What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-04 compared with 2024-07-31 · 94 added, 86 removed, 242 unchanged (43% of the section changed)

10 unchanged sentences

our expectations regarding future dividends and share repurchases;

our expectations regarding certain claims, legal proceedings, settlements or resolutions;

our comprehensive initiative to enhance our effectiveness and efficiency across the Company, including related plans and goals, anticipated charges and cost reductions, and other expected or potential benefits and outcomes;

and other statements that are preceded by, followed by, or include the words “believes,” “expects,” “anticipates,” “intends,” “plans,” “estimates,” “foresees,” or similar expressions;

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We are a worldwide operator, franchisor, and licensor of hotel, residential, timeshare, and other lodging properties under more than 30 brand names.

Under our asset-light business model, we typically manage or franchise hotels, rather than own them .

Under our asset-light business model, we typically manage or franchise

hotels, rather than own them .

We discuss our operations in the following reportable business segments:

& Canada, (2) Europe, Middle East & Africa (“EMEA”), (3) Greater China, and (4) Asia Pacific excluding China (“APEC”).

Our Caribbean & Latin America (“CALA”) operating segment does not meet the applicable criteria for

separate disclosure as a reportable business segment, and as such, we include its results in “Unallocated corporate and other.”

Our Caribbean & Latin America (“CALA”) operating segment does not meet the applicable criteria for separate disclosure as a reportable business segment, and as such, we include its results in “Unallocated corporate and other.”

Terms of our management agreements vary, but our management fees generally consist of base management fees and incentive management fees.

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Under our franchise and license agreements for most properties, franchise fees are calculated as a percentage of property-level revenue or a portion thereof.

Additionally, we earn franchise fees for the use of our intellectual property, including primarily co-branded credit card fees, as well as timeshare and yacht fees, residential branding fees, franchise application and relicensing fees, and certain other non-hotel licensing fees, which we refer to as “non-RevPAR related franchise fees.”

Performance Measures

We believe Revenue per Available Room (“RevPAR”), which we calculate by dividing property level room revenue by rooms available for the period, is a meaningful indicator of our performance because it measures the period-over-period change in room revenues.

We believe Revenue per Available Room (“RevPAR”), which we calculate by dividing property level room revenue by total rooms available for the period, is a meaningful indicator of our performance because it measures the period-over-period change in room revenues.

RevPAR may not be comparable to similarly titled measures, such as revenues, and should not be viewed as necessarily correlating with our fee revenue.

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Business Trends

We saw solid global RevPAR growth during the 2024 second quarter and 2024 first half compared to the same periods in 2023.

For the 2024 second quarter, worldwide RevPAR increased 4.9 percent, reflecting ADR growth of 2.6 percent and occupancy improvement of 1.6 percentage points.

For the 2024 first half, worldwide RevPAR increased 4.5 percent, reflecting ADR growth of 2.7 percent and occupancy improvement of 1.2 percentage points.

The increase in RevPAR in the 2024 second quarter and 2024 first half was primarily driven by strong year-over-year demand growth in most of our regions.

& Canada, where demand has normalized, RevPAR increased 2.8 percent in the 2024 first half, led by strong group business.

In EMEA, RevPAR growth of 9.6 percent in the 2024 first half was driven by strong demand across the region.

In Greater China, RevPAR was relatively unchanged compared to the 2023 first half, as RevPAR growth in the 2024 first quarter was offset by a decline in RevPAR in the 2024 second quarter due to lower domestic demand and an increase in outbound travel.

In APEC, RevPAR increased 14.8 percent in the 2024 first half, driven by strong growth in ADR and occupancy from leisure and business travelers, including an increase in inbound demand into the region.

In CALA, RevPAR increased 10.3 percent in the 2024 first half, driven by strong demand throughout the region.

We saw solid global RevPAR growth during the 2024 third quarter and 2024 first three quarters compared to the same periods in 2023.

For the 2024 third quarter, worldwide RevPAR increased 3.0 percent, reflecting ADR growth of 2.5 percent and occupancy improvement of 0.3 percentage points.

