News Classic

Third Quarter 2024 Financial Results and Highlights

• Revenue of $69.5 million, an increase of 13% year–over–year
• Cloud ARR of $71.6 million, an increase of 15% year-over-year
• Non-GAAP diluted EPS of $0.23 vs. $0.07 in Q3 2023; GAAP diluted EPS of $0.07 vs. $(0.16) in Q3 2023
• Cash flow from operations of $14.7 million and $58.9 million year-to-date

TEL AVIV, Israel, Oct. 31, 2024 (GLOBE NEWSWIRE) — Radware^® RDWR, a leading provider of cyber security and application delivery solutions, today announced its consolidated financial results for the third quarter ended September 30, 2024.

“We are pleased to report solid third-quarter results, highlighted by 13% year-over-year revenue growth and a significant improvement in profitability and cash flow from operations,” said Roy Zisapel, Radware’s President and CEO. “Our results reflect double-digit growth in subscription revenue, strong sales of software subscriptions, and the ongoing success of DefensePro X, which carries with it more subscription revenue. We are excited about the momentum we’ve built and our future growth prospects.”

Financial Highlights for the Third Quarter 2024
Revenue for the third quarter of 2024 totaled $69.5 million:

• Revenue in the Americas region was $27.7 million for the third quarter of 2024, an increase of 11% from $24.9 million in the third quarter of 2023.
• Revenue in the Europe, Middle East, and Africa (“EMEA”) region was $25.2 million for the third quarter of 2024, an increase of 30% from $19.3 million in the third quarter of 2023.
• Revenue in the Asia-Pacific (“APAC”) region was $16.6 million for the third quarter of 2024, a decrease of 5% from $17.4 million in the third quarter of 2023.

GAAP net income for the third quarter of 2024 was $3.1 million, or $0.07 per diluted share, compared to GAAP net loss of $6.9 million, or $(0.16) per diluted share, for the third quarter of 2023.

Non-GAAP net income for the third quarter of 2024 was $10.2 million, or $0.23 per diluted share, compared to non-GAAP net income of $2.9 million, or $0.07 per diluted share, for the third quarter of 2023.

As of September 30, 2024, the Company had cash, cash equivalents, short-term and long-term bank deposits, and marketable securities of $411.7 million. Cash flow from operations was $14.7 million in the third quarter of 2024.

Non-GAAP results are calculated excluding, as applicable, the impact of stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, restructuring costs, exchange rate differences, net on balance sheet items included in financial income, net, and tax-related adjustments. A reconciliation of each of the Company’s non-GAAP measures to the most directly comparable GAAP measure is included at the end of this press release.

Conference Call
Radware management will host a call today, October 31, 2024, at 8:30 a.m. EDT to discuss its third quarter 2024 results and fourth quarter 2024 outlook. To participate on the call, please use the following numbers:
U.S. participants call toll free: 888-510-2008
International participants call: 1 646-960-0306
Conference ID: 1864701

A replay will be available for two days, starting two hours after the end of the call, on telephone number +1-609-800-9099 or (US toll-free) 800-770-2030. Passcode 1864701.

The call will be webcast live on the Company’s website at: http://www.radware.com/IR/. The webcast will remain available for replay during the next 12 months.

Use of Non-GAAP Financial Information and Key Performance Indicators
In addition to reporting financial results in accordance with generally accepted accounting principles (GAAP), Radware uses non-GAAP measures of gross profit, research and development expense, selling and marketing expense, general and administrative expense, total operating expenses, operating income, financial income, net, income before taxes on income, taxes on income, net income and diluted earnings per share, which are adjustments from results based on GAAP to exclude, as applicable, stock-based compensation expenses, amortization of intangible assets, litigation costs, acquisition costs, restructuring costs, exchange rate differences, net on balance sheet items included in financial income, net, and tax–related adjustments. Management believes that exclusion of these charges allows for meaningful comparisons of operating results across past, present, and future periods. Radware’s management believes the non-GAAP financial measures provided in this release are useful to investors for the purpose of understanding and assessing Radware’s ongoing operations. The presentation of these non-GAAP financial measures is not intended to be considered in isolation or as a substitute for results prepared in accordance with GAAP. A reconciliation of each non-GAAP financial measure to the most directly comparable GAAP financial measure is included with the financial information contained in this press release. Management uses both GAAP and non-GAAP financial measures in evaluating and operating the business and, as such, has determined that it is important to provide this information to investors.

