# Cousins Properties Inc: Form 10-Q for the period ended Mar 31, 2024

- Company: [Cousins Properties Inc](/companies/cuz.md) (CIK 25232)
- Form: 10-Q
- Filed: 2024-04-25
- Accepted by EDGAR: Apr 25, 2024, 16:16 ET
- Period: 2024-03-31
- Accession: 0000025232-24-000024
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/25232/000002523224000024/cuz-20240331.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/25232/000002523224000024/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-31 | $209.2m | us-gaap:Revenues |
| Cost of revenue | 3 months, 2024-01-01 to 2024-03-31 | $71.1m | us-gaap:CostOfGoodsAndServicesSold |
| Operating income | 3 months, 2024-01-01 to 2024-03-31 | $138.6m | us-gaap:OperatingIncomeLoss |
| Interest expense | 3 months, 2024-01-01 to 2024-03-31 | $28.9m | us-gaap:InterestExpense |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | $13.3m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | $0.09 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | $0.09 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 152,385,000 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | $28.3m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Dividends paid | 3 months, 2024-01-01 to 2024-03-31 | $48.6m | us-gaap:PaymentsOfDividendsCommonStock |
| Cash and equivalents | at 2024-03-31 | $5.5m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Total assets | at 2024-03-31 | $7.68bn | us-gaap:Assets |
| Total liabilities | at 2024-03-31 | $3.17bn | us-gaap:Liabilities |
| Long-term debt | at 2024-03-31 | $2.56bn | us-gaap:LongTermDebt |
| Shareholders' equity | at 2024-03-31 | $4.49bn | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 25,921 characters.

### Overview of 2024 Performance and Company and Industry Trends

Cousins Properties Incorporated ("Cousins") (and collectively, with its subsidiaries, the "Company," "we," "our," or "us") is a publicly traded (NYSE: CUZ), self-administered, and self-managed real estate investment trust, or REIT. Cousins conducts substantially all of its business through Cousins Properties LP ("CPLP"). Cousins owns in excess of 99% of CPLP and consolidates CPLP. CPLP owns Cousins TRS Services LLC, a taxable entity that owns and manages its own real estate portfolio and performs certain real estate related services for other parties. Our strategy is to create value for our stockholders through ownership of the premier urban office portfolio in the Sun Belt markets, with a particular focus on Atlanta, Austin, Phoenix, Tampa, Charlotte, Dallas, and Nashville. This strategy is based on a disciplined approach to capital allocation that includes opportunistic acquisitions, selective developments, and timely dispositions of non-core assets with a goal of maintaining a portfolio of newer and more efficient properties with lower capital expenditure requirements. This strategy is also based on a simple, flexible, and low-leveraged balance sheet that allows us to pursue compelling growth opportunities at the most advantageous points in the cycle. To implement this strategy, we leverage our strong local operating platforms within each of our major markets.

During the first quarter of 2024, we leased or renewed 404,000 square feet of office space, including 286,000 of new and expansion leases representing 71% of the total leasing activity. Straight-line basis net rent per square foot increased 20.1% for those office spaces that were under lease within the past year. Same property net operating income (defined below) for consolidated properties and our share of unconsolidated properties increased 6.6% between the three months ended March 31, 2024 and 2023.

Even amidst economic headwinds, we believe the Sun Belt, and in particular the seven Sun Belt markets in which we operate, will continue to outperform the broader office sector evidenced by a clear bifurcation between Sun Belt and Gateway market fundamentals. In addition, as the flight to quality trend accelerates among office users, we believe our trophy portfolio is well positioned to benefit from, and ultimately outperform in, the current real estate environment.

### Results of Operations For The Three Months Ended March 31, 2024

### General

Net income available to common stockholders for the three months ended March 31, 2024 was $13.3 million. For the three months ended March 31, 2023, the net income available to common stockholders was $22.2 million. We detail below material changes in the components of net income available to common stockholders for the three months ended March 31, 2024 compared to 2023.

