What changed in this filing

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Item 1. Financial Statements

2021-08-04 compared with 2021-05-06 · 100 added, 68 removed, 391 unchanged (30% of the section changed)

3 unchanged sentences

Three Months Ended

Six Months Ended

Cost of services rendered

3 unchanged sentences

Interest expense

Interest and net investment income

Interest and net investment (income) loss

Loss on extinguishment of debt

3 unchanged sentences

Net unrealized gain (loss) on derivative instruments

Total Comprehensive Income (Loss)

Total Comprehensive Income

Earnings per Share:

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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;

85,680,630 shares issued and 85,679,700 shares outstanding at March 31, 2021 and 85,477,779 shares issued and outstanding at December 31, 2020

85,741,842 shares issued and 85,740,910 shares outstanding at June 30, 2021 and 85,477,779 shares issued and outstanding at December 31, 2020

Additional paid-in capital

1 unchanged sentence

Accumulated other comprehensive loss

Total Deficit

Total Equity (Deficit)

Total Liabilities and Shareholders'

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

Condensed Consolidated Statement of Changes in (Deficit) Equity (Unaudited)

Condensed Consolidated Statement of Changes in Equity (Deficit) (Unaudited)

(In millions)

Three Months Ended

Six Months Ended

Balance at beginning of period

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Exercise of stock options

Issuance of common stock

Taxes paid related to net share settlement of equity awards

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Balance at end of period

Total Deficit

Total Equity (Deficit)

See accompanying Notes to the unaudited Condensed Consolidated Financial Statements.

1 unchanged sentence

(In millions)

Three Months Ended

Six Months Ended

Cash and Cash Equivalents at Beginning of Period

2 unchanged sentences

Depreciation and amortization expense

Deferred income tax provision

Stock-based compensation expense

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Purchases of property and equipment

Business acquisitions, net of cash received

Purchases of available-for-sale securities

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Cash Flows from Financing Activities:

Borrowings of debt, net of discount

Payments of debt

Debt issuance cost paid

Call premium paid on retired debt

Other financing activities

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Our operations also include our ProConnect on-demand home services business and Streem, a technology platform that uses augmented reality, computer vision and machine learning to, among other things, help home service professionals more quickly and accurately diagnose breakdowns and complete repairs.

At March 31, 2021, we had over two million active home service plans across all 50 states and the District of Columbia.

At June 30, 2021, we had over two million active home service plans across all 50 states and the District of Columbia.

We recommend that the accompanying condensed consolidated financial statements be read in conjunction with the audited consolidated and combined financial statements and the notes thereto included in our 2020 Form 10-K.

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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 of 2020, during the first quarter of 2021, our financial condition and results of operations were adversely impacted by the COVID-19 pandemic as follows:

 Revenue in the first-year real estate channel has continued to be adversely impacted by the decline in U.S.

existing home sales in the second quarter of 2020.

Due to the annual nature of our home service plan agreements, the impact of this decline carried forward into the first quarter of 2021.

Additionally, a strong existing home seller’s market has constrained demand for home service plans in this channel.

 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, and, more specifically, appliance parts availability challenges drove additional replacements, contributing to the increased costs.

 We incurred incremental wages at our customer care centers due to a higher number of service requests in the appliance and plumbing trades, which is primarily a result of customers sheltering at home in response to COVID-19.

During the first six months of 2021, our financial condition and results of operations were adversely impacted by the COVID-19 pandemic as follows:

 The tight existing home sales market continues to constrain demand for home service plans in the first-year real estate channel.

Additionally, due to the annual nature of our home service plan agreements, real estate revenue for the first quarter of 2021 was adversely impacted by the decline in U.S.

existing home sales that occurred in the second quarter of 2020.

 We experienced an increase in appliance and plumbing claims primarily due to the increased usage of home systems and appliances driven by customers spending greater time at home in response to COVID-19.

In addition, industry-wide parts availability challenges in the appliance trade have caused increased cost pressure, and, more specifically, additional replacements due to lack of parts availability, further contributing to the increased costs.

Additionally, due to labor availability challenges, we continue to experience difficulties in hiring and retaining customer care center personnel.

