Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the interim condensed consolidated financial statements and corresponding notes included elsewhere in this Form 10-Q. Amounts reported in millions within this Quarterly Report on Form 10-Q are computed based on the actual amounts. As a result, the sum of the components may not equal the total amount reported in millions due to rounding. In addition, certain columns and rows within tables may not sum to the totals due to the use of rounded numbers. Percentages presented are calculated from the underlying unrounded amounts.

On March 1, 2022, we completed the spinoff of our spine and dental businesses into ZimVie. The historical results of our spine and dental businesses have been reflected as discontinued operations in our condensed consolidated financial statements through the date of the spinoff in 2022. See Note 2 to our interim condensed consolidated financial statements included in Part I, Item 1 of this report for additional information. The discussions in the following discussion and analysis are presented on a continuing operations basis unless otherwise noted.

Executive Level Overview

Results for the Three-Month Period ended March 31, 2023

We continue to recover from the effects of the COVID-19 global pandemic. In the three-month period ended March 31, 2023, we experienced fewer disruptions to elective surgical procedures from the pandemic as compared to the three-month period ended March 31, 2022 when the Omicron variant and staffing shortages caused widespread deferrals of procedures. As a result, our net sales increased by 10.1 percent in the three-month period ended March 31, 2023 when compared to the same prior year period. Our net sales in the three-month period ended March 31, 2023 were tempered by a negative 3.1 percent impact from changes in foreign currency exchange rates on year-over-year sales. Our net earnings were $232.5 million in the three-month period ended March 31, 2023 compared to $73.0 million in the same prior year period. The increase in net earnings in the three-month period ended March 31, 2023 when compared to the same prior year period was driven by the increase in net sales, improved operating leverage and the prior year period featured higher litigation-related charges and a $51.0 million loss on our investment in ZimVie.

2023 Outlook

We expect revenue growth in 2023 to be driven by a combination of market growth, procedure volume recovery from COVID-19 and new product introductions. Based on recent foreign currency exchange rates we expect foreign currency to negatively affect net sales growth in 2023, but at a lower level than experienced in 2022. We expect that supply chain and inflation pressures will continue in 2023, but with supply chain pressure easing in the second half of the year and with inflation stable to the level experienced at the end of 2022. We estimate our operating expenses in 2023 will be impacted by the expected non-reoccurrence of goodwill impairment charges and lower quality remediation expenses due to the completion of our remediation milestones. We expect our interest expense, net, will increase primarily due to higher interest rates. We also expect our non-operating other income (expense), net, will be more favorable in 2023 since the 2022 expense was primarily driven by an investment loss in the shares of ZimVie that we held following the spinoff, which we disposed of in February 2023.

Results of Operations

We review sales by two geographies, the United States and International, and by the following product categories: Knees; Hips; S.E.T. (Sports Medicine, Extremities, Trauma, Craniomaxillofacial and Thoracic); and Other. This sales analysis differs from our reportable operating segments, which are based upon our senior management organizational structure and how we allocate resources toward achieving operating profit goals. We review sales by these geographies because the underlying market trends in any particular geography tend to be similar across product categories, because we primarily sell the same products in all geographies and many of our competitors publicly report in this manner. Our business is seasonal in nature to some extent, as many of our products are used in elective surgical procedures, which typically decline during the summer months and can increase at the end of the year once annual deductibles have been met on health insurance plans.

Net Sales by Geography

The following table presents our net sales by geography and the percentage changes (dollars in millions):

		Three Months Ended
		March 31,
		2023				2022				% Inc
United States		$	1,060.4			$	941.2				12.7		%
International			770.6				722.0				6.7
Total		$	1,831.0			$	1,663.2				10.1

Net Sales by Product Category

The following table presents our net sales by product category and the percentage changes (dollars in millions):

		Three Months Ended
		March 31,
		2023				2022				% Inc
Knees		$	762.5			$	662.8				15.0		%
Hips			492.8				451.0				9.3
S.E.T.			433.4				416.8				4.0
Other			142.3				132.6				7.3
Total		$	1,831.0			$	1,663.2				10.1

The following table presents our net sales by geography for our Knees and Hips product categories, which represent our most significant product categories (dollars in millions):

