Item 9A. Controls and Procedures
Item 9A. Controls and Procedures
Disclosure Controls and Procedures
Our management, with the participation of our chief executive officer ("CEO") and chief financial officer ("CFO"), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2021. Based on such evaluation, our CEO and CFO have concluded that, as of December 31, 2021, our disclosure controls and procedures are effective in ensuring that (a) the information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and (b) such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control Over Financial Reporting
There were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the quarter ended December 31, 2021, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. We have not experienced any material impact to our internal controls over financial reporting despite the fact that most of our employees continue to work remotely due to the COVID-19 pandemic. We are continually monitoring and assessing the COVID-19 situation and our internal controls to minimize any impact on their design and operating effectiveness.
Management's Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act). Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, and includes those policies and procedures that: (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Our management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Based on this evaluation, management concluded that our internal control over financial reporting was effective as of December 31, 2021 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Management reviewed the results of its assessment with our Audit Committee. The effectiveness of our internal control over financial reporting as of December 31, 2021 has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in its report which is included immediately following Item 9A. Controls and Procedures , in this Annual Report on Form 10-K.
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Limitations on Disclosure Controls and Procedures and Internal Control over Financial Reporting
Our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives as specified above. Management does not expect, however, that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all error and fraud. Any control system, no matter how well designed and operated, is based upon certain assumptions and can provide only reasonable, not absolute, assurance that its objectives will be met. Further, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within Wayfair have been detected.
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Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of Wayfair Inc.
Opinion on Internal Control Over Financial Reporting
We have audited Wayfair Inc.’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, Wayfair Inc. (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive (loss) income, stockholders’ deficit and cash flows for each of the three years in the period ended December 31, 2021, and the related notes and our report dated February 24, 2022 expressed an unqualified opinion thereon.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.
Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
/s/ Ernst & Young LLP
Boston, Massachusetts
February 24, 2022
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Item 9B. Other Information
None.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10. Directors, Executive Officers and Corporate Governance
The information required by this item is incorporated by reference from our proxy statement for our 2022 annual meeting of stockholders, which we will file with the Securities and Exchange Commission within 120 days of December 31, 2021.
Item 11. Executive Compensation
The information required by this item is incorporated by reference from our proxy statement for our 2022 annual meeting of stockholders, which we will file with the Securities and Exchange Commission within 120 days of December 31, 2021.
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this item is incorporated by reference from our proxy statement for our 2022 annual meeting of stockholders, which we will file with the Securities and Exchange Commission within 120 days of December 31, 2021.
Item 13. Certain Relationships and Related Transactions, and Director Independence
The information required by this item is incorporated by reference from our proxy statement for our 2022 annual meeting of stockholders, which we will file with the Securities and Exchange Commission within 120 days of December 31, 2021.
Item 14. Principal Accounting Fees and Services
The information required by this item is incorporated by reference from our proxy statement for our 2022 annual meeting of stockholders, which we will file with the Securities and Exchange Commission within 120 days of December 31, 2021.
PART IV
Item 15. Exhibits and Financial Statement Schedules
(a) The following documents are filed as part of this Annual Report on Form 10-K:
(1) Financial Statements:
The financial statements are filed as part of this Annual Report on Form 10-K under Item 8, Financial Statements and Supplementary Data.
(2) Financial Statement Schedules:
The financial statement schedules are omitted because they are either not applicable or the information required is presented in the financial statements and notes thereto under Item 8, Financial Statements and Supplementary Data .
(3) Exhibits:
See the Exhibit Index immediately following the signature page of this Annual Report on Form 10-K, which is incorporated herein by reference.
Item 16. Form 10-K Summary
Not applicable.
