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Item 2. Management’s Discussion and Analysis

2024-10-31 compared with 2024-08-07 · 78 added, 76 removed, 137 unchanged (53% of the section changed)

1 unchanged sentence

Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to help the reader understand the results of operations and financial condition of NN, Inc.

and its consolidated subsidiaries for the three and six months ended June 30, 2024.

The financial information as of June 30, 2024, should be read in conjunction with the consolidated financial statements for the year ended December 31, 2023, contained in our 2023 Annual Report, and the Condensed Consolidated Financial Statements included in this Quarterly Report.

and its consolidated subsidiaries for the three and nine months ended September 30, 2024.

The financial information as of September 30, 2024, should be read in conjunction with the consolidated financial statements for the year ended December 31, 2023, contained in our 2023 Annual Report, and the Condensed Consolidated Financial Statements included in this Quarterly Report.

NN, Inc., a Delaware corporation, is a diversified industrial company that combines advanced engineering and production capabilities with in-depth materials science expertise to design and manufacture high-precision components and assemblies for a variety of end markets on a global basis.

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Factors That May Influence Results of Operations

The following paragraphs describe factors that have influenced results of operations for the six months ended June 30, 2024, that management believes are important to provide an understanding of the business and results of operations or that may influence operations in the future.

The following paragraphs describe factors that have influenced results of operations for the nine months ended September 30, 2024, that management believes are important to provide an understanding of the business and results of operations or that may influence operations in the future.

Macroeconomic Conditions

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We cannot predict the future impact on our end-markets or input costs nor our ability to recover cost increases through pricing.

Three Months Ended June 30, 2024 compared to the Three Months Ended June 30, 2023

Three Months Ended September 30, 2024 compared to the Three Months Ended September 30, 2023

Consolidated Results

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 $ Change

6 unchanged sentences

Interest expense 5,404 5,739 (335)

Other expense (income), net (3,461) 5,641 (9,102)

Other income, net (5,315) (1,463) (3,852)

Loss before benefit (provision) for income taxes and share of net income from joint venture (3,839) (7,015) 3,176

2 unchanged sentences

Net loss $ (2,557) $ (5,057) $ 2,500

Net sales decreased by $2.2 million, or 1.8%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to rationalized volume at plants undergoing turnarounds and unfavorable foreign exchange effects of $1.0 million, partially offset by the net impact of contractual pricing provisions.

Net sales decreased by $10.9 million, or 8.7%, during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to the sale of our Lubbock operations, rationalized volume at plants undergoing turnarounds, a customer settlement received in 2023 and unfavorable foreign exchange effects of $1.1 million.

Cost of Sales.

Cost of sales decreased by $6.4 million, or 6.0%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to a reduction in indirect manufacturing costs related to actions taken in 2023 to optimize plant operations as well as the impact of lower sales volume.

Cost of sales decreased by $7.4 million, or 7.1%, during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to the decrease in sales.

Selling, General, and Administrative Expense.

Selling, general, and administrative expense increased by $2.5 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to higher incentive compensation and stock compensation expense.

Selling, general, and administrative expense decreased by $1.4 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to lower incentive compensation expense.

Other Operating Income, Net.

Other operating income, net changed favorably by $0.4 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to sublease income related to the facilities that closed during the second quarter of 2023, partially offset by a reduction in gains on sales of machinery and equipment.

Other operating income, net changed favorably by $0.3 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due the loss on sales of machinery and equipment recognized in 2023.

Interest Expense.

Interest expense increased by $0.4 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to a lower amount of interest expense that was capitalized in the current quarter compared with the second quarter of 2023.

Three Months Ended June 30,

Interest expense decreased by $0.3 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to a reduction in the Term Loan balance due to the partial pay down of the outstanding balance with proceeds from the sale of our Lubbock operations.

Three Months Ended September 30,

Interest on debt $ 4,990 $ 5,779

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Total interest expense $ 5,404 $ 5,739

Other Expense (Income), Net.

Other expense (income), net changed favorably by $9.1 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to noncash derivative mark-to-market gains recognized during the current quarter compared to losses recognized in the second quarter of 2023.

Other Income, Net.

Other income, net increased by $3.9 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to the $7.2 million gain on sale of our Lubbock operations, partially offset by noncash derivative mark-to-market loses recognized during the current quarter compared to derivative gains recognized in the third quarter of 2023.

Benefit (Provision) For Income Taxes .

Our effective tax rate was 4.7% for the three months ended June 30, 2024, compared to (2.1)% for the three months ended June 30, 2023.