		Three Months Ended March 31,
		2023				2022				% Inc
Knees
United States		$	448.2			$	379.5				18.1		%
International			314.3				283.3				10.9
Total		$	762.5			$	662.8				15.0
Hips
United States		$	252.3			$	224.6				12.3		%
International			240.5				226.4				6.2
Total		$	492.8			$	451.0				9.3

Demand (Volume and Mix) Trends

Changes in volume and mix of product sales had a positive effect of 14.6 percent on year-over-year sales during the three-month period ended March 31, 2023. We saw recovery of elective surgical procedures across most of our major markets driving volume growth. In addition, new product introductions contributed positively to volume and mix trends.

Pricing Trends

Global selling prices had a negative effect of 1.4 percent on year-over-year sales during the three-month period ended March 31, 2023. The majority of countries in which we operate continue to experience pricing pressure from governmental healthcare cost containment efforts and from local hospitals and health systems. However, we have had some success in reducing the negative effects of pricing due to internal initiatives and being able to pass some inflationary impacts on to customers.

Foreign Currency Exchange Rates

For the three-month period ended March 31, 2023, changes in foreign currency exchange rates had a negative effect of 3.1 percent on year-over-year sales. If foreign currency exchange rates remain at levels consistent with recent rates, we estimate there will be a negative impact of approximately 1.0 percent on full-year 2023 sales.

Geography

The 12.7 percent net sales growth in the U.S. in the three-month period ended March 31, 2023 was driven by recovery in surgical procedures as COVID-19 cases caused fewer disruptions, especially in the Knees and Hips categories. Internationally, net sales increased by 6.7 percent during the three-month period ended March 31, 2023 when compared to the same prior year period. This increase was similarly driven by recovery in surgical procedures as COVID-19 cases caused fewer disruptions across most of our major markets. However, our International sales were negatively affected by 7.3 percent year-over-year due to changes in foreign currency exchange rates.

Product Categories

Knees and Hips net sales grew 15.0 percent and 9.3 percent, respectively, in the three-month period ended March 31, 2023 when compared to the same prior year period. The net sales increases were due to the recovery in elective surgical procedures and new product introductions. Knees net sales and Hips net sales were negatively affected by 3.2 percent and 3.6 percent, respectively, in the three-month period ended March 31, 2023 due to changes in foreign currency exchange rates. The 4.0 percent increase in S.E.T. net sales was driven by growth in our sports medicine, upper extremities, and craniomaxillofacial and thoracic products, partially offset by lower growth in other S.E.T. products, unfavorable changes in reimbursement for certain restorative therapy products and the negative effects from changes in foreign currency exchange rates.

Expenses as a Percentage of Net Sales

		Three Months Ended
		March 31,										% Inc /
		2023					2022					(Dec)
Cost of products sold, excluding intangible asset amortization			27.4		%			30.1		%			(2.7	)	%
Intangible asset amortization			7.3					7.9					(0.6	)
Research and development			6.0					5.8					0.2
Selling, general and administrative			39.1					41.2					(2.1	)
Restructuring and other cost reduction initiatives			2.3					2.6					(0.3	)
Quality remediation			-					0.4					(0.4	)
Acquisition, integration, divestiture and related			0.1					0.1					-
Operating profit			17.9					11.9					6.0

Cost of products sold as a percentage of net sales decreased in the three-month period ended March 31, 2023 compared to the same prior year period. The decline in cost of products sold as a percentage of net sales in the current year period was primarily due to lower excess and obsolete inventory charges, a mix shift to higher margin products and markets, operating leverage from volume increases and higher hedge gains recognized in the current year period as part of our hedging program when compared to the same prior year period. These favorable items were partially offset by inflationary cost pressures and lower average selling prices.

Intangible asset amortization expense increased slightly in the three-month period ended March 31, 2023, but decreased as a percentage of net sales when compared to the same prior year period. Intangible amortization expense is a cost that does not increase when net sales increase.

R&D expenses increased in amount and as a percentage of net sales in the three-month period ended March 31, 2023 when compared to the same prior year period. The increases were driven by higher personnel-related costs, higher spending on our initial compliance with the European Union Medical Device Regulation and other R&D investments.