### Rental Property Revenue, Rental Property Operating Expenses, and Net Operating Income

The following results include the performance of our Same Property portfolio. Our Same Property portfolio includes office properties that were stabilized and owned by us for the entirety of each comparable reporting period presented. Same Property amounts for the 2024 versus 2023 comparison are from properties that were stabilized and owned as of January 1, 2023 through March 31, 2024.

### Net Operating Income

Company management evaluates the performance of its property portfolio, in part, based on Net Operating Income ("NOI"). NOI represents rental property revenues, less termination fees, less rental property operating expenses. NOI is not a measure of cash flows or operating results as measured by GAAP, is not indicative of cash available to fund cash needs, and should not be considered an alternative to cash flows as a measure of liquidity. All companies may not calculate NOI in the same manner. We consider NOI to be an appropriate supplemental measure to net income as it helps both management and investors understand the core operations of our operating assets. NOI excludes corporate general and administrative expenses, interest expense, depreciation and amortization, impairments, gains/losses on sales of real estate, and other non-operating items. As a result, we use only those income and expense items that are incurred at the property level to evaluate a property's performance. Same Property NOI allows analysts, investors, and management to analyze continuing operations and evaluate the growth trend of our portfolio.

The following table reconciles NOI for consolidated properties from net income for each of the periods presented ($ in thousands):

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| **Net Income** | **$13,451** | $22,356 |
| Fee income | **(379)** | (374) |
| Termination fee income | **(470)** | (136) |
| Other income | **(44)** | (2,278) |
| General and administrative expenses | **9,214** | 8,438 |
| Interest expense | **28,908** | 25,030 |
| Depreciation and amortization | **86,230** | 75,770 |
| Reimbursed expenses | **140** | 207 |
| Other expenses | **672** | 385 |
| Income from unconsolidated joint ventures | **(348)** | (673) |
| Loss (gain) on investment property transactions | **(101)** | 2 |
| **Net Operating Income** | **$137,273** | $128,727 |

Consolidated rental property revenues, rental property operating expenses, and NOI changed between the 2024 and 2023 periods as follows ($ in thousands):

| Rental Property Revenues | Three Months Ended March 31, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Same Property | **$202,715** | $195,307 | $7,408 | 3.8% |
| Non-Same Property | **5,633** | 4,633 | 1,000 | 21.6% |
|  | **208,348** | 199,940 | 8,408 | 4.2% |
| Termination Fee Income | **470** | 136 | 334 |  |
| **Total Rental Property Revenues** | **$208,818** | $200,076 | $8,742 |  |
| **Rental Property Operating Expenses** |  |  |  |  |
| Same Property | **$69,037** | $69,892 | $(855) | (1.2)% |
| Non-Same Property | **2,038** | 1,321 | 717 | 54.3% |
| **Total Rental Property Operating Expenses** | **$71,075** | $71,213 | $(138) | (0.2)% |
| **Net Operating Income** |  |  |  |  |
| Same Property NOI | **$133,678** | $125,415 | $8,263 | 6.6% |
| Non-Same Property NOI | **3,595** | 3,312 | 283 | 8.5% |
| **Total NOI** | **$137,273** | $128,727 | $8,546 | 6.6% |

Same Property NOI represents Net Operating Income for those office properties that were stabilized and owned by the Company for the entirety of all comparable reporting periods presented. Same Property NOI allows analysts, investors, and management to analyze continuing operations and evaluate the growth trend of the Company's portfolio.

Same Property Rental Property Revenues increased for the three months ended March 31, 2024 compared to the same period in the prior year primarily due to an increase in economic occupancy at our 300 Colorado, BriarLake Plaza, and San Jacinto Center office properties and related increases in revenues recognized from tenant funded improvements owned by us. In addition, parking revenue from our Same Property portfolio increased compared to the same period in the prior year.

Same Property Operating Expenses decreased for the three months ended March 31, 2024 compared to the same period in the prior year primarily due to decreases in real estate tax expense.

Non-Same Property Rental Property Revenues and NOI increased for the three months ended March 31, 2024 compared to the same period in the prior year primarily due to the commencement of operations at our Domain 9 building in the first quarter of 2024 and increased economic occupancy at our Promenade Central operating property. This increase is partially offset by a full building redevelopment at our Hayden Ferry 1 building, which began in the fourth quarter of 2023.

