mining margin was consistent with the prior period at 28%(H1 2023:28%).Adjusted EBITDA from Energy and steelmaking coal assets was$2,105 million compared to$4,658 million in the comparable period,due to the significantly lower coal prices,as noted above,and as a result,Adjusted EBITDA energy and steelmaking coal mining margins reduced to 31%compared to 50%in H1 2023.Industrial capex at$2,836 million was 13%higher than the comparable period.US$million Metals and minerals Energy and steel-making coal Corporate and other H1 2024 Metals and minerals Energy and steel-making coal Corporate and other H1 2023 Revenue 18,084 10,071 4 28,159 17,423 13,137 4 30,564 Adjusted EBITDA 2,792 2,105 (348)4,549 3,056 4,658 (304)7,410 Adjusted EBIT 759 971 (361)1,369 1,301 3,557 (326)4,532 Adjusted EBITDA mining margin 281(P7%Production from own sources Total1 H1 2024 H1 2023 Change%Copper kt 462.6 488.0 (5)Cobalt kt 15.9 21.7 (27)Zinc kt 417.2 434.7 (4)Lead kt 87.9 87.4 1 Nickel kt 44.2 46.4 (5)Gold koz 369 369 Silver koz 9,117 9,446 (3)Ferrochrome kt 599 717 (16)Steelmaking coal mt 3.4 3.7 (8)Energy coal mt 47 51 (7)1 Controlled industrial assets and joint ventures only.Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.INDUSTRIAL ACTIVITIES Glencore Half-Year Report 2024 US$million Revenue Adjusted EBITDA Adjusted EBITDA margin3,4 Depreciation and amortisation Adjusted EBIT Capital expenditure Copper assets Africa 1,188 130 11%(396)(266)233 Collahuasi1 1,122 739 66%(139)600 466 Antamina1 745 564 76%(263)301 182 South America 1,039 440 42%(363)77 330 Development projects2(MARA,El Pachon,New Range)(35)(1)(36)69 Custom metallurgical 5,606 107 (94)13 168 Intergroup revenue elimination (118)Copper 9,582 1,945 46%(1,256)689 1,448 Zinc assets Kazzinc 2,028 489 24%(350)139 147 Australia 1,770 1 0%(114)(113)162 European custom metallurgical 1,995 46 (41)5 44 North America 460 24 (22)2 51 Volcan 7 7 Zinc 6,253 567 13%(527)40 404 Nickel assets Integrated Nickel Operations 626 109 17%(167)(58)219 Australia 338 32 9%(16)16 11 Koniambo 109 (99)n.m.(12)(111)Nickel 1,073 42 15%(195)(153)230 Ferroalloys 1,176 305 26%(55)250 75 Aluminium/Alumina (67)(67)2 Metals and minerals 18,084 2,792 28%(2,033)759 2,159 Steelmaking Australia 805 394 49%(121)273 73 Thermal Australia 3,728 1,345 36%(594)751 274 Thermal South Africa 597 122 20%(150)(28)74 Cerrejn thermal coal 887 13 1%(155)(142)190 Prodeco (41)(4)(45)1 Coal(own production)6,017 1,833 30%(1,024)809 612 Coal other revenue(buy-in coal)411 Oil E&P assets 171 77 45%(46)31 7 Oil refining assets 3,472 195 (64)131 25 Energy and steelmaking coal 10,071 2,105 31%(1,134)971 644 Corporate and other 4 (348)(13)(361)33 Total Industrial activities 28,159 4,549 27%(3,180)1,369 2,836 1 Represents the Groups share of these JVs.2 Excluding projects associated/aligned with existing operating assets such as Coroccohuayco,where such costs are including within their respective operating assets.3 Adjusted EBITDA mining margin for Metals and Minerals is Adjusted EBITDA excluding non-mining assets as described below($2,809 million(H1 2023:$2,815 million)divided by Revenue excluding non-mining assets and intergroup revenue elimination($10,032 million(H1 2023:$9,944 million)i.e.the weighted average EBITDA margin of the mining assets.Non-mining assets are the Copper custom metallurgical assets,Copper development projects,Zinc European custom metallurgical assets,Zinc North America(principally smelting/processing),Koniambo(transitioned to care and maintenance in Q1 2024),the Aluminium/Alumina group and Volcan(equity accounted with no relevant revenue)as noted in the table above.Glencore Half-Year Report 2024 US$million Revenue Adjusted EBITDA Adjusted EBITDA margin3,4 Depreciation and amortisation Adjusted EBIT Capital expenditure Copper assets Africa 1,173 172 15%(297)(125)249 Collahuasi1 978 610 62%(139)471 378 Antamina1 709 519 73%(180)339 170 South America 1,101 538 49%(317)221 238 Australia 164 24 15%(5)19 Development projects2(MARA,El Pachon,New Range)(26)(26)30 Custom metallurgical 5,029 287 (85)202 113 Intergroup revenue elimination (101)Copper 9,053 2,124 45%(1,023)1,101 1,178 Zinc assets Kazzinc 1,801 337 19%(293)44 155 Australia 1,604 (16)(1%)(125)(141)119 European custom metallurgical 1,796 153 (51)102 36 North America 575 83 (24)59 27 Volcan 27 27 Other Zinc 8 1 13%1 Zinc 5,784 585 9%(493)92 337 Nickel assets Integrated Nickel Operations 688 88 13%(158)(70)228 Australia 463 144 31%(14)130 7 Koniambo 180 (252)n.m.(14)(266)Nickel 1,331 (20)20%(186)(206)235 Ferroalloys 1,255 398 32%(53)345 56 Aluminium/Alumina (31)(31)2 Metals and minerals 17,423 3,056 28%(1,755)1,301 1,808 Steelmaking Australia 1,070 542 51%(127)415 65 Thermal Australia 5,888 3,434 58%(610)2,824 321 Thermal South Africa 784 191 24%(146)45 87 Cerrejn thermal coal 1,242 390 31%(124)266 118 Prodeco (30)(1)(31)1 Coal(own production)8,984 4,527 50%(1,008)3,519 592 Coal other revenue(buy-in coal)670 Oil E&P assets 209 94 45%(55)39 3 Oil refining assets 3,274 37 (38)(1)36 Energy and steelmaking coal 13,137 4,658 50%(1,101)3,557 631 Corporate and other 4 (304)(22)(326)30 Total Industrial activities 30,564 7,410 37%(2,878)4,532 2,469 4 Energy and steelmaking coal Adjusted EBITDA margin is Adjusted EBITDA for coal and Oil E&P(but excluding Oil refining)($1,910 million(H1 2023:$4,621 million),divided by the sum of coal revenue from own production and Oil E&P revenue($6,188 million(H1 2023:$9,193 million).INDUSTRIAL ACTIVITIES Glencore Half-Year Report 2024 Production from own sources Copper assets1 H1 2024 H1 2023 Changerican Copper(KCC,Mutanda)Copper metal kt 100.6 120.2 (16)Cobalt2 kt 14.4 20.4 (29)Collahuasi3 Copper in concentrates kt 125.0 114.4 9 Silver in concentrates koz 1,857 1,612 15 Gold in concentrates koz 23 20 15 Antamina4 Copper in concentrates kt 76.3 68.3 12 Zinc in concentrates kt 42.2 77.1 (45)Silver in concentrates koz 1,822 1,950 (7)South America(Antapaccay,Lomas Bayas)Copper metal kt 37.2 29.8 25 Copper in concentrates kt 69.4 82.7 (16)Gold in concentrates and in dor koz 38 56 (32)Silver in concentrates and in dor koz 520 609 (15)Cobar Copper in concentrates kt 15.0 (100)Silver in concentrates koz 180 (100)Total Copper department Copper kt 408.5 430.4 (5)Cobalt kt 14.4 20.4 (29)Zinc kt 42.2 77.1 (45)Gold koz 61 76 (20)Silver koz 4,199 4,351 (3)Production from own sources Zinc assets1 H1 2024 H1 2023 Change%Kazzinc Zinc metal kt 64.0 49.5 29 Zinc in concentrates kt 32.8 22.5 46 Lead metal kt 16.1 8.8 83 Lead in concentrates kt 2.3 7.5 (69)Copper metal5 kt 9.0 5.0 80 Gold koz 303 288 5 Silver koz 1,551 1,107 40 Silver in concentrates koz 40 263 (85)Australia(Mount Isa,Townsville,McArthur River)Zinc in concentrates kt 260.3 263.4 (1)Copper metal kt 28.7 35.1 (18)Lead in concentrates kt 69.5 71.1 (2)Silver koz 226 338 (33)Silver in concentrates koz 2,516 2,421 4 North America(Kidd)Zinc in concentrates kt 17.9 22.2 (19)Copper in concentrates kt 9.6 11.4 (16)Silver in concentrates koz 483 869 (44)Total Zinc department Zinc kt 375.0 357.6 5 Lead kt 87.9 87.4 1 Copper kt 47.3 51.5 (8)Gold koz 303 288 5 Silver koz 4,816 4,998 (4)INDUSTRIAL ACTIVITIES Glencore Half-Year Report 2024 Production from own sources Nickel assets1 H1 2024 H1 2023 Change%Integrated Nickel Operations(INO)(Sudbury,Raglan,Nikkelverk)Nickel metal kt 22.3 18.1 23 Copper metal kt 5.1 3.9 31 Copper in concentrates kt 1.7 2.2 (23)Cobalt metal kt 0.3 0.2 50 Gold koz 5 5 Silver koz 102 97 5 Platinum koz 14 12 17 Palladium koz 33 33 Rhodium koz 1 1 Murrin Murrin Nickel metal kt 16.9 15.6 8 Cobalt metal kt 1.2 1.1 9 Koniambo Nickel in ferronickel kt 5.0 12.7 (61)Total Nickel department Nickel kt 44.2 46.4 (5)Copper kt 6.8 6.1 11 Cobalt kt 1.5 1.3 15 Gold koz 5 5 Silver koz 102 97 5 Platinum koz 14 12 17 Palladium koz 33 33 Rhodium koz 1 1 Production from own sources Ferroalloys assets1 H1 2024 H1 2023 Changerrochrome6 kt 599 717 (16)Vanadium Pentoxide mlb 8.0 9.3 (14)Total production Custom metallurgical assets1 H1 2024 H1 2023 Change%Copper(Altonorte,Pasar,Horne,CCR)Copper metal kt 245.2 251.4 (2)Copper anode kt 215.9 225.3 (4)Zinc(Portovesme,Asturiana,Nordenham,Northfleet,CEZ Refinery)Zinc metal kt 440.1 345.3 27 Lead metal kt 97.2 123.7 (21)Coal assets1 H1 2024 H1 2023 Change%Australian steelmaking coal mt 3.4 3.7 (8)Australian semi-soft coal mt 1.4 1.9 (26)Australian thermal coal(export)mt 24.2 26.7 (9)Australian thermal coal(domestic)mt 3.7 3.2 16 South African thermal coal(export)mt 5.3 6.6 (20)South African thermal coal(domestic)mt 2.6 1.9 37 Cerrejn thermal coal mt 10.0 10.2 (2)Total Coal department mt 50.6 54.2 (7)Oil assets H1 2024 H1 2023 Change%Glencore entitlement interest basis Equatorial Guinea kboe 1,986 1,996 (1)Cameroon kbbl 168 354 (53)Total Oil department kboe 2,154 2,350 (8)1 Controlled industrial assets and joint ventures only.Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.2 Cobalt contained in concentrates and hydroxides.3 The Groups pro-rata share of Collahuasi production(44%).4 The Groups pro-rata share of Antamina production(33.75%).5 Copper metal includes copper contained in copper concentrates and blister.6 The Groups attributable 79.5%share of the Glencore-Merafe Chrome Venture.INDUSTRIAL ACTIVITIES Glencore Half-Year Report 2024 Copper assets On a like-for-like basis,removing 15,000 tonnes of Cobar(sold in June 2023)volumes from the prior period,own sourced copper production of 462,600 tonnes was 2low H1 2023.Own sourced cobalt production of 15,900 tonnes was 5,800 tonnes(27%)lower than H1 2023,reflecting planned lower run-rates at Mutanda in response to the current weak cobalt pricing environment and lower throughput and cobalt grades at KCC.African Copper Own sourced copper production of 100,600 tonnes was 19,600 tonnes(16%)lower than H1 2023,mainly reflecting lower grades from some historical stock depletion and unplanned mill downtime.The planned ramp up of tailings reprocessing at KCC,which would compensate for such,has been delayed to H2 2024.Own sourced cobalt production of 14,400 tonnes was 6,000 tonnes(29%)lower than H1 2023,reflecting planned lower run rates at Mutanda in response to the current weak cobalt pricing environment and lower throughput and cobalt grades at KCC.Collahuasi Attributable copper production of 125,000 tonnes was 10,600 tonnes(9%)higher than H1 2023,primarily due to higher feed grades,as well as throughput post commissioning of the fifth ball mill.Antamina Attributable copper production of 76,300 tonnes was 8,000 tonnes(12%)higher than H1 2023,mainly reflecting weather-related production interruptions in March 2023 and current year higher copper grades and mill throughput.Attributable zinc production of 42,200 tonnes was 34,900 tonnes(45%)lower than H1 2023,reflecting the expected mining sequence,exhibiting higher copper/lower zinc grades.South America Copper production of 106,600 tonnes was 5,900 tonnes(5%)lower than H1 2023,reflecting a geotechnical event and subsequent mine stabilisation activities at Antapaccay.Copper custom metallurgical assets Copper anode production of 215,900 tonnes was 9,400 tonnes(4%)lower than H1 2023,reflecting planned maintenance shutdown activities at Pasar.Copper cathode production of 245,200 tonnes was broadly in line with H1 2023 production.Zinc assets Own sourced overall zinc production of 417,200 tonnes was 17,500 tonnes(4%)below H1 2023,mainly reflecting lower zinc tonnes from Antamina(34,900 tonnes),given its current year expected copper/zinc mine sequence,partly offset by the ramp up of Zhairem(24,800 tonnes).Own sourced zinc production from the zinc department itself(i.e.excluding Antamina)was 17,400 tonnes(5%)higher than H1 2023.Kazzinc Own sourced zinc production of 96,800 tonnes was 24,800 tonnes(34%)higher than H1 2023,reflecting Zhairems ramp up.Own sourced lead production of 18,400 tonnes was 2,100 tonnes(13%)higher than H1 2023,also due to Zhairems ramp up.Own sourced copper production of 9,000 tonnes was 4,000 tonnes(80%)higher than H1 2023,due to an unscheduled furnace shutdown at the copper smelter in the base period.Australia Zinc production of 260,300 tonnes was broadly in line with H1 2023,reflecting lower production from McArthur River(13,400 tonnes)due to a tropical cyclone in Q1 2024,offset by higher production from Mount Isa(10,300 tonnes),largely due to heavy rains in the base period.Lead production of 69,500 tonnes was broadly in line with H1 2023.Copper production of 28,700 tonnes was 6,400 tonnes(18%)lower than H1 2023,reflecting production disruptions due to heavy rain.North America Zinc production of 17,900 tonnes was 4,300 tonnes(19%)lower than H1 2023,due to lower grades,consistent with the mining plan.Zinc custom metallurgical assets Zinc metal production of 440,100 tonnes was 94,800 tonnes(27%)higher than H1 2023,mainly reflecting consolidation of the CEZ business from April 2023 and incremental tonnes from the restart of Nordenham Zinc in February 2024.Lead metal production of 97,200 tonnes was 26,500 tonnes(21%)lower than H1 2023,reflecting a temporary furnace shutdown at Nordenham Lead and Portovesmes lead line remaining in care and maintenance.INDUSTRIAL ACTIVITIES Glencore Half-Year Report 2024 Nickel assets Own sourced nickel production of 44,200 tonnes was 2,200 tonnes(5%)lower than H1 2023,mainly reflecting Koniambos transition to care and maintenance(7,700 tonnes),partially offset by recovery from the INO supply chain constraints seen in the base period(4,200 tonnes)and higher production from Murrin Murrin(1,300 tonnes).Excluding Koniambo,own sourced nickel production of 39,200 tonnes was 5,500 tonnes(16%)higher than H1 2023.Integrated Nickel Operations(INO)Own sourced nickel production of 22,300 tonnes was 4,200 tonnes(23%)higher than H1 2023,reflecting that the base period endured supply chain constraints and follow-on impacts from the Raglan strike in 2022.Total refinery production of 47,200 tonnes was in line with H1 2023.Murrin Murrin Own sourced nickel production of 16,900 tonnes was 1,300 tonnes(8%)higher than H1 2023,due to variations in the own sourced/third party feed mix and longer than planned maintenance in the base period.Ferroalloys assets Attributable ferrochrome production of 599,000 tonnes was 118,000 tonnes(16%)below H1 2023,as the Rustenburg smelter remains idled in response to weak market conditions and pending an improved price/cost environment.Coal assets Coal production of 50.6 million tonnes was 3.6 million tonnes(7%)lower than H1 2023,mainly reflecting the progressive impact of scheduled mine closures,the temporary impact of longwall moves in Australia in 2024 and export rail constraints in South Africa.Australian steelmaking Production of 3.4 million tonnes was 0.3 million tonnes(8%)lower than H1 2023.The base period included 0.3 million tonnes from Newlands mine,prior to its closure in February 2023.Australian thermal and semi-soft Production of 29.3 million tonnes was 2.5 million tonnes(8%)lower than H1 2023,reflecting the closure of the Integra mine in June 2024 and the base period inclusion of 1.4 million tonnes from Liddell mine,prior to its closure in July 2023.The current period also included longwall moves at Ulan,while mine sequencing at HVO and Bulga reflected temporarily elevated strip ratios,with higher production expected in H2 2024.South African thermal Production of 7.9 million tonnes was 0.6 million tonnes(7%)lower than H1 2023,mainly reflecting various measures implemented in 2023-24 to progressively reduce coal production due to export rail capacity constraints.As and when additional rail capacity is restored,the potential exists to increase production rates.Cerrejn Production of 10.0 million tonnes was broadly in line with H1 2023.Oil assets Exploration and production(non-operated)Entitlement interest oil production of 2.2 million barrels of oil equivalent was 0.2 million boe(8%)lower than H1 2023,largely due to natural field decline at Bolongo in Cameroon.Glencore Half-Year Report 2024 We confirm that to the best of our knowledge:the condensed set of consolidated financial statements has been prepared in accordance with IAS 34 Interim Financial Reporting as endorsed and adopted by the United Kingdom;the interim report includes a fair review of the information required by DTR 4.2.7R(being an indication of important events that have occurred during the first six months of the financial year,and their impact on the interim report and a description of the principal risks and uncertainties for the remaining six months of the financial year);and the interim report includes a fair review of the information required by DTR 4.2.8R(being disclosure of related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or the performance of the Group during that period and any changes in the related party transactions described in the last annual report that could have a material effect on the financial position or performance of the Group in the first six months of the current financial year).By order of the Board,Gary Nagle Chief Executive Officer 6 August 2024Glencore Half-Year Report 2024 We have been engaged by Glencore plc(the Company)to review the condensed consolidated interim financial statements in the half-yearly financial report for the six months ended 30 June 2024(the 2024 Half-Year Report)which comprises the condensed consolidated statement of income,the condensed consolidated statement of comprehensive income,the condensed consolidated statement of financial position,the condensed consolidated statement of cash flows,the condensed consolidated statement of changes in equity and related notes 1 to 30.Based on our review,nothing has come to our attention that causes us to believe that the condensed set of financial statements in the 2024 Half-Year Report for the six months ended 30 June 2024 is not prepared,in all material respects,in accordance with United Kingdom adopted International Accounting Standard 34 and the Disclosure Guidance and Transparency Rules of the United Kingdoms Financial Conduct Authority.We conducted our review in accordance with International Standard on Review Engagements(UK)2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity issued by the Financial Reporting Council for use in the United Kingdom(ISRE(UK)2410).A review of interim financial information consists of making inquiries,primarily of persons responsible for financial and accounting matters,and applying analytical and other review procedures.A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing(UK)and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit.Accordingly,we do not express an audit opinion.The annual financial statements of the Company are prepared in accordance with United Kingdom adopted international accounting standards.The condensed consolidated interim financial statements included in this 2024 Half-Year Report have been prepared in accordance with United Kingdom adopted International Accounting Standard 34,Interim Financial Reporting.Based on our review procedures,which are less extensive than those performed in an audit as described in the Basis for Conclusion