Annual recurring revenue (“ARR”) is a key performance indicator defined as the annualized value of booked orders for term-based cloud services, subscription licenses, and maintenance contracts that are in effect at the end of a reporting period. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast of future revenue, which can be impacted by contract start and end dates and renewal rates and does not include revenue reported as perpetual license or professional services revenue in our consolidated statement of operations. We consider ARR a key performance indicator of the value of the recurring components of our business.

Safe Harbor Statement

This press release includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements made herein that are not statements of historical fact, including statements about Radware’s plans, outlook, beliefs, or opinions, are forward-looking statements. Generally, forward-looking statements may be identified by words such as “believes,” “expects,” “anticipates,” “intends,” “estimates,” “plans,” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may,” and “could.” Because such statements deal with future events, they are subject to various risks and uncertainties, and actual results, expressed or implied by such forward-looking statements, could differ materially from Radware’s current forecasts and estimates. Factors that could cause or contribute to such differences include, but are not limited to: the impact of global economic conditions, including as a result of the state of war declared in Israel in October 2023 and instability in the Middle East, the war in Ukraine, and the tensions between China and Taiwan; our dependence on independent distributors to sell our products; our ability to manage our anticipated growth effectively; a shortage of components or manufacturing capacity could cause a delay in our ability to fulfill orders or increase our manufacturing costs; our business may be affected by sanctions, export controls, and similar measures, targeting Russia and other countries and territories, as well as other responses to Russia’s military conflict in Ukraine, including indefinite suspension of operations in Russia and dealings with Russian entities by many multi-national businesses across a variety of industries; the ability of vendors to provide our hardware platforms and components for the manufacture of our products; our ability to attract, train, and retain highly qualified personnel; intense competition in the market for cyber security and application delivery solutions and in our industry in general, and changes in the competitive landscape; our ability to develop new solutions and enhance existing solutions; the impact to our reputation and business in the event of real or perceived shortcomings, defects, or vulnerabilities in our solutions, if our end-users experience security breaches, if our information technology systems and data, or those of our service providers and other contractors, are compromised by cyber-attackers or other malicious actors, or by a critical system failure; outages, interruptions, or delays in hosting services; the risks associated with our global operations, such as difficulties and costs of staffing and managing foreign operations, compliance costs arising from host country laws or regulations, partial or total expropriation, export duties and quotas, local tax exposure, economic or political instability, including as a result of insurrection, war, natural disasters, and major environmental, climate, or public health concerns, such as the COVID-19 pandemic; our net losses in the past two years and possibility we may incur losses in the future; a slowdown in the growth of the cyber security and application delivery solutions market or in the development of the market for our cloud-based solutions; long sales cycles for our solutions; risks and uncertainties relating to acquisitions or other investments; risks associated with doing business in countries with a history of corruption or with foreign governments; changes in foreign currency exchange rates; risks associated with undetected defects or errors in our products; our ability to protect our proprietary technology; intellectual property infringement claims made by third parties; laws, regulations, and industry standards affecting our business; compliance with open source and third-party licenses; and other factors and risks over which we may have little or no control. This list is intended to identify only certain of the principal factors that could cause actual results to differ. For a more detailed description of the risks and uncertainties affecting Radware, refer to Radware’s Annual Report on Form 20-F, filed with the Securities and Exchange Commission (SEC), and the other risk factors discussed from time to time by Radware in reports filed with, or furnished to, the SEC. Forward-looking statements speak only as of the date on which they are made and, except as required by applicable law, Radware undertakes no commitment to revise or update any forward-looking statement in order to reflect events or circumstances after the date any such statement is made. Radware’s public filings are available from the SEC’s website at www.sec.gov or may be obtained on Radware’s website at www.radware.com.

About Radware
Radware® RDWR is a global leader in application security and delivery solutions for multi-cloud environments. The company’s cloud application, infrastructure, and API security solutions use AI-driven algorithms for precise, hands-free, real-time protection from the most sophisticated web, application, and DDoS attacks, API abuse, and bad bots. Enterprises and carriers worldwide rely on Radware’s solutions to address evolving cybersecurity challenges and protect their brands and business operations while reducing costs. For more information, please visit the Radware website.

