What changed in this filing

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Item 1A. Risk Factors

2025-08-07 compared with 2025-05-07 · 62 added, 77 removed, 449 unchanged (24% of the section changed)

5 unchanged sentences

Our revenue is highly dependent on transaction volumes in the global travel industry, particularly air travel transaction volumes.

Our Travel Solutions and Hospitality Solutions revenue is largely tied to travel suppliers’ transaction volumes rather than to their unit pricing for an airplane ticket, hotel room or other travel products.

Our revenue is largely tied to travel suppliers’ transaction volumes rather than to their unit pricing for an airplane ticket, hotel room or other travel products.

This revenue is generally not contractually committed to recur annually under our agreements with our travel suppliers.

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We have in the past experienced, and may in the future experience, difficulties that could delay or prevent the successful development, marketing and implementation of platforms, enhancements, upgrades and additions.

Moreover, we may fail to

maintain, upgrade or introduce new products, services, technologies and systems as quickly as our competitors or in a cost-effective manner.

Moreover, we may fail to maintain, upgrade or introduce new products, services, technologies and systems as quickly as our competitors or in a cost-

effective manner.

For example, we must constantly update our products with new capabilities, such as New Distribution Capability, to adapt to the changing technological and regulatory environment and customer needs.

7 unchanged sentences

For example, migration of our enterprise applications and platforms to other hosting environments has caused us and will continue to cause us to incur substantial costs, and has resulted in and could in the future result in instability and business interruptions, which could materially harm our business.

Our industry is marked by rapid technological developments and innovations, such as the use of AI, and evolving industry standards, best practices, and related regulations.

See “—Any failure to comply with regulations or any changes in such regulations governing our businesses could adversely affect us.” Our competitors or other third parties may incorporate artificial intelligence ("AI") into their products more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations.

Our Travel Solutions business is exposed to pricing pressure from travel suppliers.

Our industry is marked by rapid technological developments and innovations, such as the use of artificial intelligence ("AI"), and evolving industry standards, best practices, and related regulations.

See “—Any failure to comply with regulations or any changes in such regulations governing our businesses could adversely affect us.” Our competitors or other third parties may incorporate AI into their products more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations.

Our business is exposed to pricing pressure from travel suppliers.

Travel suppliers continue to look for ways to decrease their costs and to increase their control over distribution.

For example, consolidation in the airline industry, the growth of LCC/hybrids and macroeconomic factors, among other things, have driven some airlines to negotiate for lower fees during contract renegotiations, thereby exerting increased pricing pressure on our Travel Solutions business, which, in turn, negatively affects our revenues and margins.

For example, consolidation in the airline industry, the growth of LCC/hybrids and macroeconomic factors, among other things, have driven some airlines to negotiate for lower fees during contract renegotiations, thereby exerting increased pricing pressure on our business, which, in turn, negatively affects our revenues and margins.

In addition, travel suppliers’ use of multiple distribution channels may also adversely affect our contract renegotiations with these suppliers and negatively impact our revenue.

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As a result of these sources of negotiating pressure, we have in the past and may in the future have to decrease our prices to retain their business.

If we are unable to renew our contracts with these travel suppliers on similar economic terms or at all, or if our ability to provide this content is similarly impeded, this would also adversely affect the value of our Travel Solutions business as a marketplace due to our more limited content.

If we are unable to renew our contracts with these travel suppliers on similar economic terms or at all, or if our ability to provide this content is similarly impeded, this would also adversely affect the value of our business as a marketplace due to our more limited content.

Our travel supplier customers may experience financial instability or consolidation, pursue cost reductions, change their distribution model or undergo other changes.

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Furthermore, supplier consolidation, particularly in the airline industry, could harm our business.

Our Travel Solutions business depends on a relatively small number of airlines for a substantial portion of its revenue, and all of our businesses are highly dependent on airline ticket volumes.

Our business depends on a relatively small number of airlines for a substantial portion of its revenue, and all of our businesses are highly dependent on airline ticket volumes.

