What changed in this filing

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Item 1A. Risk Factors

2025-02-21 compared with 2024-02-22 · 74 added, 83 removed, 292 unchanged (35% of the section changed)

Our business, operating results, cash flows and financial condition are subject to these risks and uncertainties, any of

which could cause actual results to vary materially and adversely from recent results or from anticipated future results.

In addition to the other information included in this Annual Report on Form 10-K and in our other filings with the SEC, the following risk factors should be considered in evaluating our business and future prospects.

These risk factors represent what we believe to be the known material risk factors with respect to us and our business.

Our business, operating results, cash flows and financial condition are subject to these risks and uncertainties, any of which could cause actual results to vary materially from recent results or from anticipated future results.

These risks are not the only risks we face.

However, these are not the only risks we face.

Additional risks and uncertainties not currently known to us, or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, or results of operations.

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Our cokemaking and logistics businesses are subject to operating risks, some of which are beyond our control.

Equipment failures or deterioration of assets, may lead to production curtailments, shutdowns, impairments, or additional expenditures, which could have a material adverse effect on our results of operations and financial condition.

Equipment failures or deterioration of assets, may lead to production curtailments, shutdowns, impairments, or additional expenditures, which could materially and adversely affect our results of operations and financial condition.

Factors beyond our control could disrupt our cokemaking and logistics operations, adversely affect our ability to service the needs of our customers and increase our operating costs, all of which could have a material and adverse effect on our results of operations.

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Adverse developments at our logistics operations could significantly disrupt our ability to provide handling, mixing, storage, terminalling, transloading and/or transportation services, of coal and other dry and liquid bulk commodities, to our customers.

Our operations depend upon critical pieces of equipment that occasionally may be out of service for scheduled upgrades or maintenance or as a result of unanticipated failures.

Our operations depend upon critical pieces of

equipment that occasionally may be out of service for scheduled upgrades or maintenance or as a result of unanticipated failures.

Assets and equipment critical to these operations also may deteriorate or become depleted materially sooner than we currently estimate, resulting in additional maintenance spending or additional replacement capital expenditures.

Our cokemaking and logistics operations are subject to significant hazards and risks, any of which could result in production and transportation difficulties and disruptions, equipment failures and risk of catastrophic loss, permit non-compliance, pollution, personal injury or wrongful death claims and other damage to our properties and the property of others.

Our cokemaking and logistics operations are subject to significant hazards and risks, any of which could result in production and transportation difficulties and disruptions, equipment failures and risk of catastrophic loss, non-compliance with our operating permits, pollution, personal injury or wrongful death claims and other damage to our properties and the property of others.

Such hazards and risks include, but are not limited to:

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The financial performance of our cokemaking and logistics businesses is substantially dependent upon a limited number of customers, and the loss of any of these customers, or any failure by them to perform under their contracts with us, could materially and adversely affect our financial condition, permit compliance, results of operations and cash flows.

Substantially all of our coke sales currently are made pursuant to long-term contracts with Cliffs Steel and U.S.

Substantially all of our sales are made to a limited number of customers.

We expect these customers, and/or their respective successors in interest, by operation of merger, or otherwise, to continue to account for a significant portion of our revenues for the foreseeable future.

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If one or more of these customers were to significantly reduce its purchases of coke or logistics services from us without a make-whole payment, or default on their agreements with us, or terminate or fail to renew their agreements with us, or if we were unable to sell such coke or logistics services to these customers on terms as favorable to us as the terms under our current agreements, our cash flows, financial position, permit compliance, or results of operations could be materially and adversely affected.

Impairment in the carrying value of long-lived assets could adversely affect our business, financial condition and results of operations.

Impairment in the carrying value of long-lived assets could materially and adversely affect our business, financial condition and results of operations.

We have a significant amount of long-lived assets on our Consolidated Balance Sheets.

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If business conditions or other factors cause profitability and cash flows to decline, we may be required to record non-cash impairment charges.

Events and conditions that could result in impairment in the value of our long-lived assets include:

the impact of a downturn in the global economy, competition, advances in technology, adverse changes in the regulatory environment, new contracts and/or modification, termination or non-renewal of existing contracts, and other factors leading to a reduction in expected long-term sales or profitability, or a significant decline in the trading price of our common stock or market capitalization, lower future cash flows, slower industry growth rates and other changes in the industries in which we or our customers operate.

