What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-11-09 compared with 2022-08-03 · 101 added, 98 removed, 130 unchanged (60% of the section changed)

36 unchanged sentences

and Transaction and integration costs in the Condensed Consolidated Statements of Operations.

The Company’s consolidated financial statements include the accounts of GXO and its majority-owned subsidiaries and variable interest entities of which the Company is the primary beneficiary.

The Company’s Condensed Consolidated Financial Statements include the accounts of GXO and its majority-owned subsidiaries and variable interest entities of which the Company is the primary beneficiary.

The Company has eliminated intercompany accounts and transactions.

3 unchanged sentences

The Company acquired Clipper for $1,103 million, consisting of $900 million in cash and the issuance of 3,749,266 shares of GXO common stock having a value of $203 million.

The Competition and Markets Authority (the “CMA”) in the U.K.

is currently reviewing the Clipper Acquisition.

The Company estimates that the CMA’s review of the acquisition will be completed during the second half of 2022.

The Clipper Acquisition was subject to review by the Competition and Markets Authority in the United Kingdom (the “CMA”).

On October 4, 2022, the CMA approved the Clipper Acquisition.

In connection with the Clipper Acquisition, (i) the Company and Clipper entered into a Cooperation Agreement;

(ii) the Company entered into a Term Loan;

(ii) the Company entered into a Delayed Draw Term Loan;

(iii) the Company entered into a Five-Year Term Loan;

and (iv) the Company terminated its Bridge Term Loan agreement.

For additional information regarding the financing agreements entered in connection with the Clipper Acquisition, see Note 6—Debt and Financing Arrangements.

The results of operations of Clipper are included in our consolidated financial statements from the date of acquisition.

The Company recorded $80 million and $1 million of revenue and income before income taxes for both the three and six months ended June 30, 2022, respectively.

and (iv) the Company terminated its Bridge Term Loan.

For additional information regarding the financing agreements entered into in connection with the Clipper Acquisition, see Note 7.

Debt and Financing Arrangements.

The Company included Clipper’s results of operations from the date of acquisition.

For the three and nine months ended September 30, 2022, the Company recorded $239 million and $319 million of revenue, respectively, and $— million and $1 million of income before income taxes, respectively.

Results of Operations

Three Months Ended June 30,

Three Months Ended September 30,

(In millions) 2022 2021 $ Change % Change

4 unchanged sentences

Transaction and integration costs 14 29 (15) (52) %

Restructuring costs (credits) and other 1 (1) 2 n/m

Operating income 59 22 37 n/m

Other income (expense), net 23 (1) 24 n/m

Restructuring costs and other — 2 (2) (100) %

Operating income 72 36 36 100 %

Other income, net 17 11 6 55 %

Interest expense, net (6) (5) (1) 20 %

Income before income taxes 73 15 58 n/m

Income tax expense (21) (1) (20) n/m

Net income $ 52 $ 14 $ 38 n/m

Income before income taxes 83 42 41 98 %

Income tax (expense) benefit (19) 31 (50) n/m

Net income $ 64 $ 73 $ (9) (12) %

n/m - not meaningful

Three Months Ended June 30, 2022 compared with the Three Months Ended June 30, 2021

Revenue for the three months ended June 30, 2022, increased by 15%, or $274 million, to $2.2 billion, compared with $1.9 billion for the same period in 2021.

For the three months ended June 30, 2022, our North America, Asia and Pacific operations reported growth of 22%, and our European operations reported growth of 11%.

The Clipper Acquisition contributed 6% to revenue in our European operations and 4% to total revenue for the three months ended June 30, 2022.

Foreign currency movements decreased revenue by approximately 9% for the three months ended June 30, 2022.

Three Months Ended September 30, 2022 compared with the Three Months Ended September 30, 2021

Revenue for the three months ended September 30, 2022 increased by 16%, or $313 million, to $2.3 billion, compared with $2.0 billion for the same period in 2021.

Our North America, Asia and Pacific operations and European operations reported growth of 18% and 15%, respectively.

The Clipper Acquisition contributed 16% to our European revenue and 10% to total revenue.

Foreign currency movements decreased revenue by approximately 11% for the three months ended September 30, 2022.

