What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2022-02-23 compared with 2021-02-24 · 151 added, 136 removed, 271 unchanged (51% of the section changed)

6 unchanged sentences

Strategic Risks Related to Our Business

If we are not successful in developing and expanding our owned and our partner brands across our brand blueprint our business will suffer.

We have made a strategic decision to focus on fewer, larger global brands with an emphasis on developing and expanding those of our owned and key partner brands, which we view as having the largest global potential.

Our business will suffer if we are not successful in developing and expanding our owned and partner brands across our brand blueprint.

Our strategy is to focus on fewer, larger global brands with an emphasis on developing and expanding those of our owned and key partner brands, which we view as having the largest global potential, across our brand blueprint.

As we concentrate our efforts on a more select group of brands, we believe we can gain additional leverage and enhance the consumer experience.

This focus means that our success depends disproportionately on our and our partners’ ability to successfully develop this select group of brands across our brand blueprint and to maintain and extend the reach and relevance of these brands to global consumers in a wide array of markets.

This strategy has required us to acquire, build and develop our competencies in storytelling, digital gaming, consumer products and entertainment.

Acquiring, developing and growing these competencies has required significant effort, time and money, with no assurance of success.

If we are unable to successfully develop, maintain and expand our owned and key partner brands, continue to drive their relevance to consumers and grow sales of products and storytelling experiences based on those brands, our business performance will suffer.

This strategy has required us to acquire, build, invest in and develop our competencies in storytelling, digital gaming, consumer products and entertainment.

Acquiring, developing, investing in and growing these competencies has required significant effort, time and money, with no assurance of success.

The success of our brand blueprint strategy also requires significant alignment and integration among our business segments.

If we are unable to successfully develop, maintain and expand our owned and key partner brands across our brand blueprint, our business performance will suffer.

If we or our partners fail to successfully develop and deliver engaging storytelling through entertainment media our ability to build our brands and sell products will suffer.

Engaging storytelling offered through entertainment media, such as television, films, digital content and other media, has become increasingly important as a way for consumers to experience our and our partners’ brands.

Engaging storytelling offered through entertainment media, such as television, films, digital content and other media, is an important way for consumers to experience our and our partners’ brands.

The success, or lack of success, of such entertainment media efforts can significantly impact the demand for our products and our financial performance.

1 unchanged sentence

We also rely heavily on the efforts of third parties, such as licensors, film studios, content producers and distribution channels with whom we work, with respect to the development of content and timing of media development, release dates and the ultimate consumer interest in and success of these media efforts.

We do not fully control when or if any particular project will be greenlit, developed or released, and our licensors, media partners or other third parties may change their plans with respect to projects and release dates or cancel development all together.

In some cases, we do not fully control when or if any particular project will be greenlit, developed or released.

Our licensors, media partners or other third parties may change their plans with respect to projects and release dates or may decide to cancel development.

Lack of control can make it difficult for us to get entertainment projects developed, plan future entertainment slates and to successfully develop and market products in conjunction with such entertainment projects, given the lengthy lead times involved in product development and successful marketing efforts.

Any delay or cancellation of planned product development work, releases, or media support may decrease the number of products we sell, which may harm our business.

In 2020, productions and entertainment releases were delayed due to the shutdown of productions and theaters during the Covid-19 pandemic.

These delays and shutdowns had an adverse effect on our results during 2020.

In 2020 and continuing into parts of 2021, productions and entertainment releases were delayed due to the shutdown of productions and theaters during the COVID-19 pandemic.

Delays and shutdowns such as those we have experienced, can have and had an adverse effect on our results.

If films, television shows, or any other key entertainment content for which we develop and market products are not as successful as we and our partners anticipate, our revenues and earnings will decline.

Consumer interests change rapidly and acceptance of products and entertainment offerings are influenced by outside factors, making it difficult to create storytelling experiences and to design and develop products and entertainment offerings which are and will continue to be popular with children, families and audiences.

The interests of children, families and audiences evolve extremely quickly and can change dramatically from year to year and by geography.

Consumer interests change rapidly and acceptance of products and entertainment offerings are influenced by outside factors, making it difficult to create storytelling experiences and to design and develop products, play patterns and entertainment offerings which are and will continue to be popular with children, families and audiences.

The interests of children, families, fans and audiences evolve extremely quickly and can change dramatically from year to year and by geography.

To be successful, we must correctly anticipate the types of entertainment, products and play patterns which will capture consumers’ interests and imagination, and quickly develop and introduce innovative products and engaging entertainment which can compete successfully for consumers’ limited time, attention and spending.

This challenge is more difficult with the ever-increasing utilization of technology and digital media in entertainment offerings, and the increasing breadth of entertainment available to consumers.

Evolving consumer tastes and shifting interests, coupled with an ever-changing and expanding pipeline of entertainment and consumer properties and products which compete for consumer interest and acceptance, create an environment in which some products and entertainment offerings can fail to achieve consumer acceptance, and other products and

Tabl e of Contents

entertainment offerings can be popular during a certain period of time but then be rapidly replaced.

As a result, our products and entertainment offerings often have short consumer life cycles.

This challenge is more difficult with the ever-increasing utilization of technology, social media and digital media in entertainment offerings, and the increasing breadth of entertainment available to consumers.

As a result, our products and entertainment offerings can have short consumer life cycles.

Consumer acceptance of our or our partners’ entertainment offerings is also affected by outside factors, such as critical reviews, promotions, the quality and acceptance of films and television programs and content released into the marketplace at or near the same time, the availability of alternative forms of entertainment and leisure time activities, general economic conditions and public tastes generally, all of which could change rapidly and most of which are beyond our control.

7 unchanged sentences

There can be no assurance our brands, products and digital games will successfully compete with other offerings or will achieve or sustain popularity.

We continue to invest in digital gaming and technology, particularly through our Wizards of the Coast business.

Costs associated with designing, developing and producing digital games and technologically advanced or sophisticated toy products tend to be higher than for many of our other more traditional products, such as board and trading card games and action figures.

Our business will suffer if we are unable to grow our Wizards of the Coast and digital gaming business.

A key component to the success of our brand blueprint strategy is to continue to invest in digital gaming and technology, particularly through our Wizards of the Coast and digital gaming business.

We have invested substantially in this business segment and as a result it has seen significant growth over the past several years, and while primarily through growth in tabletop play, continued digital game development is a key growth factor for the future.

