What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-01-27 compared with 2024-01-26 · 69 added, 80 removed, 214 unchanged (41% of the section changed)

18 unchanged sentences

Average monthly revenue per paying membership $ 11.70 $ 11.64 $ 11.76 1 %

(1) In April 2023, we announced our plans to discontinue our DVD-by-mail service, and we ceased providing our mailing services to customers on September 29, 2023.

Constant currency change (3) 4 %

(1) We discontinued our DVD-by-mail service in the year ended December 31, 2023.

The discontinuance of our DVD business had an immaterial impact on our operations and financial results.

Consolidated revenues for the year ended December 31, 2023 increased 7% as compared to the year ended December 31, 2022.

Operating margin for the year ended December 31, 2023 increased three percentage points, primarily due to revenues growing at a faster rate as compared to the growth in cost of revenues and marketing and decreased technology and development expenses, partially offset by higher growth in general and administrative expenses as compared to the growth in revenues.

(2) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or certain other promotions that may be offered by the Company to new or rejoining members.

Certain members have the option to add extra member sub accounts.

These extra member sub accounts are not included in paid memberships.

A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date.

Voluntary cancellations generally become effective at the end of the prepaid membership period.

Involuntary cancellations, as a result of a failed method of payment, become effective immediately.

Memberships are assigned to territories based on the geographic location used at time of sign-up as determined by the Company’s internal systems, which utilize industry standard geo-location technology.

(3) We believe the non-GAAP financial measure of constant currency revenue is useful in analyzing the underlying trends in average monthly revenue per paying membership (“ARM”) absent foreign currency fluctuations.

However, this non-GAAP financial measure should be considered in addition to, not as a substitute for, or superior to other financial measures prepared in accordance with GAAP.

In order to exclude the effect of foreign currency rate fluctuations on ARM, we calculate current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period and exclude the impact of hedging gains or losses realized as revenues.

Constant currency percentage change in ARM is calculated as the percentage change between current period constant currency ARM and the prior comparative period ARM.

The impact of hedging gains or losses is excluded from both the current and prior periods.

For the year ended December 31, 2024, our revenues would have been approximately $1,424 million higher, excluding the impact of hedging and had foreign currency exchange rates remained constant with those for the year ended December 31, 2023.

The unfavorable foreign exchange rate impacts in the year ended December 31, 2024 were primarily driven by the devaluation of the Argentine peso relative to the U.S.

dollar coupled with significant price increases in the local currency in this jurisdiction.

Operating margin for the year ended December 31, 2024 increased six percentage points as compared to the prior comparative period, primarily due to revenues growing at a faster rate as compared to the growth in cost of revenues, sales and marketing, and technology and development expenses, coupled with lower general and administrative expenses.

Streaming Revenues

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We expect that from time to time the prices of our membership plans in each country may change and we may test other plan and price variations.

We also earn revenue from advertisements presented on our streaming service, consumer products and various other sources.

Revenues earned from sources other than monthly membership fees were not material for the years ended December 31, 2023, 2022, and 2021.

We also earn revenue from advertisements presented on our streaming service, consumer products, live events and various other sources.

Revenues earned from sources other than monthly membership fees were not a material component of streaming revenues for the years ended December 31, 2024, 2023, and 2022.

Year Ended December 31, Change

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$ 39,000,966 $ 33,640,458 $ 31,469,852 $ 5,360,508 16 %

Streaming revenues for the year ended December 31, 2023 increased 7% as compared to the year ended December 31, 2022, primarily due to the 8% growth in average paying memberships, partially offset by a 1% decrease in average monthly revenue per paying membership.

The decrease in average monthly revenue per paying membership was primarily due to changes in plan mix, higher membership growth in regions with lower average monthly revenue per paying membership, partially offset by limited price increases.

Additionally, streaming revenues for the year ended December 31, 2023 were further impacted by unfavorable fluctuations in foreign exchange rates.

The following tables summarize streaming revenue and other streaming membership information by region for the years ended December 31, 2023, 2022 and 2021.

Streaming revenues for the year ended December 31, 2024 increased 16% as compared to the year ended December 31, 2023, primarily due to the growth in average paying memberships and price increases, partially offset by unfavorable changes in foreign exchange rates.