Direct operating expenses comprise both fixed and variable expenses and consist of operating costs related to our logistics facilities, including personnel costs and facility and equipment expenses, such as rent, utilities, equipment maintenance and repair, transportation costs, costs of materials and supplies, and information technology expenses.

Direct operating expense for the three months ended June 30, 2022 was $1.8 billion, or 82% of revenue, compared with $1.6 billion, or 83% of revenue, for the same period in 2021.

For the three months ended June 30, 2022, direct operating expenses increased by $147 million due to higher personnel and temporary labor expenses, as well as higher third-party facilities and transportation costs of $33 million.

Direct operating expense for the three months ended September 30, 2022 was $1.9 billion, or 82% of revenue, compared with $1.7 billion, or 84% of revenue, for the same period in 2021.

For the three months ended September 30, 2022, direct operating expenses primarily increased due to higher personnel and temporary labor costs of $131 million, higher facilities and transportation costs of $76 million and higher costs of materials and supplies of $16 million, these increases are mainly driven by the Clipper Acquisition.

Selling, general and administrative expense (“SG&A”) primarily consists of salary and benefits for executive and administrative functions, professional fees and legal costs.

SG&A for the three months ended June 30, 2022, increased by $43 million, to $220 million, compared with $177 million for the same period in 2021.

SG&A for the three months ended June 30, 2022 increased compared with the same prior year period due to higher personnel costs, primarily for certain administrative functions, reflecting the growth in our business.

Depreciation and amortization expense for the three months ended June 30, 2022, was $77 million, compared with $95 million for the same period in 2021.

The decrease was primarily due to allocated corporate charges from XPO before the Separation of $9 million and the impact of foreign currency movements.

Depreciation and amortization expense included amortization of intangible assets of $13 million and $14 million for the three months ended June 30, 2022 and 2021, respectively.

Transaction and integration costs for the three months ended June 30, 2022 were $24 million and primarily related to the Clipper Acquisition.

Transaction and integration costs for the three months ended June 30, 2021 were $35 million and primarily related to the Separation.

Restructuring costs (credits) and other for the three months ended June 30, 2022 and 2021 was not material.

Other income for the three months ended June 30, 2022 was $23 million.

For the three months ended June 30, 2022, pension income was $9 million and the gain on foreign currency contracts was $16 million.

Other expense for the three months ended June 30, 2021 was not material.

Interest expense, net for the three months ended June 30, 2022 was $9 million compared with $6 million for the same period in 2021.

For the three months ended June 30, 2022, interest expense primarily related to debt issued in the second half of 2021, debt issued in 2022, and capital lease obligations, partially offset by interest income on the cross-currency swap agreements.

For the three months ended June 30, 2021, interest expense primarily related to related-party debt obligations with XPO before the Separation and capital lease obligations.

Income before income taxes for the three months ended June 30, 2022 increased by $58 million, to $73 million, compared with $15 million for the same period in 2021.

The increase was primarily due to higher revenue and increased other income as a result of pension income and foreign currency contracts.

Income tax expense for the three months ended June 30, 2022 was $21 million compared with $1 million for the same period in 2021.

Our effective tax rate was 29.4% for the three months ended June 30, 2022 compared with 10.2% for the same period in 2021.

The change in our effective tax rate was primarily driven by an increase in pre-tax losses in certain jurisdictions for which no benefit was recognized, non-deductible transaction cost, offset by deferred true-ups.

Six Months Ended June 30,

SG&A for the three months ended September 30, 2022 increased by $56 million, to $227 million, compared with $171 million for the same period in 2021.

SG&A for the three months ended September 30, 2022 increased compared with the same prior year period due to higher personnel costs, primarily for certain administrative functions and the Clipper Acquisition.

Depreciation and amortization expense for the three months ended September 30, 2022 was $89 million, compared with $85 million for the same period in 2021.

Depreciation and amortization expense included amortization of intangible assets of $21 million and $16 million for the three months ended September 30, 2022 and 2021, respectively.

The increase was primarily due to higher depreciation and amortization from the Clipper Acquisition, partially offset by lower depreciation as a result of contract modifications in the prior year.

Transaction and integration costs for the three months ended September 30, 2022 were $14 million, primarily related to the Clipper Acquisition and rebranding as a result of the Separation.

Transaction and integration costs for the three months ended September 30, 2021 were $29 million, primarily related to the Separation.