Selling, general and administrative (“SG&A”) expenses increased in amount, but decreased as a percentage of net sales in the three-month period ended March 31, 2023 when compared to the same prior year period. The increase in expenses was due to selling and distribution costs that are variable expenses and increase as net sales increase. Additionally, travel and entertainment costs have increased as we have increased these activities from lower pandemic levels. These higher costs were partially offset by lower litigation-related expenses of $3.3 million in the 2023 period compared to $33.2 million in the 2022 period and lower bad debt charges in the 2023 period as we recognized higher bad debt charges in the 2022 period that were partially related to the Russia/Ukraine conflict.

In December of 2021 and 2019, we initiated restructuring programs. The 2021 Restructuring Plan is intended to further reduce costs and to reorganize our global operations in preparation for the spinoff of ZimVie. The 2019 Restructuring Plan has an objective of reducing structural costs to allow us to invest in higher priority growth opportunities. We recognized expenses of $41.8 million and $43.9 million in the three-month periods ended March 31, 2023 and 2022, respectively, primarily related to employee termination

benefits, sales agent contract terminations, and consulting fees and project management expenses associated with these programs. The expenses were slightly lower in the 2023 period due to employee termination benefits that were recognized in early 2022 related to the December 2021 restructuring program that had just been initiated. For more information regarding these charges, see Note 5 to our interim condensed consolidated financial statements included in Part I, Item 1 of this report.

In the three-month period ended March 31, 2023, we did not recognize any significant quality remediation expenses as we completed our remediation milestones in late 2022 that addressed inspectional observations on Form 483 and a Warning Letter issued by the FDA at our Warsaw North Campus facility, among other matters.

Acquisition, integration, divestiture and related decreased in the three-month period ended March 31, 2023 when compared to the same prior year period.

Other Income (Expense), Net, Interest Expense, Net, and Income Taxes

In the three-month period ended March 31, 2023 we realized a gain of $7.7 million in our other income (expense), net financial statement line item compared to a loss of $56.1 million in the same prior year period. In the current year, we recognized a gain of $2.5 million on our investment in ZimVie prior to our disposition of those shares compared to a loss of $51.0 million in the prior year period.

Interest expense, net, increased in the three-month period ended March 31, 2023 when compared to the same prior year period. The increase was primarily from losses incurred on our fixed-to-variable interest rate swaps in the current year period compared to gains in the prior year period.

In the three-month period ended March 31, 2023, our effective tax rate (“ETR”) was 18.9 percent compared to 27.8 percent for the three-month period ended March 31, 2022. The 18.9 percent ETR in the three-month period ended March 31, 2023 was primarily driven by our mix of earnings between U.S. and foreign locations. The 27.8 percent ETR in the three-month period ended March 31, 2022, was primarily driven by the loss on our investment in ZimVie which was not deductible for tax purposes. Absent discrete tax events, we expect our future ETR will be lower than the U.S. corporate income tax rate of 21.0 percent due to our mix of earnings between U.S. and foreign locations, which have lower corporate income tax rates. Our ETR in future periods could also potentially be impacted by: changes in our mix of pre-tax earnings; changes in tax rates, tax laws or their interpretation; the outcome of various federal, state and foreign audits; and the expiration of certain statutes of limitations. Currently, we cannot reasonably estimate the impact of these items on our financial results.

Segment Operating Profit

																		Operating Profit as a
		Net Sales								Operating Profit								Percentage of Net Sales
		Three Months Ended								Three Months Ended								Three Months Ended
		March 31,								March 31,								March 31,
(dollars in millions)		2023				2022				2023				2022				2023				2022
Americas		$	1,141.3			$	1,004.3			$	477.5			$	401.5				41.8		%		40.0		%
EMEA			425.6				379.9				140.7				104.9				33.1				27.6
Asia Pacific			264.1				279.0				84.6				93.4				32.0				33.5

Americas

In the Americas, operating profit and operating profit as a percentage of net sales increased in the three-month period ended March 31, 2023 when compared to the same prior year period due to higher net sales driven by continued recovery of elective surgical procedures, lower excess and obsolete inventory charges and operating profit leverage from certain costs that do not increase as net sales increase.