section of this report,nothing has come to our attention to suggest that the directors have inappropriately adopted the going concern basis of accounting or that the directors have identified material uncertainties relating to going concern that are not appropriately disclosed.This conclusion is based on the review procedures performed in accordance with ISRE(UK)2410,however future events or conditions may cause the entity to cease to continue as a going concern.The directors are responsible for preparing the 2024 Half-Year Report in accordance with the Disclosure Guidance and Transparency Rules of the United Kingdoms Financial Conduct Authority.In preparing the 2024 Half-Year Report,the directors are responsible for assessing the Companys ability to continue as a going concern,disclosing as applicable,matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations,or have no realistic alternative but to do so.In reviewing the 2024 Half-Year Report,we are responsible for expressing to the Company a conclusion on the condensed set of financial statements in the 2024 Half-Year Report.Our Conclusion,including our Conclusion Relating to Going Concern,are based on procedures that are less extensive than audit procedures,as described in the Basis for Conclusion paragraph of this report.This report is made solely to the Company in accordance with ISRE(UK)2410.Our work has been undertaken so that we might state to the company those matters we are required to state to it in an independent review report and for no other purpose.To the fullest extent permitted by law,we do not accept or assume responsibility to anyone other than the company,for our review work,for this report,or for the conclusions we have formed.Deloitte LLP Recognised Auditor London,United Kingdom 6 August 2024FOR THE SIX MONTHS ENDED 30 JUNE(UNAUDITED)Glencore Half-Year Report 2024 US$million Notes 2024 2023 Revenue 4 117,091 107,415 Cost of goods sold (114,261)(100,906)Net expected credit losses 13/15 (18)(12)Selling and administrative expenses (991)(1,030)Share of income from associates and joint ventures 12 679 755(Loss)/gain on disposals of non-current assets 5 (353)679 Other income 6 227 256 Other expense 6 (640)(274)Impairments of non-current assets 8 (1,013)(56)Reversal of impairments of financial assets 8 16 9 Dividend income 12 1 2 Interest income 7 304 321 Interest expense 7 (1,412)(1,160)(Loss)/income before income taxes (370)5,999 Income tax expense 9 (532)(1,731)(Loss)/income for the period (902)4,268 Attributable to:Non-controlling interests (669)(300)Equity holders of the Parent (233)4,568 (Loss)/earnings per share:Basic(US$)18 (0.02)0.36 Diluted(US$)18 (0.02)0.36 All amounts presented are derived from continuing operations.The accompanying notes are an integral part of the condensed consolidated interim financial statements.FOR THE SIX MONTHS ENDED 30 JUNE(UNAUDITED)Glencore Half-Year Report 2024 US$million Notes 2024 2023(Loss)/income for the period (902)4,268 Other comprehensive(loss)/income Items not to be reclassified to the statement of income in subsequent periods:Defined benefit plan remeasurements 68 54 Tax charge on defined benefit plan remeasurements (36)(23)Loss on equity investments accounted for at fair value through other comprehensive income 12 (6)(13)Tax credit/(charge)on equity investments accounted for at fair value through other comprehensive income 1 (1)Loss due to changes in credit risk on financial liabilities accounted for at fair value through profit and loss (14)Net items not to be reclassified to the statement of income in subsequent periods 27 3 Items that have been or may be reclassified to the statement of income in subsequent periods:Exchange loss on translation of foreign operations (17)(315)(Loss)/gain on cash flow hedges (62)65 Tax(charge)/credit on loss on cash flow hedges (1)4 Cash flow hedges reclassified to the statement of income 61 (63)Tax charge on cash flow hedges reclassified to the statement of income (2)Share of other comprehensive(loss)/income from associates and joint ventures 12 (26)23 Net items that have been or may be reclassified to the statement of income in subsequent periods (45)(288)Other comprehensive loss (18)(285)Total comprehensive(loss)/income (920)3,983 Attributable to:Non-controlling interests (671)(328)Equity holders of the Parent (249)4,311 All amounts presented are derived from continuing operations.The accompanying notes are an integral part of the condensed consolidated interim financial statements.AS AT 30 JUNE 2024 AND 31 DECEMBER 2023 Glencore Half-Year Report 2024 2024 2023 US$million Notes(unaudited)(audited)Assets Non-current assets Property,plant and equipment 10 37,533 39,233 Intangible assets 11 5,979 6,002 Investments in associates and joint ventures 12 9,064 8,823 Other investments 12 348 513 Advances and loans 13 3,068 2,876 Other financial assets 25 151 367 Inventories 14 593 623 Deferred tax assets 1,382 1,390 58,118 59,827 Current assets Inventories 14 30,177 31,569 Accounts receivable 15 20,075 18,385 Other financial assets 25 4,325 5,187 Income tax receivable 9 1,248 1,229 Prepaid expenses 318 317 Cash and cash equivalents 2,777 1,925 58,920 58,612 Assets held for sale 16 3,652 5,430 62,572 64,042 Total assets 120,690 123,869 Equity and liabilities Capital and reserves attributable to equity holders Share capital 17 136 136 Reserves and retained earnings 41,361 43,444 41,497 43,580 Non-controlling interests (5,734)(5,343)Total equity 35,763 38,237 Non-current liabilities Borrowings 20 22,775 21,275 Deferred income 21 1,224 1,294 Deferred tax liabilities 2,569 2,970 Other financial liabilities 25 1,845 1,710 Provisions 22 7,647 8,105 Post-retirement and other employee benefits 737 800 36,797 36,154 Current liabilities Borrowings 20 8,602 10,966 Accounts payable 23 30,689 29,289 Deferred income 21 1,395 1,044 Provisions 22 1,305 1,108 Other financial liabilities 25 4,535 3,671 Income tax payable 9 1,604 1,850 48,130 47,928 Liabilities held for sale 16 1,550 48,130 49,478 Total equity and liabilities 120,690 123,869 The accompanying notes are an integral part of the condensed consolidated interim financial statements.FOR THE SIX MONTHS ENDED 30 JUNE(UNAUDITED)Glencore Half-Year Report 2024 US$million Notes 2024 2023 Operating activities (Loss)/income before income taxes (370)5,999 Adjustments for:Depreciation and amortisation 3,083 2,773 Share of income from associates and joint ventures 12 (679)(755)Streaming revenue and other non-current provisions 49 (33)Loss/(gain)on disposals of non-current assets 5 353 (679)Unrealised mark-to-market movements on other investments 6 (109)87 Impairments 8 997 47 Other non-cash items net1 563 130 Interest expense net 7 1,108 839 Cash generated by operating activities before working capital changes,interest and tax 4,995 8,408 Working capital changes (Increase)/decrease in accounts receivable2 (1,529)8,529 Decrease in inventories 1,280 1,770 Increase/(decrease)in accounts payable3 2,425 (6,931)Total working capital changes 2,176 3,368 Income taxes paid (1,292)(5,116)Interest received 276 281 Interest paid (1,074)(928)Net cash generated by operating activities 5,081 6,013 Investing activities Increase in long-term advances and loans (75)Net cash used in acquisition of subsidiaries 24 (199)Net cash(paid)/received on disposal of subsidiaries 24 (22)770 Purchase of investments (24)(88)Proceeds from sale of investments 168 55 Purchase of property,plant and equipment (2,378)(2,080)Proceeds from sale of property,plant and equipment 121 133 Dividends received from associates and joint ventures 12 428 879 Net cash used by investing activities (1,782)(530)1 See reconciliation below.2 Includes movements in other financial assets,prepaid expenses and certain long-term advances and loans.3 Includes movements in other financial liabilities,provisions and deferred income.Other non-cash items comprise the following:US$million Notes 2024 2023 Net foreign exchange losses/(gains)6 75 (190)Closed site rehabilitation provisioning 6 (76)Closure and severance costs 6 209 Share based and deferred remuneration costs 290 237 Other 65 83 Total 563 130 All amounts presented are derived from continuing operations.The accompanying notes are an integral part of the condensed consolidated interim financial statements.FOR THE SIX MONTHS ENDED 30 JUNE(UNAUDITED)Glencore Half-Year Report 2024 US$million Notes 2024 2023 Financing activities1 Proceeds from issuance of capital market notes2 4,797 995 Repayment of capital market notes (1,964)(1,500)(Repayment of)/proceeds from revolving credit facility (1,183)1,539 Proceeds from other non-current borrowings 14 Repayment of other non-current borrowings (81)(95)Repayment of lease liabilities (416)(281)Margin(payments)/receipts in respect of financing related hedging activities (482)258 Repayment of current borrowings (1,821)(1,613)(Repayment of)/proceeds from U.S.commercial papers (309)307 Acquisition of non-controlling interests in subsidiaries 9 Return of capital/distributions to non-controlling interests (15)(4)Purchase of own shares 17 (230)(2,428)Distributions paid to equity holders of the Parent 19 (790)(2,749)Net cash used by financing activities (2,494)(5,548)Increase/(decrease)in cash and cash equivalents 805 (65)Effect of foreign exchange rate changes (15)(20)Cash and cash equivalents,beginning of period 1,987 1,998 Cash and cash equivalents,end of period 2,777 1,913 Cash and cash equivalents reported in the statement of financial position 2,777 1,863 Cash and cash equivalents attributable to assets held for sale 50 1 Refer to note 20 for reconciliation of movement in borrowings.2 Amount net of issuance costs relating to capital market notes of$20 million(2023:$5 million).All amounts presented are derived from continuing operations.The accompanying notes are an integral part of the condensed consolidated interim financial statements.FOR THE SIX MONTHS ENDED 30 JUNE(UNAUDITED)Glencore Half-Year Report 2024 Retained earnings Share premium Other reserves Own shares(Note 17)Total reserves and retained earnings Share capital Total equity attributable to equity holders Non-controlling interests Total equity 1 January 2023 25,246 36,717 (6,833)(5,861)49,269 141 49,410 (4,191)45,219 Income for the period 4,568 4,568 4,568 (300)4,268 Other comprehensive income/(loss)54 (311)(257)(257)(28)(285)Total comprehensive income 4,622 (311)4,311 4,311 (328)3,983 Own share disposals(see note 17)(96)186 90 90 90 Own share purchases(see note 17)(2,428)(2,428)(2,428)(2,428)Equity-settled share-based expenses (119)(119)(119)(119)Change in ownership interest in subsidiaries (10)(10)(10)42 32 Cancellation of shares(see note 17)(1,449)1,453 4 (4)Distributions(see note 19)(5,600)(5,600)(5,600)(4)(5,604)30 June 2023 29,653 29,668 (7,154)(6,650)45,517 137 45,654 (4,481)41,173 Retained earnings Share premium Other reserves Own shares(Note 17)Total reserves and retained earnings Share capital Total equity attributable to equity holders Non-controlling interests Total equity 1 January 2024 29,607 28,369 (7,032)(7,500)43,444 136 43,580 (5,343)38,237 Loss for the period (233)(233)(233)(669)(902)Other comprehensive income/(loss)6 (22)(16)(16)(2)(18)Total comprehensive(loss)/income (227)(22)(249)(249)(671)(920)Own share disposals(see note 17)(43)146 103 103 103 Own share purchases(see note 17)(230)(230)(230)(230)Equity-settled share-based expenses (90)(90)(90)(90)Change in ownership interest in subsidiaries (41)(41)(41)16 (25)Acquisition/disposal of business(see note 24)3 3 3 279 282 Reclassifications (2)2 Distributions(see note 19)(1,579)(1,579)(1,579)(15)(1,594)30 June 2024 29,245 26,790 (7,090)(7,584)41,361 136 41,497 (5,734)35,763 The accompanying notes are an integral part of the condensed consolidated interim financial statements.NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS Glencore Half-Year Report 2024 Glencore plc(the Company,Parent,the Group or Glencore)is a leading integrated producer and marketer of natural resources,with worldwide activities in the production,refinement,processing,storage,transport and marketing of metals,minerals and energy products.Glencore operates on a global scale,marketing and distributing physical commodities sourced from third party producers and own production to industrial consumers,such as those in the battery,electronic,construction,automotive,steel,energy and oil industries.Glencore also provides financing,logistics and other services to producers and consumers of commodities.In this regard,Glencore seeks to capture value throughout the commodity supply chain.Glencores long experience as a commodity producer and merchant has allowed it to develop and build upon its expertise in the commodities which it markets and cultivate long-term relationships with a broad supplier and customer base across diverse industries and in multiple geographic regions.Glencore is a publicly traded
2024-10-15
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FINANCIAL SUMMARY(All financial information has been prepared in accordance with IFRS Accounting Standards)FY2025 First Quarter(April 1,2024 through June 30,2024)English translation from the original Japanese-language document TOYOTA MOTOR CORPORATION FY2025 First Quarter Consolidated Financial Results(All financial information has been prepared in accordance with IFRS Accounting Standards)English translation from the original Japanese-language document August 1,2024 Company name:Toyota Motor Corporation Stock exchanges on which the shares are listed:Tokyo and Nagoya Stock Exchanges in Japan Code number:7203 URL Representative:https:/global.toyota/jp/:Koji Sato,President Contact person:Hideaki Hayashi,General Manager,Accounting Division Tel.(0565)28-2121 Payment date of cash dividends:Supplemental materials prepared for financial results:yes Earnings announcement for financial results:yes(Amounts are rounded to the nearest million yen)1.Consolidated Results for FY2025 First Quarter(April 1,2024 through June 30,2024)(1)Consolidated financial results(For the first quarter ended June 30)(%of change from previous first quarter)Sales revenues Operating income Income before income taxes Net income Net income attributable to Toyota Motor Corporation Comprehensive income Million yen%Million yen%Million yen%Million yen%Million yen%Million yen%FY2025 first quarter 11,837,879 12.2 1,308,462 16.7 1,872,258 8.8 1,363,823 2.8 1,333,347 1.7 2,196,759-14.0FY2024 first quarter 10,546,831 24.2 1,120,900 93.7 1,720,553 68.4 1,326,890 75.0 1,311,372 78.0 2,553,887 51.3Earnings per share attributable to Toyota Motor Corporation-BasicEarnings per share attributable to Toyota Motor Corporation-DilutedYen Yen FY2025 first quarter 98.99 98.99 FY2024 first quarter 96.74 96.74(2)Consolidated financial positionTotal assets Total shareholders equity Toyota Motor Corporation shareholders equity Ratio of Toyota Motor Corporation shareholders equity Million yen Million yen Million yen%FY2025 first quarter 94,037,319 36,779,372 35,737,743 38.0 FY202490,114,29635,239,33834,220,99138.02.Cash DividendsAnnual cash dividends per common share End of first quarter End of second quarter End of third quarter Year-endTotalYenYenYenYenYenFY2024 30.00 45.00 75.00FY2025 FY2025(forecast)(Note)Revisions to the forecast of cash dividends since the latest announcement:none 3.Forecast of Consolidated Results for FY2025(April 1,2024 through March 31,2025)(%of change from FY2024)Sales revenues Operating income Income before income taxes Net income attributable to Toyota Motor Corporation Earnings per share attributable to Toyota Motor Corporation-BasicMillion yen%Million yen%Million yen%Million yen%Yen Full-year 46,000,000 2.0 4,300,000-19.7 5,070,000-27.2 3,570,000-27.8265.04(Note)Revisions to the forecast of consolidated results since the latest announcement:none Notes(1)Significant changes in the scope of consolidation during the period:none (2)Changes in accounting policies and changes in accounting estimates (i)Changes in accounting policies required by IFRS Accounting Standards:none (ii)Changes other than(2)-(i)above:none (iii)Changes in accounting estimates:none (3)Number of shares issued and outstanding(common stock)(i)Number of shares issued and outstanding at the end of each period(including treasury stock):FY2025 first quarter 15,794,987,460 shares,FY2024 16,314,987,460 shares (ii)Number of treasury stock at the end of each period:FY2025 first quarter 2,325,417,265 shares,FY2024 2,840,815,433 shares (iii)Average number of shares issued and outstanding in each period:FY2025 first quarter 13,469,159,202 shares,FY2024 first quarter 13,555,662,829 shares Review of the Japanese-language originals of the attached condensed quarterly consolidated financial statements by certified public accountants or an audit firm:yes(voluntary)Cautionary Statement with Respect to Forward-Looking Statements,and Other Information This report contains forward-looking statements that reflect Toyotas plans and expectations.These forward-looking statements are not guarantees of future performance and involve known and unknown risks,uncertainties and other factors that may cause Toyotas actual results,performance,achievements or financial position to be materially different from any future results,performance,achievements or financial position expressed or implied by these forward-looking statements.These factors include,but are not limited to:(i)changes in economic conditions,market demand,and the competitive environment affecting the automotive markets in Japan,North America,Europe,Asia and other markets in which Toyota operates;(ii)fluctuations in currency exchange rates,particularly with respect to the value of the Japanese yen,the U.S.dollar,the euro,the Australian dollar,the Canadian dollar and the British pound,fluctuations in stock prices,and interest rates fluctuations;(iii)changes in funding environment in financial markets and increased competition in the financial services industry;(iv)Toyotas ability to market and distribute effectively;(v)Toyotas ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management;(vi)changes in the laws,regulations and government policies in the markets in which Toyota operates that affect Toyotas automotive operations,particularly laws,regulations and government policies relating to vehicle safety including remedial measures such as recalls,trade,environmental protection,vehicle emissions and vehicle fuel economy,as well as changes in laws,regulations and government policies that affect Toyotas other operations,including the outcome of current and future litigation and other legal proceedings,government proceedings and investigations;(vii)political and economic instability in the markets in which Toyota operates;(viii)Toyotas ability to timely develop and achieve market acceptance of new products that meet customer demand;(ix)any damage to Toyotas brand image;(x)Toyotas reliance on various suppliers for the provision of supplies;(xi)increases in prices of raw materials;(xii)Toyotas reliance on various digital and information technologies,as well as