Restructuring costs and other for the three months ended September 30, 2022 and 2021 was not material.

Other income, net consists primarily of foreign exchange gains and losses, including foreign currency contracts, and pension income.

Other income, net for the three months ended September 30, 2022 was $17 million compared with $11 million for the same period in 2021.

For the three months ended September 30, 2022, the gain on foreign currency contracts was $9 million and pension income was $7 million.

For the three months ended September 30, 2021, pension income was $10 million.

Interest expense, net for the three months ended September 30, 2022 was $6 million compared with $5 million for the same period in 2021.

For the three months ended September 30, 2022, interest expense primarily related to outstanding debt and capital lease obligations, partially offset by interest income on the cross-currency swap agreements.

For the three months ended September 30, 2021, interest expense primarily related to debt issued in connection with the Separation, and related-party debt with XPO before the Separation, partially offset by interest income on the cross-currency swap agreements.

Income before income taxes for the three months ended September 30, 2022 increased by $41 million, to $83 million, compared with $42 million for the same period in 2021.

The increase was primarily due to growth in our business, lower transaction and integration costs, and other income from a pension plan and foreign currency contracts.

Income tax for the three months ended September 30, 2022 was $19 million expense compared with $31 million benefit for the same period in 2021.

Our effective tax rate was 22.5% for the three months ended September 30, 2022 compared with (72.5)% for the same period in 2021.

The change in our effective tax rate was primarily driven by a discrete tax benefit from the initial recognition of a deferred tax asset in connection with the Separation.

Nine Months Ended September 30,

(In millions) 2022 2021 $ Change % Change

6 unchanged sentences

Operating income 168 88 80 91 %

Other income (expense), net 39 — 39 n/m

Other income, net 56 11 45 n/m

Interest expense, net (19) (16) (3) 19 %

Income before income taxes 205 83 122 n/m

Income tax expense (32) (10) (22) n/m

Net income $ 90 $ 31 $ 59 n/m

Income tax (expense) benefit (51) 21 (72) n/m

Net income $ 154 $ 104 $ 50 48 %

n/m - not meaningful

Six Months Ended June 30, 2022 compared with the Six Months Ended June 30, 2021

Revenue for the six months ended June 30, 2022, increased by 14%, or $535 million, to $4.2 billion, compared with $3.7 billion for the same period in 2021.

For the six months ended June 30, 2022, our North America, Asia and Pacific operations reported growth of 18%, and our European operations reported growth of 12%.

The Clipper Acquisition contributed 3% to revenue in our European operations and 2% to total revenue for the six months ended June 30, 2022.

Foreign currency movements decreased revenue by approximately 7% for the six months ended June 30, 2022.

Nine Months Ended September 30, 2022 compared with the Nine Months Ended September 30, 2021

Revenue for the nine months ended September 30, 2022 increased by 15%, or $848 million, to $6.5 billion, compared with $5.7 billion for the same period in 2021.

For the nine months ended September 30, 2022, our North America, Asia and Pacific operations and European operations reported growth of 18% and 13%, respectively.

The Clipper Acquisition contributed 7% to European revenue and 5% to total revenue.

Foreign currency movements decreased revenue by approximately 8% for the nine months ended September 30, 2022.

Direct operating expense for the six months ended June 30, 2022, was $3.5 billion, or 83% of revenue, compared with $3.1 billion, or 83% of revenue for the same period in 2021.

For the six months ended June 30, 2022, direct operating expenses increased by $327 million due to higher personnel and temporary labor expenses, as well as higher third-party facilities and transportation costs of $67 million.

Direct operating expense for the nine months ended September 30, 2022 was $5.4 billion, or 83% of revenue, compared with $4.7 billion, or 83% of revenue for the same period in 2021.

For the nine months ended September 30, 2022, direct operating expenses primarily increased due to higher personnel and temporary labor

expenses of $457 million, higher facilities and transportation costs of $171 million, and higher costs of materials and supplies of $43 million.

SG&A primarily consists of salary and benefits for executive and administrative functions, professional fees and legal costs.

SG&A for the six months ended June 30, 2022, increased by $62 million, to $410 million, compared with $348 million for the same period in 2021.

SG&A for the six months increased compared with the same prior year period due to higher personnel costs, primarily for certain administrative functions, reflecting the growth in our business.

