What changed in this filing

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Item 1. Business

2024-03-06 compared with 2023-03-10 · 79 added, 75 removed, 160 unchanged (49% of the section changed)

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Foster Company and its subsidiaries, unless the context indicates otherwise.

The following table shows the net sales for each business segment as a percentage of total net sales for the years ended December 31, 2022 and 2021:

Business Segments

The Company has historically operated under three reporting segments:

(1) Rail, Technologies, and Services, (2) Precast Concrete Products, and (3) Steel Products and Measurement.

During 2023, the Company made certain organizational changes, which included the appointment of an executive leader for the Infrastructure Solutions business.

The Infrastructure Solutions business comprises both the historic Precast Concrete Products and Steel Products and Measurement (since renamed “Steel Products”) reporting segments.

After evaluation of the organizational change along with the acquisitions and divestitures that the Company completed, the Company concluded that, beginning in the fourth quarter of 2023, it will operate under two reporting segments, and has restated segment information for the historical periods presented herein to conform to the current presentation.

Accordingly, the Company now operates in two reporting segments:

(1) Rail, Technologies, and Services (“Rail”) and (2) Infrastructure Solutions (“Infrastructure”).

The Company’s reportable operating segments have been determined in accordance with the Company’s internal management structure, which is organized based on operating activities, the manner in which we organize segments for making operating decisions and assessing performance, and the availability of separate financial results.

Financial information concerning these segments is set forth in Part II, Item 8, Financial Statements and Supplementary Data, Note 2 to the Consolidated Financial Statements contained in this Annual Report on Form 10-K, which is incorporated by reference into this Item 1.

The following table shows the net sales for each reporting segment as a percentage of total net sales for the years ended December 31, 2023 and 2022:

Percentage of Net Sales

Rail, Technologies, and Services 57 % 60 %

Precast Concrete Products 21 14

Steel Products and Measurement 19 28

Infrastructure Solutions 43 40

Rail, Technologies, and Services

The Company’s Rail, Technologies, and Services (“Rail”) segment is comprised of several manufacturing, distribution, and service businesses that provide a variety of products, solutions, and services for freight and passenger railroads and other industrial companies throughout the world.

The Company’s Rail segment is comprised of several manufacturing, distribution, and service businesses that provide a variety of products, solutions, and services for freight and passenger railroads and other industrial companies throughout the world.

The Rail segment has sales offices throughout North America, South America, Europe, and Asia, and works on rail projects where it offers products manufactured by the Company, or sourced from numerous supply chain partners.

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The Rail reporting segment is comprised of the Rail Products, Global Friction Management, and Technology Services and Solutions business units.

Within Rail Products and Global Friction Management, we offer a full suite of track components and friction management products and services.

Within Technology Services and Solutions, we focus on innovation, creating leading edge engineering and digital communication technology solutions for rail, infrastructure, and the built environment, including control and digital display, contract services and condition monitoring solutions.

The Technology Services and Solutions business unit also offers Total Track Monitoring railroad condition monitoring systems, equipment, and services.

Rail Products

The Rail Products business unit is comprised of the Company’s Rail Distribution, Allegheny Rail Products, Transit Products, and Concrete Tie divisions.

The Rail Products business unit is comprised of the Company’s Rail Distribution, Allegheny Rail Products, and Transit Products.

The Concrete Ties business was also included in Rail Products until it was sold in June of 2023.

Following are summaries of those divisions:

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These products are usually sold to contractors or by sealed bid to passenger railroads.

Concrete Ties - This division manufactures engineered concrete railroad ties for freight and passenger railroads and industrial accounts at its facility in Spokane, WA.

Track Components - The Track Components division manufactured track spikes and anchors at a facility in St-Jean-sur-Richelieu, Quebec.

The Company completed the sale of the assets of this division in August of 2022.

Concrete Ties (“Ties”) - This division manufactures engineered concrete railroad ties for freight and passenger railroads and industrial accounts at its facility in Spokane, WA.

The Company completed the sale of the operating assets of this division in June of 2023.

