What changed in this filing

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Item 2. Management’s Discussion and Analysis

2021-10-26 compared with 2021-07-29 · 83 added, 82 removed, 130 unchanged (56% of the section changed)

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In light of these risks and uncertainties, any forward-looking statement made in this report or elsewhere, might not occur.

When comparing the results of the petroleum additives segment for the first six months of 2021 with the first six months of 2020, net sales increased 19.2% primarily due to higher lubricant additives product shipments and a favorable foreign currency impact, partially offset by decreased selling prices and lower fuel additives product shipments.

Petroleum additives operating profit was 14.7% higher when comparing the first six months of 2021 with the first six months of 2020, reflecting improved product shipments and favorable conversion costs mostly offset by higher raw material costs.

On March 18, 2021, we issued $400 million aggregate principal amount of 2.70% senior notes due 2031.

Subsequently, in May 2021, we invested most of the proceeds in marketable securities.

When comparing the results of the petroleum additives segment for the first nine months of 2021 with the first nine months of 2020, net sales increased 19.9% primarily due to higher lubricant additives product shipments, higher selling prices, and a favorable foreign currency impact.

Petroleum additives operating profit was 3.4% lower when comparing the first nine months of 2021 with the first nine months of 2020, reflecting significantly higher raw material costs partially offset by improved product shipments and higher selling prices.

During the third quarter of 2021, we increased our quarterly dividend to $2.10 per share, and we repurchased 292,392 shares of our common stock for a total of $99.5 million.

Our operations generate cash that is in excess of the needs of the business.

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Our investments continue to be in organizational talent, technology development and processes, and global infrastructure, consisting of technical centers, production capability, and geographic expansion.

Impact of the COVID-19 Pandemic and Current Economic Environment

While to a lesser extent than during 2020, petroleum additives operating results for the first six months of 2021 include an unfavorable impact from the economic uncertainty resulting from the ongoing effects of the COVID-19 pandemic and the related restrictions on the movement of people, goods and services.

The pace and stability of improvement in demand for our products will continue to depend heavily on economic recovery and the rate at which government restrictions are lifted and remain lifted.

We will continue to monitor the government restrictions, as well as the status of the vaccination programs that are being implemented globally.

Impact of the Current Economic Environment and the COVID-19 Pandemic

The current economic environment in which we operate is characterized by steadily rising costs, including raw material costs, limitations on certain supply availability, and a challenging supply chain network and transportation system.

Because of our active business continuity process and global network, we have substantially managed through these factors during the first nine months of the year and have delivered product to our customers.

We do not currently expect the supply chain network disruptions to be long-term in nature, but we cannot predict how the current economic environment may evolve over the coming months.

We will continue working with our customers to deliver product, but at the same time, we also expect to be challenged by these ongoing economic factors as we manage our business throughout the rest of the year.

In addition, but to a lesser extent than during 2020, petroleum additives operating results for the first nine months of 2021 include an unfavorable impact from the economic uncertainty resulting from the ongoing effects of the COVID-19 pandemic and the related restrictions on the movement of people, goods and services.

The pace and stability of improvement in demand for our products will continue to depend heavily on economic recovery.

All of our locations around the world, including our manufacturing and research and development facilities, have continued to operate safely and without interruption during the pandemic, with only a very few government-ordered, short-term exceptions, and we expect them to continue to do so.

Both our raw material supply and the transportation network have experienced some disruptions, but we have managed through these challenges and expect to continue to do so.

Our products are being delivered to our customers.

Our financial position remains strong.

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Results of Operations

Consolidated net sales for the second quarter of 2021 totaled $590.7 million, representing an increase of $179.9 million, or 43.8% from the second quarter of 2020.

Consolidated net sales for the first six months of 2021 totaled $1.2 billion, representing an increase of $187.1 million, or 19.3%, from the first six months of 2020.

Consolidated net sales for the third quarter of 2021 totaled $622.2 million, representing an increase of $109.3 million, or 21.3% from the third quarter of 2020.

Consolidated net sales for the first nine months of 2021 totaled $1.8 billion, representing an increase of $296.4 million, or 20.0%, from the first nine months of 2020.

The following table shows net sales by segment and product line.