EMEA

In EMEA, operating profit and operating profit as a percentage of net sales increased in the three-month period ended March 31, 2023 when compared to the same prior year period due to higher net sales driven by continued recovery of elective surgical procedures, lower bad debt charges and operating profit leverage from certain costs that do not increase as net sales increase.

Asia Pacific

In Asia Pacific, operating profit and operating profit as a percentage of net sales declined in the three-month period ended March 31, 2023 when compared to the same prior year period. The Asia Pacific decline in operating profit was primarily driven by lower net sales due to changes in foreign currency exchange rates and by the China government implementing a nationwide volume-based procurement process.

Liquidity and Capital Resources

As of March 31, 2023, we had $330.2 million in cash and cash equivalents. In addition, we had $1.0 billion available to borrow under our 2022 364-Day Credit Agreement that matures on August 18, 2023, and $0.9 billion available under our 2022 Five-Year Revolving Facility that matures on August 19, 2027. The terms of the 2022 364-Day Credit Agreement and the 2022 Five-Year Revolving Facility are described further in Note 9 to our interim condensed consolidated financial statements included in Part I, Item 1 of this report.

We believe that cash flows from operations, our cash and cash equivalents on hand, and available borrowings under our revolving credit facilities will be sufficient to meet our ongoing liquidity requirements for at least the next twelve months. However, it is possible our needs may change. Further, there can be no assurance that, if needed, we will be able to secure additional financing on terms favorable to us, if at all.

Sources of Liquidity

Cash flows provided by operating activities from continuing operations were $307.7 million in the three-month period ended March 31, 2023, compared to $315.7 million in the same prior year period. The decrease in the 2023 period was driven by higher investments in inventory when compared to the 2022 period as well as higher bonus payments in the 2023 period.

Cash flows used in investing activities from continuing operations were $149.4 million in the three-month period ended March 31, 2023, compared to $81.1 million in the same prior year period. Instrument and property, plant and equipment additions reflected ongoing investments in our product portfolio, optimization of our manufacturing and logistics networks and investments in enterprise resource planning software.

Cash flows used in financing activities from continuing operations were $206.7 million in the three-month period ended March 31, 2023, compared to $122.4 million in the same prior year period. We borrowed a net $210.0 million on our 2022 Five-Year Revolving Facility and used those proceeds, along with cash on hand, to repurchase $267.6 million of our common stock. We also repaid $120.2 million of other debt obligations that were due in the first quarter of 2023. In the 2022 period, at the ZimVie spinoff date, we received $540.6 million as partial consideration for the contribution of assets in connection with the separation. We used these proceeds, together with $100.0 million of borrowings on our 2021 Five-Year Revolving Facility and cash on hand to redeem the full $750.0 million of senior notes that were due April 1, 2022.

We place our cash and cash equivalents in highly-rated financial institutions and limit the amount of credit exposure to any one entity. We invest only in high-quality financial instruments in accordance with our internal investment policy.

As of March 31, 2023, $329.7 million of our cash and cash equivalents were held in jurisdictions outside of the U.S. Of this amount, $47.2 million is denominated in U.S. Dollars and, therefore, bears no foreign currency translation risk. The balance of these assets is denominated in currencies of the various countries where we operate. We generally intend to limit distributions from foreign subsidiaries to earnings previously taxed in the U.S., primarily as a result of the transition tax or tax on Global Intangible Low-Taxed Income (“GILTI”), as we would not be subject to further U.S. federal tax. In addition to the previously taxed earnings, we have intercompany notes available to repatriate.

Our concentrations of credit risks with respect to trade accounts receivable are limited due to the large number of customers and their dispersion across a number of geographic areas and by frequent monitoring of the creditworthiness of the customers to whom credit is granted in the normal course of business. Substantially all of our trade receivables are concentrated in the public and private hospital and healthcare industry in the U.S. and internationally or with distributors or dealers who operate in international markets and, accordingly, are exposed to their respective business, economic and country-specific variables. We have continued to collect on outstanding receivables throughout the pandemic. However, we are closely monitoring the financial stability of our customers and the country-specific risks, including those customers in markets with hospitals sponsored by the government.