The rate for the three months ended June 30, 2024 was unfavorably impacted due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by the limitation on the amount of tax benefit recorded for losses in certain jurisdictions where we believe it is more likely than not that a future tax benefit may not be realized.

The effective tax rate was favorably impacted by return to provision adjustments in certain foreign jurisdictions and an amended return in a state jurisdiction.

Our effective tax rate was (23.5)% for the three months ended September 30, 2024, compared to 3.5% for the three months ended September 30, 2023.

The rate for the three months ended September 30, 2024 was unfavorably impacted due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by the limitation on the amount of tax benefit recorded for losses in certain jurisdictions where we believe it is more likely than not that a future tax benefit may not be realized.

Share of Net Income from Joint Venture.

Share of net income from the JV increased by $1.0 million during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to higher sales partially offset by higher fixed costs.

The JV, in which we own a 49% investment, recognized net sales of $31.6 million and $24.9 million for the three months ended June 30, 2024 and 2023, respectively.

Share of net income from the JV increased by $0.5 million during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to higher sales and increased gross margins, partially offset by higher fixed costs.

The JV, in which we own a 49% investment, recognized net sales of $32.4 million and $30.3 million for the three months ended September 30, 2024 and 2023, respectively.

Results by Segment

MOBILE SOLUTIONS

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 $ Change

1 unchanged sentence

Loss from operations $ (1,441) $ (1,283) $ (158)

Net sales decreased by $4.3 million, or 5.6%, during the three months ended June 30, 2024, compared to the three months ended June 30, 2023, primarily due to lower volume at facilities undergoing turnarounds, contractual reduction in customer pricing and unfavorable foreign exchange effects.

Loss from operations decreased by $0.2 million during the three months ended June 30, 2024, compared to the same period in the prior year, primarily due to a reduction in indirect manufacturing costs related to actions taken in 2023 to optimize plant operations.

These reductions were partially offset by higher incentive compensation and depreciation expense.

Net sales decreased by $8.3 million, or 10.5%, during the three months ended September 30, 2024, compared to the three months ended September 30, 2023, primarily due to rationalized volume at plants undergoing turnarounds, contractual reduction in customer pass-through material pricing, a customer settlement received in 2023 and unfavorable foreign exchange effects of $1.0 million.

Loss from operations changed unfavorably by $0.2 million during the three months ended September 30, 2024, compared to the same period in the prior year, primarily due to the lower revenue and impact of the customer settlement in the 2023, partially offset by lower depreciation expense.

POWER SOLUTIONS

Three Months Ended June 30,

Three Months Ended September 30,

2024 2023 $ Change

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Income from operations $ 2,505 $ 3,936 $ (1,431)

Net sales increased by $2.1 million, or 4.3%, during the three months ended June 30, 2024 compared to the three months ended June 30, 2023, primarily due to higher precious metals pass-through pricing and inflation pricing, partially offset by lower volume during the current quarter.

Income from operations increased by $2.7 million during the three months ended June 30, 2024 compared to the same period in the prior year, primarily due to the higher revenue as well as lower costs associated with the facilities that closed in 2023 and sublease income earned on those closed facilities.

Six Months Ended June 30, 2024 compared to the Six Months Ended June 30, 2023

Net sales decreased by $2.5 million, or 5.6%, during the three months ended September 30, 2024 compared to the three months ended September 30, 2023, primarily due to the sale of our Lubbock operations, partially offset by higher precious metals pass-through pricing and pricing.

Income from operations decreased by $1.4 million during the three months ended September 30, 2024 compared to the same period in the prior year, primarily due to the lower revenue resulting from the sale of the Lubbock operations and unfavorable product mix.

Nine Months Ended September 30, 2024 compared to the Nine Months Ended September 30, 2023

Consolidated Results

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 $ Change

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Depreciation and amortization 35,152 34,643 509

Other operating expense (income), net (2,390) 105 (2,495)

Other operating income, net (3,285) (526) (2,759)

Loss from operations (10,680) (13,861) 3,181

Interest expense 16,643 15,484 1,159

Other expense, net 692 3,433 (2,741)

Other expense (income), net (4,623) 1,970 (6,593)

Loss before provision for income taxes and share of net income from joint venture (22,700) (31,315) 8,615

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Net loss $ (17,297) $ (29,609) $ 12,312

Net sales decreased by $8.1 million, or 3.2%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to reduced volume, lower customer settlements and unfavorable foreign exchange effects of $0.9 million.

These decreases were partially offset by the net impact of contractual pricing provisions.

Net sales decreased by $19.0 million, or 5.0%, during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to he sale of our Lubbock operations, customer settlements received in 2023, rationalized volume at plants undergoing turnarounds and unfavorable foreign exchange effects of $1.9 million.