Radware encourages you to join our community and follow us on: Facebook, LinkedIn, Radware Blog, X, YouTube, and Radware Mobile for iOS.

©2024 Radware Ltd. All rights reserved. Any Radware products and solutions mentioned in this press release are protected by trademarks, patents, and pending patent applications of Radware in the U.S. and other countries. For more details, please see: https://www.radware.com/LegalNotice/. All other trademarks and names are property of their respective owners.

Radware believes the information in this document is accurate in all material respects as of its publication date. However, the information is provided without any express, statutory, or implied warranties and is subject to change without notice.

The contents of any website or hyperlinks mentioned in this press release are for informational purposes and the contents thereof are not part of this press release.

CONTACTS
Investor Relations:
Yisca Erez, +972-72-3917211, ir@radware.com

Media Contact:
Gerri Dyrek, gerri.dyrek@radware.com

PALM BEACH GARDENS, Fla., Oct. 31, 2024 (GLOBE NEWSWIRE) — Great Elm Capital Corp. (“we,” “our,” the “Company” or “GECC”) GECC, a business development company, today announced its financial results for the third quarter ended September 30, 2024.

Third Quarter and Other Recent Highlights:

• Net investment income (“NII”) for the quarter ended September 30, 2024 was $4.1 million, or $0.39 per share, as compared to $3.1 million, or $0.32 per share, for the quarter ended June 30, 2024.
• Net assets were $125.8 million, or $12.04 per share, on September 30, 2024, as compared to $126.0 million, or $12.06 per share, on June 30, 2024.
• In September 2024, issued $36.0 million of 8.125% unsecured notes due 2029 (the “GECCH Notes”) and an additional $5.4 million in October with the full exercise of the underwriters’ overallotment option.
• Redeemed all outstanding 6.75% unsecured notes due in January 2025 (the “GECCM Notes”) on October 12, 2024 with net proceeds from the GECCH notes and cash on hand.
• GECC’s asset coverage ratio was 166.2% as of September 30, 2024, as compared to 171.0% as of June 30, 2024 and 168.4% as of September 30, 2023.
  • Pro forma for the GECCH issuances and GECCM redemption, the asset coverage ratio would have been 164.4%.
• The Board of Directors approved a quarterly dividend of $0.35 per share for the fourth quarter of 2024, equating to a 14.0% annualized yield on the Company’s closing market price on October 30, 2024 of $10.03.

Management Commentary 
“We had a strong third quarter, reporting NII that exceeded our quarterly distribution and generating record total investment income of $11.7 million,” said Matt Kaplan, GECC’s Chief Executive Officer. “Along with managing our stable portfolio, we successfully refinanced our GECCM Notes, extending our debt maturity profile. We look forward to closing a very successful 2024 on firm footing, after completing multiple substantial capital raises at NAV and launching our CLO joint venture. Our innovative JV approach utilizing the CLO structure has increased our exposure to first lien bank loans with long term, non-recourse financing, and is already delivering strong cash income. Looking ahead, we believe we remain well-positioned to maintain our dividend coverage and deliver attractive risk-adjusted returns to our shareholders.”

Financial Highlights – Per Share Data

Portfolio and Investment Activity

As of September 30, 2024, GECC held total investments of $333.3 million at fair value, as follows:

• 53 debt investments in corporate credit, totaling approximately $204.8 million, representing 61.4% of the fair market value of the Company’s total investments. Secured debt investments comprised a substantial majority of the fair market value of the Company’s debt investments.
• An investment in Great Elm Specialty Finance, totaling approximately $43.6 million, comprised of one debt investment of $29.7 million and one equity investment of $13.9 million, representing 8.9% and 4.2%, respectively, of the fair market value of the Company’s total investments.
• An investment in the CLO JV, totaling approximately $32.9 million, representing 9.9% of the fair market value of the Company’s total investments.
• Seven dividend paying equity investments, totaling approximately $36.3 million, representing 10.9% of the fair market value of the Company’s total investments.
• Other equity investments, totaling approximately $15.7 million, representing 4.7% of the fair market value of the Company’s total investments.

As of September 30, 2024, the weighted average current yield on the Company’s debt portfolio was 12.8%. Floating rate instruments comprised approximately 72% of the fair market value of debt investments (up from 69% last quarter) and the Company’s fixed rate debt investments had a weighted average maturity of 2.0 years.