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EXHIBIT INDEX
Incorporated by Reference
Exhibit
Number Exhibit Description Filed
Herewith Form File No. Filing Date Exhibit
Number
3.1 Restated Certificate of Incorporation of the Company
8-K 001-36666 10/8/2014 3.1
3.2 Amended and Restated Bylaws of Wayfair
8-K 001-36666 10/8/2014 3.2
4.1 Specimen stock certificate evidencing the shares of Class A common stock of the Company
S-1 333-198171 9/19/2014 4.1
4.2 Indenture, dated as of September 15, 2017, by and between Wayfair Inc. and U.S. Bank National Association, as trustee
8-K 001-36666 9/15/2017 4.1
4.3 Form of 0.375% Convertible Senior Notes due 2022 (included in Exhibit 4.2)
4.4 Indenture, dated as of November 19, 2018, by and between Wayfair Inc. and U.S. Bank National Association, as trustee
8-K 001-36666 11/19/2018 4.1
4.5 Form of 1.125% Convertible Senior Notes due 2024 (included in Exhibit 4.4)
4.6 Indenture, dated as of August 19, 2019, by and between Wayfair Inc. and U.S. Bank National Association, as trustee
8-K 001-36666 8/19/2019 4.1
4.7 Form of 1.00% Convertible Senior Notes due 2026 (included in Exhibit 4.6)
4.8 Form of Indenture by and between Wayfair Inc., Wayfair LLC, as Guarantor, and U.S. Bank National Association, as trustee
8-K 001-36666 4/8/2020 4.1
4.9 Form of 2.50% Accreting Convertible Senior Notes due 2025 (included in Exhibit 4.8)
4.10 Indenture, dated as of August 14, 2020, by and between Wayfair Inc. and U.S. Bank National Association, as trustee
8-K 001-36666 8/17/2020 4.1
4.11 Form of 0.625% Convertible Senior Notes due 2025 (included in Exhibit 4.10)
4.12 Description of Wayfair Securities
10-K 001-36666 2/25/2021 4.12
10.1+ Second Amended and Restated 2010 Incentive Plan
S-1 333-198171 8/15/2014 10.1
10.2+ Form of Deferred Unit Agreement under the Second Amended and Restated 2010 Incentive Plan
S-1 333-198171 8/15/2014 10.2
10.3+ 2014 Incentive Award Plan
S-1 333-198171 9/19/2014 10.3
10.4+ Form of Option Agreement under the 2014 Incentive Award Plan (adopted fiscal 2014)
S-1 333-198171 9/19/2014 10.4
10.5+ Form of Restricted Stock Unit Agreement under the 2014 Incentive Award Plan (adopted fiscal 2014)
S-1 333-198171 9/19/2014 10.5
10.6+ Form of Restricted Stock Unit Agreement under the 2014 Incentive Award Plan (adopted fiscal 2018)
10-K 001-3666 2/25/2019 10.6
10.7+ Form of Restricted Stock Agreement under the 2014 Incentive Award Plan (adopted fiscal 2014)
S-1 333-198171 9/19/2014 10.6
10.8+ Form of Indemnification and Advancement Agreement for Directors and Executive Officers
8-K 001-36666 1/8/2018 10.1
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10.9+ Form of Amended and Restated Letter Agreement , dated May 6, 2014 between the Company and each of Niraj Shah and Steven Conine
S-1 333-198171 8/15/2014 10.11
10.10+ Letter Agreement , dated October 2, 2013 between the Company and Michael Fleisher, as amended May 5, 2014
S-1 333-198171 8/15/2014 10.12
10.11 Credit Agreement , dated March 24, 2021 among Wayfair Inc., Wayfair LLC, the lending institutions from time to time parties thereto and Citibank, N.A., in its capacity as administrative agent, collateral agent, swingline lender and a letter of credit issuer
8-K 001-36666
3/26/2021 10.1
10.12 Amendment No. 1 to the Credit Agreement , dated October 11, 2021, among Wayfair Inc., Wayfair LLC and Citibank, N.A. as the Administrative Agent
X
10.13 2020 Incremental Commitment Joinder Agreement and Consent to Waiver, dated October 30, 2020, among Silicon Valley Bank, as an Incremental Lender, the other Lenders party thereto, Wayfair LLC, Wayfair Inc. and Citibank, N.A., as Administrative Agent.
