InterDigital, Inc. 10-Q

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS . OVERVIEW The following discussion should be read in conjunction with the unaudited, condensed consolidated financial statements and notes thereto contained in Part I, Item 1 of this Quarterly Report on Form 10-Q, in addition to our 2022 Form 10-K, other reports filed with the SEC and the Statement Pursuant to the Private Securities Litigation Reform Act of 1995 — Forward-Looking Statements below. Throughout the following discussion and elsewhere in this Form 10-Q, we refer to “catch-up revenues.” Catch-up revenues are comprised of past patent royalties and revenues from static agreements. Previously we referred to catch-up revenues as non-recurring revenues. Samsung On January 1, 2023, we agreed to renew our patent license agreement with Samsung and enter into binding arbitration to determine the final terms of the license, including the amount payable by Samsung under the new agreement. In first quarter 2023, we began recognizing revenue for Samsung at a conservative level consistent with the revenue we recognized from our patent license agreement that expired on December 31, 2022. We believe that it is likely the arbitration award will exceed the conservative estimate and require a true-up at that time. Lenovo Proceedings On March 16, 2023, the UK’s High Court handed down its judgment in the company’s licensing dispute with Lenovo. The Court ruled that Lenovo should pay a total of $138.7 million for a license to InterDigital’s portfolio of 3G, 4G and 5G patents, including past sales. We recognized $101.3 million of revenue in first quarter 2023, including $98.8 million of catch-up revenues based on conservative estimates of the minimum revenue that we expect to recognize under a patent license agreement. See Note 5, “ Litigation and Legal Proceedings ,” to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information regarding the Lenovo proceedings. Share Repurchases On December 31, 2022, we announced an increase to the share repurchase program to a total of $400 million outstanding at the beginning of 2023. On January 23, 2023, we commenced a modified “Dutch auction” tender offer (the “Tender Offer”) to purchase for cash up to $200.0 million of our common stock. On February 23, 2023 we announced the final results of the Tender Offer, which resulted in the repurchase of 2.7 million shares of our common stock at a price of $72.98 per share, for an aggregate cost of $199.9 million, excluding fees, expenses and excise tax relating to the Tender Offer. During the period April 1, 2023 to April 30, 2023, we repurchased 0.3 million shares for $24.7 million. As of April 30, 2023, there was $175.4 million remaining under the share repurchase authorization, which we plan to utilize to periodically repurchase additional common shares. Cash & Short-term Investments As of March 31, 2023, we had $962.8 million of cash, restricted cash and short-term investments and an additional $1.4 billion of cash payments due under contracted fixed price agreements, which includes our conservative estimates of the minimum cash receipts that we expect to receive under patent license agreements with Samsung and Lenovo. In addition, it includes $118.7 million of fixed-fee accounts receivable. 89% of our recurring revenue comes from fixed-fee royalties. Such agreements often have prescribed payment schedules that are uneven and sometimes front-loaded, resulting in timing differences between when we collect the cash payments and recognize the related revenue. 22 Table of Contents The following table reconciles the timing differences between cash receipts and recognized revenue during the three months ended March 31, 2023 and 2022, including the resulting operating cash flow (in thousands): Three months ended March 31, Cash vs. Non-cash revenue: 2023 2022 Fixed fee cash receipts (a) $ 24,669 $ 43,803 Other cash receipts (b) 19,972 8,592 Change in deferred revenue 42,766 50,741 Change in receivables 90,856 (7,475) Other 24,110 5,657 Total Revenue $ 202,373 $ 101,318 Net cash used in operating activities $ (27,852) $ (17,972) (a) Fixed fee cash receipts are comprised of cash receipts from Dynamic Fixed-Fee Agreement royalties, including the associated catch-up patent royalties (b) Other cash receipts are primarily comprised of cash receipts related to our variable patent royalty revenue and catch-up revenues. When we collect payments on a front-loaded basis, we recognize a deferred revenue liability equal to the cash received and accounts receivable recorded which relate to revenue expected to be recognized in future periods. That liability is then reduced as we recognize revenue over the balance of the agreement. The following table shows the projected amortization of our current and long term deferred revenue as of March 31, 2023 (in thousands): Deferred Revenue Remainder of 2023 $ 