Datasets:

ChunLok

/

CAM-SentimentScore

like 0

critical audit matter the critical audit matter communicated below isa matter arising from the current-period audit of the consolidated financial statements that was communicated or required to be communicatedto the audit committee and that (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2)involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in anyway our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matterbelow, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate. impairment assessment for goodwill and intangible assets – refer to notes 2 & 4 to the consolidated financial statements critical audit matter description as reflected in the company’s consolidated financial statementsat december 31, 2021, the company’s goodwill was $1,020,314 and net intangible assets were $1,923,130. as disclosed in notes 2and 4 to the consolidated financial statements, goodwill and intangible assets are tested for impairment at least annually or more frequentlyif indicators of impairment require the performance of an interim impairment assessment. as a result of these assessments, the companyconcluded that there was no impairment to goodwill or the company’s intangible assets during the year ended december 31, 2021.auditing management’s impairment tests of goodwill and intangible assets was complex and highly judgmental due to the significantmeasurement uncertainty used by management in their impairment assessments. these assumptions are affected by the expected future marketor economic conditions, including the impact of covid-19. how the critical audit matter was addressed in the audit we obtained an understanding of the relevantcontrols over the company’s goodwill and intangible assets and management’s process to assess impairment. to test the fair values of the goodwill andintangible assets, our audit procedures included testing the reasonableness of significant assumptions and underlying data used bythe company in their qualitative impairment assessments. this assessment included consideration that current year losses were notindicative of future expected results and that future results were not expected to produce continuing losses. furthermore, wecompared the consolidated carrying value of the company to overall market capitalization of the company, noting that the marketcapitalization exceeded the consolidated carrying value of the company. management determined no indicators of impairment on the company’s existing goodwill and net intangible assets as of the december 31, 2021 evaluation date based on their qualitativeassessments and we concurred with such conclusion. /s/ haskell & white llp we have served as the company’s auditor since 2019.

critical audit matter the critical audit matter communicated below isa matter arising from the current period audit of the financial statements that was communicated or required to be communicated to theaudit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on thefinancial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinionon the critical audit matter or on the accounts or disclosures to which it relates. modifications and extinguishment of debt during the fiscal year ended september 30, 2021,the company modified several convertible notes. management determined whether to account for these modifications as a debt modificationor debt extinguishment. management followed the guidance of accounts standards codification (“asc”) 470-50, debt modificationsand extinguishments, asc 815-15, derivatives and hedging. per the guidance, management determined if the amended terms are substantiallydifferent, defined as the present value of the remaining cash flows after amendment differ by at least 10% of those prior to the amendment. f-3 given the significant estimates involved in determiningif there is a debt modification or extinguishment, the related audit effort in evaluating both management’s estimates in determiningthe total discount and the determination of whether the changes made the debt agreements a debt modification or debt extinguishment wasextensive and required a high degree of auditor judgement. the primary procedures we performed to addressthis critical audit matter included: we obtained an understanding over the company’sprocess to determine whether the modifications to the convertible notes are a modification or extinguishment. we reviewed the guidancein asc 470-50, modifications and extinguishments, and asc 815-15, embedded derivatives, and management’s calculation of the presentvalue of the cash flows prior to and after the amendments to see if there was more than a 10% change. we also recalculated the changein the present value of the remaining cash flows after the amendments for each of the amended convertible notes to determine if managementapplied the correct accounting treatment. we further considered the guidance in asc 470-60, troubled debt restructurings by debtors, todetermine if any of the amendments met the troubled debt restructuring criteria. additionally, we obtained an understanding overthe company’s process to estimate the debt discounts including how the company develops each of the estimates required. we appliedthe following audit procedures relating to testing the company’s estimates: ●we tested management’s assumptions usedfor calculation of any modification and/or extinguishment for the fair value of the convertible notes before and after modification aswell as any potential embedded derivatives. ●we recomputed management’s calculationof the debt extinguishment on a lender-by-lender basis and verified the assumptions used and agreed them to the amended agreements. ●we considered how the company should accountfor any contingent conversion option (redemption feature) ●we tested the assumptions used and recalculatedthe fair value of the embedded derivatives within the convertible note agreements. ●we reviewed the underlying agreements and assessedthe terms in relating to the technical accounting guidance, testing of the completeness and accuracy of the underlying data and the calculationssupporting the troubled debt restructuring. ●we tested and analyzed the debtor’s effectiveborrowing rate on the restructured debt and compared this to the effective borrowing rate immediately before the restructuring to evaluateif this a troubled debt restructuring, including the concession assessment and the associated gain. we have servedas the company’s auditor since 2021.

critical audit matters the critical audit matters communicated below are matters arising from the current-period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. customer allowances as more fully described in note 18 within the consolidated financial statements, revenue is recognized net of various sales adjustments, which includes estimated customer allowances for advertising subsidies, volume rebates and catalog allowances. escalade, incorporated reviews such allowances on an ongoing basis and accruals are adjusted based on the information within the customer agreements. these estimated sales adjustments totaled $21,267,000 for the year ended december 26, 2020, which are included as part of net sales on the consolidated statement of operations. at december 26, 2020, the total accrued for these customer allowances was $7,532,000 and were presented as part of accrued liabilities on the consolidated balance sheet. 29 the principal consideration for our determination that performing procedures relating to these accruals is a critical audit matter was the significant judgment by management to estimate the accruals due to the complexity of the process involved in developing the accruals. the volume of the customer contracts containing allowance agreements is significant, some customers are granted multiple types of allowances and contract terms can change frequently. management exercises judgment in computing the amount of sales subject to the allowances and tracks the amount of the various allowances taken by customers over time. all of this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s process for developing the accruals. we identified the estimated sales allowances as a critical audit matter. the primary procedures we performed to address this critical audit matter included: ● testing the design and operating effectiveness of controls, including those related to technology, over the estimated sales allowances, including data completeness and accuracy and the potential for management bias in the estimation process; ● testing the completeness and accuracy of the underlying data used to estimate the accrual by agreeing the sales data used in the calculation to reports that were reconciled to the financial statements, reconciling the various allowance percentages to signed customer contracts, tracing the allowance amounts used by the various customers during the year to supporting documentation and comparing the estimated allowances from the end of each reporting period to actual results that occurred during subsequent reporting periods; ● testing the clerical accuracy of the individual customer allowances computed by management and agreeing the total of all estimated allowances to the respective accounts on the financial statements. assumptions used in estimating goodwill and intangible assets associated with business combinations as described in note 15 to the consolidated financial statements, the company consummated the acquisition of the assets of revel match llc d/b/a rave sports during the year ended december 26, 2020, resulting in the expansion of the company’s operating product lines and additional goodwill of $5,946,000 and additional intangible assets of $5,000,000 being recognized on the company’s consolidated balance sheet. as part of this acquisition, management assessed that the acquisition qualified as a business combination and all identifiable assets and liabilities acquired were recorded at fair value as part of the purchase price allocation as of the acquisition date. the identification and valuation of such acquired assets and assumed liabilities requires management to exercise significant judgment and consider the use of outside vendors to estimate the fair value allocations. we identified the consummated acquisition and the valuation of acquired assets and assumed liabilities a critical audit matter. auditing the acquired balance sheet and acquisition related considerations involved a high degree of subjectivity in evaluating management's operational assumptions of the newly acquired division, fair value estimates, purchase price allocations and assessing the appropriateness of outside vendor valuation models. the primary procedures we performed to address this critical audit matter included: ● obtaining and reviewing the executed asset purchase agreement documents to gain an understanding of the underlying terms of the consummated acquisition; ● obtaining and reviewing management’s acquisition checklist to gain an understanding of cut-off procedures performed and asset/liability identification considerations made; ● testing management’s purchase price allocation spreadsheet focusing on the completeness and accuracy of the balance sheet acquired and related fair value purchase price allocations made to identified assets acquired and liabilities assumed; ● obtaining and reviewing all significant outside vendor valuation estimates and challenging management’s review of the appropriateness of the valuations assessed/allocated to assets acquired and liabilities assumed; including but not limited to, testing all critical inputs, assumptions applied and valuation models utilized by the outside vendors; ● testing the goodwill calculation resulting from the acquisition consummated, being the difference between the total net consideration paid and the fair value of the net assets acquired; ● utilizing internal valuation specialists to assist with testing the related fair value purchase price allocations made to identified assets acquired and liabilities assumed; ● reviewing and evaluating the adequacy of the disclosures made in the footnotes of the company’s sec filings. we have served as escalade, incorporated’s auditor since 1977.

critical audit matters the critical audit matters communicated below arematters arising from the current period audit of the financial statements that were communicated or required to be communicated to theaudit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on thefinancial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinionson the critical audit matters or on the accounts or disclosures to which they relate. fair value of intangible assets as discussed in note 4 to the financial statements,the company held intangible assets of $362,671 relating to patent and patent application rights. we identified the estimation of the fair value ofintangible assets as a critical audit matter. subjective auditor judgment was required to evaluate management’s estimates and assumptionsused to determine the fair value of the intangible assets, including the economic useful life over which the patent rights are being amortizedand whether indicators of impairment were present. the following are the primary procedures we performedto address this critical audit matter. we obtained management’s impairment analysis of intangible assets and assessment of impairmenttriggers. we assessed the consistency and reasonableness of the assumptions used by management in performing the impairment test and whetherthere were any changes in the expected useful life as compared to prior years. we discussed with management the plans and intent for thepatents and patent applications. we reviewed the company’s ability to fund future activities, and reviewed any available budgetsfor future periods. we confirmed title to ensure patent rights and patent application rights remain in good standing. we have served as the company’s auditor since2008.