If we are unable to continue to grow this business and ensure its integration with our other business segments, our business may be harmed.

The digital gaming industry is highly competitive and costs associated with designing, developing and producing digital games and technologically advanced or sophisticated toy products tend to be higher than for many of our other more traditional products, such as board and trading card games and action figures, with no assurance of success.

The ability to sell enough of these advanced products, at prices high enough to recoup our costs and make a profit, is constrained by heavy competition in consumer electronics and entertainment offerings and can be further constrained by difficult economic conditions.

As a result, we face increased risk of not achieving sales sufficient to recover our costs and we may lose money on the development and sale of these products.

Additionally, designing, developing and producing digital and technologically advanced or sophisticated products requires different competencies and follows different timelines than traditional toys and games.

Delays in the design, development or production of these products could have a significant impact on our ability to successfully offer such products.

In addition, the pace of change in product offerings and consumer tastes in the electronics and digital gaming areas is potentially even greater than for our other products.

This pace of change means that the window in which a product can achieve and maintain consumer interest may be even shorter than traditional toys and games.

Additionally, designing, developing and producing digital and technologically advanced or sophisticated products often relies on third parties and requires different competencies and follows different timelines than traditional toys and games.

Delays in the design, development or production of these digital gaming products could have a significant impact on our ability to successfully offer such products.

In addition, the pace of

change in product offerings and consumer tastes in the electronics and digital gaming areas is potentially even greater than for our other products.

If a digital game fails to gain consumer acceptance early in its life cycle, there are limited opportunities to gain such acceptance through secondary launches or distribution through alternative platforms.

This pace of change or lack of consumer acceptance means that the window in which a digital gaming product can achieve and maintain consumer interest may be even shorter than traditional toys and games.

If we fail to respond to or capitalize on the rapid technological development in the entertainment industry, including changes in entertainment delivery formats, our business could be harmed.

The entertainment industry experiences frequent change driven by technological development, including developments with respect to the formats through which films, television programming, other episodic content and recorded music are delivered to consumers.

The entertainment industry continues to experience frequent change driven by technological development, including developments with respect to the formats through which films, television programming, and other episodic content are delivered to consumers.

With rapid technological changes and dramatically expanded digital content offerings, the scale and scope of these changes have accelerated in recent years.

For example, consumers are increasingly accessing television, film and other episodic content on streaming and digital content networks, such as Netflix, Amazon Prime Video, Hulu, Disney+ and Apple TV+.

Similarly, as a result of the Covid-19 pandemic, entertainment offerings have gone direct to streaming channels as opposed to theaters or have gone to streaming channels after only a short period of time in the theaters.

Similarly, as a result of the COVID-19 pandemic, some entertainment offerings have gone direct to streaming channels as opposed to theaters or at the same time as theaters or have gone to streaming channels after only a short period of time in the theaters.

Direct release to streaming channels is likely to continue.

Technological as well as other changes caused by the pandemic have caused significant disruption to the retail distribution of entertainment offerings, and have caused and could in the future cause a negative impact on sales of our products and other forms of monetization of content, especially those which are reliant on box office success.

We may lose opportunities to capitalize on changing market dynamics, technological innovations or consumer tastes if we do not adapt our content offerings or distribution capabilities in a timely manner.

The overall effect that technological development and new digital distribution platforms have on the revenue and profits we derive from our entertainment content, including from

Tabl e of Contents

merchandise sales derived from such content, and the additional costs associated with changing markets, media platforms and technologies, is unpredictable.

The overall effect that technological development and new digital distribution platforms have on the revenue and profits we derive from our entertainment content, including from merchandise sales derived from such content, and the additional costs associated with changing markets, media platforms and technologies, is unpredictable.

If we fail to accurately assess and effectively respond to changes in technology and consumer behavior in the entertainment industry, our business may be harmed.

We may not realize the full benefit of our licenses if the licensed material has less market appeal than expected or if revenue from the licensed products is not sufficient to earn out the minimum guaranteed royalties.

The success of entertainment properties for which we have a license, such as MARVEL, STAR WARS, DISNEY FROZEN, BEYBLADE, DISNEY PRINCESS and SESAME STREET, and the ability of us to successfully market and sell related products, can significantly affect our revenues and profitability.

The success of entertainment properties for which we have a license, such as licenses we have with The Walt Disney Company, and the ability of us to successfully market and sell related products, can significantly affect our revenues and profitability.

If we produce a line of products based on a movie or television series, the success of the movie or series has a critical impact on the level of consumer interest in the associated products we are offering.

1 unchanged sentence

The license agreements we enter to obtain these rights usually require us to pay minimum royalty guarantees that may be substantial, and in some cases may be greater than what we are ultimately able to recoup from actual sales, which could result in write-offs of significant amounts which, in turn, would harm our results of operations.

Acquiring or renewing licenses may require the payment of minimum guaranteed royalties that we consider to be too high to be profitable, which may result in losing licenses that we currently hold when they become available for renewal, or missing business opportunities for new licenses.

Additionally, as a licensee of entertainment-based properties, we cannot guarantee that a particular property or brand will translate into successful toy, game or other family entertainment products, and underperformance of any such products may result in reduced revenues and operating profit for us.

5 unchanged sentences

In addition, we compete with companies who are focused on building their brands across multiple product and consumer categories, including through entertainment offerings.

Across our business, we face competitors who are constantly monitoring and attempting to anticipate consumer tastes and trends, seeking ideas which will appeal to consumers, and introducing new products that compete with our products for consumer acceptance and purchase.

Across our business, we face competitors who are constantly monitoring and

attempting to anticipate consumer tastes and trends, seeking ideas which will appeal to consumers, and introducing new products that compete with our products for consumer acceptance and purchase.

In addition to existing competitors, the barriers to entry for new participants in the play and entertainment industry are low, and the increasing importance of digital media and the heightened connection between digital media and consumer interest, has further increased the ability for new participants to enter our markets, and has broadened the array of companies we compete with.

4 unchanged sentences

The success of our brand blueprint strategy is dependent in part on our ability to produce and distribute entertainment offerings that consumers want to experience and that create further awareness of our brands and products.

Our independent studios, now operated by eOne, compete with major U.S.

Our global independent studios, operated by eOne, compete with major U.S.

and international studios, that typically release a large number of films annually and command a significant share of box office revenues, streaming revenues, and television airtime, as well as other independent film and television production or distribution companies.