During the quarter ended September 30, 2024, we deployed approximately $73.6 million into 29 investments⁽¹⁾ at a weighted average current yield of 11.5%.

During the quarter ended September 30, 2024, we monetized, in part or in full, 38 investments for approximately $39.1 million⁽²⁾, at a weighted average current yield of 10.9%. Monetizations include $13.2 million of mandatory debt paydowns and redemptions at a weighted average current yield of 13.1%.

Financial Review
Total investment income for the quarter ended September 30, 2024 was $11.7 million, or $1.12 per share. Net expenses for the quarter ended September 30, 2024 were approximately $7.7 million, or $0.73 per share.

Net realized and unrealized losses for the quarter ended September 30, 2024 were approximately $0.6 million, or $0.06 per share.

Liquidity and Capital Resources
As of September 30, 2024, cash and money market fund investments totaled approximately $26.0 million.

As of September 30, 2024, total debt outstanding (par value) was $235.3 million, comprised of 6.75% senior notes due January 2025 GECCM, 5.875% senior notes due June 2026 GECCO, 8.75% senior notes due September 2028 GECCZ, 8.50% senior notes due April 2029 GECCI and 8.125% senior notes due December 2029 GECCH.

Subsequent to quarter-end, the Company used the net proceeds from the GECCH Notes issuance and cash on hand to redeem all GECCM Notes. As of October 30, 2024, pro-forma total debt outstanding (par value) was $195.4 million.

Distributions
The Company’s Board of Directors has approved a quarterly cash distribution of $0.35 per share for the quarter ending December 31, 2024. The fourth quarter distribution will be payable on December 31, 2024 to stockholders of record as of December 16, 2024.

The distribution equates to a 14.0% annualized dividend yield on the Company’s closing market price on October 30, 2024 of $10.03 and an 11.6% annualized dividend yield on the Company’s September 30, 2024 NAV of $12.04 per share.

Conference Call and Webcast
GECC will discuss these results in a conference call today at 8:30 a.m. ET.

To access the call, please dial-in approximately five minutes before the start time and, when asked, provide the operator with passcode “GECC”. An accompanying slide presentation will be available in pdf format via the “Events and Presentations” section of Great Elm Capital Corp.’s website here after the issuance of the earnings release.

Webcast

The call and presentation will also be simultaneously webcast over the internet via the “Events and Presentations” section of GECC’s website or by clicking on the webcast link here.

About Great Elm Capital Corp.
GECC is an externally managed business development company that seeks to generate current income and capital appreciation by investing in debt and income generating equity securities, including investments in specialty finance businesses. For additional information, please visit http://www.greatelmcc.com.

Cautionary Statement Regarding Forward-Looking Statements
Statements in this communication that are not historical facts are “forward-looking” statements within the meaning of the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “expect,” “anticipate,” “should,” “will,” “estimate,” “designed,” “seek,” “continue,” “upside,” “potential” and similar expressions. All such forward-looking statements involve estimates and assumptions that are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed in the statements. The key factors that could cause actual results to differ materially from those projected in the forward-looking statements include, without limitation: conditions in the credit markets, our expected financings and investments, including interest rate volatility, inflationary pressure, the price of GECC common stock and the performance of GECC’s portfolio and investment manager. Information concerning these and other factors can be found in GECC’s Annual Report on Form 10-K and other reports filed with the Securities and Exchange Commission. GECC assumes no obligation to, and expressly disclaims any duty to, update any forward-looking statements contained in this communication or to conform prior statements to actual results or revised expectations except as required by law. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof.

This press release does not constitute an offer of any securities for sale.

Endnotes:
⁽¹⁾ This includes new deals, additional fundings (inclusive of those on revolving credit facilities), refinancings and capitalized PIK income. Amounts included herein do not include investments in short-term securities, including United States Treasury Bills.
⁽²⁾ This includes scheduled principal payments, prepayments, sales and repayments (inclusive of those on revolving credit facilities). Amounts included herein do not include investments in short-term securities, including United States Treasury Bills.