Second Quarter Ended

June 30, Six Months Ended

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in millions) 2021 2020 2021 2020

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The regions in which we operate include North America (the United States and Canada), Latin America (Mexico, Central America, and South America), Asia Pacific, and the EMEAI region.

While there is some fluctuation, the percentage of net sales generated in the regions remained fairly consistent when comparing the first six months of 2021 with the same period in 2020, as well as with the full year in 2020.

Petroleum additives net sales for the second quarter of 2021 were $586.6 million compared to $408.7 million for the second quarter of 2020, an increase of 43.5%.

Petroleum additives net sales for the first six months of 2021 were $1.2 billion compared to $966.1 million for the first six months of 2020, an increase of 19.2%.

For both the second quarter and six months comparative periods, the increases were across all regions with North America representing around 40% of the increase in both comparative periods.

The remaining regions each contributed approximately 20% of the increase in net sales for the second quarter comparison.

For the six month comparison, the Asia Pacific region reflected an approximate 35% increase with the EMEAI and Latin America regions reflecting the remaining increases in petroleum additives net sales.

While 2021 results continue to include the impact of the COVID-19 pandemic to a lesser extent, the second quarter and six months 2020 periods include a more significant impact from the pandemic.

The following table details the approximate components of the increase in petroleum additives net sales between the second quarter and first six months of 2021 and 2020.

(in millions) Second Quarter Six Months

Period ended June 30, 2020 $ 408.7 $ 966.1

While there is some fluctuation, the percentage of net sales generated in the regions remained fairly consistent when comparing the first nine months of 2021 with the same period in 2020, as well as with the full year in 2020.

Petroleum additives net sales for the third quarter of 2021 were $619.1 million compared to $510.3 million for the third quarter of 2020, an increase of 21.3%.

Petroleum additives net sales for the first nine months of 2021 were $1.8 billion compared to $1.5 billion for the first nine months of 2020, an increase of 19.9%.

For both the third quarter and nine months comparative periods, the increases were across all regions with North America representing around 40% of the increase in both comparative periods.

The EMEAI region contributed an approximate 25% increase in the third quarter comparison with the Latin America and Asia Pacific regions each contributing approximately equally for the remaining increase.

For the nine month comparison, the Asia Pacific region reflected an approximate 25% increase with the EMEAI and Latin America regions reflecting the remaining increases in petroleum additives net sales.

While 2021 results continue to include the economic impact of the COVID-19 pandemic to a lesser extent, the third quarter and nine months 2020 periods include a more significant economic impact from the pandemic.

The following table details the approximate components of the increase in petroleum additives net sales between the third quarter and first nine months of 2021 and 2020.

(in millions) Third Quarter Nine Months

Period ended September 30, 2020 $ 510.3 $ 1,476.4

Lubricant additives shipments 53.7 237.0

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Foreign currency impact, net 4.6 26.1

Period ended June 30, 2021 $ 586.6 $ 1,151.5

When comparing both the second quarter and the six months periods of 2021 and 2020, petroleum additives shipments accounted for a $160.8 million increase in net sales for the second quarter comparison and a $182.5 million increase in net sales for the six month comparison.

Selling prices improved some during the second quarter of 2021, but remained as an unfavorable impact on net sales for the six months comparison.

Period ended September 30, 2021 $ 619.1 $ 1,770.6

When comparing both the third quarter and the nine months periods of 2021 and 2020, petroleum additives shipments accounted for a $58.0 million increase in net sales for the third quarter comparison and a $239.9 million increase in net sales for the nine month comparison.

Selling prices improved during both the third quarter and nine months comparison periods.

The impact from selling prices was net of a favorable impact from foreign currency exchange rates in both comparative periods.

The United States Dollar weakened against most of the major currencies in which we transact when comparing the first six months of 2021 and 2020 resulting in a favorable impact to petroleum additives net sales for both the second quarter and six months comparative periods.

The United States Dollar weakened against most of the major currencies in which we transact when comparing both the third quarter and nine months of 2021 and 2020 resulting in a favorable impact to petroleum additives net sales for both the third quarter and nine months comparative periods.

The favorable impact was predominantly due to changes in the Euro and Chinese Renminbi exchange rates.

On a worldwide basis, the volume of product shipments for petroleum additives increased 41.1% when comparing the two second quarter periods and 19.1% when comparing the six months of 2021 and 2020.