information security;(xiii)fuel shortages or interruptions in electricity,transportation systems,labor strikes,work stoppages or other interruptions to,or difficulties in,the employment of labor in the major markets where Toyota purchases materials,components and supplies for the production of its products or where its products are produced,distributed or sold;(xiv)the impact of natural calamities,epidemics,political and economic instability,fuel shortages or interruptions in social infrastructure,wars,terrorism and labor strikes,including their negative effect on Toyotas vehicle production and sales;(xv)the impact of climate change and the transition towards a low-carbon economy;and(xvi)the ability of Toyota to hire or retain sufficient human resources.A discussion of these and other factors which may affect Toyotas actual results,performance,achievements or financial position is contained in Toyotas annual report on Form 20-F,which is on file with the United States Securities and Exchange Commission.In order to convey top managements aspirations and the companys direction to all those whose lives are touched by Toyota,Toyota communicates what Toyota is really like through Toyota Times.Toyota Times(https:/toyotatimes.jp/en/)TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial SummaryTABLE OF CONTENTS Financial Results and Position.21.Consolidated Financial Results for FY2025 First Quarter.22.Consolidated Financial Position for FY2025 First Quarter.4Unaudited Condensed Quarterly Consolidated Financial Statements.51.Unaudited Condensed Quarterly Consolidated Statement of Financial Position.52.Unaudited Condensed Quarterly Consolidated Statement of Income andUnaudited Condensed Quarterly Consolidated Statement of Comprehensive Income.73.Unaudited Condensed Quarterly Consolidated Statement of Changes in Equity.94.Unaudited Condensed Quarterly Consolidated Statement of Cash Flows.105.Notes to Unaudited Condensed Quarterly Consolidated Financial Statements.11(1)Going Concern Assumption.11(2)Segment Information.12Supplemental Material for Financial Results for FY2025 First Quarter 1TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial SummaryFinancial Results and Position 1.Consolidated Financial Results for FY2025 First QuarterFinancial ResultsConsolidated vehicle unit sales in Japan and overseas decreased by 74 thousand units,or 3.2%,to 2,252thousand units in FY2025 first quarter(the first quarter ended June 30,2024)compared with FY2024 first quarter(the first quarter ended June 30,2023).Vehicle unit sales in Japan decreased by 110 thousand units,or 20.8%,to421 thousand units in FY2025 first quarter compared with FY2024 first quarter.Meanwhile,overseas vehicle unitsales increased by 36 thousand units,or 2.0%,to 1,830 thousand units in FY2025 first quarter compared withFY2024 first quarter.The results of operations for FY2025 first quarter were as follows:Sales revenues 11,837.8 billion yen(an increase of 1,291.0 billion yen or 12.2%compared with FY2024 first quarter)Operating income 1,308.4 billion yen(an increase of 187.5 billion yen or 16.7%compared with FY2024 first quarter)Income before income taxes 1,872.2 billion yen(an increase of 151.7 billion yen or 8.8%compared with FY2024 first quarter)Net income attributable to Toyota Motor Corporation 1,333.3 billion yen(an increase of 21.9 billion yen or 1.7%compared with FY2024 first quarter)The changes in operating income were as follows:Marketing efforts an increase of 70.0 billion yen Effects of changes in exchange rates an increase of 370.0 billion yen Cost reduction efforts an increase of 55.0 billion yen Increase or decrease in expenses and expense reduction efforts a decrease of 225.0 billion yen Other a decrease of 82.5 billion yen 2TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial SummarySegment Operating Results(1)Automotive:Sales revenues for the automotive operations increased by 1,071.7 billion yen,or 11.1%,to 10,759.7billion yen in FY2025 first quarter compared with FY2024 first quarter,and operating income increased by172.2 billion yen,or 18.2%,to 1,117.9 billion yen in FY2025 first quarter compared with FY2024 first quarter.The increase in operating income was mainly due to the effects of changes in exchange rates.(2)Financial services:Sales revenues for the financial services operations increased by 230.1 billion yen,or 29.7%,to 1,005.3billion yen in FY2025 first quarter compared with FY2024 first quarter,and operating income increased by12.4 billion yen,or 8.4%,to 159.7 billion yen in FY2025 first quarter compared with FY2024 first quarter.Theincrease in operating income was mainly due to increase in loan balance in sales finance subsidiaries in theUnited States.(3)All other:Sales revenues for all other businesses increased by 9.2 billion yen,or 3.0%,to 315.6 billion yen inFY2025 first quarter compared with FY2024 first quarter,and operating income increased by 0.5 billion yen,or 1.4%,to 40.7 billion yen in FY2025 first quarter compared with FY2024 first quarter.Geographic Information(1)Japan:Sales revenues in Japan increased by 118.5 billion yen,or 2.3%,to 5,224.0 billion yen in FY2025 firstquarter compared with FY2024 first quarter,and operating income increased by 179.3 billion yen,or 25.5%,to 881.2 billion yen in FY2025 first quarter compared with FY2024 first quarter.The increase in operatingincome was mainly due to the effects of changes in exchange rates.(2)North America:Sales revenues in North America increased by 910.3 billion yen,or 22.2%,to 5,002.4 billion yen inFY2025 first quarter compared with FY2024 first quarter.However,operating income decreased by 34.5 billionyen,or 28.9%,to 85.0 billion yen in FY2025 first quarter compared with FY2024 first quarter.The decreasein operating income was mainly due to the increase in expenses and others.(3)Europe:Sales revenues in Europe increased by 209.9 billion yen,or 16.2%,to 1,509.0 billion yen in FY2025first quarter compared with FY2024 first quarter,and operating income increased by 41.5 billion yen,or 50.0%,to 124.6 billion yen in FY2025 first quarter compared with FY2024 first quarter.The increase in operatingincome was mainly due to the decrease in expenses and others.(4)Asia:Sales revenues in Asia increased by 267.1 billion yen,or 13.6%,to 2,231.7 billion yen in FY2025 firstquarter compared with FY2024 first quarter,and operating income increased by 59.7 billion yen,or 32.1%,to245.9 billion yen in FY2025 first quarter compared with FY2024 first quarter.The increase in operating incomewas mainly due to the effects of changes in exchange rates.(5)Other(Central and South America,Oceania,Africa and the Middle East):Sales revenues in other regions increased by 29.2 billion yen,or 2.9%,to 1,053.8 billion yen in FY2025first quarter compared with FY2024 first quarter.However,operating income decreased by 43.6 billion yen,or51.1%,to 41.7 billion yen in FY2025 first quarter compared with FY2024 first quarter.The decrease inoperating income was mainly due to the unfavorable impact of inflation and weak peso in Argentina.3TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary 2.Consolidated Financial Position for FY2025 first quarter Financial Position The financial position for FY2025 first quarter was as follows:Total assets increased by 3,923.0 billion yen,or 4.4%,to 94,037.3 billion yen at the end of FY2025 first quarter compared with the end of FY2024.Liabilities increased by 2,382.9 billion yen,or 4.3%,to 57,257.9 billion yen at the end of FY2025 first quarter compared with the end of FY2024.Shareholders equity increased by 1,540.0 billion yen,or 4.4%,to 36,779.3 billion yen at the end of FY2025 first quarter compared with the end of FY2024.Overview of Cash Flow Cash and cash equivalents decreased by 1,814.9 billion yen,or 19.3%,to 7,597.0 billion yen at the end of FY2025 first quarter compared with the end of FY2024.The increases or decreases for each cash flow activity compared with the previous fiscal year are as follows:Cash flows from operating activities Net cash flows from operating activities resulted in an increase in cash by 683.6 billion yen in FY2025 first quarter.Net cash provided by operating activities decreased by 674.5 billion yen from 1,358.2 billion yen in FY2024 first quarter.Cash flows from investing activities Net cash flows from investing activities resulted in a decrease in cash by 2,399.6 billion yen in FY2025 first quarter.Net cash used in investing activities increased by 1,282.5 billion yen from 1,117.0 billion yen in FY2024 first quarter.Cash flows from financing activities Net cash flows from financing activities resulted in a decrease in cash by 318.7 billion yen in FY2025 first quarter.Net cash used in financing activities increased by 225.9 billion yen from 92.8 billion yen in FY2024 first quarter.4TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial SummaryUnaudited Condensed Quarterly Consolidated Financial Statements and Notes to Unaudited Condensed Quarterly Consolidated Financial Statements 1.Unaudited Condensed Quarterly Consolidated Statement of Financial PositionYen in millions March 31,2024June 30,2024 Assets Current assets Cash and cash equivalents9,412,060 7,597,094Trade accounts and other receivables3,789,429 4,040,297Receivables related to financial services11,057,269 11,937,807Other financial assets4,702,168 6,029,041Inventories4,605,368 4,787,791Income tax receivable 116,886 163,593 Other current assets 1,031,098 1,168,228 Total current assets 34,714,279 35,723,850 Non-current assets Investments accounted for using the equity method 5,710,106 5,606,133 Receivables related to financial services 20,637,090 22,468,466 Other financial assets 11,390,559 11,696,448 Property,plant and equipment Land1,441,811 1,453,632Buildings5,884,749 6,033,632Machinery and equipment 16,469,032 17,123,075 Vehicles and equipment on operating leases 7,523,911 8,072,550 Construction in progress 1,040,188 1,186,723 Total property,plant and equipment,at cost 32,359,692 33,869,612 Less-Accumulated depreciation and impairment losses(18,101,905)(18,855,355)Total property,plant and equipment,net 14,257,788 15,014,257 Right of use assets 532,835 579,402 Intangible assets 1,355,326 1,356,564 Deferred tax assets 502,230 532,424 Other non-current assets 1,014,083 1,059,773 Total non-current assets 55,400,017 58,313,468 Total assets 90,114,296 94,037,319 5TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary Yen in millions March 31,2024 June 30,2024 Liabilities Current liabilities Trade accounts and other payables 5,251,357 5,146,699 Short-term and current portion of long-term debt 15,406,284 16,721,672 Accrued expenses 1,863,760 1,956,814 Other financial liabilities 1,700,137 1,896,316 Income taxes payable 1,224,542 689,698 Liabilities for quality assurance 1,836,314 1,929,945 Other current liabilities 1,895,516 1,864,135 Total current liabilities 29,177,909 30,205,278 Non-current liabilities Long-term debt 21,155,496 22,193,255 Other financial liabilities 495,814 571,385 Retirement benefit liabilities 1,077,962 1,115,760 Deferred tax liabilities 2,219,638 2,222,806 Other non-current liabilities 748,139 949,463 Total non-current liabilities 25,697,049 27,052,669 Total liabilities 54,874,958 57,257,947 Shareholders equity Common stock 397,050 397,050 Additional paid-in capital 491,802 491,081 Retained earnings 32,795,365 32,741,232 Other components of equity 4,503,756 5,364,252 Treasury stock(3,966,982)(3,255,871)Total Toyota Motor Corporation shareholders equity 34,220,991 35,737,743 Non-controlling interests 1,018,347 1,041,628 Total shareholders equity 35,239,338 36,779,372 Total liabilities and shareholders equity 90,114,296 94,037,319 6TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary 2.Unaudited Condensed Quarterly Consolidated Statement of Income and Unaudited Condensed Quarterly Consolidated Statement of Comprehensive Income Unaudited Condensed Quarterly Consolidated Statement of Income Yen in millions For the first quarter ended June 30,2023 For the first quarter ended June 30,2024 Sales revenues Sales of products 9,785,454 10,845,224 Financial services 761,377 992,656 Total sales revenues 10,546,831 11,837,879 Costs and expenses Cost of products sold 8,040,979 8,774,492 Cost of financial services 442,948 634,942 Selling,general and administrative 942,003 1,119,984 Total costs and expenses 9,425,931 10,529,418 Operating income 1,120,900 1,308,462 Share of profit(loss)of investments accounted for using the equity method 193,356 164,937 Other finance income 190,127 173,800 Other finance costs(23,339)(16,509)Foreign exchange gain(loss),net 246,776 236,999 Other income(loss),net(7,267)4,570 Income before income taxes 1,720,553 1,872,258 Income tax expense 393,663 508,435 Net income 1,326,890 1,363,823 Net income attributable to Toyota Motor Corporation 1,311,372 1,333,347 Non-controlling interests 15,518 30,476 Net income 1,326,890 1,363,823 Yen Earnings per share attributable to Toyota Motor Corporation Basic and Diluted 96.74 98.99 7TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary Unaudited Condensed Quarterly Consolidated Statement of Comprehensive Income Yen in millions For the first quarter ended June 30,2023 For the first quarter ended June 30,2024 Net income 1,326,890 1,363,823 Other comprehensive income,net of tax Items that will not be reclassified to profit(loss)Net changes in revaluation of financial assets measured at fair value through other comprehensive income 375,035 101,831 Remeasurements of defined benefit plans(3,074)(5,679)Share of other comprehensive income of equity method investees 60,922 5,634 Total of items that will not be reclassified to profit(loss)432,883 101,786 Items that may be reclassified subsequently to profit(loss)Exchange differences on translating foreign operations 760,182 628,685 Net changes in revaluation of financial assets measured at fair value through other comprehensive income(7,604)(21,714)Share of other comprehensive income of equity method investees 41,536 124,179 Total of items that may be reclassified subsequently to profit(loss)794,114 731,149 Total other comprehensive income,net of tax 1,226,997 832,936 Comprehensive income 2,553,887 2,196,759 Comprehensive income for the period attributable to Toyota Motor Corporation 2,500,599 2,139,964 Non-controlling interests 53,288 56,794 Comprehensive income 2,553,887 2,196,759 8TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary 3.Unaudited Condensed Quarterly Consolidated Statement of Changes in Equity For the first quarter ended June 30,2023 Yen in millions Common stock Additional paid-in capital Retained earnings Other components of equity Treasury stock Toyota Motor Corporation shareholders equity Non-controlling interests Total shareholders equity Balances at April 1,2023 397,050 498,728 28,343,296 2,836,195 (3,736,562)28,338,706 925,507 29,264,213 Comprehensive income Net income 1,311,372 1,311,372 15,518 1,326,890 Other comprehensive income,net of tax 1,189,227 1,189,227 37,770 1,226,997 Total comprehensive income 1,311,372 1,189,227 2,500,599 53,288 2,553,887 Transactions with owners and other Dividends paid (474,781)(474,781)(35,457)(510,238)Repurchase of treasury stock (34,377)(34,377)(34,377)Reissuance of treasury stock 263 649 911 911 Equity transactions and other (995)(995)1,003 8 Total transactions with owners and other (733)(474,781)(33,728)(509,242)(34,454)(543,696)Reclassification to retained earnings 99,799 (99,799)Balances at June 30,2023 397,050 497,995 29,279,685 3,925,624 (3,770,291)30,330,063 944,341 31,274,404 For the first quarter ended June 30,2024 Yen in millions Common stock Additional paid-in capital Retained earnings Other components of equity Treasury stock Toyota Motor Corporation shareholders equity Non-controlling interests Total shareholders equity Balances at April 1,2024 397,050 491,802 32,795,365 4,503,756 (3,966,982)34,220,991 1,018,347 35,239,338 Comprehensive income Net income 1,333,347 1,333,347 30,476 1,363,823 Other comprehensive income,net of tax 806,618 806,618 26,318 832,936 Total comprehensive income 1,333,347 806,618 2,139,964 56,794 2,196,759 Transactions with owners and other Dividends paid (606,338)(606,338)(43,568)(649,906)Repurchase of treasury stock (18,972)(18,972)(18,972)Reissuance of treasury stock 1,356 866 2,222 2,222 Retirement of treasury stock (1,953)(727,264)729,217 Equity transactions and other (125)(125)10,055 9,930 Total transactions with owners and other (721)(1,333,602)711,111 (623,212)(33,513)(656,725)Reclassification to retained earnings (53,878)53,878 Balances at June 30,2024 397,050 491,081 32,741,232 5,364,252 (3,255,871)35,737,743 1,041,628 36,779,372 9TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary 4.Unaudited Condensed Quarterly Consolidated Statement of Cash Flows Yen in millions For the first quarter ended June 30,2023 For the first quarter ended June 30,2024 Cash flows from operating activities Net income 1,326,890 1,363,823 Depreciation and amortization 505,809 575,278 Interest income and interest costs related to financial services,net(174,594)(197,906)Share of profit(loss)of investments accounted for using the equity method(193,356)(164,937)Income tax expense 393,663 508,435 Changes in operating assets and liabilities,and other(802,363)(1,024,898)Interest received 488,866 667,642 Dividends received 445,938 467,291 Interest paid(204,171)(324,593)Income taxes paid,net of refunds(428,464)(1,186,473)Net cash provided by(used in)operating activities 1,358,218 683,661 Cash flows from investing activities Additions to fixed assets excluding equipment leased to others(458,706)(405,618)Additions to equipment leased to others(636,023)(1,028,186)Proceeds from sales of fixed assets excluding equipment leased to others 8,165 10,098 Proceeds from sales of equipment leased to others 460,086 629,911 Additions to intangible assets(80,030)(63,862)Additions to public and corporate bonds and stocks(614,453)(1,137,458)Proceeds from sales of public and corporate bonds and stocks and upon maturity of public and corporate bonds 755,711 649,510 Other,net(551,805)(1,053,998)Net cash provided by(used in)investing activities(1,117,054)(2,399,603)Cash flows from financing activities Increase(decrease)in short-term debt 138,977 79,936 Proceeds from long-term debt 2,181,694 3,036,195 Payments of long-term debt(1,869,180)(2,774,003)Dividends paid to Toyota Motor Corporation common shareholders(474,781)(606,338)Dividends paid to non-controlling interests(35,457)(43,568)Reissuance(repurchase)of treasury stock(34,377)(18,972)Other,net 268 7,960 Net cash provided by(used in)financing activities(92,858)(318,790)Effect of exchange rate changes on cash and cash equivalents 241,175 219,765 Net increase(decrease)in cash and cash equivalents 389,481 (1,814,966)Cash and cash equivalents at beginning of period 7,516,966 9,412,060 Cash and cash equivalents at end of period 7,906,447 7,597,094 10TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary 5.Notes to Unaudited Condensed Quarterly Consolidated Financial Statements (1)Going Concern Assumption None 11TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary (2)Segment information ()Outline of reporting segments The operating segments reported below are the segments of Toyota for which separate financial information is available and for which operating income/loss amounts are evaluated regularly by executive management in deciding how to allocate resources and in assessing performance.The major portions of Toyotas operations on a worldwide basis are derived from the Automotive and Financial services business segments.The Automotive segment designs,manufactures and distributes sedans,minivans,compact cars,SUVs,trucks and related parts and accessories.The Financial services segment consists primarily of financing and vehicle leasing operations to assist in the merchandising of Toyotas products as well as other products.The All other segment includes telecommunications and other businesses.