What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-02 compared with 2023-08-09 · 79 added, 83 removed, 247 unchanged (40% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition during the three and six months ended June 30, 2023 and 2022 and should be read in conjunction with the information included under Item 1.

The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition during the three and nine months ended September 30, 2023 and 2022 and should be read in conjunction with the information included under Item 1.

Financial Statements and Supplementary Data (Unaudited) elsewhere in this report.

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Reconciliation of Gross profit per metric ton:

Three Months Ended June 30, Six Months Ended June 30,

(In millions, except volume and per metric ton data) Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 Delta 2023 2022 Delta

(In millions) % (In millions) %

Net sales $ 466.2 $ 543.1 $ (76.9) (14.2) $ 1,425.7 $ 1,568.8 $ (143.1) (9.1)

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Reconciliation of Net income to Adjusted EBITDA:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 Delta 2023 2022 Delta

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The table below presents our historical results derived from our Condensed Consolidated Financial Statements for the periods indicated.

Three Months Ended June 30, Year-Over Year

Three Months Ended September 30, Year-Over Year

2023 2022 Delta

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Research and development costs 6.2 4.5 1.7 37.8

Other (income) expenses, net (2.7) 1.3 (4.0) (307.7)

Other expenses, net 2.7 0.3 2.4 800.0

Income from operations 45.7 53.6 (7.9) (14.7)

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Comprehensive income $ 25.7 $ 34.9 $ (9.2) (26.4)

Net sales decreased by $82.4 million, or 15.2%, in the second quarter of 2023 to $458.8 million, compared to the second quarter of 2022, primarily driven by the pass-through effect of declining oil prices and lower volume in both segments.

Those were partially offset by improved contractual Rubber carbon black pricing.

Volume in both segments decreased in aggregate by 24.1 kmt in the second quarter of 2023 to 227.3 kmt, compared to the second quarter of 2022.

The global economic slowdown impacted both segments.

Net sales decreased by $76.9 million, or 14.2%, in the third quarter of 2023 to $466.2 million, compared to the third quarter of 2022, primarily driven by the pass-through effect of declining oil prices in both segments.

Those were partially offset by improved contractual pricing and favorable foreign exchange impact.

Volume increased in aggregate by 1.9 kmt in the third quarter of 2023 to 245.2 kmt, compared to the third quarter of 2022 due to higher volume in the Specialty Carbon Black segment, partly offset by lower volume in the Rubber Carbon Black segment.

Cost of sales

Cost of sales decreased by $79.7 million, or 18.9%, to $341.7 million in the second quarter of 2023, compared to the second quarter of 2022 primarily due to lower volume and the effect of declining oil prices.

Cost of sales decreased by $72.7 million, or 17.0%, to $356.0 million in the third quarter of 2023, compared to the third quarter of 2022 primarily due to the effect of declining oil prices.

Gross profit decreased by $4.2 million, or 3.7%, to $110.2 million, year over year.

The decrease was primarily driven by lower volume in both segments, partially offset by improved contractual Rubber carbon black pricing.

Gross profit per metric ton increased by 8.1% to $515.2, year over year, driven by improved contractual Rubber carbon black pricing.

The decrease was primarily driven by lower volume in Rubber Carbon Black segment and lower margin in the Specialty Carbon Black segment.

Gross profit per metric ton decreased by 4.4% to $449.4, year over year, driven by lower margin primarily in the Specialty carbon black pricing.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased by $4.7 million or 7.9% to $55.0 million in the second quarter of 2023 compared to the second quarter of 2022, primarily driven by lower freight costs due to lower volume in both segments.

Selling, general and administrative expenses remained flat in the third quarter of 2023 compared to the third quarter of 2022.

Provision for income taxes

For the three months ended June 30, 2023, the Company recognized Income before earnings in affiliated companies and income taxes of $47.7 million, compared to $42.4 million in the three months ended June 30, 2022.

The provision for income taxes was an expense of $17.8 million and $12.8 million for the three months ended June 30, 2023 and 2022, respectively.