Significant Accounting Policies

Our significant accounting policies are described in Note 2 to the audited consolidated and combined financial statements included in our 2020 Form 10-K.

There have been no material changes to the significant accounting policies for the three months ended March 31, 2021.

We enter into annual home service plan agreements with our customers.

We have one performance obligation, which is to provide for the repair or replacement of essential home systems and appliances, as applicable per the contract.

There have been no material changes to the significant accounting policies for the six months ended June 30, 2021.

The majority of our revenue is generated from annual home service plan agreements entered into with our customers.

Our home service plan agreements have one performance obligation, which is to provide for the repair or replacement of essential home systems and appliances, as applicable per the contract.

We recognize revenue at the agreed upon contractual amount over time using the input method in proportion to the costs expected to be incurred in performing services under the contracts.

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Three Months Ended

Six Months Ended

(In millions)

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First-year revenue from the direct-to-consumer channel is classified as direct-to-consumer above.

Other revenue includes revenue generated by ProConnect and Streem, as well as administrative fees and ancillary services attributable to our home service plan agreements.

Costs to obtain a contract with a customer

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 $ 20 million and $ 19 million as of March 31, 2021 and December 31, 2020, respectively.

Amortization of these deferred acquisition costs was $ 4 million for each of the three months ended March 31, 2021 and 2020.

Deferred customer acquisition costs were $ 18 million and $ 19 million as of June 30, 2021 and December 31, 2020, respectively.

Amortization of these deferred acquisition costs was $ 6 million for each of the three months ended June 30, 2021 and 2020 and $ 10 million for each of the six months ended June 30, 2021 and 2020.

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 June 30, 2021, a contract asset of $ 4 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 $ 227 million and $ 187 million as of March 31, 2021 and December 31, 2020, respectively, and as of March 31, 2021, includes a net contract liability of $ 45 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 three months ended March 31, 2021 were as follows:

Deferred revenue was $ 162 million and $ 187 million as of June 30, 2021 and December 31, 2020, respectively.

Changes in deferred revenue for the six months ended June 30, 2021 were as follows:

(In millions)

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Recognition of deferred revenue

Balance as of March 31, 2021

There was approximately $ 71 million of revenue recognized in the three months ended March 31, 2021 that was included in the deferred revenue balance as of December 31, 2020.

Balance as of June 30, 2021

There was approximately $ 75 million and $ 146 million of revenue recognized in the three and six months ended June 30, 2021, respectively, that was included in the deferred revenue balance as of December 31, 2020.

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 $ 512 million as of March 31, 2021 and December 31, 2020.

There were no goodwill or trade name impairment charges recorded in the three months ended March 31, 2021 and 2020.

There were no accumulated impairment losses recorded as of March 31, 2021 and December 31, 2020.

The balance of goodwill was $ 512 million as of June 30, 2021 and December 31, 2020.

There were no goodwill or trade name impairment charges recorded in the six months ended June 30, 2021 and 2020.

There were no accumulated impairment losses recorded as of June 30, 2021 and December 31, 2020.

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.

There were no acquisitions during the six months ended June 30, 2021.

The table below summarizes the other intangible asset balances:

As of March 31, 2021

As of June 30, 2021

As of December 31, 2020

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(1) Not subject to amortization.

Amortization expense was $ 3 million for each of the three months ended March 31, 2021 and 2020.

Amortization expense was $ 3 million and $ 4 million for the three months ended June 30, 2021 and 2020, respectively, and $ 6 million and $ 7 million for the six months ended June 30, 2021 and 2020, respectively.

The following table outlines expected amortization expense for existing intangible assets for the remainder of 2021 and the next five years :

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Weighted-average discount rate

We recognized operating lease expense of $ 1 million for each of the three months ended March 31, 2021 and 2020.

We recognized operating lease expense of $ 1 million for each of the three months ended June 30, 2021 and 2020 and $ 2 million and $ 1 million for the six months ended June 30, 2021 and 2020, respectively .

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

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

Three Months Ended

Six Months Ended

(In millions)

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_____________________________

(1) For the three months ended March 31, 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”).

(1) For the six months ended June 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 7 to the accompanying condensed consolidated financial statements for further information.

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Total operating lease liabilities

The following table presents maturities of our operating lease liabilities as of March 31, 2021.