Shipments of lubricant additives increased across all regions in both the second quarter and six months comparisons with most of the increases in the North America region but significant increases across the other regions, as well.

Fuel additives shipment volumes increased for the second quarter comparison and were substantially unchanged for the six months comparison.

The improvement in the second quarter fuel additives shipments was across all regions, while the six months comparison reflected improved fuel additives product shipments for the North America and Asia Pacific regions with substantially offsetting decreases in the Latin America and EMEAI regions.

Similar to the discussion on net sales above, the volume of product shipments in the second quarter of 2020 include the impact from unusually low shipments due to the COVID-19 pandemic.

On a worldwide basis, the volume of product shipments for petroleum additives increased 11.9% when comparing the two third quarter periods and 16.6% when comparing the nine months of 2021 and 2020.

For the third quarter comparison, lubricant additives improved across all regions by similar amounts and fuel additives increased across all regions except the EMEAI region.

For the nine months comparison, the North America and Asia Pacific regions each contributed approximately one-third of the improvement in lubricant additives shipments, with the EMEAI and Latin America regions also improving.

Fuel additives shipments for the nine months comparison improved across all regions, except for the EMEAI region.

Similar to the discussion on net sales above, the volume of product shipments in the third quarter and nine months of 2020 include the impact from unusually low shipments due to the COVID-19 pandemic.

The “All other” category includes the operations of the antiknock compounds business and certain contracted manufacturing and services.

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Depreciation on segment property, plant, and equipment, as well as amortization of segment intangible assets and lease right-of-use assets, is included in segment operating profit.

The following table reports segment operating profit for the second quarter and six months ended June 30, 2021 and June 30, 2020.

Second Quarter Ended

June 30, Six Months Ended

The following table reports segment operating profit for the third quarter and nine months ended September 30, 2021 and September 30, 2020.

Third Quarter Ended

September 30, Nine Months Ended

September 30,

(in millions) 2021 2020 2021 2020

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Petroleum Additives Segment

The petroleum additives segment operating profit increased $41.1 million when comparing the second quarter of 2021 to the second quarter of 2020 and $21.6 million when comparing the first six months of 2021 to the first six months of 2020.

The petroleum additives segment operating profit decreased $30.1 million when comparing the third quarter of 2021 to the third quarter of 2020 and $8.5 million when comparing the first nine months of 2021 to the first nine months of 2020.

Both comparative periods included the impact of the same factors that affected gross profit (see discussion below).

The operating profit margin was 12.7% for the second quarter of 2021 as compared to 8.1% for the second quarter of 2020 and was 14.6% for the first six months of 2021 as compared to 15.2% for the first six months of 2020.

For the rolling four quarters ended June 30, 2021, the operating profit margin for petroleum additives was 16.2%.

Increasing raw material costs during 2021

are having a negative impact on our operating profit margins.

While we have successfully raised selling prices to allow for the higher raw material costs, the favorable impact of increased selling prices on our operating results lags the impact of higher raw material costs.

The operating profit margin was 11.7% for the third quarter of 2021 as compared to 20.0% for the third quarter of 2020 and was 13.6% for the first nine months of 2021 as compared to 16.9% for the first nine months of 2020.

For the rolling four quarters ended September 30, 2021, the operating profit margin for petroleum additives was 14.1%.

Increasing costs during 2021, including primarily raw material costs, are having a negative impact on our operating profit margins.

While we have made some progress in adjusting our selling prices, our costs have continued to rise.

Operating profit margins remain a priority, and while they will fluctuate from quarter to quarter due to multiple factors, we believe the fundamentals of our business and industry as a whole are unchanged.

Petroleum additives gross profit increased $44.2 million when comparing the two second quarter periods and $26.0 million when comparing the first six months of 2021 and 2020 .

Cost of goods sold as a percentage of net sales was 76.1% for the second quarter of 2021, down slightly from 76.5% for the second quarter of 2020 and 73.8% for the first six months of 2021, increasing from 71.4% for the first six months of 2020.

When comparing both the second quarters and first six months of 2021 and 2020, the increase in gross profit resulted from improved product shipments, as well as a favorable impact from conversions costs.

Selling prices were higher for the second quarter comparison, but remained unfavorable for the six month comparison reflecting some price increases beginning to impact our results during the second quarter of 2021.