146,478 2024 125,467 2025 106,224 2026 1,011 2027 1,076 Thereafter 3,617 Total Revenue $ 383,873 Revenue Total revenues of $202.4 million, which includes both recurring and catch-up revenues, nearly doubled from first quarter 2022 primarily due to catch-up revenues from the Lenovo proceedings recognized in first quarter 2023. First quarter 2023 recurring revenues were $101.6 million, compared to recurring revenues of $99.1 million in first quarter 2022, a 2% year-over-year increase. In first quarter 2023, revenues (in descending order) from Lenovo and Apple each comprised 10% or more of our consolidated revenues. Refer to " Results of Operations --First Quarter 2023 Compared to First Quarter 2022 " for further discussion of our 2023 revenue. Impact of Inflation and Other Market Factors We have been actively monitoring the impact of the current macroeconomic environment in the U.S. and globally characterized by increasing inflation, supply chain issues, rising interest rates, labor shortages, and the potential for a recession. These market factors, as well as the impacts of the Russia and Ukraine conflict, have not had a material impact on our business to date. However, if these conditions continue or worsen, they could have an adverse effect on our operating results and our financial condition. See the section titled “Risk Factors” in the 2022 Form 10-K. 23 Table of Contents Comparability of Financial Results When comparing first quarter 2023 financial results against other periods, the following items should be taken into consideration: • Our first quarter 2023 revenues include $100.8 million of catch-up revenues primarily related to estimates associated with the Lenovo proceedings. • In first quarter 2023, we accrued a $5.7 million one-time charge for a net litigation fee reimbursement associated with the Lenovo proceedings. See Note 5, “ Litigation and Legal Proceedings ,” to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information regarding the Lenovo litigation. • In first quarter 2023, we incurred a $2.5 million one-time impairment on our patents held for sale. CRITICAL ACCOUNTING POLICIES AND ESTIMATES Our significant accounting policies are described in Note 2, " Summary of Significant Accounting Policies and New Accounting Guidance ", in the notes to consolidated financial statements included in our 2022 Form 10-K. A discussion of our critical accounting policies, and the estimates related to them, are included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in our 2022 Form 10-K. There have been no material changes to our existing critical accounting policies from the disclosures included in our 2022 Form 10-K. In addition, we have analyzed the impact of COVID-19 on our financial statements as of March 31, 2023, and we have determined that the changes to our significant judgments and estimates did not have a material impact on our financial statements. Refer to Note 1, “ Basis of Presentation ,” in the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for updates related to new accounting pronouncements and changes in accounting policies. FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity are cash, cash equivalents and short-term investments, as well as cash generated from operations. We believe we have the ability to obtain additional liquidity through debt and equity financings. From time to time, we may engage in a variety of transactions to augment our liquidity position as our business dictates and to take advantage of favorable interest rate environments or other market conditions, including the incurrence or issuance of debt and the refinancing or restructuring of existing debt. Based on our past performance and current expectations, we believe our available sources of funds, including cash, cash equivalents and short-term investments and cash generated from our operations, will be sufficient to finance our operations, capital requirements, debt obligations, existing stock repurchase program, dividend program, and other contractual obligations discussed below in both the short-term over the next twelve months, and the long-term beyond twelve months. Cash, cash equivalents, restricted cash and short-term investments As of March 31, 2023 and December 31, 2022, we had the following amounts of cash and cash equivalents, restricted cash and short-term investments (in thousands): March 31, 2023 December 31, 2022 Increase / (Decrease) Cash and cash equivalents $ 430,625 $ 693,479 $ (262,854) Restricted cash included within prepaid and other current assets 12,085 9,682 2,403 Short-term investments 520,059 508,298 11,761 Total cash, cash equivalents, restricted cash and short-term investments $ 962,769 $ 1,211,459 $ (248,690) The net decrease in cash, cash equivalents, restricted cash and short-term investments was attributable to cash used in financing activities of $218.1 million, cash used in operating