()Segment operating results For the first quarter ended June 30,2023:Yen in millions Automotive Financial services All other Elimination Consolidated Sales revenues Revenues from external customers 9,669,784 761,377 115,670 10,546,831 Inter-segment revenues and transfers 18,160 13,803 190,773 (222,736)Total 9,687,944 775,180 306,443 (222,736)10,546,831 Operating expenses 8,742,306 627,887 266,217 (210,479)9,425,931 Operating income 945,639 147,293 40,226 (12,256)1,120,900 For the first quarter ended June 30,2024:Yen in millions Automotive Financial services All other Elimination Consolidated Sales revenues Revenues from external customers 10,707,121 992,656 138,102 11,837,879 Inter-segment revenues and transfers 52,584 12,710 177,567 (242,861)Total 10,759,705 1,005,366 315,669 (242,861)11,837,879 Operating expenses 9,641,799 845,627 274,879 (232,888)10,529,418 Operating income 1,117,906 159,738 40,790 (9,973)1,308,462 Accounting policies applied by each segment are in conformity with those of Toyotas condensed quarterly consolidated financial statements.Transfers between segments are made in accordance with terms and conditions in the ordinary course of business.12TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary()Geographic information For the first quarter ended June 30,2023:Yen in millions Japan North America Europe Asia Other Elimination Consolidated Sales revenues Revenues from external customers 2,588,180 4,025,715 1,255,454 1,702,911 974,571 10,546,831 Inter-segment revenues and transfers 2,517,373 66,358 43,613 261,668 50,073(2,939,086)Total 5,105,553 4,092,074 1,299,067 1,964,579 1,024,644 (2,939,086)10,546,831 Operating expenses 4,403,604 3,972,416 1,215,976 1,778,377 939,236 (2,883,679)9,425,931 Operating income 701,949 119,658 83,090 186,202 85,408 (55,406)1,120,900 For the first quarter ended June 30,2024:Yen in millions Japan North America Europe Asia Other Elimination Consolidated Sales revenues Revenues from external customers 2,470,246 4,914,562 1,461,791 1,950,769 1,040,512 11,837,879 Inter-segment revenues and transfers 2,753,849 87,865 47,215 281,006 13,345(3,183,279)Total 5,224,094 5,002,427 1,509,006 2,231,775 1,053,857 (3,183,279)11,837,879 Operating expenses 4,342,815 4,917,366 1,384,330 1,985,829 1,012,062 (3,112,985)10,529,418 Operating income 881,279 85,061 124,676 245,946 41,795 (70,294)1,308,462 Other consists of Central and South America,Oceania,Africa and the Middle East.The above amounts are aggregated by region based on the location of the country where TMC or consolidated subsidiaries are located.Transfers between geographic areas are made in accordance with terms and conditions in the ordinary course of business.13TOYOTA MOTOR CORPORATION FY2025 First Quarter Financial Summary()Sales revenues by location of external customers Yen in millions For the first quarter ended June 30,2023 2024 Japan 1,888,484 1,738,709 North America 4,031,922 4,934,278 Europe 1,225,994 1,419,779 Asia 1,786,939 1,976,558 Other 1,613,493 1,768,555 Total10,546,83111,837,879Other consists of Central and South America,Oceania,Africa and the Middle East,etc.14Supplemental Material for Financial Results for FY2025 First Quarter(Consolidated)FY2024FY2025FY2025Forecast1Q2Q3Q4Q12 months1Q12 months(2023/4-6)(2023/7-9)(2023/10-12)(2024/1-3)(23/4-24/3)(2024/4-6)(24/4-25/3)2,3452,3792,4442,0959,2632,1861,0251,0901,1158134,042901Daihatsu&Hino190 232 247 65 734 141 1,3211,2891,3281,2825,2211,285Daihatsu&Hino118 139 134 114 506 106 North America5204824754991,976523Europe223161238224846215Asia4374984894531,876434Central andSouth America102105918538387Africa39443522140262,3262,4182,5512,1489,4432,2529,5005325405583631,9934211,870Daihatsu&Hino134 141 154 48 477 84 330 1,7941,8781,9931,7847,4501,8307,630Daihatsu&Hino69 74 64 64 271 61 270 North America6827037766552,8167052,870Europe2862703273081,1922911,160Asia4174784804281,8044361,940Central andSouth America128126120136510114500Oceania7687807431882300Africa5962554622149260Middle East143149151136579151600Other32321022,7512,8452,9682,52611,0902,63610,950 Total Retail Unit Sales (thousands of units)Toyota,Daihatsu and Hino Vehicle Production (thousands of units)(Japan)-including Daihatsu&Hino (Overseas)-including Daihatsu&Hino (Japan)-including Daihatsu&Hino (Overseas)-including Daihatsu&Hino Vehicle Sales (thousands of units)Supplemental 1Supplemental Material for Financial Results for FY2025 First Quarter(Consolidated)FY2024FY2025FY2025Forecast1Q2Q3Q4Q12 months1Q12 months(2023/4-6)(2023/7-9)(2023/10-12)(2024/1-3)(23/4-24/3)(2024/4-6)(24/4-25/3)137145148149145156150157159161157168(Note 1)10,546.811,434.712,041.111,072.645,095.311,837.8Japan5,105.55,404.75,626.84,883.521,020.75,224.0North America4,092.04,504.24,958.14,388.617,943.05,002.4Europe1,299.01,359.41,520.71,502.45,681.71,509.0Asia1,964.52,346.62,371.32,048.28,730.72,231.7Other1,024.61,165.1974.01,225.94,389.71,053.8Elimination-2,939.0-3,345.3-3,410.0-2,976.3-12,670.7-3,183.2 Business SegmentAutomotive9,687.910,477.311,065.710,035.141,266.210,759.7Financial Services775.1846.1922.3940.43,484.11,005.3All Other306.4319.2357.4385.01,368.1315.6Elimination-222.7-207.9-304.4-288.0-1,023.2-242.81,120.91,438.31,680.91,112.65,352.91,308.44,300.0(10.6)(12.6)(14.0)(10.0)(11.9)(11.1(9.3)Geographic InformationJapan701.9879.11,104.1799.03,484.2881.2North America119.6169.4227.4-10.2506.385.0Europe83.099.3103.1102.5388.0124.6Asia186.2224.9238.4215.9865.5245.9Other85.4104.29.2-0.6198.341.7Elimination-55.4-38.7-1.55.9-89.6-70.2 Business SegmentAutomotive945.61,301.61,472.6901.54,621.41,117.9Financial Services147.297.6172.0153.0570.0159.7All Other40.239.544.151.2175.240.7Elimination-12.2-0.4-7.96.8-13.8-9.9193.3185.1217.6166.9763.1164.9680.01,720.51,800.91,835.51,608.06,965.01,872.25,070.0(16.3)(15.7)(15.2)(14.5)(15.4)(15.8)(11.0)1,311.31,278.01,357.8997.64,944.91,333.33,570.0(12.4)(11.2)(11.3)(9.0)(11.0)(11.3)(7.8)405.4606.31,011.7(Note 2)Cash Dividends per Share(yen)304575 Payout Ratio(%)15.625.720.434.382.175.039.4231.018.9(Note 3)99.91,000.01,099.9(Note 3)(Note 4)384,95415,794,987 (Operating Income Ratio)(%)Operating Income(billions of yen)Share of Profit(Loss)of Investments Accounted for Using the Equity Method(billions of yen)380,793380,737379,659 Value of Shares Repurchased (billions of yen)actual purchase Yen to US Dollar Rate Yen to Euro Rate Sales Revenues(billions of yen)Geographic Information Number of Employees Foreign Exchange Rates Income before Income Taxes(billions of yen)Net Income Attributable toToyota Motor Corporation (billions of yen)(Income before Income Taxes Ratio)(%)Dividends (Net Income Ratio)(%)Cash Dividends(billions of yen)Number of Outstanding Shares (thousands)Value of Shares Repurchased (billions of yen)shareholder return16,314,98716,314,98716,314,987as premise:145as premise:16046,000.0381,576380,79316,314,98716,314,987Supplemental 2Supplemental Material for Financial Results for FY2025 First Quarter(Consolidated)FY2024FY2025FY2025Forecast1Q2Q3Q4Q12 months1Q12 months(2023/4-6)(2023/7-9)(2023/10-12)(2024/1-3)(23/4-24/3)(2024/4-6)(24/4-25/3)294.8314.0289.2304.21,202.3304.61,300.0(Note 5)298.3303.2302.9343.81,248.4352.31,380.0(Note 6)Japan140.7139.5133.6152.8566.7148.6North America79.484.591.4122.4377.8120.4Europe21.423.421.315.982.123.4Asia46.144.645.445.4181.648.3Other10.511.111.07.240.011.4366.6442.8486.9714.42,010.8368.02,150.0(Note 6)Japan144.0175.2174.0354.3847.6163.2North America154.1159.5182.6226.2722.5115.9Europe12.528.923.423.988.817.4Asia41.154.989.482.7268.252.6Other14.724.217.327.183.518.612,287.813,808.614,143.615,079.515,079.515,585.7(Note 7)17.916.416.912.015.815.26.86.26.54.66.05.8577165 Analysis of Consolidated Net Income Attributable to Toyota Motor Corporation for FY20251Q (billions of yen,approximately)(2024/4-6)Marketing Efforts70.0 Effects of Changes in Exchange Rates370.0 Cost Reduction Efforts55.0 From Engineering35.0 From Manufacturing and Logistics20.0-225.0 Other-82.5(Changes in Operating Income)187.5 Non-operating Income-35.8-28.4-129.721.9(Note 1)Shows the number of employees as of the end of each period(excluding loan employees from Toyota to outside Toyota and including loan employees from outside Toyota to Toyota)(Note 2)2Q=Interim Dividend,4Q=Year-end Dividend,FY=Annual Dividend(Note 3)Excluding shares constituting less than one unit that were purchased upon request and the commission fees incurred for the repurchase(Note 4)Shareholder return on Net Income for the period(Stated the maximum total purchase price for the repurchase of shares during the repurchase period,(Note 5)or the actual purchase price of shares repurchased after the completion of the repurchase period.)(Note 5)Figures for R&D expenses are R&D activity related expenditures incurred during the reporting period and do not conform to R&D Expenses on Toyotas Consolidated Statement of Income(Note 6)Figures for depreciation expenses and capital expenditures do not include vehicles in operating lease or right of use assets(Note 7)Cash and cash equivalents,time deposits,public and corporate bonds and its investment in monetary trust funds,excluding in each case those relating to financial services94,037.335,737.7(Changes in Net Income Attributable to Toyota Motor Corporation)Increase or Decrease in Expenses and Expense Reduction Efforts Share of Profit(Loss)of Investments Accounted for Using the Equity Method Income tax expense,Net Income Attributable to Non-controlling Interests Number of Associates and Joint Ventures Accounted for Using the Equity Method Number of Consolidated Subsidiaries (including Structured Entities)Geographic Information Depreciation Expenses (billions of yen)Geographic Information Total Assets(billions of yen)Total Liquid Assets(billions of yen)Return on Asset(%)Toyota Motor Corporation Shareholders Equity(billions of yen)90,114.280,131.2 R&D Expenses(billions of yen)Capital Expenditures(billions of yen)Return on Equity(%)84,232.132,561.631,893.134,220.983,661.390,114.234,220.930,330.0Cautionary Statement with Respect to Forward-Looking StatementsThis report contains forward-looking statements that reflect Toyotas plans and expectations.These forward-looking statements are not guarantees of future performance and involve known and unknown risks,uncertainties and other factors that may cause Toyotas actual results,performance,achievements or financial position to be materially different from any future results,performance,achievements or financial position expressed or implied by these forward-looking statements.These factors include,but are not limited to:(i)changes in economic conditions,market demand,and the competitive environment affecting the automotive markets in Japan,North America,Europe,Asia and other markets in which Toyota operates;(ii)fluctuations in currency exchange rates,particularly with respect to the value of the Japanese yen,the U.S.dollar,the euro,the Australian dollar,the Canadian dollar and the British pound,fluctuations in stock prices,and interest rates fluctuations;(iii)changes in funding environment in financial markets and increased competition in the financial services industry;(iv)Toyotas ability to market and distribute effectively;(v)Toyotas ability to realize production efficiencies and to implement capital expenditures at the levels and times planned by management;(vi)changes in the laws,regulations and government policies in the markets in which Toyota operates that affect Toyotas automotive operations,particularly laws,regulations and government policies relating to vehicle safety including remedial measures such as recalls,trade,environmental protection,vehicle emissions and vehicle fuel economy,as well as changes in laws,regulations and government policies that affect Toyotas other operations,including the outcome of current and future litigation and other legal proceedings,government proceedings andinvestigations;(vii)political and economic instability in the markets in which Toyota operates;(viii)Toyotas ability to timely develop and achieve market acceptance of new products that meet customer demand;(ix)any damage to Toyotas brand image;(x)Toyotas reliance on various suppliers for the provision of supplies;(xi)increases in prices of raw materials;(xii)Toyotas reliance on various digital and information technologies,as well as information security;(xiii)fuel shortages or interruptions in electricity,transportation systems,labor strikes,work stoppages or other interruptions to,or difficulties in,the employment of labor in the major markets where Toyota purchases materials,components and supplies for the production of its products or where its products are produced,distributed or sold;(xiv)the impact of natural calamities,epidemics,political and economic instability,fuel shortages or interruptions in social infrastructure,wars,terrorism and labor strikes,including their negative effect on Toyotas vehicle production and sales;(xv)the impact of climate change and the transition towards a low-carbon economy;and(xvi)the ability of Toyota to hire or retain sufficient human resources.A discussion of these and other factors which may affect Toyotas actual results,performance,achievements or financial position is contained in Toyotas annual report on Form 20-F,which is on file with the United States Securities and Exchange Commission.Supplemental 3
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Glencore Half-Year Production Report 2024 1 NEWS RELEASE Baar,30 July 2024 Half-Year Production Report 2024 Glencore Chief Executive Officer,Gary Nagle:“Across the portfolio,our full-year 2024 production guidance has been maintained and we have added additional steelmaking coal volumes in H2 2024,following successful closing of the EVR acquisition on 11 July 2024.As anticipated,2024 is expected to be a year of two halves,whereby the tracking of our year-to-date production versus guidance is expected to be caught up during the second half of the year.“Key anticipated H2 over H1 higher production levels include African Copper: c.30kt(recovery from H1 mill outage,access to higher grade ores and higher throughput rates at Mutanda),Antapaccay: c.8kt(recovery from H1 geotechnical event),Kazzinc: c.60kt(continued ramp-up at Zhairem)and Murrin Murrin: c.3kt(reflecting the timing of its annual shutdown in April).We have updated 2024 steelmaking coal production guidance to 19Mt-21Mt,via inclusion of 12Mt of expected EVR volumes in H2.In our energy coal business,the expected H2/H1 uplift is mainly from our Australian assets,reflecting longwall changes,improved equipment availability and reduced strip ratios.“As announced earlier this month,post the acquisition of EVR,we are now in the process of consulting with shareholders to assess their views regarding the potential demerger of our coal and carbon steel materials business.We expect to be able to announce the outcome of such engagement and the decision of the Board regarding the potential demerger alongside our interim results next week.”Production from own sources Total1 H1 2024 H1 2023 Change%Copper kt 462.6 488.0 (5)Cobalt kt 15.9 21.7 (27)Zinc kt 417.2 434.7 (4)Lead kt 87.9 87.4 1 Nickel kt 44.2 46.4 (5)Gold koz 369 369 Silver koz 9,117 9,446 (3)Ferrochrome kt 599 717 (16)Steelmaking coal mt 3.4 3.7 (8)Energy coal mt 47 51 (7)1.Controlled industrial assets and joint ventures only.Production is on a 100sis,except as stated later in this report.H1 production highlights On a like-for-like basis,removing 15,000 tonnes of Cobar(sold in June 2023)volumes from the prior period,own sourced copper production of 462,600 tonnes was 2low H1 2023.Own sourced cobalt production of 15,900 tonnes was 5,800 tonnes(27%)lower than H1 2023,reflecting planned lower run-rates at Mutanda in response to the current weak cobalt pricing environment and lower throughput and cobalt grades at KCC.Own sourced overall zinc production of 417,200 tonnes was 17,500 tonnes(4%)below H1 2023,mainly reflecting lower zinc tonnes from Antamina(34,900 tonnes),given its current year expected copper/zinc mine sequence,partly offset by the ramp up of Zhairem(24,800 tonnes).Own sourced zinc production from the zinc department itself(i.e.excluding Antamina)was 17,400 tonnes(5%)higher than H1 2023.Own sourced nickel production of 44,200 tonnes was 2,200 tonnes(5%)lower than H1 2023,reflecting Koniambos transition to care and maintenance(7,700 tonnes),partially offset by recovery from the INO supply chain constraints seen in the base period(4,200 tonnes)and higher production from Murrin Murrin(1,300 tonnes).Excluding Koniambo(KNS),own sourced nickel production of 39,200 tonnes was 5,500 tonnes(16%)higher than H1 2023.Attributable ferrochrome production of 599,000 tonnes was 118,000 tonnes(16%)below H1 2023,as the Rustenburg smelter remains idled in response to weak market conditions and pending an improved price/cost environment.Coal production of 50.6 million tonnes was 3.6 million tonnes(7%)lower than H1 2023,mainly reflecting the progressive impact of scheduled mine closures,the temporary impact of longwall moves in Australia in 2024 and export rail constraints in South Africa.HIGHLIGHTS continued Glencore Half-Year Production Report 2024 2 Production guidance Actual FY Previous guidance Current guidance 2024 weighting 2023 2024 2024 H1 H2 Copper kt 1,010 950-1,010 950-1,010 47S%Cobalt kt 41.3 35-40 35-40 42X%Zinc kt 919 900-950 900-950 45U%Nickel kt 98 80-90 80-90 1 46%1 54rrochrome kt 1,162 1,100-1,200 1,100-1,200 52H%Steelmaking coal mt 7.5 7-9 19-21 2 n.m.n.m.Energy coal mt 107 98-106 98-106 46T%1.KNS transitioned to care and maintenance during February 2024.The nickel production guidance above is presented ex-KNS and therefore excludes the 5.0kt produced by KNS in Q1 2024 prior to its transition to care and maintenance.2.Full year coal guidance has been updated to include circa 12mt(on a 100sis)in H2 2024 from the Elk Valley Resources(EVR)steelmaking coal business acquired on 11 July 2024.Other than forecast adjustments for the recently-acquired EVR operations,production guidance is unchanged from that announced in our full year 2023 Production Report released on 1 February 2024.Other matters H1 2024 copper,zinc,nickel and coal realised price and cost details are provided in their respective sections later in this report.We expect to report a meaningful H1 2024 reduction in net working capital,such contributing to an expected decline in reported Net Debt over the period.In May 2024,Glencore sold its stake in Volcan.On 5 July 2024,Glencore received final regulatory approval for the acquisition of a 77%interest in EVR from Teck Resources.The transaction closed on 11 July 2024.Our forward-looking production guidance has been adjusted to separate steelmaking and energy coal.Steelmaking coal guidance includes circa 12mt(on a 100sis)of forecast EVR production in H2 2024.For further information please contact:Investors Martin Fewings t: 41 41 709 2880 m: 41 79 737 5642 Media Charles Watenphul t: 41 41 709 2462 m: 41 79 904 3320 Glencore LEI:2138002658CPO9NBH955 Please refer to the end of this document for disclaimers including on forward-looking statements.Notes for Editors Glencore is one of the worlds largest global diversified natural resource companies and a major producer and marketer of more than 60 commodities that advance everyday life.Through a network of assets,customers and suppliers that spans the globe,we produce,process,recycle,source,market and distribute the commodities that support decarbonisation while meeting the energy needs of today.With over 150,000 employees and contractors and a strong footprint in over 35 countries in both established and emerging regions for natural resources,our marketing and industrial activities are supported by a global network of more than 50 offices.Glencores customers are industrial consumers,such as those in the automotive,steel,power generation,battery manufacturing and oil sectors.We also provide financing,logistics and other services to producers and consumers of commodities.Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining and Metals.We are an active participant in the Extractive Industries Transparency Initiative.We will support the global effort to achieve the goals of the Paris Agreement through our efforts to decarbonise our own operational footprint.We believe that we should take a holistic approach and have considered our commitment through the lens of our global industrial emissions.Against a restated 2019 baseline,we are targeting to reduce our Scope 1,2 and 3 industrial emissions by 15%by the end of 2026,25%by the end of 2030,50%by the end of 2035 and we have an ambition to achieve net zero industrial emissions by the end of 2050,subject to a supportive policy environment.For more information see our 2024-2026 Climate Action Transition Plan and the About our emissions calculation and reporting section in our 2023 Annual Report,available on our website at AND MINERALS Glencore Half-Year Production Report 2024 PRODUCTION DATA Production from own sources Copper assets1 H1 2024 H1 2023 Changerican Copper(KCC,Mutanda)Copper metal kt 100.6 120.2 (16)Cobalt2 kt 14.4 20.4 (29)Collahuasi3 Copper in concentrates kt 125.0 114.4 9 Silver in concentrates koz 1,857 1,612 15 Gold in concentrates koz 23 20 15 Antamina4 Copper in concentrates kt 76.3 68.3 12 Zinc in concentrates kt 42.2 77.1 (45)Silver in concentrates koz 1,822 1,950 (7)South America(Antapaccay,Lomas Bayas)Copper metal kt 37.2 29.8 25 Copper in concentrates kt 69.4 82.7 (16)Gold in concentrates and in dor koz 38 56 (32)Silver in concentrates and in dor koz 520 609 (15)Cobar Copper in concentrates kt 15.0 (100)Silver in concentrates koz 180 (100)Total Copper department Copper kt 408.5 430.4 (5)Cobalt kt 14.4 20.4 (29)Zinc kt 42.2 77.1 (45)Gold koz 61 76 (20)Silver koz 4,199 4,351 (3)Production from own sources Zinc assets1 H1 2024 H1 2023 Change%Kazzinc Zinc metal kt 64.0 49.5 29 Zinc in concentrates kt 32.8 22.5 46 Lead metal kt 16.1 8.8 83 Lead in concentrates kt 2.3 7.5 (69)Copper metal5 kt 9.0 5.0 80 Gold koz 303 288 5 Silver koz 1,551 1,107 40 Silver in concentrates koz 40 263 (85)Australia(Mount Isa,Townsville,McArthur River)Zinc in concentrates kt 260.3 263.4 (1)Copper metal kt 28.7 35.1 (18)Lead in concentrates kt 69.5 71.1 (2)Silver koz 226 338 (33)Silver in concentrates koz 2,516 2,421 4 North America(Kidd)Zinc in concentrates kt 17.9 22.2 (19)Copper in concentrates kt 9.6 11.4 (16)Silver in concentrates koz 483 869 (44)Total Zinc department Zinc kt 375.0 357.6 5 Lead kt 87.9 87.4 1 Copper kt 47.3 51.5 (8)Gold koz 303 288 5 Silver koz 4,816 4,998 (4)METALS AND MINERALS continued Glencore Half-Year Production Report 2024 Production from own sources Nickel assets1 H1 2024 H1 2023 Change%Integrated Nickel Operations(INO)(Sudbury,Raglan,Nikkelverk)Nickel metal kt 22.3 18.1 23 Copper metal kt 5.1 3.9 31 Copper in concentrates kt 1.7 2.2 (23)Cobalt metal kt 0.3 0.2 50 Gold koz 5 5 Silver koz 102 97 5 Platinum koz 14 12 17 Palladium koz 33 33 Rhodium koz 1 1 Murrin Murrin Nickel metal kt 16.9 15.6 8 Cobalt metal kt 1.2 1.1 9 Koniambo Nickel in ferronickel kt 5.0 12.7 (61)Total Nickel department Nickel kt 44.2 46.4 (5)Copper kt 6.8 6.1 11 Cobalt kt 1.5 1.3 15 Gold koz 5 5 Silver koz 102 97 5 Platinum koz 14 12 17 Palladium koz 33 33 Rhodium koz 1 1 Production from own sources Ferroalloys assets1 H1 2024 H1 2023 Changerrochrome6 kt 599 717 (16)Vanadium Pentoxide mlb 8.0 9.3 (14)Total production Custom metallurgical assets1 H1 2024 H1 2023 Change%Copper(Altonorte,Pasar,Horne,CCR)Copper metal kt 245.2 251.4 (2)Copper anode kt 215.9 225.3 (4)Zinc(Portovesme,Asturiana,Nordenham,Northfleet,CEZ Refinery)Zinc metal kt 440.1 345.3 27 Lead metal kt 97.2 123.7 (21)1 Controlled industrial assets and joint ventures only.Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.2 Cobalt contained in concentrates and hydroxides.3 The Groups pro-rata share of Collahuasi production(44%).4 The Groups pro-rata share of Antamina production(33.75%).5 Copper metal includes copper contained in copper concentrates and blister.6 The Groups attributable 79.5%share of the Glencore-Merafe Chrome Venture.METALS AND MINERALS continued Glencore Half-Year Production Report 2024 OPERATING HIGHLIGHTS Copper assets On a like-for-like basis,removing 15,000 tonnes of Cobar(sold in June 2023)volumes from the prior period,own sourced copper production of 462,600 tonnes was 2low H1 2023.Own sourced cobalt production of 15,900 tonnes was 5,800 tonnes(27%)lower than H1 2023,reflecting planned lower run-rates at Mutanda in response to the current weak cobalt pricing environment and lower throughput and cobalt grades at KCC.African Copper Own sourced copper production of 100,600 tonnes was 19,600 tonnes(16%)lower than H1 2023,mainly reflecting lower grades from some historical stock depletion and unplanned mill downtime.The planned ramp up of tailings reprocessing at KCC,which would compensate for such,has been delayed to H2 2024.Own sourced cobalt production of 14,400 tonnes was 6,000 tonnes(29%)lower than H1 2023,reflecting planned lower run rates at Mutanda in response to the current weak cobalt pricing environment and lower throughput and cobalt grades at KCC.Collahuasi Attributable copper production of 125,000 tonnes was 10,600 tonnes(9%)higher than H1 2023,primarily due to higher feed grades,as well as throughput post commissioning of the fifth ball mill.Antamina Attributable copper production of 76,300 tonnes was 8,000 tonnes(12%)higher than H1 2023,mainly reflecting weather-related production interruptions in March 2023 and current year higher copper grades and mill throughput.Attributable zinc production of 42,200 tonnes was 34,900 tonnes(45%)lower than H1 2023,reflecting the expected mining sequence,exhibiting higher copper/lower zinc grades.South America Copper production of 106,600 tonnes was 5,900 tonnes(5%)lower than H1 2023,reflecting a geotechnical event and subsequent mine stabilisation activities at Antapaccay.Copper custom metallurgical assets Copper anode production of 215,900 tonnes was 9,400 tonnes(4%)lower than H1 2023,reflecting planned maintenance shutdown activities at Pasar.Copper cathode production of 245,200 tonnes was broadly in line with H1 2023 production.Copper realised price The H1 2024 average realised price for copper was$394c/lb($8,686/t).Copper mine costs The H1 2024 copper net unit cash cost is expected to be c.$168c/lb.Our earlier full-year 2024 unit cost guidance of$150c/lb is now revised to c.$163c/lb,including to reflect the impact of lower treatment charges(TCs)on our metallurgical asset credits and lower cobalt volumes and price realisations.Estimated unit cost outcomes across H1 and H2 are influenced by the guided H1/H2 uneven copper and cobalt production splits of 47%/53%and 42%/58%,respectively.Cobalt prices and payabilities While average cobalt hydroxide payabilities were steady at c.57%in H1 2024 compared to H1 2023,the average cobalt metal price declined 20%to$12/lb over the equivalent period.Zinc assets Own sourced overall zinc production of 417,200 tonnes was 17,500 tonnes(4%)below H1 2023,mainly reflecting lower zinc tonnes from Antamina(34,900 tonnes),given its current year expected copper/zinc mine sequence,partly offset by the ramp up of Zhairem(24,800 tonnes).Own sourced zinc production from the zinc department itself(i.e.excluding Antamina)was 17,400 tonnes(5%)higher than H1 2023.Kazzinc Own sourced zinc production of 96,800 tonnes was 24,800 tonnes(34%)higher than H1 2023,reflecting Zhairems ramp up.Own sourced lead production of 18,400 tonnes was 2,100 tonnes(13%)higher than H1 2023,also due to Zhairems ramp up.Own sourced copper production of 9,000 tonnes was 4,000 tonnes(80%)higher than H1 2023,due to an unscheduled furnace shutdown at the copper smelter in the base period.Australia Zinc production of 260,300 tonnes was broadly in line with H1 2023,reflecting lower production from McArthur River(13,400 tonnes)due to a tropical cyclone in Q1 2024,offset by higher production from Mount Isa(10,300 tonnes),largely due to heavy rains in the base period.Lead production of 69,500 tonnes was broadly in line with H1 2023.Copper production of 28,700 tonnes was 6,400 tonnes(18%)lower than H1 2023,reflecting production disruptions due to heavy rain.METALS AND MINERALS continued Glencore Half-Year Production Report 2024 North America Zinc production of 17,900 tonnes was 4,300 tonnes(19%)lower than H1 2023,due to lower grades,consistent with the mining plan.Zinc custom metallurgical assets Zinc metal production of 440,100 tonnes was 94,800 tonnes(27%)higher than H1 2023,mainly reflecting consolidation of the CEZ business from April 2023 and incremental tonnes from the restart of Nordenham Zinc in February 2024.Lead metal production of 97,200 tonnes was 26,500 tonnes(21%)lower than H1 2023,reflecting a temporary furnace shutdown at Nordenham Lead and Portovesmes lead line remaining in care and maintenance.Zinc sales H1 2024 sales were 25,000 tonnes lower than production,primarily reflecting logistical challenges in Kazakhstan.Zinc realised price The H1 2024 average realised price for zinc was$118.1c/lb($2,603/t).Zinc mine costs The H1 2024 zinc net unit cash cost is expected to be c.$30.7c/lb.Our earlier full-year 2024 unit cost guidance of$5c/lb is now revised to c.$18.6c/lb,including to reflect the impact of lower TCs on our metallurgical asset credits.Estimated unit cost outcomes across H1 and H2 are heavily influenced by the guided H1/H2 uneven production split of 45%/55%.Nickel assets Own sourced nickel production of 44,200 tonnes was 2,200 tonnes(5%)lower than H1 2023,mainly reflecting Koniambos transition to care and maintenance(7,700 tonnes),partially offset by recovery from the INO supply chain constraints seen in the base period(4,200 tonnes)and higher production from Murrin Murrin(1,300 tonnes).Excluding Koniambo,own sourced nickel production of 39,200 tonnes was 5,500 tonnes(16%)higher than H1 2023.Integrated Nickel Operations(INO)Own sourced nickel production of 22,300 tonnes was 4,200 tonnes(23%)higher than H1 2023,reflecting that the base period endured supply chain constraints and follow-on impacts from the Raglan strike in 2022.Total refinery production of 47,200 tonnes was in line with H1 2023.Murrin Murrin Own sourced nickel production of 16,900 tonnes was 1,300 tonnes(8%)higher than H1 2023,due to variations in the own sourced/third party feed mix and longer than planned maintenance in the base period.Nickel realised price The H1 2024 average realised price for nickel was$784c/lb($17,284/t).Nickel earnings KNSs operating losses to be reported in Adjusted EBITDA in H1 2024 are expected to be c.$100m,including in relation to its transition to care and maintenance in Q1 2024.Ferroalloys assets Attributable ferrochrome production of 599,000 tonnes was 118,000 tonnes(16%)below H1 2023,as the Rustenburg smelter remains idled in response to weak market conditions and pending an improved price/cost environment.ENERGY AND STEELMAKING COAL Glencore Half-Year Production Report 2024 7 Coal assets1 H1 2024 H1 2023 Change%Australian steelmaking coal mt 3.4 3.7 (8)Australian semi-soft coal mt 1.4 1.9 (26)Australian thermal coal(export)mt 24.2 26.7 (9)Australian thermal coal(domestic)mt 3.7 3.2 16 South African thermal coal(export)mt 5.3 6.6 (20)South African thermal coal(domestic)mt 2.6 1.9 37 Cerrejn thermal coal mt 10.0 10.2 (2)Total Coal department mt 50.6 54.2 (7)Oil assets(non-operated)H1 2024 H1 2023 Change%Glencore entitlement interest basis Equatorial Guinea kboe 1,986 1,996 (1)Cameroon kbbl 168 354 (53)Total Oil department kboe 2,154 2,350 (8)1 Controlled industrial assets and joint ventures only.Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.OPERATING HIGHLIGHTS Coal assets Coal production of 50.6 million tonnes was 3.6 million tonnes(7%)lower than H1 2023,mainly reflecting the progressive impact of scheduled mine closures,the temporary impact of longwall moves in Australia in 2024 and export rail constraints in South Africa.Australian steelmaking Production of 3.4 million tonnes was 0.3 million tonnes(8%)lower than H1 2023.The base period included 0.3 million tonnes from Newlands mine,prior to its closure in February 2023.Australian thermal and semi-soft Production of 29.3 million tonnes was 2.5 million tonnes(8%)lower than H1 2023,reflecting the closure of the Integra mine in June 2024 and the base period inclusion of 1.4 million tonnes from Liddell mine,prior to its closure in July 2023.The current period also included longwall moves at Ulan,while mine sequencing at HVO and Bulga reflected temporarily elevated strip ratios,with higher production expected in H2 2024.South African thermal Production of 7.9 million tonnes was 0.6 million tonnes(7%)lower than H1 2023,mainly reflecting various measures implemented in 2023-24 to progressively reduce coal production due to export rail capacity constraints.As and when additional rail capacity is restored,the potential exists to increase production rates.Cerrejn Production of 10.0 million tonnes was broadly in line with H1 2023.Coal realised prices/portfolio mix adjustment Steelmaking coal:the average prime hard coking coal(PHCC)settlement price for H1 2024 was$275.1/t.After applying a portfolio mix adjustment(component of our regular coal cash flow modelling guidance)of c.$19.9/t to reflect,e.g.,movements in the pricing of non-PHCC quality coals,an average steelmaking coal realised price of c.$255.2/t can be applied across all first half steelmaking coal sales volumes.Energy coal:the average Newcastle coal(NEWC)settlement price for H1 2024 was$130.7/t.After applying a portfolio mix adjustment(component of our regular coal cash flow modelling guidance)of c.$27.5/t to reflect,e.g.,movements in the pricing of non-NEWC quality coals and impact of JPU fixed-price contracts,an average energy-equivalent realised price of c.$103.2/t can be applied across all first half energy coal sales volumes(including semi-soft coal).Coal costs Steelmaking coal:The H1 2024 average steelmaking coal free on board(FOB)unit cash cost is estimated at c.$139.9/t.Full year 2024 average steelmaking coal portfolio FOB unit cash cost(including EVR for H2 2024)is guided at c.$130.1/t.Energy coal:The H1 2024 average energy coal portfolio FOB unit cash cost is estimated at c.$72.6/t.Full year 2024 average energy coal portfolio FOB unit cash cost is guided at c.