The effective tax rate for the three months ended June 30, 2023, was 37.3%, as compared to 30.1% for the three months ended June 30, 2022.

The increase in our effective tax rate for three months ended June 30, 2023, as compared to the three months ended June 30, 2022, was primarily attributable to the

For the three months ended September 30, 2023, the Company recognized Income before earnings in affiliated companies and income taxes of $35.0 million, compared to $43.4 million in the three months ended September 30, 2022.

The provision for income taxes was an expense of $8.9 million and $11.7 million for the three months ended September 30, 2023 and 2022, respectively.

The effective tax rate for the three months ended September 30, 2023, was 25.4%, as compared to 27.0% for the three months ended September 30, 2022.

The decrease in our effective tax rate for three months ended September 30, 2023, as compared to the three months ended September 30, 2022, was primarily

Management’s Discussion and Analysis of Financial Condition and Results of Operation

projected earnings mix by geography and tax jurisdiction as compared to the prior period.

attributable to changes in projected pre-tax income mix in countries with varying statutory tax rates.

Adjusted EBITDA (A Non-GAAP Financial Measure)

Adjusted EBITDA increased in the second quarter of 2023 by $3.9 million, or 4.7%, to $87.3 million, year over year.

The increase was driven by favorable pricing and product mix in Rubber Carbon Black segment, partially offset by lower volume in both segments and decreased cogeneration revenue, a byproduct.

Adjusted EBITDA decreased in the third quarter of 2023 by $3.2 million, or 4.0%, to $77.3 million, year over year.

The decrease was driven by lower volume in the Rubber Carbon Black segment and lower cogeneration profitability in both segments, a byproduct, partially offset by improved contractual pricing.

Comprehensive Income

Comprehensive income increased by $3.5 million in the second quarter of 2023 compared to the second quarter of 2022.

Comprehensive income decreased by $9.2 million in the third quarter of 2023 compared to the third quarter of 2022.

The activities from the components of Comprehensive income are discussed below:

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• $1.9 million of net unfavorable changes in defined pension and other post-retirement benefits.

Additionally, Net income increased by $0.4 million in the second quarter of 2023 compared to the second quarter of 2022.

For the six months ended June 30, 2023 compared to six months ended June 30, 2022

Condensed Consolidated Statement of Operations Data Six Months Ended June 30, Year-Over Year

Additionally, Net income decreased by $5.6 million in the third quarter of 2023 compared to the third quarter of 2022.

For the nine months ended September 30, 2023 compared to nine months ended September 30, 2022

Condensed Consolidated Statement of Operations Data Nine Months Ended September 30, Year-Over Year

2023 2022 Delta

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Research and development costs 18.3 15.9 2.4 15.1

Other (income) expenses, net (3.7) 1.6 (5.3) (331.3)

Other expenses, net (1.0) 1.9 (2.9) (152.6)

Income from operations 178.1 161.1 17.0 10.6

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Comprehensive income $ 80.5 $ 111.8 $ (31.3) (28.0)

Net sales decreased by $66.2 million, or 6.5%, in the six months ended June 30, 2023 to $959.5 million, year over year, driven primarily by lower volume, the pass-through effect of declining oil prices and unfavorable foreign currency translation adjustments.

Those were partially offset by favorable product mix in both segments and improved contractual Rubber carbon black price.

Volume decreased by 43.8 kmt to 460.8 kmt compared to the six months ended June 30, 2022.

The global economic slowdown impacted both segments.

Net sales decreased by $143.1 million, or 9.1%, in the nine months ended September 30, 2023 to $1,425.7 million, year over year, driven primarily by the pass-through effect of declining oil prices and lower volume in both segments.

Those were partially offset by improved contractual pricing and favorable product mix in the Rubber Carbon Black segment.

Volume decreased by 41.9 kmt to 706.0 kmt compared to the nine months ended September 30, 2022.