These decreases were partially offset by the net impact of contractual pass-through material pricing provisions.

Cost of Sales.

Cost of sales decreased by $13.8 million, or 6.4%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to lower sales volume and lower labor costs associated with facility closures.

Cost of sales decreased by $21.2 million, or 6.6%, during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to lower sales volume and lower labor costs associated with facility closures.

Selling, General, and Administrative Expense.

Selling, general, and administrative expense increased by $2.7 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to higher incentive compensation, stock compensation, travel and marketing costs.

Other Operating Expense (Income), Net.

Other operating expense (income), net changed favorably by $2.5 million primarily due to sublease income earned on closed facilities.

Selling, general, and administrative expense increased by $1.3 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to higher travel and stock compensation expense, partially offset by lower salaries due to a reduction in headcount.

Other Operating Income, Net.

Other operating income, net changed favorably by $2.8 million primarily due to increased sublease income earned on closed facilities.

Interest Expense.

Interest expense increased by $1.5 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to higher debt balances and higher average interest rates.

Six Months Ended June 30,

Interest expense increased by $1.2 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to higher average interest rates, a decrease in the gain recognized on interest rate swap and an increase in the amortization of debt issuance costs.

Nine Months Ended September 30,

Interest on debt $ 16,345 $ 16,007

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Total interest expense $ 16,643 $ 15,484

Other Expense, Net.

Other expense, net decreased by $2.7 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to noncash derivative mark-to-market gains recognized during the first two quarters of 2024 compared to losses recognized during the first two quarters of 2023.

This decrease was partially offset by unfavorable foreign exchange effects associated with intercompany borrowings.

Other Expense (Income), Net.

Other expense (income), net changed favorably by $6.6 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to the $7.2 million gain on sale of the Lubbock operations, partially offset by unfavorable foreign exchange effects associated with intercompany borrowings.

Benefit (Provision) for Income Taxes.

Our effective tax rate was (1.5)% for the six months ended June 30, 2024, compared to (6.7)% for the six months ended June 30, 2023.

The rate for the six months ended June 30, 2024 was unfavorably impacted due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by the limitation on the amount of tax benefit recorded for losses in certain jurisdictions where we believe it is more likely than not that a future tax benefit may not be realized.

Our effective tax rate was (5.3)% for the nine months ended September 30, 2024, compared to (4.4)% for the nine months ended September 30, 2023.

The rate for the nine months ended September 30, 2024 was unfavorably impacted due to the accrual of tax on non-permanently reinvested unremitted earnings of foreign subsidiaries and by the limitation on the amount of tax benefit recorded for losses in certain jurisdictions where we believe it is more likely than not that a future tax benefit may not be realized.

The effective tax rate was favorably impacted by return to provision adjustments in certain foreign jurisdictions and an amended return in a state jurisdiction.

Share of Net Income from Joint Venture.

Share of net income from the JV increased by $3.0 million during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due to higher sales partially offset by higher

fixed costs, depreciation and interest expense.

The JV, in which we own a 49% investment, recognized net sales of $62.7 million and $45.6 million for the six months ended June 30, 2024 and 2023, respectively.

Share of net income from the JV increased by $3.5 million during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to higher sales and increased margin partially offset by higher fixed costs, depreciation and interest expense.

The JV, in which we own a 49% investment, recognized net sales of $95.1 million and $75.9 million for the nine months ended September 30, 2024 and 2023, respectively.

Results by Segment

MOBILE SOLUTIONS

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 $ Change

1 unchanged sentence

Loss from operations $ (5,214) $ (6,063) $ 849

Net sales decreased by $9.3 million, or 6.0%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, primarily due lower volume at facilities undergoing turnarounds, contractual reduction in customer pricing and unfavorable foreign exchange effects.

Loss from operations decreased by $1.0 million during the six months ended June 30, 2024 compared to the same period in the prior year, primarily due to a reduction of indirect manufacturing costs related to actions taken in 2023 to optimize plant operations.

These decreases were partially offset by the impact of lower sales and higher depreciation expense.

Net sales decreased by $17.5 million, or 7.5%, during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due rationalized volume at plants undergoing turnarounds, contractual reduction in customer pass-through material pricing, a customer settlement received in 2023 and unfavorable foreign exchange effects of $1.8 million.

Loss from operations changed favorably by $0.8 million during the nine months ended September 30, 2024 compared to the same period in the prior year, primarily due to a reduction of indirect manufacturing costs related to actions taken in 2023 to optimize plant operations.