Consolidation among airlines could result in the loss of an existing customer and the related fee revenue, decreased airline ticket volumes due to capacity restrictions implemented concurrently with the consolidation, and increased airline concentration and bargaining power to negotiate lower transaction fees.

See “—Our Travel Solutions business is exposed to pricing pressure from travel suppliers.”

See “—Our business is exposed to pricing pressure from travel suppliers.”

Our collection, processing, storage, use and transmission of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal requirements, differing views on data privacy, or security incidents.

We collect, process, store, use and transmit a large volume of personal data on a daily basis, including, for example, to process travel transactions for our customers and to deliver other travel-related products and services.

Personal data is

increasingly subject to legal and regulatory protections around the world, which vary widely in approach and which possibly conflict with one another.

Personal data is increasingly subject to legal and regulatory protections around the world, which vary widely in approach and which possibly

conflict with one another.

In recent years, for example, U.S.

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Implementation of software solutions often involves a significant commitment of resources, and any failure to deliver as promised on a significant implementation could adversely affect our business.

In our Travel Solutions and Hospitality Solutions businesses, the implementation of software solutions often involves a significant commitment of resources and is subject to a number of significant risks over which we may or may not have control.

In our business, the implementation of software solutions often involves a significant commitment of resources and is subject to a number of significant risks over which we may or may not have control.

These risks include:

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Significant delays or unsuccessful customer implementation projects could result in cancellation or renegotiation of existing agreements, claims from customers, harm our reputation and negatively impact our operating results.

Our Travel Solutions business depends on relationships with travel buyers.

Our Travel Solutions business relies on relationships with several large travel buyers, including travel management companies ("TMCs") and online travel agencies ("OTAs"), to generate a large portion of its revenue through bookings made by these travel companies.

Our business depends on relationships with travel buyers.

Our business relies on relationships with several large travel buyers, including travel management companies ("TMCs") and online travel agencies ("OTAs"), to generate a large portion of its revenue through bookings made by these travel companies.

This revenue concentration in a relatively small number of travel buyers makes us particularly dependent on factors affecting those companies.

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However, any reduction in transaction fees from travel suppliers due to supplier consolidation or other market forces could limit our ability to increase incentive consideration to travel agencies in a cost-effective manner or otherwise affect our margins.

Our Travel Solutions and Hospitality Solutions businesses depend on maintaining and renewing contracts with their customers and other counterparties.

In connection with our Travel Solutions and Hospitality Solutions businesses, we enter into contracts with travel buyers, travel suppliers and hotels.

Although most of our Travel Solutions travel buyer contracts have terms of one to three years, we typically have non-exclusive, five- to ten-year contracts with our major travel agency customers.

Our business depends on maintaining and renewing contracts with our customers and other counterparties.

In connection with our business, we enter into contracts with travel buyers, travel suppliers and hotels.

Although most of our travel buyer contracts have terms of one to three years, we typically have non-exclusive, five- to ten-year contracts with our major travel agency customers.

We also typically have three- to five-year contracts with corporate travel departments, which generally renew automatically unless terminated with the required advance notice.

A meaningful portion of our travel buyer agreements, typically representing approximately 15% to 20% of our bookings, are up for renewal in any given year.

Similarly, our Travel Solutions contracts with airline travel suppliers have a typical duration of three to seven years for larger airlines and one to three years for smaller airlines, and are generally subject to automatic renewal at the end of the term.

A meaningful portion of our travel buyer

agreements, typically representing approximately 15% to 20% of our bookings, are up for renewal in any given year.

Similarly, our contracts with airline travel suppliers have a typical duration of three to seven years for larger airlines and one to three years for smaller airlines, and are generally subject to automatic renewal at the end of the term.

Airlines are not typically contractually obligated to distribute exclusively through our GDS during the contract term and may terminate their agreements with us upon providing the required advance notice after the expiration of the initial term.

Our Hospitality Solutions business is based on contracts with hotels for a typical duration of three to five years, which are generally subject to automatic renewal at the end of the initial term unless terminated by either party with the required advance notice.