### Interest Expense

Interest expense, net of amounts capitalized, increased $3.9 million, or 15.5%, for the three months ended March 31, 2024, compared to the same period in the prior year. This increase is primarily due to decreases in capitalized interest as we finished construction on the core building and began operations at our Domain 9 building in the first quarter of 2024. In addition to the decreases in capitalized interest, increases in variable interest rates contributed to the increase in interest expense on floating rate debt.

### Depreciation and Amortization

Depreciation and amortization changed between the 2024 and 2023 periods as follows ($ in thousands):

| Depreciation and Amortization | Three Months Ended March 31, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Same Property | **$83,173** | $73,434 | $9,739 | 13.3% |
| Non-Same Property | **2,942** | 2,228 | 714 | 32.0% |
| Non-Real Estate Assets | **115** | 108 | 7 | 6.5% |
| **Total Depreciation and Amortization** | **$86,230** | $75,770 | $10,460 | 13.8% |

Same Property depreciation and amortization increased for the three months ended March 31, 2024 compared to the same period in the prior year primarily due to an increase of assets in service during the current period, primarily from tenant improvements, as well as a change in the estimated useful life of a building at one of our operating properties.

Non-Same Property depreciation and amortization increased for the three months ended March 31, 2024 compared to the same period in the prior year primarily due to the completion of development and commencement of operations at our Domain 9 building.

### Income and Net Operating Income from Unconsolidated Joint Ventures

Income from unconsolidated joint ventures consisted of the Company's share of the following ($ in thousands):

|  | Three Months Ended March 31, 2024 | 2023 | $ Change | % Change |
| --- | ---: | ---: | ---: | ---: |
| Income from unconsolidated joint ventures | **$348** | $673 | $(325) | (48.3)% |
| Depreciation and amortization | **459** | 479 | (20) | (4.2)% |
| Interest expense | **528** | 280 | 248 | 88.6% |
| Other expense | **31** | 14 | 17 | 121.4% |
| Other income | **(14)** | (37) | 23 | (62.2)% |
| **Net operating income from unconsolidated joint ventures** | **$1,352** | $1,409 | $(57) | (4.0)% |
| Net operating income: |  |  |  |  |
| Same Property | **1,182** | 1,109 | 73 | 6.6% |
| Non-Same Property | **170** | 300 | (130) | (43.3)% |
| **Net operating income from unconsolidated joint ventures** | **$1,352** | $1,409 | $(57) | (4.0)% |

Income from unconsolidated joint ventures decreased and interest from unconsolidated debt increased for the three months ended March 31, 2024 primarily due to an increase in interest expense driven by the June 2023 refinancing of a mortgage by our Crawford Long joint venture.

### Funds From Operations

The table below shows Funds from Operations (“FFO”) and the related reconciliation from net income available to common stockholders. We calculate FFO in accordance with the Nareit definition, which is net income available to common stockholders (computed in accordance with GAAP), excluding extraordinary items, cumulative effect of change in accounting principle, and gains on sale or impairment losses on depreciable property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures to reflect FFO on the same basis.

FFO is used by industry analysts and investors as a supplemental measure of a REIT’s operating performance. Historical cost accounting for real estate assets implicitly assumes that the value of real estate assets diminishes predictably over time. Since real estate values instead have historically risen or fallen with market conditions, many industry investors and analysts have considered presentation of operating results for real estate companies that use historical cost accounting to be insufficient by themselves. Thus, Nareit created FFO as a supplemental measure of REIT operating performance that excludes historical cost depreciation, among other items, from GAAP net income. The use of FFO, combined with the required primary GAAP presentations, has been fundamentally beneficial, improving the understanding of operating results of REITs among the investing public and making comparisons of REIT operating results more meaningful. Company management evaluates operating performance, in part, based on FFO. Additionally, we use FFO, along with other measures, to assess performance in connection with evaluating and granting incentive compensation to our officers and other key employees.