The following tables summarize streaming revenues and other streaming membership information by region for the years ended December 31, 2024, 2023 and 2022.

Hedging gains of $124 million are included in “Streaming revenues” for the year ended December 31, 2024.

No hedging gains and losses were recognized as “Streaming revenues” in the comparative prior year periods.

See Note 7 Derivative Financial Instruments and Hedging Activities to the consolidated financial statements for further information regarding the Company’s derivative and non-derivative financial instruments.

United States and Canada (UCAN)

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(in thousands, except revenue per membership and percentages)

Revenues $ 14,873,783 $ 14,084,643 $ 12,972,100 $ 789,140 6 %

Streaming revenues $ 17,359,369 $ 14,873,783 $ 14,084,643 $ 2,485,586 17 %

Paid net membership additions (losses) 9,497 5,832 (919) 3,665 63 %

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(in thousands, except revenue per membership and percentages)

Revenues $ 10,556,487 $ 9,745,015 $ 9,699,819 $ 811,472 8 %

Streaming revenues $ 12,387,035 $ 10,556,487 $ 9,745,015 $ 1,830,548 17 %

Paid net membership additions 12,320 12,084 2,693 236 2 %

7 unchanged sentences

(in thousands, except revenue per membership and percentages)

Revenues $ 4,446,461 $ 4,069,973 $ 3,576,976 $ 376,488 9 %

Streaming revenues $ 4,839,816 $ 4,446,461 $ 4,069,973 $ 393,355 9 %

Paid net membership additions 7,330 4,298 1,738 3,032 71 %

7 unchanged sentences

(in thousands, except revenue per membership and percentages)

Revenues $ 3,763,727 $ 3,570,221 $ 3,266,601 $ 193,506 5 %

Streaming revenues $ 4,414,746 $ 3,763,727 $ 3,570,221 $ 651,019 17 %

Paid net membership additions 12,203 7,315 5,391 4,888 67 %

3 unchanged sentences

Constant currency change (3) %

(1) A paid membership (also referred to as a paid subscription) is defined as a membership that has the right to receive Netflix service following sign-up and a method of payment being provided, and that is not part of a free trial or certain other promotions that may be offered by the Company to new or rejoining members.

Certain members have the option to add extra member sub accounts.

These extra member sub accounts are not included in paid memberships.

A membership is canceled and ceases to be reflected in the above metrics as of the effective cancellation date.

Voluntary cancellations generally become effective at the end of the prepaid membership period.

Involuntary cancellations, as a result of a failed method of payment, become effective immediately.

(2) We believe the non-GAAP financial measure of constant currency revenue is useful in analyzing the underlying trends in average monthly revenue per paying membership absent foreign currency fluctuations.

However, this non-GAAP financial measure should be considered in addition to, not as a substitute for, or superior to other financial measures prepared in accordance with GAAP.

In order to exclude the effect of foreign currency rate fluctuations on average monthly revenue per paying membership, we estimate current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period.

For the year ended December 31, 2023, our revenues would have been approximately $597 million higher had foreign currency exchange rates remained constant with those for the year ended December 31, 2022.

Cost of Revenues

Amortization of content assets makes up the majority of cost of revenues.

Expenses directly associated with the acquisition, licensing and production of content (such as payroll, stock-based compensation, facilities, and other related personnel expenses, costs associated with obtaining rights to music included in our content, overall deals with talent, miscellaneous production related costs and participations and residuals), streaming delivery costs and other operations costs make up the remainder of cost of revenues.

We have built our own global content delivery network (“Open Connect”) to help us efficiently stream a high volume of content to our members over the internet.

Cost of revenues primarily consists of the amortization of content assets.

Other costs of revenues include expenses associated with the acquisition, licensing and production of content, streaming delivery costs, and other operating costs.

Expenses related to the acquisition, licensing and production of content not included in content amortization may include payroll, stock-based compensation, facilities, and other personnel-related expenses, costs associated with obtaining rights to music included in our content, overall deals with talent, miscellaneous production-related costs and participations and residuals.

Streaming delivery costs are primarily related to our global content delivery network (“Open Connect”).

