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Item 1A. Risk Factors

2022-02-22 compared with 2021-02-19 · 67 added, 91 removed, 224 unchanged (41% of the section changed)

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Please also see "Special Note Regarding Forward-Looking Statements" on page 3 .

Set forth below are descriptions of certain risks relating to our business.

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Risks related to our business and industry

The outbreak of COVID-19 has significantly impacted the global economy which could have a material adverse effect on our business, operations, or financial results in future periods.

The novel strain of coronavirus (COVID-19) first identified in Wuhan, China in December 2019 has now spread to nearly all regions around the world.

Risks related to our Business and Economic Environment

The uncertainty of the ongoing COVID-19, including new variants, could have a material adverse effect on our business, operations, or financial results in future periods.

The novel strain of coronavirus (COVID-19) first identified in Wuhan, China in December 2019 has now spread across the world.

The outbreak, and measures taken to contain or mitigate it, have had dramatic adverse consequences for the economy, including on demand, operations, supply chains and financial markets.

The nature and scope of the consequences to date are difficult to evaluate precisely, and their future course is impossible to predict with confidence.

The COVID-19 crisis has already had several significant effects on our business and our financial condition, including the impact of the pandemic on the economies and financial markets of the regions in which we operate.

"Shelter-in-place" and other similar mandated or suggested isolation protocols have disrupted third-party retail stores in our Wholesale channel and company-owned stores in our Direct channel, via store closures or reduced operating hours in the U.S.

and around the world, which has decreased retail traffic and which also, in turn, decreased sales of our products in March and April when COVID-19 began materially impacting our North America business segment.

At this time, most third-party retail stores and our company-owned stores have reopened.

However, we cannot reasonably estimate the length of time these stores will remain open, or if they will be mandated to close again as the COVID-19 crisis continues to evolve.

Our e-commerce operations remain open globally, as do the e-commerce operations for many of our third-party retailers.

The effects of the COVID-19 crisis could be aggravated if the crisis continues, and we could see additional impacts such as the following:

• a continuing global recession, a decline in consumer confidence and spending, or a further increase in unemployment could continue to impact consumers' disposable income and, in turn, decreased sales of our products;

• general economic, financial and industry conditions, particularly conditions relating to liquidity, financial performance, and related credit issues in the retail sector, which may be amplified by the effects of COVID-19;

• the continued disruption to third-party retail stores and company-owned stores resulting from "shelter-in-place" and similar protocols, which, even though largely rolled back, could be reinstated as the pandemic continues to evolve;

• social distancing measures or changes in consumer spending behaviors due to COVID-19 may continue to impact retail demand after the resumption of more normalized operations and such actions could result in a loss of sales and profit;

• the failure of our Wholesale channel customers to whom we extend credit to pay amounts owed to us on time, or at all, particularly if such customers are significantly impacted by COVID-19;

• we have experienced and may continue to experience disruptions in our supply chain, as the outbreak has disrupted travel, manufacturing and distribution throughout the world;

• staffing shortages;

• we may be required to revise certain accounting estimates and judgments such as, but not limited to, those related to the valuation of long-lived assets and deferred tax assets, which could have a material adverse effect on our financial position and results of operations;

• our success in attempting to reduce operating costs and conserve cash, which could require further actions to improve our cash position, including but not limited to, implementing expanded employee furloughs and foregoing capital expenditures and other discretionary expenses.

The COVID-19 pandemic and related responses are continuing to evolve and, therefore, continue to present potential new risks to our business, particularly in light of new variants of the virus.

We have seen and expect to continue to see effects of the COVID-19 crisis on our business operations including impacts such as the following:

increased raw material prices, a decline in consumer confidence and spending, further increase in unemployment which could impact consumers' disposable income and, in turn, decrease sales of our products, required isolation in certain markets, disruptions in our supply chain, as the outbreak has disrupted travel, manufacturing and distribution throughout the world, increases in operating costs due to disruptions, the cost of complying with public health vaccine and testing mandates and personal protective equipment requirements and other increased employment-related costs.

