Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

The accompanying unaudited Condensed Consolidated Financial Statements of ADTRAN Holdings, Inc. and its subsidiaries have been prepared pursuant to the rules and regulations of the SEC applicable to interim financial information presented in Quarterly Reports on Form 10-Q. Accordingly, certain information and notes required by generally accepted accounting principles in the United States of America (“U.S. GAAP”) for complete financial statements are not included herein. The December 31, 2023, Condensed Consolidated Balance Sheet is derived from audited financial statements but does not include all disclosures required by U.S. GAAP for annual financial statements.

In the opinion of management, all adjustments necessary to fairly state these interim statements have been recorded and are of a normal and recurring nature. The results of operations for an interim period are not necessarily indicative of the results for the full year. The interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in ADTRAN Holdings, Inc. Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on March 15, 2024.

Revision of Previously Issued Condensed Consolidated Financial Statements

Following the third quarter of 2024, the Company identified errors primarily impacting the carrying values of the redeemable non-controlling interest, retained deficit, the net income attributable to the non-controlling interest and the net loss attributable to the Company and, as a consequence, of the loss per common share attributable to the Company. The Company has evaluated the errors and determined that the related impacts were not material to the previously issued consolidated financial statements for any prior period. A summary of the corrections to the Company's Condensed Consolidated Financial Statements for the periods ended March 31, 2023, June 30, 2023, September 30, 2023, December 31, 2023, March 31, 2024 and June 30, 2024, are as follows:

(a)

Pursuant to the terms of the DPLTA, each Adtran Networks shareholder (other than the Company) is entitled to receive from us an Annual Recurring Compensation payment of €0.52 per share. The Company erroneously accrued this liability every quarter at €0.59 per share, overstating the associated accrual, the net income attributable to non-controlling interest and the net loss attributable to ADTRAN Holdings, Inc. for fiscal periods beginning with the quarter ended March 31, 2023 through the quarter ended June 30, 2024.

(b)

For the periods beginning with the quarter ended March 31, 2023 through the quarter ended June 30, 2024 the Company remeasured the redeemable non-controlling interest each quarter-end at the current exchange rate of Euros to U.S. Dollar. The Company treated the redeemable non-controlling interest as a monetary mezzanine equity instrument but should have treated it as a non-monetary mezzanine equity instrument not subject to remeasurement.

We have revised our previously issued Condensed Consolidated Financial Statements for the periods ended March 31, 2023, June 30, 2023, September 30, 2023, December 31, 2023, March 31, 2024 and June 30, 2024. Additionally, the Company will revise its previously issued 2023 interim financial statements and 2023 annual financial statements in connection with the future filings of the Form 10-K for the year ended December 31, 2024, and interim reporting on Form 10-Q for the periods ended March 31, 2025 and June 30, 2025.

The following tables reflect the impact of the revision to the specific line items presented in the Company's previously reported Condensed Consolidated Balance Sheets, Condensed Consolidated Statements of Loss, and Condensed Consolidated Statements of Comprehensive Loss for the for fiscal periods beginning with the quarter ended March 31, 2023 through the quarter ended June 30, 2024.


	March 31, 2023
(In thousands)	As Previously Reported		Revision				As Revised
Other non-current liabilities	$	15,986	$	(346	)	(a)	$	15,640
Total Liabilities	$	675,765	$	(346	)		$	675,419
Redeemable Non-Controlling Interest	$	442,668	$	(430	)	(b)	$	442,238
Accumulated Other Comprehensive Income	$	34,526	$	1		(a)	$	34,527
Retained Earnings	$	8,006	$	775		(a)(b)	$	8,781
Total Equity	$	820,162	$	776			$	820,938
Total Liabilities, Redeemable Non-Controlling Interest and Equity	$	1,938,595	$	—			$	1,938,595


