What changed in this filing

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Item 1. Financial Statements

2020-11-05 compared with 2020-08-06 · 100 added, 77 removed, 433 unchanged (29% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Cost of services rendered

4 unchanged sentences

Interest expense

Interest and net investment loss (income)

Interest and net investment (income) loss

Income before Income Taxes

Provision for income taxes

Other Comprehensive Loss, Net of Income Taxes:

Net unrealized loss on derivative instruments

Other Comprehensive Income (Loss), Net of Income Taxes:

Net unrealized gain (loss) on derivative instruments

Other Comprehensive Income (Loss), Net of Income Taxes

Total Comprehensive Income

4 unchanged sentences

(In millions, except share data)

September 30,

Current Assets:

2 unchanged sentences

Receivables, less allowance of $ 2 in each period

Contract asset

Prepaid expenses and other assets

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2,000,000,000 shares authorized;

85,425,009 shares issued and outstanding at June 30, 2020 and 85,309,260 shares issued and outstanding at December 31, 2019

85,444,714 shares issued and outstanding at September 30, 2020 and 85,309,260 shares issued and outstanding at December 31, 2019

Additional paid-in capital

7 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

Balance at beginning of period

11 unchanged sentences

Balance at beginning of period

Other comprehensive loss, net of tax

Other comprehensive income (loss), net of tax

Balance at end of period

3 unchanged sentences

(In millions)

Six Months Ended

Nine Months Ended

September 30,

Cash and Cash Equivalents at Beginning of Period

13 unchanged sentences

Accrued liabilities

Accrued interest payable

Current income taxes

24 unchanged sentences

Our home service plans cover the repair or replacement of major components of up to 21 household systems and appliances, including electrical, plumbing, central HVAC systems, water heaters, refrigerators, dishwashers and ranges/ovens/cooktops.

In 2019, we launched our new on-demand home services business under the brand name Candu, and we acquired Streem, a technology startup that uses augmented reality, computer vision and machine learning to help home service professionals more quickly and accurately diagnose breakdowns and complete repairs and to help real estate professionals consult with and provide virtual tours to potential buyers and agents.

In 2019, we launched our new on-demand home services business, just recently rebranded as ProConnect, and we acquired Streem, a technology startup that uses augmented reality, computer vision and machine learning to help home service professionals more quickly and accurately diagnose breakdowns and complete repairs and to help real estate professionals consult with and provide virtual tours to potential buyers and agents.

We serve customers across all 50 states and the District of Columbia.

8 unchanged sentences

The COVID-19 situation remains very fluid, and we continue to adjust our response in real time.

While we did not experience a material impact on our results of operations and overall financial performance during the first quarter, during the second quarter of 2020, our results of operations and financial performance were adversely impacted by COVID-19 as follows:

While we did not experience a material impact on our results of operations and overall financial performance during the first quarter, during the second and third quarters of 2020, our results of operations and financial performance were adversely impacted by COVID-19 as follows:

 We experienced a decline in first-year real estate sales attributable, in part, to the adverse impact COVID-19 had on U.S.

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 We experienced an increase in appliance and plumbing claims primarily due to the increased usage of home systems and appliances driven by state and local shelter at home orders and recommendations.

In addition, industry-wide availability challenges in the appliance trade have caused increased cost pressure.

 We increased our marketing spend in the first-year direct-to-consumer channel to help mitigate the decline in first-year real estate sales.

3 unchanged sentences

Our significant accounting policies are described in Note 2 to the audited consolidated and combined financial statements included in our 2019 Form 10-K.

There have been no material changes to the significant accounting policies for the six months ended June 30, 2020.

There have been no material changes to the significant accounting policies for the nine months ended September 30, 2020.

Adoption of New Accounting Standards

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The amendments apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

The amendments are effective for all entities as of March 12, 2020 through December 31, 2022, when the reference rate replacement activity is expected to be completed.

We are currently evaluating its impact on our consolidated financial statements and related disclosures.

This standard is currently effective and upon adoption may be applied prospectively to contract modifications made on or before December 31, 2022, when the reference rate replacement activity is expected to be completed.

Our Term Loan Facility and related interest rate swap that utilize LIBOR have not discontinued its use, and, therefore, this standard is not yet effective for us.