Media & Investor Contact:
Investor Relations
investorrelations@greatelmcap.com

GREAT ELM CAPITAL CORP.
CONSOLIDATED STATEMENTS OF ASSETS AND LIABILITIES (unaudited)
Dollar amounts in thousands (except per share amounts)

GREAT ELM CAPITAL CORP.
CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)
Dollar amounts in thousands (except per share amounts)

CALGARY, Alberta, Oct. 31, 2024 (GLOBE NEWSWIRE) — Cenovus Energy Inc. CVE CVE today announced its financial and operating results for the third quarter of 2024. The company generated nearly $2.5 billion in cash from operating activities, $2.0 billion of adjusted funds flow and $614 million of free funds flow in the quarter. Upstream production of more than 771,000 barrels of oil equivalent per day (BOE/d)¹ was slightly lower compared with the second quarter primarily because of turnaround activity at the Christina Lake oil sands facility. Turnaround impacts to production were lower than forecast, as Christina Lake completed its turnaround ahead of schedule. In the downstream, total throughput increased by about 20,000 barrels per day (bbls/d) from the second quarter to almost 643,000 bbls/d, and a major turnaround was successfully completed at the Lima Refinery.

“We are efficiently and effectively progressing our major projects and our growth plan is on track to deliver increased production that will enhance shareholder returns for the long term,” said Jon McKenzie, Cenovus President & Chief Executive Officer. “With planned upstream and downstream maintenance activities behind us, we’re well positioned to deliver strong operations for the balance of the year and into 2025.”

Recent highlights

• Returned $1.1 billion of cash to shareholders in the third quarter, including $732 million in share purchases and base dividends of $329 million.
• Completed the Christina Lake turnaround safely and well ahead of schedule, resulting in production from the asset exceeding the company’s forecast by 15,000 bbls/d to 20,000 bbls/d in the quarter.
• Completed a major turnaround at the Lima Refinery on schedule, with pipeline connections to the Toledo Refinery enabling Lima crude runs to continue at a reduced rate, avoiding a full shutdown.
• Began production from two new well pads at Sunrise which will ramp up in the fourth quarter, which are part of the Sunrise growth program.
• Completed the SeaRose floating production, storage and offloading (FPSO) vessel asset life extension work with resumed volumes around year end, achieving a critical milestone for the West White Rose project.
• All major projects remain on track to deliver significant growth with West White Rose, Foster Creek optimization, Sunrise growth program and Narrows Lake pipeline progressing as expected.

Third-quarter results

Financial summary

Production and throughput

¹ See Advisory for production by product type.
² Non-GAAP financial measure or contains a non-GAAP financial measure. See Advisory.

Operating results¹

Cenovus’s total revenues were approximately $14.2 billion in the third quarter, down from $14.9 billion in the prior quarter, primarily due to lower commodity prices, which impacted both upstream and downstream results. Planned turnaround activities reduced production, primarily at the Christina Lake oil sands facility and Rainbow Lake conventional operations, as well as in the Atlantic region due to the SeaRose FPSO asset life extension, and reduced throughput at the Lima Refinery.

Upstream revenues were about $7.3 billion, down from $7.9 billion in the second quarter, while downstream revenues were approximately $9.2 billion, up from $9.1 billion in the prior quarter. Total operating margin³ was about $2.4 billion, compared with $2.9 billion in the previous quarter. Upstream operating margin⁴ was approximately $2.7 billion, down from $3.1 billion in the second quarter. The company had a downstream operating margin⁴ shortfall of $323 million in the third quarter as the Lima Refinery underwent a major planned turnaround, compared with a shortfall of $153 million in the previous quarter. In the third quarter, operating margin in U.S. Refining included approximately $209 million of first in, first out (FIFO) losses and about $100 million of turnaround expenses and improvement projects executed during the Lima turnaround.

Total upstream production was 771,300 BOE/d in the third quarter, a decrease of 29,500 BOE/d from the prior quarter due to turnarounds at Christina Lake, Rainbow Lake and other Conventional facilities. Christina Lake production was 211,800 bbls/d, compared to 237,100 bbls/d in the second quarter, as a result of the planned turnaround activity. Production impacted by the Christina Lake turnaround was restored ahead of schedule. Foster Creek and Sunrise production increased quarter-over-quarter, with 198,000 bbls/d at Foster Creek compared with 195,000 bbls/d in the second quarter and Sunrise production of 50,400 bbls/d compared with 46,100 bbls/d in the second quarter. Production from the Lloydminster thermal and Lloydminster conventional heavy assets was 109,400 bbls/d and 16,300 bbls/d respectively, both slightly below the prior quarter.