Many of the major U.S.

studios are part of large, diversified corporate groups with a variety of other operations, including television networks and cable channels that can provide both in‑house distribution capability and varied sources of earnings that may allow them to better offset fluctuations in the financial performance of their film and television operations.

Some of these competitors have substantially greater marketing and financial resources than

Tabl e of Contents

we do and may be able to compete aggressively on pricing in order to increase box office revenues, obtain distribution rights and obtain television airtime.

studios are part of large, diversified corporate groups with a variety of other operations, including television networks, cable channels and streaming services that can provide both in‑house distribution capability and varied sources of earnings that may allow them to better offset fluctuations in the financial performance of their film and television operations.

Some of these competitors have substantially greater marketing and financial resources than we do and may be able to compete aggressively on pricing in order to increase box office or streaming revenues, obtain distribution rights and obtain television airtime.

In addition, the resources of the major studios may give them an advantage in acquiring other businesses or assets, including content libraries, that we might also be interested in acquiring.

1 unchanged sentence

We may not realize the anticipated benefits of acquisitions or investments in joint ventures, or those benefits may be delayed or reduced in their realization.

Acquisitions and investments have been a component of our growth and the development of our business, such as our recent acquisition of eOne.

Acquisitions can broaden and diversify our brand holdings and product offerings, and allow us to build additional capabilities and competencies around our brand blueprint, such as our acquisition of eOne which added proven television and film capabilities.

Acquisitions and investments have been a component of our growth and the development of our business, such as our acquisition of our global independent studio, eOne.

We cannot be certain that the products and offerings of companies we may acquire, or acquire an interest in, will achieve or maintain popularity with consumers in the future or that any such acquired companies or investments will allow us to more effectively market our products, develop our competencies or grow our business.

6 unchanged sentences

Operational Risks Related to our Business

An inability to develop and introduce planned products, product lines and new brands in a timely and cost-effective manner or our inability to adapt to ecommerce may damage our business.

An inability to develop, introduce and ship planned products, product lines and new brands in a timely and cost-effective manner may damage our business.

In developing products, product lines and new brands we have anticipated dates for the associated product and brand introductions.

2 unchanged sentences

This risk is heightened by our customers’ compressed shipping schedules and the seasonality of our business.

Further, ecommerce and omni-channel business is growing significantly and accounting for a higher portion of the ultimate sales of our products to consumers.

Ecommerce retailers tend to hold less inventory and take inventory closer to the time of sale to consumers than traditional retailers.

The risk is also exacerbated by the increasing sophistication of many of the products we are designing, and brands we are developing in terms of combining digital and analog technologies, and providing greater innovation and product differentiation.

Unforeseen delays or difficulties in the development process, significant increases in the planned cost of development, or changes in anticipated consumer demand for our products and new brands may cause the introduction date for products to be later than anticipated, may reduce or eliminate the profitability of such products or, in some situations, may cause a product or new brand introduction to be discontinued.

If we are unable to navigate through global supply chain challenges, our business may be harmed.

In 2021 and continuing into 2022, we have faced global supply chain challenges with the production and delivery of some products being delayed due to logistics, including labor, trucking and container shortages, port congestion and other shipping disruptions.

We have experienced increases in material costs and shortages for some of our products, due in part to higher wages being paid due to labor shortages in China and Vietnam, as well as periodic and unpredictable manufacturing shut-downs due to COVID-19.

While we have taken actions to lessen the impact of these supply chain challenges, such as through the use of alternative ports and air freight, such actions have resulted in higher costs and there can be no assurance that the actions taken will continue to be effective.

We have also increased prices in some cases to help offset increased costs.

We can provide no assurance that we will be able to increase prices in the future and we cannot assure that price increases we have already taken will offset the entirety of additional costs we have incurred and may incur in the future to mitigate the supply chain disruption.

Further, if we are unable to negotiate favorable carrier agreements, deliver products on time or otherwise satisfy demand for our products, our business may be harmed.

If we are unable to adapt our business to the continued shift to ecommerce, our business may be harmed.

Our ecommerce business is accounting for a higher portion of the ultimate sales of our products to consumers than it has historically.

In 2021, ecommerce sales represented a significant portion of overall sales to our key customers as consumers increasingly purchased our products online as compared to through in-store shopping due to the continued transition to ecommerce accelerated by the shutdown and limited access to retail stores during the COVID-19 pandemic.

Ecommerce sales have resulted in retailers holding less inventory, which has caused us to adjust our supply chain.

Additionally, if our technology and systems used to support ecommerce order processing are not effective, our ability to deliver products on time on a cost-effective basis may be adversely affected.

Failure to continue to adapt our systems and supply chain and successfully fulfill ecommerce sales could harm our business.

The concentration of our retail customer base and continued shift to ecommerce sales means that economic difficulties or changes in the purchasing or promotional policies or patterns of our major customers could have a significant impact on us.

We depend upon a relatively small retail customer base to sell the majority of our products.

For the fiscal year ended December 27, 2020, Wal-Mart Stores, Inc., Amazon.com and Target Corporation and accounted for approximately 15 %, 10 % and 8 %, respectively, of our consolidated net revenues.

and Canada segment, approximately 59% of the net revenues of the segment were derived from our top three customers.

In 2020, ecommerce sales represented a significant portion of overall sales to these customers as consumers increasingly purchased our products online as compared to through in-store shopping due to the shutdown and limited access to retail stores during the Covid-19 pandemic.

Ecommerce sales have resulted in retailers holding less inventory,

Tabl e of Contents

which has caused us to adjust our supply chain.

Failure to continue to adapt our supply chain and successfully fulfill ecommerce sales could harm our business.

For the fiscal year ended December 26, 2021, Wal-Mart Stores, Inc., Amazon.com and Target Corporation accounted for approximately 13%, 11% and 8%, respectively, of our consolidated net revenues.

Due to our customer concentration, if one or more of our major customers were to experience difficulties in fulfilling their obligations to us, cease doing business with us, significantly reduce the amount of their purchases from us, favor competitors or new entrants, increase their direct competition with us by expanding their private-label business, change their purchasing patterns, impose unexpected fees on us, alter the manner in which they promote our products or the resources they devote to promoting and selling our products, or return substantial amounts of our products, our business may be harmed.

Our customers do not make binding long-term commitments to us regarding purchase volumes and make all purchases by delivering purchase orders.