	For the Three Months Ended March 31, 2023
(In thousands)	As Previously Reported			Revision				As Revised
Less: Net Loss attributable to non-controlling interest	$	(370	)	$	(345	)	(a)	$	(715	)
Net Loss attributable to ADTRAN Holdings, Inc.	$	(40,083	)	$	345		(a)	$	(39,738	)
Loss per common share attributable to ADTRAN Holdings, Inc. – basic	$	(0.51	)	$	—			$	(0.51	)
Loss per common share attributable to ADTRAN Holdings, Inc. – diluted	$	(0.51	)	$	—			$	(0.51	)
Foreign currency translation gain	$	8,678		$	1		(a)	$	8,679
Other Comprehensive Income, net of tax	$	8,782		$	1			$	8,783
Comprehensive Loss, net of tax	$	(31,671	)	$	1			$	(31,670	)
Less: Comprehensive Income (Loss) attributable to non-controlling interest, net of tax	$	12		$	(345	)	(a)	$	(333	)
Comprehensive Loss attributable to ADTRAN Holdings, Inc., net of tax	$	(31,683	)	$	346		(a)	$	(31,337	)


	June 30, 2023
(In thousands)	As Previously Reported			Revision				As Revised
Other non-current liabilities	$	16,401		$	(695	)	(a)	$	15,706
Total Liabilities	$	665,006		$	(695	)		$	664,311
Redeemable Non-Controlling Interest	$	445,462		$	(3,244	)	(b)	$	442,218
Accumulated Other Comprehensive Income	$	41,483		$	2		(a)	$	41,485
Retained Deficit	$	(41,010	)	$	3,937		(a)(b)	$	(37,073	)
Total Equity	$	782,470		$	3,939			$	786,409
Total Liabilities, Redeemable Non-Controlling Interest and Equity	$	1,882,938		$	—			$	1,882,938


	For the Three Months Ended June 30, 2023										For the Six Months Ended June 30, 2023
(In thousands)	As Previously Reported			Revision				As Revised			As Previously Reported			Revision				As Revised
Less: Net Income attributable to non-controlling interest	$	2,882		$	(348	)	(a)	$	2,534		$	2,512		$	(693	)	(a)	$	1,819
Net Loss attributable to ADTRAN Holdings, Inc.	$	(39,097	)	$	348		(a)	$	(38,749	)	$	(79,180	)	$	693		(a)	$	(78,487	)
Loss per common share attributable to ADTRAN Holdings, Inc. – basic	$	(0.50	)	$	—			$	(0.50	)	$	(1.01	)	$	0.01		(a)	$	(1.00	)
Loss per common share attributable to ADTRAN Holdings, Inc. – diluted	$	(0.50	)	$	—			$	(0.50	)	$	(1.01	)	$	0.01		(a)	$	(1.00	)
Foreign currency translation gain	$	6,940		$	1		(a)	$	6,941		$	15,618		$	2		(a)	$	15,620
Other Comprehensive Income, net of tax	$	6,957		$	1			$	6,958		$	15,739		$	2			$	15,741
Comprehensive Loss, net of tax	$	(29,258	)	$	1			$	(29,257	)	$	(60,929	)	$	2			$	(60,927	)
Less: Comprehensive Income attributable to non-controlling interest, net of tax	$	2,882		$	(348	)	(a)	$	2,534		$	2,894		$	(693	)	(a)	$	2,201
Comprehensive Loss attributable to ADTRAN Holdings, Inc., net of tax	$	(32,140	)	$	349		(a)	$	(31,791	)	$	(63,823	)	$	695		(a)	$	(63,128	)


	September 30, 2023
(In thousands)	As Previously Reported			Revision				As Revised
Other non-current liabilities	$	17,408		$	(1,049	)	(a)	$	16,359
Total Liabilities	$	625,355		$	(1,049	)		$	624,306
Redeemable Non-Controlling Interest	$	431,921		$	10,291		(b)	$	442,212
Accumulated Other Comprehensive Income	$	12,075		$	3		(a)	$	12,078
Retained Deficit	$	(113,289	)	$	(9,245	)	(a)(b)	$	(122,534	)
Total Equity	$	684,893		$	(9,242	)		$	675,651
Total Liabilities, Redeemable Non-Controlling Interest and Equity	$	1,742,169		$	—			$	1,742,169