We have built our own Open Connect network to help us efficiently stream a high volume of content to our members over the internet.

Delivery expenses, therefore, include equipment costs related to Open Connect, payroll and related personnel expenses and all third-party costs, such as cloud computing costs, associated with delivering content over the internet.

Other operations costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs directly incurred in making our content available to members.

Other operating costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs directly incurred in making our content available to members.

Year Ended December 31, Change

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As a percentage of revenues 54 % 58 % 61 %

The increase in cost of revenues for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was due to a $171 million increase in content amortization relating to our existing and new content, coupled with a $376 million increase in other cost of revenues primarily due to an increase in expenses directly associated with the acquisition, licensing and production of content.

Marketing expenses consist primarily of advertising expenses and certain payments made to our marketing and advertising sales partners, including consumer electronics ("CE") manufacturers, multichannel video programming distributors ("MVPDs"), mobile operators and ISPs.

Advertising expenses include promotional activities such as digital and television advertising.

Marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support sales and marketing activities.

The increase in cost of revenues for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was due to a $1,104 million increase in content amortization relating to our existing and new content.

Sales and Marketing

Sales and marketing expenses consist primarily of advertising expenses and certain payments made to marketing and advertising sales partners, including consumer electronics ("CE") manufacturers, multichannel video programming distributors ("MVPDs"), mobile operators, and ISPs.

Marketing expenses include promotional activities such as digital and television advertising.

Sales and marketing expenses also include payroll, stock-based compensation, facilities, and other related expenses for personnel that support advertising sales and marketing activities.

Year Ended December 31, Change

1 unchanged sentence

(in thousands, except percentages)

Marketing $ 2,657,883 $ 2,530,502 $ 2,545,146 $ 127,381 5 %

Sales and marketing $ 2,917,554 $ 2,657,883 $ 2,530,502 $ 259,671 10 %

As a percentage of revenues 7 % 8 % 8 %

The increase in marketing expenses for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily due to a $146 million increase in advertising expenses and a $21 million increase in personnel-related costs, partially offset by a $39 million decrease in payments to our marketing partners.

The increase in sales and marketing expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily driven by a $131 million increase in personnel-related costs due to the growth in advertising sales headcount.

Other sales and marketing expenses increased $129 million primarily due to a $54 million increase in marketing expenses due to the timing of marketing spend on our content slate, coupled with an increase in expenses incurred in connection with our advertising offering, including increased payments to advertising sales partners and other advertising distribution expenses.

Technology and Development

6 unchanged sentences

As a percentage of revenues 8 % 8 % 9 %

Technology and development expenses for the year ended December 31, 2023 as compared to the year ended December 31, 2022 remained relatively flat.

The increase in technology and development expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was primarily due to a $224 million increase in personnel-related costs.

General and Administrative

6 unchanged sentences

As a percentage of revenues 4 % 5 % 5 %

The increase in general and administrative expenses for the year ended December 31, 2023 as compared to the year ended December 31, 2022 was primarily due to a $82 million increase in third-party expenses and a $78 million increase in personnel-related costs.

General and administrative expenses for the year ended December 31, 2024 as compared to the year ended December 31, 2023 remained relatively flat.

Interest Expense

6 unchanged sentences

As a percentage of revenues 2 % 2 % 2 %

Interest expense for the year ended December 31, 2023 consisted primarily of $698 million of interest on our Notes.

Interest expense for the year ended December 31, 2023 as compared to the year ended December 31, 2022 remained relatively flat.

Interest expense primarily consists of interest on our Notes of $718 million for the year ended December 31, 2024.

The increase in interest expense for the year ended December 31, 2024 as compared to the year ended December 31, 2023 was due to the increase in debt.

Interest and Other Income (Expense)

Interest and other income (expense) consists primarily of foreign exchange gains and losses on foreign currency denominated balances and interest earned on cash, cash equivalents and short-term investments.

Interest and other income (expense) consists primarily of foreign exchange gains and losses on foreign currency denominated balances, gains and losses on certain derivative instruments, and interest earned on cash, cash equivalents and short-term investments.