These factors combined contributed over 100% of the improvement in gross profit for both comparative periods.

Raw material costs were significantly unfavorable for both the second quarter and six months comparison.

Petroleum additives selling, general, and administrative expenses (SG&A) for the second quarter of 2021 were $1.2 million higher as compared to the second quarter of 2020, and $1.8 million higher when comparing the first six months of 2021 to the same 2020 period.

SG&A as a percentage of net sales was 5.2% for the second quarter of 2021, 7.2% for the second quarter of 2020, 5.4% for the first six months of 2021 and 6.2% for the first six months of 2020.

Petroleum additives gross profit decreased $25.9 million when comparing the two third quarter periods and was substantially unchanged when comparing the first nine months of 2021 and 2020 .

Cost of goods sold as a percentage of net sales was 77.7% for the third quarter of 2021, increasing from 67.9% for the third quarter of 2020, and 75.2% for the first nine months of 2021, increasing from 70.2% for the first nine months of 2020.

When comparing the third quarters of 2021 and 2020, the decrease in gross profit primarily resulted from significantly higher raw material costs, as well as a small unfavorable impact from conversion costs, which were partially offset by improved selling prices and product shipments.

The same unfavorable effect from higher raw material costs impacted the nine months comparison, but was offset primarily by improved product shipments and improved selling prices.

Petroleum additives selling, general, and administrative expenses (SG&A) for the third quarter of 2021 were $1.9 million higher as compared to the third quarter of 2020, and $3.7 million higher when comparing the first nine months of 2021 to the same 2020 period.

SG&A as a percentage of net sales was 4.9% for the third quarter of 2021, 5.6% for the third quarter of 2020, 5.2% for the first nine months of 2021, and 6.0% for the first nine months of 2020.

Our SG&A costs are primarily personnel-related and include salaries, benefits, and other costs associated with our workforce, including travel expenses.

While personnel-related costs fluctuate from period to period, there were no significant changes in the drivers of these costs when comparing the periods.

Our investment in petroleum additives research, development, and testing (R&D) increased $2.0 million when comparing the second quarter of 2021 with the second quarter of 2020 and $2.8 million when comparing the first six months periods of 2021 and 2020.

As a percentage of net sales, R&D was 6.1% for the second quarter of 2021, 8.2% for the second quarter of 2020, 6.2% for the first six months of 2021, and 7.2% for the first six months of 2020.

Our investment in petroleum additives research, development, and testing (R&D) increased $2.3 million when comparing the third quarter of 2021 with the third quarter of 2020 and $5.1 million when comparing the first nine months periods of 2021 and 2020.

As a percentage of net sales, R&D was 5.7% for the third quarter of 2021, 6.5% for the third quarter of 2020, 6.1% for the first nine months of 2021, and 6.9% for the first nine months of 2020.

Our R&D investments reflect our efforts to support the development of solutions that meet our customers' needs, meet new and evolving standards, and support our expansion into new product areas.

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Interest and Financing Expenses

Interest and financing expenses were $8.9 million for the second quarter of 2021, $7.0 million for the second quarter of 2020, $15.2 million for the first six months of 2021 and $14.1 million for the first six months of 2020.

The increase for both the second quarter and the six months comparison resulted primarily from higher outstanding debt during the 2021 periods, along with higher average interest rate in both 2021 periods.

Higher capitalized interest during the 2021 period partially offset the average rate and debt impact.

Interest and financing expenses were $9.3 million for the third quarter of 2021, $6.5 million for the third quarter of 2020, $24.6 million for the first nine months of 2021 and $20.6 million for the first nine months of 2020.

The increase for both the third quarter and the nine months comparison resulted primarily from higher outstanding debt during the 2021 periods.

A slightly lower average interest rate resulted in a small favorable impact for the third quarter comparison, while a higher average interest rate resulted in a small unfavorable impact for the nine months comparison.

Higher capitalized interest during the 2021 periods partially offset the average debt impact.

Other Income (Expense), Net

Other income (expense), net was income of $5.2 million for the second quarter of 2021, $6.5 million for the second quarter of 2020, $12.4 million for the first six months of 2021 and $14.0 million for the first six months of 2020.