critical audit matters (ca ms) in the audit opinion, and the kpmg audit opinion that follows includes this discussion of ca ms. in december 2018, we announced our intention to conduct an auditor tender process, which is currently underway.the board of directors, through its audit committee, which consists entirely of independent directors, meets periodically with management, internal auditors, and our independent registered public accounting firm to ensure that each is meeting its responsibilities and to discuss matters concerning internal controls and financial reporting. kpmg llp and the internal auditors each have full and free access to the audit committee.management’s annual report on internal control over financial reporting. management is responsible for establishing and maintaining adequate internal control over financial reporting for the company. with our participation, an evaluation of the effectiveness of our internal control over financial reporting was conducted as of december 31, 2019, based on the framework and criteria established in internal control – integrated framework (2013) issued by the committee of sponsoring organizations of the treadway commission.based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of december 31, 2019.our independent registered public accounting firm has issued an audit report on our internal control over financial reporting. their report follows./s/ h. lawrence culp, jr. /s/ jamie s. miller h. lawrence culp, jr. jamie s. miller chairman of the board and chief executive officer senior vice president and chief financial officer february 24, 2020 disclosure controls. under the direction of our chief executive officer and chief financial officer, we evaluated our disclosure controls and procedures and internal control over financial reporting and concluded that our disclosure controls and procedures were effective as of december 31, 2019. there have been no changes in the company’s internal control over financial reporting during the quarter ended december 31, 2019, that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting. ge 2019 form 10-k 58reports report of independent registered public accounting firm to the board of directors and shareownersof general electric company:opinions on the consolidated financial statements and internal control over financial reporting we have audited the accompanying consolidated statements of financial position of general electric company and consolidated affiliates (the company) as of december 31, 2019 and 2018, the related consolidated statements of earnings (loss), comprehensive income (loss), changes in shareowners’ equity and cash flows for each of the years in the three-year period ended december 31, 2019, and the related notes (collectively, the consolidated financial statements). we also have audited the company’s internal control over financial reporting as of december 31, 2019, based on criteria established in internal control - integrated framework (2013) issued by the committee of sponsoring organizations of the treadway commission.in our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the company as of december 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the three-year period ended december 31, 2019, in conformity with u.s. generally accepted accounting principles. also in our opinion, the company maintained, in all material respects, effective internal control over financial reporting as of december 31, 2019 based on criteria established in internal control - integrated framework (2013) issued by the committee of sponsoring organizations of the treadway commission.basis for opinions the company’s management is responsible for these consolidated financial statements, 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 annual report on internal control over financial reporting. our responsibility is to express an opinion on the company’s consolidated financial statements and an opinion on the company’s internal control over financial reporting based on our audits. we are a public accounting firm registered with the public company accounting oversight board (united states) (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 audits in accordance with the standards of the pcaob. those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. our audits also included performing such other procedures as we considered necessary in the circumstances. we believe that our audits provide a reasonable basis for our opinions.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.accompanying supplemental information the accompanying consolidating information appearing on pages 63, 65, and 67 (the supplemental information) has been subjected to audit procedures performed in conjunction with the audit of the company’s consolidated financial statements. the supplemental information is the responsibility of the company’s management. our audit procedures included determining whether the supplemental information reconciles to the consolidated financial statements or the underlying accounting and other records, as applicable, and performing procedures to test the completeness and accuracy of the information presented in the supplemental information. in our opinion, the supplemental information is fairly stated, in all material respects, in relation to the consolidated financial statements as a whole.ge 2019 form 10-k 59reports critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.evaluation of revenue recognition on certain long-term service agreements as discussed in note 1 to the consolidated financial statements, the company enters into long-term service agreements with some of its customers. certain long-term service agreements require the company to provide maintenance services that may include levels of assurance regarding asset performance and uptime throughout the contract period. revenue for such long-term service agreements is recognized using the percentage of completion method, based on costs incurred relative to total expected costs. we identified the evaluation of revenue recognition on certain long-term service agreements as a critical audit matter because of the complex auditor judgment required in evaluating some of the long-term estimates in such arrangements. such estimates include the amount of customer payments expected to be received over the contract term, which are generally based on a combination of both historical customer utilization of the covered assets as well as forward-looking information such as market conditions. in addition, these estimates include the total costs expected to be incurred to perform required maintenance services over the contract term and include estimates of expected cost improvements when such cost improvements are supported by actual results or have been proven effective. further, contract modifications that extend or revise contract terms are not uncommon and require judgment in evaluating the related revisions of the long-term estimates. the primary procedures we performed to address this critical audit matter included the following. we tested certain internal controls over the company’s revenue recognition process for long-term service agreements, including controls related to estimating customer payments and costs expected to be incurred to perform required maintenance services over the contract term. we evaluated the estimated customer payments by comparing the estimated customer utilization of the covered assets to historical utilization and industry utilization data, where available. we evaluated the estimated costs expected to be incurred to perform required maintenance services over the contract term by: •comparing estimated labor and part costs to historical labor and parts costs, •comparing the estimated useful life, which is referred to as part life, of certain component parts to historical data and regulatory limits on part life, where applicable,•inspecting evidence underlying the inclusion of cost improvements in estimated costs, including regulatory and engineering approvals and actual reductions in production costs to date, and•ascertaining if major overhauls of covered assets are included in the cost estimates on a basis consistent with the estimated customer utilization of the assets that is used in estimating customer payments.in addition, we involved valuation professionals with specialized skills and knowledge, who assisted in testing certain cost estimates, including assessing statistical models used by the company to estimate the part life of certain component parts of the covered assets. evaluation of premium deficiency testing to assess the adequacy of future policy benefit reserves as discussed in notes 1 and 12 to the consolidated financial statements, the company performs premium deficiency testing to assess the adequacy of future policy benefit reserves. this testing is performed on an annual basis, or whenever events and changes in circumstances indicate that a premium deficiency event may have occurred. significant uncertainties exist in testing cash flow projections in the premium deficiency testing for these insurance contracts, including consideration of a wide range of possible outcomes of future events over the life of the underlying contracts that can extend for long periods of time.we identified the evaluation of premium deficiency testing to assess the adequacy of future policy benefit reserves as a critical audit matter. specifically, the evaluation of the following key assumptions in the premium deficiency testing required subjective auditor judgment and specialized skills and knowledge: long-term care morbidity and mortality, long-term care morbidity improvement and mortality improvement, discount rates, and long-term care premium rate increases. the primary procedures we performed to address this critical audit matter included the following. we tested certain internal controls over the company’s premium deficiency testing process, including controls to develop the key assumptions described above. in addition, we involved actuarial professionals with specialized skills and knowledge, who assisted in:•challenging the company’s key assumptions and results by evaluating the relevance, reliability, and consistency of the assumptions with each other, the underlying data, relevant historical data, and industry data,•assessing the summary experience data and the corresponding actuarial assumptions for conformity with generally accepted actuarial principles,•performing recalculations to assess that the key assumptions were reflected in the cash flow projections, and•comparing the current year and prior year cash flow projections to analyze the impact of the updated key assumptions to the cash flows.ge 2019 form 10-k 60reports we evaluated projected future long-term premium rate increases by comparing the proposed, attained, denied, and approved premium rate increases to underlying source documentation. we also compared the current year premium rate increase projection to actual historical rate increase experience.evaluation of projected revenue and operating profit used in the assessment of the carrying value of goodwill in the grid solutions equipment and services and hydro reporting units as discussed in note 8 to the consolidated financial statements, the company performs a goodwill impairment test on an annual basis or whenever events or changes in circumstances indicate that the carrying value of a reporting unit might exceed its fair value. projected revenue and operating profit are important elements of the estimated future cash flows used by the company in determining the fair value of each reporting unit and the amount of related goodwill impairment losses. in the second quarter of 2019, the company reorganized its grid solutions reporting unit to separate the grid solutions software business and the grid solutions equipment and services business. as a result of this reorganization, the company allocated goodwill to the grid solutions businesses based on their relative fair values, and performed a goodwill impairment test. the goodwill allocated to the grid solutions equipment and services business was determined to be impaired, and an impairment loss of $744 million was recorded. in the third quarter of 2019, the company performed its annual goodwill impairment test, and recorded an impairment loss of $742 million in its hydro reporting unit. we identified the evaluation of projected revenue and operating profit used in the assessment of the carrying value of goodwill, including the determination of related goodwill impairment losses, for the grid solutions equipment and services and hydro reporting units as a critical audit matter. specifically, the evaluation of projected revenue and operating profit required the application of subjective auditor judgment because these projections involve assumptions about future events. the primary procedures we performed to address this critical audit matter included the following. we tested certain internal controls over the company’s goodwill impairment process, including controls over the development of projected financial information, and the company’s review of the projections and comparison to historical results. we evaluated the projected revenue and operating profit assumptions by comparing the projected amounts to the past performance of the reporting units, including historical results and growth rates, and relevant and reliable industry benchmark data related to future events. we also considered evidence obtained in other areas of the audit, including information that might be contrary to the assumptions used by the company in preparing its projections. we evaluated the company’s ability to accurately prepare projections by comparing the projected revenues and operating profit to actual results for the same period. in addition, we involved valuation professionals with specialized skills and knowledge, who assisted in: •comparing the projected amounts to industry benchmark data, and•evaluating sensitivity analyses related to key inputs, including long-term revenue growth rates and projected operating profit.evaluation of the effects of particular tax positions as discussed in note 15 to the consolidated financial statements, the company’s annual tax rate is based on the company’s income, statutory tax rates, and the effects of tax positions taken in the various jurisdictions in which the company operates. tax laws are complex and subject to different interpretations by taxpayers and respective government taxing authorities. we identified the evaluation of the effects of particular tax positions as a critical audit matter. complex auditor judgment was involved in evaluating the company’s interpretation of applicable tax laws and regulations for these tax positions, including the evaluation of income tax uncertainties related to the tax positions. the primary procedures we performed to address this critical audit matter included the following. we tested certain internal controls over the company’s income tax process for particular tax positions, including controls related to the company’s interpretation of applicable tax laws and regulations and the evaluation of income tax uncertainties. we inspected relevant documentation related to particular tax positions, including correspondence between the company and taxing authorities. in addition, we involved tax professionals with specialized skills and knowledge, who assisted in:•evaluating the company’s interpretation and application of relevant tax laws and regulations related to the tax positions, including income tax uncertainties, and•assessing the company’s computation of the effects of the tax positions./s/ kpmg llpkpmg llp we have served as the company's auditor since 1909.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. recognition of variable consideration description of the matter at january 1, 2022 the company’s revenue returns liability, which is included in the deferred revenues and returns liability in the consolidated balance sheet, was $13.8 million. as discussed in note 2 of the consolidated financial statements, when recording revenue for its contracts with customers the company estimates variable consideration at the most likely amount to which it expects to be entitled. variable consideration that does not meet revenue recognition criteria is deferred and a revenue returns liability is recorded. the variable consideration estimate considers both the likelihood of a return and the amount of potential price concession. auditing management’s estimate of the revenue returns liability was judgmental because the calculation involves subjective management assumptions about the estimates of expected future price concessions and/or product returns. for example, the estimated variable consideration included in the transaction price reflects management’s evaluation of contractual terms, historical experience, assumptions about future economic conditions and the quantity of products distributors are expected to sell. changes in those assumptions can have a material effect on the amount of variable consideration recognized.f-1table of contents how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the measurement and valuation of the variable consideration recognized as revenue and the revenue returns liability. for example, we tested controls over management’s review of the variable consideration methodology, the significant assumptions and the historical data utilized in the estimate for assumed product returns and expected price concessions.to test the variable consideration recognized as revenue and the revenue returns liability, we performed audit procedures that included, among others, an evaluation of the company’s methodology and significant assumptions and estimates, and tested the completeness and accuracy of the historical data utilized in the estimates. in our assessment of the methodology, we considered changes in the business, changes to specific distributor contracts, and evaluated significant assumptions used by management by comparison to current trends and recent transactions. we also evaluated the accuracy of management’s assumed product returns and expected price concessions from prior periods by comparing to subsequent actual activity. accounting for discontinued operations description of the matter as discussed in note 3 of the consolidated financial statements, on july 26, 2021, the company completed the sale of its infrastructure and automotive (“i&a”) business to skyworks solutions, inc. for $2.75 billion in cash. in connection with the sale, the company recognized a pre-tax gain of $2.4 billion in discontinued operations. as a result of the discontinued operations classification, the comparative period consolidated financial statements for fiscal years 2020 and 2019 have been recast to reclassify balance sheet, income statement and cash flow amounts related to the infrastructure and automotive business as discontinued operations.auditing the company’s discontinued operations was complex due to judgments made by management to calculate the gain on sale, including allocating goodwill between the i&a and internet of things (io t) business lines as well as the non-routine process used by management to compile historical financial data for the i&a business, which involved certain judgments in allocating expenses to the discontinued operations.how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s accounting for the discontinued operations. for example, we tested controls over management’s treatment of the sale and calculation of the gain on sale, which included management’s review of the methodologies and assumptions used in the gain on sale calculation as well as controls over the disclosure of discontinued operations, including recasting prior period comparative financial statements.our audit procedures included, among others, testing the accuracy of the gain on sale calculation and evaluating the adequacy of the company’s disclosures related to discontinued operations. for example, we evaluated the appropriateness of the company’s application of the criteria for reporting of discontinued operations by inspecting management’s supporting documentation, reading of board of director meeting minutes and other entity information, and evaluating for contrary evidence based on our understanding of the business. to test the gain recognized in discontinued operations, we performed audit procedures that included testing the existence and valuation of cash proceeds; inspecting the related sale agreement to obtain an understanding of the assets and liabilities included in the scope of the sales transaction and testing the completeness and accuracy of the assets and liabilities included in the gain calculation on a sample basis by comparing amounts to the company’s accounting records and testing the tax effects of the sale. to test the allocation of goodwill between the i&a and io t business lines, we involved our valuation specialists to evaluate the reasonableness of the company’s valuation methodology and significant assumptions used to allocate goodwill. for example, we compared the significant assumptions used by the company to current market and economic trends, to the assumptions used to value similar assets in other relevant divestitures, and to the historical results of the company. we performed procedures to audit the presentation of discontinued operations in the financial statements, including testing the recast prior period financial statements and assessing the reasonableness of key judgments applied by management in allocating expenses to the discontinued operations. /s/ ernst & young llp we have served as the company’s auditor since 1996.

critical audit matters the critical audit matters communicated below are matters arisingfrom the current period audit of the consolidated financial statements that was communicated or required to be communicated to the auditcommittee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on thefinancial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinionon the critical audit matter or on the accounts or disclosures to which it relates. valuation of inventory inventories consist of growing and processed plants and oils and arevalued at the lower of cost or net realizable value. in evaluating whether inventories are stated at lower of cost or net realizable value,management considers such factors as inventories in hand, estimated time to sell such inventories and current market conditions. write-offsfor inventory obsolescence are recorded when, in the opinion of management, the value of specific inventory items has been impaired. our audit procedures to address the company’s valuation of inventoryincluded the following, among others. we updated to our understanding of the company’s inventory process, observations of year endquantities, and the testing of the cultivation, manufacturing and processing costs allocated to the various stages of inventory duringthe year. we also tested the company’s net realizable values across each inventory and the assumptions used. impairment of long-lived assets the carrying value of long-lived assets are reviewed when facts andcircumstances suggest that the assets may be impaired or that the amortization period may need to be changed. the company considers internaland external factors relating to each asset, including cash flows, local market developments, industry trends and other publicly availableinformation. if these factors and the projected undiscounted cash flows of the company over the remaining amortization period indicatethat the asset will not be recoverable, the carrying value will be adjusted to the fair market value our audit procedures relating to the company’s assessment ofimpairment of long-lived assets included the following, among others. we evaluated the methodologies and tested the significant assumptionsand underlying data used by the company. such testing included assessing the reasonableness of the undiscounted cash flow projectionsused by the company in their assessment of impairment in comparison with historical data and the company’s assumptions used forthe projections. /s/ prager metis cpa’s llc we have served as the company’s auditor since 2018