Production in the Conventional segment was 118,100 BOE/d in the third quarter, a slight decrease from 123,100 BOE/d in the second quarter, as turnaround activities were safely completed at Rainbow Lake and other Conventional facilities.

In the Offshore segment, production was 65,500 BOE/d compared with 66,200 BOE/d in the second quarter. In Asia Pacific, sales volumes were 56,500 BOE/d, slightly lower than the previous quarter due to the completion of planned maintenance on the Liwan offshore platform and at the onshore Gaolan gas plant. In the Atlantic, production was 9,000 bbls/d, up from 8,400 bbls/d in the prior quarter as the non-operated Terra Nova field continues to ramp up to full rates. Planned maintenance work on the SeaRose FPSO was completed at the dry dock in Belfast and the vessel is returning to the White Rose field, with production expected to resume by year end.

Refining throughput in the third quarter was 642,900 bbls/d, an increase from 622,700 bbls/d in the second quarter, primarily due to reduced maintenance activity. Crude throughput in Canadian Refining was 99,400 bbls/d in the third quarter, compared with 53,800 bbls/d in the previous quarter, with the increase primarily due to a major turnaround at the Lloydminster Upgrader which impacted second quarter throughput.

In U.S. Refining, crude throughput was 543,500 bbls/d in the third quarter, compared with 568,900 bbls/d in the second quarter. Throughput decreased primarily due to a major turnaround at the Lima Refinery that commenced in September, which resulted in the plant running at reduced crude throughput rates. Market capture in the U.S. was lower than the previous quarter primarily due to inventory timing impacts, the Lima Refinery turnaround and unplanned outages in secondary units at the operated and non-operated refineries. Subsequent to the quarter, the turnaround at Lima was safely and successfully completed in October.

³ Non-GAAP financial measure. Total operating margin is the total of Upstream operating margin plus Downstream operating margin. See Advisory.
⁴ Specified financial measure. See Advisory.

Financial results

Cash from operating activities in the third quarter, which includes changes in non-cash working capital, was about $2.5 billion, compared with $2.8 billion in the second quarter. Adjusted funds flow was approximately $2.0 billion, compared with $2.4 billion in the prior period and excess free funds flow (EFFF) was $146 million, compared with $735 million in the previous quarter. Third-quarter financial results were impacted by lower benchmark prices, planned turnaround activity, unplanned outages, and a FIFO loss in the U.S. Refining segment. Net earnings in the third quarter were $820 million, compared with $1.0 billion in the previous quarter.

Long-term debt, including the current portion, was $7.2 billion at September 30, 2024. Net debt decreased slightly from the prior quarter to approximately $4.2 billion at September 30, 2024, primarily due to free funds flow of $614 million and a release of non-cash working capital, offset by shareholder returns of $1.1 billion. Following the achievement of the net debt target in July 2024, the company continues to steward toward a net debt level near $4.0 billion and returning 100% of EFFF to shareholders over time in accordance with its financial framework.

Growth projects and capital investments

In the Oil Sands segment, the company continues to progress the tie-back of Narrows Lake, building a 17-kilometre pipeline connecting the reservoir to the Christina Lake processing facility, which will add between 20,000 bbls/d and 30,000 bbls/d of production. The project is approximately 93% constructed, as critical tie-ins to the Narrows Lake pipeline were completed during the Christina Lake turnaround. The project remains on track for first production mid-2025. At Sunrise, as part of the growth program, the company brought two new well pads online in the third quarter, which will continue to ramp up into the fourth quarter. One additional well pad will come online in early 2025. The optimization project at Foster Creek remains on schedule for startup by the middle of 2026, with most modules and major pieces of equipment in place and pipe installation underway. At the Lloydminster conventional heavy oil assets, 20 new production wells were drilled in the third quarter, positioning the company for growth from this business in 2025.

The West White Rose project reached a significant milestone with the completion of the SeaRose FPSO asset life extension work at the dry dock in Belfast. The vessel is now sailing back to the White Rose field where reconnection and commissioning will take place to enable the existing field to resume production by year end. The West White Rose project is now approximately 85% complete and progressing on-schedule.