We are currently evaluating the impact of adopting this standard and do not expect its adoption to have a material impact on our consolidated financial statements and related disclosures.

We enter into annual service plan agreements with our customers.

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Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions)

13 unchanged sentences

We capitalize the incremental costs of obtaining a contract with a customer, primarily sales commissions, and recognize the expense using the input method in proportion to the costs expected to be incurred in performing services under the contract, over the expected customer relationship period.

Deferred customer acquisition costs were $ 18 million as of June 30, 2020 and December 31, 2019.

Amortization of these deferred acquisition costs was $ 6 million for each of the three months ended June 30, 2020 and 2019 and $ 10 million for each of the six months ended June 30, 2020 and 2019.

Deferred customer acquisition costs were $ 18 million as of September 30, 2020 and December 31, 2019.

Amortization of these deferred acquisition costs was $ 6 million for each of the three months ended September 30, 2020 and 2019 and $ 15 million and $ 16 million for the nine months ended September 30, 2020 and 2019, respectively.

There were no impairment losses in relation to these capitalized costs.

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As a result, a contract asset is created when revenue is recognized on monthly-pay customers before being billed.

As of September 30, 2020, a contract asset of $ 47 million was recorded related to the recognition of monthly-pay customer revenue on an other-than-straight-line basis to match the timing of cost recognition.

Deferred revenue represents a contract liability and is recognized when cash payments are received in advance of the performance of services, including when the amounts are refundable.

Amounts are recognized as revenue in proportion to the costs expected to be incurred in performing services under our contracts.

Deferred revenue was $ 173 million and $ 188 million as of June 30, 2020 and December 31, 2019, respectively, and, as of June 30, 2020, includes a net contract liability of $ 3 million related to the recognition of monthly pay-customer revenue on an other-than-straight-line basis to match the timing of cost recognition.

Changes in deferred revenue for the six months ended June 30, 2020 were as follows:

Deferred revenue was $ 179 million and $ 188 million as of September 30, 2020 and December 31, 2019, respectively.

Changes in deferred revenue for the nine months ended September 30, 2020 were as follows:

(In millions)

2 unchanged sentences

Recognition of deferred revenue

Balance as of June 30, 2020

There was approximately $ 73 million and $ 145 million of revenue recognized in the three and six months ended June 30, 2020, respectively, that was included in the deferred revenue balance as of December 31, 2019.

Balance as of September 30, 2020

There was approximately $ 42 million and $ 187 million of revenue recognized in the three and nine months ended September 30, 2020, respectively, that was included in the deferred revenue balance as of December 31, 2019.

Goodwill and Intangible Assets

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An assessment for impairment is performed on October 1 of every year.

The balance of goodwill was $ 502 million and $ 501 million as of June 30, 2020 and December 31, 2019, respectively.

There were no goodwill or trade name impairment charges recorded in the six months ended June 30, 2020 and 2019.

There were no accumulated impairment losses recorded as of June 30, 2020 and December 31, 2019.

The balance of goodwill was $ 512 million and $ 501 million as of September 30, 2020 and December 31, 2019, respectively.

The increase in goodwill reflects adjustments related to our acquisition of Streem.

See Note 7 to the accompanying condensed consolidated financial statements for further information.

There were no goodwill or trade name impairment charges recorded in the nine months ended September 30, 2020 and 2019.

There were no accumulated impairment losses recorded as of September 30, 2020 and December 31, 2019.

During the second quarter of 2020, we completed a business acquisition for $ 5 million, which was primarily allocated to developed technology and other intangible assets.

The table below summarizes the other intangible asset balances:

As of June 30, 2020

As of September 30, 2020

As of December 31, 2019

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(1) Not subject to amortization.

Amortization expense was $ 4 million and $ 1 million for the three months ended June 30, 2020 and 2019, respectively, and $ 7 million and $ 3 million for the six months ended June 30, 2020 and 2019, respectively.

Amortization expense was $ 2 million and $ 1 million for the three months ended September 30, 2020 and 2019, respectively, and $ 9 million and $ 5 million for the nine months ended September 30, 2020 and 2019, respectively.