We cannot guarantee that we will be able to renew our Travel Solutions or Hospitality Solutions contracts in the future on favorable economic terms or at all, and the termination or expiration of these agreements could materially adversely impact our business.

See “—Our Travel Solutions business is exposed to pricing pressure from travel suppliers." Additionally, we use several third-party distributor partners and equity method investments to extend our GDS services in Europe, the Middle East, and Africa (“EMEA”) and Asia-Pacific (“APAC”).

The termination of our contractual arrangements with any of these third-party distributor partners and equity method investments could adversely impact our Travel Solutions business in the relevant regions.

We cannot guarantee that we will be able to renew our contracts in the future on favorable economic terms or at all, and the termination or expiration of these agreements could materially adversely impact our business.

See “—Our business is exposed to pricing pressure from travel suppliers." Additionally, we use several third-party distributor partners and equity method investments to extend our GDS services in Europe, the Middle East, and Africa (“EMEA”) and Asia-Pacific (“APAC”).

The termination of our contractual arrangements with any of these third-party distributor partners and equity method investments could adversely impact our business in the relevant regions.

See “—We rely on third-party distributor partners and equity method investments to extend our GDS services to certain regions, which exposes us to risks associated with lack of direct management control and potential conflicts of interest.” for more information on our relationships with our third-party distributor partners and equity method investments.

In addition, our failure to renew some or all of our Travel Solutions agreements on economically favorable terms or at all, or the early termination of these existing contracts, would adversely affect the value of our Travel Solutions business as a marketplace due to our limited content and distribution reach, which could cause some of our subscribers to move to a competing GDS or use other travel technology providers for the solutions we provide and would materially harm our business, reputation and brand.

In addition, our failure to renew some or all of our agreements on economically favorable terms or at all, or the early termination of these existing contracts, would adversely affect the value of our business as a marketplace due to our limited content and distribution reach, which could cause some of our subscribers to move to a competing GDS or use other travel technology providers for the solutions we provide and would materially harm our business, reputation and brand.

Our business therefore relies on our ability to renew our agreements with our travel buyers, travel suppliers, third-party distributor partners and equity method investments or developing relationships with new travel buyers and travel suppliers to offset any customer losses.

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The cost of compliance with PCI DSS is significant and may increase as the requirements change.

For example, the Payment Card Industry Security Standards Council has released version 4.0 of its Data Security Standard, and we are in the process of incorporating these new standards on our existing processes and controls.

We are assessed periodically for assurance and successfully completed our last annual assessment in October 2024.

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Moreover, regulatory authorities have relatively broad discretion to grant, renew and revoke licenses and approvals and to implement or interpret regulations.

Accordingly, these

regulatory authorities could prevent or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us if our practices were found not to comply with the applicable regulatory or licensing requirements or any interpretation of such requirements by the regulatory authority.

Accordingly, these regulatory authorities could prevent or temporarily suspend us from carrying on some or all of our activities or otherwise penalize us if our practices were found not to comply with the applicable regulatory or licensing requirements or any interpretation of such requirements by the regulatory authority.

In addition, we are subject to or affected by international, federal, state and local laws, regulations and policies, which are constantly subject to change.

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Our failure to comply with any of these requirements, interpretations, legislation or regulations could have a material adverse effect on our operations.

Further, the United States has imposed economic sanctions, and could impose further sanctions in the future, that affect transactions with designated countries, including but not limited to, Cuba, Iran, the Crimea, Donetsk and Luhansk regions of Ukraine, North Korea and Syria, and nationals and others of those countries, and certain specifically targeted individuals and entities engaged in conduct detrimental to U.S.

Ukraine, North Korea and Syria, and nationals and others of those countries, and certain specifically targeted individuals and entities engaged in conduct detrimental to U.S.

national security interests.

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These sanctions, export controls and related items, as well as actions taken by us or others in response to them or otherwise in connection with the military conflict, have adversely impacted, and in the future could further adversely impact, our business, results of operations and financial condition.

Effective October 30, 2022, Russian legislation and related regulations have required activities related to the development, creation and operation of automated information systems for processing domestic air transportation within the Russian Federation to be owned and operated by Russian residents or legal entities with no updates from or connection with systems abroad.

This legislation and these regulations have prohibited our ability to provide these services in Russia, which has negatively impacted our revenue and results.

On May 23, 2024, Russia issued a decree establishing a process for the seizure of assets of U.S.

Russian legislation and related regulations require activities related to the development, creation and operation of automated information systems for processing domestic air transportation within the Russian Federation to be owned and operated by Russian residents or legal entities with no updates from or connection with systems abroad.

This legislation and these regulations have prohibited us from providing these services in Russia, which has negatively impacted our revenue and results.

Russia has also issued a decree establishing a process for the seizure of assets of U.S.

companies and nationals in Russia, further limiting our ability to operate and provide services in Russia.

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We have voluntarily disclosed the receipt of these payments to the U.K.

Office of Financial Sanctions Implementation (OFSI).

to impose a penalty, we believe that it would not be material;

however, there can be no assurance of the amount of any such penalty.

Office of Financial Sanctions Implementation (OFSI), and we are currently cooperating with their review.

If OFSI were to impose a penalty, we do not believe that it would have a material adverse impact on our financial condition or results of operation;

however, there can be no assurance of the outcome of the matter.

We are exposed to risks associated with acquiring or divesting businesses or business operations.

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the diversion of our management’s attention from our existing business to integrate operations and personnel;

possible material adverse effects on our results of operations during the integration process;

possible material adverse effects

on our results of operations during the integration process;

becoming subject to contingent or other liabilities, including liabilities arising from events or conduct predating the acquisition that were not known to us at the time of the acquisition;

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Failure to timely complete or to consummate a divestiture may negatively affect the valuation of the affected business or business operations or result in restructuring charges.

For example, we have entered into a definitive agreement regarding the Hospitality Solutions Sale.

See “Recent Developments Affecting our Results of Operations— Agreement to Sell Hospitality Solutions Business.” The Hospitality Solutions Sale is expected to close by the end of the third quarter of 2025, subject to customary closing conditions and regulatory approvals.

We may not be able to achieve the full strategic, financial, operational, and other benefits that are expected to result from the Hospitality Solutions Sale, including any expected optimization of our core business, long-term growth, improvements in our capital structure, future debt refinancings, and other business opportunities that may be facilitated by the Hospitality Solutions Sale.

For example, during the third quarter of 2025, we sold our Hospitality Solutions business.

See “Recent Developments Affecting our Results of Operations— Sale of Hospitality Solutions Business.” We may not be able to achieve the full strategic, financial, operational, and other benefits that are expected to result from the sale of the Hospitality Solutions business, including any expected optimization of our core business, long-term growth, improvements in our capital structure, future debt refinancings, and other business opportunities that may be facilitated by the sale of the Hospitality Solutions business.

In addition, these benefits may be delayed or less significant than anticipated.

We cannot predict with certainty when the benefits expected from the Hospitality Solutions Sale will occur or the extent to which they will be achieved, or when they will be achieved, if at all.

A failure to realize these and other anticipated benefits of the Hospitality Solutions Sale or effectively utilize the proceeds from the Hospitality Solutions Sale could have an adverse impact our business, financial condition and results of operations.

As noted above, the Hospitality Solutions Sale is subject to customary closing conditions and regulatory approvals.

If any condition to the closing of the Hospitality Solutions Sale is not satisfied or, if permissible, waived, or if we fail to obtain any necessary regulatory approval, the Hospitality Solutions Sale may not be completed.

In addition, satisfying the closing conditions to the Hospitality Solutions Sale may occur on a longer or shorter timeframe than we expect.

All of the conditions to closing may not be satisfied or waived, and we may not successfully obtain requisite regulatory approvals.

Further, other events may intervene to delay or result in a failure to consummate the Hospitality Solutions Sale.

If the Hospitality Solutions Sale is not completed for any reason, investor confidence could decline, and we would fail to receive the benefits of the transaction.

In addition, we have expended, and continue to expend, significant resources in an effort to complete the Hospitality Solutions Sale.

Management’s attention may be diverted away from the day-to-day operations of our business and execution of our existing business plan in an effort to complete the Hospitality Solutions Sale, which could disrupt operations and have an adverse effect on our operating results and business.

In connection with the Hospitality Solutions Sale, we and the Buyer will enter into certain agreements, including a transition services agreement, providing for the performance of certain services by us for the benefit of the Buyer for a period of time after the Hospitality Solutions Sale.

We cannot predict with certainty when the benefits expected from the sale of the Hospitality Solutions business will occur or the extent to which they will be achieved, or when they will be achieved, if at all.

A failure to realize these and other anticipated benefits of the sale of the Hospitality Solutions business or effectively utilize the proceeds from the sale could have an adverse impact our business, financial condition and results of operations.

In connection with the sale of the Hospitality Solutions business, we and the Buyer have entered into certain agreements, including a transition services agreement, providing for the performance of certain services by us for the benefit of the Buyer for a period of time after the sale.

If we do not satisfactorily perform our obligations under these agreements, we may be held liable for certain losses incurred by the Buyer.

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Further, as a result of these transition services, our counterparty will have managed access to certain of our information technology systems during the transition services period, as well as shared information technology infrastructure.

Any disruption, degradation, destruction or manipulation of our information technology systems as a result of this access following the Hospitality Solutions Sale, whether accidental or intentional, may cause cybersecurity, data protection, or privacy incidents or failures, which could in turn interrupt or adversely impact our operations.

Any disruption, degradation, destruction or manipulation of our information technology systems as a result of this access following the sale, whether accidental or intentional, may cause cybersecurity, data protection, or privacy incidents or failures, which could in turn interrupt or adversely impact our operations.

See “—Our success depends on maintaining the integrity of our systems and infrastructure, which may suffer from failures, capacity constraints, business interruptions and forces outside of our control.” and “—Security incidents expose us to liability and could damage our reputation and our business.”

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We rely on third-party distributor partners and equity method investments to extend our GDS services to certain regions, which exposes us to risks associated with lack of direct management control and potential conflicts of interest.

Our Travel Solutions business utilizes third-party distributor partners and equity method investments to extend our GDS services in EMEA and APAC.

Our business utilizes third-party distributor partners and equity method investments to extend our GDS services in EMEA and APAC.

We work with these partners to establish and maintain commercial and customer service relationships with both travel suppliers and travel buyers.

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For example, we have previously experienced a significant outage of the Sabre platform due to a failure on the part of one of our service providers, and such outages may occur in the future.

This outage, which affected our Travel Solutions business, lasted several hours and caused significant problems for our customers.

This outage, which affected our business, lasted several hours and caused significant problems for our customers.

Any such future outages could cause damage to our reputation, customer loss and require us to pay compensation to affected customers for which we may not be indemnified or compensated.

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These constraints could also lead to the deterioration of our services or impair our ability to process transactions and have in the past and could in the future lead to higher costs.

We occasionally experience system interruptions that make certain of our systems unavailable including, but not limited to, our GDS and the services that our Travel Solutions and Hospitality Solutions businesses provide to airlines and hotels.

We occasionally experience system interruptions that make certain of our systems unavailable including, but not limited to, our GDS and the services that our business provides.

In addition, we have experienced in the past and may in the future occasionally experience system interruptions as we execute changes for the purpose of enhancing our products or achieving other technological objectives.

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Our systems have in the past been, and at any time, including in the future could be, damaged or disrupted by events such as power, hardware, software or telecommunication failures, human errors, natural events including floods, hurricanes, fires, winter storms, earthquakes and tornadoes, terrorism, break-ins, hostilities, war or similar events.