These decreases were partially offset by the impact of lower sales, impact of the customer settlement in the 2023 and higher depreciation expense.

POWER SOLUTIONS

Six Months Ended June 30,

Nine Months Ended September 30,

2024 2023 $ Change

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Income from operations $ 11,804 $ 8,266 $ 3,538

Net sales increased by $1.3 million, or 1.3%, during the six months ended June 30, 2024, compared to the six months ended June 30, 2023, due to higher precious metals pass-through pricing and higher volumes, partially offset by premium pricing received on a certain customer project during the first quarter of 2023.

Income from operations increased by $5.0 million during the six months ended June 30, 2024 compared to the same period in the prior year, primarily due to lower costs associated with the facilities that closed in the second quarter of 2023 and sublease income earned on those closed facilities.

Changes in Financial Condition from December 31, 2023 to June 30, 2024

From December 31, 2023 to June 30, 2024, total assets decreased by $13.7 million primarily due to decreases in property, plant and equipment and intangible assets due to depreciation and amortization.

Additionally, accounts receivable, inventory and property, plant and equipment decreased due to the classification of the IMC assets as held for sale, which were offset by increases in other current and noncurrent assets.

From December 31, 2023 to June 30, 2024, total liabilities decreased by $4.6 million, primarily due to a decrease in other non-current liabilities due to the exercise of warrants in 2024, partially offset by an increase in long-term debt.

Working capital, which consists of current assets less current liabilities, was $94.4 million as of June 30, 2024, compared to $100.9 million as of December 31, 2023.

The decrease in working capital was primarily due to increases accounts payable and in the current maturities of long-term debt.

Cash used in operations was $0.6 million for the six months ended June 30, 2024, compared with cash provided by operations of $8.6 million for the six months ended June 30, 2023.

The unfavorable change was due to an increase in accounts receivable due to higher revenue in the second quarter of 2024 compared with the fourth quarter of 2023, a decrease in inventory during the first half of 2023 and an increase in accounts payable during the first half of 2023.

Cash used in investing activities decreased by $0.6 million primarily due to the lower expenditures for property, plant and equipment, partially offset by proceeds from the sale of equipment at the Taunton and Irvine facilities in the first half of 2023.

Cash provided by financing activities decreased by $0.7 million primarily due to higher repayments of long-term debt and debt issuance costs, partially offset by proceeds from the sale-leaseback transactions and proceeds from international loans in 2023.

Net sales decreased by $1.3 million, or 0.9%, during the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023, primarily due to the sale of our Lubbock operation and premium pricing received on a certain customer project during the first quarter of 2023.

These decreases were partially offset by higher precious metals pass-through pricing and higher volumes.

Income from operations increased by $3.5 million during the nine months ended September 30, 2024 compared to the same period in the prior year, primarily due to lower costs associated with the facilities that closed in the second quarter of 2023 and increased sublease income earned on those closed facilities in 2024.

Changes in Financial Condition from December 31, 2023 to September 30, 2024

From December 31, 2023 to September 30, 2024, total assets decreased by $27.8 million primarily due to decreases in property, plant and equipment and intangible assets due to depreciation and amortization.

Additionally, accounts receivable, inventory and property, plant and equipment decreased due to the sale of our Lubbock operations during the quarter.

These decreases were partially offset by increases in our investment in a joint venture.

From December 31, 2023 to September 30, 2024, total liabilities decreased by $20.8 million, primarily due to a decrease in other non-current liabilities due to the exercise of warrants in 2024 and a reduction in long-term debt due to the partial pay down of the outstanding balance with proceeds from the sale of our Lubbock operations.

These decreases were partially offset by an increase in other current liabilities.

Working capital, which consists of current assets less current liabilities, was $85.3 million as of September 30, 2024, compared to $100.9 million as of December 31, 2023.

The decrease in working capital was primarily due to increases in the current maturities of long-term debt and an increase in other current liabilities.

Cash provided by operations was $4.4 million for the nine months ended September 30, 2024, compared with $23.9 million for the nine months ended September 30, 2023.

The decrease was due to an increase in accounts receivable, a decrease in inventory during the first half of 2023 and an increase in accounts payable during the first half of 2023.

In addition, the Company received a $3.9 million dividend from the JV in the third quarter of 2023.

Cash provided by investing activities was $1.9 million for the nine months ended September 30, 2024, compared with cash used in investing activities of $13.4 million for the nine months ended September 30, 2023.

The favorable change is primarily due to the $17.0 million received for the sale of the Lubbock operations during 2024.