Global Friction Management

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Friction management products include mobile and wayside systems that apply lubricants and liquid or solid friction modifiers.

These products and systems are designed, engineered, manufactured, fabricated, serviced, and marketed in the United States (“U.S.”), Canada, the United Kingdom (“U.K.”), and Germany.

These products and systems are designed, engineered, manufactured, fabricated, serviced, and marketed in the United States (“US”), Canada, the United Kingdom (“UK”), and Germany.

Technology Services and Solutions

The Company’s Technology Services and Solutions business unit engineers and manufactures railroad condition monitoring systems and equipment, wheel impact load detection systems, wayside data collection and management systems, and rockfall, flood, earthworks, and bridge strike monitoring.

The Company’s Technology Services and Solutions business unit engineers and manufactures Total Track Monitoring railroad condition monitoring systems and equipment including wheel impact load detection systems, wayside data collection and management systems, and rockfall, flood, earthworks, and bridge strike monitoring.

These offerings create a smart interface between conventional rail products and intelligent digital technologies to monitor safety, increase network velocity, and enable the digital railway.

In addition, the business unit provides controls, display, and telecommunication contract management solutions for the transit, control room, and customer information and display sectors to enhance safety, operational efficiency, and customer experience.

These products, systems, and services are designed, engineered, serviced, and marketed in the U.S., U.K., and Germany.

These products, systems, and services are designed, engineered, serviced, and marketed in the US, UK, and Germany.

In June of 2022, the Company acquired the stock of Skratch Enterprises Ltd.

(“Skratch”), located in Telford, United Kingdom.

(“Skratch”), located in Telford, UK.

Skratch offers a single-point supply solution model for clients, and enables large scale deployments of its intelligent digital signage solutions.

Skratch’s service offerings include design, prototyping and proof of concept, hardware and software, logistics and warehousing, installation, maintenance, content management, and managed monitoring.

Infrastructure Solutions

The Infrastructure segment uses its industry expertise to design, manufacture, and deploy advanced technologies that positively impact the built environment, including precast concrete buildings and products, bridge products, and pipe protective coatings and threading.

The Infrastructure segment is composed of nine operating facilities across the US providing engineered precast concrete solutions, fabricated bridge products, and protective pipe coating and threading offerings across North America.

Precast Concrete Products

The Precast Concrete Products (“Precast”) segment manufactures precast concrete products for the North American civil infrastructure market.

The Precast Concrete Products (“Precast”) business unit manufactures precast concrete products for the North American civil infrastructure market.

Under its CXT ® brand, Precast manufactures restrooms, concession stands, and other protective storage buildings available in multiple designs, textures, and colors for national, state, and municipal parks.

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In August of 2022, the Company acquired the operating assets of VanHooseCo Precast, LLC (“VanHooseCo”), a privately-held business headquartered in Loudon, Tennessee specializing in precast concrete walls, water management products, and forms for the commercial and residential infrastructure markets.

VanHooseCo has an existing manufacturing site in Loudon, near Knoxville, and a new facility recently commissioned in Lebanon, TN near Nashville.

VanHooseCo has a manufacturing site in Loudon, near Knoxville, and a facility in Lebanon, TN near Nashville.

The Company also entered into license agreements for VanHooseCo’s ENVIROCAST ® pre-insulated concrete walls and ENVIROKEEPER ® water retention and management product lines.

The acquisition expands L.B.

The acquisition expanded L.B.

Foster’s addressable market to include commercial and residential developers, as well as state and local agencies in Tennessee and surrounding states, and provides a platform for further investment and organic growth in the expanding precast concrete infrastructure market.

Steel Products and Measurement

The Company’s Steel Products and Measurement segment provides custom engineered solutions and services that help to build and maintain critical civil and energy infrastructure throughout the Americas.

Steel Products and Measurement designs, manufactures, and supplies a variety of steel bridge products to contractors performing installation and repair work to North American transportation infrastructure network.

