What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2022-03-11 compared with 2021-03-12 · 89 added, 89 removed, 264 unchanged (40% of the section changed)

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the exposure to international operations could negatively impact our future revenue and growth;

the uncertainty surrounding the effect of Brexit;

data protection laws and self-regulatory codes may restrict our activities and increase our costs;

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our international operations expose us to foreign currency exchange rate risk;

we may be subject to claims for substantial damages by our clients arising out of disruptions to their businesses or inadequate

service and our insurance coverage may be inadequate;

we may be subject to claims for substantial damages by our clients arising out of disruptions to their businesses or inadequate service and our insurance coverage may be inadequate;

we could be liable to our clients for damages and subject to liability and our reputation could be damaged if our confidential information or client data is compromised;

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our actual operating results may differ significantly from our guidance;

and other risks and uncertainties.

risks and uncertainties.

The potential fluctuations in our operating income could cause period-to-period comparisons of operating results not to be meaningful and could provide an unreliable indication of future operating results.

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market intelligence and technology research and analysis.

Founded in 2006, and based in Stamford, Conn., ISG employs approximately 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data.

Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data.

For more information, visit www.isg-one.com.

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Our utilization rate can also be affected by seasonal variations in the demand for our services from our clients.

The number of business work days is also affected by the number of vacation days taken by our consultants and holidays in each quarter.

We typically have fewer business work days available in the fourth quarter of the year, which can impact revenues during that period.

The number of business workdays is also affected by the number of vacation days taken by our consultants and holidays in each quarter.

We typically have fewer business workdays available in the fourth quarter of the year, which can impact revenues during that period.

Time-and-expense engagements do not provide us with a high degree of predictability as to performance in future periods.

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CURRENT ENVIRONMENT

On March 11, 2020, the World Health Organization categorized the novel coronavirus (COVID-19) as a pandemic, and COVID-19 has spread throughout the United States and the rest of the world with different geographical locations impacted more than others.

The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as the imposition of social distancing and orders to work-from-home, stay-at-home and shelter-in-place, have, to some degree, adversely impacted our business and demand for our

Businesses have adjusted, reduced or suspended operating activities, which has negatively impacted the markets and some of the clients we serve.

We continue to believe our focus on our strategic strengths, including technology expertise, digital transformation, data management capabilities, and the relevance of our service offerings will continue to serve our Firm well as we navigate a rapidly changing marketplace.

New vaccines are coming to market and the pandemic shows early signs of receding.

This is the first indication that life may begin to return to normal in 2021 and release the pent-up demand for our advice, data, and support.

If there is a silver lining to the pandemic for ISG, it is this:

it is accelerating digital adoption and transformation.

Every company now sees, clearer than ever, the need for digital—to get closer to their customers, enhance customer experience and analyze customer data for new growth opportunities;

to digitize the workplace to make work more efficient and collaborative, improve employee engagement and attract the best talent;

to become more agile and flexible to address rapid-fire changes in the market, and to make operations smarter and leaner, streamline the entire supply chain and generally reduce the friction of business.

ISG is ideally positioned to be our clients’ partner in digital transformation.

Our full range of digital, network and research solutions, and subscription software platforms, are here to help clients see, plan for and realize what’s next.

We have taken steps to strengthen our financial position, which will serve us well during this period of heightened uncertainty.

On March 10, 2020, we refinanced our credit facility and expanded our borrowing capacity under our revolving credit agreement, and extended the maturity date, lowered the interest rate, and secured less restrictive debt covenants.

During 2020, we lowered our cost base as well as introduced a new operating model, ISG NEXT, that we believe will enhance our growth opportunities and drive significant value for all stakeholders.

In March 2020, the World Health Organization categorized the disease caused by the novel coronavirus ("COVID-19") as a pandemic, and it continues to spread extensively throughout the United States and the rest of the world, particularly in recent months with the impact of the Omicron variant of the COVID-19 virus identified in the fourth quarter of 2021.

The outbreak of COVID-19 and public and private sector measures to reduce its transmission, such as business closures and limits on operations, the adoption of social distancing measures and public and private mandates to work-from-home, stay-at-home and shelter-in-place, in particular in the early months of the pandemic, adversely impacted our business and demand for our services as some businesses adjusted, reduced or suspended operating activities, which negatively impacted the markets we serve and our results of operations, cash flows and financial position throughout 2020.