The following table outlines expected amortization expense for existing intangible assets for the remainder of 2020 and the next five years :

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The weighted-average remaining lease term and weighted-average discount rate related to operating leases is as follows:

September 30,

Weighted-average remaining lease term (years)

Weighted-average discount rate

We recognized operating lease expense of $ 1 million for each of the three months ended June 30, 2020 and 2019 and $ 1 million and $ 2 million for the six months ended June 30, 2020 and 2019, respectively.

We recognized operating lease expense of $ 1 million for each of the three months ended September 30, 2020 and 2019, and $ 2 million and $ 3 million for the nine months ended September 30, 2020 and 2019, respectively.

These expenses are included in Selling and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

For the six months ended June 30, 2020, and 2019, cash paid for amounts included in the measurement of lease liabilities were $ 3 million and $ 2 million, respectively, and are reflected in the accompanying condensed consolidated statements of cash flows.

For the six months ended June 30, 2020, amounts i nclude $ 2 million of lease termination costs related to the decision to consolidate the operations of Landmark Home Warranty, LLC (“Landmark”) with those of OneGuard Home Warranties (“OneGuard”) .

Supplemental cash flow information related to operating leases is as follows:

Nine Months Ended

September 30,

(In millions)

Cash paid for amounts included in the measurement of lease liabilities (1)

Leased assets obtained in exchange for new lease liabilities

_____________________________

(1) For the nine months ended September 30, 2020, amounts include $ 2 million of lease termination costs related to the decision to consolidate certain operations of Landmark Home Warranty, LLC (“Landmark”) with those of OneGuard Home Warranties (“OneGuard”).

See Note 8 to the accompanying condensed consolidated financial statements for further information.

Supplemental balance sheet information related to operating leases is as follows:

September 30,

(In millions)

5 unchanged sentences

Total operating lease liabilities

The following table presents maturities of our operating lease liabilities as of June 30, 2020.

The following table presents maturities of our operating lease liabilities as of September 30, 2020.

(In millions)

2 unchanged sentences

Less imputed interest

As of June 30, 2020, we have entered into additional leases as a lessee for real estate that have not yet commenced.

As of September 30, 2020, we have entered into additional leases as a lessee for real estate that have not yet commenced.

These leases will result in operating lease right-of-use assets and corresponding lease liabilities of approximately $ 7 million.

These leases are expected to commence during the second half of 2020 and first half of 2021, with lease terms between three years and seven years .

These leases are expected to commence during the fourth quarter of 2020 and first quarter of 2021, with lease terms between three years and seven years .

As required by ASC 740, we compute interim period income taxes by applying an anticipated annual effective tax rate to our year-to-date income or loss from operations before income taxes, except for significant unusual or infrequently occurring items.

Our estimated tax rate is adjusted each quarter in accordance with ASC 740.

The effective tax rate on income was 25.5 percent and 25.1 percent for the three months ended June 30, 2020 and 2019, respectively, and 25.4 percent for each of the six months ended June 30, 2020 and 2019.

The effective tax rate on income was 24.8 percent and 25.7 percent for the three months ended September 30, 2020 and 2019, respectively, and 25.1 percent and 25.5 percent for the nine months ended September 30, 2020 and 2019, respectively.

The decrease in the effective tax rates for the three and nine months ended September 30, 2020 compared to 2019 is primarily due to a decrease in our state and local effective tax rates.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was enacted in response to the COVID-19 pandemic.

3 unchanged sentences

We are not subject to state and local income tax examinations by tax authorities in jurisdictions where separate income tax returns are filed for the years prior to 2015.

Substantially all of our income before income taxes for the six months ended June 30, 2020 and 2019 was generated in the U.S.

Substantially all of our income before income taxes for the nine months ended September 30, 2020 and 2019 was generated in the U.S.

Our policy is to recognize potential interest and penalties related to our tax positions within the tax provision.

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As discussed in our 2019 Form 10-K, we completed the acquisition of Streem in the fourth quarter of 2019.

During the six months ended June 30, 2020, we updated our preliminary allocation and reclassified $ 1 million from other intangibles, primarily customer relationships, to goodwill.

As of June 30, 2020, the purchase price allocation for this acquisition has not been finalized.

During the second quarter of 2020, we acquired a business for a cash purchase price of $ 5 million to expand the Candu on-demand offering via their technology platform.