It also provides solutions in corrosion protection, measurement, and control systems for the safe transportation and accurate measurement of gas and liquids in pipelines as well as threaded pipe for water well applications.

The Steel Products and Measurement reporting segment is comprised of the Fabricated Steel Products and Coatings and Measurement business units.

Fabricated Steel Products

The Fabricated Steel Products business unit provides fabricated bridge products to infrastructure end markets and provides threading services for agricultural, municipal and industrial water well applications.

The Fabricated Steel Products business unit markets and sells products primarily in North America.

Steel Products

The Company’s Steel Products business unit provides custom engineered solutions and services that help to build and maintain critical civil and energy infrastructure throughout North America.

Steel Products designs, manufactures, and supplies a variety of steel bridge products to contractors performing installation and repair work to North American transportation infrastructure network.

It also provides solutions in corrosion protection for the safe transportation of gas and liquids in pipelines as well as threaded pipe for water well applications.

Bridge Products - The Bridge Products facility in Bedford, PA manufactures a number of fabricated steel and aluminum products primarily for the highway, bridge, and transit industries, including concrete-reinforced steel grid decking, open steel grid deck, aluminum bridge railing, and stay-in-place steel bridge forms.

Water Well Threading - The Company’s Magnolia, TX facility cuts, threads, and paints pipe primarily for water well applications for the agriculture industry and municipal water authorities and, to a lesser extent, threading services for the Oil Country Tubular Goods markets.

Piling Products - On September 24, 2021, the Company completed the sale of its Piling Products division.

The Company retained all pre-closing receivables and liabilities associated with the division.

The sale included substantially all inventory and fixed assets associated with the division.

Coatings and Measurement

The Coatings and Measurement business unit provides protective coating services and precision measurement products to infrastructure end markets.

The following is a summary of those product and service offerings:

Protective Coatings - There are two pipeline coating services locations that make up our Protective Coatings division.

The Company discontinued its grid deck product line in the third quarter of 2023 and expects to complete any remaining customer obligations in 2024.

Water Well Products - The Company’s Magnolia, TX facility cuts, threads, and paints pipe primarily for water well applications for the agriculture industry and municipal water authorities and, to a lesser extent, threading services for oil and gas production.

Protective Pipe Coatings - There are two pipeline coating services locations that make up our Protective Coatings division.

Our Birmingham, AL facility coats the outside and inside diameter of pipe primarily for oil and gas transmission pipelines.

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The second location, situated in Willis, TX, applies specialty outside and inside diameter coatings for a wide variety of pipe diameters for oil and gas transmission, mining, and waste-water pipelines, as well as custom coatings for specialty pipe fittings and connections.

Precision Measurement Products and Systems - The Company manufactures and provides turnkey solutions for metering and injection systems primarily for the oil, and, to a lesser extent, gas industry.

The Willis, TX location operates a fabrication plant that builds metering systems for custody transfer applications, including crude oil and other petroleum-based products.

These systems are used at well sites, pipelines, refineries, chemical plants, and loading/unloading facilities.

The Willis, TX location also manufactures and installs additive and dye injection systems.

These systems are used to inject performance additives and/or dyes into petroleum products.

Precision Measurement Products and Systems - The Company manufactured and provided turnkey solutions for metering and injection systems primarily for the oil, and, to a lesser extent, gas industry via its Chemtec Energy Services LLC (“Chemtec”) business.

The Willis, TX location operated a fabrication plant that built metering systems for custody transfer applications, including crude oil and other petroleum-based products.

The Company completed the sale of the Chemtec business, which included all of the operating assets of this division, in March of 2023.

International Operations

Foster Company generally markets its Rail products and services directly in all major industrial areas of North America, South America, Europe and Asia.

Infrastructure products and services are primarily marketed domestically.

The Company employs a global sales force of approximately 78 people of which 17 are located outside of the US to reach current customers and cultivate potential customers in these areas.

For the years ended December 31, 2023 and 2022, approximately 15% and 24%, respectively, of the Company’s total sales were outside the US.