In 2021, despite the economic and health impacts from the spread of the Delta and Omicron variants of the COVID-19 virus, we positively benefited from the effects of robust economic recovery in many of our principal markets as vaccination efforts took hold and the overall

public health situation improved in many markets.

We continue to believe that our focus on our strategic strengths, which include talent, our ISG NEXT operating model, data management capabilities, and the relevance of our offerings, position us well to navigate a rapidly changing marketplace.

The future course of the pandemic is unpredictable, and the extent of its impact on our business will vary depending on the duration and severity of the continuing economic and operational impacts of COVID-19.

The impact of the variants identified in 2021 and the pace of improvements in health and economic conditions has not been uniform across all geographies and could be threatened by such factors as the continued spread of the Omicron or other variants to the COVID-19 virus and limitations on the effectiveness of mass vaccination and other public health efforts to mitigate the impact of the pandemic.

At the outset of the COVID-19 pandemic, we responded swiftly in support of our people, our clients and our communities.

To protect our employees, and to do our part in stopping the spread of COVID-19, within days, our entire global workforce had moved to a remote work environment.

Prior to the rapid spread of the Omicron variant in the fourth quarter of 2021, a significant portion of our workforce had begun to return to the office at least part of the time, although much of our worldwide workforce continues to work from home.

We recognized the importance of regular communication to reassure employees and to keep them updated on our plans as the pandemic continues to unfold.

We continue to adjust our practices to facilitate the new working environments and take into account the need of many employees to work during non-traditional hours and juggle home lives and work responsibilities.

We believe we have had significant success in maintaining and continuing to advance the quality of our services notwithstanding extensive changes required by the pandemic.

With respect to managing costs, we undertook multiple initiatives to align our expenses with changes in revenue.

The steps we took in 2020 across the firm, included freezes on hiring and temporary labor, major cuts in non-essential spending, staff reductions and furloughs and salary reductions, including voluntary salary reductions for our senior corporate management team.

Several of these actions were discontinued in 2021 as revenue growth returned.

In 2020, the Company also took restructuring actions to lower our operating expenses structurally and permanently relative to revenue and to accelerate the transformation of our business.

Most of these actions were based on our experience and learning in the COVID-19 pandemic and a resulting review of our operations.

Notably, we foresee a greater role for work-from-home in a hybrid office-home model to deliver and support our services in a post-COVID world.

EXECUTIVE SUMMARY

2020 was a year like no other.

We began the year with a solid growth plan and strong momentum coming off a successful second half of 2019.

Then, the bottom fell out as the pandemic spread.

We immediately adjusted our business plan.

We pivoted quickly to a work-from-home model, made tough but necessary decisions to lower our cost base to match anticipated client demand, and reset our financial expectations.

In parallel, we began the process of creating a business model that would allow us to meet the challenge of the pandemic head on—not only to survive a difficult year, but to emerge from the pandemic a stronger, more energized and vital firm for our clients.

Thanks to our swift and decisive actions, and the collective contributions of our professionals around the world, ISG bounced back from the initial economic shock of the pandemic and turned a challenging year into a successful one.

Before the pandemic hit, our clients were focused on large-scale digital transformation programs.

Then, facing business disruption, they quickly turned to us for help with immediate needs, such as cost takeout, captive monetization and supply chain management, as well as digital workplace, cloud and network modernization initiatives to support remote work and digital customer experience.

As with most businesses, the pandemic had an immediate negative impact on our revenues.

But that impact was short-lived.

After a difficult first half, ISG turned the corner, delivering quarter-over-quarter revenue and adjusted EBITDA growth in the second half.

Client demand rose, as companies realized they needed to continue investing in digital to recover faster and emerge stronger from this crisis.

Our renewed revenue momentum, coupled with our disciplined operating approach, enabled ISG to generate a record $44 million of cash flow from operations in 2020.

We used $8 million of that cash to pay down debt, lowering our balance by 9 percent.