	For the Three Months Ended September 30, 2023										For the Nine Months Ended September 30, 2023
(In thousands)	As Previously Reported			Revision				As Revised			As Previously Reported			Revision				As Revised
Less: Net Income attributable to non-controlling interest	$	2,914		$	(353	)	(a)	$	2,561		$	5,426		$	(1,046	)	(a)	$	4,380
Net Loss attributable to ADTRAN Holdings, Inc.	$	(78,563	)	$	353		(a)	$	(78,210	)	$	(157,743	)	$	1,046		(a)	$	(156,697	)
Loss per common share attributable to ADTRAN Holdings, Inc. – basic	$	(1.00	)	$	—			$	(1.00	)	$	(2.01	)	$	0.01		(a)	$	(2.00	)
Loss per common share attributable to ADTRAN Holdings, Inc. – diluted	$	(1.00	)	$	—			$	(1.00	)	$	(2.01	)	$	0.01		(a)	$	(2.00	)
Foreign currency translation loss	$	(29,716	)	$	1		(a)	$	(29,715	)	$	(14,098	)	$	3		(a)	$	(14,095	)
Other Comprehensive Loss, net of tax	$	(29,408	)	$	1			$	(29,407	)	$	(13,669	)	$	3			$	(13,666	)
Comprehensive Loss, net of tax	$	(105,057	)	$	1			$	(105,056	)	$	(165,986	)	$	3			$	(165,983	)
Less: Comprehensive Income attributable to non-controlling interest, net of tax	$	2,914		$	(353	)	(a)	$	2,561		$	5,808		$	(1,046	)	(a)	$	4,762
Comprehensive Loss attributable to ADTRAN Holdings, Inc., net of tax	$	(107,971	)	$	354		(a)	$	(107,617	)	$	(171,794	)	$	1,049		(a)	$	(170,745	)


	March 31, 2024
(In thousands)	As Previously Reported			Revision				As Revised
Accrued Expenses and Other Liabilities	$	36,404		$	(1,403	)	(a)	$	35,001
Total Current Liabilities	$	282,746		$	(1,403	)		$	281,343
Other non-current liabilities	$	35,375		$	(350	)	(a)	$	35,025
Total Liabilities	$	620,488		$	(1,753	)		$	618,735
Redeemable Non-Controlling Interest	$	441,635		$	511		(b)	$	442,146
Accumulated Other Comprehensive Income	$	29,656		$	5		(a)	$	29,661
Retained Deficit	$	(558,363	)	$	1,237		(a)(b)	$	(557,126	)
Total Equity	$	265,783		$	1,242			$	267,025
Total Liabilities, Redeemable Non-Controlling Interest and Equity	$	1,327,906		$	—			$	1,327,906


	For the Three Months Ended March 31, 2024
(In thousands)	As Previously Reported			Revision				As Revised
Less: Net Income attributable to non-controlling interest	$	2,880		$	(349	)	(a)	$	2,531
Net Loss attributable to ADTRAN Holdings, Inc.	$	(324,550	)	$	349		(a)	$	(324,201	)
Loss per common share attributable to ADTRAN Holdings, Inc. – basic	$	(4.12	)	$	—			$	(4.12	)
Loss per common share attributable to ADTRAN Holdings, Inc. – diluted	$	(4.12	)	$	—			$	(4.12	)
Foreign currency translation loss	$	(17,745	)	$	1		(a)	$	(17,744	)
Other Comprehensive Loss, net of tax	$	(17,805	)	$	1			$	(17,804	)
Comprehensive Loss, net of tax	$	(339,475	)	$	1			$	(339,474	)
Less: Comprehensive Income attributable to non-controlling interest, net of tax	$	2,880		$	(349	)	(a)	$	2,531
Comprehensive Loss attributable to ADTRAN Holdings, Inc., net of tax	$	(342,355	)	$	350		(a)	$	(342,005	)