Dividend declarations and share purchases

The Board of Directors has declared a quarterly base dividend of $0.180 per common share, payable on December 31, 2024 to shareholders of record as of December 13, 2024.

In addition, the Board has declared a quarterly dividend on each of the Cumulative Redeemable First Preferred Shares – Series 1, Series 2, Series 3, Series 5 and Series 7 – payable on December 31, 2024 to shareholders of record as of December 13, 2024 as follows:

Preferred shares dividend summary

All dividends paid on Cenovus’s common and preferred shares will be designated as “eligible dividends” for Canadian federal income tax purposes. Declaration of dividends is at the sole discretion of the Board and will continue to be evaluated on a quarterly basis.

In the third quarter, the company returned approximately $1.1 billion to common shareholders, composed of $732 million from its purchase of 28.4 million shares through its normal course issuer bid (NCIB) and $329 million through base dividends.

Since the share buyback program began in November 2021, as at October 28, Cenovus has purchased approximately 227 million common shares, delivering $5.3 billion in returns to shareholders. The current NCIB will expire on November 8, 2024. Cenovus has received approval from the Board of Directors to apply for another NCIB program. Cenovus will apply for approval to repurchase up to approximately 127 million of the company’s common shares, representing approximately 10% of its public float, as defined by the TSX.

2024 planned maintenance

The following table provides details on planned maintenance activities at Cenovus assets through 2024 and anticipated production or throughput impacts.

Potential quarterly production/throughput impact (Mbbls/d or MBOE/d)

Sustainability

Cenovus’s 2023 Corporate Social Responsibility report was issued in August, highlighting the company’s progress and performance related to safety, Indigenous reconciliation, and inclusion & diversity as well as its approach to governance. Cenovus remains committed to delivering on its environmental projects and performance, however recent changes to Canada’s Competition Act has created uncertainty and risk around the company’s ability to speak publicly about its actions.

Conference call today
8 a.m. Mountain Time (10 a.m. Eastern Time)

Cenovus will host a conference call today, October 31, 2024, starting at 8 a.m. MT (10 a.m. ET).

To join the conference call, please dial 888-307-2440 (toll-free in North America) or 647-694-2812 to reach a live operator who will join you into the call. A live audio webcast will also be available and archived for approximately 30 days.

Advisory

Basis of Presentation

Cenovus reports financial results in Canadian dollars and presents production volumes on a net to Cenovus before royalties basis, unless otherwise stated. Cenovus prepares its financial statements in accordance with International Financial Reporting Standards (IFRS) Accounting Standards.

Barrels of Oil Equivalent

Natural gas volumes have been converted to barrels of oil equivalent (BOE) on the basis of six thousand cubic feet (Mcf) to one barrel (bbl). BOE may be misleading, particularly if used in isolation. A conversion ratio of one bbl to six Mcf is based on an energy equivalency conversion method primarily applicable at the burner tip and does not represent value equivalency at the wellhead. Given that the value ratio based on the current price of crude oil compared with natural gas is significantly different from the energy equivalency conversion ratio of 6:1, utilizing a conversion on a 6:1 basis is not an accurate reflection of value.

Product types

Forward‐looking Information

This news release contains certain forward‐looking statements and forward‐looking information (collectively referred to as “forward‐looking information”) within the meaning of applicable securities legislation about Cenovus’s current expectations, estimates and projections about the future of the company, based on certain assumptions made in light of the company’s experiences and perceptions of historical trends. Although Cenovus believes that the expectations represented by such forward‐looking information are reasonable, there can be no assurance that such expectations will prove to be correct. Forward‐looking information in this document is identified by words such as “anticipate”, “continue”, “deliver”, “expect”, “focus”, “plan”, “progress”, “steward”, “target” and “will” or similar expressions and includes suggestions of future outcomes, including, but not limited to, statements about:   returning Excess Free Funds Flow to shareholders; shareholder returns, including renewing the company’s normal course issuer bid; safety; growth plans and projects; Net Debt; production guidance; the optimization project at Foster Creek; the tie-back of Narrows Lake to Christina Lake; amount and timing of production at Narrows Lake; production and timing of well pads at Sunrise; drilling activity and production at the Conventional Heavy Oil assets; return of the Sea Rose FPSO to the White Rose Field and return of production; the construction of the West White Rose project; 2024 planned maintenance; and dividend payments.