$69.1/t.Oil assets Exploration and production(non-operated)Entitlement interest oil production of 2.2 million barrels of oil equivalent was 0.2 million boe(8%)lower than H1 2023,largely due to natural field decline at Bolongo in Cameroon.SELECTED AVERAGE COMMODITY PRICES Glencore Half-Year Production Report 2024 8 MARKET CONDITIONS Selected average commodity prices Spot 30 Jun 2024 Spot 31 Dec 2023 Average H1 2024 Average H1 2023 Change in average%S&P GSCI Industrial Metals Index 460 423 441 443 S&P GSCI Energy Index 271 245 265 258 3 LME(cash)copper price($/t)9,456 8,464 9,093 8,709 4 LME(cash)zinc price($/t)2,879 2,640 2,640 2,839 (7)LME(cash)lead price($/t)2,177 2,035 2,121 2,127 LME(cash)nickel price($/t)17,040 16,375 17,517 24,185 (28)Gold price($/oz)2,327 2,063 2,207 1,934 14 Silver price($/oz)29 24 26 23 13 Fastmarkets cobalt standard grade,Rotterdam($/lb)(low-end)11 13 12 15 (20)Ferro-chrome 50%Cr import,CIF main Chinese ports,contained Cr(/lb)100 96 98 106 (8)Iron ore(Platts 62R North China)price($/DMT)101 130 112 112 Coal API4(FOB South Africa)($/t)106 98 101 129 (22)Coal Newcastle(6,000 kcal/kg)($/t)132 149 131 204 (36)Coal HCC(Aus premium hard coking coal)($/t)249 326 277 297 (7)Dutch TTF Natural Gas 1-Month Forward($/MWh)37 35 32 48 (33)Oil price Brent($/bbl)86 77 83 80 4 PRODUCTION BY QUARTER Q2 2023 TO Q2 2024 Glencore Half-Year Production Report 2024 9 Metals and minerals PRODUCTION FROM OWN SOURCES TOTAL1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2024 H1 2023 Change H1 24 vs H1 23%Change Q2 24 vs Q2 23%Copper kt 243.9 247.8 274.3 239.7 222.9 462.6 488.0 (5)(9)Cobalt kt 11.2 10.8 8.8 6.6 9.3 15.9 21.7 (27)(17)Zinc kt 229.4 237.4 246.4 205.6 211.6 417.2 434.7 (4)(8)Lead kt 48.1 46.2 49.1 43.8 44.1 87.9 87.4 1 (8)Nickel kt 25.5 22.0 29.2 23.8 20.4 44.2 46.4 (5)(20)Gold koz 182 175 203 201 168 369 369 (8)Silver koz 4,921 5,064 5,501 4,520 4,597 9,117 9,446 (3)(7)Ferrochrome kt 317 156 289 297 302 599 717 (16)(5)Coal mt 27.3 29.7 29.7 26.6 24.0 50.6 54.2 (7)(12)Oil(entitlement interest basis)kboe 1,142 1,164 1,229 1,153 1,001 2,154 2,350 (8)(12)PRODUCTION FROM OWN SOURCES COPPER ASSETS1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2024 H1 2023 Change H1 24 vs H1 23%Change Q2 24 vs Q2 23rican Copper(KCC,Mutanda)KCC Copper metal kt 48.7 59.9 44.2 46.9 41.6 88.5 102.3 (13)(15)Cobalt2 kt 7.6 7.4 5.6 4.9 6.8 11.7 14.6 (20)(11)Mutanda Copper metal kt 9.7 9.0 8.2 5.0 7.1 12.1 17.9 (32)(27)Cobalt2 kt 3.0 3.0 2.4 1.0 1.7 2.7 5.8 (53)(43)Total Copper metal kt 58.4 68.9 52.4 51.9 48.7 100.6 120.2 (16)(17)Total Cobalt2 kt 10.6 10.4 8.0 5.9 8.5 14.4 20.4 (29)(20)Collahuasi3 Copper in concentrates kt 57.3 66.1 71.7 64.7 60.3 125.0 114.4 9 5 Silver in concentrates koz 888 1,242 1,178 911 946 1,857 1,612 15 7 Gold in concentrates koz 11 9 12 10 13 23 20 15 18 Antamina4 Copper in concentrates kt 36.3 34.5 39.6 35.9 40.4 76.3 68.3 12 11 Zinc in concentrates kt 45.3 42.1 37.4 21.5 20.7 42.2 77.1 (45)(54)Silver in concentrates koz 1,027 918 1,044 806 1,016 1,822 1,950 (7)(1)South America(Antapaccay,Lomas Bayas)Antapaccay Copper in concentrates kt 45.9 33.8 56.5 42.9 26.5 69.4 82.7 (16)(42)Gold in concentrates koz 35 16 25 30 8 38 56 (32)(77)Silver in concentrates koz 358 235 423 343 177 520 609 (15)(51)Lomas Bayas Copper metal kt 11.9 15.5 20.5 18.5 18.7 37.2 29.8 25 57 Total Copper metal kt 11.9 15.5 20.5 18.5 18.7 37.2 29.8 25 57 Total Copper in concentrates kt 45.9 33.8 56.5 42.9 26.5 69.4 82.7 (16)(42)Total Gold in concentrates and in dor koz 35 16 25 30 8 38 56 (32)(77)Total Silver in concentrates and in dor koz 358 235 423 343 177 520 609 (15)(51)Australia(Cobar)Cobar Copper in concentrates kt 6.3 15.0 (100)(100)Silver in concentrates koz 80 180 (100)(100)Total Copper department Copper kt 216.1 218.8 240.7 213.9 194.6 408.5 430.4 (5)(10)Cobalt kt 10.6 10.4 8.0 5.9 8.5 14.4 20.4 (29)(20)Zinc kt 45.3 42.1 37.4 21.5 20.7 42.2 77.1 (45)(54)Gold koz 46 25 37 40 21 61 76 (20)(54)Silver koz 2,353 2,395 2,645 2,060 2,139 4,199 4,351 (3)(9)PRODUCTION BY QUARTER Q2 2023 TO Q2 2024 continued Glencore Half-Year Production Report 2024 10 Metals and minerals PRODUCTION FROM OWN SOURCES ZINC ASSETS1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2024 H1 2023 Change H1 24 vs H1 23%Change Q2 24 vs Q2 23%Kazzinc Zinc metal kt 24.6 31.6 32.7 32.3 31.7 64.0 49.5 29 29 Zinc in concentrates kt 13.1 15.8 21.8 16.3 16.5 32.8 22.5 46 26 Lead metal kt 4.0 5.2 4.7 8.6 7.5 16.1 8.8 83 88 Lead in concentrates kt 4.0 3.3 6.1 1.7 0.6 2.3 7.5 (69)(85)Copper metal5 kt 1.6 4.4 5.4 4.4 4.6 9.0 5.0 80 188 Gold koz 134 147 163 158 145 303 288 5 8 Silver koz 414 760 860 762 789 1,551 1,107 40 91 Silver in concentrates koz 123 143 142 27 13 40 263 (85)(89)Kazzinc total smelter production including third party feed Zinc metal kt 61.5 66.2 71.1 64.7 68.0 132.7 125.0 6 11 Lead metal kt 21.8 27.7 24.6 29.4 27.9 57.3 45.7 25 28 Copper metal kt 5.8 11.8 13.0 12.8 12.3 25.1 17.3 45 112 Gold koz 270 275 318 273 249 522 531 (2)(8)Silver koz 4,716 4,355 3,634 3,524 3,203 6,727 9,577 (30)(32)Australia(Mount Isa,McArthur River)Mount Isa Zinc in concentrates kt 68.5 76.0 81.1 63.7 76.7 140.4 130.1 8 12 Copper metal kt 18.6 16.1 17.9 13.7 15.0 28.7 35.1 (18)(19)Lead in concentrates kt 27.8 25.4 24.7 21.2 22.9 44.1 46.6 (5)(18)Silver koz 158 134 143 105 121 226 338 (33)(23)Silver in concentrates koz 1,086 1,056 987 842 817 1,659 1,794 (8)(25)Mount Isa,Townsville total production including third party feed Copper metal kt 50.5 53.0 49.4 45.5 53.2 98.7 94.8 4 5 Gold koz 35 46 50 36 59 95 72 32 69 Silver koz 386 482 475 303 862 1,165 794 47 123 McArthur River Zinc in concentrates kt 66.4 63.1 65.8 61.3 58.6 119.9 133.3 (10)(12)Lead in concentrates kt 12.3 12.3 13.6 12.3 13.1 25.4 24.5 4 7 Silver in concentrates koz 261 262 403 374 483 857 627 37 85 Total Zinc in concentrates kt 134.9 139.1 146.9 125.0 135.3 260.3 263.4 (1)Total Copper kt 18.6 16.1 17.9 13.7 15.0 28.7 35.1 (18)(19)Total Lead in concentrates kt 40.1 37.7 38.3 33.5 36.0 69.5 71.1 (2)(10)Total Silver koz 158 134 143 105 121 226 338 (33)(23)Total Silver in concentrates koz 1,347 1,318 1,390 1,216 1,300 2,516 2,421 4 (3)North America Kidd Zinc in concentrates kt 11.5 8.8 7.6 10.5 7.4 17.9 22.2 (19)(36)Copper in concentrates kt 4.6 5.1 6.1 4.5 5.1 9.6 11.4 (16)11 Silver in concentrates koz 477 254 255 294 189 483 869 (44)(60)Total Zinc department Zinc kt 184.1 195.3 209.0 184.1 190.9 375.0 357.6 5 4 Lead kt 48.1 46.2 49.1 43.8 44.1 87.9 87.4 1 (8)Copper kt 24.8 25.6 29.4 22.6 24.7 47.3 51.5 (8)Gold koz 134 147 163 158 145 303 288 5 8 Silver koz 2,519 2,609 2,790 2,404 2,412 4,816 4,998 (4)(4)PRODUCTION BY QUARTER Q2 2023 TO Q2 2024 continued Glencore Half-Year Production Report 2024 11 Metals and minerals PRODUCTION FROM OWN SOURCES NICKEL ASSETS1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2024 H1 2023 Change H1 24 vs H1 23%Change Q2 24 vs Q2 23%Integrated Nickel Operations(Sudbury,Raglan,Nikkelverk)Nickel metal kt 10.0 7.3 13.7 10.6 11.7 22.3 18.1 23 17 Nickel in concentrates kt 0.1 0.1 n.m.n.m.Copper metal kt 1.9 2.2 2.8 2.4 2.7 5.1 3.9 31 42 Copper in concentrates kt 1.1 1.2 1.4 0.8 0.9 1.7 2.2 (23)(18)Cobalt metal kt 0.1 0.2 0.2 0.1 0.3 0.2 50 Gold koz 2 3 3 3 2 5 5 Silver koz 49 60 66 56 46 102 97 5 (6)Platinum koz 6 5 7 6 8 14 12 17 33 Palladium koz 17 14 18 15 18 33 33 6 Rhodium koz 1 1 1 1 1 n.m.Integrated Nickel Operations total production including third party feed Nickel metal kt 23.2 23.9 24.0 23.8 23.4 47.2 47.1 1 Nickel in concentrates kt 0.1 0.1 0.1 0.1 0.1 Copper metal kt 5.0 4.8 5.1 4.3 4.7 9.0 10.2 (12)(6)Copper in concentrates kt 1.6 1.1 1.9 0.8 2.2 3.0 3.2 (6)38 Cobalt metal kt 0.8 0.8 1.0 0.8 0.8 1.6 1.7 (6)Gold koz 8 5 8 6 7 13 14 (7)(13)Silver koz 89 110 122 108 96 204 175 17 8 Platinum koz 13 11 15 14 18 32 25 28 38 Palladium koz 54 43 58 51 62 113 100 13 15 Rhodium koz 1 1 1 1 2 2 Murrin Murrin Total Nickel metal kt 7.8 7.5 8.0 8.2 8.7 16.9 15.6 8 12 Total Cobalt metal kt 0.5 0.4 0.6 0.5 0.7 1.2 1.1 9 40 Murrin Murrin total production including third party feed Total Nickel metal kt 9.0 8.6 9.9 8.9 9.7 18.6 17.9 4 8 Total Cobalt metal kt 0.6 0.4 0.7 0.7 0.6 1.3 1.3 Koniambo Nickel in ferronickel kt 7.7 7.1 7.4 5.0 5.0 12.7 (61)(100)Total Nickel department Nickel kt 25.5 22.0 29.2 23.8 20.4 44.2 46.4 (5)(20)Copper kt 3.0 3.4 4.2 3.2 3.6 6.8 6.1 11 20 Cobalt kt 0.6 0.4 0.8 0.7 0.8 1.5 1.3 15 33 Gold koz 2 3 3 3 2 5 5 Silver koz 49 60 66 56 46 102 97 5 (6)Platinum koz 6 5 7 6 8 14 12 17 33 Palladium koz 17 14 18 15 18 33 33 6 Rhodium koz 1 1 1 1 1 n.m.PRODUCTION BY QUARTER Q2 2023 TO Q2 2024 continued Glencore Half-Year Production Report 2024 12 Metals and minerals PRODUCTION FROM OWN SOURCES FERROALLOYS ASSETS1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2024 H1 2023 Change H1 24 vs H1 23%Change Q2 24 vs Q2 23rrochrome6 kt 317 156 289 297 302 599 717 (16)(5)Vanadium pentoxide mlb 3.9 5.6 4.6 5.3 2.7 8.0 9.3 (14)(31)TOTAL PRODUCTION CUSTOM METALLURGICAL ASSETS1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2024 H1 2023 Change H1 24 vs H1 23%Change Q2 24 vs Q2 23%Copper(Altonorte,Pasar,Horne,CCR)Copper metal kt 123.2 125.7 130.2 129.5 115.7 245.2 251.4 (2)(6)Copper anode kt 105.4 122.8 95.2 106.5 109.4 215.9 225.3 (4)4 Zinc(Portovesme,Asturiana,Nordenham,Northfleet,CEZ Refinery)Zinc metal kt 204.7 200.5 206.8 210.1 230.0 440.1 345.3 27 12 Lead metal kt 58.7 60.9 60.0 48.0 49.2 97.2 123.7 (21)(16)1 Controlled industrial assets and joint ventures only.Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.2 Cobalt contained in concentrates and hydroxides.3 The Groups pro-rata share of Collahuasi production(44%).4 The Groups pro-rata share of Antamina production(33.75%).5 Copper metal includes copper contained in copper concentrates and blister.6 The Groups attributable 79.5%share of the Glencore-Merafe Chrome Venture.PRODUCTION BY QUARTER Q2 2023 TO Q2 2024 continued Glencore Half-Year Production Report 2024 13 Energy and steelmaking coal PRODUCTION FROM OWN SOURCES COAL ASSETS1 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2024 H1 2023 Change H1 24 vs H1 23%Change Q2 24 vs Q2 23%Australian steelmaking coal mt 1.7 1.5 2.3 1.4 2.0 3.4 3.7 (8)18 Australian semi-soft coal mt 0.8 0.9 1.3 0.8 0.6 1.4 1.9 (26)(25)Australian thermal coal(export)mt 13.8 14.3 14.2 13.1 11.1 24.2 26.7 (9)(20)Australian thermal coal(domestic)mt 1.7 2.0 1.8 2.0 1.7 3.7 3.2 16 South African thermal coal(export)mt 3.4 3.8 3.3 2.8 2.5 5.3 6.6 (20)(26)South African thermal coal(domestic)mt 1.1 1.0 1.2 1.2 1.4 2.6 1.9 37 27 Cerrejn thermal coal mt 4.8 6.2 5.6 5.3 4.7 10.0 10.2 (2)(2)Total Coal department mt 27.3 29.7 29.7 26.6 24.0 50.6 54.2 (7)(12)OIL ASSETS(NON-OPERATED)Q2 2023 Q3 2023 Q4 2023 Q1 2024 Q2 2024 H1 2024 H1 2023 Change H1 24 vs H1 23%Change Q2 24 vs Q2 23%Glencore entitlement interest basis Equatorial Guinea kboe 979 1,030 1,109 1,072 914 1,986 1,996 (1)(7)Cameroon kbbl 163 134 120 81 87 168 354 (53)(47)Total Oil department kboe 1,142 1,164 1,229 1,153 1,001 2,154 2,350 (8)(12)Gross basis Equatorial Guinea kboe 5,241 5,680 6,399 5,923 4,911 10,834 11,268 (4)(6)Cameroon kbbl 410 367 302 266 241 507 893 (43)(41)Total Oil department kboe 5,651 6,047 6,701 6,189 5,152 11,341 12,161 (7)(9)1 Controlled industrial assets and joint ventures only.Production is on a 100sis,except for joint ventures,where the Groups attributable share of production is included.FULL YEAR 2024 PRODUCTION GUIDANCE Glencore Half-Year Production Report 2024 14 Actual FY Actual FY Actual FY Previous guidance Current guidance 2024 weighting 2021 2022 2023 2024 2024 H1 H2 Copper kt 1,196 1,058 1,010 950-1,010 950-1,010 47S%Cobalt kt 31.3 43.8 41.3 35-40 35-40 42X%Zinc kt 1,118 939 919 900-950 900-950 45U%Nickel kt 102 108 98 80-90 80-90 1 46%1 54rrochrome kt 1,468 1,488 1,162 1,100-1,200 1,100-1,200 52H%Steelmaking coal mt 9.1 8.7 7.5 7-9 19-21 2 n.m.n.m.Energy coal mt 94 101 107 98-106 98-106 46T%1 KNS transitioned to care and maintenance during February 2024.The nickel production guidance above is presented ex-KNS and therefore excludes the 5.0kt produced by KNS in Q1 2024 prior to its transition to care and maintenance.2 Full year coal guidance has been updated to include circa 12mt(on a 100sis)in H2 2024 from the EVR steelmaking coal business acquired on 11 July 2024.Other than forecast adjustments for the recently-acquired EVR operations,production guidance is unchanged from that announced in our full year 2023 Production Report released on 1 February 2024.Glencore Half-Year Production Report 2024 15 Important notice This document does not constitute or form part of any offer or invitation to sell or issue,or any solicitation of any offer to purchase or subscribe for any securities.This document does not purport to contain all of the information you may wish to consider.Cautionary statement regarding forward-looking information Certain descriptions in this document are oriented towards future events and therefore contains statements that are,or may be deemed to be,“forward-looking statements”which are prospective in nature.Such statements may include,without limitation,statements in respect of trends in commodity prices and currency exchange rates;demand for commodities;reserves and resources and production forecasts;expectations,plans,strategies and objectives of management;expectations regarding financial performance,results of operations and cash flows,climate scenarios;sustainability(including,without limitation,environmental,social and governance)performance-related goals,ambitions,targets,intentions and aspirations;approval of certain projects and consummation and impacts of certain transactions(including,without limitation,acquisitions and disposals);closures or divestments of certain assets,operations or facilities(including,without limitation,associated costs);capital costs and scheduling;operating costs and supply of materials and skilled employees;financings;anticipated productive lives of projects,mines and facilities;provisions and contingent liabilities;and tax,legal and regulatory developments.These forward-looking statements may be identified by the use of forward-looking terminology,or the negative thereof including,without limitation,“outlook”,“guidance”,“trend”,“plans”,“expects”,“continues”,“assumes”,“is subject to”,“budget”,“scheduled”,“estimates”,“aims”,“forecasts”,“risks”,“intends”,“positioned”,“predicts”,“projects”,“anticipates”,“believes”,or variations of such words or comparable terminology and phrases or statements that certain actions,events or 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materially from any future event,results,performance,achievements or other outcomes expressed or implied by such forward-looking statements.Important factors that could impact these uncertainties include(without limitation)those disclosed in the risk management section of our latest Annual Report and/or Half-Year Report(which can each be found on our website).These risks and uncertainties may materially affect the timing and feasibility of particular developments.Other factors which impact risks and uncertainties include,without limitation:the ability to produce and transport products profitably;demand for our products and commodity prices;development,efficacy and adoption of new or competing technologies;changing or divergent preferences and expectations of our stakeholders;events giving rise to adverse reputational impacts;changes to the assumptions regarding the recoverable value of our tangible and intangible assets;inadequate estimates of resources and reserves;changes in environmental scenarios and related regulations,including,without limitation,transition risks and the evolution and development of the global transition to a low carbon economy;recovery rates and other operational capabilities;timing,quantum and nature of certain acquisitions and divestments;delays,overruns or other unexpected developments in connection with significant projects;the ability to successfully manage the planning and execution of closure,reclamation and rehabilitation of industrial sites;health,safety,environmental or social performance incidents;labor shortages or workforce disruptions;natural catastrophes or adverse geological conditions,including,without limitation,the physical risks associated with climate change;effects of global pandemics and outbreaks of infectious disease;the outcome of litigation or enforcement or regulatory proceedings;the effect of foreign currency exchange rates on market prices and operating costs;actions by governmental authorities,such as changes in taxation or regulation or changes in the decarbonisation policies and plans of other countries;breaches of Glencores policy framework,applicable laws or regulations;the availability of sufficient credit and management of liquidity and counterparty risks;changes in economic and financial market conditions generally or in various countries or regions;political or geopolitical uncertainty;and wars,political or civil unrest,acts of terrorism,cyber attacks or sabotage.Readers,including,without limitation,investors and prospective investors,should review and consider these risks and uncertainties(as well as the other risks identified in this document)when considering the information contained in this document.Readers should also note that the high degree of uncertainty around the nature,timing and magnitude of climate-related risks,and the uncertainty as to how the energy transition will evolve,makes it particularly difficult to determine all potential risks and opportunities and disclose these and any potential impacts with precision.Neither Glencore nor any of its affiliates,associates,employees,directors,officers or advisers,provides any representation,warranty,assurance or guarantee as to the accuracy,completeness or correctness,likelihood of achievement or reasonableness of any forward-looking information contained in this document or that the events,results,performance,achievements or other outcomes expressed or implied in any forward-looking statements in this document will actually occur.Glencore cautions readers against reliance on any forward-looking statements contained in this document,particularly in light of the long-term time horizon which this document discusses in certain instances and the inherent uncertainty in possible policy,market and technological developments in the future.No statement in this document is intended as any kind of forecast(including,without limitation,a profit forecast or a profit estimate),guarantee or prediction of future events or performance and past performance cannot be relied on as a guide to future performance.Glencore Half-Year Production Report 2024 16 Except as required by applicable rules and regulations or by law,Glencore is not under any obligation,and Glencore and its affiliates expressly disclaim any intention,obligation or undertaking,to update or revise any forward-looking statements,whether as a result of new information,future events or otherwise.This document shall not,under any circumstances,create any implication that there has been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is correct as at any time subsequent to its date.Sources Certain statistical and other information included in this document is sourced from publicly available third-party sources.This information has not been independently verified and presents the view of those third parties,and may not necessarily correspond to the views held by Glencore and Glencore expressly disclaims any responsibility for,or liability in respect of,and makes no representation or guarantee in relation to,such information(including,without limitation,as to its accuracy,completeness or whether it is current).Glencore cautions readers against reliance on any of the industry,market or other third-party data or information contained in this document.Information preparation In preparing this document,Glencore has made certain estimates and assumptions that may affect the information presented.Certain information is derived from management accounts,is unaudited and based on information Glencore has available to it at the time.Figures throughout this document are subject to rounding adjustments.The information presented is subject to change at any time without notice and we do not intend to update this information except as required.This document contains alternative performance measures which reflect how Glencores management assesses the performance of the Group,including results that exclude certain items included in our reported results.These alternative performance measures should be considered in addition to,and not as a substitute for,or as superior to,measures of financial performance or position reported in accordance with IFRS.Such measures may not be uniformly defined by all companies,including those in Glencores industry.Accordingly,the alternative performance measures presented may not be comparable with similarly titled measures disclosed by other companies.Further information can be found in our reporting suite available at to any terms implied by law which cannot be excluded,Glencore accepts no responsibility for any loss,damage,cost or expense(whether direct or indirect)incurred by any person as a result of any error,omission or misrepresentation in information in this document.Other information The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities.In this document,“Glencore”,“Glencore group”and“Group”are used for convenience only where references are made to Glencore plc and its subsidiaries in general.These collective expressions are used for ease of reference only and do not imply any other relationship between the companies.Likewise,the words“we”,“us”and“our”are also used to refer collectively to members of the Group or to those who work for them.These expressions are also used where no useful purpose is served by identifying the particular company or companies.