	June 30, 2024
(In thousands)	As Previously Reported			Revision				As Revised
Accrued Expenses and Other Liabilities	$	36,307		$	(1,403	)	(a)	$	34,904
Total Current Liabilities	$	289,712		$	(1,403	)		$	288,309
Other non-current liabilities	$	34,445		$	(701	)	(a)	$	33,744
Total Liabilities	$	630,810		$	(2,104	)		$	628,706
Redeemable Non-Controlling Interest	$	439,743		$	2,379		(b)	$	442,122
Accumulated Other Comprehensive Income	$	28,274		$	6		(a)	$	28,280
Retained Deficit	$	(606,375	)	$	(281	)	(a)(b)	$	(606,656	)
Total Equity	$	220,229		$	(275	)		$	219,954
Total Liabilities, Redeemable Non-Controlling Interest and Equity	$	1,290,782		$	—			$	1,290,782


	For the Three Months Ended June 30, 2024										For the Six Months Ended June 30, 2024
(In thousands)	As Previously Reported			Revision				As Revised			As Previously Reported			Revision				As Revised
Less: Net Income attributable to non-controlling interest	$	2,854		$	(350	)	(a)	$	2,504		$	5,734		$	(699	)	(a)	$	5,035
Net Loss attributable to ADTRAN Holdings, Inc.	$	(49,865	)	$	350		(a)	$	(49,515	)	$	(374,415	)	$	699		(a)	$	(373,716	)
Loss per common share attributable to ADTRAN Holdings, Inc. – basic	$	(0.63	)	$	—			$	(0.63	)	$	(4.75	)	$	0.01		(a)	$	(4.74	)
Loss per common share attributable to ADTRAN Holdings, Inc. – diluted	$	(0.63	)	$	—			$	(0.63	)	$	(4.75	)	$	0.01		(a)	$	(4.74	)
Foreign currency translation loss	$	(1,375	)	$	1		(a)	$	(1,374	)	$	(19,120	)	$	2		(a)	$	(19,118	)
Other Comprehensive Loss, net of tax	$	(1,382	)	$	1			$	(1,381	)	$	(19,187	)	$	2			$	(19,185	)
Comprehensive Loss, net of tax	$	(48,393	)	$	1			$	(48,392	)	$	(387,868	)	$	2			$	(387,866	)
Less: Comprehensive Income attributable to non-controlling interest, net of tax	$	2,854		$	(350	)	(a)	$	2,504		$	5,734		$	(699	)	(a)	$	5,035
Comprehensive Loss attributable to ADTRAN Holdings, Inc., net of tax	$	(51,247	)	$	351		(a)	$	(50,896	)	$	(393,602	)	$	701		(a)	$	(392,901	)

The following tables reflect the impact of the revisions to the specific line items presented in the Company’s previously reported Consolidated Balance Sheet as of December 31, 2023, the Consolidated Statement of Loss and the Consolidated Statement of Comprehensive Loss for the year ended December 31, 2023.


	December 31, 2023
(In thousands)	As Previously Reported			Revision				As Revised
Accrued Expenses and Other Liabilities	$	37,607		$	(1,403	)	(a)	$	36,204
Total Current Liabilities	$	279,511		$	(1,403	)		$	278,108
Total Liabilities	$	636,934		$	(1,403	)		$	635,531
Redeemable Non-Controlling Interest	$	451,756		$	(9,604	)	(b)	$	442,152
Accumulated Other Comprehensive Income	$	47,461		$	4		(a)	$	47,465
Retained Deficit	$	(243,908	)	$	11,003		(a)(b)	$	(232,905	)
Total Equity	$	593,822		$	11,007			$	604,829
Total Liabilities, Redeemable Non-Controlling Interest and Equity	$	1,682,512		$	—			$	1,682,512