Cost of sales

Cost of sales decreased by $82.0 million, or 10.4%, to $706.0 million and in the six months ended June 30, 2023 compared to the six

Cost of sales decreased by $154.7 million, or 12.7%, to $1,062.0 million and in the nine months ended September 30, 2023 compared to the

Management’s Discussion and Analysis of Financial Condition and Results of Operation

months ended June 30, 2022, primarily due to lower volume and the effect of declining oil prices.

nine months ended September 30, 2022, primarily due to the effect of declining oil prices and lower volume.

Gross profit increased by $11.6 million, or 3.3%, to $363.7 million, and gross profit per metric ton increased by 9.4% to $515.2 year over year.

The increase was primarily driven by favorable product mix in both segments and improved contractual Rubber carbon black price, partially offset by lower volume in both segments.

The increase was primarily driven by improved contractual pricing and favorable product mix in the Rubber Carbon Black segment, partially offset by lower volume in both segments.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased by $4.5 million, or 3.8%, to $112.7 million in the six months ended June 30, 2023 compared to the six months ended June 30, 2022, primarily driven by lower freight costs due to lower volume in both segments.

Selling, general and administrative expenses decreased by $4.9 million, or 2.8%, to $168.3 million in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022, primarily driven by lower freight costs due to lower volume in both segments.

Provision for income taxes

For the six months ended June 30, 2023, the Company recognized Income before earnings in affiliated companies and income taxes of $108.2 million, compared to $88.6 million in the six months ended June 30, 2022.

The provision for income taxes was an expense of $36.1 million for the six months ended June 30, 2023, and $26.6 million for the six months ended June 30, 2022.

The effective tax rate for the six months ended June 30, 2023, was 33.4%, as compared to 30.0% for the six months ended June 30, 2022.

The increase in our effective tax rate for the six months ended June 30, 2023, as compared to the six months ended June 30, 2022, was primarily attributable to the projected earnings mix by geography and tax jurisdiction as compared to the prior period.

For the nine months ended September 30, 2023, the Company recognized Income before earnings in affiliated companies and income taxes of $143.2 million, compared to $132.0 million in the nine months ended September 30, 2022.

The provision for income taxes was an expense of $45.0 million and $38.3 million for the nine months ended September 30, 2023 and September 30, 2022, respectively.

The effective tax rate for the nine months ended September 30, 2023, was 31.4%, as compared to 29.0% for the nine months ended September 30, 2022.

The increase in our effective tax rate for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022, was primarily attributable to changes in projected pre-tax income mix in countries with varying statutory tax rates.

Adjusted EBITDA (A Non-GAAP Financial Measure)

Adjusted EBITDA increased by $21.8 million, or 13.1%, from $166.6 million in the six months ended June 30, 2022 to $188.4 million in the six months ended June 30, 2023.

The increase was primarily due to favorable product mix in both segments and improved contractual Rubber carbon black price.

Those were partially offset by lower volume in both segments.

Adjusted EBITDA increased by $18.6 million, or 7.5%, from $247.1 million in the nine months ended September 30, 2022 to $265.7 million in the nine months ended September 30, 2023.

The increase was primarily due to improved contractual pricing and favorable product mix in the Rubber Carbon Black segment.

Those were partially offset by lower volume and cogeneration profitability in both segments.

Comprehensive Income

Comprehensive income decreased by $22.1 million in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

Comprehensive income decreased by $31.3 million in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

The activities from the components of Comprehensive income are discussed below:

• $5.5 million of net unfavorable impacts of unrealized changes in foreign currency translation adjustments.

• $2.5 million of net favorable impacts of unrealized changes in foreign currency translation adjustments.

• $33.4 million of net unfavorable impacts related to financial derivative instruments primarily driven by net periodic changes in cross currency and interest rate swaps, and

• $5.0 million of net unfavorable changes in defined pension and other post-retirement benefits.

These decreases were partially offset by $10.2 million of higher net income in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

These decreases were partially offset by $4.6 million of higher net income in the nine months ended September 30, 2023 compared to the nine months ended September 30, 2022.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

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The table below presents our segment results derived from our unaudited Condensed Consolidated Financial Statements for the periods indicated.