Material Cash Requirements from Known Contractual and Other Obligations

At March 31, 2023, we had outstanding debt of $5,789.8 million, of which $585.0 million was classified as current debt. The $585.0 million of current debt is outstanding under our 2022 Five-Year Revolving Facility which we expect to repay over the next twelve months. We believe we can satisfy these debt obligations with cash generated from our operations.

For additional information on our debt, including types of debt, maturity dates, interest rates, debt covenants and available revolving credit facilities, see Note 9 to our interim condensed consolidated financial statements included in Part I, Item 1 of this report.

In March 2023, our Board of Directors declared a quarterly cash dividend of $0.24 per share. We expect to continue paying cash dividends on a quarterly basis; however, future dividends are subject to approval of the Board of Directors and may be adjusted as business needs or market conditions change.

In February 2016, our Board of Directors authorized a new $1.0 billion share repurchase program effective March 1, 2016, with no expiration date. As of March 31, 2023, $606.0 million remained authorized under this program.

As discussed in Note 5 to our interim condensed consolidated financial statements in Part I, Item 1 of this report, we have a 2021 Restructuring Plan and a 2019 Restructuring Plan. The 2021 Restructuring Plan is expected to result in total pre-tax restructuring charges of approximately $220 million, of which approximately $150 million was incurred through March 31, 2023. We expect to reduce gross annual pre-tax operating expenses by approximately $190 million relative to the 2021 baseline expenses by the end of 2024 as program benefits under the 2021 Restructuring Plan are realized. The 2019 Restructuring Plan is expected to result in total pre-tax restructuring charges of approximately $350 million to $400 million, of which approximately $284 million was incurred through March 31, 2023. In our original estimates, we expected to reduce gross annual pre-tax operating expenses by approximately $180 million to $280 million relative to the 2019 baseline expenses by the end of 2023 as program benefits under the 2019 Restructuring Plan are realized. Our latest estimates indicate that we will be near the low end of that range.

As discussed in Note 13 to our interim condensed consolidated financial statements included in Part I, Item 1 of this report, the IRS has issued proposed adjustments for years 2010 through 2012, as well as proposed adjustments for years 2013 through 2015, reallocating profits between certain of our U.S. and foreign subsidiaries. We have disputed these proposed adjustments and intend to continue to vigorously defend our positions. Although the ultimate timing for resolution of the disputed tax issues is uncertain, future payments may be significant to our operating cash flows.

As discussed in Note 16 to our interim condensed consolidated financial statements included in Part I, Item 1 of this report, we are involved in various litigation matters. We estimate the total liabilities for all litigation matters was $320.9 million as of March 31, 2023. However, litigation is inherently uncertain, and upon resolution of any of these uncertainties, we may incur charges in excess of these estimates, and may in the future incur other material judgments or enter into other material settlements of claims. We expect to pay these liabilities over the next few years. Additionally, we have entered into development, distribution and other contractual arrangements that may result in future payments dependent upon various events such as the achievement of certain product R&D milestones, sales milestones, or, at our discretion, maintenance of exclusive rights to distribute a product. Since there is uncertainty on the timing or whether such payments will have to be made, they have not been recognized on our condensed consolidated balance sheets. These estimated payments could range from $0 to approximately $410 million.

Recent Accounting Pronouncements

Information pertaining to recent accounting pronouncements can be found in Note 3 to our interim condensed consolidated financial statements included in Part I, Item 1 of this report.

Critical Accounting Estimates

The preparation of our financial statements is affected by the selection and application of accounting policies and methods, and also requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting estimates are those that involve a significant level of estimation uncertainty and have had or are reasonably likely to have a material impact on our financial condition and results of operations. There were no changes in the three-month period ended March 31, 2023 to our critical accounting estimates as described in our Annual Report on Form 10-K for the year ended December 31, 2022.