Year Ended December 31, Change

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As a percentage of revenues 1 % — % 1 %

Interest and other income (expense) decreased primarily due to foreign exchange losses of $293 million for the year ended December 31, 2023 as compared to a gain of $282 million for the year ended December 31, 2022.

The foreign exchange loss in the year ended December 31, 2023 was primarily driven by the non-cash loss of $176 million from the remeasurement of our Senior Notes denominated in euros, coupled with the remeasurement of cash and content liability positions in currencies other than the functional currencies.

The foreign exchange gain in the year ended December 31, 2022 was primarily driven by the non-cash $353 million gain from the remeasurement of our Senior Notes denominated in euros, partially offset by the remeasurement of cash and content liability positions in currencies other than the functional currencies.

The change in foreign currency gains and losses was partially offset by a $221 million increase in interest income earned due to higher average interest rates and investment balances for the year ended December 31, 2023 as compared to the year ended December 31, 2022.

Interest and other income (expense) increased for the year ended December 31, 2024 primarily due to foreign exchange losses of $18 million, net of the impacts of derivatives and hedging, compared to the losses of $293 million for the corresponding period in 2023.

In the year ended December 31, 2024, the foreign exchange losses were primarily driven by the remeasurement of cash and content liability positions in currencies other than the functional currencies, partially offset by a non-cash gain of $122 million, net of hedging impacts, from the remeasurement of our €5,170 million Senior Notes.

The foreign exchange loss in the year ended December 31, 2023 was primarily driven by a non-cash loss of $176 million from the remeasurement of our Senior Notes denominated in euros, coupled with the remeasurement of cash and content liability positions in currencies other than the functional currencies.

Provision for Income Taxes

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Effective tax rate 13 % 13 % 15 %

The decrease in our effective tax rate for the year ended December 31, 2023 as compared to the year ended December 31, 2022 is primarily due to a decrease in foreign taxes.

The effective tax rate for the year ended December 31, 2024 remained relatively flat as compared to the year ended December 31, 2023.

See Note 10 Income Taxes to the consolidated financial statements for further information regarding income taxes.

5 unchanged sentences

Short-term and long-term debt 15,582,804 14,543,261 1,039,543 7 %

Cash, cash equivalents, restricted cash and short-term investments increased $1,058 million in the year ended December 31, 2023 primarily due to cash provided by operations, partially offset by the repurchase of stock.

Debt, net of debt issuance costs, increased $190 million primarily due to the remeasurement of our euro-denominated notes.

Cash, cash equivalents, restricted cash and short-term investments increased $2,447 million in the year ended December 31, 2024 primarily due to cash provided by operations, issuance of debt, and proceeds from issuance of common stock, partially offset by the repurchase of stock and repayment of debt.

Debt, net of debt issuance costs and discounts, increased $1,040 million primarily due to the issuance of $1,800 million in additional Senior Notes, partially offset by the repayment upon maturity of the $400 million aggregate principal amount of our 5.750% Senior Notes and the remeasurement of our euro-denominated notes in the year ended December 31, 2024.

The amount of principal and interest due in the next twelve months is $2,487 million.

The amount of principal and interest due beyond the next twelve months is $16,662 million.

As of December 31, 2024, no amounts had been borrowed under our $3 billion Revolving Credit Agreement.

See Note 6 Debt in the accompanying notes to our consolidated financial statements.

We anticipate that our future capital needs from the debt market will be more limited compared to prior years.

Our ability to obtain this or any additional financing that we may choose or need, including for potential strategic acquisitions and investments, will depend on, among other things, our development efforts, business plans, operating performance, and the condition of the capital markets at the time we seek financing.

We anticipate that we may periodically raise additional debt capital.

Our ability to obtain this or any additional financing that we may choose or need, including for the refinancing of upcoming maturities or potential strategic acquisitions and investments, will depend on, among other things, our development efforts, business plans, operating performance, and the condition of the capital markets at the time we seek financing.

We may not be able to obtain such financing on terms acceptable to us or at all.

If we raise additional funds through the issuance of equity or debt securities, those securities may have rights, preferences or privileges senior to the rights of our common stock, and our stockholders may experience dilution.

In March 2021, our Board of Directors authorized the repurchase of up to $5 billion of our common stock, with no expiration date, and in September 2023, the Board of Directors increased the share repurchase authorization by an additional $10 billion, also with no expiration date.

