What changed in this filing

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Item 1. Financial Statements

2024-05-02 compared with 2023-11-02 · 96 added, 130 removed, 358 unchanged (39% of the section changed)

4 unchanged sentences

Three months ended

Nine months ended

September 30,

Total revenue

10 unchanged sentences

Interest expense

Total other income (expense)

Total other income

Income before income taxes

9 unchanged sentences

Three months ended

Nine months ended

September 30,

Other comprehensive loss:

Other comprehensive (loss) / income:

Foreign currency translation adjustments

Amortization of actuarial net gain and other adjustments from pension plan, net of tax

Total other comprehensive loss

Total other comprehensive (loss) / income

Comprehensive income

3 unchanged sentences

(In thousands, except per share amounts)

September 30,

Current assets:

25 unchanged sentences

Common stock, $ 0.001 par value, 75,000 shares authorized;

32,772 shares issued and outstanding at September 30, 2023;

32,605 shares issued and outstanding at March 31, 2024;

32,685 shares issued and outstanding at December 31, 2023

12 unchanged sentences

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

3 unchanged sentences

Balance at March 31, 2023

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

Issuance of stock under Employee Stock Purchase Plan

Issuance of common stock on restricted stock units, net of shares withheld

Stock-based compensation expense

Repurchase of common stock

Balance at June 30, 2022

Foreign currency translation adjustments

Change in pension obligation

Exercise of stock options

Issuance of common stock on restricted stock units, net of stock withheld

Stock-based compensation expense

Repurchase of common stock

Balance at September 30, 2022

See accompanying Notes to these Consolidated Financial Statements (Unaudited)

Axcelis Technologies, Inc.

Consolidated Statements of Stockholders’ Equity

(In thousands)

Comprehensive

2 unchanged sentences

Foreign currency translation adjustments

Exercise of stock options

Change in pension obligation

Issuance of common stock on restricted stock units, net of shares withheld

2 unchanged sentences

Balance at March 31, 2024

Foreign currency translation adjustments

Issuance of stock under Employee Stock Purchase Plan

Issuance of common stock on restricted stock units, net of shares withheld

Stock-based compensation expense

Repurchase of common stock

Balance at June 30, 2023

Foreign currency translation adjustments

Issuance of common stock on restricted stock units, net of stock withheld

Stock-based compensation expense

Repurchase of common stock

Balance at September 30, 2023

See accompanying Notes to these Consolidated Financial Statements (Unaudited)

2 unchanged sentences

(In thousands)

Nine months ended

September 30,

Three months ended

Cash flows from operating activities

22 unchanged sentences

Repurchase of common stock

Proceeds from Employee Stock Purchase Plan purchases

Principal payments on finance lease obligation

2 unchanged sentences

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period

13 unchanged sentences

The balance sheet at December 31, 2023 has been derived from the audited consolidated financial statements at that date but does not include all the information and footnotes required by generally accepted accounting principles for complete financial statements.

As of September 30, 2023, there have been no material changes in the Company’s significant accounting policies.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

As of March 31, 2024, there have been no material changes in the Company’s significant accounting policies, other than with respect to the Company’s accounting policy for derivative financial instruments, which it had not held in prior periods, as described in Note 2 below.

For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2024, as amended by Amendment No.

1 thereto, filed with the SEC on February 28, 2024 (as so amended, the “2023 Form 10-K”).

Significant Accounting Policies

Derivative instruments

We are exposed to certain risks relating to our ongoing business operations, including market risks relating to fluctuations in foreign currency exchange rates.

We have entered into forward exchange contracts in order to mitigate risks associated with fluctuations in exchange rates on forecasted transactions denominated in foreign currencies and to minimize the impact of foreign currency fluctuations on our earnings and cash flows.

These contracts have month-to-month settlement dates.

As of March 31, 2024, we had open contracts with a notional value of $ 100 million.

We measure these instruments at fair value and recognize assets or liabilities associated with the intrinsic value on these open contracts on the Consolidated Balance Sheets at the end of each reporting period.

At March 31, 2024, the recognized unrealized gain on these forward exchange contracts was approximately $ 18 thousand and is included in other current assets within our Consolidated Balance Sheets.