Our Go Digital investments over the last few years helped ISG pivot quickly to new ways of working, collaborating and engaging with clients.

Importantly, we did not allow the pandemic to impact our long-term vision for the firm.

We continued to invest in the ISG Platform, our suite of subscription-based, on-demand software solutions.

That included expanding the capabilities of ISG GovernX®, to meet rising demand from clients looking to manage their supply chains and mitigate risk.

We also created an internal platform, the ISG Workbench, that reimagines how we collaborate and access the tools, information, and IP we need to make our delivery more efficient and more valuable for our clients.

Considering our current work-from-home model, the timing could not have been better.

As it has for many of our clients, the pandemic has opened our eyes to the art of the possible and allowed us to think differently about our business.

The result is ISG NEXT, an entirely new operating model for ISG.

Under ISG NEXT, we are pivoting from services to solutions, building our capabilities around two major consulting practices, ISG Digital and ISG Enterprise, complemented by ISG Research and Events and our SaaS platforms.

Every client engagement now passes through our dedicated Solution Hubs, to bring the best thinking, tools and capabilities to bear to solve every client challenge.

A key part of ISG NEXT is our new ISG iFlex™ virtual delivery model, which enables us to rapidly deploy our global resources to support clients, regardless of geography or time zone.

We also are building more industry-specific capabilities, particularly in the Americas and Europe.

ISG delivered its best year ever in 2021.

Our success is reflected in our share price, as investors continue to take note of our performance.

During 2021, our share price rose 133 percent.

For the year, we increased shareholder value by more than $214 million and returned $21 million of capital to our shareholders in the form of dividends and share repurchases.

Our ISG NEXT operating model, introduced in the third quarter of 2020, really proved to be a game-changer in 2021.

Our solution-centric approach is resonating with clients and allowing us to expand our relationships by offering more end-to-end solutions, supported by our ISG Research and ISG Platform businesses.

We also have sharpened our focus on key industry segments, marshalling our vertical expertise with targeted industry solutions to capture more business in several sectors.

And we are realizing the service and productivity benefits of our virtual ISG iFlex™ global delivery network, which allows us to support our clients as one firm, across borders and time zones, leveraging the tools and information found in our cloud-based ISG Workbench.

Our ISG Platform business, anchored by our ISG GovernX supplier management solution, continues to grow—in the breadth of its offerings, in the number of clients we serve, and in revenues.

In 2021, we added new third-party risk management capabilities to GovernX, and continued to expand our other platform offerings.

Our ISG Research business delivered double-digit revenue growth, fueled, in particular, by the expansion of our ISG Provider Lens™ provider evaluation research business, which doubled in size in 2021.

During 2021, we took steps toward building our capabilities in several areas that show great promise for the firm, including ISG Digital Engineering, ISG Cybersecurity, and ISG Enterprise Cloud, a new approach to the market aimed at partnering with hyperscalers to support client transitions to the public cloud.

We are proud of our efforts to advance our Corporate Social Responsibility (CSR) agenda in areas including Inclusion, Diversity, Equity and Awareness (the IDEA team), Environmental Practices, Women in Digital and ISG Cares.

Each of these have fostered greater awareness of social issues and enhanced our ability to make a positive impact in our firm and in the communities we serve.

As we look ahead to even greater success in 2022, we can look back on 2021 as a year of enormous accomplishment and success.

It was a year when we began to emerge from the worst of the pandemic, streamlined our operations and positioned ourselves for greater efficiency and growth.

Under the umbrella of ISG NEXT, we simplified what we do, how we go to market and concentrated on the essence of how our clients benefit from ISG.

As a result, we achieved record financial results and our investors rewarded us with a growing share price.

Most importantly, we now have a solid foundation upon which to deliver robust growth in 2022 and in the years ahead.

ISG continues to have momentum in the marketplace and with our clients.

Market demand for all things digital is at record highs, and there is no doubt we have the right people, the right solutions, and the right approach to help every client navigate the still-challenging passage to becoming a fully digital enterprise.

Most every enterprise today is focused on continuous transformation:

being nimble and agile to continuously adjust their operating models to rapidly changing technology and business conditions.

This will create ongoing, sustainable demand for our advice, support, and services.