Depreciation and amortization expense for the six months ended June 30, 2022 was $153 million, compared with $174 million for the same period in 2021.

The decrease was a result of allocated corporate charges from XPO before the Separation of $14 million and the impact of foreign currency movements.

Depreciation and amortization expense included amortization of intangible assets of $27 million and $28 million for the six months ended June 30, 2022 and 2021, respectively.

Transaction and integration costs for the six months ended June 30, 2022 were $43 million and primarily related to the Clipper Acquisition.

Transaction and integration costs for the six months ended June 30, 2021 were $53 million and primarily related to the Separation.

Restructuring costs and other for the six months ended June 30, 2022, were $14 million.

For the six months ended June 30, 2022, restructuring costs and other included $6 million related to severance costs and $8 million related to the deconsolidation of a joint venture.

Restructuring costs and other for the six months ended June 30, 2021 were $3 million and primarily related to severance costs.

Other income for the six months ended June 30, 2022 was $39 million.

For the six months ended June 30, 2022, pension income was $18 million and the gain on foreign currency contracts was $24 million.

Other income for the six months ended June 30, 2021 was not material.

Interest expense, net for the six months ended June 30, 2022 was $13 million compared with $11 million for the same period in 2021.

For the six months ended June 30, 2022, interest expense primarily related to debt issued in the second half of 2021, debt issued in 2022, and capital lease obligations, partially offset by interest income on the cross-currency swap agreements.

For the six months ended June 30, 2021, interest expense primarily related to related-party debt obligations with XPO before the Separation and capital lease obligations.

Income before income taxes for the six months ended June 30, 2022 increased by $81 million, to $122 million, compared with $41 million for the same period in 2021.

The increase was primarily due to higher revenue and increased other income as a result of pension income and foreign currency contracts, partially offset by the deconsolidation of a joint venture.

Income tax expense for the six months ended June 30, 2022, was $32 million compared with $10 million for the same period in 2021.

Our effective tax rate was 26.4% for the six months ended June 30, 2022 compared with 24.9% for the same period in 2021.

The change in our effective tax rate was primarily driven by $5 million non-deductible transaction cost, offset by $4 million of deferred true-ups.

SG&A for the nine months ended September 30, 2022 increased by $118 million, to $637 million, compared with $519 million for the same period in 2021.

SG&A for the nine months increased compared with the same prior year period due to higher personnel costs, primarily for certain administrative functions.

Depreciation and amortization expense for the nine months ended September 30, 2022 was $242 million, compared with $259 million for the same period in 2021.

Depreciation and amortization expense included amortization of intangible assets of $48 million and $44 million for the nine months ended September 30, 2022 and 2021, respectively.

The decrease was primarily a result of $15 million allocated corporate charges from XPO before the Separation in the prior year and lower depreciation as a result of contract modifications in the prior year, partially offset by higher depreciation and amortization from the Clipper Acquisition.

Transaction and integration costs for the nine months ended September 30, 2022 were $57 million, primarily related to the Clipper Acquisition and rebranding as a result of the Separation.

Transaction and integration costs for the nine months ended September 30, 2021 were $82 million, primarily related to the Separation.

Restructuring costs and other for the nine months ended September 30, 2022 were $14 million.

For the nine months ended September 30, 2022, restructuring costs and other included $8 million related to the deconsolidation of a joint venture and $6 million related to severance costs.

Restructuring costs and other for the nine months ended September 30, 2021 were $5 million and related to severance costs.

Other income, net consists primarily of foreign exchange gains and losses, including foreign currency contracts, and pension income.

Other income, net for the nine months ended September 30, 2022 was $56 million compared with $11 million for the same period in 2021.

For the nine months ended September 30, 2022, the gain on foreign currency contracts was $33 million and pension income was $25 million.

For the nine months ended September 30, 2021, pension income was $10 million.

Interest expense, net for the nine months ended September 30, 2022 was $19 million compared with $16 million for the same period in 2021.

For the nine months ended September 30, 2022, interest expense primarily related to outstanding debt and capital lease obligations, partially offset by interest income on the cross-currency swap agreements.

For the nine months ended September 30, 2021, interest expense primarily related to debt issued in connection with the Separation, related-party debt with XPO before the Separation, and capital lease obligations, partially offset by interest income on the cross-currency swap agreements.