Any customer could reduce its overall purchase of our products and reduce the number and variety of our products that it carries and the shelf space allotted for our products.

Any customer could reduce its overall purchase of our products and

reduce the number and variety of our products that it carries and the shelf space allotted for our products.

In addition, increased concentration among our customers could negatively impact our ability to negotiate higher sales prices for our products and could result in lower gross margins than would otherwise be obtained if there were less consolidation among our customers.

2 unchanged sentences

subject us to risks associated with international operations.

We operate facilities and sell products in numerous countries outside the U.S.

We operate facilities and sell products and entertainment offerings in numerous countries outside the U.S.

Over time, we expect our international sales and operations to continue to grow both in dollars and as a percentage of our overall business as a result of a key business strategy to expand our presence in emerging and underserved international markets, such as Eastern Europe, Latin America, Africa and Asia.

Additionally, we utilize third-party manufacturers primarily located in the Far East, including China, India and Vietnam, to produce most of our products.

Additionally, we utilize third-party manufacturers primarily located in the Far East, including China, Vietnam and India, to produce most of our products.

These international operations, including operations in emerging markets, have unique consumer preferences and business climates, present additional challenges and are subject to risks that may significantly harm our sales, increase our costs or otherwise damage our business, including:

5 unchanged sentences

• Implications or difficulties arising out of the United Kingdom’s exit from the European Union;

• Complications in complying with different laws in varying jurisdictions and in dealing with changes in governmental policies and the evolution of laws and regulations and related enforcement;

• Complications in complying with different laws in varying jurisdictions and in dealing with changes in governmental policies and the evolution of laws and regulations and related enforcement, as such laws and policies relate to our products and approval of entertainment;

• Difficulties understanding the retail climate, consumer trends, local customs and competitive conditions in foreign markets which may be quite different from the U.S.;

• Natural disasters and the greater difficulty and cost in recovering therefrom;

• Difficulties in moving materials and products from one country to another, including port congestion, strikes and other transportation delays and interruptions;

• Difficulties in moving materials and products from one country to another, including port congestion, strikes, labor shortages and other events causing transportation delays and interruptions;

• Increased investment and operational complexity to make our products compatible with systems in various countries and compliant with local laws;

1 unchanged sentence

Because of the importance of international sales, sourcing and manufacturing to our business, our financial condition and results of operations could be significantly harmed if any of the risks described above were to occur or if we are otherwise unsuccessful in managing our increasing global business and operating in an environment with these risks.

Tabl e of Contents

Our reliance on third-party manufacturers to produce our products, particularly in China, India and Vietnam, presents risks to our business.

All of our products are manufactured by third-party manufacturers, the majority of which are located in China, with a significant amount of our product sourcing also coming from manufacturers in India and Vietnam.

Our reliance on third-party manufacturers to produce our products, particularly in China, Vietnam and India, presents risks to our business.

All our products are manufactured by third-party manufacturers, the majority of which are in China, with a significant amount of our product sourcing also coming from manufacturers in Vietnam and a lesser amount from India.

Should changes be necessary, our external sources of manufacturing can be shifted, over a significant period of time, to alternative sources of supply.

If we were prevented or delayed in obtaining products or components for a material portion of our product lines due to economic, political, civil, labor or other factors beyond our control, including work stoppages, slowdowns or strikes, natural disasters, adverse health conditions or pandemics, our ability to manufacture would be adversely affected and our operations may be substantially disrupted, potentially for a significant period of time.

significant period of time.

This delay could significantly reduce our revenues and profitability and harm our business while alternative sources of supply are secured.

Given that our toy manufacturing is conducted by third-party manufacturers, health conditions, such as the coronavirus, and other factors affecting social and economic activity where our manufacturers are located may affect the movement of people and products into and from those locations to our major markets, including North America and Europe.

Given that our toy and game manufacturing is conducted by third-party manufacturers, health conditions, such as the coronavirus, and other factors affecting social and economic activity where our manufacturers are located may affect the movement of people and products into and from those locations to our major markets, including North America and Europe.

Further, increases in the costs of labor and other costs of doing business in markets where we manufacture, could also have a significant negative impact on our operations, revenues and earnings.

5 unchanged sentences

Additionally, the suspension of the operations of a third-party manufacturer by government inspectors in China or another market in which we source products could result in delays to us in obtaining product and may harm sales.

We have been working over the last several years to reduce our reliance on manufacturing in China, such as by moving production of certain products to facilities in other countries like India, Vietnam and Mexico, as well as by increasing production of our products in other markets, including in the U.S.

We have been working over the last several years to reduce our reliance on manufacturing in China, such as by moving production of certain products to facilities in other countries like Vietnam, India and Mexico, as well as by increasing production of our products in other markets, including in the U.S.

We plan to continue those efforts in future years, but cannot guarantee we will be as successful in these efforts as we plan.

Furthermore, many of these newer production facilities, such as in India and Vietnam, raise other risks in that we are working with vendors who have not been manufacturing products like ours for as long as historical vendors in China.

Furthermore, many of these newer production facilities, such as in Vietnam and India, raise other risks in that we are working with vendors who have not been manufacturing products like ours for as long as historical vendors in China.

That means these new vendors must successfully develop the capability to manufacture our products to the quality and safety standards we require and within the tight timeframe required by our customers.

Newer and less experienced vendors are more susceptible to product quality, logistics and other issues, due in part to their less mature infrastructure or unfamiliarity with our product standards.

We require our third-party manufacturers to comply with our Global Business Ethics Principles, which are designed to prevent products manufactured for us from being produced under inhumane or exploitive conditions.

8 unchanged sentences

Our business may be harmed if the studios, content producers and distribution channels with which we work stop or reduce the amount of work they do with us or otherwise demand less favorable terms to us.

Tabl e of Contents

We have entered into long-term output licensing agreements for the acquisition of content and these agreements may not be renewed on favorable terms or at all.

We have entered into long-term agreements to acquire films with producers.

In some cases, we have entered into long-term agreements to acquire films with producers.

These agreements require us to pay for films released by the relevant studio at rates typically calculated by reference to the film’s budget.

2 unchanged sentences

These arrangements are also terminable by the counterparty under certain circumstances.

If we are unable to renew or replace them on acceptable terms, we may not be able to replace this content with other film acquisitions.

If we are unable to renew or replace them on

acceptable terms, we may not be able to replace this content with other film acquisitions.