The rapid development and uncertainty of the pandemic precludes any prediction as to the ultimate impact of COVID-19.

The full extent of the impact and effects of COVID-19 on our business, operations, liquidity, financial condition and results of operations remain uncertain at this time but could be material.

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The full extent of the impact and effects of COVID-19 on our business,

operations, liquidity, financial condition and results of operations remain uncertain at this time but could be material.

Any of these events could potentially result in a material adverse impact on our business and results of operations.

We operate in a highly competitive industry and if we are unable to compete successfully, we may lose customers and our sales may decline.

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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.

Loss of suppliers and disruptions in the supply of our raw materials could increase our costs of sales and reduce our ability to compete effectively.

We acquire raw materials and certain components from a number of suppliers with manufacturing locations around the world.

If we were unable to obtain raw materials and certain components from these suppliers for any reason, we would have to find replacement suppliers.

Any substitute arrangements for raw materials and certain components might not be on terms as favorable to us.

In addition, we outsource the procurement of certain goods and services from suppliers in foreign countries.

If we were no longer able to outsource through these suppliers, we would need to source them elsewhere, potentially at a higher cost.

We maintain relatively small supplies of our raw materials and outsourced goods at our manufacturing facilities, and any disruption in the on-going shipment of supplies could interrupt production of our products, which in turn could result in a decrease of our sales or could cause an increase in our cost of sales, either of which could decrease our liquidity and profitability.

Loss of suppliers and disruptions in the supply of our raw materials and components could increase our costs of sales and reduce our ability to compete effectively.

We acquire raw materials and components from a number of suppliers with manufacturing locations around the world.

If we were unable to obtain raw materials and components from these suppliers for any reason, we would have to find replacement suppliers.

Any substitute arrangements for raw materials and components might not be on terms as favorable to us.

We maintain relatively small supplies of our raw materials and components at our manufacturing facilities, and any disruption in the shipment of supplies could interrupt production of our products, which in turn could result in a decrease of our sales or could cause an increase in our cost of sales, either of which could decrease our liquidity and profitability.

Raw materials for Sealy, Sherwood Bedding 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.

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

We also purchase a significant portion of our Sealy foundation parts from third party sources under supply agreements.

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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.

Our adjustable base products are dependent on components supply chains originating in China.

We believe over time that sufficient alternate sources of supply for the same or similar products will be available outside of China from our current and alternate suppliers.

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.

Such a disruption could occur for a variety of reasons, including changes in international trade duties and other aspects of international trade policy, natural disasters, pandemics and political events.

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.

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

We are subject to fluctuations in the cost of raw materials, and increases in these costs could reduce our liquidity and profitability.

Such a disruption could occur for a variety of reasons, including changes in international trade duties and other aspects of international trade policy, labor shortages, natural disasters, pandemics and political events.

For example, the ongoing conflict between Russia and Ukraine could result in a temporary disruption in supply of a component in our International segment.

If we are not able to successfully mitigate such supply chain risks, we could experience disruptions in production or increased costs, which may result in a decrease in our gross margin or reduced sales, and have a material adverse effect on our business, results of operations and financial condition.

Changes in economic conditions, including inflationary trends in the price of our input costs, such as raw materials, could adversely affect our business and financial results.

The bedding industry is subject to volatility in the price of petroleum-based and steel products, which affects the cost of polyurethane foam, polyester, polyethylene foam and steel innerspring component parts.

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Given the significance of the cost of these materials to our products, volatility in the prices of the underlying commodities can significantly affect profitability.

We currently expect commodity costs and inflation to increase into 2021.

During the fourth quarter of 2020, we implemented pricing actions that fully mitigated the anticipated commodity costs increases expected for 2021.

In the first quarter of 2021, commodity costs have increased greater than expected and we will consider additional pricing actions as needed.

We have experienced and may continue to experience, volatility and increases in the price of certain of these raw materials as a result of a global market and supply chain disruptions and the broader inflationary environment related to the COVID-19 pandemic.

Throughout 2021, we implemented pricing actions to mitigate these known commodity headwinds.

In January 2022, we implemented pricing actions designed to offset the dollar impact of these inflationary headwinds.

To the extent we are unable to absorb higher costs, or pass any such higher costs to our customers, our gross margin could be negatively affected, which could result in a decrease in our liquidity and profitability.

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Risks related to operating our business

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Each year we invest significant time and resources in research and development to improve our product offerings and launch new products.

In 2020, we introduced the Tempur-Ergo Smart Base Collection with Sleeptracker® technology in our North America segment.

In 2021, we are refreshing our Sealy portfolio with the launch of new models in our Posturepedic Plus TM , Posturepedic® and Essentials product lines.

In 2021, we began refreshing our Sealy portfolio with the launch of new models in our Posturepedic Plus TM , Posturepedic® and Essentials product lines and expect to complete this rollout in 2022.

Additionally in 2022, we are launching a refreshed Stearns & Foster product line and introducing a new Sealy® Naturals™ product line in the U.S.

and beginning the launch of a new line of Tempur mattresses internationally.

There are a number of risks that are inherent in our new product line introductions, including that the anticipated level of market acceptance may not be realized, which could negatively impact our sales.

Further, introduction costs, the speed of the rollout of the product and manufacturing inefficiencies may be greater than anticipated, each of which could impact profitability.

Further, introduction costs and manufacturing inefficiencies may be greater than anticipated, while the rollout of the product could be delayed, each of which could impact profitability.

Because we depend on certain significant customers, a decrease or interruption in their business with us would reduce our sales and results of operations.

Our top five customers, collectively, accounted for approximately 36% of our net sales in 2020, and of these, there was one customer that contributed 10% to 15%.

The credit environment in which our customers operate has been relatively stable over the past few years.

Our top five customers, collectively, accounted for approximately 33% of our net sales in 2021, and of these, there was one wholesale customer that contributed approximately 15%.

The credit environment in which our customers operate has been

relatively stable over the past few years.

However, there have been signs of deterioration in the U.S.

retail sector, both nationally and regionally.

Department store and regional retail customers in the U.S.

continue to file for bankruptcy protection.

We expect that some additional retailers that carry our products may consolidate, undergo restructurings or reorganizations, experience financial difficulty, or realign their affiliations, any of which could decrease the number of stores that carry our products or increase the ownership concentration in the retail industry.

Some additional retailers that carry our products may consolidate, undergo restructurings or reorganizations, experience financial difficulty, or realign their affiliations, any of which could decrease the number of stores that carry our products or increase the ownership concentration in the retail industry.

An increase in the concentration of our sales to large customers may negatively affect our profitability due to the impact of volume and other incentive programs related to these customers.

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A substantial decrease or interruption in business from these significant customers could result in the loss of future business and could reduce revenue, liquidity and profitability.

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We rely significantly on information technology and any failure, inadequacy, interruption or security lapse of that technology, including cyber-based attacks, could harm our ability to effectively operate our business.

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Any disruptions caused by the failure of these systems could adversely impact our day-to-day business and decision making and could have a material adverse effect on our performance.

We are subject to laws and regulations relating to information technology security and personal data protection and privacy.

For example, the GDPR, which took effect in May 2018, and the CCPA, which took effect in January 2020, have imposed new and expanded compliance requirements on companies, including us, that process personal data from citizens living in the EU and California.

In addition, there are country-specific data privacy laws in Europe and elsewhere in the world, and state-specific data privacy laws forthcoming in the U.S., which broadly follow the principles laid out in the GDPR and the CCPA, but in some cases, impose additional requirements on businesses like ours.

We are actively working to ensure ongoing compliance with all data privacy regulations to which we are subject, which involves substantial costs.

Despite our ongoing efforts to maintain compliance with the GDPR and the CCPA, we may not be successful due to various factors within or outside of our control.

Failure to comply with GDPR, CCPA, country-specific or U.S.

state-specific laws could result in costly investigations and litigation, expose us to potentially significant penalties, and result in negative publicity that could damage our reputation and credibility.

We are subject to laws and regulations relating to information technology security and personal data protection and privacy and this legislative landscape is forever evolving.

For example, the GDPR, which took effect in May 2018, the CCPA, which took effect in January 2020 and the PIPL, which took effect in November 2021, have imposed new and expanded compliance requirements on companies, including us, that process personal data from citizens living in the European Union, California and China.

In addition, there are country-specific data privacy laws in Europe and elsewhere in the world, such as those in Japan, Korea, Australia, New Zealand, Canada and Mexico, and state-specific data privacy laws forthcoming in the U.S., such as those in Virginia and Colorado, which broadly follow key principles laid out in the GDPR and the CCPA, but in some cases, impose different and additional requirements on businesses like ours.

We are actively working to ensure ongoing compliance with all data privacy and information technology security laws and regulations worldwide to which we are subject, which involves substantial resource and costs.

Despite our ongoing efforts to maintain compliance, we may not be successful due to various factors within or outside of our control.

Failure to comply with applicable laws and regulations could result in costly investigations from regulators and litigation, expose us to potentially significant penalties, and result in negative publicity that could damage our reputation and credibility.

Prior to 2020, we successfully implemented a new enterprise resource planning, or "ERP," system across several of our global subsidiaries.

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This new system replaces a substantial portion of our legacy systems that have historically supported our operations.

If we are unable to successfully continue the implementation of the replacement system, it could lead to a disruption in our business and unanticipated additional use of capital and other resources, which may adversely impact our results of operations.

If we are unable to successfully continue the implementation of the replacement system or if errors or failures in the implementation process lead to production shutdowns, our business may be materially impacted and disrupted and we may be required to engage in unanticipated additional use of capital and other resources, which may adversely impact our results of operations.

In addition, if the cost of implementing this ERP system increases above our estimates, this could have a significant adverse effect on our profitability.

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As of December 31, 2021, we had approximately 12,000 full-time employees.

Our Asia joint venture also employs approximately 1,350 full-time employees.

Our joint ventures also employ approximately 1,350 full-time employees.

Approximately 19% of our employees are represented by various labor unions with separate collective bargaining agreements or government labor union contracts for certain international locations.

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Any significant increase in our labor costs could decrease our liquidity and profitability and any deterioration of employee relations, slowdowns or work stoppages at any of our locations, whether due to union activities, employee turnover or otherwise, could result in a decrease in our net sales or an increase in our costs, either of which could decrease our liquidity and profitability.

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We may face exposure to product liability claims and premises liability claims, which could reduce our liquidity and profitability and reduce consumer confidence in our products.

We face an inherent business risk of exposure to product liability claims if the use of any of our products results in personal injury or property damage.

In the event that any of our products prove to be defective, we may be required to recall, redesign or even discontinue those products.

In the event that any of our products prove to be defective or otherwise fail to meet safety standards, we may be required to recall, redesign or even discontinue those products.

We maintain insurance against product liability claims, but such coverage may not continue to be available on terms acceptable to us or be adequate for liabilities actually incurred.

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Furthermore, our patents may not provide meaningful protection and patents may never issue from pending applications.

It is also possible that others could bring claims of infringement against us, as our principal product formula and manufacturing processes are not patented, and that any licenses protecting our intellectual property could be terminated.

It is also possible that others could bring claims of infringement against us, as our principal product formula and

manufacturing processes are not patented, and that any licenses protecting our intellectual property could be terminated.