2024-10-15
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Kingsoft Cloud Announces Unaudited Second Quarter 2024 Financial Results08/20/2024BEIJING,Aug.20,202.
2024-10-15
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iQIYI Announces Second Quarter 2024 Financial Results BEIJING,CHINA,August 22,2024 iQIYI,Inc.(Nasda.
2024-10-15
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JD.com Announces First Quarter 2024 ResultsBEIJING,May 16,2024(GLOBE NEWSWIRE)-JD.com,Inc.(NASDAQ:JD and HKEX:9618(HKD counter)and 89618(RMB counter),the“Company”),a leading supply chain-based technology and service provider,today announced its unaudited financial results for the quarter endedMarch 31,2024.First Quarter 2024 HighlightsNet revenues were RMB260.0 billion(US$136.0 billion)for the first quarter of 2024,an increase of 7.0%from the firstquarter of 2023.Income from operations was RMB7.7 billion(US$1.1 billion)for the first quarter of 2024,compared to RMB6.4 billion forthe first quarter of 2023.Non-GAAP2 income from operations was RMB8.9 billion(US$1.2 billion)for the first quarter of2024,compared to RMB7.9 billion for the first quarter of 2023.Net income attributable to the Companys ordinary shareholders was RMB7.1 billion(US$1.0 billion)for the firstquarter of 2024,compared to RMB6.3 billion for the first quarter of 2023.Net margin attributable to the Companys ordinaryshareholders was 2.7%for the first quarter of 2024,compared to 2.6%for the first quarter of 2023.Non-GAAP netincome attributable to the Companys ordinary shareholders was RMB8.9 billion(US$1.2 billion)for the first quarter of2024,compared to RMB7.6 billion for the first quarter of 2023.Non-GAAP net margin attributable to the Companysordinary shareholders was 3.4%for the first quarter of 2024,compared to 3.1%for the first quarter of 2023.Diluted net income per ADS was RMB4.53(US$0.63)for the first quarter of 2024,an increase of 15.3%from RMB3.93for the first quarter of 2023.Non-GAAP diluted net income per ADS was RMB5.65(US$0.78)for the first quarter of2024,an increase of 18.7%from RMB4.76 for the first quarter of 2023.“We are pleased to kick off the year with a solid performance for the first quarter,”said Sandy Xu,Chief Executive Officer of JD.com.“The year of 2024is marked with execution,and we are already seeing measurable results across the business.In particular,in the first quarter,our focus on userexperience helped to drive strong growth in the number of active users as well as user engagement.We are confident that we will further build on ourmomentum in the months ahead as JDs commitment to providing the best combination of selection,speed,quality and price continues to attractChinese consumers nationwide.We are approaching the 10th anniversary of our listing on Nasdaq in 2024,and we believe we are well-positioned tocontinue to create value to our users,employees,shareholders and the society as a whole in the next chapter.”“We delivered solid financial results this quarter with accelerated revenue growth and healthy profitability,as our focus on execution led to improvedoperational efficiencies,”said Ian Su Shan,Chief Financial Officer of JD.com.“We were pleased to see our general merchandise category continue topick up momentum,thanks to the robust recovery of supermarket category,which reflects JDs ability to deliver the best product quality and selection,price competitiveness and customer service.During the quarter,we also continued to execute on our share repurchase program which,alongside ourannual dividend,underscores the Companys healthy profitability,sound balance sheet,and commitment to returning value to shareholders.”Updates of Share Repurchase ProgramDuring the period from January 1,2024 to May 15,2024,the Company repurchased a total of 98.3 million Class A ordinary shares(equivalent of 49.2million ADSs)for a total of US$1.3 billion.All of these shares were repurchased in the open markets from both Nasdaq and the Hong Kong StockExchange pursuant to the Companys share repurchase programs publicly announced.The total number of shares repurchased by the Companyduring the period from January 1,2024 to May 15,2024 amounted to approximately 3.1%of its ordinary shares outstanding as of December 31,20233.Pursuant to the Companys previous share repurchase program,expired on March 17,2024,the Company had repurchased a total of approximatelyUS$2.1 billion as of March 17,2024.Pursuant to the Companys new share repurchase program,which is effective through March 18,2027,the Company had repurchased a total ofapproximately US$0.7 billion as of May 15,2024.The remaining amount under the Companys new share repurchase program was US$2.3 billion asof May 15,2024.10th Anniversary of Listing on NasdaqJD.com will celebrate the 10th anniversary of its listing on Nasdaq on May 22,2024.In the past decade,it has scaled its businesses with totalrevenues expanding 16 times from RMB69.3 billion in 2013 prior to its listing to RMB1.1 trillion in 2023,and Non-GAAP net income attributable to theCompanys ordinary shareholders growing 157 folds from RMB223.9 million to RMB35.2 billion.The total amount it has returned to its shareholdersthrough dividends and share buybacks has surpassed the total capital raised during the past ten years.The Company has also created full-time jobsto 517,124 employees with social insurance and housing fund benefits as of the end of 2023,representing a 13-time increase compared to ten yearsago.JD.com had a proven track record in the past decade,and will continue to create value to its users,employees,shareholders,and the society asa whole in the next chapter.Business HighlightsJD Retail：On April 16,2024,JD.com introduced an AI digital representative of its founder and chairman of the board,Mr.Richard Qiangdong Liu,to join its supermarket,home appliances and home goods livestreaming rooms,drawing over 20million views within the first hour.It marks the industrys first livestreaming hosted by an AI avatar of an entrepreneur.Withthis,the Company will make further efforts to build its content ecosystem.JDs livestreaming featured its procurement andsales managers is committed to providing users with more affordable and hassle-free livestreaming shopping experiencewith its price competitiveness,quality products and superior services.JD Health:During the first quarter,JD Health partnered with multiple pharmaceutical companies,such as Pfizer andSanofi,to debut new and specialty drugs online,continuing to enhance medicine accessibility.JD Health also expandedcollaborations with Shanghai Pharmaceuticals,Daiichi Sankyo,Sunshine Mandi Pharmaceutical,and others to furtherupgrade its one-stop experience of medicine retailing and healthcare services.JD Logistics:JD Logistics continues to help Chinese brands expand overseas with one-stop service offerings.In the firstquarter,JD Logistics provided MINISO with integrated supply chain services covering warehousing and fulfillment forMINISO stores in Australia and Malaysia.The two parties will further explore global cooperation opportunities.Environment,Social and GovernanceDriven by JD.coms unwavering commitment and unremitting efforts to creating more jobs and making contribution to thesociety,the Companys total expenditure for human resources,including both its own employees and external personnelwho work for the Company,amounted to RMB106.6 billion for the twelve months ended March 31,2024.First Quarter 2024 Financial ResultsNet Revenues.Net revenues increased by 7.0%to RMB260.0 billion(US$36.0 billion)for the first quarter of 2024 from RMB243.0 billion for the firstquarter of 2023.Net product revenues increased by 6.6%,while net service revenues increased by 8.8%for the first quarter of 2024,compared to thefirst quarter of 2023.Cost of Revenues.Cost of revenues increased by 6.4%to RMB220.3 billion(US$30.5 billion)for the first quarter of 2024 from RMB206.9 billion forthe first quarter of 2023.Fulfillment Expenses.Fulfillment expenses,which primarily include procurement,warehousing,delivery,customer service and payment processingexpenses,increased by 9.3%to RMB16.8 billion(US$2.3 billion)for the first quarter of 2024 from RMB15.4 billion for the first quarter of 2023.Fulfillment expenses as a percentage of net revenues was 6.5%for the first quarter of 2024,compared to 6.3%for the first quarter of 2023.Theincrease was in relation to the adoption of lower threshold for free shipping services.Marketing Expenses.Marketing expenses increased by 15.6%to RMB9.3 billion(US$1.3 billion)for the first quarter of 2024 from RMB8.0 billion forthe first quarter of 2023.Marketing expenses as a percentage of net revenues was 3.6%for the first quarter of 2024,compared to 3.3%for the firstquarter of 2023.The increase was mainly due to the increased spending in promotion activities including the Spring Festival Gala sponsorship.Research and Development Expenses.Research and development expenses decreased by 3.6%to RMB4.0 billion(US$0.6 billion)for the firstquarter of 2024 from RMB4.2 billion for the first quarter of 2023.Research and development expenses as a percentage of net revenues was 1.6%forthe first quarter of 2024,compared to 1.7%for the first quarter of 2023.General and Administrative Expenses.General and administrative expenses decreased by 21.0%to RMB2.0 billion(US$0.3 billion)for the firstquarter of 2024 from RMB2.5 billion for the first quarter of 2023,primarily due to a decrease in share-based compensation expenses.General andadministrative expenses as a percentage of net revenues was 0.8%for the first quarter of 2024,compared to 1.0%for the first quarter of 2023.Income from Operations and Non-GAAP Income from Operations.Income from operations increased by 19.8%to RMB7.7 billion(US$1.1billion)for the first quarter of 2024 from RMB6.4 billion for the first quarter of 2023.Operating margin was 3.0%for the first quarter of 2024,comparedto 2.6%for the first quarter of 2023.Non-GAAP income from operations increased by 12.7%to RMB8.9 billion(US$1.2 billion)for the first quarter of2024 from RMB7.9 billion for the first quarter of 2023.Non-GAAP operating margin was 3.4%for the first quarter of 2024,compared to 3.2%for thefirst quarter of 2023.Operating margin of JD Retail before unallocated items was 4.1%for the first quarter of 2024,compared to 4.6%for the firstquarter of 2023,as the Company continues to invest in user experience.Non-GAAP EBITDA.Non-GAAP EBITDA increased by 13.6%to RMB10.8 billion(US$1.5 billion)for the first quarter of 2024 from RMB9.5 billion forthe first quarter of 2023.Non-GAAP EBITDA margin was 4.1%for the first quarter of 2024,compared to 3.9%for the first quarter of 2023.Others,net.Other non-operating income was RMB2.7 billion(US$0.4 billion)for the first quarter of 2024,compared to RMB2.8 billion for the firstquarter of 2023.Net Income Attributable to the Companys Ordinary Shareholders and Non-GAAP Net Income Attributable to the Companys OrdinaryShareholders.Net income attributable to the Companys ordinary shareholders increased by 13.9%to RMB7.1 billion(US$1.0 billion)for thefirst quarter of 2024 from RMB6.3 billion for the first quarter of 2023.Net margin attributable to the Companys ordinary shareholders was 2.7%for thefirst quarter of 2024,compared to 2.6%for the first quarter of 2023.Non-GAAP net income attributable to the Companys ordinary shareholdersincreased by 17.2%to RMB8.9 billion(US$1.2 billion)for the first quarter of 2024 from RMB7.6 billion for the first quarter of 2023.Non-GAAP netmargin attributable to the Companys ordinary shareholders was 3.4%for the first quarter of 2024,compared to 3.1%for the first quarter of 2023.Diluted EPS and Non-GAAP Diluted EPS.Diluted net income per ADS increased by 15.3%to RMB4.53(US$0.63)for the first quarter of 2024 fromRMB3.93 for the first quarter of 2023.Non-GAAP diluted net income per ADS increased by 18.7%for the first quarter of 2024 to RMB5.65(US$0.78)from RMB4.76 for the first quarter of 2023.Cash Flow and Working CapitalAs of March 31,2024,the Companys cash and cash equivalents,restricted cash and short-term investments totaled RMB179.3 billion(US$24.8billion),compared to RMB197.7 billion as of December 31,2023.For the first quarter of 2024,free cash flow of the Company was as follows:For the three months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$(In millions)Net cash used in operating activities(21,607)(11,315)(1,567)Less:Impact from consumer financing receivables included in the operating cash flow(582)(1,281)(177)Less:Capital expenditures,net of related sales proceeds Capital expenditures for development properties(2,145)(1,360)(188)Other capital expenditures*(1,068)(1,520)(211)Free cash flow(25,402)(15,476)(2,143)*Including capital expenditures related to the Companys headquarters in Beijing and all other CAPEX.Net cash provided by investing activities was RMB28.4 billion(US$3.9 billion)for the first quarter of 2024,consisting primarily of the cash receipt frommaturity in short-term investments,partially offset by cash paid for purchase of short-term investments and capital expenditures.Net cash used in financing activities was RMB7.4 billion(US$1.0 billion)for the first quarter of 2024,consisting primarily of cash paid for sharerepurchase.For the twelve months ended March 31,2024,free cash flow of the Company was as follows:For the twelve months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$(In millions)Net cash provided by operating activities 39,697 69,813 9,669 Add/(Less):Impact from consumer financing receivables included in the operating cash flow 908 (1,191)(165)Less:Capital expenditures,net of related sales proceeds Capital expenditures for development properties(16,974)(11,332)(1,569)Other capital expenditures(4,641)(6,713)(930)Free cash flow 18,990 50,577 7,005 Supplemental InformationFrom the first quarter of 2024,the Company started to report three segments,JD Retail,JD Logistics and New Businesses,to reflect changes made tothe reporting structure whose financial information is reviewed by the chief operating decision maker of the Company under its ongoing operatingstrategies.JD Retail,including JD Health and JD Industrials,among other components,mainly engages in online retail,online marketplace andmarketing services in China.JD Logistics includes both internal and external logistics businesses.New Businesses mainly include Dada,JD Property,Jingxi and overseas businesses.The table below sets forth the segment operating results,with prior period segment information retrospectively recast to conform to current periodpresentation:For the three months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$(In millions,except percentage data)Net revenues:JD Retail212,358 226,835 31,416 JD Logistics36,728 42,137 5,836 New Businesses6,026 4,870 675 Inter-segment eliminations*(12,156)(13,793)(1,911)Total consolidated net revenues242,956 260,049 36,016 Operating income/(loss):JD Retail9,844 9,325 1,291 JD Logistics(1,123)224 31 New Businesses(374)(670)(94)Including:gain on sale of development properties472 Total segment operating income8,347 8,879 1,228 Unallocated items*(1,920)(1,179)(162)Total consolidated operating income6,427 7,700 1,066 YoY%change of net revenues:JD Retail(2.4)%6.8%JD Logistics34.3.7%New Businesses(6.5)%(19.2)%Operating margin:JD Retail4.6%4.1%JD Logistics(3.1)%0.5%New Businesses(6.2)%(13.8)%*The inter-segment eliminations mainly consist of revenues from supply chain solutions and logistics services provided by JD Logistics to JD Retail,on-demand delivery and retail services provided by Dada to JD Retail and JD Logistics,and property leasing services provided by JD Property to JDLogistics.*Unallocated items include share-based compensation,amortization of intangible assets resulting from assets and business acquisitions,effects ofbusiness cooperation arrangements,and impairment of goodwill and intangible assets,which are not allocated to segments.The table below sets forth the revenue information:For the three months ended March 31,2023 March 31,2024 March 31,2024 YoY%Change RMB RMB US$(In millions,except percentage data)Electronics and home appliances revenues116,999 123,212 17,065 5.3%General merchandise revenues78,565 85,296 11,813 8.6%Net product revenues195,564 208,508 28,878 6.6%Marketplace and marketing revenues19,062 19,289 2,671 1.2%Logistics and other service revenues28,330 32,252 4,467 13.8%Net service revenues47,392 51,541 7,138 8.8%Total net revenues242,956 260,049 36,016 7.0%Conference CallJD.coms management will hold a conference call at 8:00 am,Eastern Time on May 16,2024,(8:00 pm,Beijing/Hong Kong Time on May 16,2024)todiscuss the first quarter of 2024 financial results.Please register in advance of the conference using the link provided below and dial in 15 minutes prior to the call,using participant dial-in numbers,thePasscode and unique access PIN which would be provided upon registering.You will be automatically linked to the live call after completion of thisprocess,unless required to provide the conference ID below due to regional restrictions.PRE-REGISTER LINK:https:/s1.c- ID:10038661A telephone replay will be available for one week until May 23,2024.The dial-in details are as follows:US: 1-855-883-1031International: 61-7-3107-6325Hong Kong:800-930-639Mainland China:400-120-9216Passcode:10038661 Additionally,a live and archived webcast of the conference call will also be available on the JD.coms investor relations website at http:/.About JD.comJD.com is a leading supply chain-based technology and service provider.The Companys cutting-edge retail infrastructure seeks to enable consumersto buy whatever they want,whenever and wherever they want it.The Company has opened its technology and infrastructure to partners,brands andother sectors,as part of its Retail as a Service offering to help drive productivity and innovation across a range of industries.Non-GAAP MeasuresIn evaluating the business,the Company considers and uses non-GAAP measures,such as non-GAAP income/(loss)from operations,non-GAAPoperating margin,non-GAAP net income/(loss)attributable to the Companys ordinary shareholders,non-GAAP net margin attributable to theCompanys ordinary shareholders,free cash flow,non-GAAP EBITDA,non-GAAP EBITDA margin,non-GAAP net income/(loss)per share andnon-GAAP net income/(loss)per ADS,as supplemental measures to review and assess operating performance.The presentation of these non-GAAPfinancial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordancewith accounting principles generally accepted in the United States of America(“U.S.GAAP”).The Company defines non-GAAP income/(loss)fromoperations as income/(loss)from operations excluding share-based compensation,amortization of intangible