Even if these contracts are renewed or replaced, the terms on which we acquire content may be less favorable than the terms of our current agreements and the financial success or quantity of films and television programs we acquire through these long-term contracts may decrease.

1 unchanged sentence

Our success is dependent on the efforts and dedication of our officers and other employees.

Our officers and employees are at the heart of all of our efforts.

Our officers and employees are at the heart of all our efforts.

It is their skill, innovation and hard work that drive our success.

We compete with many other potential employers in recruiting, hiring and retaining our management team and our many other skilled officers and employees around the world.

In the entertainment industry, experienced personnel and top creative talent are in high demand and competition for their talent is intense.

In the entertainment and digital gaming industries, experienced personnel and top creative talent are in high demand and competition for their talent is intense.

The increasing prevalence of remote work creates further challenges in retaining employees as some employees desire more flexibility in their employment and the ability to work remotely opens up more employment opportunities.

The impact of failing to retain key employees can be high due to loss of key knowledge and relationships, loss of creative talent, lost productivity, hiring and training costs, all of which could result in lower profitability.

We cannot guarantee that we will recruit, hire or retain the key personnel we need to succeed.

We have experienced significant changes in our workforce due in part to our acquisition of eOne, restructuring efforts, recruitment and hiring of new skill sets required for our evolving global business, and retirement of certain executives.

The changes in our employee composition, both in terms of global distribution and in skill sets, have required changes in our business.

Our loss of key management or other employees, or our inability to hire talented people with the skill sets we need for our changing business, could significantly harm our business.

We have experienced significant changes in our leadership due in part to the untimely passing of our former Chief Executive Officer and Chairman, Brian Goldner in October of 2021, resulting in the recent appointment of Chris Cocks as our new Chief Executive Officer and, Eric Nyman as our new President and Chief Operating Officer, both becoming effective February 25, 2022.

Our future success will depend on the leadership of our key executives such as Mr.

Cocks and Mr.

In addition, we have experienced the retirement and transition of certain other executives, and changes in our employee composition, both in terms of global distribution and in skill sets.

Our loss of key management or other employees, inability to drive success through our new leaders, or our inability to retain or hire talented people with the skill sets we need for our diverse and changing business, could significantly harm our business.

If we fail to develop diverse top talent, we may be unable to compete and our business may be harmed.

18 unchanged sentences

Our failure to successfully protect our intellectual property rights could significantly harm our business and competitive position.

Tabl e of Contents

Failure to successfully operate our information systems and implement new technology effectively could disrupt our business or reduce our sales or profitability.

8 unchanged sentences

We maintain systems and processes designed to protect this data, but notwithstanding such protective measures, there is a risk of intrusion, cyber-attacks or tampering that could compromise the integrity and privacy of this data.

Cyber-attacks are increasing in their frequency, sophistication and intensity, and are becoming increasingly difficult to detect.

They are often carried out by motivated, well-resourced, skilled and persistent actors, including nation states, organized crime groups, “hacktivists” and employees or contractors acting with malicious intent.

Cyber-attacks could include the deployment of harmful malware and key loggers, ransomware, a denial-of-service attack, a malicious website, the use of social engineering and other means to affect the confidentiality, integrity and availability of our technology systems and data.

Cyber-attacks could also include supply chain attacks, which could cause a delay in the manufacturing of our products.

In addition, we provide confidential and proprietary information to our third-party business partners in certain cases where doing so is necessary to conduct our business.

3 unchanged sentences

The global coronavirus outbreak or other similar outbreaks of communicable infections, diseases, or public health pandemics in the markets in which we and our employees, consumers, customers, partners, licensees, suppliers and manufacturers operate, could substantially harm our business.

The global outbreak of the coronavirus which continues to adversely impact global populations, and any other outbreaks of communicable infections, diseases or other adverse public health conditions in markets in which we, our employees, consumers, customers, partners, licensees, licensors, suppliers and manufacturers operate, could have a significant negative impact on our business, revenues and profitability.

The global outbreak of the coronavirus which continues to adversely impact global populations, and any other variants or outbreaks of communicable infections, diseases or other adverse public health conditions in markets in which we, our employees, consumers, customers, partners, licensees, licensors, suppliers and manufacturers operate, could have a significant negative impact on our business, revenues and profitability.

The occurrence of these types of events can result, and in the case of the coronavirus has resulted in, disruptions and damage to our business, caused by a number of factors:

• the negative impact to our ability to design, develop, manufacture and ship product as well as produce and distribute entertainment content;

• delays in entertainment content releases from our partners and licensors, or changes in release plans, that can adversely impact our product sales;

examples of releases that have been delayed include Disney’s MULAN , MARVEL’S BLACK WIDOW, SONY PICTURES GHOSTBUSTERS AFTERLIFE and SNAKE EYES:

JOE ORIGINS ;

• the negative impact on consumer purchasing behavior and availability of product to consumers, including due to retail store closures, limited reopenings, shelter at home instructions and limitations on the capacity of ecommerce;

• disruptions or restrictions on the ability of some of our employees, suppliers and manufacturers to work effectively, including due to illness, quarantines, government actions, and facility closures or other similar restrictions;

Tabl e of Contents

• temporary or permanent closures of, limited reopenings, or other restrictions on businesses, such as retail stores, in which our products and/or the products of our licensees are sold, as well as studios and theaters in which or for which we produce and distribute entertainment content;

• other negative effects of the coronavirus on our business, including increased risks of accounts receivable collection, bankruptcies of retailers, delays in payment and negotiations with customers or licensees over payment terms or the ability to perform under contracts or licenses.

During 2020, due to the coronavirus, we experienced and could experience further disruptions in supply of product, which has been and can be driven by:

manufacturing and other work stoppages, factory and other business closings, slowdowns or delays in places where a substantial portion of our manufacturing occurs;

restrictions and limitations placed on workers and factories, including quarantines and other limitations on the ability to travel and return to work;

and shortages or delays in production or shipment of products or raw materials.

Even as facilities reopen or workers return to work, such reopenings and returns have been and we expect will continue to be measured and gradual for some period of time so as to minimize the risk of further outbreaks of the virus, and that despite precautions further outbreaks may occur and result in future negative impacts.

Certain aspects of our entertainment business have continued without significant disruption, such as development and pre-production work in our animation business.

Other aspects of our entertainment business were significantly negatively impacted by the coronavirus.

