What changed in this filing

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Item 1. Business

2021-02-19 compared with 2020-02-24 · 115 added, 91 removed, 132 unchanged (61% of the section changed)

We are a vertically integrated global bedding company that develops, manufactures and markets bedding products.

Tempur Sealy’s stated purpose is “to improve the sleep of more people, every night, all around the world.” This commitment manifests itself in everything we do, including a company-wide decision to undertake global efforts to improve our communities and environment.

To that end, we have enlisted the same innovative spirit that has guided our world-class bedding business to the top of the industry in our drive to achieve industry-leading sustainability and environmental initiatives.

Our long-term strategy is to drive earnings growth with high return on invested capital and robust free cash flow, which is a non-GAAP financial measure.

In order to achieve our long-term strategy while managing the current economic and competitive environments, we focus on developing the most innovative bedding products in all the markets we serve, making significant investments in our iconic global brands and optimizing our worldwide omni-channel distribution.

We also intend to generate earnings growth through ongoing investments in research and development and productivity initiatives, which will improve our profitability and create long-term stockholder value.

Tempur Sealy has strong brands across a portfolio of bedding products serving all price points.

Our powerful distribution model operates through an omni-channel strategy across both wholesale and direct, with both channels growing worldwide.

We are committed to improving the sleep of more people, every night, all around the world.

As a global leader in the design, manufacture and distribution of bedding products, we know how crucial a good night of sleep is to overall health and wellness.

Utilizing over a century of knowledge and industry-leading innovation, we deliver award-winning products that provide breakthrough sleep solutions to consumers in over 100 countries.

Tempur Sealy has strong brands across a portfolio of bedding products serving a wide range of price points.

Our highly recognized brands include Tempur-Pedic®, Sealy® featuring Posturepedic® Technology and Stearns & Foster® and our non-branded offerings include private label and original equipment manufacturer ("OEM") products.

Our distinct brands allow for complementary merchandising strategies.

Our powerful distribution model operates through an omni-channel strategy.

Our products are sold across wholesale and direct channels through brick and mortar retail stores and e-commerce platforms.

We have a global manufacturing footprint with approximately 9,000 employees around the world.

Tempur Sealy has a strong competitive presence in the bedding marketplace with a leadership position that comes from product and service quality, culture, strategy and people, backed with financial strength and a disciplined approach to returning value to shareholders.

Our long-term strategy is to drive earnings growth with high return on invested capital and strong free cash flow, which is a non-GAAP financial measure.

We operate in two segments:

North America and International.

Corporate operating expenses are not included in either of the segments and are presented separately as a reconciling item to consolidated results.

These segments are strategic business units that are managed separately based on geography.

In the fourth quarter of 2020, we realigned our business segment reporting to include Mexico within the North America segment, which was previously included in the International segment.

The change in segment reporting aligned with changes in how our global operations are managed.

Our North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in the U.S., Canada and Mexico.

Our International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America (other than Mexico).

On January 31, 2020, we acquired an 80% ownership interest in a newly formed limited liability company containing substantially all of the assets of the Sherwood Bedding business.

Sherwood Bedding is a major manufacturer in the U.S.

private label and OEM bedding market, and this acquisition of a majority interest marks our entrance into the private label category.

Our principal executive office is located at 1000 Tempur Way, Lexington, Kentucky 40511 and our telephone number is (800) 878-8889.

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We also routinely introduce new mattress models, launch new products and update our existing mattress products in each of our segments.

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In order to achieve our goal to improve the sleep of more people, every night, all around the world, one of our strategic initiatives is to leverage and strengthen our comprehensive portfolio of iconic brands and products.

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• Comfort Revolution ® - Comfort Revolution originated in 1986 in West Long Beach, New Jersey.

The brand develops, produces, markets and distributes foam and gel bedding products, which we sell through both our Wholesale and Direct channels.

The brand develops, produces, markets and distributes bedding products.

• Non-Branded - Our non-branded product offerings include private label and OEM products, including mattresses, pillows and other bedding products and components at a wide range of price points.

The addition of non-branded offerings expands our capabilities to service third-party retailers to capture manufacturing profits from bedding brands outside our own.

Our portfolio of retail brands includes Tempur-Pedic® retail stores, Sleep Outfitters®, Sleep Solutions Outlet TM , SOVA and a variety of other retail brands internationally, which operate in various countries.

The retail brands named above are described below:

Tempur-Pedic ® retail stores - Tempur-Pedic® retail stores are designed for the approximately 20% of U.S.

• Tempur-Pedic ® retail stores - Tempur-Pedic® retail stores are designed for the approximately one in five of U.S.

consumers, based on our research, that prefer to purchase directly from the manufacturer, and for those seeking a more personalized and educational sales experience.

These retail boutiques are strategically located in high traffic, premium retail centers with customer demographics that closely align to the Tempur-Pedic customer profile.

As of December 31, 2019 we had 56 retail stores.

We expect to open approximately 20 stores in 2020.

Sleep Outfitters ® - Sleep Outfitters is a regional bedding retailer with 97 stores across five states in the U.S.

Sleep Outfitters is a specialty mattress retailer that serves consumers across all price points with its extensive selection of Tempur-Pedic®, Sealy® and Stearns & Foster® products.

• Sleep Outfitters ® - Sleep Outfitters is a regional bedding retailer with locations across five states in the U.S.

Sleep Outfitters is a specialty mattress retailer that serves consumers across a wide range of price points with its extensive selection of Tempur-Pedic®, Sealy® and Stearns & Foster® products.

• Sleep Solutions Outlet TM - Sleep Solutions Outlet stores serve as a channel of high-quality comfort returns, as well as discontinued or factory close-out mattresses and bases.

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that sell these products, which reduces our disposal costs, and helps reduce the volume of products disposed of via landfill, thereby favorably impacting the environment.

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• SOVA - SOVA is a highly respected and well established premium bedding chain in Sweden.

Our stores are connected to the urban areas of Stockholm, Gothenburg and Malmoe.

The assortment primarily focuses on premium to super premium brands and well trained sales staff targeting to sell quality beds with a very high average selling price.

In addition to our highly recognized product and retail brands, in January 2020 we acquired a majority ownership in Sherwood Acquisition Holdings, LLC (“Sherwood Bedding”), a major manufacturer in the U.S.

private label and original equipment manufacturer (“OEM”) bedding market.

Sherwood Bedding operates four domestic manufacturing facilities and is a Top 10 U.S.

bedding producer.

With our majority ownership in Sherwood Bedding, we have a complete suite of product offerings, from Sherwood Bedding's non-branded private label products to our well-known branded products from Tempur-Pedic, Stearns & Foster, Sealy featuring Posturepedic Technology and Cocoon by Sealy.

In 2019, we launched the all-new Tempur-Breeze® products as well as a new Stearns & Foster lineup in North America.

The new Breeze line includes ProBreeze TM and LuxeBreeze TM models offering the most innovative cooling system in the market, re-designed to deliver all night cooling comfort.

The new Breeze products complete the largest Tempur rollout in our history.

The new Stearns & Foster design utilizes the finest materials and legendary craftsmanship, featuring a premium, timeless look.

Our all new IntelliCoil® HD innerspring incorporates 20% more coils, allowing sleepers to find their perfect level of support.

This lineup, also features for the first time, the proprietary memory foam engineered exclusively for Stearns & Foster by Tempur-Pedic.

In 2020, we are completing the national launch of the innovative Tempur-Ergo® Smart Base Collection with Sleeptracker® technology and we are launching the all-new Sealy Posturepedic Plus mattress lineup.

The smart base collection is our solution for those that want to improve their health and wellness by sleeping more soundly.

The Tempur-Ergo Smart Base with Sleeptracker® technology is a completely integrated sleep system that features automatic snore detection and response, personalized sleep analytics and coaching and smart home connectivity and voice control.

The new Sealy Posturepedic Plus mattress line features the impressive all-new Posturepedic Plus technology which offers improved comfort, best-in-class cooling capabilities and increased support.

Our stores are connected to the urban areas of Stockholm, Gothenburg and Malmö.

The assortment primarily focuses on premium to ultra premium brands and well trained sales staff targeting to sell quality beds with a very high average selling price.

In 2021, we are planning to launch a complete refresh of our North American Sealy portfolio.

The updated Sealy portfolio features new models in our Posturepedic Plus TM , Posturepedic® and Essentials product lines.

These models offer superior support and feature Sealy Chill TM and Surface-Guard Technology TM , making this product the ideal choice for the consumer searching for high quality sleep.

In 2020, we completed the national launch of the innovative Tempur-Ergo® Smart Base Collection with Sleeptracker® technology.

The smart base collection is our solution for those that want to improve their sleep through technology.

The Tempur-Ergo Smart Base with Sleeptracker® technology is a completely integrated sleep system that features sense and respond technology, personalized sleep analytics and coaching, smart home connectivity and voice control.

Omni-Channel Distribution

Our primary selling channels are Wholesale and Direct.

These channels align to the margin characteristics of our business and our marketplace.

These channels align to the operating margin characteristics of our business and our marketplace.

One of Tempur Sealy's long-term initiatives is to be wherever the consumer wants to shop, and our wholesale business strategy brings this key business initiative to life by growing our share with existing customers, gaining new business and expanding into new channels of distribution.

In 2018, we focused on growing our relationships with existing third-party retailers.

The resulting growth has been broad-based, spanning multiple channels of bedding retail including furniture, big-box, specialty and online-only.

Our Wholesale channel includes all third party retailers, including third party distribution, hospitality and healthcare, and represented 87.5% of net sales in 2019 .

We have also identified new business opportunities.

In 2019, we announced three new or expanded third-party retail relationships in the U.S.

This resulted in the largest expansion of stores in our history.

In 2019, we entered into a supply agreement with Mattress Firm, Inc.

("Mattress Firm"), the largest specialty mattress retailer in North America, to reintroduce Tempur-Pedic, Stearns & Foster, and Sealy branded products into approximately 2,500 Mattress Firm stores across the U.S.

This agreement reunites some of the strongest bedding brands with more than three million people a year that find their right sleep solution at Mattress Firm.

The reintroduction of products into Mattress Firm stores commenced in the fourth quarter of 2019 and is expected to be completed early in the first quarter of 2020.

In 2019, we also announced the recent expansion of our long-term supply agreement with Big Lots, Inc.

(“Big Lots”), a 1,400-store retailer in the U.S.

This agreement is expected to grow the sales of entry-level Sealy products and to drive unit volume, primarily in the below $1,000 retail price point.

Our launch of Sealy products with Big Lots was completed in 2019.

We also recently extended our European retail distribution network by reaching a supply agreement with Beter Bed Holding, one of Europe’s leading bedding retailers.

The launch of new products with Beter Bed Holding was completed in 2019 in over 100 stores.

In addition, in 2020 we are expanding our Direct channel to strengthen our distribution footprint to provide alternatives to allow the customer to shop on their preferred terms - whether online, in company-owned stores or through our thousands of third-party retailers.

Our Direct channel includes company-owned stores, e-commerce and call centers and represented 12.5% of net sales in 2019 .

In 2020, we successfully completed product rollout to our expanded distribution relationships, realizing robust wholesale channel growth as a result.

We also invested in our direct business, generating triple-digit growth in North American web sales while supporting our company-owned stores and third-party retailers throughout difficulties resulting from the global COVID-19 pandemic.

We are continuing to expand our Direct channel to strengthen our distribution footprint and provide alternatives to allow the customer to shop on their preferred terms - whether online or in-store.

Our Direct channel includes company-owned stores, online and call centers and represented 13.4% of net sales in 2020.

The Direct channel growth rate has surpassed the Wholesale growth rate over the last few years, and we anticipate the Direct channel to continue to grow as a percentage of net sales in future years.

For consumers that prefer to purchase directly from the manufacturer (our research indicates approximately 20%), and for those seeking a more personalized and educational sales experience, we appeal to this consumer through our Tempur-Pedic retail stores.

Our expanded direct channel distribution complements our wholesale business, and we believe this balanced approach enhances the overall sales potential and profitability of Tempur Sealy.

For consumers that prefer to purchase directly from the manufacturer and for those seeking a more personalized and educational sales experience, we appeal to this consumer through our Tempur-Pedic retail stores.

As of December 31, 2020, we had 76 stores throughout the U.S.

that provide a low-pressure environment to explore the comprehensive line up of our Tempur-Pedic products.

Our retail boutiques are strategically located in high traffic, premium retail centers with customer demographics that closely align to the Tempur-Pedic customer profile.

Each showroom features knowledgeable, non-commissioned Brand Ambassadors who educate potential customers on Tempur-Pedic products in a relaxed, comfortable environment.

Going forward, our strategy for opening additional locations of Tempur-Pedic retail stores will remain consistent with our previous expansion approach.

We plan to open approximately 20 Tempur-Pedic retail stores in 2020.

In addition to our high-end Tempur-Pedic retail stores, we operate Sleep Outfitters, a regional bedding retailer that had 99 stores across Kentucky, Tennessee, Ohio, West Virginia and Alabama in 2020.

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For customers that prefer the convenience of making purchases online and having their bedding products delivered right to their front door, we have evolved our distribution model to include multiple online options to reach those that want to purchase our products without the need to go into a brick-and-mortar store.

Tempur Sealy’s Direct channel expansion has evolved over the past two years, increasing our presence to be within reach of consumers no matter how they choose to shop.

Our expanded direct channel distribution complements our wholesale business, and we believe this balanced approach enhances the overall sales potential and profitability of Tempur Sealy.

Table of Co ntents

Our overall marketing strategy is to drive consumer demand through the use of effective marketing.

We invest across multiple media platforms to build brand awareness and drive consumer interest in our products.

The majority of our advertising programs are created on a centralized basis through our in-house advertising organization.

The majority of our advertising programs are created on a centralized basis through our in-house marketing team.

We plan to drive net sales through continued investments in new products, marketing and other initiatives.

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We do not consider ourselves dependent upon any single outside manufacturer as a source of these products.

Sealy product raw materials consist mainly of polyethylene foam, textiles and steel innerspring components that we purchase from various suppliers.

Raw materials for Sealy, Sherwood and Comfort Revolution products consist mainly of polyethylene foam, textiles and steel innerspring components that we purchase from various suppliers.

and Canada, we source the majority of our requirements for polyurethane foam components and spring components for our Sealy and Stearns & Foster mattress units and adjustable bed bases from a key supplier for each component.

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We do not consider ourselves to be dependent in the long term upon any single outside vendor as a source of supply to our bedding business, and we believe over time that sufficient alternate sources of supply for the same, similar or alternate components are available.

However, if a key supplier for an applicable component failed to supply components in the amount we require, this could significantly interrupt production of our products and increase our production costs in the near term.

Beginning in the second quarter of 2020, one key supplier's inability to supply components in the amount we required, as well as industry supply constraints generally, limited our production levels.

Additionally, the U.S.

government has mandated that domestic suppliers of certain materials used in the production of bedding products redirect such materials towards the production of personal protective equipment.

This has constrained production for certain products and has increased our production costs in the near term.

Research and Development

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and one in Denmark, that conduct technology and product development.

Additionally, we have a product testing facility that conducts hundred of consumer tests annually.

Additionally, we have a product testing facility that conducts hundreds of consumer tests annually.

We believe our consumer-research driven approach to innovation results in best-in-class products that benefit the consumer.

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Industry and Competition

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The bedding industry is comprised of mattresses and foundations, pillows and accessories.

The mattress market category is comprised of traditional innerspring mattresses and non-innerspring mattresses, which includes visco-elastic and foam mattresses, innerspring/foam hybrid mattresses, airbeds and latex mattresses.

The mattress category is comprised of traditional innerspring mattresses and non-innerspring mattresses, which includes visco-elastic and foam mattresses, innerspring/foam hybrid mattresses, airbeds and latex mattresses.

The foundation category is comprised of traditional foundations and adjustable foundations.

Additionally, the pillow market is comprised of traditional foam and feather pillows, as well as pillows made of visco-elastic, latex, foam, sponge, rubber and down.

The primary distribution channels for mattresses and foundations are retail furniture and bedding stores, department stores, wholesale clubs and the internet.

We operate in two segments:

North America and International.

Corporate operating expenses are not included in either of the segments and are presented separately as a reconciling item to consolidated results.

These segments are strategic business units that are managed separately based on geography.

Our North America segment consists of Tempur and Sealy manufacturing and distribution subsidiaries and licensees located in the U.S.

Our International segment consists of Tempur and Sealy manufacturing and distribution subsidiaries, joint ventures and licensees located in Europe, Asia-Pacific and Latin America.

The primary distribution channels for bedding products are retail furniture and bedding stores, department stores, wholesale clubs and online.

We encounter competition from a number of bedding manufacturers in both the highly concentrated domestic and highly fragmented international markets.

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Mattress and pillow manufacturers and retailers are seeking to increase their channels of distribution and are looking for new ways to reach the consumer, including the recent expansion in the number of U.S.

and international companies pursuing online direct-to-consumer models for foam mattresses.

and international companies pursuing online direct-to-consumer models for mattresses.

In addition, retailers in both the U.S.

and internationally are increasingly seeking to integrate vertically in the furniture and bedding industries, including by offering their own brands of mattresses and pillows.

Entry-level bedding imports from China significantly increased during 2018 and are competing against our value priced Sealy products in the U.S.

We believe these imports are being sold below cost.

In September 2018, we and other industry participants filed petitions with the U.S.

International Trade Commission and the U.S.

Department of Commerce, alleging that many of these Chinese imports are being dumped into the U.S.

market at prices below cost.

As a result of these petitions, the U.S.

International Trade Commission and the U.S.

Department of Commerce commenced investigations.

A final determination was reached by the U.S.

Department of Commerce in October 2019, imposing a range of tariffs on these imports from 57% to 1,731%, subject to an affirmative determination by the U.S.

International Trade Commission.

On December 9, 2019, the U.S.

International Trade Commission affirmatively determined that the imports of mattresses from China materially injured an industry in the U.S.

Overall, we view the outcome of the case as a positive to the industry as it puts the domestic manufacturers on the same level as the Chinese imports.

However, low-priced imports into the U.S.

from other countries in Asia have risen dramatically during the progression of the case.

Nevertheless, we believe our focus on internal initiatives to deliver the highest quality product and highest levels of manufacturing reliability and customer service continue to be the reason that existing retailers lean into our portfolio of products.

The international market is served by a large number of manufacturers, primarily operating on a regional and local basis.

These manufacturers offer a broad range of mattress and pillow products.

The highly competitive nature of the mattress and pillow industries means we are continually subject to the risk of loss of market share, loss of significant customers, reductions in margins, and the inability to acquire new customers.

Entry-level bedding imports from Asia began to significantly increase during 2018 and are competing against certain of our products in the U.S.

In September 2018 and again in December 2019, petitions were filed with the U.S.

International Trade Commission and the U.S.

Department of Commerce, alleging that many of these imports were being dumped into the U.S.

market at prices less than fair value.

Department of Commerce issued an anti-dumping duty order regarding the 2018 petition on December 16, 2019 and the U.S.

International Trade Commission affirmed a range of tariffs on these imports from 57% to 1,731%.

Regarding the 2019 petition, the U.S.

International Trade Commission reached an affirmative preliminary determination in May 2020 that there was a reasonable indication that imports of mattresses from some of the countries at issue negatively impact, or threaten to negatively impact, the domestic mattress industry.

Department of Commerce reached an affirmative preliminary determination in October 2020 regarding the 2019 petition.

Department of Commerce and the U.S.

International Trade Commission are scheduled to announce final determinations on the 2019 petition in 2021.

Intellectual Property

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In addition, we license the Bassett® trade name in various territories under a long-term agreement.

We derive income from royalties by licensing Sealy® brands, technology and trademarks to other manufacturers.

Under the license arrangements, licensees have the right to use certain trademarks and current proprietary and/or patented technology that we utilize.

We derive income from royalties by licensing Sealy® and Tempur brands®, technology and trademarks to other manufacturers.

Under the license arrangements, licensees have the right to use certain trademarks and current proprietary and/or patented technology.

We also provide our licensees with product specifications, research and development, statistical services and marketing programs.

For the year ended December 31, 2019 , our licensing activities as a whole generated unaffiliated net royalties of approximately $22.6 million .

For the year ended December 31, 2020, our licensing activities as a whole generated net royalties of approximately $21.9 million.

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Governmental Regulation

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We are also subject to environmental and health and safety requirements with regard to the manufacture of our products and the conduct of our operations and facilities.

We have made and will continue to make capital and other expenditures necessary to comply with these requirements.

We have made and will continue to make expenditures necessary to comply with these requirements.

Currently these expenditures are immaterial to our financial results.

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We have implemented a global compliance system and have put reasonable measures in place to facilitate adherence to the continuing compliance requirements of data privacy laws such as the GDPR and CCPA.

As of December 31, 2019 , we had approximately 7,400 Tempur Sealy employees, approximately 5,400 of which are located in North America and 2,000 in the rest of the world.

We increased headcount in 2019 to handle our unit volume increases.

Environmental, Social and Corporate Governance (“ESG”)

We recognize that as a corporate citizen we have a responsibility to protect our communities and environment.

Our executive leadership and board members believe that our success as an organization must be inclusive of our impact on our communities and environment.

We delivered significant progress on our environmental initiatives in 2020.

We transitioned to sourcing renewable energy from wind farms to fully power our wholly-owned U.S.

and European manufacturing operations and began the installation of solar panels to partially power our largest manufacturing operations.

In 2020, we also improved the percent of waste recycled from our North American wholly-owned manufacturing operations to 91.0% and achieved a 28.0% reduction in greenhouse gas emissions per unit produced at our wholly-owned manufacturing and logistics operations.

Our progress in 2020 represents a significant step towards achieving our new, long-term sustainability goal.

We expect to achieve carbon neutrality by fully reducing or offsetting our greenhouse gas emissions from our wholly-owned manufacturing, logistics and retail operations by 2040.

This will reduce both Scope 1 emissions (direct emissions from sources we own or control) and Scope 2 emissions (emissions attributable to the electricity we consume).

We plan to achieve this long-term goal through absolute emission reductions from the continued use of renewable energy and operational efficiency improvements, as well as the funding of carbon offsets.

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In addition, we intend to extend our sustainability efforts to our global supply chain by encouraging our suppliers to establish their own sustainability goals.

Through this initiative, we aim to increase sustainability awareness and initiatives within our supplier base with the goal of reducing our Scope 3 emissions (emissions from sources we do not directly own or control) and reducing the environmental footprint of our supply chain.

In 2020, we also delivered on our social and corporate governance initiatives.

We established a qualitative ESG performance metric in executive leadership's compensation beginning in 2021.

We also increased the wages of U.S.

salaried employees and created new jobs in an uncertain economy, increasing our global employee headcount by 21%.

Amid the global pandemic, keeping our employees and consumers safe and healthy was and continues to be our top priority.

In addition to many employee safety initiatives, we also developed and launched our Clean Shop Promise TM protocol which focused on providing customers a comfortable and hygienic experience as they returned to shopping in stores.

These industry-leading cleanliness guidelines were implemented at all of our own stores and offered to retailers.

Throughout the year, we also utilized our extensive operations and expertise to manufacture medical grade mattresses and other products for use by medical facilities and professionals on the frontline of the global COVID-19 pandemic.

We actively engaged with numerous government and healthcare organizations to assess product need and timing, donating a significant amount of product to COVID-19 workers, healthcare facilities, field hospitals and homeless shelters.

These donations marked a continuation of our legacy of charitable giving, with the Company donating over $100 million in products, cash and stock over the last ten years.

Human Capital Management

As a global organization, our workforce is important to us.

We believe a key driver of long-term success is the strength of our workforce and we are committed to investing in our workforce.

As part of our commitment to our workforce, we focus on the following key areas noted below:

Global Workforce and Diversity.

As of December 31, 2020, we had approximately 9,000 Tempur Sealy employees, approximately 6,300 of which are located in the U.S.

and 2,700 in the rest of the world.

We are committed to continuing our efforts to ensure that we have a diverse workforce in terms of demographic, thought and experience.

To realize our commitment to equal opportunity employment we promote a diverse slate of qualified candidates during the hiring process;

outreach with organizations in each of our local communities to increase the flow of minority, female, veteran and disabled applicants for employment;

conduct an annual gender and minority pay equity analysis;

and attend external, community-based activities sponsored by local organizations assisting women, minorities, veterans and other demographic groups.

Women represent 25% of our Board of Directors and minorities represent 13% of our Board of Directors.

Freedom of Association and Collective Bargaining.

Approximately 26% of our employees are represented by various labor unions with separate collective bargaining agreements.

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As of December 31, 2020, our North America segment employed approximately 300 individuals covered under collective bargaining agreements expiring in 2021 and our International segment employed approximately 500 individuals covered under collective bargaining agreements expiring in 2021.

Employee Retention.

Employee retention helps us operate efficiently and achieve our Company goals.

We believe our commitment to living out our core values, actively prioritizing concern for our employees’ well-being, supporting our employees’ career goals, offering competitive wages and providing valuable fringe benefits aids in retention of our top-performing employees.

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

What changed 10-K

Item 1. Business