10-Q 001-36666 11/3/2020 10.15
10.14 Letter Agreement, dated September 11, 2017, between Citibank, N.A. and Wayfair Inc. regarding the 2017 Base Capped Call Transaction
8-K 001-36666
9/15/2017 10.2
10.15 Letter Agreement, dated September 11, 2017, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the 2017 Base Capped Call Transaction
8-K 001-36666
9/15/2017 10.3
10.16 Letter Agreement, dated September 11, 2017, between Bank of America, N.A. and Wayfair Inc. regarding the 2017 Base Capped Call Transaction
8-K 001-36666
9/15/2017 10.4
10.17 Letter Agreement, dated September 14, 2017, between Citibank, N.A. and Wayfair Inc. regarding the 2017 Additional Capped Call Transaction
8-K 001-36666
9/15/2017 10.5
10.18 Letter Agreement, dated September 14, 2017, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the 2017 Additional Capped Call Transaction
8-K 001-36666
9/15/2017 10.6
10.19 Letter Agreement, dated September 14, 2017, between Bank of America, N.A. and Wayfair Inc. regarding the 2017 Additional Capped Call Transaction
8-K 001-36666
9/15/2017 10.7
10.20 Letter Agreement, dated November 14, 2018, between Morgan Stanley & Co. LLC and Wayfair Inc. regarding the 2018 Base Capped Call Transaction
8-K 001-36666 11/19/2018 10.2
10.21 Letter Agreement, dated November 14, 2018, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the 2018 Base Capped Call Transaction
8-K 001-36666 11/19/2018 10.3
10.22 Letter Agreement, dated November 14, 2018, between Bank of America, N.A. and Wayfair Inc. regarding the 2018 Base Capped Call Transaction
8-K 001-36666 11/19/2018 10.4
10.23 Amended and Restated Letter Agreement, dated November 15, 2018, between Citibank, N.A. and Wayfair Inc. regarding the 2017 Base Capped Call Transaction
8-K 001-36666 11/19/2018 10.5
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10.24 Amended and Restated Letter Agreement, dated November 15, 2018, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the 2017 Base Capped Call Transaction
8-K 001-36666 11/19/2018 10.6
10.25 Amended and Restated Letter Agreement, dated November 15, 2018, between Bank of America, N.A. and Wayfair Inc. regarding the 2017 Base Capped Call Transaction
8-K 001-36666 11/19/2018 10.7
10.26 Amended and Restated Letter Agreement, dated November 15, 2018, between Citibank, N.A. and Wayfair Inc. regarding the 2017 Additional Capped Call Transaction
8-K 001-36666 11/19/2018 10.8
10.27 Amended and Restated Letter Agreement, dated November 15, 2018, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the 2017 Additional Capped Call Transaction
8-K 001-36666 11/19/2018 10.9
10.28 Amended and Restated Letter Agreement, dated November 15, 2018, between Bank of America, N.A. and Wayfair Inc. regarding the 2017 Additional Capped Call Transaction
8-K 001-36666 11/19/2018 10.10
10.29 Letter Agreement, dated November 27, 2018, between Morgan Stanley & Co. LLC and Wayfair Inc. regarding the 2018 Additional Capped Call Transaction
8-K 001-36666 11/29/2018 10.1
10.30 Letter Agreement, dated November 27, 2018, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the 2018 Additional Capped Call Transaction
8-K 001-36666 11/29/2018 10.2
10.31 Letter Agreement, dated November 27, 2018, between Bank of America, N.A. and Wayfair Inc. regarding the 2018 Additional Capped Call Transactions
8-K 001-36666 11/29/2018 10.3
10.32 Letter Agreement, dated August 14, 2019, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the 2019 Base Capped Call Transactions
8-K 001-36666 8/19/2019 10.2
10.33 Letter Agreement, dated August 14, 2019, between Citibank, N.A. and Wayfair Inc. regarding the 2019 Base Capped Call Transactions
8-K 001-36666 8/19/2019 10.3
10.34 Letter Agreement, dated August 14, 2019, between JPMorgan Chase Bank, N.A. and Wayfair Inc. regarding the 2019 Base Capped Call Transactions
8-K 001-36666 8/19/2019 10.4
10.35 Letter Agreement, dated August 16, 2019, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the 2019 Base Capped Call Transactions
8-K 001-36666 8/19/2019 10.5
10.36 Letter Agreement, dated August 16, 2019, between Citibank, N.A. and Wayfair Inc. regarding the 2019 Base Capped Call Transactions
8-K 001-36666 8/19/2019 10.6
10.37 Letter Agreement, dated August 16, 2019, between JPMorgan Chase Bank, N.A. and Wayfair Inc. regarding the 2019 Base Capped Call Transactions