assets resulting from assets andbusiness acquisitions,effects of business cooperation arrangements,gain on sale of development properties and impairment of goodwill andlong-lived assets.The Company defines non-GAAP net income/(loss)attributable to the Companys ordinary shareholders as net income/(loss)attributable to the Companys ordinary shareholders excluding share-based compensation,amortization of intangible assets resulting from assets andbusiness acquisitions,effects of business cooperation arrangements and non-compete agreements,gain/(loss)on disposals/deemed disposals ofinvestments and others,reconciling items on the share of equity method investments,loss/(gain)from fair value change of long-term investments,impairment of goodwill,long-lived assets and investments,gain in relation to sale of development properties and tax effects on non-GAAPadjustments.The Company defines free cash flow as operating cash flow adjusting the impact from consumer financing receivables included in theoperating cash flow and capital expenditures,net of the proceeds from sale of development properties.Capital expenditures include purchase ofproperty,equipment and software,cash paid for construction in progress,purchase of intangible assets and land use rights.The Company definesnon-GAAP EBITDA as non-GAAP income/(loss)from operations plus depreciation and amortization excluding amortization of intangible assetsresulting from assets and business acquisitions.Non-GAAP basic net income/(loss)per share is calculated by dividing non-GAAP net income/(loss)attributable to the Companys ordinary shareholders by the weighted average number of ordinary shares outstanding during the periods.Non-GAAPdiluted net income/(loss)per share is calculated by dividing non-GAAP net income/(loss)attributable to the Companys ordinary shareholders by theweighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the periods,including the dilutive effect ofshare-based awards as determined under the treasury stock method.Non-GAAP net income/(loss)per ADS is equal to non-GAAP net income/(loss)per share multiplied by two.The Company presents these non-GAAP financial measures because they are used by management to evaluate operating performance andformulate business plans.Non-GAAP income/(loss)from operations,non-GAAP net income/(loss)attributable to the Companys ordinaryshareholders and non-GAAP EBITDA reflect the Companys ongoing business operations in a manner that allows more meaningful period-to-periodcomparisons.Free cash flow enables management to assess liquidity and cash flow while taking into account the impact from consumer financingreceivables included in the operating cash flow and the demands that the expansion of fulfillment infrastructure and technology platform has placed onfinancial resources.The Company believes that the use of the non-GAAP financial measures facilitates investors to understand and evaluate theCompanys current operating performance and future prospects in the same manner as management does,if they so choose.The Company alsobelieves that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses,gain/loss and other items that are not expected to result in future cash payments or that are non-recurring in nature or may not be indicative of theCompanys core operating results and business outlook.The non-GAAP financial measures have limitations as analytical tools.The Companys non-GAAP financial measures do not reflect all items ofincome and expense that affect the Companys operations or not represent the residual cash flow available for discretionary expenditures.Further,these non-GAAP measures may differ from the non-GAAP information used by other companies,including peer companies,and therefore theircomparability may be limited.The Company compensates for these limitations by reconciling the non-GAAP financial measures to the nearest U.S.GAAP performance measure,all of which should be considered when evaluating performance.The Company encourages you to review theCompanys financial information in its entirety and not rely on a single financial measure.CONTACTS:Investor RelationsSean Zhang 86(10)8912-6804IRJD.comMedia Relations 86(10)8911-6155PressJD.comSafe Harbor StatementThis announcement contains forward-looking statements.These statements are made under the“safe harbor”provisions of the U.S.Private SecuritiesLitigation Reform Act of 1995.These forward-looking statements can be identified by terminology such as“will,”“expects,”“anticipates,”“future,”“intends,”“plans,”“believes,”“estimates,”“confident”and similar statements.Among other things,the business outlook and quotations frommanagement in this announcement,as well as JD.coms strategic and operational plans,contain forward-looking statements.JD.com may also makewritten or oral forward-looking statements in its periodic reports to the U.S.Securities and Exchange Commission(the“SEC”),in announcementsmade on the website of the Hong Kong Stock Exchange,in its annual report to shareholders,in press releases and other written materials and in oralstatements made by its officers,directors or employees to third parties.Statements that are not historical facts,including statements about JD.comsbeliefs and expectations,are forward-looking statements.Forward-looking statements involve inherent risks and uncertainties.A number of factorscould cause actual results to differ materially from those contained in any forward-looking statement,including but not limited to the following:JD.coms growth strategies;its future business development,results of operations and financial condition;its ability to attract and retain newcustomers and to increase revenues generated from repeat customers;its expectations regarding demand for and market acceptance of its productsand services;trends and competition in Chinas e-commerce market;changes in its revenues and certain cost or expense items;the expected growthof the Chinese e-commerce market;laws,regulations and governmental policies relating to the industries in which JD.com or its business partnersoperate;potential changes in laws,regulations and governmental policies or changes in the interpretation and implementation of laws,regulations andgovernmental policies that could adversely affect the industries in which JD.com or its business partners operate,including,among others,initiativesto enhance supervision of companies listed on an overseas exchange and tighten scrutiny over data privacy and data security;risks associated withJD.coms acquisitions,investments and alliances,including fluctuation in the market value of JD.coms investment portfolio;natural disasters andgeopolitical events;change in tax rates and financial risks;intensity of competition;and general market and economic conditions in China and globally.Further information regarding these and other risks is included in JD.coms filings with the SEC and the announcements on the website of the HongKong Stock Exchange.All information provided herein is as of the date of this announcement,and JD.com undertakes no obligation to update anyforward-looking statement,except as required under applicable law.JD.com,Inc.Unaudited Interim Condensed Consolidated Balance Sheets(In millions,except otherwise noted)As of December 31,2023 March 31,2024 March 31,2024 RMB RMB US$ASSETS Current assets Cash and cash equivalents 71,892 81,626 11,305Restricted cash 7,506 7,293 1,010Short-term investments 118,254 90,371 12,516Accounts receivable,net(including consumer financing receivables of RMB2.3 billionand RMB1.2 billion as of December 31,2023 and March 31,2024,respectively)(1)20,302 17,540 2,429Advance to suppliers 2,753 2,388 331Inventories,net 68,058 67,994 9,417Prepayments and other current assets 15,639 12,803 1,773Amount due from related parties 2,114 2,943 408Assets held for sale 1,292 1,114 154Total current assets 307,810 284,072 39,343Non-current assets Property,equipment and software,net 70,035 71,255 9,869Construction in progress 9,920 9,501 1,316Intangible assets,net 6,935 6,626 918Land use rights,net 39,563 38,646 5,352Operating lease right-of-use assets 20,863 21,503 2,978Goodwill 19,980 19,980 2,767Investment in equity investees 56,746 55,849 7,735Marketable securities and other investments 80,840 79,572 11,021Deferred tax assets 1,744 1,712 237Other non-current assets 14,522 13,106 1,815Total non-current assets 321,148 317,750 44,008Total assets 628,958 601,822 83,351 JD.com,Inc.Unaudited Interim Condensed Consolidated Balance Sheets(In millions,except otherwise noted)As of December 31,2023 March 31,2024 March 31,2024 RMB RMB US$LIABILITIES Current liabilities Short-term debts 5,034 5,267 729Accounts payable 166,167 146,831 20,336Advance from customers 31,625 30,169 4,178Deferred revenues 2,097 2,073 287Taxes payable 7,313 4,773 661Amount due to related parties 1,620 716 99Accrued expenses and other current liabilities 43,533 48,149 6,668Operating lease liabilities 7,755 7,859 1,088Liabilities held for sale 506 262 36Total current liabilities 265,650 246,099 34,082Non-current liabilities Deferred revenues 964 833 115Unsecured senior notes 10,411 10,432 1,445Deferred tax liabilities 9,267 9,095 1,260Long-term borrowings 31,555 32,157 4,454Operating lease liabilities 13,676 14,264 1,976Other non-current liabilities 1,055 979 136Total non-current liabilities 66,928 67,760 9,386Total liabilities 332,578 313,859 43,468 MEZZANINE EQUITY 614 618 86 SHAREHOLDERS EQUITY Total JD.com,Inc.shareholders equity (US$0.00002 par value,100,000 million sharesauthorized,3,183 million shares issued and 3,054 million shares outstanding as of March31,2024)231,858 222,380 30,799Non-controlling interests 63,908 64,965 8,998Total shareholders equity 295,766 287,345 39,797 TOTAL LIABILITIES,MEZZANINE EQUITY AND SHAREHOLDERS EQUITY 628,958 601,822 83,351 (1)JD Technology performs credit risk assessment services for consumer financing receivables business and absorbs the credit risk of the underlyingconsumer financing receivables.Facilitated by JD Technology,the Company periodically securitizes consumer financing receivables through thetransfer of those assets to securitization plans and derecognizes the related consumer financing receivables through sales type arrangements.JD.com,Inc.Unaudited Interim Condensed Consolidated Statements of Operations(In millions,except per share data)For the three months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$Net revenues Net product revenues195,564 208,508 28,878 Net service revenues47,392 51,541 7,138 Total net revenues242,956 260,049 36,016 Cost of revenues(206,938)(220,279)(30,507)Fulfillment(15,371)(16,806)(2,328)Marketing(8,005)(9,254)(1,282)Research and development(4,186)(4,034)(559)General and administrative(2,501)(1,976)(274)Gain on sale of development properties472 Income from operations(2)(3)6,427 7,700 1,066 Other income/(expenses)Share of results of equity investees(821)(730)(101)Interest expense(590)(601)(83)Others,net(4)2,792 2,696 373 Income before tax7,808 9,065 1,255 Income tax expenses(1,609)(1,700)(235)Net income6,199 7,365 1,020 Net income/(loss)attributable to non-controlling interests shareholders(62)235 33 Net income attributable to the Companys ordinary shareholders6,261 7,130 987 Net income per share:Basic1.99 2.28 0.32 Diluted1.96 2.27 0.31 Net income per ADS:Basic3.99 4.56 0.63 Diluted3.93 4.53 0.63 JD.com,Inc.Unaudited Interim Condensed Consolidated Statements of Operations(In millions,except per share data)For the three months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$(2)Includes share-based compensation as follows:Cost of revenues(37)(26)(4)Fulfillment(199)(110)(15)Marketing(135)(83)(11)Research and development(332)(175)(24)General and administrative(771)(365)(51)Total(1,474)(759)(105)(3)Includes amortization of business cooperation arrangement and intangible assets resulting from assets and business acquisitions as follows:Fulfillment(105)(103)(14)Marketing(219)(219)(30)Research and development(90)(66)(9)General and administrative(32)(32)(4)Total(446)(420)(57)(4)Others,net are other non-operating income/(loss),primarily consist of gains/(losses)from fair value change of long-term investments,governmentincentives,interest income,gains/(losses)from acquirements or disposals of businesses and investments,impairment of investments,foreignexchange gains/(losses),net.JD.com,Inc.Unaudited Non-GAAP Net Income Per Share and Per ADS(In millions,except per share data)For the three months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$Non-GAAP net income attributable to the Companys ordinary shareholders 7,5918,8991,231 Weighted average number of shares:Basic 3,1393,1263,126Diluted 3,1803,1443,144 Non-GAAP net income per share:Basic 2.422.850.39Diluted 2.382.830.39 Non-GAAP net income per ADS:Basic 4.845.690.79Diluted 4.765.650.78 JD.com,Inc.Unaudited Interim Condensed Consolidated Statements of Cash Flows and Free Cash Flow(In millions)For the three months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$Net cash used in operating activities(21,607)(11,315)(1,567)Net cash provided by investing activities 16,692 28,414 3,935 Net cash provided by/(used in)financing activities 1,255 (7,445)(1,031)Effect of exchange rate changes on cash,cash equivalents and restricted cash(726)(130)(18)Net increase/(decrease)in cash,cash equivalents and restricted cash(4,386)9,524 1,319 Cash,cash equivalents,and restricted cash at beginning of period,including cash andcash equivalents classified within assets held for sale 85,156 79,451 11,004 Less:cash,cash equivalents,and restricted cash classified within assets held for sale atbeginning of period(41)(53)(8)Cash,cash equivalents,and restricted cash at beginning of period 85,115 79,398 10,996 Cash,cash equivalents,and restricted cash at end of period,including cash and cashequivalents classified within assets held for sale 80,770 88,922 12,315 Less:cash,cash equivalents,and restricted cash classified within assets held for sale atend of period (3)*Cash,cash equivalents and restricted cash at end of period 80,770 88,919 12,315 Net cash used in operating activities(21,607)(11,315)(1,567)Less:Impact from consumer financing receivables included in the operating cash flow(582)(1,281)(177)Less:Capital expenditures,net of related sales proceeds Capital expenditures for development properties(2,145)(1,360)(188)Other capital expenditures(1,068)(1,520)(211)Free cash flow(25,402)(15,476)(2,143)*Absolute value is less than US$1 million.JD.com,Inc.Supplemental Financial Information and Business Metrics(In RMB billions,except turnover days data)Q1 2023Q2 2023Q3 2023Q4 2023Q1 2024 Cash flow and turnover days Operating cash flow trailing twelve months(“TTM”)39.752.558.459.569.8 Free cash flow TTM 19.033.539.440.750.6 Inventory turnover days(5)TTM 32.431.730.830.329.0 Accounts payable turnover days(6)TTM 51.352.852.653.251.8 Accounts receivable turnover days(7)TTM 4.85.05.45.65.4 (5)TTM inventory turnover days are the quotient of average inventory over the immediately preceding five quarters,up to and including the lastquarter of the period,to cost of revenues of retail business for the last twelve months,and then multiplied by 360 days.(6)TTM accounts payable turnover days are the quotient of average accounts payable for retail business over the immediately preceding fivequarters,up to and including the last quarter of the period,to cost of revenues of retail business for the last twelve months,and then multiplied by 360days.(7)TTM accounts receivable turnover days are the quotient of average accounts receivable over the immediately preceding five quarters,up to andincluding the last quarter of the period,to total net revenues for the last twelve months and then multiplied by 360 days.Presented are the accountsreceivable turnover days excluding the impact from consumer financing receivables.JD.com,Inc.Unaudited Reconciliation of GAAP and Non-GAAP Results(In millions,except percentage data)For the three months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$Income from operations 6,427 7,700 1,066Add:Share-based compensation 1,474 759 105Add:Amortization of intangible assets resulting from assets and business acquisitions 336 309 42Add:Effects of business cooperation arrangements 110 111 15Reversal of:Gain on sale of development properties(472)Non-GAAP income from operations 7,875 8,879 1,228Add:Depreciation and other amortization 1,624 1,908 265Non-GAAP EBITDA 9,499 10,787 1,493 Total net revenues 242,956 260,049 36,016 Non-GAAP operating margin 3.2%3.4%Non-GAAP EBITDA margin 3.9%4.1%JD.com,Inc.Unaudited Reconciliation of GAAP and Non-GAAP Results(In millions,except percentage data)For the three months ended March 31,2023March 31,2024March 31,2024 RMBRMBUS$Net income attributable to the Companys ordinary shareholders 6,261 7,130 987 Add:Share-based compensation 1,256 592 82 Add:Amortization of intangible assets resulting from assets and business acquisitions 222 143 20 Add:Reconciling items on the share of equity method investments(8)840 370 51 Add:Impairment of goodwill,long-lived assets,and investments 26 558 77 Reversal of:Gain from fair value change of long-term investments(876)(8)(1)Reversal of:Gain on sale of development properties(364)Reversal of:Gain on disposals/deemed disposals of investments and others(21)(22)(3)Add:Effects of business cooperation arrangements and non-compete agreements 110 111 15 Add:Tax effects on non-GAAP adjustments 137 25 3 Non-GAAP net income attributable to the Companys ordinary shareholders 7,591 8,899 1,231 Total net revenues 242,956 260,049 36,016 Non-GAAP net margin attributable to the Companys ordinary shareholders 3.1%3.4%(8)To exclude the GAAP to non-GAAP reconciling items on the share of equity method investments and share of amortization of intangibles not ontheir books._1 The U.S.dollar(US$)amounts disclosed in this announcement,except for those transaction amounts that were actually settled in U.S.dollars,arepresented solely for the convenience of the readers.The conversion of Renminbi(RMB)into US$in this announcement is based on the exchange rateset forth in the H.10 statistical release of the Board of Governors of the Federal Reserve System as of March 29,2024,which was RMB7.2203 toUS$1.00.The percentages stated in this announcement are calculated based on the RMB amounts.2 See the sections entitled“Non-GAAP Measures”and“Unaudited Reconciliation of GAAP and Non-GAAP Results”for more information about thenon-GAAP measures referred to in this announcement.3 The number of ordinary shares outstanding as of December 31,2023 was 3,137,663,915 shares,being 3,183,434,337 issued shares minus45,770,422 treasury stock.
2024-10-15
11页
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