The purchase price was primarily allocated to developed technology and other intangible assets.

As of June 30, 2020, the purchase price allocation for this acquisition has not been finalized.

Regarding the two acquisitions discussed above, we are still evaluating the fair value of certain intangible assets.

As we finalize the fair value of assets acquired and liabilities assumed for each acquisition, additional purchase price adjustments may be recorded during the measurement period in 2020.

During the nine months ended September 30, 2020, we updated our preliminary purchase price allocation and reclassified $ 14 million from intangible assets, primarily developed technology, to goodwill.

The purchase price allocation for this acquisition was completed during the third quarter of 2020, resulting in goodwill of $ 35 million and other intangible assets of $ 24 million, consisting of developed technology and patents, offset, in part, by a deferred tax liability of $ 4 million.

During the second quarter of 2020, we acquired a business for a cash purchase price of $ 5 million to expand our on-demand offering via their technology platform.

The purchase price was allocated to developed technology and other intangible assets.

The purchase price allocation for this acquisition was completed during the third quarter of 2020.

No acquisitions occurred during the three months ended September 30, 2020.

Restructuring Charges

We incurred restructuring charges of $ 1 million ($ 1 million, net of tax) and less than $ 1 million (less than $ 1 million, net of tax) for the three months ended June 30, 2020 and 2019, respectively, and $ 4 million ($ 3 million, net of tax) and less than $ 1 million (less than $ 1 million, net of tax) for the six months ended June 30, 2020 and 2019, respectively.

For the three months ended June 30, 2020, restructuring charges primarily comprised accelerated depreciation of certain technology systems driven by efforts to enhance our technological capabilities.

For the three months ended June 30, 2019, restructuring charges comprised severance costs.

For the six months ended June 30, 2020, restructuring charges comprised $ 2 million of lease termination costs and $ 1 million of severance and other costs related to the decision to consolidate the operations of Landmark with those of OneGuard, which was completed during the first quarter of 2020, as well as $ 1 million of accelerated depreciation of certain technology systems.

For the six months ended June 30, 2019, restructuring charges comprised severance costs.

We incurred restructuring charges of less than $ 1 million (less than $ 1 million, net of tax) for each of the three months ended September 30, 2020 and 2019, and $ 4 million ($ 3 million, net of tax) and less than $ 1 million (less than $ 1 million, net of tax) for the nine months ended September 30, 2020 and 2019, respectively.

For the three months ended September 30, 2020, restructuring charges primarily comprised accelerated depreciation of certain technology systems driven by efforts to enhance our technological capabilities.

For the nine months ended September 30, 2020, restructuring charges comprised lease termination costs and severance and other costs related to the decision to consolidate certain operations of Landmark with those of OneGuard, which was completed during the first quarter of 2020, as well as accelerated depreciation of certain technology systems.

For the three and nine months ended September 30, 2019, restructuring charges comprised severance costs.

The pre-tax charges discussed above are reported in “Restructuring charges” in the accompanying condensed consolidated statements of operations and comprehensive income.

As of December 31, 2019, there was less than $ 1 million of restructuring charges accrued, which were paid or otherwise settled during the six months ended June 30, 2020.

As of June 30, 2020, there was less than $ 1 million in accrued restructuring charges in the accompanying condensed consolidated statements of financial position.

As of December 31, 2019, there was less than $ 1 million of restructuring charges accrued, which were paid or otherwise settled during the nine months ended September 30, 2020.

As of September 30, 2020, there was less than $ 1 million in accrued restructuring charges in the accompanying condensed consolidated statements of financial position.

Commitments and Contingencies

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Stock-Based Compensation

We recognized stock-based compensation expense of $ 5 million ($ 4 million, net of tax) and $ 3 million ($ 2 million, net of tax) for the three months ended June 30, 2020 and 2019, respectively, and $ 8 million ($ 7 million, net of tax) and $ 4 million ($ 4 million, net of tax) for the six months ended June 30, 2020 and 2019, respectively.

We recognized stock-based compensation expense of $ 4 million ($ 4 million, net of tax) and $ 2 million ($ 2 million, net of tax) for the three months ended September 30, 2020 and 2019, respectively, and $ 13 million ($ 11 million, net of tax) and $ 7 million ($ 5 million, net of tax) for the nine months ended September 30, 2020 and 2019, respectively.