	For the Year Ended December 31, 2023
(In thousands)	As Previously Reported			Revision				As Revised
Less: Net Income attributable to non-controlling interest	$	8,345		$	(1,399	)	(a)	$	6,946
Net Loss attributable to ADTRAN Holdings, Inc.	$	(267,688	)	$	1,399		(a)	$	(266,289	)
Loss per common share attributable to ADTRAN Holdings, Inc. – basic	$	(3.41	)	$	0.02		(a)	$	(3.39	)
Loss per common share attributable to ADTRAN Holdings, Inc. – diluted	$	(3.41	)	$	0.02		(a)	$	(3.39	)
Foreign currency translation gain	$	22,753		$	4		(a)	$	22,757
Other Comprehensive Income, net of tax	$	21,717		$	4			$	21,721
Comprehensive Loss, net of tax	$	(237,626	)	$	4			$	(237,622	)
Less: Comprehensive Income attributable to non-controlling interest, net of tax	$	8,727		$	(1,399	)	(a)	$	7,328
Comprehensive Loss attributable to ADTRAN Holdings, Inc., net of tax	$	(246,353	)	$	1,403		(a)	$	(244,950	)

The following tables reflect the impact of the revision to the specific line items presented in the Company's previously reported Condensed Consolidated Statements of Changes in Stockholders Equity as of September 30, 2023 and 2024:


	Retained Earnings (Deficit)										Accumulated Other Comprehensive Income
(In thousands)	As Previously Reported			Revision				As Revised			As Previously Reported			Revision			As Revised
Annual recurring compensation earned	$	(2,809	)	$	345		(a)	$	(2,464	)	$	-		$	-		$	-
Other comprehensive income, net of tax	$	-		$	-			$	-		$	8,400		$	1	(a)	$	8,401
Foreign currency remeasurement of redeemable non-controlling interest	$	(430	)	$	430		(b)	$	-		$	-		$	-		$	-
Balance as of March 31, 2023	$	8,006		$	775			$	8,781		$	34,526		$	1		$	34,527
Annual recurring compensation earned	$	(2,882	)	$	348		(a)	$	(2,534	)	$	-		$	-		$	-
Other comprehensive income, net of tax	$	-		$	-			$	-		$	6,957		$	1	(a)	$	6,958
Foreign currency remeasurement of redeemable non-controlling interest	$	(2,814	)	$	2,814		(b)	$	-		$	-		$	-		$	-
Balance as of June 30, 2023	$	(41,010	)	$	3,937			$	(37,073	)	$	41,483		$	2		$	41,485
Annual recurring compensation earned	$	(2,914	)	$	353		(a)	$	(2,561	)	$	-		$	-		$	-
Other comprehensive loss, net of tax	$	-		$	-			$	-		$	(29,408	)	$	1	(a)	$	(29,407	)
Foreign currency remeasurement of redeemable non-controlling interest	$	13,535		$	(13,535	)	(b)	$	-		$	-		$	-		$	-
Balance as of September 30, 2023	$	(113,289	)	$	(9,245	)		$	(122,534	)	$	12,075		$	3		$	12,078


	Retained Deficit										Accumulated Other Comprehensive Income
(In thousands)	As Previously Reported			Revision				As Revised			As Previously Reported			Revision			As Revised
Balance as of December 31, 2023	$	(243,908	)	$	11,003		(a)	$	(232,905	)	$	47,461		$	4	(a)	$	47,465
Annual recurring compensation earned	$	(2,880	)	$	349		(a)	$	(2,531	)	$	-		$	-		$	-
Other comprehensive loss, net of tax	$	-		$	-			$	-		$	(17,805	)	$	1	(a)	$	(17,804	)
Foreign currency remeasurement of redeemable non-controlling interest	$	10,115		$	(10,115	)	(b)	$	-		$	-		$	-		$	-
Balance as of March 31, 2024	$	(558,363	)	$	1,237			$	(557,126	)	$	29,656		$	5		$	29,661
Annual recurring compensation earned	$	(2,854	)	$	350		(a)	$	(2,504	)	$	-					$	-
Other comprehensive loss, net of tax	$	-		$	-			$	-		$	(1,382	)	$	1	(a)	$	(1,381	)
Foreign currency remeasurement of redeemable non-controlling interest	$	1,868		$	(1,868	)	(b)	$	-		$	-		$	-		$	-
Balance as of June 30, 2024	$	(606,375	)	$	(281	)		$	(606,656	)	$	28,274		$	6		$	28,280