We face competition, both in our cokemaking operations and in our logistics business, which has the potential to reduce demand for our products and services, and that could have an adverse effect on our financial condition and results of operations.

Events and conditions that could result in impairment in the value of our long-lived assets include, but are not limited to:

negotiations related to renewals of certain of our long-term, take-or-pay agreements, new contracts and/or modifications entered into in the future, termination or non-renewal of existing contracts, and other factors leading to a reduction in expected long-term sales or profitability, the impact of a downturn in the global economy, competition, advances in technology, adverse changes in the regulatory environment, or a significant decline in the trading price of our common stock or market capitalization, lower future cash flows, slower industry growth rates and other changes in the industries in which we or our customers operate.

We face competition, both in our cokemaking operations and in our logistics business, which has the potential to reduce demand for our products and services, and that could materially and adversely affect our financial condition and results of operations.

We face competition, both in our cokemaking operations and in our logistics business:

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• Logistics business :

Decreased throughput and utilization of our logistics assets could result indirectly due to competition in the electrical power generation business from abundant and relatively inexpensive supplies of

natural gas displacing thermal coal as a fuel for electrical power generation by utility companies.

In addition, competition in the steel industry from processes such as electric arc furnaces, or blast furnace injection of pulverized coal or natural gas, may reduce the demand for metallurgical coals processed through our logistics facilities.

In the future, additional coal handling facilities and terminals with rail and/or barge access may be constructed in the Eastern U.S.

Such additional facilities could compete directly with us in specific markets now served by our logistics business.

Certain coal mining companies and independent terminal operators in some areas may compete directly with our logistics facilities.

In some markets, trucks may competitively deliver mined coal to certain shorter-haul destinations, resulting in reduced utilization of existing terminal capacity.

Such competition could reduce demand for our products and services, thus having an adverse effect on our financial condition and results of operations.

Other logistics facilities and independent terminal operations in some areas may compete directly with our logistics facilities.

In some markets, trucks may competitively deliver products to certain shorter-haul destinations, resulting in reduced utilization of existing terminal capacity.

In the future, additional logistics facilities and terminals with rail and/or barge access may be constructed in the Gulf Coast and East Coast regions, and such additional facilities and terminals could compete directly with us in specific markets now served by our CMT and KRT facilities, respectively.

Other logistics facilities, both global and domestic, may compete with our coal handling exports out of the Gulf Region, which may reduce the demand for our CMT facility.

In addition, decreased throughput and utilization of our logistics assets could result indirectly due to competition in:

(i) the electrical power generation business from abundant and relatively inexpensive supplies of natural gas displacing thermal coal as a fuel for electrical power generation by utility companies;

(ii) the steel industry from processes such as electric arc furnaces, or blast furnace injection of pulverized coal or natural gas reducing demand for metallurgical coals handled through our logistics facilities;

and/or (iii) the barge unloading business from service alternatives, such as mid-stream operations.

Such competition could reduce demand for our products and services, thus having a material and adverse effect on our financial condition and results of operations.

We are subject to extensive laws and regulations, which may increase our cost of doing business and have an adverse effect on our cash flows, financial position, or results of operations.

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protection of plants and wildlife;

reclamation and restoration of properties after completion of mining or drilling;

reclamation and restoration of properties after

completion of mining or drilling;

sales of electric power;

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and protection of employee health and safety.

For a description of environmental laws and matters applicable to us and associated risks, see “Item 1.

Business-Legal and Regulatory Requirements.”

Complying with these and other regulatory requirements, including the terms of our permits, can be costly and time-consuming, and may hinder operations.

In addition, these requirements are complex, change frequently and have become more stringent over time.

Regulatory requirements, including those related to GHGs, and various CAA programs, may change in the future in a manner that could result in substantially increased capital, operating and compliance costs, which could have an adverse effect on our financial condition and results of operations.

Failure to comply with applicable laws, regulations or permits may result in the assessment of administrative, civil and criminal penalties, the imposition of cleanup and site restoration costs and liens, the issuance of injunctions to limit or cease operations, the suspension or revocation of permits and other enforcement measures that could cause delays in permitting or development of projects or materially limit, or increase the cost of, our operations.

We may not have been, or may not be, at all times, in complete compliance with all such requirements, and we may incur material costs or liabilities in connection with such requirements, or in connection with remediation at sites we own, or third-party sites where it has been alleged that we have liability, in excess of the amounts we have accrued.