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.f-2fcc broadcast license impairment test as described in note 6 to the consolidated financial statements, the fcc licenses totaled approximately $275 million as of december 31, 2021. management conducts an annual impairment test as of december 31, or when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable, using a discounted cash flow method, the greenfield method, that assumes that a hypothetical buyer develops indefinite-lived intangible assets and builds a new operation with similar attributes from scratch, while incurring start-up costs during the build-up phase. the determination of the fair value of the fcc licenses requires management to make significant estimates and assumptions related to discount rates, forecasts of future revenue, margins, and market share, which may be affected by future economic and market conditions. we identified the valuation of certain fcc licenses during the annual impairment assessment as a critical audit matter. the principal considerations for our determination were the significant judgments by management when developing the fair value of the licenses, primarily due to the sensitivity of the respective fair values to the underlying assumptions applied in the greenfield method. auditing the valuation of certain fcc licenses during the annual impairment assessment involved especially challenging and subjective auditor judgment due to the nature and extent of the audit effort required to address this matter, including the extent of specialized skills and knowledge needed.the primary procedures we performed to address this critical audit matter included:•evaluating the reasonableness of the significant assumptions used by management by comparing the forecasts of future revenue, margins, and market share to third-party industry projections for the broadcast industry, where applicable, and historical results when third-party projections are not available and;•testing the completeness and accuracy of the underlying data supporting the significant assumptions and estimates, and;•utilizing personnel with specialized skills and knowledge in valuation to assist in i) assessing the appropriateness of the valuation method utilized, ii) testing the mathematical accuracy of the company’s calculations, and iii) evaluating the reasonableness of the discount rate used in the greenfield method.accounting for issuance and repayment of senior secured notes as described in note 8 to the consolidated financial statements, on january 6, 2021, the company completed the private offering and sale of $550.0 million aggregate principal amount of senior secured notes due 2026 (the “2026 notes”), the proceeds of which, together with cash on hand, were used to repay: (i) all outstanding borrowings under the 2015 senior secured credit facility, which included a seven year $275.0 million term loan facility with $272.4 million principal amount outstanding and $2.1 million in accrued interest, (ii) all of the outstanding $273.4 million of principal amount of unsecured senior notes due in 2023 (the “2023 notes”), a prepayment premium of $4.4 million, and $5.1 million in accrued interest, and (iii) fees and expenses related thereto.the company incurred approximately $13.6 million of fees and expenses in connection with the issuance of the 2026 notes, of which approximately $9.4 million were capitalized and are being amortized over the remaining term of the 2026 notes using the effective interest method. the company recognized a $4.9 million loss on the early extinguishment of debt, comprised of a $3.1 million portion of the 2023 notes prepayment premium and the write-off of $1.8 million of unamortized debt discount and deferred financing fees previously capitalized in connection with the senior secured credit facility and 2023 notes. the company recognized a $1.1 million loss on the modification of terms loans and 2023 notes, which is primarily related to a portion of fees and expenses incurred related to the issuance of the 2026 notes.f-3we identified the accounting for the issuance of the 2026 notes and related repayment of the 2023 notes as a critical audit matter. the principal considerations for our determination were (1) the complexity of the application of the technical accounting guidance in determination of whether the 2023 notes were modified or extinguished for each lender who was a part of the syndicate of lenders participating in both the 2023 and 2026 senior secured notes, (2) the complexity of recalculating the losses on debt extinguishment and modification on a lender by lender basis, and (3) the complexity of the application of the technical accounting guidance in determining the existence of any derivatives that may require separate accounting under applicable accounting guidance. auditing these elements involved especially challenging and complex auditor judgment due to the nature and extent of audit effort required to address these matters, including the extent of specialized skills or knowledge needed.the primary procedures we performed to address this critical audit matter included:•evaluating management’s analysis and application of the technical accounting guidance applicable to the issuance of the 2026 notes, including:◦inspecting and reviewing the terms of all relevant legal and other documents supporting the transaction;◦assessing the existence of any derivatives that may require separate accounting under applicable accounting guidance.•evaluating management’s analysis and application of the technical accounting guidance applicable to the repayment of the 2023 notes, including:◦recalculating the lender by lender assessment of whether the 2023 notes were modified or extinguished; ◦recalculating the losses recognized on debt extinguishment and modification;•utilizing personnel with specialized knowledge and skills in the relevant technical accounting areas to assist in evaluating the issuance of the 2026 notes and repayment of the 2023 notes to determine the appropriateness of the company’s evaluation and application of the relevant accounting guidance./s/ bdo usa, llp we have served as the company's auditor since 2019.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.evaluation of the measurement of the fair values used in the purchase price allocation of real estate acquisitions as described further in notes 2 and 3 to the financial statements, the acquisition of property for investment purposes is typically accounted for as an asset acquisition in which the company allocates the purchase price of acquired properties to land, buildings and identified intangible assets and liabilities, based in each case on their relative estimated fair values and without giving rise to goodwill. the company acquired approximately $841.1 million of real estate investments during the year ended december 31, 2021. we identified the measurement of the fair values used in the purchase price allocation of real estate acquisitions as a critical audit matter.71the principal consideration for our determination of the measurement of the fair values used in the purchase price allocation of acquired real estate acquisitions as a critical audit matter is the higher risk of estimation uncertainty in determining estimates of fair value. specifically, fair value measurements were sensitive to establishing a range of market assumptions for land values, building replacement values, and rental rates. establishing the market assumptions for land, building and rent included identifying the relevant properties in the established range most comparable to the acquired property. there was a high degree of subjective and complex auditor judgment in evaluating these key inputs and assumptions.our audit procedures related to the measurement of the fair values used in the purchase price allocation of real estate acquisitions included the following, among others:we obtained an understanding and evaluated the design and tested the operating effectiveness of relevant controls relating to the process to allocate the purchase price of real estate acquisitions, including internal controls over the selection and review of the inputs and assumptions to estimate fair value, including those used by third party valuation professionals.for a selection of real estate acquisitions, we involved our real estate valuation professionals with specialized skills and knowledge who assisted in evaluating the valuation techniques and assumptions to the fair value measurements used in the purchase price allocations. we read the purchase agreements and tested the completeness and accuracy of underlying data used that was contractual in nature, including rental data. the evaluation included comparison of the company’s assumptions to independently developed ranges using market data from industry transaction databases and published industry reports. we analyzed where the company's market rental rates fell compared to our valuation professionals' independently developed ranges to evaluate if management bias was present. our overall assessment of these assumptions and the amounts reported and disclosed in the consolidated financial statements included consideration of whether such information was consistent with evidence obtained in other areas of the audit.evaluation of the provision for impairment of real estate investments as described in note 2 to the consolidated financial statements, the company reviews its real estate investments for potential impairment when certain events or changes in circumstances indicate that the carrying amount may not be recoverable through operations plus estimated disposition proceeds. those events and circumstances include, but are not limited to, significant changes in real estate market conditions, estimated residual values, and an expectation to sell assets before the end of the previously estimated life. for real estate investments that show an indication of impairment, management determines whether an impairment has occurred by comparing the estimated undiscounted future cash flows, including the residual value of the real estate, with the carrying amount of the individual asset. forecasting the estimated future cash flows requires management to make estimates and assumptions about significant variables, such as the probabilities of outcomes and estimated holding periods, direct and terminal capitalization rates, and potential disposal proceeds to be received upon a sale. we identified the evaluation of the provision for impairment of real estate investments as a critical audit matter.the principal consideration for our determination of the evaluation of impairment of investments in real estate was a critical audit matter was the higher risk of estimation uncertainty due to sensitivity of management judgments, not only regarding indicators of impairment, but also regarding estimates and assumptions utilized in forecasting cash flows for cost recoverability and determining fair value measurements. specifically, forecasted cash flows for recoverability and estimates of fair value were sensitive to changes in the probability of outcomes, anticipated sale values, and capitalization rates. there was a high degree of subjective and complex auditor judgment in evaluating these key inputs and assumptions.our audit procedures related to the evaluation of the provision for impairment of investments in real estate included the following, among others:we obtained an understanding and evaluated the design and tested the operating effectiveness of relevant controls over the evaluation of potential real estate investment impairments, such as internal controls over the company’s monitoring of the real estate investment portfolio, the company’s assessments of recoverability, and the company’s estimates of fair value.72we evaluated the completeness of the population of investments in real estate requiring further analysis as compared to the criteria established in management’s accounting policies over impairment.we tested the company’s undiscounted cash flow analyses and estimates of fair value for real estate investments with indicators of impairment, including evaluating the reasonableness of the methods and significant inputs and assumptions used.we compared the probability of outcomes with historical performance of the impacted real estate investment and considered any relevant prospective data, including property specific industry information.we compared anticipated sale values and capitalization rates with comparable observable market data, which involved the use of our valuation specialists.our assessment included sensitivity analyses over these significant inputs and assumptions, and we considered whether such assumptions were consistent with evidence obtained in other areas of the audit./s/ grant thornton llp we have served as the company’s auditor since 2021.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 63table of contents goodwill and intangible assets with indefinite lives impairment assessment description of the matter at december 31, 2020, the company’s goodwill and intangible assets with indefinite lives, which consist of newspaper mastheads, were $534.1 million and $171.4 million, respectively. as discussed in note 1 of the consolidated financial statements, goodwill and intangible assets with indefinite lives are tested for impairment at least annually or when events occur that indicate impairment could exist. as a result of these assessments, the company recognized impairments of $393.4 million during the year ended december 31, 2020.auditing management’s impairment tests of goodwill and newspaper masthead intangible assets was complex and judgmental and required the involvement of specialists due to the estimation required in determining the fair value of the reporting units and newspaper mastheads. in particular, the estimates of the fair value of the reporting units are sensitive to significant assumptions such as the revenue growth rates, discount rates and projected ebitda margins. the estimates of fair value of the newspaper masthead intangible assets are sensitive to significant assumptions including the royalty rates, discount rates and revenue growth rates. these assumptions are affected by expectations about future economic and industry factors.how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s goodwill and intangible assets with indefinite lives impairment review process. for example, we tested controls over management’s review of the significant assumptions described above as well as management’s review of the reasonableness of the underlying data used in the valuation analyses.to test the estimated fair value of the company’s reporting units and newspaper masthead intangible assets, we performed audit procedures that included, among others, assessing the valuation methodologies used, testing the significant assumptions described above and testing the completeness and accuracy of the underlying data the company used in its analyses. for example, we compared the revenue growth rates and projected ebitda margins used in the valuations to current industry and economic trends and assessed the historical accuracy of management’s estimates. with the assistance of our internal valuation specialists, we also developed an independent range of the discount rate and royalty rate assumptions and compared them to the rates determined by management. we performed sensitivity analyses of the significant assumptions to evaluate the changes in the fair value of the reporting units and the newspaper masthead intangible assets that would result from changes in the assumptions. in addition, we tested management’s reconciliation of the fair value of the reporting units to the market capitalization of the company.defined benefit pension obligation description of the matter at december 31, 2020, the company’s aggregate obligation for its defined benefit pension plans was $3.2 billion, with related pension assets of $3.2 billion, resulting in a net pension asset of $64.2 million as of december 31, 2020. the company recorded a net periodic pension benefit of $71.8 million for the year-ended december 31, 2020. as described in note 9 of the consolidated financial statements, the company updates the estimates used to measure the defined benefit pension assets and obligations annually or upon a remeasurement event to reflect the actual return on plan assets and updated actuarial assumptions.auditing the defined benefit pension obligations and net periodic pension benefit was complex and required the involvement of specialists due to the judgmental nature of the actuarial assumptions such as the discount rate and expected return on plan assets used in the measurement process. these assumptions have a significant effect on the projected defined benefit pension obligation and net periodic pension benefit.64table of contents how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of the controls over management’s measurement and valuation of the defined benefit pension obligations and net periodic pension benefit. for example, we tested controls over management’s review of the defined benefit pension obligation calculations, the significant actuarial assumptions, and the data inputs used in the actuarial models.to test the defined benefit pension obligation and net periodic pension benefit, our audit procedures included, among others, evaluating the methodology used, the significant actuarial assumptions described above, and the underlying data used by the company. we compared the actuarial assumptions used by management to historical trends. we involved actuarial specialists in the evaluation of management’s methodology for determining the discount rate that reflects the maturity and duration of the benefit payments and is used to measure the defined benefit pension obligation. to perform this evaluation, we compared the discount rate to an independent range of discount rates developed using the projected benefit cash outlays. as part of this assessment, we compared the projected cash flows to the historical cash flows and compared the current year benefits paid to the plans’ prior year projected cash flows. we also tested the completeness and accuracy of the underlying data, including the participant data provided to the company’s actuarial specialists. to evaluate the expected return on plan assets, we assessed whether management’s assumption is consistent with a range of returns for a portfolio of comparative investments./s/ ernst & young llp we have served as the company’s auditor since 2007.