Specifically, scheduled live-action productions were delayed or postponed during much of 2020 due to the shutdown of production work and the closure or limited reopening of studios, theatrical releases have been delayed due to the closure or limited reopening of theaters, and in some cases, global releases moved to different media platforms, such as streaming services.

Although productions have been reopening, on a limited basis, depending on the future impact of the coronavirus our entertainment business may continue to be adversely affected in the future.

The negative impact to demand can be caused by delays in or reduced purchases from customers and consumers who may be reluctant or unable to leave home or otherwise shop in a normal manner due to restrictions on or closure, either temporarily or permanently, of many retail stores and hobby stores in which our products are sold.

Demand has been and may be further impacted due to consumers’ lower discretionary income due to reduced or limited work or unemployment, which has increased dramatically due to the coronavirus.

Due the nature of our global business, we have experienced and expect to continue to experience fluctuations in our performance based on the progress of different countries in controlling the coronavirus and the maturity of ecommerce platforms in those markets.

For example, we experienced substantial business difficulties in certain countries in Latin America, which have continued to be adversely affected by the number of coronavirus cases, resulting in substantial retail disruption, and which, have not historically had large ecommerce businesses.

Further, countries that may currently be controlling the virus may suffer setbacks as markets, businesses, schools and communities reopen, thereby causing further restrictions or closures of retail stores, studios and production work, all of which could adversely impact our business.

Since mid-March 2020, most of our workforce has been working remotely.

Reopening of our offices has begun on a limited basis, and we continue to actively work on a plan to safely bring additional workers back to the office.

While most of our workforce has been able to work remotely in an effective manner, certain employees whose job responsibilities require in person work, such as those whose job it is to go into retail stores or are involved in design or production work, have seen reduced productivity and, in some cases, have been furloughed or terminated.

We regularly communicate and engage with our employees to minimize the disruption and stress of working remotely, provide flexibility and ensure that our employees are getting access to information and accommodations as we continue to plan for a successful and safe reentry to the workplace.

We believe we have sufficient liquidity and capital resources available at this time.

During this time of uncertainty, however, we are managing our expenses to further preserve our liquidity and we are closely monitoring our customers’ health and collectability of receivables, with some customers having difficulty making payments or requesting extended payment terms at a time when retailers are experiencing challenges and some have filed for bankruptcy.

• difficulties in shipping and distributing products due to ongoing port capacity, and labor, shipping container and truck transportation shortages, resulting in higher costs for both ocean and air freight and delays in the availability of products, which can result in delayed sales and in some cases result in lost sales.

These and other disruptions are expected to continue in 2022;

• disruptions in supply of products, due to closures or reductions in operations at third-party manufacturing facilities across several geographies including, but not limited to, China, Vietnam, India, the United States and Ireland;

• adverse sales impact due to changes in consumer purchasing behavior and availability of products to consumers, resulting from retail store closures, limited reopening of retail stores and limitations on the capacity of ecommerce channels to supply additional products;

• fluctuations in our performance based on the progress of different countries in controlling the coronavirus and the maturity of e-commerce platforms in those markets;

• limited production of live-action scripted and unscripted entertainment content due to the hard stop and soft reopening of production studios;

• delays or postponements of entertainment productions and releases of entertainment content both internally and by our partners;

• increases in entertainment production costs due to measures required to minimize COVID-19 risks;

• challenges of working remotely.

In response to these challenges, we developed and continue to develop and execute plans to mitigate the negative impact of COVID-19 to the business.

Our responses included:

• utilizing our global supply chain and existing inventory to work to meet demand, while managing freight cost increases across all markets, as our manufacturing facilities returned to varying levels of operation;

• mitigating risk in our global supply chain by expanding shipping capacity, activating alternate ports in China and the U.S.

and prioritizing supply based on inventory and customer needs, including utilizing air freight if necessary;

• accelerating our business online and expanding omni-channel to get products to customers and consumers;

• developing innovative ways to enable players to continue to play games remotely;

• continuing to create new entertainment, including post-production work and the development of animation productions remotely;

• implementing preventative measures and health and safety protocols.

We have reopened our offices, providing employees flexibility in their return to the office by working partially in the office and partially remote.

We have taken measures to safely bring additional workers back to the office, including a return to fully remote work when variants emerge which increase infection rates significantly in areas where we do business.

The transition back from fully remote work to partial remote and partial in person may be difficult for some employees.

We are actively soliciting feedback and making modifications to provide our employees with a productive and safe environment, and plan to continue to monitor employee efficiency, satisfaction, and morale as we continue to transition.

There can be no assurance that employees will not have some disruption in their work due to the transition.

Changes in flexible working arrangements could impact employee retention, employees’ productivity and morale, strain our technology resources and introduce operational risks.

Additionally, the risk of cyber-attacks or other privacy or data security incidents may be heightened as a result of our moving increasingly towards a remote working environment, which may be less secure and more susceptible to hacking attacks.

The impact of coronavirus outbreak continues to be fluid and uncertain, and while vaccines are being rolled out, it is still difficult to forecast the final impact it could have on our future operations.

If our business experiences prolonged occurrence of adverse public health conditions due to the coronavirus or other similar outbreaks, we believe our business could be substantially harmed.

Tabl e of Contents

Changes in U.S., global or regional economic conditions could harm our business and financial performance.

Our financial performance is impacted by the level of discretionary consumer spending in the markets in which we operate.

Recessions, credit crises and other economic downturns, or disruptions in credit markets, in the U.S.

and in other markets in which we operate can result in lower levels of economic activity, lower employment levels, less consumer disposable income, and lower consumer confidence.

Similarly, reductions in the value of key assets held by consumers, such as their homes or stock market investments, can lower consumer confidence and consumer spending power.

Any of these factors can reduce the amount which consumers spend on the purchase of our products and entertainment.

This in turn can reduce our revenues and harm our financial performance and profitability.

In addition to experiencing potentially lower revenues during times of economic difficulty, in an effort to maintain sales during such times we may need to reduce the price of our products, increase our promotional spending and/or sales allowances, take other steps to encourage retailer and consumer purchase of our products, or incur expenses to develop and produce entertainment offerings with no assurance of success.

Those steps may lower our net revenues or increase our costs, thereby decreasing our operating margins and lowering our profitability.