In September 2023, the Board of Directors authorized the repurchase of up to $10 billion of our common stock, with no expiration date, and in December 2024, the Board of Directors increased the share repurchase authorization by an additional $15 billion, also with no expiration date.

Stock repurchases may be effected through open market repurchases in compliance with Rule 10b-18 under the Exchange Act, including through the use of trading plans intended to qualify under Rule 10b5-1 under the Exchange Act, privately-negotiated transactions, accelerated stock repurchase plans, block purchases, or other similar purchase techniques and in such amounts as management deems appropriate.

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We may discontinue any repurchases of our common stock at any time without prior notice.

In the fiscal year ended December 31, 2023, the Company repurchased 14,513,790 shares of common stock for an aggregate amount of $6,045 million.

In the fiscal year ended December 31, 2024, the Company repurchased 9,861,935 shares of common stock for an aggregate amount of $6,211 million (excluding the 1% excise tax on stock repurchases as a result of the Inflation Reduction Act of 2022).

As of December 31, 2024, $17.1 billion remains available for repurchases.

15 unchanged sentences

Content obligations include amounts related to the acquisition, licensing and production of content.

An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements and other production related commitments.

An obligation for the production of content includes non-cancelable commitments under creative talent and employment agreements and other production related

An obligation for the acquisition and licensing of content is incurred at the time we enter into an agreement to obtain future titles.

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See Note 5 Balance Sheet Components in the accompanying notes to our consolidated financial statements for further details regarding leases.

In addition, as of December 31, 2023, we had gross unrecognized tax benefits of $327 million, of which $221 million was classified in “Other non-current liabilities" in the Consolidated Balance Sheets.

As of December 31, 2024, we had gross unrecognized tax benefits of $432 million, of which $302 million was classified in “Other non-current liabilities" in the Consolidated Balance Sheets.

At this time, an estimate of the range of reasonably possible adjustments to the balance of unrecognized tax benefits cannot be made.

Free Cash Flow

We define free cash flow as cash provided by (used in) operating activities less purchases of property and equipment and change in other assets.

We believe free cash flow is an important liquidity metric because it measures, during a given period, the amount of cash generated that is available to repay debt obligations, make strategic acquisitions and investments and for certain other activities like stock repurchases.

Free cash flow is considered a non-GAAP financial measure and should not be considered in isolation of, or as a substitute for, net income, operating income, net cash provided by operating activities, or any other measure of financial performance or liquidity presented in accordance with GAAP.

In assessing liquidity in relation to our results of operations, we compare free cash flow to net income, noting that the major recurring differences are the timing impact between content payments and amortization, non-cash stock-based compensation expense, non-cash remeasurement gain/loss on our euro-denominated debt, excess property and equipment purchases over depreciation, and other working capital differences.

Working capital differences primarily include deferred revenue, taxes and semi-annual interest payments on our outstanding debt.

Our receivables from members generally settle quickly.

In addition, we may be required to pay deposits of approximately $800 million related to certain direct and indirect taxes in the next twelve months, which are in excess of our typical annual obligations.

The following table summarizes our cash flows:

Year Ended December 31, Change

7 unchanged sentences

(4,074,427) (5,950,803) (664,254) (1,876,376) (32) %

Non-GAAP reconciliation of free cash flow:

Net cash provided by operating activities

7,274,301 2,026,257 392,610 5,248,044 259 %

Purchases of property and equipment (348,552) (407,729) (524,585) (59,177) (15) %

Change in other assets

— — (26,919) — — %

Free cash flow

$ 6,925,749 $ 1,618,528 $ (158,894) $ 5,307,221 328 %

Net cash provided by operating activities increased $5,248 million from the year ended December 31, 2022 to $7,274 million for the year ended December 31, 2023.

The increase in net cash provided by operating activities was primarily driven by a decrease in payments for content assets, coupled with a $916 million or 20% increase in net income and favorable changes in working capital.

The payments for content assets decreased $3,519 million, from $16,660 million to $13,140 million, or 21%.