Unrealized gains and losses are shown in our cash flows from operating activities within our Consolidated Statement of Cash Flows.

We have not designated these forward exchange contracts as hedging instruments and we record changes in the fair values at each measurement date in Other, net on the Consolidated Statements of Operations.

For the three months ended March 31, 2024, we recorded $ 1.5 million of gain on forward currency exchange contracts.

We do not offset fair value amounts of derivative instruments.

We do not use derivative instruments for speculative purposes.

Stock-Based Compensation

We maintain the Axcelis Technologies, Inc.

2012 Equity Incentive Plan, as amended (the “2012 Equity Plan”), an Internal Revenue Code Section 423 plan, which became effective on May 2, 2012, and permits the issuance of options, restricted stock, restricted stock units (“RSUs”) and performance awards to selected employees, directors and consultants of the Company.

The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2022.

We recognized stock-based compensation expense of $ 5.1 million and $ 3.6 million for the three-month periods ended September 30, 2023 and 2022, respectively.

We recognized stock-based compensation expense of $ 13.0 million and $ 9.8 million for the nine-month periods ended September 30, 2023 and 2022, respectively.

These amounts include compensation expense related to RSUs, non-qualified stock options and stock issued to participants under the 2020 Employee Stock Purchase Plan (the “2020 ESPP”).

In the three-month period ended September 30, 2023, we issued 7,320 shares of common stock upon vesting of RSUs.

In the three-month period ended September 30, 2022, we issued 38,507 shares of common stock upon vesting of RSUs and stock option exercises.

In the three-month period ended September 30, 2023, we received no proceeds in connection with the exercise of stock options.

In the three-month period ended September 30, 2022, we received proceeds of $ 0.4 million in connection with the exercise of stock options.

In the nine-month periods ended September 30, 2023 and 2022, we issued 0.3 million and 0.4 million shares of common stock, respectively, upon stock option exercises, purchases under the 2020 ESPP and vesting of RSUs.

In the nine-month periods ended September 30, 2023 and 2022, we received proceeds of $ 1.0 million and $ 1.9 million, respectively, in connection with the exercise of stock options and purchases under the 2020 ESPP.

2012 Equity Incentive Plan, as amended (the “2012 Equity Plan”), which became effective on May 2, 2012, and permits the issuance of options, restricted stock, restricted stock units (“RSUs”) and performance awards to selected employees, directors and consultants of the Company.

The 2012 Equity Plan is more fully described in Note 13 to the consolidated financial statements in our 2023 Form 10-K.

We recognized stock-based compensation expense of $ 4.7 million and $ 3.2 million for the three-month periods ended March 31, 2024 and 2023, respectively.

These amounts include compensation expense related to RSUs and non-qualified stock options.

In the three-month period ended March 31, 2024, we issued 41,941 shares of common stock upon vesting of RSUs.

In the three-month period ended March 31, 2023, we issued 57,604 shares of common stock upon vesting of RSUs and stock option exercises.

In the three-month period ended March 31, 2024, we received no proceeds in connection with the exercise of stock options.

In the three-month period ended March 31, 2023, we received proceeds of $ 25.0 thousand in connection with the exercise of stock options.

We have operating leases for manufacturing, office space, warehouse space, computer and office equipment and vehicles used in our business operations.

We have a finance lease in relation to the 2015 sale-leaseback of our corporate headquarters in Beverly, Massachusetts.

We review all agreements to determine if the agreement contains a lease

We review all agreements to determine if the agreement contains a lease component.

An agreement contains a lease component if it provides for the use of a specific physical space or a specific physical item.

4 unchanged sentences

We have made the following policy elections:

(i) operating leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet;

(i) operating leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets;

(ii) we recognize lease expense for operating leases on a straight-line basis over the lease term;

7 unchanged sentences

The amounts of operating and finance lease right-of-use assets and related lease obligations recorded within our consolidated balance sheets are as follows:

September 30,

Classification

10 unchanged sentences

Total lease liabilities

*Finance lease assets are recorded net of accumulated depreciation of $ 46.7 million and include $ 0.6 million of prepaid financing costs as of September 30, 2023.