Other adverse economic conditions in the markets in which we and our employees, consumers, customers, suppliers and manufacturers operate could negatively impact our ability to produce and ship our products, and lower our revenues, margins and profitability.

Adverse economic conditions in the markets in which we and our employees, consumers, customers, suppliers and manufacturers operate could negatively impact our ability to produce and ship our products, and lower our revenues, margins and profitability.

Various economic conditions in the markets we, our employees, consumers, customers, suppliers and manufacturers operate, could have a significant negative impact on our revenues, profitability and business.

3 unchanged sentences

and other factors that cause increases in costs or delay in revenues.

Significant increases in the costs of other products which are required by consumers, such as gasoline, home heating fuels, or groceries, may reduce household spending on the discretionary products and entertainment we offer.

Weakened economic conditions, lowered employment levels or recessions in any of our major markets may also significantly reduce consumer purchases of our products and spending on entertainment.

Inflation, such as what consumers in the U.S.

and other economies are experiencing, can cause significant increases in the costs of other products which are required by consumers, such as gasoline, home heating fuels, or groceries, may reduce household spending on the discretionary products and entertainment we offer.

Weakened economic conditions, lowered employment levels or recessions in any of our major markets may also significantly

reduce consumer purchases of our products and spending on entertainment.

Economic conditions may also be negatively impacted by terrorist attacks, wars and other conflicts, natural disasters, increases in critical commodity prices or labor costs, or the prospect of such events.

1 unchanged sentence

Our success and profitability not only depend on consumer demand for our products, but also on our ability to produce and sell those products at costs which allow for us to make a profit.

Rising fuel and raw material prices, for paperboard and other components such as resin used in plastics or electronic components, increased transportation costs, and increased labor costs in the markets in which our products are manufactured all may increase the costs we incur to produce and transport our products, which in turn may reduce our margins, reduce our profitability and harm our business.

Rising fuel and raw material prices, due to inflation or otherwise, for paperboard and other components such as resin used in plastics or electronic components, increased transportation and shipping costs, and increased labor costs in the markets in which our products are manufactured all may increase the costs we incur to produce and transport our products, which in turn may reduce our margins, reduce our profitability and harm our business.

Changes in U.S., global or regional economic conditions could harm our business and financial performance.

Our financial performance is impacted by the level of discretionary consumer spending in the markets in which we operate.

Reductions in stimulus payments provided to consumers could impact discretionary spending.

Recessions, credit crises and other economic downturns, or disruptions in credit markets, in the U.S.

and in other markets in which we operate can result in lower levels of economic activity, lower employment levels, less consumer disposable income, and lower consumer confidence.

Similarly, reductions in the value of key assets held by consumers, such as their homes or stock market investments, can lower consumer confidence and consumer spending power.

Any of these factors can reduce the amount which consumers spend on the purchase of our products and entertainment.

This in turn can reduce our revenues and harm our financial performance and profitability.

Financial Risks Relating to our Business

1 unchanged sentence

Sales of our toys, games and other entertainment products are extremely seasonal, with a majority of retail sales occurring during the period from September through December in anticipation of the holiday season.

This seasonality has increased over time, as retailers become more and more efficient in their control of inventory levels through quick response or just in time inventory management techniques, including the use of automated inventory replenishment programs.

This seasonality for our consumer products business has increased over time, as retailers become more and more efficient in their control of inventory levels through quick response or just in time inventory management techniques, including the use of automated inventory replenishment programs.

Further, ecommerce continues to grow significantly and accounts for a higher portion of the ultimate sales of our products to consumers.

3 unchanged sentences

This can also result in our losing significant revenues and earnings if our supply chain is unable to supply product to our customers when they want it.

Tariffs can exacerbate this negative impact by causing retailers to shift from direct import to domestic orders, further pressuring our supply chain as we experienced in 2019.

Tariffs can exacerbate this negative impact by causing retailers to shift from direct import to domestic orders, further pressuring our supply chain.

The level of inventory carried by retailers may also reduce or delay retail sales resulting in lower revenues for us.

If we or our customers determine that one of our products is more popular at retail than was originally anticipated, we may not have sufficient time to produce and ship enough additional products to fully meet consumer demand.

Tabl e of Contents

Additionally, the logistics of supplying more product within shorter time periods increases the risk that we will fail to achieve tight and compressed shipping schedules, which also may reduce our sales and harm our financial performance.

This seasonal pattern requires significant use of working capital, mainly to manufacture or acquire inventory during the portion of the year prior to the holiday season, and requires accurate forecasting of demand for products during the holiday season in order to avoid losing potential sales of popular products or producing excess inventory of products that are less popular with consumers.

Our failure to accurately predict and respond to consumer demand, resulting in under producing popular items and/or overproducing less popular items, would reduce our total sales and harm our results of operations.

These risks have been exacerbated in 2021 and continuing into 2022 due to the global supply chain challenges we have faced due to logistics, including labor, trucking and container shortages, port congestion and other shipping disruptions.

Our entertainment business is also subject to seasonal variations based on the timing of television, film, streaming and digital content releases.

Release dates are determined by several factors, including the timing of holiday periods, geographical release dates and competition in the market.

As a result of the seasonal nature of our business, we would be significantly and adversely affected, in a manner disproportionate to the impact on a company with sales spread more evenly throughout the year, by unforeseen events such as a natural disaster, a terrorist attack, economic shock or pandemic that harms the retail environment or consumer buying patterns during our key selling season, or by events such as strikes or port delays that interfere with the shipment of goods, particularly from the Far East, during the critical months leading up to the holiday shopping season.

Release dates are determined by several factors, including the timing of holiday periods, geographical release dates and competition in the market, and more recently, the timing of release dates has been affected by the pandemic.

This seasonal patterns of our business requires significant use of working capital, mainly to manufacture or acquire inventory during the portion of the year prior to the holiday season, and requires accurate forecasting of demand for products during the holiday season in order to avoid losing potential sales of popular products or producing excess inventory of products that are less popular with consumers.

As a result of the seasonal nature of our business, we would be significantly and adversely affected, in a manner disproportionate to the impact on a company with sales spread more evenly throughout the year, by unforeseen events such as a natural disaster, a terrorist attack, economic shock or pandemic that harms the retail environment or consumer buying patterns during our key selling season, or by events such as strikes or port delays or other supply chain challenges that interfere with the shipment of goods, particularly from the Far East, during the critical months leading up to the holiday shopping season.