These charges are included in Selling and administrative expenses in the accompanying condensed consolidated statements of operations and comprehensive income.

As of June 30, 2020, there was $ 40 million of total unrecognized compensation costs, net of estimated forfeitures, related to unvested stock options, restricted stock units (“RSUs”), performance shares and restricted stock awards.

These remaining costs are expected to be recognized over a weighted-average period of 2.7 4 years.

As of September 30, 2020, there was $ 36 million of total unrecognized compensation costs, net of estimated forfeitures, related to unvested stock options, restricted stock units (“RSUs”), performance shares and restricted stock awards.

These remaining costs are expected to be recognized over a weighted-average period of 2.

Long-Term Debt

Long-term debt is summarized in the following table:

September 30,

(In millions)

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___________________________________

(1) As of June 30, 2020 and December 31, 2019, presented net of $ 6 million and $ 7 million, respectively, in unamortized debt issuance costs and $ 1 million in unamortized original issue discount paid.

(2) As of June 30, 2020 and December 31, 2019, presented net of $ 5 million in unamortized debt issuance costs.

(1) As of September 30, 2020 and December 31, 2019, presented net of $ 6 million and $ 7 million, respectively, in unamortized debt issuance costs and $ 1 million in unamortized original issue discount paid.

(2) As of September 30, 2020 and December 31, 2019, presented net of $ 4 million and $ 5 million, respectively, in unamortized debt issuance costs.

Supplemental Cash Flow Information

Supplemental information relating to the accompanying condensed consolidated statements of cash flows is presented in the following table:

Six Months Ended

Nine Months Ended

September 30,

(In millions)

5 unchanged sentences

Cash, money market funds and certificates of deposit with maturities of three months or less when purchased are included in Cash and cash equivalents in the accompanying condensed consolidated statements of financial position.

As of June 30, 2020 and December 31, 2019, marketable securities primarily consisted of treasury bills with maturities of less than one year and are classified as available-for-sale securities.

As of June 30, 2020 and December 31, 2019, the amortized cost of our short-term investments was $ 2 million and $ 7 million, respectively, and the estimated fair value of these investments was $ 2 million and $ 7 million, respectively.

As of September 30, 2020 and December 31, 2019, marketable securities primarily consisted of treasury bills with maturities of less than one year and are classified as available-for-sale securities.

As of September 30, 2020 and December 31, 2019, the amortized cost of our short-term investments was less than $ 1 million and $ 7 million, respectively, and the estimated fair value of these investments was less than $ 1 million and $ 7 million, respectively.

Gains and losses on sales of investments, as determined on a specific identification basis, are included in investment income in the period they are realized.

For the each of the three and six months ended June 30, 2020 and 2019, there were no gross realized gains, gross realized losses or proceeds resulting from sales of available-for-sale securities.

Maturities of available-for-sale securities were $ 7 million and $ 4 million for the six months ended June 30, 2020 and 2019, respectively.

For each of the three and nine months ended September 30, 2020 and 2019, there were no gross realized gains, gross realized losses or proceeds resulting from sales of available-for-sale securities.

Maturities of available-for-sale securities were $ 9 million for each of the nine months ended September 30, 2020 and 2019.

We periodically review our portfolio of investments to determine whether an allowance for credit losses is necessary.

There was a $ 3 million loss on an investment recognized in the three and six months ended June 30, 2020, which is included in Interest and net investment loss (income) in the accompanying condensed consolidated statements of operations and comprehensive income.

There were no credit losses due to declines in the value of our investments recognized for the three and six months ended June 30, 2019.

There was a $ 3 million loss on an investment recognized in the nine months ended September 30, 2020, which is included in Interest and net investment (income) loss in the accompanying condensed consolidated statements of operations and comprehensive income.

There were no credit losses due to declines in the value of our investments recognized for the three months ended September 30, 2020 or the three and nine months ended September 30, 2019.