The following table presents maturities of our operating lease liabilities as of June 30, 2021.

(In millions)

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

The effective tax rate on income was 9.8 percent and 25.0 percent for the three months ended March 31, 2021 and 2020, respectively.

The decrease in the effective tax rate for the three months ended March 31, 2021 compared to 2020 is primarily due to excess tax benefits for share-based awards.

The effective tax rate on income was 26.0 percent and 25.5 percent for the three months ended June 30, 2021 and 2020, respectively, and 24.5 percent and 25.4 percent for six months ended June 30, 2021 and 2020, respectively .

The decrease in the effective tax rate for the six months ended June 30, 2021 compared to 2020 is primarily due to excess tax benefits for share-based awards.

We are subject to taxation in the United States, various states and foreign jurisdictions.

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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 2016.

Substantially all of our income before income taxes for the three months ended March 31, 2021 and 2020 was generated in the United States.

Substantially all of our income before income taxes for the six months ended June 30, 2021 and 2020 was generated in the United States.

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

1 unchanged sentence

Restructuring Charges

We incurred restructuring charges of $ 1 million ($ 1 million, net of tax) and $ 3 million ($ 2 million, net of tax) for the three months ended March 31, 2021 and 2020, respectively.

For the three months ended March 31, 2021 , restructuring charges primarily comprised accelerated depreciation of certain technology systems driven by efforts to enhance our technological capabilities.

For the three months ended March 31, 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.

We incurred restructuring charges of $ 1 million (less than $ 1 million, net of tax) and $ 1 million ($ 1 million, net of tax) for the three months ended June 30, 2021 and 2020, respectively, and $ 2 million ($ 1 million, net of tax) and $ 4 million ($ 3 million, net of tax) for the six months ended June 30, 2021 and 2020, respectively.

For the three months ended June 30, 2021 and 2020 , restructuring charges primarily comprised accelerated depreciation of certain technology systems driven by efforts to enhance our technological capabilities.

For the six months ended June 30, 2021, restructuring charges comprised $ 1 million of accelerated depreciation of certain technology systems driven by efforts to enhance our technological capabilities and $ 1 million of severance and other 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.

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, 2020, there were $ 1 million of restructuring charges accrued, which were paid or otherwise settled during the three months ended March 31, 2021.

As of March 31, 2021, there were less than $ 1 million in accrued restructuring charges in the accompanying condensed consolidated statements of financial position.

As of December 31, 2020, there were $ 1 million of restructuring charges accrued, which were paid or otherwise settled during the six months ended June 30, 2021.

As of June 30, 2021, there were less than $ 1 million in accrued restructuring charges in the accompanying condensed consolidated statements of financial position.

Commitments and Contingencies

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Any resulting adjustments, which could be material, are recorded in the period the adjustments are identified.

In January 2021, a lawsuit was filed in the Superior Court of the State of Arizona by the Arizona Attorney General (the "AZ Attorney General") against Landmark, alleging, among other things, that Landmark violated the Arizona Consumer Fraud Act by engaging in deceptive, misleading or unfair practices with respect to the provision of expedited services to its customers during extreme temperatures from January 2017 to July 2020.

The AZ Attorney General sought $ 14.7 million in damages plus penalties, costs, interest and attorneys’ fees in this matter.

Although Landmark disagreed with the allegations that it violated Arizona law, as litigation is inherently unpredictable, Landmark fully settled this matter with the AZ Attorney General in March 2021 for $ 1.8 million.

As we recorded an estimate of loss with respect to this matter during the year ended December 31, 2020 equal to the amount of the settlement, no additional expense was recognized in the three months ended March 31, 2021.

Due to the nature of our business activities, we are also at times subject to pending and threatened legal and regulatory actions that arise out of the ordinary course of business.

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Stock-Based Compensation

We recognized stock-based compensation expense of $ 6 million ($ 4 million, net of tax) and $ 3 million ($ 3 million, net of tax) for the three months ended March 31, 2021 and 2020, respectively.