For the 2024 first three quarters, worldwide RevPAR increased 4.0 percent, reflecting ADR growth of 2.7 percent and occupancy improvement of 0.9 percentage points.

The increase in RevPAR in the 2024 third quarter and 2024 first three quarters was primarily driven by strong year-over-year demand growth in nearly all of our regions.

& Canada, where demand has normalized, RevPAR increased 2.6 percent in the 2024 first three quarters, led by strong group business.

In EMEA, RevPAR growth of 9.4 percent in the 2024 first three quarters was driven by strong demand across the region, strengthened by the 2024 Paris Olympics and other special events.

In APEC, RevPAR increased 13.3 percent in the 2024 first three quarters, driven by strong growth in ADR and occupancy, including an increase in inbound demand into the region.

In CALA, RevPAR increased 9.3 percent in the 2024 first three quarters, driven by strong demand throughout the region.

In Greater China, RevPAR declined 2.7 percent in the 2024 first three

quarters and 7.9 percent in the 2024 third quarter due to lower domestic demand as a result of macro-economic conditions, severe weather, and an increase in outbound travel.

Earlier this year, we launched a comprehensive initiative to enhance our effectiveness and efficiency across the Company.

At this point in the process, we expect this initiative to yield $80 million to $90 million of annual general and administrative cost reductions beginning in 2025.

These efforts are also anticipated to deliver cost savings to our owners and franchisees.

As part of these efforts, we implemented a voluntary retirement program for certain above-property associates in the 2024 third quarter, and we also expect that some above-property roles in the organization will be eliminated or redefined going forward.

We anticipate charges for employee termination benefits related to the above efforts primarily in the 2024 fourth quarter and expect to substantially complete this initiative by the end of the 2025 first quarter.

Starwood Data Security Incident

On November 30, 2018, we announced a data security incident involving unauthorized access to the Starwood reservations database (the “Data Security Incident”).

We discontinued use of t he Starwood reservations database for business operations at the end of 2018 .

We are currently unable to reasonably estimate the range of total possible financial impact to the Company from the Data Security Incident in excess of the expenses already recorded;

however, we do not believe this incident will impact our long-term financial health.

Although our insurance program includes coverage designed to limit our exposure to losses such as those related to the Data Security Incident, that insurance may not be sufficient or available to cover all of our expenses or other losses (including monetary payments to regulators and/or litigants) related to the Data Security Incident.

In addition, certain expenses by their nature (such as, for example, expenses related to enhancing our cybersecurity program) are not covered by our insurance program.

We expect to incur ongoing legal and other expenses associated with the Data Security Incident in future periods, and we believe it is reasonably possible that we may incur additional monetary payments to regulators and/or litigants in excess of the amounts already recorded and costs in connection with compliance with any settlements or resolutions of matters.

See Note 5 for additional information related to legal proceedings and governmental investigations related to the Data Security Incident.

System Growth and Pipeline

At the end of the 2024 second quarter, our system had 8,969 properties (1,658,659 rooms), compared to 8,785 properties (1,597,380 rooms) at year-end 2023 and 8,590 properties (1,565,258 rooms) at the end of the 2023 second quarter.

In the 2024 first half, we added roughly 61,300 net rooms, including the addition of approximately 37,000 rooms from our exclusive, long-term strategic licensing agreement with MGM Resorts International.

At the end of the 2024 second quarter, we had approximately 3,500 hotels and more than 559,000 rooms in our development pipeline, which includes roughly 33,000 rooms approved for development but not yet under signed contracts.

Over 209,000 rooms in the pipeline, or 37 percent, were under construction at the end of the 2024 second quarter.

Over half of the rooms in our development pipeline are located outside U.S.

We currently expect full year 2024 net rooms growth of 5.5 to 6.0 percent.

At the end of the 2024 third quarter, our system had 9,068 properties (1,674,600 rooms), compared to 8,785 properties (1,597,380 rooms) at year-end 2023 and 8,675 properties (1,581,002 rooms) at the end of the 2023 third quarter.