critical audit matter – impairment of intangible assets thecritical audit matter communicated below is a matter arising from the current period audit of the financial statements that wascommunicated or required to be communicated to the company’s audit committee and that: (i) relates to accounts or disclosuresthat are material to the financial statements and (ii) involved especially challenging, subjective, or complex judgements. thecommunication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, andwe are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or onthe accounts or disclosures to which it relates. critical audit matter description asdisclosed in note 2 to the financial statements, the company evaluates the recoverability of its long-lived assets whenever eventsor changes in circumstances indicate impairment may have occurred. an impairment loss is recognized when the net book value ofsuch assets exceeds the estimated future undiscounted cash flows attributed to the assets or the business to which the assetsrelate. impairment losses, if any, are measured as the amount by which the carrying value exceeds the fair value of the assets.as further discussed in note 2, the company recorded an impairment charge totaling $500,000 during the year ended december 31,2020. ahigh degree of auditor judgment and effort was required in performing audit procedures to evaluate the reasonableness of management’scash flow forecasts and the significant assumptions used. significant uncertainty exists with these assumptions because they aresensitive to future market or economic conditions. howthe critical audit matter was addressed in the audit ●obtained an understanding of the internal controls and processes over the valuation of the intangible assets, including management's controls over forecasts of future cash flows and selection of other significant assumptions. ●evaluated the sufficiency and appropriateness of the impairment valuation model used by management. ●evaluated the significant assumptions and inputs used in the future cash flow model and reviewed corroborating documentation to support the assumptions and inputs. ●performed a sensitivity analysis over the company’s intangible impairment analysis. /s/cherry bekaert, llp wehave served as the company’s auditors since 2016.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. consolidated financial statements - impact of control environment, information technology general controls and journal entry controls the completeness and accuracy of the consolidated financial statements, including the financial condition, results of operations and cash flows, is dependent on, in part, (i) designing and maintaining an effective control environment, including maintaining a sufficient complement of resources with an appropriate level of controls knowledge, expertise and training commensurate with financial reporting requirements, (ii) designing and maintaining effective information technology general controls for significant applications used in the preparation of the financial statements, including access and monitoring changes within the significant applications, and (iii) designing and maintaining effective controls to timely detect and independently review instances where individuals with access to post a journal may also have edited or created the journal entry.the principal considerations for our determination that performing procedures relating to the consolidated financial statements - impact of control environment, information technology general controls and journal entry controls is a critical audit matter are there was a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to the consolidated financial statements, information systems and journal entries. as described above in the “opinions on the financial statements and internal control over financial reporting” section, material weaknesses related to (i) the control environment, (ii) information technology general controls and (iii) journal entry controls existed as of december 31, 2019.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included, among others, evaluating the nature and extent of audit procedures performed and evidence obtained. these procedures also included manually testing the completeness and accuracy of system reports or other information generated by the company’s information technology systems.-67-table of contents revenue recognition - product and services revenue as described in notes 2 and 3 to the consolidated financial statements, the company recognizes revenue when control of the promised goods or services is transferred to its customers, in an amount that reflects the consideration expected to be received in exchange for those products and services. the company’s total product and services revenue was $103.7 million for the year ended december 31, 2019. the completeness, accuracy and occurrence of product and services revenue is dependent on customer orders being completely and accurately recorded and recognized in the company’s customer billing and revenue processes.the principal considerations for our determination that performing procedures relating to revenue recognition - product and services revenue is a critical audit matter are there was a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to the completeness, accuracy and occurrence of product and services revenue. as described above in the “opinions on the financial statements and internal control over financial reporting” section, a material weakness related to the billing and revenue controls existed as of december 31, 2019.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included, among others, evaluating the nature and extent of audit procedures performed and evidence obtained. these procedures also included obtaining and inspecting source documents including cash receipts from customers, where applicable.inventory as described in notes 2 and 8 to the consolidated financial statements, inventory consists of finished goods, work in process, raw materials and certain component parts to be used in manufacturing or servicing the company’s products. the company’s total inventory value was $19.8 million as of december 31, 2019. the existence of inventory is dependent on the performance of periodic inventory counts, processing the receipt of inventory, and recording adjustments to inventory quantities in the company’s inventory process.the principal considerations for our determination that performing procedures relating to inventory is a critical audit matter are there was a high degree of auditor judgment and effort in performing procedures and evaluating audit evidence related to the existence of inventory. as described above in the “opinions on the financial statements and internal control over financial reporting” section, a material weakness related to inventory controls existed as of december 31, 2019.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included, among others, evaluating the nature and extent of audit procedures performed and evidence obtained. these procedures also included inventory count procedures and testing of inventory activity between the date of the inventory count procedures and december 31, 2019./s/ pricewaterhouse coopers llp seattle, washington march 2, 2020we have served as the company’s auditor since 2008.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.f-3table of contents allowance for loan losses - notes receivable description of the matter at december 31, 2019, the company’s notes receivable portfolio totaled $159.4 million. as discussed in notes 2 and 6 to the consolidated financial statements, management estimates the allowance for loan losses on outstanding notes receivable based primarily upon the value of the underlying development project. for loans determined to be impaired, the company recognizes impairment losses calculated as the difference between the carrying amount of the loan and its estimated realizable value. the calculation of the estimated realizable value includes an estimation of the projected sales proceeds from the sale of the underlying development property.auditing management’s estimate of the allowance for loan losses was complex and highly judgmental due to the significant estimation required to determine the estimated realizable value of each loan. in particular, the estimated realizable value of each loan was largely dependent on the estimated fair value of the underlying development property, which was highly sensitive to significant assumptions based on management’s expectations about future real estate market or economic conditions and the projected operating results of the property. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the allowance for loan losses process. for example, we tested controls over management’s review of the estimated allowance, the significant assumptions, and the data used to calculate the estimated realizable values of loans.to test the allowance for loan losses, we performed audit procedures that included, among others, assessing methodologies used and testing the significant assumptions and underlying data used by the company in calculating the estimated realizable values of loans. we compared the significant assumptions used by management to external evidence, including comparable market capitalization rates and recent appraisals of the subject property. we tested the projected operating results of subject properties by comparing inputs and assumptions to executed or draft lease agreements and operating expenses incurred at similar operating properties owned by the company. we performed sensitivity analyses of significant assumptions to evaluate the changes to the estimated realizable value of each loan that would result from changes in the assumptions. we also assessed the historical accuracy of management’s estimates. general contracting revenue recognition description of the matter for the year ended december 31, 2019, the company’s general contracting revenues totaled approximately $105.9 million. as described in note 2 to the consolidated financial statements, for each construction contract, the company estimates its progress in satisfying performance obligations based on the proportion of incurred costs to total estimated costs at completion. the company also estimates the total transaction price, including variable components, for each construction contract. auditing the company’s measurement of general contracting revenue was challenging due to the significant estimation required to determine the estimated total costs at completion and variable consideration. estimated costs at completion are affected by management’s forecasts of anticipated costs to be incurred and contingency reserves for exposures related to unknown costs, such as design deficiencies and subcontractor defaults. estimated variable consideration is affected by claims and unapproved change orders, which may result from changes in the scope of the contract. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of the company’s controls over the measurement of general contracting revenue. for example, we tested controls over management’s review and monitoring of the variable consideration calculation and the underlying assumptions related to estimates of costs at completion.to test general contracting revenue recognition, our audit procedures included, among others, evaluating the estimates discussed above and testing the completeness and accuracy of the underlying data used by the company to calculate variable consideration and total estimated costs at completion. for example, we tested variable consideration by inspecting subsequently executed change orders, reviewing legally enforceable terms of the contracts or confirming the value of executed change orders directly with the customers. we also confirmed directly with customers specific contract details, including the current and original contract value as well as the estimated percentage of completion. we tested the estimated costs at completion by comparing management’s cost estimates of materials, labor, and subcontractors to third-party evidence, such as subcontractor bids. in addition, we visited development sites, conducted interviews with the company’s project management personnel, and involved our engineering specialists to assist in testing the company’s estimated costs at completion. we also assessed the historical accuracy of management’s estimates of variable consideration and estimated costs at completion through retrospective review of actual gross-margins of completed projects compared to the anticipated gross margins during the projects.f-4table of contents accounting for acquisition of operating properties description of the matter during 2019, the company completed a series of six operating property acquisitions for a total purchase price of $361.1 million as described in notes 2 and 5 to the consolidated financial statements. these transactions were accounted for as asset acquisitions.auditing the company's accounting for these acquisitions was challenging due to the significant estimation required by management to determine the fair values of the acquired assets used to allocate costs of the acquisitions on a relative fair value basis. the significant estimation was primarily due to the sensitivity of the respective fair values to underlying assumptions. the significant assumptions used to estimate the values of the tangible and intangible assets included the replacement cost of the properties, total lease-up time and lost rental revenues during such time, market rents, estimated future cash flows and other valuation assumptions. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s acquisition and purchase price allocation process, including controls over management’s review of the significant assumptions described above. for example, we tested controls over management’s review of the valuation methodology, the purchase price allocation, and the significant assumptions used. to test the costs allocated to the tangible and intangible assets, we involved our valuation specialists and performed audit procedures that included, among others, evaluating the company’s valuation methodologies, testing the significant assumptions described above and testing the completeness and accuracy of the underlying data. for example, we compared the significant assumptions to observable market data, including other properties within the same submarkets and to historical costs incurred by the company in developing and constructing similar assets. we also performed sensitivity analyses of the significant assumptions to evaluate the change in fair values resulting from the changes in assumptions. in addition, we compared the company’s estimated fair values of acquired assets to independent estimates developed by our valuation specialist. /s/ ernst & young llp we have served as the company’s auditor since 2012.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.capitalization of external costs as discussed in notes 3 and 10 to the consolidated financial statements, the company capitalizes certain external costs for construction and installation activities and internal use software. capitalized external costs for construction and installation activities and internal use software are recorded within property and equipment, net which has a balance of $6,981.5 million as of december 31, 2021.ii-43we identified the assessment of the capitalization of external costs for construction and installation activities and internal use software as a critical audit matter. assessing the company’s determination of which costs qualify for capitalization or expense required a high degree of auditor judgment to evaluate the nature of the supporting documentation.the following are the primary procedures we performed to address this critical audit matter. we applied auditor judgment to determine the nature of procedures to be performed over the capitalization of external costs for construction and installation activities and internal use software. this included comparing the external costs capitalized in the current year for construction and installation activities and internal use software to the historical external costs capitalized, considering the nature of the company’s business activities, to identify, for further investigation, inconsistent trends or unexpected patterns of capitalization. we evaluated the design and tested the operating effectiveness of certain internal controls related to the capitalization of external costs for construction and installation activities and internal use software. this included controls related to (1) the company’s identification of qualifying capital external costs and (2) the company’s review of the nature of the underlying activity. we selected a sample of capitalized external costs in the current year and independently assessed the company’s determination that such costs qualify for capitalization by investigating the nature of the costs based on underlying third-party documentation such as project documentation, vendor contracts and invoices.fair value measurement of the initial investment in the vmo2 jv as discussed in notes 6 and 9 to the consolidated financial statements, the company acquired a 50% interest in a joint venture with telefónica sa (the vmo2 jv) on june 1, 2021 in exchange for its contribution of virgin media inc.’s united kingdom operations and certain other of the company’s subsidiaries. the company estimated the fair value of the vmo2 jv using a discounted cash flow analysis, and based on the estimated fair value, the company recorded its initial equity method investment of $14,670.8 million for the vmo2 jv.we identified the evaluation of the fair value measurement of the initial investment in the vmo2 jv as a critical audit matter. evaluating the projected revenue growth rates, ebitda margins, discount rate, and terminal growth rate used to estimate the fair value of the initial investment in the vmo2 jv required a higher degree of auditor judgment due to the subjective nature of the assumptions. additionally, addressing the matter required specialized skills and knowledge.the following are the primary procedures we performed to address this critical audit matter. we performed sensitivity analyses to assess the impact of possible changes to certain assumptions on the fair value measurement. we evaluated the design and tested the operating effectiveness of certain internal controls over the company’s fair value measurement process related to the valuation of the initial investment in the vmo2 jv, including controls related to the development of the above assumptions. we evaluated the projected revenue growth rates used by the company by comparing them to historical average growth rates, and publicly available industry and market data. we assessed the projected ebitda margins by comparing them to historical ebitda margins and publicly available industry and market data. we involved valuation professionals with specialized skills and knowledge, who assisted in:•evaluating the discount rate by comparing it to an independently developed range using publicly available market data for comparable entities•evaluating the terminal growth rate by comparing it to publicly available market data•evaluating the fair value of the initial investment derived from the assumptions above by comparing the implied market multiple from the company’s fair value estimates to the observed range of market multiples derived from comparable entities./s/ kpmg llp we have served as the company’s auditor since 2004.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of the critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which the relate. f-2 revenue recognition – health solution services description of the matter as described in note 3 to the consolidated financial statements, the company’s health solution services revenue is recognized over time where each benefits cycle and enrollment period represents a time increment under the series guidance as a single performance obligation. the company recognizes revenue for this performance obligation over time and measures progress to completion based on labor costs incurred as a percentage of total labor costs to complete the performance obligation. accordingly, the revenue recognized for these arrangements is dependent upon estimates of the remaining labor hours that will be incurred in fulfilling the company’s performance obligation in the contract. in addition, the company frequently enters into change orders or other contract modifications to add or modify services provided to the customer. the company evaluates whether these modifications should be accounted for as separate contracts or a modification to an existing contract.auditing these revenues was especially challenging because of the significant estimation required by management to determine the total expected labor hours for contracts related to health solution services revenue. making this estimate required judgment because the company’s calculation involves management assumptions based on historical evidence regarding the level of effort to be expended in both the enrollment phase and the ongoing administrative phase, which is measured as labor cost. in addition, determining whether the change order represents a separate performance obligation or is part of the ongoing health solution services performance obligation involves judgment based on the nature of the underlying promises in the contract and the time period in which the service is performed. how we addressed the matter in our audit our audit procedures included, among others, evaluating the significant assumptions and the accuracy and completeness of the underlying data used in management's calculation. this included testing management's estimate of the labor costs expected to be incurred for the remaining performance obligation through evaluating whether the historical costs incurred are representative of the upcoming benefits cycle, whether projected changes in circumstances are appropriately considered in the company’s analysis, and mathematically recomputed certain of the company’s calculations of revenue recognized. we also performed a retrospective review of actual hours incurred compared to previously estimated hours to evaluate the company’s historical accuracy. in addition, we performed sensitivity analyses to evaluate changes in the amount of revenue that would result from changes in the company's significant assumptions.to test the company’s conclusions related to the nature of the contract modification, our audit procedures included, among others, testing the completeness and accuracy of the population of contract modifications and testing a sample of modifications to evaluate whether the modification was appropriately accounted for as a separate contract or combined with existing performance obligations and that the amount of deferred revenue recorded was appropriate. f-3 measurement of the tax receivable agreement liability description of the matter as discussed in note 15 of the consolidated financial statements, the company has a tax receivable agreement (“tra”) with certain current and historical holders of llc interests, which is a contractual commitment to distribute 85% of any tax benefits (“tra payment”), realized or deemed to be realized by the company to the parties to the tra. the tra payments are contingent upon, among other things, the generation of future taxable income over the term of the tra and future changes in tax laws. at december 31, 2021, the company’s liability due to the holders of llc interests under the tra (“tra liability”), was $581 million.auditing management’s accounting for the tra liability is especially complex and judgmental as the company’s calculation of the tra liability requires estimates of its future taxable income over the term of the tra as a basis to determine if the related tax benefits are expected to be realized. the liability recorded is based on several inputs including the company’s share of the tax basis in the llc, the amount and timing of the realizability of certain tax attributes, the discount rate applied to the future cash payments, as well as the estimate of future taxable income over the term of the tra. significant changes in estimates could have a material effect on the company’s results of operations.how we addressed the matter in our audit our audit procedures included, among others, testing the measurement of the company’s tra liability by performing procedures to validate the existence of the company’s deferred tax assets and liabilities and to recalculate the company’s share of the tax basis in the net assets of the llc, as discussed above. to test the company’s position that there is sufficient future taxable income to realize the tax benefits discussed above, we evaluated the assumptions used by management to develop the projections of future taxable income. for example, we obtained a schedule detailing the reversal of deferred tax liabilities as a source of income and also compared management’s projections of future financial results with the actual results and assessed the reasonableness of the assumptions. with the assistance of our fair value specialists, we evaluated the reasonableness of the discount rate by testing the mathematical accuracy of the calculation, validating the third-party inputs and testing the methodology employed. we also recalculated the tra liability and verified the calculation of the tra liability was in accordance with the terms set out in the tra. /s/ ernst & young llp we have served as the company’s auditor since 2016.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of a critical audit matter does not alter in any way our opinion on the consolidated f-2financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.assessment of impairment of long-lived assets as discussed in note 2 to the consolidated financial statements, the company is required to test their long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. the company’s long-lived assets primarily consist of the total real estate investment and the related intangible lease assets, net of accumulated depreciation and amortization, which had a balance of $1.6 billion as of december 31, 2020. we identified the assessment of the events or changes in circumstances which indicate that the carrying amount of long-lived assets may not be recoverable as a critical audit matter. specifically, the factors that required a higher degree of auditor judgment were the identification and evaluation of changes in market conditions including factors impacting tenant credit quality and the period of time the company expects to own the long-lived assets. significant adverse changes in market conditions or a decrease in the period of time the company expects to own the long-lived asset could indicate that the carrying amount of long-lived assets may not be recoverable. the primary procedures we performed to address this critical audit matter included the following. we tested certain internal controls over the company’s impairment process, including controls over the identification of changes in market conditions including factors impacting tenant credit quality and the assessment of the period of time the company expects to own long-lived assets. we evaluated the market conditions impacting the company’s real estate investment portfolio based on our understanding of the entity and the industry by reading third party market reports. we tested the tenant’s performance of their lease obligation by evaluating the company’s accounts receivable balance and collection of rental payments to identify any indicators of impairment related to tenant credit quality. for certain tenants, we read publicly available information including the tenant’s financial statements, analyst reports, recent public filings and news articles which may identify events or changes in circumstances that may indicate potential impairment. we examined the company’s ability to evaluate events or changes in circumstances that may indicate potential impairment by assessing the timeliness of historically recognized impairment charges. we also read board of directors meeting minutes, inspected other internal documentation such as strategic plans and property marketing information and inquired to assess the period of time the company expects to own the long-lived assets./s/ kpmg llp we have served as the company’s auditor since 2015.