activities of $27.9 million, and cash used in investing activities of $8.5 million, excluding sales and purchases of short-term investments. Refer to the sections below for further discussion of these items. Cash flows used in operating activities Cash flows used in operating activities in the first quarter 2023 and 2022 (in thousands) were as follows: Three months ended March 31, 2023 2022 Change Net cash used in operating activities $ (27,852) $ (17,972) $ (9,880) 24 Table of Contents Our cash flows used in operating activities are principally derived from cash operating expenses and income tax payments, offset by cash receipts from patent license agreements. The $9.9 million change in net cash used in operating activities was primarily driven by lower cash receipts due to the timing of cash receipts related to existing patent license agreements. The table below sets forth the significant items comprising our cash flows used in operating activities during the three months ended March 31, 2023 and 2022 (in thousands): Three months ended March 31, 2023 2022 Change Total Cash Receipts $ 44,642 $ 52,395 $ (7,753) Cash Outflows: Cash operating expenses a 53,296 46,465 6,831 Income taxes paid b 4,942 3,349 1,593 Total cash outflows 58,238 49,814 8,424 Other working capital adjustments (14,256) (20,553) 6,297 Cash flows used in operating activities $ (27,852) $ (17,972) $ (9,880) ______________________________ (a) Cash operating expenses include operating expenses less depreciation and disposals of fixed assets, amortization of patents, non-cash compensation and non-cash changes in fair value. (b) Income taxes paid include foreign withholding taxes. Cash flows from investing and financing activities Net cash used in investing activities for first quarter 2023 was $14.5 million, a $122.1 million change from $107.6 million of net cash provided by investing activities in first quarter 2022. During first quarter 2023, we purchased $6.0 million of short-term marketable securities, net of sales, and capitalized $8.5 million of patent costs and property and equipment purchases. During first quarter 2022, we sold $117.8 million of short-term marketable securities, net of purchases, and capitalized $10.2 million of patent costs and property and equipment purchases. Net cash used in financing activities for first quarter 2023 was $218.1 million, a change of $205.1 million from $13.0 million the first quarter 2022. This change was primarily attributable to a $203.4 million increase in share repurchases in first quarter 2023. Other Our combined short-term and long-term deferred revenue balance as of March 31, 2023 was approximately $383.9 million, a net decrease of $42.8 million from December 31, 2022. This decrease in deferred revenue was primarily due to amortization of deferred revenue recognized in the period, partially offset by cash receipts on existing patent license agreements. Based on current license agreements, we expect the amortization of dynamic fixed-fee royalty payments to reduce the March 31, 2023 deferred revenue balance of $383.9 million by $178.8 million over the next twelve months. Convertible Notes See Note 7, “ Obligations ” to the notes to condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for definitions of capitalized terms below. Our 2027 and 2024 Notes, which for purposes of this discussion are also referred to as the "Convertible Notes", are included in the dilutive earnings per share calculation using the if-converted method. Under the if-converted method, we must assume that conversion of convertible securities occurs at the beginning of the reporting period. The Convertible Notes are convertible into cash up to the aggregate principal amount of the Convertible Notes to be converted. Any remaining obligation of the 2027 Notes may be settled in cash, shares of the Company’s common stock or a combination thereof and any remaining obligation of the 2024 Notes is settled in shares of our common stock. As the principal amount must be paid in cash and only the conversion spread is settled in shares, we only include the net number of incremental shares that would be issued upon conversion. We must calculate the number of shares of our common stock issuable under the terms of the Convertible Notes based on the average market price of our common stock during the applicable reporting period and include that number in the total diluted shares figure for the period. 