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 Delta 2023 2022 Delta

(In millions) % (In millions) %

Three Months Ended September 30, Nine Months Ended September 30,

(In millions, except volume and percentage data) 2023 2022 Delta 2023 2022 Delta

Specialty Carbon Black

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Specialty Carbon Black

Net sales decreased by $32.4 million, or 17.8%, year over year, to $149.5 million and decreased by $48.0 million, or 13.4%, year over year, to $311.5 million for the three and six months ended June 30, 2023, respectively.

The net sales decrease in both comparative periods was primarily driven by reduced volume and oil prices.

Volume decreased by 6.1 kmt, or 10.2%, year over year, to 53.6 kmt and decreased by 18.7 kmt, or 14.9% year over year, to 106.6 kmt for the three and six months ended June 30, 2023, respectively.

Volumes in both comparative periods were lower primarily due to weakness in most end-markets.

Gross profit decreased by $18.0 million, or 29.7%, year over year, to $42.6 million, and decreased by $23.5 million, or 19.9%, year over year, to $94.7 million for the three and six months ended June 30, 2023, respectively.

The gross profit decrease in both comparative periods was primarily driven by the global economic slowdown, which resulted in lower volume.

Adjusted EBITDA decreased by $15.5 million, or 34.1%, year over year, to $29.9 million, and decreased by $20.7 million, or 23.5%, year over year, to $67.2 million for the three and six months ended June 30, 2023, respectively.

The decrease in both comparative periods was primarily due to the global economic slowdown, which resulted in lower volume, product mix and decreased cogeneration revenue, a byproduct.

End-market pricing was stable.

Adjusted EBITDA margin decreased by 500 basis points, year over year, to 20.0% and by 290 basis points, year over year, to 21.6% for the three and six months ended June 30, 2023, respectively.

Rubber Carbon Black

Net sales decreased by $50.0 million, or 13.9%, year over year, to $309.3 million and decreased by $18.2 million, or 2.7%, year over year, to $648.0 million for the three and six months ended June 30, 2023, respectively.

The decrease in both comparative periods was primarily due to lower volume and oil prices, partially offset by improved contractual Rubber carbon black price and favorable product mix.

Volume decreased by 18.0 kmt, or 9.4%, year over year, to 173.7 kmt and decreased by 25.1 kmt, or 6.6%, year over year, to 354.2 kmt, for

Net sales decreased by $19.2 million, or 11.3%, year over year, to $150.4 million for the three months ended September 30, 2023, primarily driven by the pass-through effect of declining oil prices.

Net sales decreased by $67.2 million, or 12.7%, year over year, to $461.9 million for the nine months ended September 30, 2023, primarily driven by the pass-through effect of declining oil prices and lower volume.

Volume increased by 7.6 kmt, or 14.5%, year over year, to 59.9 kmt for the three months ended September 30, 2023, primarily due to ramp up of our Huaibei facility.

Volumes decreased by 11.1 kmt, or 6.3% year over year, to 166.5 kmt for the nine months ended September 30, 2023, primarily due to weakness in certain end-markets.

Gross profit decreased by $6.2 million, or 13.8%, year over year, to $38.6 million, and decreased by $29.7 million, or 18.2%, year over year, to $133.3 million for the three and nine months ended September 30, 2023, respectively.

The gross profit decrease in both comparative periods was primarily driven by the lower margin due to lower demand and lower volume in the first half of 2023.

Adjusted EBITDA decreased by $5.0 million, or 16.1%, year over year, to $26.1 million, for the three September 30, 2023, primarily due to lower demand, which resulted in unfavorable product mix and lower cogeneration profitability.

Adjusted EBITDA decreased by $25.7 million, or 21.6%, year over year, to $93.3 million for the nine months ended September 30, 2023.

The decrease was primarily due to lower demand, which resulted in lower volume, unfavorable product mix and lower cogeneration profitability.

Adjusted EBITDA margin decreased by 90 basis points, year over year, to 17.4% and by 230 basis points, year over year, to 20.2% for the three and nine months ended September 30, 2023, respectively.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

the three and six months ended June 30, 2023, respectively due to the global economy slowdown in both comparative periods.