If we incurred any significant impairment charges, our net earnings would be reduced.

Declines in the profitability of acquired brands or our decision to reduce our focus or exit these brands may impact our ability to recover the carrying value of the related assets and could result in an impairment charge.

Similarly, declines in our profitability may impact the fair value of our reporting units, which could result in a write-down of our goodwill and consequently harm our results of operations.

Similarly, declines in our profitability may impact the fair value of our reporting units, which could result in a write-down of our goodwill and consequently harm our net earnings.

We may incur impairments if the films and television programs we acquire and produce do not perform well enough to recoup our acquisition, production, marketing and distribution costs.

13 unchanged sentences

Similarly, our business could be harmed by greater-than-expected costs, or unexpected delays or difficulties, associated with our investment in Discovery Family Channel, such as difficulties in increasing subscribers to the network or in building advertising revenues for Discovery Family Channel.

If the Discovery Family Channel is not successful our investments may become impaired, which could result in a write-down through net earnings.

During the fourth quarter of 2021 we recorded an impairment loss of $74.1 million associated with our investment in the Discovery Family Channel.

Changes in foreign currency exchange rates can significantly impact our reported financial performance.

6 unchanged sentences

dollar terms can be negatively impacted by exchange rate movements which we do not control.

Depreciation in key

Tabl e of Contents

currencies may have a significant negative impact on our revenues and earnings as they are reported in U.S.

Our indebtedness may limit our availability of cash, cause us to divert cash to fund debt service payments or may it more difficult to take certain other actions .

Depreciation in key currencies may have a significant negative impact on our revenues and earnings as they are reported in U.S.

Our indebtedness may limit our availability of cash, cause us to divert cash to fund debt service payments or make it more difficult to take certain other actions .

We incurred significant indebtedness to finance our acquisition of eOne.

20 unchanged sentences

We also may choose to finance our capital needs, from time to time, through the issuance of debt securities.

Our ability to issue such securities on satisfactory terms, if at all, will depend on the state of our business and financial condition, any ratings issued by major credit rating agencies, market interest rates, and the overall condition of the

Tabl e of Contents

financial and credit markets at the time of the offering.

The condition of the credit markets and prevailing interest rates have fluctuated significantly in the past and are likely to fluctuate in the future.

13 unchanged sentences

There is some degree of uncertainty and subjectivity in complying with transfer pricing rules.

Our effective tax rate could be impacted by changes in, or the interpretation of, tax laws or by changes in the amount of revenue and earnings we derive, or are determined to derive by tax authorities, from jurisdictions with differing tax rates.

Our effective tax rate could be impacted by changes in, or the interpretation of, tax laws, such as those being considered by the current U.S.

administration and other jurisdictions in which we do business, or by changes in the amount of revenue and earnings we derive, or are determined to derive by tax authorities, from jurisdictions with differing tax rates.

In addition, we may be subject to tax examinations by federal, state, and international jurisdictions, and these examinations can result in significant tax findings if the tax authorities interpret the application of laws and rules differently than we do or disagree with the intercompany rates we are applying.

12 unchanged sentences

In addition, certain of our products are subject to regulation by the Food and Drug Administration or similar international authorities.

Advertising to children is subject to regulation by the Federal Trade Commission, the Federal Communications Commission and a host of other agencies globally, and the collection of information from children under the age of 13 is subject to the provisions of the Children’s Online Privacy Protection Act and other privacy laws around the world.

The collection of personally identifiable information from anyone, including adults, is under increasing regulation in many markets, such as the

Tabl e of Contents

General Data Protection Regulation adopted by the European Union.

Advertising to children is subject

to regulation by the Federal Trade Commission, the Federal Communications Commission and a host of other agencies globally, and the collection of information from children under the age of 13 is subject to the provisions of the Children’s Online Privacy Protection Act and other privacy laws around the world.

The collection of personally identifiable information from anyone, including adults, is under increasing regulation in many markets, such as the General Data Protection Regulation adopted by the European Union, and data protection laws in the United States and in a number of other counties.

While we take all the steps we believe are necessary to comply with these acts and regulations, we cannot assure you that we will be in compliance and, if we fail to comply with these requirements or other regulations enacted in the future, we could be subject to fines, liabilities or sanctions which could have a significant negative impact on our business, financial condition and results of operations.

4 unchanged sentences

Complying with these regulations imposes costs on us which can reduce our profitability and our failure to successfully comply with any such legal requirements could subject us to monetary liabilities and other sanctions that could further harm our business and financial condition.

We may face increased costs in achieving our sustainability goals, and, any failure to achieve our goals could result in reputational damage.

We view sustainability challenges as opportunities to innovate and continuously improve our product design and operational efficiencies.

We also believe the long-term viability and health of our own operations and our supply chain, and the significant potential for environmental improvements, are critical to our business success.

We have set key goals and objectives in this area as described in our business section of this Form 10-K.

We devote significant resources and expenditures to help achieve these goals.

It is possible that we will incur significant expense in trying to achieve these goals with no assurance that we will be successful.

Additionally, our reputation could be damaged if we fail to achieve our sustainability goals, or if we or others in our industry do not act, or are perceived not to act, responsibly with respect to the production and packaging of our products.

Our entertainment business involves risks of liability claims for media content, which could adversely affect our business, results of operations and financial condition.

2 unchanged sentences

Any imposition of liability that is not covered by insurance or is in excess of insurance coverage could have a material adverse effect on our business, results of operation and financial condition.

From time to time, we are involved in litigation, arbitration or regulatory matters where the outcome is uncertain and which could entail significant expense.

As a large multinational corporation, we are subject, from time to time, to regulatory investigations, litigation and arbitration disputes, including potential liability from personal injury or property damage claims by the users of products that have been or may be developed by us, claims by third parties that our products infringe upon or misuse such third parties’ property or rights, or claims by former employees for employment related matters.

We are involved in litigation, arbitration or regulatory matters where the outcome is uncertain and which could entail significant expense.

As a large multinational corporation, we are subject to regulatory investigations, litigation and arbitration disputes, including potential liability from personal injury or property damage claims by the users of products that have been or may be developed by us, claims by third parties that our products infringe upon or misuse such third parties’ property or rights, or claims by former employees for employment related matters.

Because the outcome of litigation, arbitration and regulatory investigations is inherently difficult to predict, it is possible that the outcome of any of these matters could entail significant cost for us and harm our business.

3 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors