Economic Risks
−Removed: The COVID-19 pandemic has adversely impacted our business, results of operations and financial position and could adversely impact our business, results of operations and financial position in the future.
−Removed: In 2020, the COVID-19 pandemic negatively impacted our business, results of operations and financial position.
−Removed: Most of our clients' businesses were negatively affected by the COVID-19 pandemic.
−Removed: As long as the COVID-19 pandemic remains a threat, global economic conditions will continue to be volatile and such uncertainty cuts across all clients, industries and geographies.
−Removed: Demand for our services can be expected to continue to be adversely affected as marketers reduce expenditures in the short term due to the uncertain impact of the pandemic on the global economy.
−Removed: The extent of the impact of the COVID-19 pandemic on our business will depend on numerous factors that we are not able to accurately predict, including the duration and scope of the pandemic, government actions to mitigate the effects of the pandemic, and the intermediate and long-term impact of the pandemic on marketers' spending plans.
Adverse economic conditions, a reduction in client spending, a deterioration in the credit markets or a delay in client payments could have a material effect on our business, results of operations and financial position.
Economic conditions have a direct impact on our business, results of operations and financial position.
−Removed: Adverse global or regional economic conditions, including those caused by the COVID-19 pandemic, pose a risk that clients may reduce, postpone or cancel spending on advertising, marketing and corporate communications projects.
−Removed: Such actions would reduce the demand for our services and could result in a reduction in our revenue, which would adversely affect our business, results of operations and
−Removed: financial position.
+Added: Adverse economic conditions, including those caused by the COVID-19 pandemic, severe and sustained inflation in countries that comprise our major markets, supply chain issues affecting the distribution of our clients’ products, or a disruption in the credit markets, pose a risk that clients may reduce, postpone or cancel spending on advertising, marketing and corporate communications projects.
+Added: Such actions would reduce the demand for our services and could result in a reduction in our revenue, which would adversely affect our
+Added: business, results of operations and financial position.
A contraction in the availability of credit may make it more difficult for us to meet our working capital requirements.
−Removed: In addition, a disruption in the credit markets could adversely affect our clients and could cause them to delay payment for our services or take other actions that would negatively affect our working capital.
+Added: In addition, a disruption in the credit markets could adversely affect our clients liquidity and could cause them to delay payment for our services or take other actions that would negatively affect our working capital.
In such circumstances, we may need to obtain additional financing to fund our day-to-day working capital requirements, which may not be available on favorable terms, or at all.
6 unchanged sentences
Where purchases of media and production services are made by our agencies as a principal or are not subject to the theory of sequential liability, the risk of a material loss as a result of payment default by our clients could increase significantly and such a loss could have a material adverse effect on our business, results of operations and financial position.
−Removed: In addition, our methods of managing the risk of payment default, including obtaining credit insurance, requiring payment in advance, mitigating the potential loss in the marketplace or negotiating with media providers, may be less available or unavailable during a severe economic downturn.
+Added: In addition, our methods of managing the risk of payment default, including obtaining credit insurance, requiring payment in advance, mitigating the potential loss in the marketplace or negotiating with media providers, may be insufficient, less available, or unavailable during a severe economic downturn.
+Added: The COVID-19 pandemic has negatively impacted our business, results of operations and financial position, and the COVID-19 pandemic or other similar public health crises could adversely impact our business, results of operations and financial position in the future.
+Added: The COVID-19 pandemic negatively impacted our business, results of operations and financial position in 2020 and through the first quarter of 2021, as most of our clients’ businesses were affected by the pandemic.
+Added: As long as the COVID-19 pandemic, including any existing or new variants, remains a public health threat, global economic conditions will continue to be volatile and such uncertainty cuts across all clients, industries and geographies.
+Added: Demand for certain of our service offerings may be adversely affected by new developments in the pandemic, including the emergence of new variants, or other similar public health crises.
+Added: The extent of the impact of the COVID-19 pandemic, or other similar public health crises, on our business will depend on numerous factors that we are not able to accurately predict.
Business and Operational Risks
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As a service business, our ability to attract and retain key personnel is an important aspect of our competitiveness.
−Removed: If we are unable to attract and retain key personnel, our ability to provide our services in the manner clients have come to expect may be adversely affected, which could harm our reputation and result in a loss of clients, which could have a material adverse effect on our business, results of operations and financial position.
+Added: If we are unable to attract and retain key personnel, our ability to provide our services in the manner clients have come to expect may be
+Added: adversely affected, which could harm our reputation and result in a loss of clients, which could have a material adverse effect on our business, results of operations and financial position.