In the 2024 first three quarters, we added over 77,200 net rooms, including the addition of approximately 37,000 rooms from our exclusive, long-term strategic licensing agreement with MGM Resorts International.

At the end of the 2024 third quarter, we had approximately 3,800 hotels and 585,000 rooms in our development pipeline, which includes roughly 34,000 rooms approved for development but not yet under signed contracts.

More than 220,000 rooms in the pipeline, or 38 percent, including rooms from our long-term licensing agreement with Sonder Holdings Inc.

that we announced in August 2024, were under construction at the end of the 2024 third quarter.

Fifty-six percent of the rooms in our development pipeline are located outside U.S.

We currently expect full year 2024 net rooms growth to be around 6.5 percent.

Properties and Rooms

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Properties Rooms

June 30, 2024 June 30, 2023 vs.

June 30, 2023 June 30, 2024 June 30, 2023 vs.

June 30, 2023

September 30, 2024 September 30, 2023 vs.

September 30, 2023 September 30, 2024 September 30, 2023 vs.

September 30, 2023

1,999 2,039 (40) (2) % 572,731 573,991 (1,260) — %

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Systemwide statistics include data from our franchised properties, in addition to our company-operated properties.

Three Months Ended June 30, 2024 and Change vs.

Three Months Ended June 30, 2023

Three Months Ended September 30, 2024 and Change vs.

Three Months Ended September 30, 2023

RevPAR Occupancy Average Daily Rate

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$ 182.24 2.5 %

Six Months Ended June 30, 2024 and Change vs.

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2024 and Change vs.

Nine Months Ended September 30, 2023

RevPAR Occupancy Average Daily Rate

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CONSOLIDATED RESULTS

The discussion below presents an analysis of our consolidated results of operations for the 2024 second quarter compared to the 2023 second quarter and for the 2024 first half compared to the 2023 first half.

The discussion below presents an analysis of our consolidated results of operations for the 2024 third quarter compared to the 2023 third quarter and for the 2024 first three quarters compared to the 2023 first three quarters.

Also see the “Business Trends” section above for further discussion.

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

($ in millions)

June 30, 2024 June 30, 2023 Change 2024 vs.

2023 June 30, 2024 June 30, 2023 Change 2024 vs.

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

Base management fees $ 312 $ 306 $ 6 2 % $ 955 $ 917 $ 38 4 %

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Net fee revenues $ 1,257 $ 1,174 $ 83 7 % $ 3,760 $ 3,514 $ 246 7 %

The increase in base management fees in the 2024 second quarter and 2024 first half primarily reflected higher RevPAR.

The increase in franchise fees in the 2024 second quarter and 2024 first half primarily reflected unit growth ($26 million and $48 million, respectively), higher RevPAR, and higher non-RevPAR related franchise fees ($28 million and $39 million, respectively).

Non-RevPAR related franchise fees of $234 million in the 2024 second quarter and $442 million in the 2024 first half increased primarily due to higher co-branded credit card fees ($15 million and $28 million, respectively).

In the 2024 second quarter, non-RevPAR related franchise fees also increased due to higher residential branding fees ($13 million).

The increase in base management fees in the 2024 third quarter and 2024 first three quarters primarily reflected higher RevPAR.

The increase in franchise fees in the 2024 third quarter and 2024 first three quarters primarily reflected unit growth ($26 million and $74 million, respectively), higher RevPAR, higher co-branded credit card fees ($10 million and $38 million, respectively), and higher residential branding fees ($12 million and $22 million, respectively).

The increase in incentive management fees in the 2024 third quarter and 2024 first three quarters primarily reflected higher profits at managed hotels.

Owned, Leased, and Other

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

($ in millions)

June 30, 2024 June 30, 2023 Change 2024 vs.

2023 June 30, 2024 June 30, 2023 Change 2024 vs.

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

Owned, leased, and other revenue $ 381 $ 363 $ 18 5 % $ 1,133 $ 1,109 $ 24 2 %

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Cost Reimbursements

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

($ in millions)

June 30, 2024 June 30, 2023 Change 2024 vs.