Net cash provided by (used in) investing activities increased $2,618 million from the year ended December 31, 2022 to $542 million for the year ended December 31, 2023.

The increase in net cash provided by (used in) investing activities is primarily due to proceeds from the maturities of short-term investments, net of purchases, and there being no acquisitions in the year ended December 31, 2023, as compared to acquisitions for an aggregate amount of $757 million in the year ended December 31, 2022.

Net cash used in financing activities increased $5,287 million from the year ended December 31, 2022 to $5,951 million for the year ended December 31, 2023.

The increase in net cash used in financing activities is primarily due to repurchases of common stock for an aggregate amount of $6,045 million in the year ended December 31, 2023, as compared to no repurchases of common stock in the year ended December 31, 2022, partially offset by the absence of debt maturities in the year ended December 31, 2023 as compared to the repayment upon maturity of the $700 million aggregate principal amount of our 5.500% Senior Notes in February 2022.

Free cash flow was $1,518 million higher than net income for the year ended December 31, 2023 primarily due to $1,057 million of amortization expense exceeding cash payments for content assets, $339 million of non-cash stock-based compensation expense, $176 million of non-cash remeasurement loss on our euro-denominated debt, and $47 million in other favorable working capital differences, partially offset by $101 million of property and equipment purchases exceeding depreciation expense.

Net cash provided by operating activities for the year ended December 31, 2024 increased $87 million as compared to the year ended December 31, 2023, primarily driven by a $3,304 million or 61% increase in net income, an increase in adjustments for non-cash expenses, and favorable changes in working capital, partially offset by an increase in payments for content assets.

The payments for content assets increased $3,862 million, from $13,140 million to $17,003 million, or 29%.

Net cash provided by (used in) investing activities for the year ended December 31, 2024 decreased $2,724 million as compared to the year ended December 31, 2023, primarily due to there being no maturities of investments in the year ended December 31, 2024, as compared to maturities of investments of $1,395 million in the year ended December 31, 2023, coupled with an increase in purchases of investments of $1,237 million and an increase in purchases of property and equipment of $91 million.

Net cash used in financing activities for the year ended December 31, 2024 decreased $1,876 million as compared to the year ended December 31, 2023, primarily due to proceeds from the issuance of debt of $1,794 million in the year ended December 31, 2024 and a $663 million increase in the proceeds from the issuance of common stock.

These cash inflows were partially offset by the repayment upon maturity of the $400 million aggregate principal amount of our 5.750% Senior Notes in the year ended December 31, 2024 as compared to no repayments of debt in the corresponding period in 2023, coupled with a $218 million increase in the repurchases of common stock.

Indemnifications

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For produced content, we capitalize costs associated with the production, including development costs, direct costs and production overhead.

Participations and residuals are expensed in line with the amortization of production costs.

Based on factors including historical and estimated viewing patterns, we amortize the content assets (licensed and produced) in “Cost of revenues” on the Consolidated Statements of Operations over the shorter of each title's contractual window of availability or estimated period of use or ten years, beginning with the month of first availability.

The amortization is on an accelerated basis, as we typically expect more upfront viewing, and film amortization is more accelerated than TV series amortization.

On average, over 90% of a licensed or produced content asset is expected to be amortized within four years

after its month of first availability.

On average, over 90% of a licensed or produced content asset is expected to be amortized within four years after its month of first availability.

We review factors that impact the amortization of the content assets on a regular basis.

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Although we believe our assumptions, judgments and estimates are reasonable, changes in tax laws or our interpretation of tax laws and the resolution of any tax audits could significantly impact the amounts provided for income taxes in our consolidated financial statements.

In evaluating our ability to recover our deferred tax assets, in full or in part, we consider all available positive and negative evidence, including our past operating results, and our forecast of future earnings, future taxable income and prudent and feasible tax planning strategies.

In evaluating our ability to recover our deferred tax assets, in full or in part, we consider all available positive and negative evidence, including our past operating results, our forecast of future earnings and future taxable income, and prudent and feasible tax planning strategies.

The assumptions utilized in determining future taxable income require significant judgment and are consistent with the plans and estimates we are using to manage the underlying business.

8 unchanged sentences

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

What changed 10-K

Item 7. Management’s Discussion and Analysis