The loss of several of our largest clients could have a material adverse effect on our business, results of operations and financial position.
3 unchanged sentences
We rely extensively on information technology systems, and cybersecurity incidents could adversely affect us.
−Removed: We rely on information technology systems and infrastructure to process, store and transmit data, summarize results, manage our business and maintain client advertising and marketing information.
+Added: We rely on information technology systems and infrastructure to connect with our clients, people and others and store business and financial data.
Increased cybersecurity threats and attacks, which are constantly evolving, pose a risk to our systems and networks.
For example, in February 2021, we experienced a cybersecurity incident that resulted in the disruption of certain of our information technology systems at one of our networks.
−Removed: Based on the information currently known and our investigation to date, we do not believe the incident will have a material impact on our business, operations or financial results.
+Added: Based on our investigation, the incident did not have a material impact on our business, results of operations or financial position.
However, cybersecurity threats and attacks in the future could be material.
1 unchanged sentence
We also have access to sensitive or personal data or information that is subject to privacy laws and regulations.
−Removed: Our systems and processes to protect against, detect, prevent, respond to and mitigate cybersecurity incidents and our organizational training for employees to develop an understanding of cybersecurity risks and threats may be unable to prevent material security breaches, theft, modification or loss of data, employee malfeasance and additional known and unknown threats.
−Removed: Such events could adversely affect our business and reputation.
+Added: Our systems and processes may be unable to prevent future material security breaches, and such breaches could adversely affect our business and reputation.
We also use third-party service providers, including cloud providers, to store, transmit and process data.
These third-party service providers could also be subject to cybersecurity incidents that could adversely affect us.
−Removed: In addition, in 2020 and continuing into 2021, the overwhelming majority of our workforce temporarily transitioned to working from home during the COVID-19 pandemic.
+Added: In addition, through 2021, the overwhelming majority of our workforce temporarily transitioned to working from home during the COVID-19 pandemic.
The increase in the number of our employees working from home may increase certain business and procedural control risks, including increased risk of cybersecurity incidents and exposure of sensitive business and client advertising and marketing information, as well as personal data or information.
8 unchanged sentences
As a global business we face certain risks of doing business internationally, and we are exposed to risks from operating in high-growth markets and developing countries, which could have a material adverse effect on our business, results of operations and financial position.
−Removed: The operational and financial performance of our international businesses are affected by global and regional economic conditions, competition for new business and staff, currency exchange rate fluctuations, political conditions, differing regulatory environments and other risks associated with extensive international operations.
+Added: The operational and financial performance of our international businesses are affected by global and regional economic conditions, competition for new business and staff, currency exchange rate fluctuations, political conditions, differing tax and regulatory environments and other risks associated with extensive international operations.
In addition, we conduct business in numerous high-growth markets and developing countries that tend to have longer billing collection cycles, currency repatriation restrictions and commercial laws that can be undeveloped, vague, inconsistently enforced, retroactively applied or frequently changed.
1 unchanged sentence
Additionally, our operations are subject to the United States Foreign Corrupt Practices Act and other anti-corruption and anti-bribery laws and regulations.
−Removed: These laws and regulations are complex and stringent, and any violation could have an adverse effect on our business and reputation.
+Added: These laws and regulations are complex and stringent, and any changes and violations could have an adverse effect on our business and reputation.
For financial information by geographic region, see Note 8 to the consolidated financial statements.
1 unchanged sentence
and the Euro Zone.
−Removed: On December 31, 2020, the U.K.
+Added: In 2020, the U.K.
completed its separation from the European Union, or E.U., (commonly referred to as “Brexit”) and entered into an agreement, or Brexit Agreement, with the E.U.
29 unchanged sentences
Specifically, these companies may seek to pass their increased costs through to their customers.
−Removed: Further, if our clients are impacted by such laws or requirements, either directly or indirectly, their spending for advertising and marketing services may decline, which could adversely impact our business, results of operations and financial position.
−Removed: Additionally, to comply with potential future changes in environmental laws and regulations, we may need to incur additional costs;
−Removed: therefore, at this time, we cannot estimate what impact such regulations may have on our business, results of operations and financial position.
+Added: If our clients are impacted by such laws or regulations, either directly or indirectly, their spending for advertising and marketing services may decline, which could adversely impact our business, results of operations and financial position.
+Added: Additionally, to comply with potential future changes in environmental laws and regulations, we may need to incur additional costs, which could impact our business, results of operations and financial position.
Unresolved Staff Comments
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.