*Finance lease assets are recorded net of accumulated depreciation of $ 46.7 million and include $ 0.6 million of prepaid financing costs as of March 31, 2024.

Finance lease assets are recorded net of accumulated depreciation of $ 46.4 million and include $ 0.6 million of prepaid financing costs as of December 31, 2023.

1 unchanged sentence

Our Axcelis Asia Operations Center facility in South Korea brings production capability closer to our Asia-based customers.

Our state-of-the-art 98,500 square foot logistics and flex manufacturing center in Beverly, Massachusetts became fully operational in the third quarter of 2023.

Operating lease expense and depreciation and interest expense relating to our finance lease obligation are recognized within our consolidated statement of operations for the three and nine months ended September 30, 2023 and 2022 as follows:

Our state-of-the-art 101,800 square foot logistics and flex manufacturing center was built to our specifications in Beverly, Massachusetts.

Operating lease expense and depreciation and interest expense relating to our finance lease obligation are recognized within our Consolidated Statement of Operations for the three months ended March 31, 2024 and 2023 as follows:

Three months ended

Nine months ended

September 30,

Classification

17 unchanged sentences

Total lease cost

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.6 million and $ 1.6 million for the three and nine months ended September 30, 2023, respectively, and includes short-term lease and variable lease costs of approximately $ 0.4 million and $ 1.4 million for the three and nine months ended September 30, 2022, respectively.

* Product / services, sales and marketing and general and administrative expense also includes short-term lease and variable lease costs of approximately $ 0.6 million and $ 0.5 million for the three months ended March 31, 2024 and 2023, respectively.

The lease of our corporate headquarters, shown below under finance leases, had an original lease term of 22 years , beginning in January 2015 and expiring in January 2037, with renewal options.

All other locations are treated as operating leases, with lease terms ranging from one to sixteen years .

The tables below reflect the minimum cash outflow regarding our current lease obligations as well as the weighted-average remaining lease term and weighted-average discount rates used in our calculation of our lease obligations and right-of-use assets as of September 30, 2023:

All other locations are treated as operating leases, with lease terms ranging from one to 16 years .

Maturity of Lease Liabilities

6 unchanged sentences

The table above does not include options to renew lease terms that are not reasonably certain of being exercised.

September 30,

Lease term and discount rate

8 unchanged sentences

Our cash flows from our finance lease include both an interest component and a principal component.

The table below shows our cash outflows by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets for the nine months ended September 30, 2023 and 2022, respectively:

Nine months ended September 30,

The table below shows our cash outflows by lease type and related section of our statement of cash flows, as well as the non-cash amount capitalized on our balance sheet in relation to our operating lease right-of-use assets for the three months ended March 31, 2024 and 2023, respectively:

Three months ended March 31,

Cash paid for amounts included in the measurement of lease liabilities

9 unchanged sentences

Three months ended

Nine months ended

September 30,

(in thousands)

4 unchanged sentences

Three months ended

Nine months ended

September 30,

(in thousands)

3 unchanged sentences

Contract liabilities are as follows:

September 30,

(in thousands)

Contract liabilities

Contract liabilities are reflected as deferred revenue on the consolidated balance sheet and relate to payments invoiced or received in advance of completion of performance obligations under a contract.

Contract liabilities are reflected as deferred revenue on the consolidated balance sheets and include payments received in advance of system sales as well as deferral of revenue from systems sales for installation and other future performance obligations.

Contract liabilities are recognized as revenue upon the fulfillment of performance obligations.

Three months ended

Nine months ended

September 30,

(in thousands)

3 unchanged sentences

Balance, end of the period

The majority of our system transactions have either (1) payment terms of 90 % due upon shipment of the system and 10 % due upon acceptance or (2) a pre-shipment deposit ranging from 20 % to 60 %, 70 % to 30 % due upon shipment and 10 % at acceptance.

The majority of our system transactions have either (1) payment terms of 90 % due upon shipment of the system and 10 % due upon acceptance or (2) a pre-shipment deposit ranging from 20 % to 60 %, with the remainder due upon shipment, less 10 % due at acceptance.