Our international sales and long-lived assets are presented in Note 2 of the Company’s consolidated financial statements, set forth in Item 8 of this Annual Report.

Marketing and Competition

Foster Company generally markets its Rail products and services directly in all major industrial areas of the U.S., Canada, and Europe.

Precast and Steel Products and Measurement products and services are primarily marketed domestically.

The Company employs a sales force of approximately 79 people that is supplemented with a network of agents across Europe, South America, and Asia to reach current customers and cultivate potential customers in these areas.

For the years ended December 31, 2022 and 2021, approximately 24% of the Company’s total sales were outside the U.S.

The major markets for the Company’s products are highly competitive.

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The Company purchases a variety of raw materials from its supplier base including steel, aggregate, epoxy, electronics, and components, from both domestic and foreign suppliers.

Products are also purchased in the form of finished or semi-finished products which the majority of it is supplied from domestic and foreign steel producers.

Products are also purchased in the form of finished or semi-finished products with the majority of product being supplied by domestic and foreign steel producers.

Generally, the Company has a number of vendor options.

The Company’s purchases from foreign suppliers are subject to foreign currency exchange rate changes and the risks associated with changes in international conditions, as well as U.S.

and international laws that could impose import restrictions on selected classes of products and for anti-dumping duties if products are sold in the U.S.

at prices that are below specified prices.

The Company’s purchases from foreign suppliers are subject to foreign currency exchange rate changes and the risks associated with changes in international conditions, as well as US and international laws that could impose import restrictions on selected classes of products and for anti-dumping duties if products are sold in the US at prices that are below specified prices.

The Company’s backlog represents the sales price of customer purchase orders or contracts in which the performance obligations have not been met, and therefore are precluded from revenue recognition.

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Foster a great place to work.

The Company seeks to attract and retain employees that embody and demonstrate its values, which are

summarized in our SPIRIT model, focusing on Safety, People, Integrity, Respect, Innovation, and Teamwork.

The Company seeks to attract and retain employees that embody and demonstrate its values, which are summarized in our SPIRIT model, focusing on Safety, People, Integrity, Respect, Innovation, and Teamwork.

The Company uses these six principles to guide its employees every day.

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Environmental, Social, and Governance Matters

As part of its ongoing commitment to good corporate stewardship, in 2022 the Company hired an employee in a newly created full-time role to focus on and enhance its sustainability and environmental, social, and governance (“ESG”) initiatives.

The position is intended to facilitate collaboration with the Board of Directors, senior leadership, investors, employees, customers, and societal and civic organizations to integrate ESG policies, frameworks, goals, and metrics into the Company’s business risk and opportunity strategies.

The new role leads cross-functional efforts to coordinate, execute, improve, and communicate the Company’s ESG efforts.

Additionally, the Company has created an employee-led Social Responsibility Committee to promote and execute the Company's values surrounding social responsibility internally.

The Company is committed to good corporate citizenship and promoting the highest standards of environmental performance, corporate governance, and ethical behavior to positively impact the communities in which we operate.

With a focus on continuous improvement, the Company has adopted safety and environmental policies in support of long term environmental, health, safety, and sustainability excellence.

Among our core values are safety, teamwork, and innovation which we rely on to create more advanced solutions around sustainability.

We also emphasize continual improvement in preventing pollution and reducing the environmental impact of our operations while maximizing opportunities for environmental and social benefits.

Health and Safety

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The Company has 9 locations/businesses throughout North America and Europe that Environmental Management Systems has independently assessed and are compliant with the requirements of ISO 14001:2015 and ISO 45001:2018.

Additionally, the Company has facilitated the formation of an internal, employee-led Wellness Committee to promote initiatives and values Company-wide that focus on all aspects of health and wellness.

Leadership and Talent Management

The Company’s executive leadership team sets the Company’s strategic direction and is dedicated to sustainable profitable growth through its commitment to providing quality products and services to its customers and treating our customers, suppliers, and employees as partners.