25 Table of Contents At the time we issued the Convertible Notes, we entered into the 2027 Call Spread Transactions and 2024 Call Spread Transactions that together were designed to have the economic effect of reducing the net number of shares that will be issued in the event of conversion of the Convertible Notes by, in effect, increasing the conversion price of the Convertible Notes from our economic standpoint. However, under GAAP, since the impact of the 2027 Note Hedge Transactions and 2024 Note Hedge Transactions (together, the "Note Hedge Transactions") is anti-dilutive, we exclude from the calculation of fully diluted shares the number of shares of our common stock that we would receive from the counterparties to these agreements upon settlement. During periods in which the average market price of our common stock is above the applicable conversion price of the Convertible Notes ($77.49 per share for the 2027 Notes and $81.29 per share for the 2024 Notes as of March 31, 2023) or above the strike price of the warrants ($106.37 per share for the 2027 Warrant Transactions and $109.43 per share for the 2024 Warrant Transactions as of March 31, 2023), the impact of conversion or exercise, as applicable, would be dilutive and such dilutive effect is reflected in diluted earnings per share. As a result, in periods where the average market price of our common stock is above the conversion price or strike price, as applicable, under the if-converted method, we calculate the number of shares issuable under the terms of the Convertible Notes and the warrants based on the average market price of the stock during the period, and include that number in the total diluted shares outstanding for the period. Under the if-converted method, changes in the price per share of our common stock can have a significant impact on the number of shares that we must include in the fully diluted earnings per share calculation. As described in Note 7, " Obligations, " the Convertible Notes are convertible into cash up to the aggregate principal amount of the Convertible Notes to be converted and any remaining obligation may be in cash, shares of the Company’s common stock or a combination thereof ("net share settlement"). Assuming net share settlement upon conversion, the following tables illustrate how, based on the $460.0 million aggregate principal amount of the 2027 Notes and the $126.2 million aggregate principal amount of the 2024 Notes outstanding as of March 31, 2023, and the approximately 5.9 million warrants related to the 2027 Notes and the 1.6 million warrants remaining related to the 2024 Notes, outstanding as of the same date, changes in our stock price would affect (i) the number of shares issuable upon conversion of the Convertible Notes, (ii) the number of shares issuable upon exercise of the warrants subject to the 2027 Warrant Transactions and 2024 Warrant Transactions (together, the "Warrant Transactions"), (iii) the number of additional shares deemed outstanding with respect to the Convertible Notes, after applying the if-converted method, for purposes of calculating diluted earnings per share ("Total If-Converted Method Incremental Shares"), (iv) the number of shares of our common stock deliverable to us upon settlement of the Note Hedge Transactions and (v) the number of shares issuable upon concurrent conversion of the Convertible Notes, exercise of the warrants subject to the Warrant Transactions, and settlement of the Note Hedge Transactions: 2027 Notes Market Price Per Share Shares Issuable Upon Conversion of the 2027 Notes Shares Issuable Upon Exercise of the 2027 Warrant Transactions Total If-Converted Method Incremental Shares Shares Deliverable to InterDigital upon Settlement of the 2027 Note Hedge Transactions Incremental Shares Issuable (a) (Shares in thousands) $80 186 — 186 (186) — $85 524 — 524 (524) — $90 825 — 825 (825) — $95 1,094 — 1,094 (1,094) — $100 1,336 — 1,336 (1,336) — $105 1,555 — 1,555 (1,555) — $110 1,754 196 1,950 (1,754) 196 $115 1,936 445 2,381 (1,936) 445 $120 2,103 674 2,777 (2,103) 674 $125 2,256 885 3,141 (2,256) 885 26 Table of Contents 2024 Notes Market Price Per Share Shares Issuable Upon Conversion of the 2024 Notes Shares Issuable Upon Exercise of the 2024 Warrant Transactions Total If-Converted Method Incremental Shares Shares Deliverable to InterDigital upon Settlement of the 2024 Note Hedge Transactions Incremental Shares Issuable (a) (Shares in thousands) $85 68 — 68 (68) — $90 150 — 150 (150) — $95 224 — 224 (224) — $100 290 — 290 (290) — $105 351 — 351 (351) — $110 405 8 413 (405) 8 $115 455 75 530 (455) 75 $120 501 137 638 (501) 137 $125 543 193 736 (543) 193 $130 582 246 828 (582) 246 ______________________________ (a) Represents incremental shares issuable upon concurrent conversion of convertible notes, exercise of warrants and settlement of the hedge agreements. 