We recognized stock-based compensation expense of $ 8 million ($ 6 million, net of tax) and $ 5 million ($ 4 million, net of tax) for the three months ended June 30, 2021 and 2020, respectively, and $ 13 million ($ 10 million, net of tax) and $ 8 million ($ 7 million, net of tax) for the six months ended June 30, 2021 and 2020, respectively.

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

A summary of awards granted under the Omnibus Plan during the three months ended March 31, 2021 is presented below:

A summary of awards granted under the Omnibus Plan during the six months ended June 30, 2021 is presented below:

Weighted Avg.

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(1) The number of performance shares granted during the three months ended March 31, 2021 represents the target value of the awards.

(1) The number of performance shares granted during the six months ended June 30, 2021 represents the target value of the awards.

The performance shares contain a performance condition that is based on our revenue target, and the ultimate number of performance shares to be earned depends on the achievement of this performance condition.

As of March 31, 2021, there was $ 61 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options, restricted stock units (“RSUs”), performance shares and restricted stock awards (“RSAs”).

As of June 30, 2021, there was $ 54 million of total unrecognized compensation cost, net of estimated forfeitures, related to unvested stock options, restricted stock units (“RSUs”), performance shares and restricted stock awards (“RSAs”).

These remaining costs are expected to be recognized over a weighted-average period of 2.50 years.

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(In millions)

Term Loan Facility maturing in 2025 (1)

Revolving Credit Facility maturing in 2023

Term Loan A maturing in 2026 (1)

Term Loan B maturing in 2028 (2)

Amended Revolving Credit Facility maturing in 2026

Existing Term Loan Facility maturing in 2025 (3)

Existing Revolving Credit Facility maturing in 2023

2026 Notes (4)

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___________________________________

(1) As of March 31, 2021 and December 31, 2020, presented net of $ 4 million and $ 5 million, respectively, in unamortized debt issuance costs and $ 1 million in unamortized original issue discount paid.

(2) As of March 31, 2021 and December 31, 2020, presented net of $ 4 million in unamortized debt issuance costs.

On February 17, 2021, we repaid $ 100 million of the outstanding principal amount of the Term Loan Facility.

(1) As of June 30, 2021, presented net of $ 2 million in unamortized debt issuance costs.

(2) As of June 30, 2021, presented net of $ 4 million in unamortized debt issuance costs and $ 2 million in unamortized original issue discount.

(3) As of December 31, 2020, presented net of $ 5 million in unamortized debt issuance costs and $ 1 million in unamortized original issue discount.

(4) As of December 31, 2020, presented net of $ 4 million in unamortized debt issuance costs.

Credit Facilities

On February 17, 2021, we repaid $ 100 million of the outstanding principal amount of the Existing Term Loan Facility.

In connection with the repayment, we recorded a loss on extinguishment of debt of $ 1 million, which included the write-off of debt issuance costs and original issue discount.

On June 17, 2021, we entered into the Amended Credit Agreement, providing for the Term Loan A maturing June 17, 2026 , the Term Loan B maturing June 17, 2028 and the Amended Revolving Credit Facility, which terminates June 17, 2026 .

The net proceeds of the transaction, together with cash on hand, were used to redeem the remaining outstanding principal amounts of $ 534 million of the Existing Term Loan Facility and $ 350 million of the 2026 Notes at a price of 106.1 %.

In addition, the Amended Revolving Credit Facility replaced the Existing Revolving Credit Facility .

In connection with the repayments, we recorded a loss on extinguishment of debt of $ 30 million in the second quarter of 2021, which included a “make-whole” redemption premium of $ 21 million on the 2026 Notes and the write-off of $ 9 million of debt issuance costs and original issue discount.

The interest rates applicable to the Term Loan A and the Amended Revolving Credit Facility are based on a fluctuating rate of interest based on the Consolidated First Lien Leverage Ratio ( as defined in the Amended Credit Agreement ) and measured by reference to either, at our option, (i) an adjusted LIBOR plus a margin range of 1.50 % to 2.00 % per annum or (ii) an alternate base rate plus a margin range of 0.50 % to 1.00 % per annum.

The interest rates applicable to the Term Loan B are based on a fluctuating rate of interest measured by reference to either, at our option, (i) an adjusted LIBOR plus a margin of 2.25 % per annum or (ii) an alternate base rate plus a margin of 1.25 % per annum.