The Company’s executive leadership team sets the Company’s strategic direction and is dedicated to sustainable, profitable growth through its commitment to providing quality products and services to customers and treating customers, suppliers, and employees as partners.

Foster cultivates and empowers talent through performance management, career planning/development, and succession planning, creating an environment for people to be successful in achieving our strategic plan through the following areas:

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We strongly encourage an ongoing process of communication between a supervisor and an employee throughout the year, in support of accomplishing the strategic objectives of the organization.

As of December 31, 2022, the Company had 1,131 employees, 867 located within the U.S., 43 within Canada, 215 in Europe, and 6 within other locations.

As of December 31, 2023, the Company had 1,065 employees of which 820 were located within the US, 43 within Canada, 196 in Europe, and 6 within other locations.

There were 497 hourly production workers and 568 salaried employees.

Of the hourly production workers, approximately 44 were represented by unions.

Two collective bargaining agreements covering approximately 24 and 20 employees are scheduled to expire in March 2025, and September 2025, respectively.

The Company divested its Track Components division on August 1, 2022, which included the collective bargaining agreement with employees of that business division.

Of the hourly production workers, 11 were represented by unions.

The Company has one collective bargaining agreement covering 11 employees which is scheduled to expire in March 2025.

The Company divested its Ties and Track Components divisions on June 30, 2023 and August 1, 2022, respectively, which included collective bargaining agreements with employees of those business divisions.

The Company has not suffered any major work stoppages in recent history and considers its relations with its employees to be satisfactory.

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The Company’s press releases and recent investor presentations are also available on its website.

Our website and the information posted thereto is not part of this Annual Report on Form 10-K and unless otherwise stated is specifically not incorporated by reference herein.

Executive Officers of the Registrant

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Name Age Position

Friedman 44 Vice President - Steel Products and Measurement

Guinee 53 Senior Vice President, General Counsel, and Secretary

Jones 56 Vice President - Technology Services and Solutions

Friedman 45 Senior Vice President - Steel Products and Special Projects

Guinee 54 Executive Vice President, General Counsel, and Secretary

Jones 57 Senior Vice President - UK Services and Solutions

Kasel 58 President and Chief Executive Officer

Kelly 63 Senior Vice President - Human Resources and Administration

Lippard 54 Senior Vice President - Rail

Ness 59 Vice President - Precast Concrete Products

Kelly 64 Executive Vice President - Human Resources and Administration

Lippard 55 Senior Vice President - Rail, Technologies, and Services

Ness 60 Senior Vice President - Infrastructure Solutions

Reilly 51 Corporate Controller and Principal Accounting Officer

Thalman 56 Senior Vice President and Chief Financial Officer

Treacy 63 Senior Vice President and Chief Growth Officer

Friedman was elected Vice President - Steel Products and Measurement in October 2021, having previously served as Vice President - Coatings and Measurement since joining the Company in May of 2019.

Thalman 57 Executive Vice President and Chief Financial Officer

Treacy 64 Executive Vice President and Chief Growth Officer

Friedman was elected Senior Vice President - Steel Products and Special Projects in December of 2023, having previously served as Senior Vice President, Steel Products, Vice President - Steel Products and Measurement, and Vice President - Coatings and Measurement since joining the Company in May of 2019.

Prior to joining the Company, Mr.

Friedman was employed by ABB Ltd from 2012 to 2019 in various roles including Director Global Product Management and Manufacturing Unit Manager.

Previously, he served in various research and development and operations role for Hunter Fan Company from 2001 to 2012.

Guinee serves as Senior Vice President, General Counsel, and Secretary and was elected Vice President, General Counsel, and Secretary in 2014.

Previously, he served in various research and development and operations roles for Hunter Fan Company from 2001 to 2012.

Guinee was elected Executive Vice President, General Counsel, and Secretary in June of 2023, having previously served as Senior Vice President, General Counsel, and Secretary, and was elected Vice President, General Counsel, and Secretary in 2014.

Prior to joining the Company, Mr.

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Foster since 2010.