Gross profit increased by $15.3 million, or 25.8%, year over year, to $74.5 million, and increased by $39.3 million, or 32.9%, to $158.8 million for the three and six months ended June 30, 2023, respectively.

The increase in both comparative periods was primarily due to improved contractual price and favorable product mix.

Adjusted EBITDA increased by $19.4 million, or 51.1%, year over year, to $57.4 million, and increased by $42.5 million, or 54.0%, to $121.2 million for the three and six months ended June 30, 2023.

The increase was primarily due to contractual base price improvement, which resulted in improved gross profit margins, partially offset by lower volume and decreased cogeneration revenue, a byproduct.

For the three and six months ended June 30, 2023, Adjusted EBITDA margin rose 800 basis points to 18.6%, year over year, and 690 basis points to 18.7%, year over year, respectively.

Rubber Carbon Black

Net sales decreased by $57.7 million, or 15.4%, year over year, to $315.8 million and decreased by $75.9 million, or 7.3%, year over year, to $963.8 million for the three and nine months ended September 30, 2023, respectively.

The decrease in both comparative periods was primarily due to the pass-through effect of declining oil prices and lower volumes, partially offset by improved contractual pricing.

Volume decreased by 5.7 kmt, or 3.0%, year over year, to 185.3 kmt and decreased by 30.8 kmt, or 5.4%, year over year, to 539.5 kmt, for the three and nine months ended September 30, 2023, respectively, due to lower demand in both comparative periods.

Gross profit increased by $2.0 million, or 2.9%, year over year, to $71.6 million, and increased by $41.3 million, or 21.8%, to $230.4 million for the three and nine months ended September 30, 2023, respectively.

The increase in both comparative periods was primarily due to improved contractual pricing, partially offset by lower cogeneration profitability.

Adjusted EBITDA increased by $1.8 million, or 3.6%, year over year, to $51.2 million, and by $44.3 million, or 34.6%, to $172.4 million for the three and nine months ended September 30, 2023.

The increase was primarily due to improved contractual pricing, partially offset by lower volume and cogeneration profitability.

For the three and nine months ended September 30, 2023, Adjusted EBITDA margin rose 300 basis points to 16.2%, year over year, and 560 basis points to 17.9%, year over year, respectively.

Liquidity and Capital Resources

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The tables below present our historical cash flows derived from our unaudited Condensed Consolidated Financial Statements for the periods indicated.

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions)

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Net cash provided by (used in) financing activities (164.9) 167.4

Net cash provided by operating activities during the six months ended June 30, 2023 was $206.2 million.

Net cash provided by operating activities during the nine months ended September 30, 2023 was $273.7 million.

The cash provided by operating activities primarily reflects changes in working capital and higher Net income.

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Debt and Other Obligations.

Net cash used in investing activities in the six months ended June 30, 2023 amounted to $69.1 million.

Net cash used in investing activities in the nine months ended September 30, 2023 amounted to $111.0 million.

These expenditures were composed of a combination of safety, maintenance-related and growth investments, as well as $26.5 million of expenditures associated with our ongoing efforts to install emissions reduction technology to meet EPA requirements in the U.S.

Net cash used in financing activities during the six months ended June 30, 2023 amounted to $120.7 million.

Net cash used in financing activities during the nine months ended September 30, 2023 amounted to $164.9 million.

These outflows primarily consisted of $88.7 million related to the reduction of other short-term debt, $58.9 million for repurchase of common stock under the Stock Repurchase Program and $23.7 million, net related to repayment of our ancillary credit facilities.

Net cash used in operating activities for the six months ended June 30, 2022, amounted to $50.9 million.

Net cash used in operating activities for the nine months ended September 30, 2022, amounted to $16.7 million.

The cash used in operating activities primarily reflects changes in working capital and lower Net income.

Net cash used in investing activities for the six months ended June 30, 2022, amounted to $108.7 million.

Net cash used in investing activities for the nine months ended September 30, 2022, amounted to $167.1 million.

These expenditures were comprised of a combination of safety, maintenance-related, and growth investments, as well as expenditures associated with our ongoing efforts to install emissions reduction technology to meet EPA requirements in the U.S.