Other income (expense), net was income of $7.4 million for the third quarter of 2021, $25.3 million for the third quarter of 2020, $19.8 million for the first nine months of 2021 and $39.3 million for the first nine months of 2020.

The amounts for both of the 2021 and 2020 periods primarily reflect the components of net periodic benefit cost (income), except for service cost, from defined benefit pension and postretirement plans.

See Note 4 for further information on total periodic benefit cost (income).

Both of the 2020 periods also included a gain of $16.5 million related to the sale of a non-operating parcel of real estate and both of the 2021 periods included the gains and losses on marketable securities.

Income Tax Expense

Income tax expense was $15.1 million for the second quarter of 2021 and $4.9 million for the second quarter of 2020.

The effective income tax rate was 22.5% for the second quarter of 2021 and 18.0% for the second quarter of 2020.

Income tax expense increased $7.2 million due to higher income before income tax expense and $3.0 million resulting from the higher effective income tax rate.

Income tax expense was $34.8 million for the first six months of 2021 and $29.5 million for the first six months of 2020.

The effective tax rate was 22.2% for the first six months of 2021 and 21.4% for the first six months of 2020.

Income tax expense increased $4.1 million due to higher income before income tax expense.

The higher effective income tax rate resulted in a $1.2 million increase in income tax.

The increase in the tax rate for both periods is primarily driven by income from our foreign operations.

Income tax expense was $9.1 million for the third quarter of 2021 and $21.8 million for the third quarter of 2020.

The effective income tax rate was 14.9% for the third quarter of 2021 and 18.6% for the third quarter of 2020.

Income tax expense decreased $10.5 million due to lower income before income tax expense and $2.2 million resulting from the lower effective income tax rate.

Income tax expense was $43.9 million for the first nine months of 2021 and $51.3 million for the first nine months of 2020.

The effective tax rate was 20.2% for the first nine months of 2021 and 20.1% for the first nine months of 2020.

Income tax expense decreased $7.5 million due to lower income before income tax expense with the remainder of the difference caused by the slightly higher effective tax rate.

The decrease in the tax rate for the third quarter comparison period is primarily driven by the impact from our foreign operations.

Cash Flows, Financial Condition, and Liquidity

Cash and cash equivalents at June 30, 2021 were $153.9 million, which was an increase of $28.7 million since December 31, 2020.

Cash and cash equivalents held by our foreign subsidiaries amounted to $117.4 million at June 30, 2021 and $97.3 million at December 31, 2020.

Cash and cash equivalents at September 30, 2021 were $59.6 million, which was a decrease of $65.6 million since December 31, 2020.

Cash and cash equivalents held by our foreign subsidiaries amounted to $57.8 million at September 30, 2021 and $97.3 million at December 31, 2020.

Periodically, we repatriate cash from our foreign subsidiaries to the United States through intercompany dividends and loans.

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Cash Flows – Operating Activities

Cash flows provided from operating activities for the first six months of 2021 were $104.1 million, including the use of $59.5 million to fund higher working capital requirements.

Cash flows provided from operating activities for the first nine months of 2021 were $145.0 million, adjusted for the use of $98.4 million to fund higher working capital requirements.

The $98.4 million used for working capital excluded a favorable foreign currency impact to the components of working capital on the balance sheet.

The most significant changes in working capital included increases in accounts receivable, inventory, and accounts payable.

The increase in accounts receivable balances when comparing June 30, 2021 with the end of 2020 was primarily the result of higher sales in certain regions, as well as slightly slower customer payments.

The increase in accounts receivable balances when comparing September 30, 2021 with the end of 2020 was primarily the result of increased shipment volumes along with higher sales prices.

The increase in inventory was primarily in response to higher forecasted demand in some regions, as well as increased raw material costs.

The increase in accounts payable reflected normal fluctuations across the regions due to timing, increased purchases of raw materials to meet customer demand, and higher raw material costs.

Including cash and cash equivalents, as well as the impact of changes in foreign currency exchange rates on the balance sheet, we had total working capital of $1.1 billion at June 30, 2021 and $585.6 million at December 31, 2020.

The current ratio was 3.83 to 1 at June 30, 2021 and 2.87 to 1 at December 31, 2020.

The increase in accounts payable reflected higher raw material costs, increased purchases of raw materials to meet customer demand, and normal fluctuations across the regions due to timing.

Including cash and cash equivalents, as well as the impact of changes in foreign currency exchange rates on the balance sheet, we had total working capital of $975.5 million at September 30, 2021 and $585.6 million at December 31, 2020.

The current ratio was 3.49 to 1 at September 30, 2021 and 2.87 to 1 at December 31, 2020.

Cash Flows – Investing Activities

Cash used in investing activities totaled $422.2 million during the first six months of 2021 and represented the purchases (net of proceeds from sales and maturities) of marketable securities of $377.8 million and capital expenditures of $44.4 million.

Cash used in investing activities totaled $445.6 million during the first nine months of 2021 and represented the purchases (net of proceeds from sales and maturities) of marketable securities of $381.5 million and capital expenditures of $64.0 million.

We currently expect that our total capital spending during 2021 will be in the $75 million to $85 million range and will include several improvements to our manufacturing and R&D infrastructure around the world.

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Cash Flows – Financing Activities

Cash provided from financing activities during the first six months of 2021 amounted to $346.1 million.

These cash flows included $395.1 million of proceeds from the issuance of our $400 million 2.70% senior notes.

Cash flows from financing activities also included cash dividend payments of $41.5 million.

Our long-term debt was $990.6 million at June 30, 2021 compared to $598.8 million at December 31, 2020.

Cash provided from financing activities during the first nine months of 2021 amounted to $235.7 million.

These cash flows included $395.1 million of proceeds from the issuance of our $400 million 2.70% senior notes, which were subsequently mostly invested in marketable securities.

Cash flows from financing activities also included $91.7 million for repurchase of our common stock and cash dividend payments of $64.1 million.

Our long-term debt was $991.9 million at September 30, 2021 compared to $598.8 million at December 31, 2020.

On March 18, 2021, we issued $400 million aggregate principal amount of 2.70% senior notes due 2031 at an issue price of 98.763%.

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The revolving credit facility contains financial covenants that require NewMarket to maintain a consolidated Leverage Ratio (as defined in the agreement) of no more than 3.75 to 1.00, except during an Increased Leverage Period (as defined in the agreement) at the end of each quarter.

At June 30, 2021, the Leverage Ratio was 2.28 under the revolving credit facility.

At June 30, 2021, we were in compliance with all covenants under the 4.10% senior notes, 3.78% senior notes, 2.70% senior notes, and revolving credit facility.

As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage increased from 44.1% at December 31, 2020 to 53.8% at June 30, 2021.

At September 30, 2021, the Leverage Ratio was 2.66 under the revolving credit facility.

At September 30, 2021, we were in compliance with all covenants under the 4.10% senior notes, 3.78% senior notes, 2.70% senior notes, and revolving credit facility.

As a percentage of total capitalization (total long-term debt and shareholders’ equity), our total long-term debt percentage increased from 44.1% at December 31, 2020 to 56.2% at September 30, 2021.

The change in the percentage resulted primarily from the issuance of the 2.70% senior notes, partially offset by the increase in shareholders' equity.

The change in shareholders’ equity primarily reflects our earnings offset by dividend payments, and the impact of foreign currency translation adjustments along with the changes in the funded position of our defined benefit plans.

The change in shareholders’ equity primarily reflects our earnings offset by dividend payments, the repurchases of our common stock, and the impact of foreign currency translation adjustments along with the changes in the funded position of our defined benefit plans.

Generally, we repay any outstanding long-term debt with cash from operations or refinancing activities.

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Our global business will see varying effects on demand that will differ by region based on our product portfolio and geographic coverage.

The global market should stabilize when government restrictions on the movement of people, goods, and services are lifted, as modern transportation and machinery cannot function without our products.

The global market for our products should continue to stabilize as government restrictions on the movement of people, goods, and services are lifted, as modern transportation and machinery cannot function without our products.

We expect that the petroleum additives market will grow in the 1% to 2% range annually for the foreseeable future.

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It is our view that this industry segment will provide the greatest opportunity for solid returns on our investments while minimizing risk.

We remain focused on this strategy and will evaluate any future opportunities.

We remain focused on this strategy and will evaluate

any future opportunities.

We will continue to evaluate all alternative uses of cash to enhance shareholder value, including stock repurchases and dividends.

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