The obligations under the Amended Credit Agreement are guaranteed by certain subsidiaries (collectively, the “Guarantors”) and are secured by substantially all of the material tangible and intangible assets of Frontdoor and the Guarantors, subject to certain customary exceptions.

The Amended Revolving Credit Facility provides for senior secured revolving loans and stand-by and other letters of credit.

The Amended Revolving Credit Facility limits outstanding letters of credit to $ 250 million.

As of June 30, 2021, there were $ 2 million of letters of credit outstanding and $ 248 million of available borrowing capacity under the Amended Revolving Credit Facility.

The Amended Credit Agreement contains certain affirmative and negative covenants, including limitations on the incurrence of indebtedness, liens, ability to engage in certain fundamental transactions, make certain dispositions, make certain restricted payments and engage in transactions with affiliates.

The Amended Credit Agreement also contains a financial covenant requiring the maintenance of a Consolidated First Lien Leverage Ratio, as defined in the Amended Credit Agreement, of not greater than 3.50 to 1.00 at the end of each fiscal quarter or, subject to certain limitations, 4.00 to 1.00 following material acquisitions .

As of June 30, 2021, we were in compliance with the financial covenants under the Amended Credit Agreement that were in effect on such date.

Scheduled Long-term Debt Payments

As of June 30, 2021, future scheduled long - term debt payments are $ 8 million for the remainder of 2021, $ 17 million for each of the years ending December 31, 2022 through 2025 and $ 205 million for the year ending December 31, 2026.

Supplemental Cash Flow Information

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

Three Months Ended

Six Months Ended

(In millions)

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Net current period other comprehensive income (loss)

Balance as of March 31, 2021

Balance as of June 30, 2021

Balance as of December 31, 2019

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Net current period other comprehensive income (loss)

Balance as of March 31, 2020

Balance as of June 30, 2020

___________________________________

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Other Comprehensive Income (Loss)

Three Months Ended

Six Months Ended

Consolidated Statements of

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See Note 12 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 March 31, 2021.

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, 2021.

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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The period-end carrying amounts of cash and cash equivalents, receivables, accounts payable and accrued liabilities approximate fair value because of the short maturity of these instruments.

The carrying amount of total debt was $ 875 million and $ 975 million, and the estimated fair value was $ 902 million and $ 1,004 million as of March 31, 2021 and December 31, 2020, respectively.

The carrying amount of total debt was $ 633 million and $ 975 million, and the estimated fair value was $ 640 million and $ 1,004 million as of June 30, 2021 and December 31, 2020, 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 March 31, 2021 and December 31, 2020.

The fair value estimates presented in this report are based on information available to us as of June 30, 2021 and December 31, 2020.

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

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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 have not changed our valuation techniques for measuring the fair value of any financial assets and liabilities during the three months ended March 31, 2021.

We did not change our valuation techniques for measuring the fair value of any financial assets and liabilities during the six months ended June 30, 2021.

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

There were no transfers between levels during the three months ended March 31, 2021 and 2020.

There were no transfers between levels during the six months ended June 30, 2021 and 2020.

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:

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‎ Unobservable

As of March 31, 2021:

As of June 30, 2021:

Financial Liabilities:

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Three Months Ended

Six Months Ended

(In millions, except per share data)

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(1) Options to purchase 0.3 million shares for the three months ended March 31, 2020 were not included in the diluted earnings per share calculation because their effect would have been anti-dilutive.

There were no such anti-dilutive options for the three months ended Mar ch 31, 2021.

(1) Options to purchase 0.2 million and 0.9 million shares for the three months ended June 30, 2021 and 2020, respectively, and 0.1 million and 0.6 million shares for the six months ended June 30, 2021 and 2020, 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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 increases in interest rates increasing the cost of servicing our substantial indebtedness;

 increased borrowing costs due to lowering or withdrawal of the ratings, outlook or watch assigned to us, our debt securities or our Credit Facilities;

 increased borrowing costs due to lowering or withdrawal of the ratings, outlook or watch assigned to us, our debt securities or our Amended Credit Facilities;

 our ability to generate the significant amount of cash needed to fund our operations and service our debt obligations;

8 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-Q

Item 1. Financial Statements