Aftermarket transaction payment terms typically provide that payment is due either within 30 or 60 days after the service is provided or parts delivered.

12 unchanged sentences

Changes to the allowances for credit losses are maintained through adjustments to the provision for credit losses, which are charged to current period earnings.

We recorded $ 0.7 million in bad debt expense for the three and nine-month periods ended September 30, 2023.

We did not have any allowance or incur any credit losses or recoveries for the three and nine-month periods ended September 30, 2022.

As of September 30, 2023 and 2022, respectively, we had no provision for credit losses.

We recorded $ 0.5 million of recovery of bad debt expense for the three-month period ended March 31, 2024.

We did no t have any allowance or incur any credit losses or recoveries for the three-month period ended March 31, 2023.

As of both March 31, 2024 and 2023, we had no provision for credit losses.

Computation of Net Earnings per Share

3 unchanged sentences

Three months ended

Nine months ended

September 30,

(in thousands, except per share amounts)

Net income available to common stockholders

3 unchanged sentences

Net income per share

Diluted weighted average shares of common stock outstanding does not include 734 and 5,046 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended September 30, 2023 and 2022, respectively, or 2,598 and 6,692 common equivalent shares issuable with respect to outstanding equity awards for the nine-month periods ended September 30, 2023 and 2022, respectively, as their effect would have been anti-dilutive.

Diluted weighted average shares of common stock outstanding does not include 19,548 and 1,120 common equivalent shares issuable with respect to outstanding equity awards for the three-month periods ended March 31, 2024 and 2023, respectively, as their effect would have been anti-dilutive.

Accumulated Other Comprehensive Loss

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the nine months ended September 30, 2023:

The following table presents the changes in accumulated other comprehensive loss, net of tax, by component, for the three months ended March 31, 2024:

Defined benefit

2 unchanged sentences

Other comprehensive loss and pension reclassification

Balance at September 30, 2023

Balance at March 31, 2024

Cash, cash equivalents and restricted cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets to the total of the amounts shown in the statement of cash flows:

September 30,

(in thousands)

2 unchanged sentences

Total cash, cash equivalents and restricted cash

As of September 30, 2023, we had $ 6.7 million in restricted cash representing the total of (i) a $ 5.9 million cash collateral relating to our lease for our headquarters in Beverly, Massachusetts, (ii) a $ 0.7 million letter of credit relating to workers’ compensation insurance and (iii) a $ 0.1 million deposit relating to customs activity.

As of March 31, 2024, we had $ 6.7 million in restricted cash representing the total of (i) a $ 5.9 million cash collateral relating to our lease for our headquarters in Beverly, Massachusetts, (ii) a $ 0.7 million letter of credit relating to workers’ compensation insurance and (iii) a $ 0.1 million deposit relating to customs activity.

See Note 13 for further discussion on the $ 5.9 million cash collateral.

1 unchanged sentence

The components of inventories are as follows:

September 30,

(in thousands)

4 unchanged sentences

When recorded, inventory reserves reduce the carrying value of inventories to their net realizable value.

We establish inventory reserves when conditions exist that indicate inventory may be in excess of anticipated demand or is obsolete based upon assumptions about future demand for the Company’s products or market conditions.

We regularly evaluate the ability to realize the value of inventories based on a combination of factors including the following:

3 unchanged sentences

We generally offer a one-year warranty for all of our systems, the terms and conditions of which vary depending upon the product sold.

For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and defer the portion of systems revenue attributable to the fair value of non-standard warranty.

For all systems sold, we accrue a liability for the estimated cost of standard warranty at the time of system shipment and, if applicable, defer the portion of systems revenue attributable to non-standard warranty.

Costs for non-standard warranty are expensed as incurred.

2 unchanged sentences

The changes in our standard product warranty liability are as follows:

Nine months ended

September 30,

Three months ended

(in thousands)

3 unchanged sentences

Changes in estimate of liability for pre-existing warranties during the period

Balance at September 30 (end of period)

Balance at March 31 (end of period)

Amount classified as current

17 unchanged sentences

The following table sets forth our assets by level within the fair value hierarchy:

September 30, 2023

March 31, 2024

Fair Value Measurements

5 unchanged sentences

Government Securities and Agency Investments)

Mark-to-market adjustment on forward exchange contracts

December 31, 2023

7 unchanged sentences

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses and other current assets and non-current assets, restricted cash, accounts payable and accrued expenses approximate fair value due to their short-term maturities.