critical audit matters the critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.f-1table of contents acquisitions, infiltrator water technologies, customer relationships intangible— refer to note 4 to the financial statements critical audit matter description on july 31, 2019, the company completed its acquisition of infiltrator water technologies (iwt) for cash consideration of $1,147.2 million. the company records acquisitions resulting in the consolidation of an enterprise using the acquisition method of accounting. under this method, the company allocated the fair value of purchase consideration transferred to the tangible and intangible assets acquired and liabilities assumed based on their estimated fair values on the date of acquisition, including customer relationships intangible asset of approximately $360.0 million. the fair value assigned is based on estimates and assumptions determined by management.we identified the valuation of the customer relationships intangible asset as a critical audit matter because of the significant assumptions made by management to determine the fair value for purposes of the preliminary purchase price allocation. those assumptions included revenue growth rates and ebitda (together, the “forecasts”), as well as discount and customer attrition rates. our performance of audit procedures to evaluate these assumptions required a high degree of auditor judgment and an increased extent of audit effort, including the need to involve our fair value specialists.how the critical audit matter was addressed in the audit our audit procedures related to testing the assumptions identified above included the following, among others: •we tested the operating effectiveness of management’s internal controls over revenue growth rates, ebitda, and the selection of the discount and customer attrition rates. •we assessed the reasonableness of management’s forecasts by comparing the forecasted information used to iwt’s historical results, peer company historical results and forecasts, industry historical results and forecasts, and internal communications to management and the board of directors. •with the assistance of our fair value specialists, we evaluated the reasonableness of the following significant valuation assumptions: o customer attrition rate by assessing the underlying data used in determining the rate and testing the mathematical accuracy of the calculation. o discount rate by testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation. goodwill, infiltrator water technologies reporting unit — refer to note 8 to the financial statements critical audit matter description the company’s evaluation of goodwill for impairment involves comparing the carrying value of each reporting unit to the estimated fair value of the reporting unit. the company’s determination of estimated fair value of the reporting unit is determined by considering both the market approach and the income approach. the determination of the estimated fair value requires management to make significant estimates and assumptions related to the valuation of the reporting unit. changes in these assumptions could have a significant impact on either the fair value of the reporting unit, the amount of any goodwill impairment charge, or both. the company’s consolidated goodwill balance was $597.8 million as of march 31, 2020, of which $495.8 million was allocated to the iwt reporting unit, which is the reporting unit that exhibits significant sensitivity to changes in estimates and assumptions given the limited cushion between the carrying value and estimated fair value. as of march 31, 2020, the estimated fair value of the iwt reporting unit exceeded its carrying value by less than 20%.we identified the valuation of goodwill for iwt as a critical audit matter because of the significant assumptions made by management to estimate its fair value. those assumptions included revenue growth rates, ebitda, and the selection of the discount rate. our performance of audit procedures to evaluate the assumptions required a high degree of auditor judgment and an increased extent of audit effort, including the need to involve our fair value specialists.f-2table of contents how the critical audit matter was addressed in the audit our audit procedures related to testing the fair value of the iwt reporting unit focused on revenue growth rates, ebitda, and the selection of the discount rate and included the following procedures, among others: •we tested the operating effectiveness of management’s internal controls over revenue growth rates, ebitda, and the selection of the discount rate. •we assessed the reasonableness of management’s forecasts by comparing the forecasted information used to iwt’s historical results, peer company historical results and forecasts, industry historical results and forecasts, and internal communications to management and the board of directors. •with the assistance of our fair value specialists, we evaluated the reasonableness of the following significant valuation assumptions: o the discount rate, by testing the source information underlying the determination of the discount rate and testing the mathematical accuracy of the calculation. o the long-term revenue growth rate in the terminal period through industry and macroeconomic benchmarking./s/ deloitte & touche llp columbus, ohio june 1, 2020 we have served as the company's auditor since 2002.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. amortization of film inventory as described in notes 2 and 6 to the consolidated financial statements, inventories related to film production costs are stated at the lower of amortized cost or fair value and were approximately $1.4 billion as of september 30, 2019. management uses an individual-film-forecast-computation method to amortize film costs based upon the ratio of current period to estimated remaining total gross revenues (“ultimate revenues”) for each title. as disclosed by management, the estimate of ultimate revenues for feature films includes revenues from all sources that are estimated to be earned within 10 years from the date of a film’s initial theatrical release. prior to the release of feature films, management estimates ultimate revenues based on the historical performance of similar content and pre-release market research (including test market screenings), and incorporates factors of the content itself, including, but not limited to, the expected number of theaters and markets in which the original content will be released, the genre of the original content and the past box office performance of the lead actors and actresses. upon a film’s initial release, management updates their estimate of ultimate revenues based on expected future and actual results. management believes the most sensitive factor affecting the estimate of ultimate revenues for films intended for theatrical release is theatrical exhibition, as revenues from subsequent markets have historically exhibited a high correlation to theatrical performance.the principal considerations for our determination that performing procedures relating to amortization of film inventory is a critical audit matter are there was significant judgment by management when estimating ultimate revenues, which in turn led to a high degree of auditor judgment, effort and subjectivity in performing procedures to evaluate management’s estimate of ultimate revenues and the significant assumptions, including the historical performance of similar films and theatrical exhibition. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls over management’s estimation of ultimate revenues and controls over the significant assumptions used in the ultimate revenues estimate. these procedures also included, among others, testing management’s process for estimating ultimate revenues, including evaluating whether the significant assumptions were reasonable considering information such as historical performance of similar content, market research performed, impact of competing products, marketing budget and strategy, economic conditions, and theatrical exhibition, including actual box office performance. procedures were also performed to test the reliability, completeness and relevance of management's data used in the estimate of ultimate revenues./s/ pricewaterhouse coopers llp new york, new york november 14, 2019we have served as the company’s auditor since 2005.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. accounts receivable allowances description of matter as described in note 2 to the consolidated financial statements, management maintains allowances for estimated losses resulting from the inability of customers to make required payments and other accounts receivable allowances. f-2table of contents the principal considerations for our determination that performing procedures relating to the accounts receivable allowances is a critical audit matter are (i) the significant judgement by management when determining the estimate for the accounts receivable allowances; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s estimate and significant assumptions related to the customers continued ability to make required payments. how we addressed the matter addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included, among others, testing management’s process for determining the accounts receivable allowances. procedures related to management’s estimate included evaluating the appropriateness of the method used by management, the completeness, accuracy, and relevance of underlying data used in the estimate, and the reasonableness of significant assumptions used by management in estimating the customers continued ability to make required payments. evaluating management’s assumptions relating to customers’ credit worthiness, historical payment experience with the customer, and the customers’ new business opportunities. extended warranty – powerhead failure description of matter as described in note 6 to the consolidated financial statements, management accrued an extended warranty to account for the replacement of high risk failure parts in fielded systems due to a supplier defect. management’s estimate of this extended warranty liability is generally affected by historical failure rates within a certain population of components, repair costs, and the point of failure within the product life cycle. the principal considerations for our determination that performing procedures relating to the extended warranty liability is a critical audit matter are (i) the significant judgement by management when determining the estimate for the extended warranty liability; and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate management’s estimate and significant assumptions related to historical failure rates, repair costs, and the point of failure within the product life cycle. how we addressed the matter addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included, among others, testing management’s process for determining the extended warranty liability. procedures related to management’s estimate included evaluating the appropriateness of the method used by management, the completeness, accuracy, and relevance of underlying data used in the warranty estimate, and the reasonableness of significant assumptions used by management in estimating the extended warranty liability related to the component failure rates, repair costs, and the point of failure within the product life cycle. evaluating management’s assumptions relating to the component failure rates, repair costs, and the point of failure within the product life cycle involved evaluating whether the assumptions were reasonable considering historical product experience of the company. /s/ marcum llp marcum llp we have served as the company’s auditor since 2017.

critical audit matters the critical audit matters communicated beloware matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicatedto the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and(2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alterin any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical auditmatters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. going concern the accompanying consolidated financial statementshave been prepared assuming that the company will continue as a going concern. as discussed in note 1 to the consolidated financial statements,the company has negative cash flows from operating activities, accumulated deficit from recurring net losses incurred for the prior yearsand significant short-term debt obligations maturing in less than one year as of december 31, 2021. the company has contractual obligationssuch as commitments for purchases of equipment, building constructions cost, payable, capital injection to subsidiaries and short-termloan (collectively “obligations”). currently management’s forecasts and related assumptions illustrate their abilityto meet the obligations through management of expenditures and, if necessary, obtaining additional debt financing, loans from existingdirectors and shareholders and private placements of capital stock for additional funding to meet its operating needs. should there beconstraints on the ability to access such financing, the company can manage cash outflows to meet the obligations through reductions incapital expenditures and other operating expenditures. we identified management’s assessment ofthe company’s ability to continue as a going concern as a critical audit matter. management made judgments to conclude that it isprobable that the company’s plans will be effectively implemented and will provide the necessary cash flows to fund the company’sobligations as they become due. specifically, the judgments with the highest degree of impact and subjectivity in determining it is probablethat the company’s plans will be effectively implemented included the revenue growth and gross margin assumptions underlying itsforecast operating cash flows, its ability to reduce capital expenditures and other operating expenditures, its ability to access fundingfrom the capital market and its ability to obtaining loans from existing directors and shareholders. auditing the judgments made by managementrequired a high degree of auditor judgment and an increased extent of audit effort. addressing the matter involved performing proceduresand evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these proceduresincluded the following, among others: (i) testing key assumptions underlying management’s forecast operating cash flows, includingrevenue growth and gross margin assumptions; (ii) evaluating the probability that the company will be able to access funding from thecapital market; (iii) evaluating the probability that the company will be able to reduce capital expenditures and other operating expendituresif required and (iv) evaluating the probability that the company will be able to obtain the loan from existing directors and shareholders. inventory write-down as described in note 5 of the consolidated financialstatements, inventories are stated at the lower of cost or net realizable value, with cost determined on a weighted average cost method.write-down of potential obsolete or slow moving inventories is recorded based on management’s assumptions about future demands andmarket conditions. for the year ended december 31, 2021, the company recorded inventory impairment charges of $0.9 million. inventoriesinclude items that have been written down to the company’s best estimate of their realizable value, which includes considerationof various factors. we identified the inventory write-down as a criticalaudit matter. the company’s determination of future markdowns is subjective. specifically, there was a high degree of subjectiveauditor judgment in evaluating how the company’s merchandising strategy and related inventory markdown assumptions affected therealizable value of inventory. addressing the matter involved performing proceduresand evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these proceduresincluded the following, among others: (i) observing the physical condition of inventories during inventory counts; (ii) evaluating theappropriateness of management's process for developing the estimates of net realizable value; (iii) testing the reasonableness of theassumptions about quality, damages, future demand, selling prices and market conditions by considering with historical trends and consistencywith evidence obtained in other areas of the audit; and corroborating the assumptions with individuals within the product team; and (iv)assessing the company’s adjustments of inventory costs to net realizable value for slow-moving and obsolete inventories by (1) comparingthe historical estimate for net realizable value adjustments to actual adjustments of inventory costs, and (2) analyzing sales subsequentto the measurement date. assessment of impairment of long-lived assets as discussed in note 7 to the consolidated financialstatements, the company reviews long-lived assets for impairment whenever events or changes in circumstances indicate the carrying valueof these assets may not be recoverable. recoverability of long-lived assets to be held and used is measured by a comparison of the carryingamount of an asset to the estimated undiscounted future cash flows expected to be generated by the asset. if the carrying amount of anasset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amountof the asset exceeds the fair value of the asset. fair value is generally measured based on either quoted market prices, if available,or discounted cash flow analyses. based upon the analysis performed, the fair value of long-lived assets exceeded its carrying value asof the december 31, 2021 and no impairment was recognized for the year ended december 31, 2021. f-3 we identified the assessment of impairment oflong-lived assets as a critical audit matter because of the significant estimates and assumptions management used in the projections offuture cash flows, including the expected production and sales volumes, production costs, operating expenses and discount rates appliedto these forecasted future cash flows. performing audit procedures to evaluate the reasonableness of these estimates and assumptions requireda high degree of auditor judgment and an increased extent of effort. addressing the matter involved performing proceduresand evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these proceduresincluded the following, among others: (i) comparing the methodology used by the company, that is, recoverable amount calculations basedon future discounted cash flows, to industry practice and testing the completeness and accuracy of the underlying data used in the projections;(ii) assessing the reasonableness of the significant assumptions used in the calculations, which comprised of, amongst others, expectedproduction and sales volumes, production costs, operating expenses and discount rates, by comparing them to external industry outlookreports from a number of sources and by analyzing the historical accuracy of management’s estimates; and (iii) involving our valuationspecialists to assist us with assessing the appropriateness of the valuation methodologies and the reasonableness of assumptions used,including the discount rates. assessment of impairment of goodwill as described in notes 12 and 13 to the consolidatedfinancial statements, the company’s consolidated goodwill balance was $1.6 million as of december 31, 2021. the companyperforms an assessment of the carrying value of the reporting units at least on an annual basis or when events occur or circumstanceschange that would more likely than not reduce the estimated fair value of the reporting units below its carrying value. the company performeda goodwill impairment analysis as of december 31, 2021. for purposes of impairment testing, management allocates its goodwill tothe relevant cash-generating units (“cg us”), and compares the recoverable amounts of these cg us to their respective carryingamounts. management determined the recoverable amounts of these cgu based on the value in use (“viu”) which is calculatedbased on discounted cash flows expected to be derived from the respective cgu. management’s cash flows projections included significantjudgments and assumptions relating to the expected production and sales volumes, production costs, operating expenses and discount rates.the fair value of the cgu exceeded its carrying value as of the december 31, 2021 and no impairment was recognized for the year ended december 31, 2021. we identified the assessment of impairment ofgoodwill as a critical audit matter because of the significant estimates and assumptions management used in the projections of futurecash flows, including the expected production and sales volumes, production costs, operating expenses and discount rates applied to theseforecasted future cash flows. performing audit procedures to evaluate the reasonableness of these estimates and assumptions required ahigh degree of auditor judgment and an increased extent of effort. addressing the matter involved performing proceduresand evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these proceduresincluded the following, among others: (i) comparing the methodology used by the company, that is, recoverable amount calculations basedon future discounted cash flows, to industry practice and testing the completeness and accuracy of the underlying data used in the projections;(ii) assessing the reasonableness of the significant assumptions used in the calculations, which comprised of, amongst others, expectedproduction and sales volumes, production costs, operating expenses and discount rates, by comparing them to external industry outlookreports from a number of sources and by analyzing the historical accuracy of management’s estimates; and (iii) involving our valuationspecialists to assist us with assessing the appropriateness of the valuation methodologies and the reasonableness of assumptions used,including the discount rates. assessment of allowances for doubtful accounts as discussed in note 2 to the consolidated financialstatements, the allowance for doubtful accounts is the company’s best estimate of the amount of probable credit losses in the company’sexisting trade accounts receivable. the company determines the allowance based on historical write-off experience, customer specific factsand economic conditions. outstanding accounts receivable balances are reviewed individually for collectability. account balances are chargedoff against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. basedupon the analysis performed, the company maintained an allowance for doubtful account of $4.6 million as of december 31, 2021. we identified the assessment of allowances fordoubtful accounts as a critical audit matter. specifically, the specific allowance is an estimate that involved assessing the likelihoodof collection of a customer’s accounts receivable by considering various factors such as the nature of any dispute, communicationsfrom the customer, historical collections, and number of days accounts receivables have been outstanding. subjective auditor judgmentwas involved in evaluating the relevance and reliability of the evidence obtained in evaluating these factors. addressing the matter involved performing proceduresand evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these proceduresincluded the following, among others: (i) investigating significant fluctuations in the specific allowance as compared to net accountsreceivable and the prior year specific allowance; (ii) inquiring of company personnel to evaluate the rationale for establishing a specificallowance for certain customers; (iii) assessing the company’s estimate of the specific customer allowance by evaluating the underlyingcontractual documents, historical collection trends, communications with customers and other additional factors; and (iv) evaluating subsequentcollections occurring after the balance sheet date and considered the impact of potential subsequent events on the estimate of the specificallowance. /s/ centurion zd cpa & co. centurion zd cpa & co. we have served as the company's auditor since2016.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. accounting for the effects of regulatory matters as described in notes 1 and 4 to the consolidated financial statements, the company’s regulated utility operations are subject to accounting standards for the effects of certain types of regulation. as of december 31, 2019, there was $421 million of regulatory assets and $562 million of regulatory liabilities recorded. regulatory assets represent incurred costs that have been deferred as they are probable for recovery in customer rates. regulatory liabilities represent obligations to make refunds to customers and amounts collected in rates for which the related costs have not yet been incurred. management assesses quarterly whether regulatory assets and liabilities meet the criteria for probability of future recovery or deferral. as disclosed by management, these standards require the company to reflect the effect of regulatory decisions in its financial statements. this assessment considers factors such as, but not limited to, changes in the regulatory environment and recent rate orders to other regulated entities under the same jurisdiction. if future recovery or refund of costs becomes no longer probable, the assets and liabilities would be recognized in current period net income or other comprehensive income. the principal consideration for our determination that performing procedures relating to the company’s accounting for the effects of regulatory matters is a critical audit matter are there was significant judgment by management in determining the recoverability of costs. this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence obtained related to the recoverability of costs. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s implementation of new regulatory orders, changes to existing regulatory orders, and assessing the recoverability of costs. these procedures also included, among others, evaluating (i) the reasonableness of management’s assessment of impacts arising from correspondence with regulators and changes in laws and regulations, (ii) management’s judgments related to the recoverability of regulatory assets and the establishment of regulatory liabilities, and (iii) the sufficiency of the disclosures in the consolidated financial statements. testing the regulatory assets and liabilities involved considering the provisions and formulas outlined in rate orders, other regulatory correspondence, and application of relevant regulatory precedents. /s/ pricewaterhouse coopers llp minneapolis, minnesota february 13, 2020 we have served as the company’s auditor since 1963.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.revenue recognition – identifying and evaluating terms and conditions in contracts as described in note 1 to the consolidated financial statements, management applies the following steps in their determination of revenue to be recognized: 1) identification of the contract with a customer; 2) identification of the performance obligations in the contract; 3) determination of the transaction price; 4) allocation of the transaction price to the performance obligations in the contract; and 5) recognition of revenue when, or as, the company satisfies a performance obligation. management applies judgment in identifying and evaluating any terms and conditions in contracts which may impact revenue recognition. for the fiscal year ended july 31, 2021, the company’s revenue was $673.1 million.the principal considerations for our determination that performing procedures relating to revenue recognition, specifically the identification and evaluation of terms and conditions in contracts, is a critical audit matter are the significant amount of effort and judgment required by management in identifying and evaluating terms and conditions in contracts that impact revenue recognition. this in turn led to a high degree of auditor judgment, subjectivity and significant audit effort in performing our audit procedures to evaluate whether terms and conditions in contracts were appropriately identified and evaluated by management.92table of contents addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls related to the identification and evaluation of terms and conditions in contracts that impact revenue recognition. these procedures also included, among others, testing the completeness and accuracy of management’s identification and evaluation of the terms and conditions in contracts by examining revenue arrangements on a test basis and testing management’s process of identifying and evaluating the terms and conditions in contracts, including management’s determination of the impact of those terms and conditions on revenue recognition./s/ pricewaterhouse coopers llp san jose, california september 16, 2021we have served as the company's auditor since 2015.