Jones was elected Vice President - Technology Services and Solutions in October 2021, having previously served as Vice President - Global Technology and Managing Director of L.B.

Foster Rail Technologies (UK) Ltd having held the latter position from 2010 to 2021.

Jones was elected Senior Vice President - UK Services and Solutions in October 2021, having previously served as Vice President - Global Technology and Managing Director of L.B.

Technologies (UK) Ltd, having held the latter position from 2010 to 2021.

Prior to L.B.

Jones held the position of Managing Director of Portec Rail Products (UK) Ltd from 2006 to 2010.

Effective February 29, 2024, Mr.

Jones retired from his position as Senior Vice President - UK Services and Solutions.

Kasel was elected President and Chief Executive Officer in July 2021, having previously served as Senior Vice President and Chief Operating Officer since December 2019, Senior Vice President - Rail and Construction from 2017 to 2019, Senior Vice President - Rail Products and Services from 2012 to 2017, Senior Vice President - Operations and Manufacturing from 2005 to 2012, and Vice President - Operations and Manufacturing from 2003 to 2005.

Kasel served as Vice President of Operations for Mammoth, Inc., a Nortek company from 2000 to 2003.

Kelly serves as Senior Vice President - Human Resources and Administration and was elected Vice President - Human Resources and Administration in 2012, having previously served as Vice President, Human Resources since 2006.

Kelly was elected Executive Vice President - Human Resources and Administration in June of 2023, having previously served as Senior Vice President - Human Resources and Administration, and was elected Vice President - Human Resources and Administration in 2012, having previously served as Vice President, Human Resources since 2006.

Prior to joining the Company, Mr.

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from 1994 to 2004.

Lippard serves as Senior Vice President - Rail, and was previously Vice President - Rail Technologies and Services from 2020 to 2021, Vice President - Rail from January 2020 to November 2020 and Vice President - Rail Products from 2017 to 2019.

Lippard was elected Senior Vice President - Rail, Technologies, and Services in December of 2023 and was previously Senior Vice President - Rail from 2021 to 2023, Vice President - Rail, Technologies, and Services from 2020 to 2021, Vice President - Rail from January 2020 to November 2020 and Vice President - Rail Products from 2017 to 2019.

From 2000 to 2017, he served as Vice President - Rail Product Sales.

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Lippard served in various other capacities with the Company after his initial employment in 1991.

Ness was elected Vice President - Precast Concrete Products in January 2021, having previously served as Director, Operations of CXT Precast since June 2020.

Ness was elected Senior Vice President - Infrastructure Solutions in December 2023, having previously served as Vice President - Precast Concrete Products since January 2021, and as Director, Operations of CXT Precast from June 2020 to January 2021.

Previously, Mr.

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Director of Finance - Asia from 2013 to 2015 in Singapore and Earthworks Controller from 2007 to 2012.

Thalman was appointed Senior Vice President and Chief Financial Officer of the Company in February 2021.

Thalman was elected Executive Vice President and Chief Financial Officer in June 2023, having previously served as Senior Vice President and Chief Financial Officer of the Company from February 2021.

Prior to joining the Company, Mr.

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Vice President - Finance Infrastructure, Director of Finance - M&A and Planning, Director of Finance – Kennametal Europe, Director of Finance - MSSG Americas, Assistant Corporate Controller, and Director of Financial Reporting.

Treacy was appointed Senior Vice President and Chief Growth Officer in October 2021, and was previously Senior Vice President - Infrastructure Solutions in 2021, Vice President - Infrastructure Solutions from November 2020 to February 2021, Vice President - Tubular and Energy Services from 2017 to 2020.

Treacy was appointed Executive Vice President and Chief Growth Officer in October 2021, and was previously Senior Vice President - Infrastructure Solutions in 2021, Vice President - Infrastructure Solutions from November 2020 to February 2021, Vice President - Tubular and Energy Services from 2017 to 2020.

Treacy previously served as Director of Technology and General Manager, Transit Products within the Rail Products and Services segment since 2013.

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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 1. Business