27 Table of Contents RESULTS OF OPERATIONS First Quarter 2023 Compared to First Quarter 2022 Revenues The following table compares first quarter 2023 revenues to first quarter 2022 revenues (in thousands): Three months ended March 31, 2023 2022 Increase/(Decrease) Recurring revenues: Smartphone $ 87,431 $ 87,698 $ (267) — % CE, IoT/Auto 14,086 11,190 2,896 26 % Other 56 239 (183) (77) % Total recurring revenues 101,573 99,127 2,446 2 % Catch-up revenues a 100,800 2,191 98,609 4,501 % Total revenues $ 202,373 $ 101,318 $ 101,055 100 % (a) Catch-up revenues are comprised of past patent royalties and revenues from static agreements. Total revenues of $202.4 million, which includes both recurring and catch-up revenues, nearly doubled from first quarter 2022 primarily due to catch-up revenues from the Lenovo proceedings recognized in first quarter 2023. Recurring revenues increased 2% to $101.6 million, compared to recurring revenue of $99.1 million in first quarter 2022. The increase was primarily driven by CE, IoT/Auto recurring revenue resulting from six new patent license agreements and new connected automobile license agreements signed over the last twelve months. In first quarter 2023 and 2022, 67% and 80%, respectively, of our total revenue was attributable to licensees that individually accounted for 10% or more of our total revenue. In first quarter 2023 and 2022, the following licensees accounted for 10% or more of our total revenue: Three months ended March 31, 2023 2022 Customer A 50% —% Customer B 17% 35% Customer C <10% 19% Customer D <10% 15% Customer E <10% 11% Operating Expenses The following table summarizes the changes in operating expenses between first quarter 2023 and first quarter 2022 by category (in thousands): Three months ended March 31, 2023 2022 Increase/(Decrease) Research and portfolio development $ 49,429 $ 44,177 $ 5,252 12 % Licensing 21,368 15,530 5,838 38 % General and administrative 12,315 10,884 1,431 13 % Restructuring activities — 542 (542) (100) % Total Operating expenses $ 83,112 $ 71,133 $ 11,979 17 % 28 Table of Contents Operating expenses increased to $83.1 million in first quarter 2023 from $71.1 million in first quarter 2022. The $12.0 million increase in total operating expenses was primarily due to changes in the following items (in thousands): Increase/(Decrease) One-time net litigation fee reimbursement $ 5,737 Personnel-related costs 3,376 Patent impairment 2,500 Share-based compensation 2,396 Restructuring activities (542) Other (1,488) Total increase in operating expenses $ 11,979 The $12.0 million increase in operating expenses was driven by one-time items, including a $5.7 million net litigation fee reimbursement and a $2.5 million patent impairment on our patents held for sale. A $3.4 million increase in personnel-related costs was driven by fair value changes of our deferred compensation liability, which was offset by a related gain recorded within "O ther income (expense), net " on the investments that we hold under this plan. Additionally, share-based compensation increased $2.4 million driven by both higher accrual rates and higher award levels to non-executive employees. These increases were partially offset by a $0.5 million decrease in non-recurring restructuring activities recognized in first quarter 2022. Research and portfolio development expense: The $5.3 million increase in research and portfolio development expense was primarily driven by the above-noted increased personnel-related costs and patent impairment. Licensing expense: Licensing expense increased $5.8 million primarily driven by the above-noted one-time net litigation fee reimbursement. General and administrative expense: General and administrative expense increased $1.4 million primarily due to the above-noted increased share-based compensation costs. Restructuring activities: Restructuring expenses associated with our overall restructuring plan decreased due to the plan being substantially complete in 2022. Non-Operating Income (Expense), net The following table compares first quarter 2023 non-operating income (expense), net to first quarter 2022 non-operating income (expense), net (in thousands): Three months ended March 31, 2023 2022 Increase/(Decrease) Interest expense $ (12,087) $ (5,515) $ (6,572) (119) % Interest and investment income 11,680 209 11,471 5,489 % Other income (expense), net 1,511 (1,214) 2,725 (224) % Total non-operating income (expense), net $ 1,104 $ (6,520) $ 7,624 117 % Interest expense increased primarily due to the additional interest on the 2027 Notes issued during second quarter 2022 and significant financing expense resulting from a previously announced patent license agreement. The $11.5 million increase in interest and investment income was primarily due to market conditions driving higher yields on our short-term investments. Lastly, the change in Other income (expense), net was primarily due to fair value adjustments of our investments resulting in a $1.0 million net gain in 2023, compared to a $0.8 million net loss in 2022 and due to a foreign currency translation net gain arising from euro translation of our foreign subsidiaries of $0.7 million in first quarter 2023, compared to a $0.4 million net loss in first quarter 2022. 