2023 June 30, 2024 June 30, 2023 Change 2024 vs.

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

Cost reimbursement revenue $ 4,617 $ 4,391 $ 226 5 % $ 13,778 $ 12,995 $ 783 6 %

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Over the long term, our centralized programs and services are not designed to impact our economics, either positively or negatively.

The decrease in cost reimbursements, net in the 2024 second quarter and 2024 first half primarily reflected higher Loyalty Program expenses and lower revenues, net of expenses, for our other centralized programs and services, partially offset by lower expenses related to our insurance program.

The decrease in cost reimbursements, net in the 2024 third quarter and 2024 first three quarters primarily reflected lower revenues, net of expenses, for our other programs and services, higher Loyalty Program expenses, and higher expenses related to our insurance program.

Other Operating Expenses

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

($ in millions)

June 30, 2024 June 30, 2023 Change 2024 vs.

2023 June 30, 2024 June 30, 2023 Change 2024 vs.

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

Depreciation, amortization, and other $ 45 $ 46 $ (1) (2) % $ 137 $ 138 $ (1) (1) %

General, administrative, and other 276 239 37 15 % 785 681 104 15 %

Merger-related charges and other 8 38 (30) (79) % 16 39 (23) (59) %

General, administrative, and other expenses increased in the 2024 first half primarily due to higher compensation costs.

Merger-related charges and other expenses decreased in the 2024 second quarter and 2024 first half primarily due to lower charges related to the Data Security Incident discussed in Note 5.

Restructuring and merger-related charges

9 13 (4) (31) % 25 52 (27) (52) %

General, administrative, and other expenses increased in the 2024 third quarter and 2024 first three quarters primarily due to higher guarantee reserves ($21 million and $25 million, respectively).

The increase in the 2024 first three quarters was also due to higher compensation costs and higher legal expenses ($16 million).

Restructuring and merger-related charges decreased in the 2024 first three quarters primarily due to lower charges related to the Data Security Incident discussed in Note 5.

Non-Operating Income (Expense)

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

($ in millions)

June 30, 2024 June 30, 2023 Change 2024 vs.

2023 June 30, 2024 June 30, 2023 Change 2024 vs.

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

Gains and other income, net $ 7 $ 28 $ (21) (75) % $ 15 $ 33 $ (18) (55) %

Interest expense (179) (146) (33) (23) % (515) (412) (103) (25) %

Interest income 9 (1) 10 nm* 19 14 5 36 %

Interest income 11 7 4 57 % 30 21 9 43 %

Equity in earnings 3 1 2 200 % 8 9 (1) (11) %

* Percentage change is not meaningful.

Interest expense increased in the 2024 second quarter and 2024 first half primarily due to higher debt balances driven by Senior Notes issuances, net of maturities ($28 million and $58 million, respectively).

Three Months Ended Six Months Ended

Gains and other income, net decreased in the 2024 third quarter and 2024 first three quarters primarily due to a gain recorded in the prior year on the sale of a hotel in the CALA region ($24 million).

Interest expense increased in the 2024 third quarter and 2024 first three quarters primarily due to higher debt balances driven by Senior Notes issuances, net of maturities ($35 million and $93 million, respectively).

Three Months Ended Nine Months Ended

($ in millions)

June 30, 2024 June 30, 2023 Change 2024 vs.

2023 June 30, 2024 June 30, 2023 Change 2024 vs.

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

Provision for income taxes $ (202) $ (237) $ 35 15 % $ (633) $ (562) $ (71) (13) %

Provision for income taxes increased by $30 million in the 2024 second quarter primarily due to the increase in pre-tax income ($18 million).

Provision for income taxes increased by $106 million in the 2024 first half primarily due to the prior year release of tax reserves ($103 million), which was mostly due to completion of a tax audit, and a shift in earnings to jurisdictions with higher tax rates ($22 million).

Provision for income taxes decreased in the 2024 third quarter primarily due to the decrease in pre-tax income ($51 million), partially offset by a shift in earnings to jurisdictions with higher tax rates ($16 million).