For a description of certain environmental laws and matters applicable to us and associated risks, see “Item 1.

Business-Legal and Regulatory Requirements.”

Our operations may impact the environment or cause exposure to hazardous substances, which could result in material liabilities to us.

Our operations result in emissions of various substances to the air, including GHGs, use hazardous materials, and generate solid and hazardous waste.

In addition, such regulatory requirements, including those related to GHGs, and various CAA programs, may change in the future in a manner that could result in substantially increased capital, operating and compliance costs, materially and adversely affecting our cash flows, financial condition, or results of operations.

Our operations may impact the environment or cause exposure to hazardous pollutants, which could result in material liabilities to us.

Our operations result in emissions of various substances to the air, including GHGs and hazardous air pollutants.

Our operations also generate solid and hazardous waste.

We have in the past and could in the future be subject to claims under federal, state and local laws and regulations arising from these activities, including for the investigation and clean-up of soil, surface water, or groundwater.

Some environmental laws also can impose liability regardless of fault or legality at the time in question, including the characterization of materials.

We previously have been and could again in the future be subject to litigation for alleged bodily injuries or property damage arising from claimed exposure to emissions or hazardous substances allegedly used, released, or disposed of by us, as well as litigation related to climate change by governments, private entities, or individuals.

Although we make every effort to avoid litigation, these matters are not totally within our control.

We will contest these matters vigorously and have made insurance claims where appropriate, but because of the uncertain nature of litigation and coverage decisions, we cannot predict the outcome of these matters.

We previously have been and could again in the future be subject to litigation for alleged personal injury or property damage arising from claimed exposure to emissions or hazardous substances allegedly used, released, or disposed of by us, as well as litigation related to climate change by governments, private entities, or individuals.

We make every effort to avoid litigation.

However, such matters are not totally within our control, and due to the inherently uncertain nature of litigation, we cannot predict the outcome of such matters.

Environmental impacts resulting from our operations, including exposures to emissions, hazardous substances, or wastes associated with our operations, could result in costs and liabilities that could adversely impact our financial condition and results of operations.

We may be unable to obtain, maintain or renew permits or leases necessary for our operations, which could materially reduce our production, cash flows or profitability.

We may be unable to obtain, maintain or renew permits or leases necessary for our operations, which could materially and adversely affect our production, cash flows or profitability.

Our cokemaking and logistics operations require us to obtain a number of permits that impose strict regulations on various environmental and operational matters.

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The permitting rules, and the interpretations of these rules, are complex, change frequently, and are often subject to discretionary interpretations by our regulators, all of which may make compliance more costly, difficult or impractical, and may possibly preclude the continuance of ongoing operations or the development of future cokemaking and/or logistics facilities.

Non-governmental organizations, environmental groups and individuals have certain rights to engage in the permitting process, and may

comment upon, or object to, the requested permits.

Such persons also have the right to bring citizen’s lawsuits to challenge the issuance of permits, or the validity of environmental impact statements related thereto.

If any permits or leases are not issued or renewed in a timely fashion or at all, or if permits issued or renewed are conditioned in a manner that restricts our ability to efficiently and economically conduct our operations, it could have an adverse effect on our financial condition and results of operations.

Non-governmental organizations, environmental groups and individuals have certain rights to engage in the permitting process, and may comment upon, or object to, the requested permits.

Such persons may also have the right to bring citizen’s lawsuits to challenge the issuance of permits, or the validity of environmental evaluations related thereto.

If any permits or leases are not issued or renewed in a timely fashion or at all, or if permits issued or renewed are conditioned in a manner that restricts our ability to efficiently and economically conduct our operations, it could have a material and adverse effect on our financial condition and results of operations.

Our businesses are subject to inherent risks, some for which we maintain third party insurance and some for which we self-insure.

We may incur losses and be subject to liability claims that could have a material adverse effect on our financial condition, results of operations or cash flows.

We may incur losses and be subject to liability claims that could materially and adversely affect our financial condition, results of operations or cash flows.

We maintain insurance policies that provide limited coverage for some, but not all, potential risks and liabilities associated with our business.

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As a result, we may not be able to renew our existing insurance policies or procure other desirable insurance on commercially reasonable terms, if at all.

In addition, certain risks, such as certain environmental and pollution risks, and certain cybersecurity risks, generally are not fully insurable.

In addition, certain risks, such as certain environmental and pollution risks, and

certain cybersecurity risks, generally are not fully insurable.

We must compensate employees for work-related injuries.

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A portion of our strategy to grow our business is dependent upon our ability to acquire and operate new assets that result in an increase in our earnings.

We may not derive the financial returns we expect on our investment in such additional assets or such operations may not be profitable.

We may not realize the expected financial returns from our investment in such additional assets, or such operations may not be profitable.

We cannot predict the effect that any failed expansion may have on our core businesses.

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In addition, our cokemaking and logistics operations have inherent safety risks that may give rise to events resulting in death, injury, or property loss to employees, customers, or unaffiliated third parties.

Depending upon the nature and severity of such events, we could be exposed to significant financial loss, reputational damage, potential civil or criminal government or other regulatory enforcement actions, or private litigation, the settlement or outcome of which could have a material and adverse effect on our financial condition or results of operations.

A new or more stringent greenhouse gas emission standard designed to address climate change and physical effects attributed to climate change may adversely affect our operations and impose significant costs on our business and our customers and suppliers.

There is increasing regulatory attention concerning the issue of climate change and the impact of GHGs, particularly from fossil fuels, which are integral to our cokemaking and logistics businesses.

Our business and operations, as well as the business and operations of our key suppliers and customers, may become subject to legislation or regulation intended to limit GHG emissions or the use of fossil fuels.

It is not possible to foresee the details of such legislation or regulations or changes in the economy or their resulting effects on our business.

Because our coking process is dependent on coal as a raw material and the coking process generates carbon dioxide, we are limited in our ability to reduce our GHG emissions and could be affected by future regulation of GHGs.

Future legislation or regulation regarding climate change and GHG emissions could have a material adverse effect on our financial condition and results of operations.

Climate change may cause changes in weather patterns and increase the frequency or severity of weather events and flooding.

An increase in severe weather events and flooding may adversely impact us, our operations, and our ability to procure raw materials and manufacture and transport our products which could have a material adverse effect on our financial condition and results of operations.

Extreme weather conditions may increase our costs, temporarily impact our production capabilities or cause damage to our facilities.

For example, our terminals are located near bodies of water and may be impacted by flooding or hurricanes, disrupting our or our customers' ability to move products.

Our coke plants are also generally located near bodies of water and may be impacted by the effects of climate change.

Additionally, extreme cold could prevent coal delivery and unloading at our coke plants, impeding operation, or create a more hazardous outdoor working environment for our employees .

Investor interest in climate change, fossil fuels, and sustainability could adversely affect our business and our stock price.

Climate change and sustainability have increasingly become important topics to investors and the community at large.

As such, there have been recent efforts aimed at the investment community to encourage the divestment of shares of companies associated with energy, coal and/or fossil fuels, as well as to pressure lenders and other financial services companies to limit or curtail business relations with coal and fossil fuel companies.

If these efforts are successful, our stock price and our ability to access capital markets may be negatively impacted.

Members of the investment community are also increasing their focus on sustainability practices, including management of GHGs and climate change.

To the extent ESG matters impact our reputation, they may also impact our ability to attract or retain employees or customers.

As a result, we may face increasing pressure regarding our sustainability disclosures and practices.

While we have in the past engaged, and expect in the future to continue to engage, in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) on “ESG matters”, such as sustainability and inclusion, to respond to stakeholder expectations, such initiatives may be costly and may not have the desired effect.

For example, actions or statements that we may take based on expectations, assumptions, or third-party information may at some point be

determined to be erroneous or otherwise not in keeping with best practices.

If we fail to, or are perceived to fail to, appropriately advance certain initiatives or use appropriate methodologies and data sources, we may be subject to various adverse impacts, including reputational damage, stakeholder engagement, and/or litigation.

Simultaneously, there are efforts by some parties, including some policymakers and activists, to constrain or eliminate companies' efforts on various ESG-related matters.

To the extent we are subject to any such activism, it may require us to incur costs or otherwise adversely impact our business.

Many of our customers, business partners, and suppliers may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.

Depending upon the nature and severity of such events, we could be exposed to significant financial loss, reputational damage, potential civil or criminal government or other regulatory enforcement

actions, or private litigation, the settlement or outcome of which could have a material and adverse effect on our financial condition or results of operations.

Physical effects attributed to, and various parties’ efforts to respond to climate-related changes, could materially and adversely affect our operations and impose significant costs on our business and our customers and suppliers.

We are subject to various climate-related risks.

Various policymakers have adopted, or are considering adopting, regulations regarding GHGs, particularly from fossil fuels, which are integral to our cokemaking and logistics businesses.

Such regulations range from provisions to reduce GHG emissions, either directly or indirectly (such as through carbon pricing), to requirements for disclosure of climate-related information, any of which may result in substantial compliance costs.

Moreover, pressure to reduce GHG emissions may also contribute to competition with alternatives to our products.

Our operations may be impacted by climate-related changes in weather, temperature, hydrological patterns, and/or increased frequency or severity of natural disasters.

Extreme weather and temperature conditions, such as storms, fires, and flooding, may increase our costs, impact our production capabilities, damage our facilities, contribute to workplace hazards, and materially and adversely affect our ability to procure raw materials, and/or manufacture and transport our products.

While we aim to manage such risks, we cannot guarantee that such mitigation efforts will be successful, or that insurance will continue to be available at costs we deem acceptable.

Any of these transition or physical risks associated with climate change could materially and adversely affect our reputation, financial condition, and results of operations.

Stakeholder scrutiny of sustainability matters could materially and adversely affect our business and our stock price.

There continues to be significant attention to climate, civil and human rights, and other sustainability issues by various stakeholders.

Responding to such matters can be complex.

Methodologies and data for measuring and reporting on sustainability matters continue to evolve, as does our own approach to such matters, and we cannot guarantee that our approach will align with the preferences or interpretations of any particular stakeholder.

While we take actions to manage our sustainability profile, such initiatives may be costly and may not have the desired effect.

Various regulations regarding sustainability matters have been adopted or proposed, but such regulations are not uniform, and can increase the complexity and cost of compliance.

We may incur costs to respond to such regulation, or activism from both advocates and opponents of sustainability measures.

Many of our customers, business partners, and suppliers may be subject to similar expectations, which could create additional risks, including risks unknown to us.

Failure to appropriately navigate any of these considerations could materially and adversely impact our reputation, financial condition, and/or results of operations.

Risks Related to Our Cokemaking Business

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Further, because of certain technological design constraints, we do not have the ability to shut down our cokemaking operations if we do not have adequate customer demand.

If a customer refuses to take or pay for our coke, we must continue to operate our coke ovens even though we may not be able to sell our coke immediately and may incur significant additional costs for natural gas to maintain the temperature inside our coke oven batteries and fees under our rail contracts to account for reductions in inbound coal or outbound coke shipments at our plants, which may have a material and adverse effect on our cash flows, financial position or results of operations.

If a customer refuses to take or pay for our coke, we must continue to operate our coke ovens even though we may not be able to sell our coke immediately or may incur significant additional costs for:

(i) natural gas to maintain the temperature inside our coke oven batteries;

and (ii) fees under our rail contracts to account for reductions in inbound coal or outbound coke shipments at our plants, which may have a material and adverse effect on our cash flows, financial position or results of operations.

Excess capacity in the global steel industry, and/or increased exports of coke from producing countries, may weaken our customers' demand for our coke and could materially and adversely affect our future revenues and profitability.

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At our Granite City and Haverhill cokemaking facilities, we rely on third-parties to mix coals that we have purchased into coal mixes that we use to produce coke.

We have entered into long-term agreements with coal mixing service providers that are coterminous with our coke sales agreements.

We have entered into agreements with coal mixing service providers that are coterminous with our coke sales agreements.

However, there are limited alternative providers of coal mixing services and any disruptions from our current service providers could materially and adversely impact our results of operations.

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Alternative transportation and delivery systems are generally inadequate and not suitable to handle the quantity of our shipments or to ensure timely delivery.

The loss of access to rail capacity could create temporary disruption until the access is restored, significantly impairing our ability to receive coal and resulting in materially decreased

The loss of access to rail capacity could create temporary disruption until the access is restored, significantly impairing our ability to receive coal and resulting in materially decreased revenues.

Our ability to open new cokemaking facilities may also be affected by the availability and cost of rail or other transportation systems available for servicing these facilities.

Our coke production obligations at our Jewell cokemaking facility and one half of our Haverhill cokemaking facility require us to deliver coke to certain customers via railcar.

Our coke production obligations at our Jewell cokemaking facility and our Haverhill cokemaking facility require us to deliver coke to certain customers via railcar.

We have entered into long-term rail transportation agreements to meet these obligations.

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Future growth and profitability of our logistics business segment will depend, in part, upon whether we can contract for additional coal and other bulk commodity volumes at a rate greater than that of any decline in volumes from existing customers.

Accordingly, decreased demand for coal, or other bulk commodities, or a decrease in the market price of coal, or other bulk commodities, could have a material adverse effect on the results of operations or financial condition of our logistics business.

decreased demand for coal, or other bulk commodities, or a decrease in the market price of coal, or other bulk commodities, could have a material adverse effect on the results of operations or financial condition of our logistics business.

The geographic location of CMT could expose us to potential significant liabilities, including operational hazards and unforeseen business interruptions, that could substantially and adversely affect our future financial performance.

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We may face material debt maturities which may adversely affect our consolidated financial position.

As of December 31, 2023, we have no consolidated debt maturing over the next five years.

Over the next five years, we have $500.0 million of total consolidated debt maturing.

See Note 11 to our consolidated financial statements.

However, we may enter into debt agreements throughout the course of the fiscal year which could create material debt maturities.

We may not be able to refinance this debt, or may be forced to do so on terms substantially less favorable than our currently outstanding debt.

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Our ability to meet our debt obligations and reduce our level of indebtedness depends upon our future performance and general economic, financial, business, and other factors, many of which are beyond our control.

Factors affecting our

ability to raise cash through an offering of our common stock or a refinancing of our debt include financial market conditions, the value of our assets, and our performance at the time we need capital.

Factors affecting our ability to raise cash through an offering of our common stock or a refinancing of our debt include financial market conditions, the value of our assets, and our performance at the time we need capital.

In addition, the credit agreement governing our credit facilities contains restrictive covenants that limit our ability to engage in activities (such as incurring additional debt) that may be in our long-term best interest.

Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt.

Our failure to comply with those covenants, or covenants of any new agreements, could result in an event of default which, if not cured or waived, could result in the acceleration of all our debt.

In the event of an acceleration of all our debt, we may not have sufficient cash on hand to repay the indebtedness in full or refinance such debt on favorable terms, or at all.

Such event could materially adversely affect our business, financial condition and results of operations.

Risks Related to Our Legacy Coal Mining Business

Our former coal mining operations were subject to governmental regulations pertaining to employee health and safety and mandated benefits for retired coal miners.

Following the divestiture of our coal mining operations, compliance with such regulations has continued to impose significant costs on our business.

Our former coal mining operations were subject to strict regulation by federal, state and local authorities with respect to environmental matters such as reclamation, and to matters such as employee health and safety and mandated benefits for retired coal miners.

Even after divestiture of our coal mining business, compliance with these reclamation and benefits requirements has continued to impose significant costs on us.

As a former coal mine operator, federal law requires us to secure payment of federal black lung benefits to claimants who were employees, and to contribute to a trust fund for payment of benefits and medical expenses to claimants who last worked in the coal industry before January 1, 1970.

At December 31, 2023, our liabilities for coal workers’ black lung benefits totaled $58.2 million .

Our business could be materially and adversely harmed if these liabilities, including the number and award size of claims, were increased.

Business-Legal and Regulatory Requirements-Regulation of Operations.”

General Risks

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The nature of our operations exposes us to possible litigation claims in the future, including disputes relating to our operations and commercial and contractual arrangements.

Although we make every effort to avoid litigation, these matters are not totally within our control.

Although we make every effort to avoid litigation, these matters

are not totally within our control.

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The growth of cyber-attacks has resulted in an evolving legal landscape which imposes costs that are likely to increase over time.

For example, new laws and regulations governing data privacy and the unauthorized disclosure of confidential information, including the European Union General Data Protection Regulation and recent California legislation (which, among other things, provides for a private right of action), pose increasingly complex compliance challenges and could potentially elevate our costs over time.

For example, new laws and regulations governing data privacy and the unauthorized disclosure of confidential information including, but not limited to the European Union General Data Protection Regulation and recent

California legislation (which, among other things, provides for a private right of action), pose increasingly complex compliance challenges and could potentially elevate our costs over time.

Any failure by us to comply with such laws and regulations could result in penalties and liabilities.

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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