The reconciliation of net income to FFO is as follows for the three months ended March 31, 2024 and 2023 ($ in thousands, except per share information):

|  | Three Months Ended March 31, 2024 Dollars | Weighted Average Common Shares | Per Share Amount | 2023 Dollars | Weighted Average Common Shares | Per Share Amount |
| --- | ---: | ---: | ---: | ---: | ---: | ---: |
| **Net Income Available to Common Stockholders** | **$13,288** | **151,945** | **$0.09** | $22,196 | 151,579 | $0.15 |
| Noncontrolling interest related to unitholders | **2** | **25** | **—** | 4 | 25 | — |
| Conversion of unvested restricted stock units | **—** | **415** | **—** | — | 276 | — |
| **Net Income — Diluted** | **13,290** | **152,385** | **0.09** | 22,200 | 151,880 | 0.15 |
| Depreciation and amortization of real estate assets: |  |  |  |  |  |  |
| Consolidated properties | **86,116** | **—** | **0.56** | 75,662 | — | 0.50 |
| Share of unconsolidated joint ventures | **459** | **—** | **—** | 479 | **—** | — |
| Partners' share of real estate depreciation | **(268)** | **—** | **—** | (249) | — | — |
| Loss (gain) on sale of depreciated properties: |  |  |  |  |  |  |
| Consolidated properties | **(101)** | **—** | **—** | 2 | — | — |
| **Funds From Operations** | **$99,496** | **152,385** | **$0.65** | $98,094 | 151,880 | $0.65 |

### Liquidity and Capital Resources

Our primary short-term and long-term liquidity needs include the following:

- property operating expenses;
- property and land acquisitions;
- expenditures on development and redevelopment projects;
- building improvements, tenant improvements, and leasing costs;
- principal and interest payments on indebtedness;
- general and administrative costs; and
- common stock dividends and distributions to outside unitholders of CPLP.

We may satisfy these needs with one or more of the following:

- cash and cash equivalents on hand;
- net cash from operations;
- proceeds from the sale of assets;
- borrowings under our credit facility;
- proceeds from mortgage notes payable;
- proceeds from construction loans;
- proceeds from unsecured loans;
- proceeds from offerings of equity securities;
- proceeds from offerings of debt securities; and
- joint venture formations.

Our material capital expenditure commitments as of March 31, 2024 include $111.3 million of unfunded tenant improvements and construction costs. As of March 31, 2024, we had $292.2 million drawn under our credit facility with the ability to borrow the remaining $707.8 million, as well as $5.5 million of cash and cash equivalents. We expect to have sufficient liquidity to meet our obligations for the foreseeable future.

#### Other Debt Information

In addition to our $1 billion unsecured Credit Facility (with $292.2 million outstanding as of March 31, 2024), we also have unsecured debt from two term loans totaling $750 million and five tranches of unsecured senior notes totaling $1 billion. Under our Credit Facility and our 2022 and 2021 Term Loans, the interest rates applicable vary according to the Company's leverage ratio, provided that after the Company obtains an investment grade credit rating, the Company may permanently elect to base the applicable spread and facility fees based on the applicable credit ratings. Subsequent to quarter end, the Company noticed the administrative agent of the Credit Facility and the terms loans of corporate investment grade ratings received. These ratings reduce the Credit Facility's current applicable spread to 0.775% and 2022 and 2021 Term Loans' current applicable spreads to 0.85% and 1.00%, respectively. There can be no assurance that the Company will maintain any particular rating in the future and if our credit ratings decrease, then we may be subject to higher applicable spreads.

Our existing mortgage debt is comprised of non-recourse, fixed-rate mortgage notes secured by various real estate assets. We expect to either refinance our non-recourse mortgage loans at maturity or repay the mortgage loans with other capital resources, including our credit facility, unsecured debt, non-recourse mortgages, construction loans, the sale of assets, joint venture equity, the issuance of common stock, the issuance of preferred stock, or the issuance of units of CPLP. For each non-recourse mortgage loan, the Company provides a customary "non-recourse carve-out guaranty." Additional guarantees related to re-leasing costs may also apply. Many of our non-recourse mortgages contain covenants that, if not satisfied, could result in acceleration of the maturity of the debt. We expect to either refinance the non-recourse mortgages at maturity or repay the mortgages with proceeds from asset sales, debt, or other capital resources. The portion of our consolidated debt bearing interest at a fixed rate is 89%. The 11% of consolidated debt that bears interest at a floating rate is based on SOFR.