Provision for income taxes increased in the 2024 first three quarters primarily due to the prior year release of tax reserves ($103 million), which was mostly due to completion of a tax audit, and a shift in earnings to jurisdictions with higher tax rates ($37 million), partially offset by the decrease in pre-tax income ($61 million).

BUSINESS SEGMENTS

The following discussion presents an analysis of the operating results of our reportable business segments for the 2024 second quarter compared to the 2023 second quarter and for the 2024 first half compared to the 2023 first half.

The following discussion presents an analysis of the operating results of our reportable business segments for the 2024 third quarter compared to the 2023 third quarter and for the 2024 first three quarters compared to the 2023 first three quarters.

Also see the “Business Trends” section above for further discussion.

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

($ in millions)

June 30, 2024 June 30, 2023 Change 2024 vs.

2023 June 30, 2024 June 30, 2023 Change 2024 vs.

September 30, 2024 September 30, 2023 Change 2024 vs.

2023 September 30, 2024 September 30, 2023 Change 2024 vs.

Segment net fee revenues

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Properties Rooms

June 30, 2024 June 30, 2023 vs.

June 30, 2023 June 30, 2024 June 30, 2023 vs.

June 30, 2023

September 30, 2024 September 30, 2023 vs.

September 30, 2023 September 30, 2024 September 30, 2023 vs.

September 30, 2023

6,090 5,927 163 3 % 1,030,074 975,391 54,683 6 %

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606 550 56 10 % 137,568 125,986 11,582 9 %

In the 2024 second quarter and 2024 first half, net fee revenue grew in U.S.

& Canada, EMEA, and APEC, compared to the same periods in 2023, primarily reflecting higher RevPAR and unit growth (see the Lodging Statistics and Properties and Rooms tables above for more information).

In Greater China, net fee revenue decreased in the 2024 second quarter, primarily due to lower demand.

Segment profits for all segments shown above reflected higher general, administrative, and other expenses primarily due to higher compensation costs compared to the 2023 second quarter and 2023 first half.

In the 2024 third quarter and 2024 first three quarters, net fee revenue grew in U.S.

In Greater China, net fee revenue decreased in the 2024 third quarter and 2024 first three quarters, primarily due to lower demand.

Additionally, U.S.

& Canada segment profit reflected $6 million and $30 million of lower cost reimbursement revenue, net of reimbursed expenses compared to the 2023 second quarter and 2023 first half, respectively .

& Canada segment profits in the 2024 third quarter and 2024 first three quarters compared to the same periods in 2023 reflected lower cost reimbursement revenue, net of reimbursed expenses ($129 million and $159 million, respectively) as well as higher general, administrative, and other expenses, primarily due to higher guarantee reserves ($21 million and $26 million, respectively).

LIQUIDITY AND CAPITAL RESOURCES

Our long-term financial objectives include maintaining diversified financing sources, optimizing the mix and maturity of our long-term debt, and reducing our working capital.

At the end of the 2024 second quarter, our long-term debt had a weighted average interest rate of 4.5 percent and a weighted average maturity of approximately 5.1 years.

The ratio of our fixed-rate long-term debt to our total long-term debt was 0.9 to 1.0 at the end of the 2024 second quarter.

At the end of the 2024 third quarter, our long-term debt had a weighted average interest rate of 4.5 percent and a weighted average maturity of approximately 5.4 years.

The ratio of our fixed-rate long-term debt to our total long-term debt was 0.9 to 1.0 at the end of the 2024 third quarter.

Sources of Liquidity

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dollar borrowings under the Credit Facility bear interest at SOFR (the Secured Overnight Financing Rate) plus a spread based on our public debt rating.

We also pay quarterly fees on the Credit Facility at a rate based on our public debt rating.

We also pay quarterly fees on the Credit Facility at a rate based on our

public debt rating.

We classify outstanding borrowings under the Credit Facility and outstanding commercial paper borrowings (which generally have short-term maturities of 45 days or less) as long-term based on our ability and intent to refinance the outstanding borrowings on a long-term basis.