29 Table of Contents Income taxes In first quarter 2023 and 2022, based on the statutory federal tax rate net of discrete federal and state taxes, we had an effective tax rate of 14.0% and 25.2%, respectively. The change in effective tax rate is due to an increase in the amount of Foreign Derived Intangible Income deduction benefit available to the Company due to an increase in taxable income for the timing difference between the recognition of book and tax revenue. The effective tax rate in both periods was impacted by losses in certain jurisdictions where the Company presently has recorded a valuation allowance against the related tax benefit, as well as by the foreign-derived intangible income deduction and non-deductible compensation. Excluding this valuation allowance, our first quarter 2023 and 2022 effective tax rate would have been 13.8% and 19.2%, respectively. STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 — FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include certain information in regarding our current beliefs, plans and expectations, including, without limitation, the matters set forth below. Words such as "believe," “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “forecast,” "goal," "could," "would," "should," "if," "may," "might," "future," "target," "trend," "seek to," "will continue," "predict," "likely," "in the event," and variations of any such words or similar expressions contained herein are intended to identify such forward-looking statements. Forward-looking statements are made on the basis of management’s current views and assumptions and are not guarantees of future performance. Although the forward-looking statements in this Form 10-Q reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by us. Consequently, forward-looking statements concerning our business, results of operations and financial condition are inherently subject to risks and uncertainties. These risks and uncertainties include, but are not limited to, the risks and uncertainties described in Part I, Item 1A of our 2022 Form 10-K and the risks and uncertainties set forth below: • unanticipated delays, difficulties or accelerations in the execution of patent license agreements; • our ability to leverage our strategic relationships and secure new patent license agreements on acceptable terms; • our ability to enter into sales and/or licensing partnering arrangements for certain of our patent assets; • our ability to enter into partnerships with leading inventors and research organizations and identify and acquire technology and patent portfolios that align with our roadmap; • our ability to commercialize our technologies and enter into customer agreements; • the failure of the markets for our current or new technologies to materialize to the extent or at the rate that we expect; • unexpected delays or difficulties related to the development of our technologies; • changes in our interpretations of, and assumptions and calculations with respect to the impact on us of, the 2017 Tax Cuts and Jobs Act, as well as further guidance that may be issued regarding such act; • risks related to the potential impact of new accounting standards on our financial position, results of operations or cash flows; • failure to accurately forecast the impact of our restructuring activities on our financial statements and our business; • the resolution of current legal proceedings, including any awards or judgments relating to such proceedings, additional legal proceedings, changes in the schedules or costs associated with legal proceedings or adverse rulings in such proceedings; • the timing and impact of potential administrative and legislative matters; • changes or inaccuracies in market projections; • our ability to obtain liquidity through debt and equity financings; • the potential effects that macroeconomic uncertainty could have on our financial position, results of operations and cash flows • changes in our business strategy; • changes or inaccuracies in our expectations with respect to royalty payments by our customers; and • risks related to our assumptions and application of relevant accounting standards, including with respect to revenue recognition. 30 Table of Contents You should carefully consider these factors before making any investment decision with respect to our common stock. These factors, individually or in the aggregate, may cause our actual results to differ materially from our expected and historical results. You should understand that it is not possible to predict or identify all such factors. In addition, you should not place undue reliance on the forward-looking statements contained herein, which are made only as of the date of this Form 10-Q. We undertake no obligation to revise or update publicly any forward-looking statement for any reason, except as otherwise required by law. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . There have been no material changes in quantitative and qualitative market risk from the disclosures included in our 2022 Form 10-K.