Income before income taxes for the nine months ended September 30, 2022 increased by $122 million, to $205 million, compared with $83 million for the same period in 2021.

The increase was primarily due to growth in our business, lower transaction and integration costs, and other income from a pension plan and foreign currency contracts, partially offset by restructuring costs due to the deconsolidation of a joint venture.

Income tax for the nine months ended September 30, 2022 was $51 million expense compared with $21 million benefit for the same period in 2021.

Our effective tax rate was 24.7% for the nine months ended September 30, 2022 compared with (24.8)% for the same period in 2021.

The change in our effective tax rate was primarily driven by a discrete tax benefit from the initial recognition of a deferred tax asset in connection with the Separation and non-deductible transaction cost, offset by deferred true-ups in 2022.

Liquidity and Capital Resources

6 unchanged sentences

Five-Year Term Loan

On May 25, 2022, we entered into a five-year unsecured Term Loan (the “Five-Year Term Loan due 2027”) that provided a $500 million unsecured term loan facility to fund the Clipper Acquisition.

On May 25, 2022, we entered into a five-year unsecured Term Loan (the “Five-Year Term Loan”) that provided a $500 million unsecured term loan facility to fund the Clipper Acquisition.

On May 26, 2022, we borrowed $500 million that will mature on May 26, 2027.

1 unchanged sentence

Delayed Draw Term Loan

On March 22, 2022, we entered into an unsecured delayed draw Term Loan (the “Delayed Draw Term Loan”) that provided a £375 million ($457 million as of June 30, 2022) unsecured term loan facility to fund the Clipper Acquisition.

The loans were available to us in U.S.

On March 22, 2022, we entered into an unsecured delayed draw Term Loan (the “Delayed Draw Term Loan”) that provided a £375 million unsecured term loan facility to fund the Clipper Acquisition.

The loan was available to us in U.S.

dollars or British pounds sterling.

On May 26, 2022, we borrowed in U.S.

dollars a $165 million 2-year term loan tranche (the “Two-Year Term Loan due 2024”) and a $235 million 3-year term loan tranche (the “Three-Year Term Loan due 2025”) that will mature on May 26, 2024, and May 26, 2025, respectively.

dollars a $165 million 2-year term loan tranche (the “Two-Year Term Loan”) and a $235 million 3-year term loan tranche (the “Three-Year Term Loan”) that will mature on May 26, 2024, and May 26, 2025, respectively.

Loans bear interest at a fluctuating rate per annum equal to, at our option, the alternate base rate or the adjusted SOFR, plus an applicable margin based on the Company’s credit ratings.

Bridge Term Loan

On February 28, 2022, we entered into an unsecured Bridge Term Loan (the “Bridge Term Loan”) that provided a £745 million ($907 million as of June 30, 2022) unsecured term loan facility to fund the Clipper Acquisition.

On February 28, 2022, we entered into an unsecured Bridge Term Loan (the “Bridge Term Loan”) that provided a £745 million unsecured term loan facility to fund the Clipper Acquisition.

The commitments under the Bridge Term Loan were terminated with the effectiveness of the Five-Year Term Loan and the Delayed Draw Term Loan.

No amounts were drawn under the Bridge Term Loan credit agreement.

No amounts were drawn under the Bridge Term Loan.

Unsecured Notes

5 unchanged sentences

The Revolving Credit Facility provides commitments of up to $800 million, of which $60 million is available for the issuance of letters of credit.

No amounts were outstanding under the Revolving Credit Facility as of June 30, 2022.

No amounts were outstanding under the Revolving Credit Facility as of September 30, 2022.

Sales of Certain Receivables

5 unchanged sentences

Information related to the trade receivables sold was as follows:

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

(In millions) 2022 2021 2022 2021

6 unchanged sentences

Covenants and Compliance

As of June 30, 2022, we were in compliance with the covenants contained in our debt and financing arrangements.

As of September 30, 2022, we were in compliance with the covenants contained in our debt and financing arrangements.

Financial Condition

The following table summarizes our asset and liability balances as of June 30, 2022 and December 31, 2021:

(In millions) June 30, 2022 December 31, 2021 $ Change % Change

The following table summarizes our asset and liability balances as of September 30, 2022 and December 31, 2021:

(In millions) September 30, 2022 December 31, 2021 $ Change % Change

Total current assets $ 2,242 $ 2,099 $ 143 7 %

2 unchanged sentences

Total long-term liabilities 3,932 2,552 1,380 54 %

The increase in our assets and liabilities from December 31, 2021 to June 30, 2022 primarily reflects the assets acquired and liabilities assumed, as well as various debt instruments entered into in connection with the Clipper Acquisition.

The increase in our assets and liabilities from December 31, 2021 to September 30, 2022 primarily reflects the assets acquired and liabilities assumed, as well as various debt instruments entered into in connection with the Clipper Acquisition.

Cash Flow Activity

Our cash flows from operating, investing and financing activities, as reflected on our Condensed Consolidated Statements of Cash Flows, are summarized as follows:

Six Months Ended June 30,

Our cash flows from operating, investing and financing activities, as reflected on our Condensed Consolidated Statements of Cash Flows, were summarized as follows:

Nine Months Ended September 30,

(In millions) 2022 2021 $ Change

6 unchanged sentences

Operating Activities

Cash flows from operating activities for the six months ended June 30, 2022 increased by $54 million compared with the same period in 2021.

The increase was primarily due to a $59 million increase in net income, partially offset by an $11 million decrease in non-cash items.

Cash flows from operating activities for the nine months ended September 30, 2022 increased by $65 million compared with the same period in 2021.

The increase was due to $50 million higher net income in 2022 and $39 million non-cash adjustments driven by a deferred tax benefit in 2021, partially offset by a $24 million decrease in working capital.

Investing Activities

Investing activities used $1,003 million of cash for the six months ended June 30, 2022, compared with $71 million used for the same period of 2021.

During the six months ended June 30, 2022, we used $874 million, net of cash received, to fund the Clipper Acquisition, used $154 million to purchase property and equipment, received $10 million in proceeds from cross-currency swap agreements, excluding accrued interest, and received $6 million from sales of property and equipment.

During the six months ended June 30, 2021, we used $119 million to purchase property and equipment, received $34 million net cash from the Kuehne + Nagel acquisition, received $12 million in connection with the purchase and sale of affiliate trade receivables, and received $2 million from sales of property and equipment.

Investing activities used $1,056 million of cash for the nine months ended September 30, 2022, compared with $140 million used for the same period of 2021.

During the nine months ended September 30, 2022, we used $874 million, net of cash received, to fund the Clipper Acquisition, used $239 million to purchase property and equipment, received $26 million in proceeds from the settlement of cross-currency swap agreements, excluding accrued interest, and received $22 million from sales of property and equipment.

During the nine months ended September 30, 2021, we used $180 million to purchase property and equipment, received $34 million net cash from the Kuehne + Nagel acquisition, and received $8 million from sales of property and equipment.

Financing Activities

Financing activities generated $869 million of cash for the six months ended June 30, 2022, compared with $78 million used for the same period of 2021.

The primary sources of cash from financing activities in the six months ended June 30, 2022, were $898 million in proceeds from long-term debt, partially offset by $15 million repayment of debt and finance leases and $12 million in payments for employee taxes on net settlement of equity awards.

The primary uses of cash from financing activities in the six months ended June 30, 2021, were $128 million in the purchase of a noncontrolling interest, $56 million in repayments of debt and finance leases, and $25 million in repayment of debt related to a trade securitization program, partially offset by $116 million of net transfers from XPO.

Financing activities generated $863 million of cash for the nine months ended September 30, 2022, compared with $165 million used for the same period of 2021.

The primary sources of cash from financing activities in the nine months ended September 30, 2022, were $898 million in proceeds from long-term debt, net, partially offset by $23 million repayment of debt and finance leases and $12 million in payments for employee taxes on net settlement of equity awards.

The primary uses of cash from financing activities in the nine months ended September 30, 2021, were $774 million of net transfers to XPO, $128 million in the purchase of noncontrolling interest, $64 million in repayments of debt and finance leases, and $21 million in repayment of debt related to a trade securitization program, partially offset by $794 million in proceeds from long-term debt.

Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

We do not engage in any off-balance sheet financing arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations

6 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 2. Management’s Discussion and Analysis