We are confident the best lies ahead for our firm and our clients as we power through the challenges of a rapidly changing world—and realize new levels of operational excellence and growth, together.

RESULTS OF OPERATIONS

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Total revenues

Revenues decreased by $16.6 million or approximately 6% in 2020.

The decrease in revenues in the Americas and Europe was primarily attributable to a decline in our Advisory service line, related to the COVID-19 pandemic and its impact on certain of our clients’ operations, and was partially offset by an increase in our Research service line.

The increase in revenues in Asia Pacific was primarily attributable to an increase in our public sector service line in Australia.

Revenues also declined by $7.9 million due to lower travel and expense reimbursement resulting from pandemic related travel restrictions.

Revenues increased by $28.7 million or approximately 12% in 2021.

The increase in revenues in the Americas was primarily attributable to an increase in our Advisory and Research service lines, as our clients made investments in their digital infrastructure and spending levels rebounded from the COVID-19 pandemic.

The increase in revenues in Asia Pacific was primarily attributable to an increase in our Advisory service line, primarily in Australia.

The increase in revenues in Europe was primarily attributable to an increase in our Research service line, primarily in Germany.

The translation of foreign currency revenues into U.S.

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Total operating expenses

Total operating expenses decreased by $12.5 million for 2020 with decreases in direct costs and expenses for advisors, selling, general and administrative (“SG&A”) expenses, and depreciation and amortization.

The decrease in SG&A and direct costs and expenses for advisors were due primarily to lower travel expenses of $16.9 million.

The cost decreases were partially offset by higher RPA license fees of $2.8 million, severance, integration, and other expense of $1.0 million, and bad debt expense of $0.7 million.

Total operating expenses increased by $12.7 million, or approximately 5%, for 2021.

The increase in operating expenses were due primarily to higher compensation expenses of $12.2 million and contract labor of $11.9 million.

The cost increases were partially offset by lower travel and entertainment of $4.5 million, non-cash stock compensation of $2.4 million, restructuring costs of $1.4 million, bad debt

expense of $1.0 million, communications expense of $0.5 million, occupancy expenses of $0.4 million, and contingent consideration of $0.3 million, as well as general cost savings initiatives implemented in response to the COVID-19 pandemic and the ISG NEXT operating model.

Compensation costs consist of a mix of fixed and variable salaries, annual bonuses, benefits and retirement plan contributions.

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General and administrative costs also reflect continued investment associated with implementing and operating client and employee management systems.

Because our billable personnel operate primarily on client premises, all occupancy expenses are recorded as general and administrative.

Because our billable personnel operate remotely or on client premises, all occupancy expenses are recorded as general and administrative.

Depreciation and amortization expense in 2021 and 2020 were $5.3 million and $6.2 million, respectively.

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Interest expense

Foreign currency loss

Foreign currency gain (loss)

Total other income (expense), net

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We use non-GAAP financial measures to supplement the financial information presented on a GAAP basis.

We provide adjusted EBITDA (defined as net income, plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, change in contingent consideration, acquisition-related costs, severance, integration and other expense, tax indemnity receivable, and financing-related costs), adjusted net income (defined as net income, plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, change in contingent consideration, acquisition-related costs, severance, integration and other expense, financing-related costs, and write-off of deferred financing costs on a tax-adjusted basis) and adjusted net income as earnings per diluted share, excluding the net of tax effect of the items set forth in the table below.

We provide adjusted EBITDA (defined as net income, plus interest, taxes, depreciation and amortization, foreign currency transaction gains/losses, non-cash stock compensation, change in contingent consideration, acquisition-related costs, severance, integration and other expense, and financing-related costs), adjusted net income (defined as net income, plus amortization of intangible assets, non-cash stock compensation, foreign currency transaction gains/losses, change in contingent consideration, acquisition-related costs, severance, integration and other expense, financing-related costs, and write-off of deferred financing costs on a tax-adjusted basis) and adjusted net income as earnings per diluted share, excluding the net of tax effect of the items set forth in the table below.

These are non-GAAP measures that the Company believes provide useful information to both management and investors by excluding certain expenses and financial implications of foreign currency translations that management believes are not indicative of ISG’s core operations.