Net cash provided by financing activities for the six months ended June 30, 2022, amounted to $138.1 million.

Cash inflows during the six months of $126.1 million were primarily related to net drawings under our senior secured revolving credit facilities (“RCF”), $17.2 million borrowings to partially finance our Huaibei facility in China from Bank of China and $7.7 million of short-term working capital borrowings in Korea, partially offset by scheduled debt repayments.

Net cash provided by financing activities for the nine months ended September 30, 2022, amounted to $167.4 million.

Cash inflows during the nine months of $139.9 million were primarily related to net drawings under our senior secured revolving credit facilities (“RCF”), $35.3 million borrowings to partially finance our Huaibei facility in China from Bank of China and $7.0 million of short-term working capital borrowings in Korea, partially offset by scheduled debt repayments.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Sources of Liquidity

Our principal sources of liquidity are the net cash generated (i) from operating activities, primarily driven by our operating results and changes in working capital requirements and (ii) from financing activities, primarily driven by borrowing amounts available under our committed multicurrency, senior secured RCF and related ancillary facilities, various uncommitted local credit lines, and, from time to time, term loan borrowings and Accounts receivable factoring.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

We believe our anticipated future operating cash flows, the capacity under our existing credit facilities and uncommitted bilateral lines of credit, along with access to surety bonds, will be sufficient to finance our planned Capital expenditures, settle our commitments and contingencies, and address our normal anticipated working capital needs for the foreseeable future.

As of June 30, 2023, the company had total liquidity of $339.6 million, including cash and equivalents of $77.3 million, $205.0 million availability under our revolving credit facility, including ancillary lines, $16.2 million undrawn on the Term-loan for Huaibei, China, and $41.1 million of capacity under other available credit lines.

As of September 30, 2023, the company had total liquidity of $333.7 million, including cash and equivalents of $59.1 million, $234.4 million availability under our revolving credit facility, including ancillary lines, and $40.2 million of capacity under other available credit lines.

Net debt was $756.5 million, and Net leverage was 2.29x.

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The following table sets forth the principal components of our Net working capital as of the dates indicated.

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

(In millions)

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Conversely, decreases in the cost of raw materials lead to a decrease in our Net working capital requirements over the same period of time.

Our Net working capital decreased from $461.6 million as of December 31, 2022, to $367.9 million as of June 30, 2023.

Our Net working capital decreased from $461.6 million as of December 31, 2022, to $373.3 million as of September 30, 2023.

The drivers of the changes in working capital over the periods were:

• Accounts receivable, net —Improved payment terms and accounts receivables factoring of certain customers.

• Accounts receivable, net —Improved payment terms and factoring of certain accounts receivables.

Debt and Other Obligations to the accompanying Condensed Consolidated Financial Statements for further information related to the Company’s factoring agreements.

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Off-Balance Sheet Arrangements

As of June 30, 2023, we did not have any off-balance sheet arrangements.

As of September 30, 2023, we did not have any off-balance sheet arrangements.

Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

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• the status of contract negotiations with counterparties and the impact of new contracts on our growth;

• the implementation of our natural gas and other raw material consumption reduction contingency plan;

• the implementation of our natural gas and other raw material consumption reduction contingency plans;

• the demand for our specialty products;

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• any and all impacts from the Russian war against Ukraine and/or any escalation thereof as well as related energy shortages or other economic or physical impairments or disruptions;

• any and all impacts from the recent Hamas terror assaults against Israel as well as any reactions by Israel and any and all escalations of the Hamas/Israel conflict;

• the geopolitical events in the European Union (“EU”), relations amongst the EU member states as well as future relations between the EU and other countries and organizations;

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Quantitative and Qualitative Disclosures About Market Risk

Information about market risks for the period ended June 30, 2023 does not differ materially from that discussed under “ Item 7A” in our 2022 Form 10-K.

Information about market risks for the period ended September 30, 2023 does not differ materially from that discussed under “ Item 7A” in our 2022 Form 10-K.

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