The carrying amounts reflected in the consolidated balance sheets for accounts receivable, prepaid expenses, forward currency exchange contracts and other current assets and non-current assets, restricted cash, accounts payable and accrued expenses approximate fair value due to their short-term maturities.

(d) Forward Currency Exchange Contracts

Beginning in February 2024, we entered into forward currency exchange contracts to minimize the impact of foreign currency fluctuations on our earnings and cash flows.

These contracts have month-to-month settlement dates.

Any gains or losses on these contracts are reported within Other, net within our Consolidated Statement of Operations.

Any open contracts at period end that have settlement dates within one month after the reported period end and any mark-to-market valuation adjustments related to these open contracts are recorded within the current asset or current liability account and any unrealized gain or loss recognized is recorded within Other, net within our Consolidated Statement of Operations.

These contracts are measured at fair value using observable market inputs such as forward currency exchange rates and our counterparties’ credit risks.

Based on these inputs, the derivative instruments are classified within Level 2 of the valuation hierarchy.

At March 31, 2024, the recognized unrealized gain on these forward exchange contracts was approximately $ 18 thousand and is included in other current assets within our Consolidated Balance Sheets.

Based on our continued ability to trade and enter into forward contracts, we consider the markets for our fair value instruments to be active.

We evaluated the credit risk associated with the counterparties to these derivative instruments and determined that as of March 31, 2024, such credit risks have not had an adverse impact on the fair value of these instruments.

Financing Arrangements

1 unchanged sentence

As part of the sale, we also entered into a 22-year lease agreement of our headquarters facility.

This sale-leaseback is accounted for as a financing lease under generally accepted accounting principles and, as such, we have recorded a financing obligation of $ 45.5 million as of September 30, 2023.

This sale-leaseback is accounted for as a financing lease under generally accepted accounting principles and, as such, we have recorded a financing obligation of $ 44.8 million as of March 31, 2024.

The associated lease payments include both an interest component and payment of principal, with the remaining liability being extinguished at the end of the original lease term.

As of September 30, 2023, we had a security deposit of $ 5.9 million related to this lease.

On April 5, 2023 we terminated the Senior Secured Credit Facilities Credit Agreement, as amended (the “Credit Agreement”), with Silicon Valley Bank that we entered into on July 31, 2020.

The Credit Agreement provided for a revolving credit facility covering borrowings and letters of credit in an aggregate principal amount not to exceed $ 40.0 million.

Our obligations under the Credit Agreement were secured by a security interest, senior to any current and future debts and to any security interest, in all of our rights, title, and interest in, to and under substantially all of our assets, subject to limited exceptions, including permitted liens.

Upon termination, these liens and all other obligations under the credit agreement, were released.

A letter of credit issued by Silicon Valley Bank, a division of First Citizens Bank & Trust Company (successor by purchase to the Federal Deposit Insurance Corporation as Receiver for Silicon Valley Bridge Bank, N.A.) as successor to Silicon Valley Bank, remains outstanding in the amount of $ 5.9 million, securing our lease on our corporate headquarters.

This letter of credit was transitioned to a cash collateral arrangement on March 30, 2023, and was classified as long-term restricted cash on our balance sheet at September 30, 2023.

Income tax expense was $ 7.7 million for the three months ended September 30, 2023, compared to $ 4.7 million for the three months ended September 30, 2022.

The $ 3.0 million increase was primarily due to an increase in pre-tax

income partially offset by the tax deduction related to foreign sales taxed at a lower rate.

Income tax expense was $ 16.0 million for the nine months ended September 30, 2023, compared to $ 13.0 million for the nine months ended September 30, 2022.

The $ 3.0 million increase was primarily due to an increase in pre-tax income partially offset by the tax deduction related to stock based compensation and additional research and development tax credit.

The effective tax rate for the three and nine months ended September 30, 2023 was less than the U.S.