Cautionary Note Regarding Forward-Looking Statements and Factors That May Affect Future Results

This quarterly report contains certain statements that are forward-looking statements within the meaning of federal securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this report, the words “may,” “will,” “can,” “should,” “would,” “could,” “anticipate,” “expect,” “plan,” “seek,” “believe,” “are confident that,” “look forward to,” “predict,” “estimate,” “potential,” “project,” “target,” “forecast,” “see,” “intend,” “design,” “strive,” “strategy,” “future,” “opportunity,” “assume,” “guide,” “position,” “continue” and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on current beliefs, expectations and assumptions of management and are subject to significant risks, uncertainties and changes in circumstances that could cause actual results to differ materially from such forward-looking statements. These risks, uncertainties and changes in circumstances include, but are not limited to:

the effects of business disruptions such as the COVID-19 pandemic, either alone or in combination with other risks on our business and operations;

the risks and uncertainties related to our ability to successfully execute our restructuring plans;

control of costs and expenses;

our ability to attract, retain and develop the highly skilled employees, senior management, independent agents and distributors we need to support our business;

the possibility that the anticipated synergies and other benefits from mergers and acquisitions will not be realized, or will not be realized within the expected time periods;

the risks and uncertainties related to our ability to successfully integrate the operations, products, employees and distributors of acquired companies;

the effect of the potential disruption of management’s attention from ongoing business operations due to integration matters related to mergers and acquisitions; the effect of mergers and acquisitions on our relationships with customers, suppliers and lenders and on our operating results and businesses generally;

the ability to form and implement alliances;

dependence on a limited number of suppliers for key raw materials and other inputs and for outsourced activities;

the risk of disruptions in the supply of materials and components used in manufacturing or sterilizing our products;

supply and prices of raw materials and products; breaches or failures of our information technology systems or products, including by cyberattack, unauthorized access or theft;

challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the U.S. Food and Drug Administration (“FDA”) and foreign government regulators, such as more stringent requirements for regulatory clearance of products;

the outcome of government investigations;

dependence on new product development, technological advances and innovation;

shifts in the product category or regional sales mix of our products and services;

competition;

pricing pressures;

changes in customer demand for our products and services caused by demographic changes or other factors;

the impact of healthcare reform and cost containment measures, including efforts sponsored by government agencies, legislative bodies, the private sector and healthcare purchasing organizations, through reductions in reimbursement levels and otherwise;

the impact of substantial indebtedness on our ability to service our debt obligations and/or refinance amounts outstanding under our debt obligations at maturity on terms favorable to us, or at all;

changes in tax obligations arising from examinations by tax authorities and from changes in tax laws in jurisdictions where we do business, including those expected to occur as a result of the “base erosion and profit shifting” project undertaken by the Organisation for Economic Co-operation and Development and otherwise;

challenges to the tax-free nature of the ZimVie Inc. (“ZimVie”) spinoff transaction and the subsequent liquidation of our retained interest in ZimVie;

the risk of additional tax liability due to the recategorization of our independent agents and distributors to employees;

the risk that material impairment of the carrying value of our intangible assets, including goodwill, could negatively affect our operating results;

changes in general domestic and international economic conditions, including interest rate and currency exchange rate fluctuations;

changes in general industry and market conditions, including domestic and international growth, inflation and currency exchange rates;

the domestic and international business impact of political, social and economic instability, tariffs, trade restrictions and embargoes, sanctions, wars, disputes and other conflicts, including on our ability to operate in, export from or collect accounts receivable in affected countries;

challenges relating to changes in and compliance with governmental laws and regulations affecting our U.S. and international businesses, including regulations of the FDA and foreign government regulators relating to medical products, healthcare fraud and abuse laws and data privacy and security laws; the success of our quality and operational excellence initiatives;

the ability to remediate matters identified in inspectional observations or warning letters issued by the FDA and other regulators, while continuing to satisfy the demand for our products;

product liability, intellectual property and commercial litigation losses; and

the ability to obtain and maintain adequate intellectual property protection.

Our Annual Report on Form 10-K for the year ended December 31, 2022 and this Quarterly Report on Form 10-Q contain detailed discussions of these and other important factors under the heading “Risk Factors.” You should understand that it is not possible to predict or identify all factors that could cause actual results to differ materially from forward-looking statements. Consequently, you should not consider any list or discussion of such factors to be a complete set of all potential risks or uncertainties.

Forward-looking statements speak only as of the date they are made and we expressly disclaim any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Readers of this report are cautioned not to rely on these forward-looking statements since there can be no assurance that these forward-looking statements will prove to be accurate. This cautionary statement is applicable to all forward-looking statements contained in this report.