8-K 001-36666 8/19/2019 10.7
10.38 Form of Registration Rights Agreement by and between Wayfair Inc. and GHEP VII Aggregator, L.P., CBEP Investments, LLC and The Spruce House Partnership LLC
8-K 001-36666 4/8/2020 10.2
10.39 Letter Agreement, dated August 11, 2020, between Barclays PLC and Wayfair Inc. regarding the Base Capped Call Transaction
8-K 001-36666 8/17/2020 10.2
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10.40 Letter Agreement, dated August 11, 2020, between Citibank, N.A. and Wayfair Inc. regarding the Base Capped Call Transaction
8-K 001-36666 8/17/2020 10.3
10.41 Letter Agreement, dated August 11, 2020, between Morgan Stanley & Co. LLC and Wayfair Inc. regarding the Base Capped Call Transaction
8-K 001-36666 8/17/2020 10.4
10.42 Letter Agreement, dated August 11, 2020, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the Base Capped Call Transaction
8-K 001-36666 8/17/2020 10.5
10.43 Letter Agreement, dated August 11, 2020, between Nomura Global Financial Products Inc. and Wayfair Inc. regarding the Base Capped Call Transaction
8-K 001-36666 8/17/2020 10.6
10.44 Letter Agreement, dated August 11, 2020, between Bank of Montreal and Wayfair Inc. regarding the Base Capped Call Transaction
8-K 001-36666 8/17/2020 10.7
10.45 Letter Agreement, dated August 12, 2020, between Barclays Bank PLC and Wayfair Inc. regarding the Additional Capped Call Transaction
8-K 001-36666 8/17/2020 10.8
10.46 Letter Agreement, dated August 12, 2020, between Citibank, N.A. and Wayfair Inc. regarding the Additional Capped Call Transaction
8-K 001-36666 8/17/2020 10.9
10.47 Letter Agreement, dated August 12, 2020, between Morgan Stanley & Co. LLC and Wayfair Inc. regarding the Additional Capped Call Transaction
8-K 001-36666 8/17/2020 10.10
10.48 Letter Agreement, dated August 12, 2020, between Goldman Sachs & Co. LLC and Wayfair Inc. regarding the Additional Capped Call Transaction
8-K 001-36666 8/17/2020 10.11
10.49 Letter Agreement, dated August 12, 2020, between Nomura Global Financial Products Inc. and Wayfair Inc. regarding the Additional Capped Call Transaction
8-K 001-36666 8/17/2020 10.12
10.50 Letter Agreement, dated August 12, 2020, between Bank of Montreal and Wayfair Inc. regarding the Additional Capped Call Transaction
8-K 001-36666 8/17/2020 10.13
21.1 Subsidiaries of the Company
X
23.1 Consent of Ernst & Young LLP
X
31.1 Certification of Chief Executive Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
31.2 Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
X
32.1# Certification of Chief Executive Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
32.2# Certification of Chief Financial Officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
X
101.INS XBRL Instance Document X
101.SCH XBRL Taxonomy Schema Linkbase Document X
101.CAL XBRL Taxonomy Calculation Linkbase Document X
101.DEF XBRL Taxonomy Definition Linkbase Document X
101.LAB XBRL Taxonomy Labels Linkbase Document X
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101.PRE XBRL Taxonomy Presentation Linkbase Document X
104 Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.*) X
+ Indicates a management contract or compensatory plan
# This certification is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (Exchange Act), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
WAYFAIR INC.
By: /s/ NIRAJ SHAH
Niraj Shah
Chief Executive Officer and President
Date: February 24, 2022
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
Signature Title Date
/s/ NIRAJ SHAH Chief Executive Officer and President, Co-Founder and Director (Principal Executive Officer) February 24, 2022
Niraj Shah
/s/ MICHAEL FLEISHER Chief Financial Officer (Principal Financial and Accounting Officer) February 24, 2022
Michael Fleisher
/s/ STEVEN CONINE Co-Founder and Director February 24, 2022
Steven Conine
/s/ JEFFREY NAYLOR Director February 24, 2022
Jeffrey Naylor
/s/ MICHAEL CHOE Director February 24, 2022
Michael Choe
/s/ ANDREA JUNG Director February 24, 2022
Andrea Jung
/s/ MICHAEL KUMIN Director February 24, 2022
Michael Kumin
/s/ JEREMY KING Director February 24, 2022
Jeremy King
/s/ ANKE SCH Ä FERKORDT
Director February 24, 2022
Anke Sch ä ferkordt
/s/ MICHAEL E. SNEED Director February 24, 2022
Michael E. Sneed
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