Developing forward‐looking information involves reliance on a number of assumptions and consideration of certain risks and uncertainties, some of which are specific to Cenovus and others that apply to the industry generally. The factors or assumptions on which the forward‐looking information in this news release are based include, but are not limited to: the allocation of free funds flow; commodity prices, inflation and supply chain constraints; Cenovus’s ability to produce on an unconstrained basis; Cenovus’s ability to access sufficient insurance coverage to pursue development plans; Cenovus’s ability to deliver safe and reliable operations and demonstrate strong governance; and the assumptions inherent in Cenovus’s 2024 corporate guidance available on cenovus.com.

The risk factors and uncertainties that could cause actual results to differ materially from the forward‐looking information in this news release include, but are not limited to: the accuracy of estimates regarding commodity production and operating expenses, inflation, taxes, royalties, capital costs and currency and interest rates; risks inherent in the operation of Cenovus’s business; and risks associated with climate change and Cenovus’s assumptions relating thereto and other risks identified under “Risk Management and Risk Factors” and “Advisory” in Cenovus’s Management’s Discussion and Analysis (MD&A) for the year ended December 31, 2023.

Except as required by applicable securities laws, Cenovus disclaims any intention or obligation to publicly update or revise any forward‐looking statements, whether as a result of new information, future events or otherwise. Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. Events or circumstances could cause actual results to differ materially from those estimated or projected and expressed in, or implied by, the forward‐looking information. For additional information regarding Cenovus’s material risk factors, the assumptions made, and risks and uncertainties which could cause actual results to differ from the anticipated results, refer to “Risk Management and Risk Factors” and “Advisory” in Cenovus’s MD&A for the periods ended December 31, 2023 and September 30, 2024, and to the risk factors, assumptions and uncertainties described in other documents Cenovus files from time to time with securities regulatory authorities in Canada (available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and Cenovus’s website at cenovus.com.)

Specified Financial Measures

This news release contains references to certain specified financial measures that do not have standardized meanings prescribed by IFRS Accounting Standards. Readers should not consider these measures in isolation or as a substitute for analysis of the company’s results as reported under IFRS Accounting Standards. These measures are defined differently by different companies and, therefore, might not be comparable to similar measures presented by other issuers. For information on the composition of these measures, as well as an explanation of how the company uses these measures, refer to the Specified Financial Measures Advisory located in Cenovus’s MD&A for the period ended September 30, 2024 (available on SEDAR+ at sedarplus.ca, on EDGAR at sec.gov and on Cenovus’s website at cenovus.com) which is incorporated by reference into this news release.

Upstream Operating Margin and Downstream Operating Margin

Upstream Operating Margin and Downstream Operating Margin, and the individual components thereof, are included in Note 1 to the interim Consolidated Financial Statements.

Total Operating Margin

Total Operating Margin is the total of Upstream Operating Margin plus Downstream Operating Margin.

⁵ Found in the September 30, 2024, or the June 30, 2024, interim Consolidated Financial Statements.

Adjusted Funds Flow, Free Funds Flow and Excess Free Funds Flow

The following table provides a reconciliation of cash from (used in) operating activities found in Cenovus’s Consolidated Financial Statements to Adjusted Funds Flow, Free Funds Flow and Excess Free Funds Flow. Adjusted Funds Flow per Share – Basic and Adjusted Funds Flow per Share – Diluted are calculated by dividing Adjusted Funds Flow by the respective basic or diluted weighted average number of common shares outstanding during the period and may be useful to evaluate a company’s ability to generate cash.

⁵ Found in the September, 30, 2024, or the June 30, 2024, interim Consolidated Financial Statements.

Cenovus Energy Inc.

Cenovus Energy Inc. is an integrated energy company with oil and natural gas production operations in Canada and the Asia Pacific region, and upgrading, refining and marketing operations in Canada and the United States. The company is focused on managing its assets in a safe, innovative and cost-efficient manner, integrating environmental, social and governance considerations into its business plans. Cenovus common shares and warrants are listed on the Toronto and New York stock exchanges, and the company’s preferred shares are listed on the Toronto Stock Exchange. For more information, visit cenovus.com.

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Cenovus contacts

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403-766-7711

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