If we were unable to maintain the proprietary nature of our intellectual property and our significant current or proposed products, this loss of a competitive advantage could result in decreased sales or increased operating costs, either of which would decrease our liquidity and profitability.

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We may not prevail in any such litigation, and if we are unsuccessful, we may not be able to obtain any necessary licenses on reasonable terms or at all.

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The loss of the services of any members of our executive management team could impair our ability to execute our business strategy and as a result, reduce our sales and profitability.

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dollar strengthens relative to the Euro or other foreign currencies where we have operations, for example, there will be a negative impact on our operating results upon translation of those foreign operating results into the U.S.

In 2020, foreign currency exchange rate changes positively impacted our net income by approximately 0.3% and positively impacted adjusted EBITDA per credit facility, which is a non-U.S.

GAAP financial measure, by approximately 0.2%.

In 2021, we expect that foreign exchange translation may provide a small benefit to our results of operations.

In 2021, foreign currency exchange rate changes positively impacted our net income by approximately 1.8% and positively impacted adjusted EBITDA, which is a non-GAAP financial measure, by approximately 1.4%.

Changes in foreign currency exchange rates could have an adverse impact on our financial condition, results of operations and cash flows.

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• limiting our flexibility in planning for, or reacting to, changes in our business or the industry in which we operate;

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• exposing us to variability in interest rates, as a substantial portion of our indebtedness is and will be at variable rates;

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Our variable rate debt agreements, including our 2019 Credit Agreement, use LIBOR, which is subject to uncertainty.

If LIBOR ceases to exist or is no longer representative of the underlying market at some point in the future, our variable rate debt agreements with interest rates that are indexed to LIBOR will use various alternative methods to calculate the applicable interest rate, which could result in increases in interest rates on such debt and adversely impact our interest expense, results of operations and cash flows.

In March 2021, the United Kingdom’s Financial Conduct Authority (the "FCA"), which regulates LIBOR, confirmed that all of the LIBOR settings for Euro and Swiss Franc and some of the LIBOR settings for Japanese Yen, Sterling and US dollars will cease in December 2021 and the remainder of the LIBOR settings for U.S.

dollars will cease in June 2023.

When LIBOR ceases to exist or is no longer representative of the underlying market, our variable rate debt agreements with interest rates that are indexed to LIBOR will use various alternative methods to calculate the applicable interest rate, which could result in increases in interest rates on such debt and adversely impact our interest expense, results of operations and cash flows.

Further, we may need to amend our variable rate debt agreements to replace LIBOR with a new reference rate.

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Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S.

financial institutions, is considering replacing U.S.

financial institutions, may replace U.S.

Dollar LIBOR with a new index calculated by short term repurchase agreements, backed by Treasury securities called the Secured Overnight Financing Rate ("SOFR").

Whether or not SOFR attains market traction as a LIBOR replacement remains a question and the future of LIBOR at this time is uncertain.

Because of this uncertainty, we cannot reasonably estimate the expected impact of a transition away from LIBOR to our business.

Whether or not SOFR attains market traction as a LIBOR replacement remains a question and the future of LIBOR and any successor rates for LIBOR is uncertain.

For information regarding our sensitivity to changes in interest rates, refer to "Quantitative and Qualitative Disclosures About Market Risk" included in Part II, ITEM 7A of this Report.

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and the potential imposition of trade or foreign exchange restrictions, tariffs and other tax increases, inflation and unstable political situations and labor issues.

We are also limited in our ability to independently expand in certain international markets where we have granted licenses to manufacture and sell Sealy® bedding products.

We are also limited in our ability to independently expand in certain international markets where we have granted licenses to

manufacture and sell Sealy® bedding products.

Fluctuations in the rate of exchange between currencies in which we do business may affect our financial condition or results of operations.

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and abroad, could materially impact our business.

Our business operations and financial results may be impacted by the United Kingdom’s ("UK") departure from the EU, on January 31, 2020, commonly referred to as "Brexit".

The full effect of Brexit is uncertain and may, among other things, result in short term supply chain disruption and certain adverse tax consequences for us relating to the movement of products and related matters between the UK and EU.

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Regulatory requirements, including, but not limited to, trade, environmental, health and safety requirements, may require costly expenditures and expose us to liability.

Our products and our marketing and advertising programs are subject to regulation in the U.S.

by various federal, state and local regulatory authorities, including the Federal Trade Commission and the U.S.

by various federal, state and local regulatory authorities, including the Federal Trade Commission, the Consumer Product Safety Commission and the U.S.

Food and Drug Administration.

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For example, the CPSC and many foreign jurisdictions have adopted rules relating to fire retardancy standards for the mattress industry.

Further, some states and the U.S.

Further, some cities, states and the U.S.

Congress continue to consider fire retardancy regulations that may be different or more stringent than the CPSC standard.

Adoption of multi-layered regulatory regimes, particularly if they conflict with each other, could increase our costs, alter our manufacturing processes and impair the performance of our products which may have an adverse effect on our business.

We are also subject to various health and environmental provisions, such as California Proposition 65 (the Safe Drinking Water and Toxic Enforcement Act of 1986) and 16 CFR Part 1633 (Standard for the Flammability (Open Flame) of Mattress Sets) and in our international jurisdictions we are subject to the medical devices regulatory authorities such as the Medicines and Healthcare products Regulatory Agency (MHRA) in the UK and the International Chamber of Commerce Advertising and Marketing Communications Code.

Our marketing and advertising practices could also become the subject of proceedings before regulatory authorities or the subject of claims by other parties and could require us to alter or end these practices or adopt new practices that are not as effective or are more expensive.

In addition, we are subject to federal, state and local laws and regulations relating to pollution, environmental protection and occupational health and safety.

In addition, we are subject to laws and regulations both in the U.S.

and internationally, relating to pollution, environmental protection and occupational health and safety.

We may not be in complete compliance with all such requirements at all times.

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If a release of hazardous substances occurs on or from our properties or any associated offsite disposal location, or if contamination from prior activities is discovered at any of our properties, we may be held liable and the amount of such liability could be material.

As a manufacturer of bedding and related products, we use and dispose of a number of substances, such as glue, lubricating oil, solvents and other petroleum products, as well as certain foam ingredients, that may subject us to regulation under numerous foreign, federal and state laws and regulations governing the environment.

As a manufacturer of bedding and related products, we use and dispose of a number of substances, such as glue, lubricating oil and solvents, as well as certain foam ingredients, that may subject us to regulation under numerous foreign, federal and state laws and regulations governing the environment.

Among other laws and regulations, we are subject in the U.S.

to the Federal Water Pollution Control Act, the Comprehensive Environmental Response, Compensation and Liability Act, the Resource Conservation and Recovery Act, the Clean Air Act and related state and local statutes and regulations.

to the Federal Water Pollution Control Act, the Resource Conservation and Recovery Act, the Clean Air Act and related state and local statutes and regulations in our international jurisdictions we are subject to the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH), the Waste from Electrical and Electronic Equipment Directive (WEEE) and the General Product Safety Directive amongst others.

Our operations could also be impacted by a number of pending legislative and regulatory proposals to address greenhouse gas emissions in the U.S.

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Such events may significantly impair our profitability and liquidity and the possibility of having to make these payments could affect our decision on whether to close or sell a particular facility.

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We also contribute to multi-employer pension plans according to collective bargaining agreements that cover certain union-represented employees.

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Challenges to our pricing or promotional allowance policies or practices could adversely affect our operations .

Certain of our retail pricing and promotional allowance policies or practices are subject to antitrust regulations in the U.S.

If antitrust regulators or private parties in any jurisdiction in which we do business initiate investigations or claims that challenge our pricing or promotional allowance policies or practices, our efforts to respond could force us to divert management resources and we could incur significant unanticipated costs.

If such an investigation or claim were to result in a charge that our practices or policies were in violation of applicable antitrust or other laws or regulations, we could be subject to significant additional costs of defending such charges in a variety of venues and, ultimately, if there were a finding that we were in violation of antitrust or other laws or regulations, there could be an imposition of fines, and damages for persons injured, as well as injunctive or other relief.

Certain of our retail pricing and promotional allowance policies or practices are subject to antitrust and consumer protection regulations in the U.S.

If regulators or private parties in any jurisdiction in which we do business initiate investigations or claims that challenge our pricing or promotional allowance policies or practices, our efforts to respond could force us to divert management resources and we could incur significant unanticipated costs.

If such an investigation or claim were to result in a charge that our practices or policies were in violation of applicable antitrust, consumer protection or other laws or regulations, we could be subject to significant additional costs of defending such charges in a variety of venues and, ultimately, if there were a finding that we were in violation of antitrust, consumer protection or other laws or regulations, there could be an imposition of fines, and damages for persons injured, as well as injunctive or other relief.

Any requirement that we pay fines or damages (which, under the laws of certain jurisdictions, may be trebled) could decrease our liquidity and profitability, and any investigation or claim that requires significant management attention or causes us to change our business practices could disrupt our operations or increase our costs, also resulting in a decrease in our liquidity and profitability.

An antitrust class action or individual suit against us could result in potential liabilities, substantial costs, treble damages, and the diversion of our management’s attention and resources, regardless of the outcome.

An antitrust or consumer protection class action or individual suit against us could result in potential liabilities, substantial costs, treble damages, and the diversion of our management’s attention and resources, regardless of the outcome.

Risks Related to Ownership of Our Common Stock

Although we recently announced a quarterly cash dividend, there can be no assurance as to the declaration or amount of future dividends.

We recently declared a dividend of $0.07 per share for the first quarter of 2021 and announced our intention to begin paying a quarterly cash dividend beginning in 2021.

We previously announced our intention to begin paying a quarterly cash dividend beginning in 2021 and recently declared a dividend of 10 cents per share for the first quarter of 2022.

Any decision to declare and pay dividends, and the amount of any such dividends, will be dependent on a variety of factors, including compliance with Section 170 of the Delaware General Corporation Law;

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contractual restrictions in our debt agreements;

economic conditions, including the impact of COVID-19 on our business and financial condition;

economic conditions, including the impact of COVID-19 and related macroeconomic impacts on our business and financial condition;

and other factors the Board of Directors may deem relevant.

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Our share repurchase program could be suspended or terminated, and may not enhance long-term stockholder value.

Our Board of Directors has authorized a share repurchase program in 2016 pursuant to which we are authorized to repurchase shares of our common stock.

Since 2016 and through December 31, 2020, we had repurchased an aggregate of 17.0 million shares for approximately $961.3 million under our share repurchase program.

Our Board of Directors authorized a share repurchase program in 2016 pursuant to which we are authorized to repurchase shares of our common stock.

From 2016 through December 31, 2021, we had repurchased an aggregate of 36.6 million shares for approximately $1,762.7 million under our share repurchase program.

As of December 31, 2021, we had approximately $1,400.7 million remaining under the share repurchase authorization.

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The timing and amount of repurchases, if any, will depend upon several factors, including market and business conditions, restrictions in our debt agreements, the trading price of our common stock and the nature of other investment opportunities.

Repurchases of our

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common stock pursuant to our share repurchase program could affect the market price of our common stock or increase its volatility.

Repurchases of our common stock pursuant to our share repurchase program could affect the market price of our common stock or increase its volatility.

Although our share repurchase program is intended to enhance long-term stockholder value, there is no assurance that it will do so and short-term stock price fluctuations could reduce the program's effectiveness.

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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-K

Item 1A. Risk Factors