The following tables reflect the impact of the revision to the specific line items presented in the Company's previously reported Consolidated Statement of Changes in Stockholders as of December 31, 2023:


	Retained Earnings (Deficit)									Accumulated Other Comprehensive Income
(In thousands)	As Previously Reported			Revision			As Revised			As Previously Reported		Revision			As Revised

Annual recurring compensation earned	$	(11,524	)	$	1,399	(a)	$	(10,125	)	$	-	$	-		$	-
Other comprehensive income, net of tax	$	-		$	-		$	-		$	21,335	$	4	(a)	$	21,339
Foreign currency remeasurement of redeemable non-controlling interest	$	(9,604	)	$	9,604	(b)	$	-		$	-	$	-		$	-
Balance as of December 31, 2023	$	(243,908	)	$	11,003		$	(232,905	)	$	47,461	$	4		$	47,465

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting period. Significant estimates include allowance for credit losses on accounts receivable and contract assets, excess and obsolete inventory reserves, warranty reserves, customer rebates, determination and accrual of the deferred revenue related to performance obligations under contracts with customers, estimated costs to complete obligations associated with deferred and accrued revenue and network installations, estimated income tax provision and income tax contingencies, fair value of stock-based compensation, assessment of goodwill and other intangibles for impairment, estimated lives of intangible assets, estimates of intangible assets upon measurement, estimated pension liability and fair value of investments and estimated contingent liabilities. Actual amounts could differ significantly from these estimates.

We assessed certain accounting matters that generally require consideration of forecasted financial information in context with the information reasonably available to us and the unknown future impacts of ongoing inflationary pressures, continued elevated interest rates, instability in the financial services industry, currency fluctuations and political tensions as of September 30, 2024, and through the date of this report. These conditions could result in further impacts to the Company's consolidated financial statements in future reporting periods. The accounting matters assessed included, but were not limited to, the allowance for credit losses, stock-based compensation, carrying value of goodwill, intangibles and other long-lived assets, financial assets, valuation allowances for tax assets, revenue recognition and costs of revenue.

Accounts Receivable Factoring

Receivables Purchase Agreement

On July 1, 2024, the Company entered into a receivables purchase agreement (the “Factoring Agreement”) with a third-party financial institution (the “Factor”), which accelerates receivable collection and helps to better manage cash flow. These transactions are accounted for in accordance with ASC Topic 860 and result in a reduction in accounts receivable because the Factoring Agreement transfers effective control over, and risk related to the receivables to the buyers. Trade accounts receivables balances sold are removed from the Condensed Consolidated Balance Sheets and cash received is reflected as cash flows provided by (used in) operating activities in the Condensed Consolidated Statements of Cash Flow. Factoring related interest expense is recorded to interest expense on the Condensed Consolidated Statements of Loss. On each sale date, the Factor retains from the sale price a default reserve, up to a required balance, which is held by the Factor in a reserve account and pledged to the Company. The Factor is entitled to withdraw from the reserve account the sale price of a defaulted receivable. The balance in the reserve account is included in other assets on the Condensed Consolidated Balance Sheets.

Previous Receivables Purchase Agreement

On December 19, 2023, the Company entered into a receivables purchase agreement (the “Prior Factoring Agreement”) with a third-party financial institution and was terminated on July 1, 2024. The Prior Factoring Agreement qualified for treatment as a secured borrowing with a pledge of collateral under Accounting Standards Codification ("ASC") Topic 810, Consolidations, as the Company was considered the primary beneficiary in a variable interest entity created to hold the factored receivables and the Company retained a residual claim on reserves related to the factored receivables. Within the Condensed Consolidated Balance Sheets, the receivables factored were carried in accounts receivable, less allowance for credit losses, and the secured borrowings were carried as a current liability within accounts payable. The proceeds and repayments of secured borrowings were reflected as cash flows (used in) provided by financing activities within the Condensed Consolidated Statements of Cash Flows, and program fees were recorded as interest expense in the Consolidated Statements of Loss. The short-term liability classification of the secured borrowings was based on the estimated timing of the collection of the accounts receivable which were expected to be received within 12 months. See Note 2 for additional information.

Redeemable Non-Controlling Interest

As of September 30, 2024 and December 31, 2023, the non-controlling Adtran Networks stockholders’ equity ownership percentage in Adtran Networks was approximately 33.0% and 34.6%, respectively.

As a result of the effectiveness of the DPLTA on January 16, 2023, the Adtran Networks shares, representing the equity interest in Adtran Networks held by holders other than the Company, can be tendered at any time and are, therefore, redeemable and must be classified outside stockholders’ equity. Therefore, the permanent equity noncontrolling interest balance was reclassified to redeemable non-controlling interest on January 16, 2023, and was remeasured to fair value based on the trading market price of the Adtran Networks shares.

Subsequently, the carrying value of the RNCI is adjusted to its maximum redemption value at each reporting date when the maximum redemption value is greater than the initial carrying amount of the RNCI. For the period of time that the DPLTA is in effect, the RNCI will continue to be presented as RNCI outside of stockholders’ equity in the Condensed Consolidated Balance Sheets. See Note 14 for additional information on RNCI.

Recent Accounting Pronouncements Not Yet Adopted

In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2024-03, "Disaggregation of Income Statement Expenses (DISE) (Topic 220): Improvements to Income Statement Disclosures", which applies to all public business entities (PBEs) and is intended to enhance disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The amendments are effective prospectively for annual periods beginning after December 15, 2026, and early adoption and retrospective application are permitted. The Company is currently evaluating the effect that adoption of ASU 2024-03 will have on our disclosures.

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-09, "Income Taxes (Topic 740): Improvements to Income Tax Disclosures", which is intended to enhance the transparency, decision usefulness and effectiveness of income tax disclosures. The amendments in this ASU require a public entity to disclose a tabular tax rate reconciliation, using both percentages and currency, with specific categories. A public entity is also required to provide a qualitative description of the states and local jurisdictions that make up the majority of the effect of the state and local income tax category and the net amount of income taxes paid, disaggregated by federal, state and foreign taxes and also disaggregated by individual jurisdictions. The amendments also remove certain disclosures that are no longer considered cost beneficial. The amendments are effective prospectively for annual periods beginning after December 15, 2024, and early adoption and retrospective application are permitted. The Company is currently evaluating the effect that adoption of ASU 2023-09 will have on our disclosures.

In November 2023, the FASB issued ASU 2023-7, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures", which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses, allowing financial statement users to better understand the components of a segment's profit or loss to assess potential future cash flows for each reportable segment and the entity as a whole. The amendments expand a public entity's segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), clarifying when an entity may report one or more additional measures to assess segment performance, requiring enhanced interim disclosures, providing new disclosure requirements for entities with a single reportable segment, and requiring other new disclosures. The amendments are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and early adoption is permitted. The Company expects to adopt the new disclosures as required for the year ended December 31, 2024. The Company is currently evaluating the impact on the related disclosures.

Recently Adopted Accounting Pronouncements

There are currently no recently adopted accounting pronouncements that are expected to have a material effect on the Condensed Consolidated Financial Statements.