Computer viruses, malware, denial of service attacks, ransomware attacks, attacks on, or exploitations of, hardware or software vulnerabilities, physical or electronic break-ins, phishing attacks, cybersecurity incidents or other security incidents, and similar disruptions affecting the Internet, telecommunication services, our systems, or our customers' systems have caused in the past and could at any time, including in the future, cause service interruptions or the

loss of critical data, preventing us from providing timely services.

Failure to efficiently provide services to customers or other third parties could cause damage to our reputation and result in the loss of customers and revenues, asset impairments, significant recovery costs or litigation and liabilities.

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However, there is no assurance that it will not result in significant costs to us, reputational harm, expenditure of additional resources, lawsuits and related fees, costs and expenses, or regulatory inquiries in the future that could result in a material adverse effect.

For example, in December 2024 and January 2025, four lawsuits were filed against us in the United States District Court for the Northern District of Texas, each of which is seeking class certification.

In April 2025, these lawsuits were consolidated into one lawsuit filed against us in the United States District Court for the Northern District of Texas.

For example, we are subject to a lawsuit seeking class certification filed against us in the United States District Court for the Northern District of Texas.

The complaint generally asserts negligence and other claims based on this cybersecurity incident, and, in addition to monetary damages, the plaintiffs are also seeking declaratory and injunctive relief.

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In addition, we may not successfully implement remediation plans to address all potential exposures.

It is possible that we may have to expend additional financial and other

resources to address these problems.

It is possible that we may have to expend additional financial and other resources to address these problems.

Failure to prevent or mitigate data loss or other security incidents could expose us or our customers to a risk of loss or misuse of such information, cause customers to lose confidence in our data protection measures, damage our reputation, adversely affect our operating results or result in litigation or potential liability for us.

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Copyrights of U.S.

origin must be registered before the copyright owner

may bring an infringement suit in the United States.

origin must be registered before the copyright owner may bring an infringement suit in the United States.

Accordingly, if one of our unregistered copyrights of U.S.

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In addition, the current military conflict in Ukraine and the related imposition of sanctions and export controls on Russia and Belarus, as well as conflicts in the Middle East, have created global economic uncertainty and contributed to inflationary pressures.

A significant escalation or expansion of economic disruption, the conflicts' current scope or additional sanctions and export controls and actions taken in response to these sanctions and export controls could disrupt our business further, broaden

inflationary costs, and have a material adverse effect on our results of operations.

See “—Our revenue is highly dependent on transaction volumes in the global travel industry, particularly air travel transaction volumes.”

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We have a significant amount of indebtedness.

As of March 31, 2025, we had $5.1 billion of indebtedness outstanding which is net of debt issuance costs and unamortized discounts.

As of June 30, 2025, we had $5.0 billion of indebtedness outstanding which is net of debt issuance costs and unamortized discounts.

Our substantial level of indebtedness increases the possibility that we may not generate enough cash flow from operations to pay, when due, the principal of, interest on or other amounts due in respect of, these obligations.

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Any failure to comply with the restrictions of our Amended and Restated Credit Agreement or any agreement governing our other indebtedness may result in an event of default under those agreements.

Such default may allow the creditors to accelerate the related debt, which may trigger cross-acceleration or cross-

default provisions in other debt.

Such default may allow the creditors to accelerate the related debt, which may trigger cross-acceleration or cross-default provisions in other debt.

In addition, lenders may be able to terminate any commitments they had made to supply us with further funds.

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Recent increases in interest rates have significantly increased our interest expense, and further increases in interest rates would result in additional interest expense, which would adversely impact our financial performance.

In addition, any downgrade of our debt ratings by Standard & Poor’s, Moody’s Investor Service or similar ratings agencies, increases in general interest rate levels and credit spreads or overall weakening in the credit markets could increase our cost of capital.

In addition, any downgrade of our debt ratings by Standard &

Poor’s, Moody’s Investor Service or similar ratings agencies, increases in general interest rate levels and credit spreads or overall weakening in the credit markets could increase our cost of capital.

Furthermore, raising capital through public or private sales of equity, or sales of equity-linked securities, could cause earnings or ownership dilution to your shareholding interests in our company.

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We may recognize impairments on long-lived assets, including goodwill and other intangible assets, or recognize impairments on our equity method investments.

Our consolidated balance sheets as of March 31, 2025 contained goodwill and intangible assets, net totaling $2.9 billion.

Our consolidated balance sheets as of June 30, 2025 contained goodwill and intangible assets, net totaling $2.7 billion.

Future acquisitions that result in the recognition of additional goodwill and intangible assets would cause an increase in these types of assets.

We do not amortize goodwill and intangible assets that are determined to have indefinite useful lives, but we amortize definite-lived intangible assets on a straight-line basis over their useful economic lives, which range from four to thirty years, depending on classification.

We evaluate goodwill for impairment on an annual basis or earlier if impairment indicators

exist and we evaluate definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of definite-lived intangible assets used in combination to generate cash flows largely independent of other assets may not be recoverable.

We evaluate goodwill for impairment on an annual basis or earlier if impairment indicators exist and we evaluate definite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of definite-lived intangible assets used in combination to generate cash flows largely independent of other assets may not be recoverable.

We record an impairment charge whenever the estimated fair value of our reporting units or of such intangible assets is less than its carrying value.

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Ensuring that we have adequate internal financial and accounting controls and procedures in place, as well as maintaining these controls and procedures, is a costly and time-consuming effort that needs to be re-evaluated frequently.

Section 404 of the Sarbanes-Oxley Act (“Section 404”) requires that we annually evaluate our internal control over financial reporting to enable management to report on, and our independent auditors to audit as of the end of each fiscal year the effectiveness of those controls.

Section 404 of the Sarbanes-Oxley Act (“Section 404”) requires

that we annually evaluate our internal control over financial reporting to enable management to report on, and our independent auditors to audit as of the end of each fiscal year the effectiveness of those controls.

In connection with the Section 404 requirements, both we and our independent registered public accounting firm test our internal controls and could, as part of that documentation and testing, identify material weaknesses, significant deficiencies or other areas for further attention or improvement.

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Such changes could result in an increase or decrease in the effective tax rate applicable to all or a portion of our income or losses which would impact our profitability.

We consider the undistributed capital investments in our foreign subsidiaries to be indefinitely reinvested as of March 31, 2025, and, accordingly, have not provided deferred taxes on any outside basis differences for most subsidiaries.

We consider the undistributed capital investments in our foreign subsidiaries to be indefinitely reinvested as of June 30, 2025, and, accordingly, have not provided deferred taxes on any outside basis differences for most subsidiaries.

We establish reserves for our potential liability for U.S.

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Historically our right to recover certain value-added tax receivables associated with our European businesses has been questioned by tax authorities.

These reserves represent our best estimate of our contingent

liability for taxes.

These reserves represent our best estimate of our contingent liability for taxes.

The interpretation of tax laws and the determination of any potential liability under those laws are complex, and the amount of our liability may exceed our established reserves.

New tax laws, statutes, rules, regulations or ordinances could be enacted at any time and existing tax laws, statutes, rules, regulations and ordinances could be interpreted, changed, modified or applied adversely to us.

New tax laws, such as the OBBBA (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources"), statutes, rules, regulations or ordinances could be enacted at any time and existing tax laws, statutes, rules, regulations and ordinances could be interpreted, changed, modified or applied adversely to us.

These events could require us to pay additional tax amounts on a prospective or retroactive basis, as well as require us to pay fees, penalties or interest for past amounts deemed to be due.

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In some countries where we operate the new rules were effective in the year 2024 with more expected in the year 2025.

We are closely monitoring developments and evaluating the impacts these new rules will have on our tax rate.

We are closely monitoring developments and evaluating the impact these new rules will have on our tax rate.

Additionally, several countries, primarily Canada and in Europe, have adopted DST on revenue earned by multinational companies from the provision of certain digital services, such as the use of an online marketplace, regardless of physical presence.

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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 1A. Risk Factors