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Sources and Uses of Cash

Cash, cash equivalents, and restricted cash totaled $370 million at June 30, 2024, an increase of $4 million from year-end 2023, primarily due to net cash provided by operating activities ($1,551 million), Senior Notes issuances, net of repayments ($918 million), and net commercial paper issuances ($342 million), partially offset by share repurchases ($2,156 million), dividends paid ($330 million), capital and technology expenditures ($234 million), and financing outflows for employee stock-based compensation withholding taxes ($125 million).

Our ratio of current assets to current liabilities was 0.4 to 1.0 at the end of the 2024 second quarter.

Cash, cash equivalents, and restricted cash totaled $416 million at September 30, 2024, an increase of $50 million from year-end 2023, primarily due to net cash provided by operating activities ($2,431 million), Senior Notes issuances, net of repayments ($2,398 million), and issuances of common stock for our employee stock purchase plan ($73 million), partially offset by share repurchases ($3,176 million), net commercial paper repayments ($648 million), dividends paid ($506 million), capital and technology expenditures ($408 million), and financing outflows for employee stock-based compensation withholding taxes ($127 million).

Our ratio of current assets to current liabilities was 0.4 to 1.0 at the end of the 2024 third quarter.

We have significant borrowing capacity under our Credit Facility should we need additional working capital.

Capital Expenditures and Other Investments

We made capital and technology expenditures of $234 million in the 2024 first half and $194 million in the 2023 first half.

We made capital and technology expenditures of $408 million in the 2024 first three quarters and $318 million in the 2023 first three quarters.

We expect capital expenditures and other investments will total approximately $1.1 billion to $1.2 billion for the 2024 full year, including capital and technology expenditures, loan advances, contract acquisition costs, and other investing activities (including approximately $160 million for maintenance capital spending).

Our anticipated capital and technology expenditures include $200 million of spending related to our option to purchase the land underlying the Sheraton Grand Chicago, which we discuss in Note 5.

Capital and technology expenditures in 2024 include higher than typical spending on our worldwide technology systems transformation, which is overwhelmingly expected to be reimbursed over time.

Share Repurchases and Dividends

We repurchased 4.1 million shares of our common stock for $1.0 billion in the 2024 second quarter.

Year-to-date through July 29, 2024, we repurchased 10.4 million shares for $2.5 billion.

We repurchased 4.5 million shares of our common stock for $1.0 billion in the 2024 third quarter.

Year-to-date through October 31, 2024, we repurchased 14.2 million shares for $3.4 billion.

For additional information, see “Issuer Purchases of Equity Securities” in Part II, Item 2.

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(1) $0.52 per share declared on February 8, 2024 and paid on March 29, 2024 to stockholders of record on February 22, 2024;

and (2) $0.63 per share declared on May 10, 2024 and paid on June 28, 2024 to stockholders of record on May 24, 2024.

(2) $0.63 per share declared on May 10, 2024 and paid on June 28, 2024 to stockholders of record on May 24, 2024;

$0.63 per share declared on August 2, 2024 and paid on September 30, 2024 to stockholders of record on August 16, 2024.

We expect to continue to return cash to stockholders through a combination of share repurchases and cash dividends.

Material Cash Requirements

As of the end of the 2024 second quarter, there have been no material changes to our cash requirements as disclosed in our 2023 Form 10-K.

As of the end of the 2024 third quarter, there have been no material changes to our cash requirements as disclosed in our 2023 Form 10-K.

See Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” of our 2023 Form 10-K for more information about our cash requirements.

Also, see Note 6 for information on our long-term debt.

At June 30, 2024, projected Deemed Repatriation Transition Tax payments under the 2017 Tax Cuts and Jobs Act totaled $135 million, which is payable within the next 12 months from June 30, 2024.

At September 30, 2024, projected Deemed Repatriation Transition Tax payments under the 2017 Tax Cuts and Jobs Act totaled $135 million, which is payable within the next 12 months from September 30, 2024.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

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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-Q

Item 2. Management’s Discussion and Analysis