These non-GAAP measures are used by the Company to evaluate the Company’s business strategies and management’s performance.

These non-GAAP financial measures exclude non-cash and certain other special charges that many investors believe may obscure the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future.

These non-GAAP financial measures exclude non-cash and certain other special charges or credits that many investors believe may obscure the user’s overall understanding of the Company’s current financial performance and the Company’s prospects for the future.

We believe that these non-GAAP measures provide useful information to investors because they improve the comparability of the financial results between periods and provide for greater transparency of key measures used to evaluate the Company’s performance.

Years Ended December 31,

(in thousands)

Interest expense (net of interest income)

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Severance, integration and other expense

Tax indemnity receivable

Financing-related costs

Foreign currency transaction loss

Foreign currency transaction (gain) loss

Non-cash stock compensation

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Years Ended December 31,

(in thousands)

Non-cash stock compensation

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Write-off of deferred financing costs

Foreign currency transaction loss

Foreign currency transaction (gain) loss

Tax effect (2)

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Write-off of deferred financing costs

Foreign currency transaction loss

Foreign currency transaction (gain) loss

Tax effect (2)

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Our primary sources of liquidity are cash flows from operations, existing cash and cash equivalents and borrowings under our revolving line of credit.

Operating assets and liabilities consist primarily of receivables from billed and unbilled services, accounts payable, accrued expenses, and accrued payroll and related benefits.

Operating assets and liabilities consist primarily of accounts receivable and contract assets, prepaid expense and other assets, accounts payable, contract liabilities, accrued expenses, and accrued payroll and related benefits.

The volume of billings and timing of collections and payments affect these account balances.

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Effect of exchange rate changes on cash

Net increase (decrease) in cash, cash equivalents, and restricted cash

Net increase in cash, cash equivalents, and restricted cash

As of December 31, 2021, our liquidity and capital resources included cash, cash equivalents, and restricted cash of $47.6 million compared to $43.8 million as of December 31, 2020, a net increase of $3.8 million, which was primarily attributable to the following:

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Net cash provided from operations was primarily attributable to $14.4 million provided by working capital and our net income after adjustments for non-cash charges of approximately $27.6 million.

The change in working capital was primarily attributable to a $13.1 million increase in accrued expenses, $10.1 million decline in accounts receivable and contract assets, and $2.1 increase in accounts payable partially offset by a $1.7 million increase in prepaid expense and other assets;

● net principal payments on borrowings of $8.1 million;

The change in working capital was primarily attributable to a $4.5 million increase in accounts payable, $5.5 million increase in accrued expenses, $1.9 million increase in contract liabilities, $2.6 million decrease in accounts receivable and contract assets, and a $0.2 million increase in prepaid expense and other assets;

● treasury share repurchases of $16.3 million;

● Neuralify acquisition of $2.3 million;

● payments of $2.0 million related to tax withholding for stock-based compensation;

● payments related to tax withholding for stock-based compensation of $7.1 million;

● cash dividends paid to shareholders of $4.4 million;

● principal payments on borrowings of $4.3 million;

● payment of contingent consideration of $2.6 million;

● capital expenditures for property, plant and equipment of $2.3 million;

● debt financing costs of $0.9 million.

● proceeds from issuance of employee stock purchase plan shares of $0.6 million.

Capital Resources

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The fair values of debt have been estimated using a discounted cash flow analysis based on the Company's incremental borrowing rate for similar borrowing arrangements.

The incremental borrowing rate used to discount future cash flows is 2.49%.

The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions.

The incremental borrowing rate used to discount future cash flows is 2.0% and 2.5% for December 31, 2021 and 2020, respectively.

The Company also considered recent transactions of peer group companies for similar instruments with comparable terms and maturities as well as an analysis of current market conditions and interest rates.

As of December 31, 2021 and 2020, there were no borrowings under the revolver.

We anticipate that our current cash and the ongoing cash flows from our operations will be adequate to meet our working capital, capital expenditure, and debt financing needs for at least the next twelve months.