Comprehensive Income (Loss)

11 unchanged sentences

Net current period other comprehensive income (loss)

Balance as of June 30, 2020

Balance as of September 30, 2020

Balance as of December 31, 2018

6 unchanged sentences

Net current period other comprehensive income (loss)

Balance as of June 30, 2019

Balance as of September 30, 2019

___________________________________

4 unchanged sentences

Other Comprehensive Income (Loss)

Six Months Ended

Nine Months Ended

September 30,

Consolidated Statements of

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We hedge the interest payments on a portion of our variable rate debt through the use of an interest rate swap agreement.

Our interest rate swap contract is classified as a cash flow hedge, and, as such, it is recorded on the accompanying condensed consolidated statements of financial position as either an asset or liability at fair value, with the effective portion of changes in the fair value attributable to the hedged risks recorded in AOCI.

Any change in the fair value of the hedging instrument resulting from ineffectiveness, as defined by accounting standards, is recognized in current period earnings.

Cash flows related to the interest rate swap contract are classified as operating activities in the accompanying condensed consolidated statements of cash flows.

2 unchanged sentences

See Note 14 to the accompanying condensed consolidated financial statements for the effective portion of the gain or loss on derivative instruments recorded in AOCI and for the amounts reclassified out of AOCI and into earnings.

As the underlying forecasted transactions occur during the next 12 months, the unrealized hedging loss in AOCI expected to be recognized in earnings is $ 8 million, net of tax, as of June 30, 2020.

As the underlying forecasted transactions occur during the next 12 months, the unrealized hedging loss in AOCI expected to be recognized in earnings is $ 8 million, net of tax, as of September 30, 2020.

The amounts that are ultimately reclassified into earnings will be based on actual interest rates at the time the positions are settled and may differ materially from the amount noted above.

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Unrealized gains and losses are reported net of tax as a component of AOCI in the accompanying condensed consolidated statements of financial position.

There were no allowances for credit losses for the six months ended June 30, 2020 and 2019.

The carrying amount of total debt was $ 977 million and $ 980 million, and the estimated fair value was $ 993 million and $ 1,031 million as of June 30, 2020 and December 31, 2019, respectively.

There were no allowances for credit losses for the nine months ended September 30, 2020 and 2019.

The carrying amount of total debt was $ 976 million and $ 980 million, and the estimated fair value was $ 1,005 million and $ 1,031 million as of September 30, 2020 and December 31, 2019, respectively.

The fair value of our debt is estimated based on available market prices for the same or similar instruments that are considered significant other observable inputs (Level 2) within the fair value hierarchy.

The fair values presented reflect the amounts that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price).

The fair value estimates presented in this report are based on information available to us as of June 30, 2020 and December 31, 2019.

The fair value estimates presented in this report are based on information available to us as of September 30, 2020 and December 31, 2019.

We value our interest rate swap contract using a forward interest rate curve obtained from a third-party market data provider.

1 unchanged sentence

The expected future settlements are determined by comparing the contract interest rate to the expected forward interest rate as of each settlement date and applying the difference between the two rates to the notional amount of debt in the interest rate swap contract.

We did not change our valuation techniques for measuring the fair value of any financial assets and liabilities during the year.

We have not changed our valuation techniques for measuring the fair value of any financial assets and liabilities during the year.

Transfers between levels, if any, are recognized at the end of the reporting period.

There were no transfers between levels during the six months ended June 30, 2020 and 2019.

There were no transfers between levels during the nine months ended September 30, 2020 and 2019.

The carrying amount and estimated fair value of our financial instruments that are recorded at fair value on a recurring basis for the periods presented are as follows:

4 unchanged sentences

‎ Unobservable

As of June 30, 2020:

Financial Assets:

Investments in marketable securities

Marketable securities

Total financial assets

As of September 30, 2020:

Financial Liabilities:

19 unchanged sentences

Three Months Ended

Six Months Ended

Nine Months Ended

September 30,

(In millions, except per share data)

6 unchanged sentences

___________________________________

(1) Options to purchase 0.9 million shares and 0.6 million shares for the three and six months ended June 30, 2020, respectively, and 0.5 million shares and 0.3 million shares for the three and six months ended 2019, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

(1) Options to purchase 0.9 million and 0.7 million shares for the three and nine months ended September 30, 2020, respectively, and 0.3 million and 0.5 million shares for the three and nine months ended 2019, respectively, were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS

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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-Q

Item 1. Financial Statements