Cash used in financing activities increased by $14.4 million during the nine months ended September 30, 2024 compared to the same period in 2023, primarily due to higher repayments of long-term debt and debt issuance costs in 2024, partially offset by proceeds from the sale-leaseback transactions in 2024 and proceeds from international loans in 2023.

Liquidity and Capital Resources

Credit Facilities

The principal amount outstanding under our Term Loan Facility as of June 30, 2024, was $129.4 million, without regard to unamortized debt issuance costs and discount.

As of June 30, 2024, we had $27.0 million available for future borrowings under the ABL Facility.

This amount of borrowing capacity is net of $9.9 million of outstanding letters of credit at June 30, 2024, which are considered as usage of the ABL Facility.

The principal amount outstanding under our Term Loan Facility as of September 30, 2024, was $114.2 million, without regard to unamortized debt issuance costs and discount.

As of September 30, 2024, we had $21.9 million available for future borrowings under the ABL Facility.

This amount of borrowing capacity is net of $9.9 million of outstanding letters of credit at September 30, 2024, which are considered as usage of the ABL Facility.

The Term Loan Facility requires quarterly principal payments of $0.4 million with the remaining unpaid principal amount due on the final maturity date of September 22, 2026.

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Outstanding borrowings under the Term Loan Facility bear interest at either:

1) one-month, three-month, or six-month Adjusted SOFR, subject to a 1.00% floor, plus an applicable margin of 6.875%;

1) one-month, three-month, or six-month Adjusted Term SOFR, subject to a 1.00% floor, plus an applicable margin of 6.875%;

or 2) the greater of various benchmark rates plus an applicable margin of 5.875%.

Beginning with the second quarter of 2023, interest is increased on a paid-in-kind basis at a rate between 1.00% and 2.00%, dependent on the our leverage ratio.

Based on the interest rate in effect at June 30, 2024, annual cash interest payments would be approximately $16.3 million.

Beginning with the second quarter of 2023, interest is increased on a paid-in-kind basis at a rate between 1.00% and 2.00%, dependent on our net leverage ratio, for the most recently reported fiscal quarter and subject to reduction upon the occurrence of certain conditions as set forth in the credit agreement governing the Term Loan Facility.

Based on the interest rate in effect at September 30, 2024, annual cash interest payments would be approximately $16.9 million.

The ABL Facility bears interest on a variable borrowing rate based on either:

1) Adjusted SOFR plus an applicable margin of 1.75% or 2.00%, depending on availability;

1) Adjusted Term SOFR plus an applicable margin of 1.75% or 2.00%, depending on availability;

or 2) the greater of the federal funds rate or prime, plus an applicable margin of 0.75% or 1.00%, depending on availability.

We pay a commitment fee of 0.375% for unused capacity under the ABL Facility.

We were in compliance with all requirements under our Term Loan Facility and ABL Facility as of June 30, 2024.

We were in compliance with all requirements under our Term Loan Facility and ABL Facility as of September 30, 2024.

Both credit facilities allow for optional expansion of available borrowings, subject to certain terms and conditions.

Sale Leaseback Transactions

During the six months ended June 30, 2024, we entered into several sale-leaseback transactions.

During the nine months ended September 30, 2024, we entered into several sale-leaseback transactions.

We received $16.9 million from the sale and leaseback of three properties, with the net proceeds used to repay a portion of the outstanding borrowings under the Term Loan Facility.

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In 2021, we filed a refund claim with the IRS as a result of the Coronavirus Aid, Relief, and Economic Security Act.

Including interest accrued on the initial refund amount, we have a $11.9 million tax refund receivable at June 30, 2024, which is in the process of IRS review and approval.

The timing of the receipt of the refund remains uncertain.

Including interest accrued on the initial refund amount, we have a $12.1 million tax refund receivable at September 30, 2024, which is in the process of IRS review and approval.

The timing of the receipt of the refund is expected in the first half of 2025.

Seasonality and Fluctuation in Quarterly Results

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Critical Accounting Estimates

Our critical accounting policies, including the assumptions and judgments underlying them, are disclosed in the 2023 Annual Report, including those policies as discussed in Note 1 to the Notes to Consolidated Financial Statements included in the 2023 Annual Report.

There have been no material changes to these policies during the six months ended June 30, 2024.

Our significant accounting policies, including the assumptions and judgments underlying them, are disclosed in Note 1 of the Notes to Consolidated Financial Statements included in the 2023 Annual Report.

Our most critical accounting estimates are discussed in the Management’s Discussion and Analysis of Financial Condition and Results of Operations included in the 2023 Annual Report.

There have been no material changes to our significant accounting policies or critical accounting estimates during the nine months ended September 30, 2024.

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