The anticipated cash needs of our business could change significantly if we pursue and complete additional business acquisitions, if our business plans change, if economic conditions change from those currently prevailing or from those now anticipated, or if other unexpected circumstances arise that may have a material effect on the cash flow or profitability of our business, including the potential impacts of the COVID-19 pandemic and the severity of the related economic downturn and length of time of an economic recovery.

If we require additional capital resources to grow our business, either internally or through acquisition, or maintain liquidity, we may seek to sell additional equity securities or to secure additional debt financing.

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We may not be able to obtain financing arrangements in amounts or on terms acceptable to us in the future.

The Company has financial covenants underlying its debt which require an adjusted Debt to EBITDA ratio of 3.25.

In light of the pandemic, there is uncertainty regarding the marketplace demand for the Company’s services and thus the Company’s future revenue generation.

Accordingly, in light of this uncertainty, the Company has developed plans to further reduce operating expenses to the extent more prolonged revenue shortfalls are experienced which would prevent the Company from complying with its financial covenants.

We believe that cash flows generated from operations, existing cash and cash equivalents and borrowing capacity under our senior secured credit facility are sufficient to finance the requirements of our business for 12 months from the date of issuance of these financial statements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet financing arrangements or liabilities, guarantee contracts, retained or contingent interests in transferred assets or any obligation arising out of a material variable interest in an unconsolidated entity.

The Company has financial covenants underlying its debt which require a Debt to adjusted EBITDA ratio of 3.25.

The Company is currently in compliance with its financial covenants.

Employee Retirement Plans

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For ongoing managed services contract, revenue is recognized over time, consistent with the weekly or monthly fee specified within such arrangements.

We also derive revenues based on negotiating reductions in network costs of companies with the entity’s related service providers and providing other services such as audits of network and communication expenses, and consultation for network architecture.

We also derive revenues based on negotiating reductions in network and software costs of companies with the entity’s related service providers and providing other services such as audits of network and communication expenses, and consultation for network architecture.

These contracts can be fixed in fees or can be based on the level of savings achieved related to its communications costs.

Additionally, these contracts can also have a fixed component and a contingent component that is based on the savings generated by the Company.

For network contingency contracts with termination for convenience clauses, revenue is recognized over time due to the existence of provisions for payment for progress incurred to date plus a reasonable profit margin.

Additionally, these contracts can also have a fixed component and a contingent component that is based on the savings generated by the

For network and software contingency contracts with termination for convenience clauses, revenue is recognized over time due to the existence of provisions for payment for progress incurred to date plus a reasonable profit margin.

The contract periods range from a few months to in excess of a year.

We also enter into arrangements for the sale of robotics software licenses and related delivery of consulting or implementation services at the same time or within close proximity to one another.

Such software-related performance obligations include the sale of software licenses and other software-related services.

For software and implementation contracts, revenue associated with the software performance obligation is recognized at the point at which the software is installed, while revenue associated with the implementation service performance obligation is recognized over the software implementation period as a percentage of hours incurred to date as compared to the total expected hours.

Revenue associated with events is recognized at the point of time at which the event occurs.

We also enter into arrangements for the sale of automation software licenses and related delivery of consulting or implementation services at the same time or within close proximity to one another.

Such software-related performance obligations include the sale of on-premise software and software-as-a-service licenses, as well as other software-related services.

Revenue associated with the software performance obligation is primarily recognized at the point at which the software is installed or access is granted, while revenue associated with the implementation service performance obligation is recognized over the software implementation period as a percentage of hours incurred to date as compared to the total expected hours.

Revenue associated with events is recognized at the point of time at which the event occurs and is primarily comprised of sponsorships.

Conversely, revenue associated with research subscriptions is recognized over time, as the customer accesses our data or related platforms.

In addition, we sell research products for which the revenue is recognized at a point in time upon delivery to the client.

The agreements entered into in connection with a project typically allow our clients to terminate early due to breach or for convenience with 30 days’ notice.

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When we recognize revenues in advance of billing, those revenues are recorded as contract assets.

When we receive cash in advance of completing services or earning revenues, those amounts are recorded as contract liabilities.

When we invoice in advance of completing services or earning revenues, those amounts are recorded as contract liabilities.

Recent Accounting Pronouncements

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

What changed 10-K

Item 7. Management’s Discussion and Analysis