We are in compliance with all covenants of our existing unsecured and secured debt.

#### Future Capital Requirements

To meet capital requirements for future investment activities over the long-term, we intend to actively manage our portfolio of properties and strategically sell assets to exit our non-core holdings and reposition our portfolio of income-producing assets. We expect to continue to utilize cash retained from operations, as well as third-party sources of capital such as indebtedness, to fund future commitments as well as utilize construction facilities for some development assets, if available and under appropriate terms. We may also generate capital through the issuance of securities that include common or preferred stock, warrants, debt securities, or the issuance of CPLP limited partnership units.

Our business model also includes raising or recycling capital, which can assist in meeting obligations and funding development and acquisition activity. If one or more sources of capital are not available when required, we may be forced to reduce the number of projects we acquire or develop and/or raise capital on potentially unfavorable terms, or we may be unable to raise capital, which could have an adverse effect on our financial position or results of operations.

### Cash Flows

We report and analyze our cash flows based on operating activities, investing activities, and financing activities. The following table sets forth the changes in cash flows ($ in thousands):

|  | Three Months Ended March 31, 2024 | 2023 | Change |
| --- | ---: | ---: | ---: |
| Net cash provided by operating activities | **$28,292** | $26,494 | $1,798 |
| Net cash used in investing activities | **(83,951)** | (93,847) | 9,896 |
| Net cash provided by financing activities | **55,064** | 65,793 | (10,729) |

The reasons for significant increases and decreases in cash flows between the periods are as follows:

**Cash Flows from Operating Activities.** Cash flows provided by operating activities increased $1.8 million between the 2024 and 2023 three month periods primarily due to the following: timing of receipt of prepaid rents from tenants; rent abatements ending at our 100 Mill property; and the commencement of operations in the first quarter of 2024 at our Domain 9 property; partially offset by the full building redevelopment of Hayden Ferry 1 in the fourth quarter of 2023.

**Cash Flows from Investing Activities.** Cash flows used in investing activities decreased $9.9 million between the 2024 and 2023 three month periods primarily due to a decrease in contributions to our Neuhoff Holdings LLC ("Neuhoff") joint venture needed to fund our equity share of the development of the Nashville mixed-used project, which was partially offset by an increase in capital expenditures (see table below).

**Cash Flows from Financing Activities.** Cash flows provided by financing activities decreased $10.7 million between the 2024 and 2023 three month periods primarily due to an increase in net repayments of our Credit Facility.

**Capital Expenditures**. We incur costs related to our real estate assets that include acquisition of properties, development of new properties, redevelopment of existing or newly purchased properties, leasing costs (including tenant improvements) for new or replacement tenants, and ongoing property repairs and maintenance.

Capital expenditures for assets we develop or acquire and then hold and operate are included in the property acquisition, development, and tenant asset expenditures line item within investing activities on the condensed consolidated statements of cash flows. The change in amounts accrued are removed from the table below to show the components of these costs on a cash basis. Components of costs included in this line item for the three months ended March 31, 2024 and 2023 are as follows ($ in thousands):

|  | Three Months Ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Projects under development (1) | **$13,350** | 19,486 |
| Operating properties—redevelopment | **10,884** | 18,724 |
| Operating properties—building improvements | **7,419** | 6,405 |
| Operating properties—leasing costs | **37,498** | 18,514 |
| Capitalized interest and salaries | **3,166** | 6,734 |
| Total property acquisition, development, and tenant asset expenditures | **$72,317** | $69,863 |
| (1) Includes initial leasing costs. |  |  |

Capital expenditures increased $2.5 million between the 2024 and 2023 periods primarily due to increased spending on leasing costs. The primary driver in increased leasing costs is spending on tenant improvements as economic occupancy increased at our Briarlake Plaza operating property. This increase in leasing costs is partially offset by decreases in development, redevelopment, and related capitalized interest and salaries due to the following: (i) the Domain 9 development commenced initial operations in the first quarter of 2024 primarily driving the decreased spending on projects under development and a related decrease in capitalized interest and salaries and (ii) spending on operating properties for redevelopments decreased compared to 2023 as the renovations at 3350 Peachtree and Promenade Central were substantially completed in 2023, offset by the commencement of a full building redevelopment of Hayden Ferry 1 in the fourth quarter of 2023.

The amounts of tenant improvement and leasing costs for our office portfolio on a per square foot basis for the three months ended March 31, 2024 and 2023 were as follows:

|  | 2024 | 2023 |
| --- | ---: | ---: |
| New leases | $13.53 | $14.55 |
| Renewal leases | $7.54 | $6.12 |
| Expansion leases | $13.79 | $11.60 |
| Total | $11.86 | $11.19 |

The amounts of tenant improvement and leasing costs on a per square foot basis vary by lease and by market.

**Dividends.** We paid common dividends of $48.6 million and $48.4 million in the three months ended March 31, 2024 and 2023, respectively. We expect to fund our future quarterly common dividends with cash provided by operating activities, also using proceeds from any investment property sales, distributions from unconsolidated joint ventures, indebtedness, and proceeds from offerings of equity and other securities, if necessary.

On a quarterly basis, we review the amount of the common dividend in light of current and projected future cash flows from the sources noted above and also consider the requirements needed to maintain our REIT status. In addition, we have certain covenants under credit agreements that could limit the amount of common dividends paid. In general, common dividends of any amount can be paid as long as leverage, as defined in our credit agreements, is less than 60% and we are not in default. Certain conditions also apply in which we can still pay common dividends if leverage is above that amount. We routinely monitor the status of our common dividend payments in light of the covenants of our credit agreements.

### Off Balance Sheet Arrangements

**General.** We have a number of off balance sheet joint ventures with varying structures, as described in note 5 of the notes to consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023 and in note 3 of the notes to condensed condensed consolidated financial statements for the three months ended March 31, 2024. The joint ventures in which we have an interest are involved in the ownership, acquisition, and/or development of real estate. A venture will fund capital requirements or operational needs with cash from operations or financing proceeds, if possible. If additional capital is deemed necessary, a venture may request a contribution from the partners, and we will evaluate such request.

**Debt.** At March 31, 2024, our unconsolidated joint ventures had aggregate outstanding indebtedness to third parties of $321.3 million. These loans are mortgage or construction loans, which are generally non-recourse to us. In addition, in certain instances, we provide “non-recourse carve-out guarantees” on these non-recourse loans. Certain of these loans have variable interest rates, which creates exposure to the ventures in the form of market risk from interest rate changes.

### Critical Accounting Policies

There have been no material changes in the critical accounting policies from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

## Market risk

As filed, 208 characters.

There have been no material changes in the market risk associated with our notes payable at March 31, 2024 compared to that as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

## Controls and procedures

As filed, 1,505 characters.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applies judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding our control objectives.

As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer along with the Chief Financial Officer, of the effectiveness, design, and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)). Based upon the foregoing, the Chief Executive Officer along with the Chief Financial Officer concluded that our disclosure controls and procedures were effective. In addition, based on such evaluation, we have identified no changes in our internal control over financial reporting that occurred during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

## Risk factors

As filed, 846 characters.

Risk factors that affect our business and financial results are discussed in Part I, "Item 1A. Risk Factors," of our Annual Report on Form 10-K for the year ended December 31, 2023. There have been no material changes in our risk factors from those previously disclosed in our Annual Report. You should carefully consider the risks described in our Annual Report, which could materially affect our business, financial condition, or future results. The risks described in our Annual Report are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem immaterial also may materially adversely affect our business, financial condition, and/or operating results. If any of the risks actually occur, our business, financial condition, and/or results of operations could be negatively affected.

Filed Apr 25, 2024.
Source: SEC EDGAR, the filing index for accession 0000025232-24-000024. Last ingested by Listed: Oct 29, 2026, 16:44 ET. No prices; not investment advice.