As of March 31, 2024, we had a security deposit of $ 5.9 million related to this lease in the form of a cash collateralized letter of credit issued with UBS Bank USA, which is classified as long-term restricted cash on our balance sheet at March 31, 2024.

Income tax expense was $ 7.4 million for the three months ended March 31, 2024, compared to $ 5.2 million for the three months ended March 31, 2023.

The $ 2.2 million increase was primarily due to an increase in pre-tax income and a decrease in stock compensation deduction partially offset by the tax deduction related to foreign sales taxed at a lower rate.

The effective tax rate for the three months ended March 31, 2024 was less than the U.S.

statutory rate of 21 % due to a forecasted Foreign Derived Intangible Income deduction, Federal research and development tax credits and a favorable discrete item related to equity compensation that reduces the annual tax rate.

The deferred income taxes of $ 44.3 million and $ 31.7 million as of September 30, 2023 and December 31, 2022, respectively, reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards.

As of September 30, 2023, we have recorded a $ 10.6 million valuation allowance in the U.S.

The deferred income taxes of $ 54.5 million and $ 53.4 million as of March 31, 2024 and December 31, 2023, respectively, reflect the net tax effect of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, as well as the tax effect of carryforwards.

As of March 31, 2024, we have recorded a $ 10.8 million valuation allowance in the U.S.

against certain tax credits and state net operating losses due to the uncertainty of their realization.

3 unchanged sentences

Concentration of Risk

For the three months ended September 30, 2023, no individual customer accounted for greater than ten percent of total revenue.

For the three months ended September 30, 2022, one customer accounted for 13.8 % of total revenue.

For the nine months ended September 30, 2023, one customer accounted for 10.7 % of total revenue.

For the nine months ended September 30, 2022, one customer accounted for 14.8 % of total revenue.

At September 30, 2023, three customers accounted for 11.8 %, 11.0 %, and 10.2 % of accounts receivable, respectively.

At December 31, 2022, two customers accounted for 19.4 % and 11.5 % of accounts receivable, respectively.

For the three months ended March 31, 2024, no individual customer accounted for greater than ten percent of total revenue.

For the three months ended March 31, 2023, two customers accounted for 15.2 % and 12.9 % of total revenue, respectively.

At March 31, 2024, no individual customer accounted for greater than ten percent of accounts receivable.

At December 31, 2023, one customer accounted for 12.2 % of accounts receivable.

Share Repurchase

1 unchanged sentence

In August 2023, our Board of Directors approved additional funding of $ 200 million for our stock repurchase program, to be available on full utilization of the $ 100 million repurchase funding approved in February 2022.

During the nine months ended September 30, 2023, we repurchased 0.3 million shares at an average cost of $ 137.54 per share.

During the three months ended March 31, 2024, we repurchased 0.1 million shares at an average cost of $ 122.99 per share.

The timing and actual number of any additional shares to be repurchased under this program will depend on various factors including price, corporate and regulatory requirements, alternative investment opportunities and other market conditions.

10 unchanged sentences

We have not incurred any material costs as a result of such indemnifications and have not accrued any liabilities related to such obligations in the accompanying consolidated financial statements.

Recent Accounting Guidance

In November 2023 the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 is intended to enhance disclosures for significant segment expenses for all public entities required to report segment information in accordance with ASC Topic 280, Segment Reporting (“ASC 280”).

ASC 280 requires a public entity to report for each reportable segment a measure of segment profit or loss that its chief operating decision maker (“CODM”) uses to assess segment performance and to make decisions about resource allocations.

ASU 2023-07 is intended to improve financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more useful financial analyses.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

A public entity should apply ASU 2023-07 retrospectively to all prior periods presented in the consolidated financial statements.

We are currently evaluating the impact of ASU 2023- on our future consolidated financial statements and related disclosures.

In December 2023 the FASB issued Accounting Standards Update 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (“ASU 2023-09”).

ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures.

ASU 2023-09 addresses investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information.

Early adoption is permitted.

A public entity should apply ASU 2023-09 prospectively to all annual periods beginning after December 15, 2024.

We are currently evaluating the impact of ASU 2023-09 on our future consolidated financial statements and related disclosures.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements