What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-02-16 compared with 2023-02-16 · 76 added, 79 removed, 172 unchanged (47% of the section changed)

10 unchanged sentences

A discussion regarding our financial condition and results of operations for the year ended December 31, 2022 compared to 2021 can be found under Part II, Item 7 in our Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on February 16, 2023, which is available on the SEC’s website at www.sec.gov and our Investor Relations website at ir.avisbudgetgroup.com.

In 2022, we saw strong demand and pricing for vehicle rentals, driven by global travel demand, and favorable conditions in the used-vehicle market in the United States.

This coupled with disciplined cost management and continued fleet management resulted in revenues of approximately $12.0 billion, net income of $2.8 billion and Adjusted EBITDA of $4.1 billion for the year ended December 31, 2022.

We are susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations.

In 2023, we saw strong volume as normal seasonality returned to our industry.

This coupled with revenue per day and inflationary pressures resulted in revenues of approximately $12.0 billion, net income of $1.6 billion and Adjusted EBITDA of $2.5 billion for the year ended December 31, 2023.

We continue to be susceptible to a number of industry-specific and global macroeconomic factors that may cause our actual results of operations to differ from our historical results of operations or current expectations.

The factors and trends that we currently believe are or will be most impactful to our results of operations and financial condition include the following:

interest rates, inflationary impact on items such as commodity prices and wages, used car values, and an economic downturn that may impact travel demand.

interest rates, inflationary impact on items such as commodity prices and wages, disruption in the supply of new vehicles, used car values, and an economic downturn that may impact travel demand, all of which may be exacerbated by the ongoing military conflicts in the Middle East and Eastern Europe.

We continue to monitor the potential favorable or unfavorable impacts of these and other factors on our business, operations, financial condition, and future results of operations.

Our strategy continues to primarily focus on costs and customer experience to strengthen our company, enable resilience, and deliver stakeholder value.

Our strategy continues to primarily focus on customer experience and costs to strengthen our Company, maximize profitability, and deliver stakeholder value.

We measure performance principally using the following key metrics:

7 unchanged sentences

In identifying our reportable segments, we also consider the nature of services provided by our operating segments, the geographical areas in which our segments operate and other relevant factors.

Management evaluates the operating results of each of our reportable segments based upon revenues and “Adjusted EBITDA,” which we define as income from continuing operations before non-vehicle related depreciation and amortization;

Management evaluates the operating results of each of our reportable segments based upon revenues and Adjusted EBITDA, which we define as income (loss) from continuing operations before non-vehicle related depreciation and amortization;

any impairment charges;

3 unchanged sentences

transaction-related costs, net;

charges for unprecedented personal-injury and other legal matters, net, which includes amounts recorded in excess of $5 million related to class action lawsuits;

non-operational charges related to shareholder activist activity, which include third party advisory, legal and other professional fees;

charges for legal matters, net, which includes amounts recorded in excess of $5 million related to class action lawsuits and personal injury matters;

non-operational charges related to shareholder activist activity, which includes third-party advisory, legal and other professional fees;

COVID-19 charges, net;

cloud computing costs;

other (income) expense, net, and income taxes.

We revised our definition of Adjusted EBITDA to exclude other (income) expense, net.

We did not revise prior years' Adjusted EBITDA because there were no other charges similar in nature.

We believe Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our operating businesses and in comparing our results from period to period.

19 unchanged sentences

Total expenses $ 10,094 $ 8,358 $ 1,736 21 %

Income before income taxes 3,636 1,708 1,928 n/m

Provision for income taxes 880 425 455 n/m

Net income $ 2,756 $ 1,283 $ 1,473 n/m

net loss attributable to non-controlling interests (8) (2) (6) n/m

Income before income taxes 1,914 3,636 (1,722) (47 %)

Provision for income taxes 279 880 (601) (68 %)

Net income $ 1,635 $ 2,756 $ (1,121) (41 %)

Net income (loss) attributable to non-controlling interests 3 (8) 11 n/m

Net income attributable to Avis Budget Group, Inc.

$ 2,764 $ 1,285 $ 1,479 n/m

$ 1,632 $ 2,764 $ (1,132) (41 %)

n/m Not meaningful.

Revenues increased $2.7 billion, or 29%, for the year ended December 31, 2022 compared to 2021, primarily due to a 23% increase in volume and a 8% incr ease in revenue per day, excluding exchange rate effects, partially offset by a $327 million negative impact fro m currency exchange rate movements.

Total expenses increased 10% for the year ended December 31, 2022, compared to 2021, primarily due to increased demand, partially offset by cost discipline as volume returned.

Our effective tax rates for the years ended December 31, 2022 and 2021 were provisions of approximately 24% and 25% , respectively .

As a result of these items, our net income increased by $1.5 billion compared to 2021.

Revenues for the year ended December 31, 2023 were consistent with the similar period in 2022, primarily due to a 5% increase in volume, partially offset by a 5% decrease in revenue per day, excluding exchange rate effects.

Total expenses increased 21% for the year ended December 31, 2023, compared to the similar period in 2022, primarily due to increased fleet costs, interest costs, and the impact of inflation .

Our effective tax rates for the years ended December 31, 2023 and 2022 were provisions of 14.6% and 24.2%, respectively .

As a result of these items, our net income decreased by $1.1 billion compared to the similar period in 2022.

For the years ended December 31, 2023 and 2022, we reported earnings per diluted share of $42.08 and $57.16, respectively.

Operating expenses decreased to 44.1% of revenue for the year ended December 31, 2022 compared to 45.7% in 2021 , primarily due to increased revenues and cost discipline as volume returned.

Vehicle depreciation and lease charges decreased to 6.9% of revenue for the year ended December 31, 2022 compared to 12.9% in 2021 , primarily due to 41% lower per unit fleet cost, excluding exchange rate effects, driven by a favorable trend in the used-vehicle market.

Selling, general and administrative costs decreased to 11.2% of revenue for the year ended December 31, 2022 compared to 12.3% in 2021, primarily due to increased revenues and cost discipline as volume returned.

Vehicle interest costs represented 3.4% of revenue, unchanged for the year ended December 31, 2022 compared to 2021.

Operating expenses increased to 47.3% of revenue for the year ended December 31, 2023 compared to 44.1% during the similar period in 2022 , primarily due to cost inflation.

Vehicle depreciation and lease charges increased to 14.5% of revenue for the year ended December 31, 2023 compared to 6.9% during the similar period in 2022 , primarily due to increased per unit fleet costs, excluding exchange rate effects, driven by increased fleet levels, increased depreciation rates, and a decrease in the gain on sale of vehicles .

Selling, general and administrative costs increased to 11.7% of revenue for the year ended December 31, 2023 compared to 11.2% during the similar period in 2022, primarily due to increased marketing costs and inflation .

Vehicle interest costs increased to 6.1% of revenue for the year ended December 31, 2023, compared to 3.4% during the similar period in 2022, primarily due to rising interest rates and additional funding for vehicles.

Following is a more detailed discussion of the results of each of our reportable segments and reconciliation of net income to Adjusted EBITDA:

5 unchanged sentences

Total Company $ 12,008 $ 2,490 $ 11,994 $ 4,133

Reconciliation of net income (loss) to Adjusted EBITDA

Reconciliation of net income to Adjusted EBITDA

Net income $ 1,635 $ 2,756

1 unchanged sentence

Income before income taxes $ 1,914 $ 3,636

Non-vehicle related depreciation and amortization (b)

Non-vehicle related depreciation and amortization 216 225

Interest expense related to corporate debt, net

1 unchanged sentence

Early extinguishment of debt 5 —

Restructuring and other related charges (c)

Transaction-related costs, net (d)

Unprecedented personal-injury and other legal matters, net (e)

COVID-19 charges, net (f)

Other (income) expense, net (7) —

Restructuring and other related charges 11 19

Transaction-related costs, net 5 8

Other (income) expense, net (b)

Reported within operating expenses:

Cloud computing costs 35 10

COVID-19 charges, net — (9)

Legal matters, net 5 1

Adjusted EBITDA $ 2,490 $ 4,133

(a) Includes unallocated corporate overhead which is not attributable to a particular segment.

(b) Includes cloud computing costs of $10 million and $7 million in 2022 and 2021, respectively, within operating expenses.

(d) Primarily comprised of acquisition and integration related expenses.

(e) Reported within operating expenses in our consolidated results of operations.

(f) The following table presents the unusual, direct and incremental costs due to the COVID-19 pandemic:

Minimum annual guaranteed rent in excess of concession fees, net $ (9) $ (2)

Vehicles damaged in overflow parking lots, net of insurance proceeds — (7)

Other charges — 7

Operating expenses (9) (3)

Selling, general and administrative expenses — 1

COVID-19 charges, net $ (9) $ (2)

(b) Primarily consists of gains or losses related to our equity investment in a former subsidiary, offset by fleet related and certain administrative services provided to the same former subsidiary.

2023 2022 % Change

1 unchanged sentence

Adjusted EBITDA $ 2,196 $ 3,660 (40 %)

Revenues increased 25% for the year ended December 31, 2022 compared to 2021 , primarily due to a 22% increase in volume and a 3% increase in revenue per day.

Operating expenses are consistent with prior year at 43.8% of revenue for the year ended December 31, 2022 compared to 43.7% in 2021.

Vehicle depreciation and lease charges decreased to 4.4% of revenue for the year ended December 31, 2022 compared to 11.3% in 2021, primarily due to increased revenues and a 61% decrease in per-unit fleet costs, excluding exchange rate effects, driven by a favorable trend in the used-vehicle market.

Selling, general and administrative costs decreased to 9.5% of revenue for the year ended December 31, 2022 compared to 10.3% in 2021, primarily due to increased revenues and cost discipline as volume returned.

Vehicle interest costs increased to 3.7% of revenue for the year ended December 31, 2022 compared to 3.4% in 2021, primarily due to higher interest rates.

Adjusted EBITDA was $1.3 billion higher for the year ended December 31, 2022 compared to 2021, primarily due to increased revenues, lower per-unit fleet costs and cost discipline as volume returned.

Revenues decreased 1% for the year ended December 31, 2023 compared to the similar period in 2022 , primarily due to a 6% decrease in revenue per day, partially offset by a 5% increase in volume.

Operating expenses increased to 47.4% of revenue for the year ended December 31, 2023 compared to 43.8% during the similar period in 2022, primarily due to cost inflation.

Vehicle depreciation and lease charges increased to 13.0% of revenue for the year ended December 31, 2023 compared to 4.4% during the similar period in 2022, primarily due to increased per-unit fleet costs, driven by increased fleet levels, increased depreciation rates, and a decrease in the gain on sale of vehicles.

Selling, general and administrative costs were approximately 9.6% of revenue for the year ended December 31, 2023, consistent with the similar period in 2022, primarily due to increased marketing costs, offset by a decrease in other selling, general and administrative costs .

Vehicle interest costs increased to 6.6% of revenue for the year ended December 31, 2023 compared to 3.7% during the similar period in 2022, primarily due to rising interest rates and additional funding for vehicles.

Adjusted EBITDA decreased 40% for the year ended December 31, 2023 compared to the similar period in 2022, primarily due to higher per-unit fleet costs and inflationary pressures.

International

2 unchanged sentences

Adjusted EBITDA $ 400 $ 560 (29 %)

Revenues increased 44% for the year ended December 31, 2022, compared to 2021, primarily due to a 31% increase in revenue per day, excluding exchange r ate effects, a 23% increase in vo lume, partially offset by a $310 million negative impact from currency exchange rate movements.

Operating expenses decreased to 44.3% of revenue for the year ended December 31, 2022 compared to 53.5% in 2021, primarily due to increased revenues and cost discipline as volume returned.

Vehicle depreciation and lease charges decreased to 16.4% of revenue for the year ended December 31, 2022 compared to 19.7% in 2021, primarily due to increased revenues and improved utilization, partially offset by a 10% increase in p er-unit fleet costs, excluding exchange rate effects.

Selling, general and administrative cost s decreased to 15.0% of revenue for the year ended December 31, 2022 compared to 17.1% in 2021, primarily due to increased revenues and cost discipline as volume returned.

Vehicle interest costs decreased to 2.2% of revenue for the year ended December 31, 2022 compared to 3.1% in 2021, primarily due to increased revenue.

Adjusted EBITDA was $442 million higher for the year ended December 31, 2022 compared to 2021, primarily due to increased revenues and cost discipline as volume returned, partially offset by an increase in per-unit fleet costs an d a $80 million negative impact from currency exchange rate movements.

Revenues increased 6% for the year ended December 31, 2023 compared to the similar period in 2022, primarily due to a 6% increase in vo lume and a $25 million positive impact from currency exchange rate movements, partially offset by a 1% decrease in revenue per day, excluding exchange r ate effects .

Operating expenses increased to 45.6% of revenue for the year ended December 31, 2023 compared to 44.3% during the similar period in 2022, primarily due to cost inflation.

Vehicle depreciation and lease charges increased to 19.7% of revenue for the year ended December 31, 2023 compared to 16.4% during the similar period in 2022, primarily due to increased per-unit fleet costs, excluding exchange rate effects, driven by increased fleet levels and increased depreciation rates .

Selling, general and administrative cost s increased to 15.4% of revenue for the year ended December 31, 2023 compared to 15.0% during the similar period in 2022, primarily due to increased marketing costs and inflation .

Vehicle interest costs increased to 4.4% of revenue for the year ended December 31, 2023 compared to 2.2% during the similar period in 2022, primarily due to rising interest rates and additional funding for vehicles .

Adjusted EBITDA decreased 29% for the year ended December 31, 2023 compared to the similar period in 2022, primarily due to higher per-unit fleet costs and inflationary pressures.

Corporate and Other

3 unchanged sentences

n/m Not meaningful.

Adju sted EBITDA decreased $16 million for the year ended December 31, 2022, compared to 2021, due to higher selling, general and administrative expenses related to current year performance accruals and computer technology transformation costs, which are not attributable to a particular segment.

Adju sted EBITDA decreased 22% for the year ended December 31, 2023 compared to the similar period in 2022, primarily due to higher selling, general and administrative expenses related to computer technology transformation costs, which are not attributable to a particular segment.

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

12 unchanged sentences

Stockholders’ equity (343) (700) 357

The increase in liabilities exclusive of liabilities under vehicle programs compared to 2021 is principally related to the increase in corporate indebtedness from the issuance of Floating Rate Term Loan due March 2029.

See “Liquidity and Capital Resources” and Note 13 – Long-term Corporate Debt and Borrowing Arrangements to our Consolidated Financial Statements.

The increases in assets and liabilities under vehicle programs are principally related to the increase in the size of our vehicle rental fleet to meet increased demand.

The decrease in stockholders’ equity compared to 2021 is principally related to our share repurchases, partially offset by comprehensive income.

The increase in assets exclusive of assets under vehicle programs compared to 2022 is principally related to the increase in operating lease right-of-use assets, deferred income taxes, other current assets and property and equipment.

See Note 3 – Leases, Note 9 – Income Taxes, Note 10 – Other Current Assets and Note 11 – Property and Equipment, net to our Consolidated Financial Statements.

The increase in liabilities exclusive of liabilities under vehicle programs compared to 2022 is principally related to the increase in operating lease liabilities and corporate indebtedness from the issuance of senior notes.

See “Liquidity and Capital Resources,” Note 3 – Leases and Note 13 – Long-term Corporate Debt and Borrowing Arrangements to our Consolidated Financial Statements.

The increases in assets and liabilities under vehicle programs are principally related to the increase in the size and cost of our vehicle rental fleet to meet demand.

The increase in stockholders’ equity compared to 2022 is principally related to comprehensive income, partially offset by our share repurchase activity.

LIQUIDITY AND CAPITAL RESOURCES

Our principal sources of liquidity are cash on hand and our ability to generate cash through operations and financing activities, as well as available funding arrangements and committed credit facilities, each of which is discussed below.

In March 2022, we entered into a $750 million Floating Rate Term Loan due March 2029, at a price of 97% of the aggregate principal amount, with interest paid monthly, which is part of our senior credit facilities.

The Floating Rate Term Loan due March 2029 bears interest at one-month Secured Overnight Financing Rate (“SOFR”) plus 350 basis points.

During 2022, our Avis Budget Rental Car Funding (AESOP) LLC subsidiary issued approximately $2.1 billion of asset-backed notes with expected final payment dates ranging from March 2023 to February 2028, and a weighted average interest rate of 4.94%.

The proceeds from these borrowings were used to fund the repayment

of maturing vehicle-backed debt and the acquisition of rental cars in the United States.

Our Board of Directors has authorized the repurchase of up to $8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February 2023.

In July 2023, we issued €400 million of 7.250% euro-denominated Senior Notes due July 2030, at par, with interest payable semi-annually.

In September 2023, we used net proceeds from the offering primarily to redeem all of the €300 million of our outstanding 4.125% euro-denominated Senior Notes due 2024 plus accrued interest.

In November 2023, we issued $500 million of 8.000% Senior Notes due February 2031, at 99.3% of face value, with interest payable semi-annually.

Net proceeds were used to fully redeem our 4.500% euro-denominated Senior Notes due 2025 and a portion of our outstanding balance on our Term Loan due 2029, with the remainder being used for general corporate purposes.

During 2023, our Avis Budget Rental Car Funding (AESOP) subsidiary issued approximately $3.9 billion of asset-backed notes with expected final payment dates ranging from October 2026 to February 2029, and a weighted average interest rate of 5.81%.

In January 2024, AESOP issued $1.2 billion of asset-backed notes to investors with an expected final payment date of June 2029 and a weighted average interest rate of 5.51%.

The proceeds from these borrowings were used to fund the repayment of maturing vehicle-backed debt and the acquisition of rental cars in the United States.

In December 2023, we paid a special cash dividend of $10.00 per share to all holders of our common stock as of December 15, 2023, totaling approximately $355 million.

Our Board of Directors has authorized the repurchase of up to approximately $8.1 billion of our common stock under a plan originally approved in 2013 and subsequently expanded, most recently in February 2023.

Our stock repurchases may occur through open market purchases, privately negotiated transactions or trading plans pursuant to Rule 10b5-1 of the Exchange Act.

2 unchanged sentences

The repurchase program has no set expiration or termination date.

For the year ended December 31, 2022, we repurchased approximately 16.7 million shares of common stock at a cost of approximately $3.3 billion under the program.

As of February 13, 2023, approximately $1.7 billion of authorization remained available to repurchase common stock under the program.

For the year ended December 31, 2023, we repurchased approximately 4.3 million shares of common stock at a cost of approximately $889 million (excluding excise taxes due under the Inflation Reduction Act of 2022) under the program.

As of December 31, 2023, approximately $802 million of authorization remained available to repurchase common stock under the program.

Year Ended December 31, 2023 vs.

8 unchanged sentences

Effect of changes in exchange rates on cash and cash equivalents, program and restricted cash

(32) (11) (21)

Net change in cash and cash equivalents, program and restricted cash

Cash and cash equivalents, program and restricted cash, beginning of period

626 765 (139)

Cash and cash equivalents, program and restricted cash, end of period

$ 644 $ 642 $ 2

The increase in cash provided by operating activities during 2022 compared with 2021 is primarily due to the increase in our net income.

The decrease in cash used in investing activities during 2022 compared with 2021 is primarily due to the increase in proceeds received on vehicle sales.

The decrease in cash provided by financing activities during 2022 compared with 2021 is primarily due to the increase in repurchases of common stock and net payments on vehicle borrowings, offset by a decrease in net payments on corporate borrowings.

The decrease in cash provided by operating activities during 2023 compared with 2022 is primarily due to the decrease in our net income.

The increase in cash used in investing activities during 2023 compared with 2022 is primarily due to the increase in our net investment in vehicles.

The increase in cash provided by financing activities during 2023 compared with 2022 is primarily due to the increase in our net borrowings under vehicle programs and the decrease in our common stock repurchases, offset by the increase in our payments of corporate borrowings.

We anticipate that our non-vehicle property and equipment additions will be approximately $285 million in 2024.

6 unchanged sentences

Our primary sources of funding are operating revenue, cash received upon the sale of vehicles, borrowings under our vehicle-backed borrowing arrangements and our senior revolving credit facility, and other financing activities.

Our liquidity has in the past been, and could in the future be, negatively affected by any financial market disruptions or the absence of a recovery or worsening of the U.S.

and worldwide economies, which may result in unfavorable conditions in the mobility industry, in the asset-backed financing market and in the credit markets generally.

Our liquidity has in the past been, and could in the future be, negatively affected by any financial market disruptions or the absence of a recovery or worsening of the United States and worldwide economies, which may result in unfavorable conditions in the mobility industry, in the asset-backed financing market and in the credit markets generally.

We believe these factors have affected and could further affect the debt ratings assigned to us by credit rating agencies and the cost of our borrowings.

Additionally, a worsening or prolonged downturn in the worldwide economy or a disruption in the credit markets could further impact our liquidity due to (i) decreased demand and pricing for vehicles in the used vehicle market, (ii) increased costs associated with, and/or reduced capacity or increased collateral needs under, our financings, (iii) the adverse impact of vehicle manufacturers being unable or unwilling to honor their obligations to repurchase or guarantee the depreciation on the related program vehicles and (iv) disruption in our ability to obtain financing due to negative credit events specific to us or affecting the overall debt market (see Part I, Item 1A, “Risk Factors” for further discussion).

As of December 31, 2022, we had access to $0.6 billion of available cash and cash equivalents and available borrowings under our revolving credit facility of approximately $1.0 billion, providing us with access to an approximate $1.6 billion of total liquidity.

As of December 31, 2023, we had access to $555 million of available cash and cash equivalents and available borrowings under our revolving credit facility of approximately $261 million, providing us with access to an approximate $816 million of total liquidity.

Our liquidity position could also be negatively impacted if we are unable to remain in compliance with the consolidated first lien leverage ratio requirement and other covenants associated with our senior credit facilities and other borrowings.

6 unchanged sentences

The results of the majority of our recurring operations are recorded in our financial statements using accounting policies that are not particularly subjective, nor complex.

However, in presenting our financial statements in conformity with generally accepted accounting principals (GAAP), we are required to make estimates and assumptions that affect the amounts reported therein.

However, in presenting our financial statements in conformity with generally accepted accounting principles (GAAP), we are required to make estimates and assumptions that affect the amounts reported therein.

Several of the estimates and assumptions we are required to make relate to matters that are inherently uncertain as they relate to future events and/or events that are outside of our control.

If there is a significant unfavorable change to current conditions, it could result in a material adverse impact to our consolidated results of operations, financial position and liquidity.

If there is a significant unfavorable change to current conditions, it could result in a material

adverse impact to our consolidated results of operations, financial position and liquidity.

We believe that the estimates and assumptions we used when preparing our financial statements were the most appropriate at that time.

6 unchanged sentences

A change in these underlying assumptions will cause a change in the results of the tests and, as such, could cause the fair value to be less than the respective carrying amount.

In such event, we would then be

required to record a charge, which would impact earnings.

In such event, we would then be required to record a charge, which would impact earnings.

We review the carrying value of goodwill and other indefinite-lived intangible assets for impairment annually or more frequently if circumstances indicate that an impairment may have occurred.

2 unchanged sentences

See Note 7 – Intangible Assets to our Consolidated Financial Statements.

For our Europe, Middle East and Africa (“EMEA”) reporting unit, the percentage by which the estimated fair value exceeded the carrying value as of October 1, 2023 was approximately 14% and the amount of goodwill allocated to our reporting unit was approximately $460 million.

We will continue to closely monitor actual results versus our expectations, as well as any significant changes in events or conditions, and the resulting impact to our assumptions about future estimated cash flows, the discount rate and market multiples.

In the future, failure to achieve our business plans, a significant deterioration of the macroeconomic conditions of the countries in which we operate, or significant changes in the assumptions and estimates that are used in our impairment testing for goodwill and indefinite-lived intangible assets (such as the discount rate) could result in significantly different estimates of fair value that could trigger an impairment of the goodwill of our reporting units or intangible assets.

We present vehicles at cost, net of accumulated depreciation, on the Consolidated Balance Sheets.

15 unchanged sentences

In the event we were to determine that we would be able to realize deferred income tax assets in the future in excess of their net recorded amount, we would make an adjustment to the valuation allowance which would reduce the provision for income taxes.

Currently we do not record valuation allowances on the majority of our tax loss carryforwards as there are adequate deferred tax liabilities that could be realized within the carryforward period.

Currently we do not record valuation allowances on the majority of

our tax loss carryforwards as there are adequate deferred tax liabilities that could be realized within the carryforward period.

See Note 2 – Summary of Significant Accounting Policies and Note 9 – Income Taxes to our Consolidated Financial Statements for more information regarding income taxes.

9 unchanged sentences

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-K

Item 7. Management’s Discussion and Analysis