critical audit matter below.basis for opinion these financial statements are the responsibility of the company's management. our responsibility is to express an opinion on the company's financial statements based on our audits. 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 audits in accordance with the standards of the pcaob. those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. we believe that our audits provide a reasonable basis for our opinion.critical audit matters the critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.leases - refer to notes 1 and 4 to the financial statements (also see change in accounting principle paragraph above)critical audit matter description the company adopted the new lease standard on january 1, 2019 using the modified retrospective approach. the company recognized and measured their operating leases within the scope of the standard through a cumulative-effect adjustment by recording an operating lease liability and a corresponding operating right-of-use asset on january 1, 2019. the initial operating lease liability recorded was determined based on the present value of the remaining lease payments for all the company’s operating leases that are within the scope of the standard. f-2table of contents management made significant estimates and assumptions in adopting the standard and was required to apply these estimates and assumptions to a high volume of leases globally. we identified the initial adoption of the standard as a critical audit matter given the complexity of applying the standard to numerous and differing lease provisions within the company’s global lease portfolio. the related audit effort required a higher degree of auditor judgment and increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s judgments, including the selection of the incremental borrowing rate and the completeness and accuracy of the underlying data utilized within the new leasing module of the company’s general ledger.how the critical audit matter was addressed in the audit our principal audit procedures related to the adoption of the standard included the following: •we tested the effectiveness of the company’s controls over the adoption of the standard, including controls over a) the selection of the most critical assumptions, including the incremental borrowing rate, b) the process in place to validate the accuracy and completeness of the existing lease population, and c) the development and oversight of the company’s new leasing module.•we evaluated the reasonableness of the company’s incremental borrowing rates by testing the source information underlying the determination of the incremental borrowing rates and testing the mathematical accuracy of the calculations.•we judgmentally selected a sample of communication site locations from the company’s fixed asset sub-ledger and tested for proper inclusion or exclusion from the corresponding operating lease liability and right-of-use asset account balance. •we judgmentally selected a sample of leases from the company’s new global leasing module taking into consideration location, size and complexities of agreements and performed the following procedures for each selection:◦tested management’s identification of the significant terms and provisions of the lease agreements for completeness and accuracy.◦assessed the terms in the lease agreement and evaluated the appropriateness of management’s application of their accounting policies, along with their use of judgments and estimates, in the determination of the operating lease liability and right-of-use asset recorded.◦developed an independent estimate of the operating lease liability and right-of-use asset and compared it to the amounts recorded.revenue - refer to notes 1 and 4 to the financial statements critical audit matter description the company’s contracts with major customers are often governed by a master lease agreement that contains terms and provisions governing the customer’s right to use the company’s telecommunications sites and the land on which the sites are located (the “lease component”) and the customer’s responsibility for reimbursement of various costs incurred by the company in operating the telecommunications towers and supporting the customer’s equipment as well as other services and contractual rights (the “non-lease components”). the master lease agreements contain both lease and non-lease components, may contain unusual or non-standard terms, and often pertain to a large number of the company’s telecommunications sites. in the current year a revised master lease agreement was entered into with an existing major customer.management of the company exercised significant judgment in determining the appropriate revenue recognition for the revised master lease agreement, including the following:•determination of the lease and non-lease components and whether they should be accounted for as a combined lease component or separately.•determination of the stand-alone selling prices for each performance obligation in the master lease agreement if not accounted for with the lease component.•determination of the fixed and variable consideration in the master lease agreement, the impact of cancellation and renewal provisions, the estimated term of each of the individual contracts impacted by the master lease agreement, and the pattern of recognition for each lease component or performance obligation.we identified the revised master lease agreement with a major customer as a critical audit matter because the audit effort required to evaluate management’s judgments in determining the appropriate revenue recognition for the impact of a multi-faceted, complex master lease agreement entered into with a major tenant was extensive.how the critical audit matter was addressed in the audit f-3table of contents our principal audit procedures related to the company’s master lease agreement with a major customer included the following: •we tested the effectiveness of internal controls related to the company’s process for evaluating the proper accounting for the master lease agreement.•we evaluated the company’s significant accounting policies related to the master lease agreement for reasonableness and compliance with the applicable accounting standards.•we judgmentally selected a sample of individual communication site locations governed by the master lease agreement and performed the following procedures for each selection:◦obtained and evaluated the relevant site location source documents and other documents that were part of the overall master lease agreement.◦tested management’s identification of the significant terms for completeness and accuracy, including the identification of the lease and non-lease components, cancellation and renewal provisions, estimated term and fixed and variable consideration. ◦assessed the terms and provisions in the master lease agreement and the site location source documents and evaluated the appropriateness of management’s application of their accounting policies, along with their use of estimates, in the determination of revenue recognition conclusions.•we tested the mathematical accuracy of management’s determination of revenue and the associated timing of revenue recognized in the financial statements./s/ deloitte & touche llp boston, massachusetts february 25, 2020we have served as the company's auditor since 1997.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. goodwill impairment assessment as described in notes 2 and 5 in the consolidated financial statements, the company’s goodwill balance was $22.1 million as of december 31, 2020. the entire balance of goodwill is associated with the natural habitat reporting segment. management evaluates goodwill for impairment as of september 30 every year or more frequently if events or circumstances dictate. the impairment evaluation for goodwill allows management to first assess qualitative factors to determine whether it is necessary to perform the more detailed quantitative goodwill impairment test. management performs the quantitative test if the qualitative assessment indicates it is more-likely-than-not that a reporting unit’s estimated fair value is less than its carrying amount, or management may elect to bypass the qualitative assessment and proceed directly to the quantitative test for the reporting unit. when performing the quantitative test, if the estimated fair value of the reporting unit exceeds its carrying value, no further analysis is required. however, if the estimated fair value of the reporting unit is less than the carrying value, goodwill is written down based on the difference between the reporting unit’s carrying amount and its fair value, limited to the amount of goodwill allocated to the reporting unit. f-2 as a result of the effect of covid-19 on management’s expected future operating cash flows, management performed a discounted cash flow analysis for the natural habitat reporting unit as of december 31, 2020. management determined that the estimated fair value of the reporting unit exceeded the carrying value and no goodwill impairment charge was recognized for the year ended december 31, 2020. the principal considerations for our determination that performing procedures relating to the goodwill impairment assessment for the natural habitat reporting unit at december 31, 2020 is a critical audit matter are (i) the significant judgments by management in determining the fair value of the reporting unit and (ii) the high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to forecasted undiscounted cash flows. addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessments. these procedures also included, among others (i) testing management’s process for determining the fair value estimates of the reporting unit related to the impairment assessment; (ii) evaluating the appropriateness of the discounted cash flow analyses; (iii) testing the completeness and accuracy of underlying data used in the analyses; and (iv) evaluating the significant assumptions used by management related to undiscounted cash flows. evaluating management’s assumptions related to undiscounted cash flows involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit and (ii) whether these assumptions were consistent with evidence obtained in other areas of the audit. long-lived assets impairment assessment as described in notes 2 and 4 in the consolidated financial statements, the company’s long-lived asset net balance was $482.7 million as of december 31, 2020, $373.4 million of the balance is associated vessels and vessel improvements. management tests long-lived assets for recoverability whenever events or circumstances dictate the carrying value of these assets may not be recoverable. as a result of the effect of covid-19 on management’s expected future operating cash flows, management performed undiscounted cash flow analyses of its long-lived assets as of december 31, 2020. management determined that the estimated undiscounted cash flows of the assets exceeded their carrying values and no impairment charge was recognized for the year ended december 31, 2020. the principal considerations for our determination that performing procedures relating to long-lived asset impairment assessments is a critical audit matter are (i) the significant judgment by management in developing the undiscounted cash flow analyses for each vessel and (ii) the high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to undiscounted cash flows. addressing the critical audit matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s long-lived asset impairment assessments, including controls over undiscounted cash flow impairment analyses for each vessel. these procedures also included, among others (i) testing management’s process for developing the undiscounted cash flow estimates for ships; (ii) evaluating the appropriateness of the undiscounted cash flow model; and (iii) testing the completeness and accuracy of underlying data used in the estimates. /s/ marcum llp marcum llp we have served as the company’s auditor since 2015.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the company’s audit committee that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments by us. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.loans held for investment and the allowance for credit losses – refer to note 3 to the financial statements critical audit matter description the company presents certain financial assets carried at amortized cost, such as loans held for investment, at the net amount estimated to be collected after expected credit losses. the measurement of expected credit losses over the life of each financial asset is based on information about past events, including historical experience, current conditions, macroeconomic factors, and reasonable and supportable forecasts that affect the collectability of the reported amount. to estimate credit losses, the company considers key credit quality indicators and utilizes a model-based approach for the majority of its financial assets and an individually-assessed approach for certain of its financial assets. as of december 31, 2020, the company recorded an allowance for credit losses of $62.8 million.given the significant amount of judgement required by management to estimate an allowance for credit losses, we identified the company’s allowance for credit losses to be a critical audit matter. auditing management’s allowance for credit losses requires a high degree of auditor judgment and increased extent of effort.how the critical audit matter was addressed in the audit our audit procedures related to the company’s allowance for credit losses included the following, among others: •we tested the design and operating effectiveness of controls implemented by the company related to the estimation of an allowance for credit losses. •we evaluated the accuracy and appropriateness of the loan-level information and credit quality indicators utilized by management to estimate the allowance for credit losses. •we evaluated the reasonableness of the methodology and significant assumptions used to select the macroeconomic factors for the forecast period by considering economic conditions and relevant industry trends, including whether the methodology and significant assumptions were appropriate and not inconsistent with other market participants. f-3 •for loans with an allowance for credit loss developed using a model-based approach, we evaluated the appropriateness of the model and significant inputs to the model used by the company. •for loans with an allowance for credit loss developed using an individually assessed approach, we, with the assistance of internal fair value specialists, evaluated the appropriateness of the valuation methodology, significant assumptions and inputs, and mathematical accuracy of the valuation model used by management to determine the fair value of the collateral on which the allowance for credit loss is based./s/ deloitte & touche llp dallas, texas february 24, 2021 we have served as the company’s auditors since 2016.

critical audit matters the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. allowance for loan losses as described in notes 1 and 4 to the consolidated financial statements, the company’s consolidated allowance for loan losses (all) was $26.6 million at december 31, 2021. the company describes in note 1 of the 25 table of contents consolidated financial statements the “allowance for loan losses” accounting policy around this estimate. the all is an estimate of losses inherent in the loan portfolio. the determination of the reserve requires significant judgment reflecting the company’s best estimate of probable loan losses. the allowance for loan losses is established through a provision for loan losses charged to expense. loans are charged against the allowance for loan losses when management believes that the collectability of the principal is unlikely. subsequent recoveries, if any, are credited to the allowance. current methodology used by management to estimate the allowance for loan losses takes into consideration such factors as changes in the nature and volume of the loan portfolio, overall portfolio quality, review of specific problem loans, historic categorical trends, current delinquency levels as related to historical levels, portfolio growth rates, changes in composition of the portfolio, the current economic environment, as well as current allowance adequacy in relation to the portfolio. the company considers all of these factors prior to making any adjustments to the allowance due to the subjectivity and imprecision involved in allocation methodology. this evaluation is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. the primary reason for our determination that the allowance for loan losses is a critical audit matter is that auditing the estimated allowance for loan losses involved significant judgment and complex review. there is a high degree of subjectivity in evaluating management’s estimate, such as evaluating management’s assessment of economic conditions and other environmental factors on the loan portfolio, evaluating the adequacy of specific allowances associated with impaired loans and assessing the appropriateness of loan grades. our audit procedures related to the estimated allowance for loan losses included: • evaluated and tested the design and operating effectiveness of related controls over the reliability and accuracy of data used to calculate and estimate various components of the all including: ○ classification of loans by segment ○ historical loss data and loss rates ○ establishment of qualitative adjustments ○ grading and risk classification ○ establishment of specific reserves on impaired loans • testing the clerical and computational accuracy of the formulas and information utilized within the all model. • evaluating the qualitative and environmental adjustment to the historical loss rates, including assessing the basis for the adjustments and the reasonableness of the significant assumptions. • evaluating the relevance and reliability of data and assumptions. • testing of the loan review function and the accuracy of how loan grades are determined. specifically, evaluating the appropriateness of loan grades and to assess the reasonableness of specific impairments on loans. • evaluating the overall reasonableness of qualitative factors and the appropriateness of their direction and magnitude and the company’s support for the direction and magnitude compared to previous years. • evaluating credit quality indicators such as trends in delinquencies, nonaccruals, and charge-offs. • evaluating the accuracy and completeness of disclosures in the consolidated financial statements. we have served as the company’s auditor since 2021.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. quantitative goodwill impairment assessment as described in notes 1 and 5 to the consolidated financial statements, the company’s consolidated goodwill balance was $14,395.2 million as of december 31, 2020. goodwill, which is not amortized, is tested for impairment on an annual basis (or an interim basis if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value). management conducted its analysis qualitatively and assessed whether it was more likely than not that the respective fair value of the reporting units was less than the carrying amount. management determined that impairment of goodwill was not likely in 35 of its reporting units and thus was not required to perform a quantitative analysis for these reporting units. for the remaining one reporting unit, management performed its quantitative analysis. the quantitative process utilizes both an income approach (discounted cash flows) and a market approach (consisting of a comparable public company earnings multiples methodology) to estimate the fair value of a reporting unit. when performing the quantitative assessment, key assumptions used in the income and market methodologies are updated when the analysis is performed for each reporting unit. the assumptions that have the most significant effect on the fair value calculations are the projected revenue growth rates, future operating margins, discount rates, terminal values, and earnings multiples.the principal considerations for our determination that performing procedures relating to the quantitative goodwill impairment assessment is a critical audit matter are (i) the significant judgment by management when determining the fair value estimate of the reporting unit; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to projected revenue growth rates and the discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the company’s reporting units. these procedures also included, among others (i) testing management’s process for determining the fair value estimate of the one reporting unit; (ii) evaluating the appropriateness of the income approach; (iii) testing the completeness and accuracy of the underlying data used in the approach; and (iv) evaluating the reasonableness of the significant assumption used by management related to projected revenue growth rates and the discount rate. evaluating management’s assumption related to projected revenue growth rates involved evaluating whether the assumption was reasonable considering (i) the current and past performance of the reporting unit; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the income approach and (ii) the reasonableness of the discount rate significant assumption.31quantitative indefinite-lived trade name intangible asset impairment assessment as described in notes 1 and 5 to the consolidated financial statements, the company’s consolidated indefinite-lived intangible assets balance was $784.1 million as of december 31, 2020, which was comprised entirely of trade names. trade names that are determined to have an indefinite useful economic life are not amortized, but separately tested for impairment during the fourth quarter of the fiscal year or on an interim basis if an event occurs that indicates the fair value is more likely than not below the carrying value. management first qualitatively assesses whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of the indefinite-lived trade name is less than its carrying amount. if necessary, management conducts a quantitative review using the relief-from-royalty method. the assumptions that have the most significant effect on the fair value calculations are the royalty rates, projected revenue growth rates, discount rates, and terminal values. each royalty rate is determined based on the profitability of the trade name to which it relates and observed market royalty rates. revenue growth rates are determined after considering current and future economic conditions, recent sales trends, discussions with customers, planned timing of new product launches or other variables. the principal considerations for our determination that performing procedures relating to the quantitative indefinite-lived trade name intangible asset impairment assessment is a critical audit matter are (i) the significant judgment by management when determining the fair value estimate of the indefinite-lived trade name intangible asset; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the royalty rate, discount rate, and terminal value; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s indefinite-lived trade name intangible assets impairment test, including controls over the valuation of the company’s indefinite-lived trade name intangible asset. these procedures also included, among others (i) testing management’s process for determining the fair value estimate; (ii) evaluating the appropriateness of the relief-from-royalty method; (iii) testing the completeness and accuracy of the underlying data used in the method; and (iv) evaluating the reasonableness of significant assumptions used by management related to the royalty rate, discount rate, and terminal value. evaluating management’s assumption related to the terminal value involved evaluating whether the assumption was reasonable considering (i) the current and past performance of the asset group comprised of the indefinite-lived trade name intangible asset; (ii) the consistency with external market and industry data; and (iii) whether the assumption was consistent with evidence obtained in other areas of the audit. professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the relief-from-royalty method and (ii) the reasonableness of the royalty rate and the discount rate significant assumptions.valuation of amortizable customer relationships intangible assets acquired – project viking holdings, inc. (vertafore)as described in notes 1 and 2 to the consolidated financial statements, the company acquired 100% of the shares of project viking holdings, inc. (the parent company of vertafore) on september 3, 2020, for a purchase price of $5,398.6 million. the acquired amortizable intangible assets include customer relationships of $2,230 million. the fair value for customer relationships is determined as of the acquisition date using the excess earnings method. under this methodology, the fair value is determined based on the estimated future after-tax cash flows arising from the acquired customer relationships over their estimated lives after considering the customer attrition rates and contributory asset charges. the assumptions that have the most significant effect on the fair value calculations are the customer attrition rates, projected customer revenue growth rates, margins, contributory asset charges, and discount rates.the principal considerations for our determination that performing procedures relating to the valuation of amortizable customer relationships intangible assets acquired is a critical audit matter are (i) the significant judgment by management when determining the fair value estimates of the amortizable customer relationships intangible assets; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the customer attrition rates, projected customer revenue growth rates, margins, and discount rate; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s valuation of acquired amortizable customer relationships intangible assets. these procedures also included, among others (i) testing management’s process for determining the fair value estimates; (ii) evaluating the appropriateness of the excess earnings method; (iii) testing the completeness and accuracy of the underlying data used in the method; and (iv) evaluating the reasonableness of significant assumptions used by management related to the customer attrition rates, projected customer revenue growth rates, margins, and discount rate. evaluating management’s assumptions related to projected customer revenue growth rates and margins involved evaluating whether the assumptions were reasonable considering (i) the past and post-acquisition performance of the business and (ii) whether the assumptions were consistent with evidence obtained in other 32areas of the audit. professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of significant assumptions related to the customer attrition rates and the discount rate./s/ pricewaterhouse coopers llp tampa, florida february 22, 2021we have served as the company’s auditor since 2002.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.valuation of certain investments in securities, loans and unconsolidated entities that are determined based on management’s internal valuation techniques as described in notes 2 and 3 to the consolidated financial statements, the company’s investments in securities at fair value, loans at fair value and investments in unconsolidated entities at fair value were $1.5 billion, $1.5 billion and $0.1 billion, respectively as of december 31, 2020. the company elected the fair value option for those of its assets for which such election is permitted, including its investments in securities, loans, and investments in unconsolidated entities. management generally uses third party valuations when available. if third-party valuations are not available, management uses other valuation techniques, such as a discounted cash flow methodology. management’s estimate of fair value may be based on several assumptions, including but not limited to management’s estimates of yield, projected collateral prepayments, projected collateral losses, projected collateral recoveries, recovery amount, and recovery timeline, as applicable. for certain investments in unconsolidated entities, an equity price-to-book assumption is also considered. fair value measurements are impacted by the interrelationships of these assumptions.the principal considerations for our determination that performing procedures relating to the valuation of certain investments in securities, loans and unconsolidated entities that are determined based on management’s internal valuation techniques is a critical audit matter are (i) the significant judgment by management in determining the fair value of these investments, which in turn led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the valuation of these investments and the interrelated assumptions related to yield, projected collateral prepayments, projected collateral losses, projected collateral recoveries, recovery amount, recovery timeline, and equity price-to-book, as applicable; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s valuation of certain investments in securities, loans, and unconsolidated entities, including controls over management’s comparison of internally developed fair values to fair values obtained from third-party pricing providers. these procedures also included, among others, developing an independent range of fair value estimates, which included (i) testing the completeness and accuracy of data provided by management; (ii) comparing management’s estimate of fair value to independent sources, where available; and (iii) for a sample of investments, the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of estimates of fair value by independently developing assumptions related to yield, projected collateral prepayments, projected collateral losses, projected collateral recoveries, recovery amount, recovery timeline, and equity price-to-book assumptions, as applicable./s/pricewaterhouse coopers llp new york, new york march 16, 2021we have served as the company’s auditor since 2007.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.assessment of the self-insurance claim liability for workers’ compensation as discussed in notes 1 and 10 to the consolidated financial statements, at april 30, 2022, the company was primarily self-insured for workers’ compensation claims. the self-insurance claim liability for workers’ compensation is determined actuarially based on claims filed and an estimate of claims incurred but not yet reported. factors affecting the uncertainty of the claim liability include the (1) loss development factors, which include the development time frame and settlement patterns, and (2) expected loss rates, which include litigation and adjudication direction, and medical treatment and cost trends. as discussed in notes 1 and 10 to the consolidated financial statements, the company reported a self-insurance claim liability of $53,752 thousand, which included the self-insurance claim liability for workers’ compensation.we identified the assessment of the self-insurance claim liability for workers’ compensation as a critical audit matter. the evaluation of the key assumptions used to estimate the liability, specifically the loss development factors and expected loss 30rates, required complex auditor judgment due to the significant measurement uncertainty. specialized skill and knowledge was necessary to evaluate the methods and key assumptions used to determine the liability. the following are the primary procedures we performed to address this critical audit matter. we evaluated the design and tested the operating effectiveness of certain internal controls related to the company’s process to determine the self-insurance claim liability for workers’ compensation. this included controls related to the selection of the methods used to determine the liability, and the evaluation of the loss development factors and expected loss rates. we involved actuarial professionals with specialized skill and knowledge, who assisted in:•assessing the methods used by the company by comparing them to generally accepted actuarial methods•evaluating the loss development factors and expected loss rates used by the company by comparing them to industry trends.evaluation of the value allocated to land in certain business combinations as discussed in note 2 to the consolidated financial statements, the company acquired buchanan energy and several stores from pilot corporation during the year ended april 30, 2022. these acquisitions met the criteria to be recorded as business combinations. the significant assets acquired include buildings, equipment, and land. the company primarily values buildings and equipment using the cost method and land using comparable land sales. the company assigned $306,818 thousand and $67,365 thousand to property and equipment in the buchanan energy and pilot acquisitions, which includes the value allocated to land.we identified the evaluation of the fair value of land acquired in the buchanan energy and pilot business combinations as a critical audit matter. a high degree of subjective auditor judgment was required to evaluate the relevance of comparable land sales that were used to determine the fair value of the acquired land. this matter required the assistance of valuation professionals with specialized skills and knowledge.the following are the primary procedures we performed to address this critical audit matter. we evaluated the design and tested the operating effectiveness of certain internal controls related to the company’s land value estimation process in business combinations. this included controls related to the identification and selection of the publicly available comparable land sales. for a sample of land acquired we involved valuation professionals with specialized skills and knowledge, who assisted in developing independent ranges of fair value estimates using publicly available land sales and comparing them to the company’s fair value estimates./s/ kpmg llp we have served as the company’s auditor since 1987.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. deferred tax assets as discussed in notes 2 and 11 to the consolidated financial statements, as at december 31, 2020 the company recorded deferred tax assets of $199,655 relating to temporary differences. the company has determined it is more likely than not that some portion of the deferred tax asset will not be realized. 331 newman springs road p (732) 784-1582building 1, 4th floor, suite 143f (732) 510-0665red bank, nj 07701 f-1table of contents the principal considerations for our determination that performing procedures relating to the deferred tax asset and valuation allowance is a critical audit matter are the significant judgement by management in determining the valuation allowance, this in turn led to significant auditor judgement in performing procedures and evaluating audit evidence. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinions on the financial statements. these procedures included 1) testing the tax reconciliation to the annual corporate tax filings, 2) evaluating the appropriateness and consistency of management’s methods and assumptions used in identification, recognition, measurement and disclosure of the income tax net operating loss deferred asset and valuation allowance and 3) evaluating the reasonableness of management’s estimates by considering the realization of past managements’ estimates of deferred taxes and how tax law, including statutes and regulations impacted management’s judgement. /s/ boyle cpa, llc we have served as the company’s auditor since 2019r

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. valuation and related purchase price allocations of properties acquired from an unconsolidated joint venture as described in notes 1, 3 and 5 to the consolidated financial statements, as of december 31, 2021, the company holds a 20% equity interest in the ddrm properties joint venture with madison international realty. in december 2021, the company acquired the 80% equity interest in six properties owned by the ddrm properties joint venture for $107.2 million and stepped up the previous 20% interest due to a change in control, resulting in recognition of a $7.2 million gain on sale and change in control of interests and recognition of the aggregate gross fair value (at 100%) of the properties acquired of $134.0 million. management used a discounted cash flow analysis to estimate the fair value for each property. the discounted cash flow analyses used to estimate the fair value of the properties acquired involves significant estimates and assumptions, including discount rates, exit capitalization rates and certain market leasing assumptions. property fair values were then further allocated to the property level tangible assets and liabilities acquired, consisting of land, building and improvements and intangible assets and liabilities, generally including above- and below-market leases and in-place leases. as disclosed by management, the allocation process includes various valuation methods and involves significant estimates and assumptions by management related to discount rates, exit capitalization rates, estimated land values (per square foot), capitalization rates and certain market leasing assumptions. the fair value of land of an acquired property considers the value of land as if the site was unimproved based on comparable market transactions. the fair value of the building is determined as if it were vacant by applying a capitalization rate to market leasing assumptions. above- and below-market lease values are calculated based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between contractual rents and estimated market rents, measured over a period equal to the remaining term of the lease for above-market leases and the remaining term plus the estimated term of any below-market, renewal options for below-market leases. the value of acquired in-place leases is recorded based on the present value of the estimated gross monthly market rental rate for each individual lease multiplied by the estimated period of time it would take to lease the space to a new tenant. the principal considerations for our determination that performing procedures relating to the valuation and related purchase price allocations of properties acquired from an unconsolidated joint venture is a critical audit matter are the significant judgment by management in determining and allocating the aggregate gross fair value of the properties acquired to each individual property for purposes of establishing a basis for the purchase price allocations to the individual properties acquired and subsequent allocation of the purchase price to the property level tangible and intangible assets and liabilities acquired associated with each property; this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the discount rates, exit capitalization rates, and certain market leasing assumptions used to estimate the fair value of the individual properties acquired and the discount rates, estimated land values (per square foot), capitalization rates, and certain market leasing assumptions used to estimate the fair value of certain property level tangible and intangible assets and liabilities acquired, and the audit effort involved the use of professionals with specialized skill and knowledge. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the company’s acquisition accounting process, including controls over the valuation and related purchase price allocations of the properties acquired. these procedures also included, among others, (i) reading the respective purchase and sale agreements and (ii) testing management’s process for estimating the fair value of the individual properties f-3 acquired and estimating the fair value of certain property level tangible and intangible assets and liabilities acquired. testing management’s process included (i) evaluating the appropriateness of the valuation methods, (ii) testing the completeness and accuracy of data provided by management, (iii) evaluating the reasonableness of the significant assumptions related to the discount rates, exit capitalization rates, and certain market leasing assumptions used to estimate the fair value of the individual properties acquired and the discount rates, estimated land values (per square foot), capitalization rates, and certain market leasing assumptions used to estimate the fair value of certain property level tangible and intangible assets and liabilities acquired, and (iv) for certain individual properties and property level tangible and intangible assets and liabilities acquired, the involvement of professionals with specialized skill and knowledge to assist in evaluating the reasonableness of the aforementioned significant assumptions. evaluating the reasonableness of significant assumptions relating to the discount rates, exit capitalization rates, estimated land values (per square foot), capitalization rates, and certain market leasing assumptions involved considering whether the assumptions used were consistent with evidence obtained in other areas of the audit and third party market data. identification and evaluation of impairment indicators for real estate assets as described in notes 1 and 6 to the consolidated financial statements, the carrying value of the company’s total net real estate assets was $3,667.3 million and net intangible assets was $34.4 million as of december 31, 2021. management reviews its individual real estate assets, including undeveloped land and construction in progress, and intangibles for potential impairment indicators whenever events or changes in circumstances indicate that the carrying value may not be recoverable. impairment indicators are primarily the result of a change in hold period or significant, prolonged decreases in projected cash flows. for assets with impairment indicators, management determines if the undiscounted future cash flows are sufficient to recover the asset’s carrying value. the principal considerations for our determination that performing procedures relating to the identification and evaluation of impairment indicators for real estate assets is a critical audit matter are the significant judgment by management to identify and evaluate events or changes in circumstances indicating that the carrying value may not be recoverable, which led to a high degree of auditor judgment in evaluating audit evidence relating to management’s identification and evaluation of impairment indicators. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the company’s impairment process, including controls over the identification and evaluation of events or changes in circumstances that indicate the carrying value may not be recoverable. these procedures also included, among others, testing management’s process for identifying individual real estate assets with potential impairment indicators. testing management’s process included evaluating management’s identification and evaluation of impairment indicators. /s/ pricewaterhouse coopers llp cleveland, ohio february 24, 2022we have served as the company’s auditor since 1992.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which it relates. revenue recognition under bill and hold arrangements as discussed in note 1 to the consolidated financial statements, the company’s distillery products segment routinely enters into bill and hold arrangements, whereby the company produces and sells aged and unaged distillate to customers. as discussed in note 3 to the consolidated financial statements, brown goods premium beverage alcohol revenue was $162,074 thousands for the year ended december 31, 2021, a portion of which was for bill and hold arrangements.we identified the evaluation of revenue recognized under bill and hold arrangements as a critical audit matter because of the extent of additional audit effort required to test the incremental bill and hold revenue recognition criteria. the incremental bill and hold revenue recognition criteria include the evaluation of: 1) the reason for the bill and hold arrangement; 2) the identification of the product as separately belonging to the customer; 3) the product being currently ready for physical transfer to the customer; and 4) the company’s inability to use the product or direct it to another customer.the following are the primary procedures we performed to address this critical audit matter. we evaluated the design and tested the operating effectiveness of certain internal controls over the company’s revenue recognition process, including controls related to bill and hold revenue recognition criteria being met. we examined a sample of bill and hold revenue transactions to assess the incremental bill and hold revenue recognition criteria. specifically, we inspected documentation received from the customer directing the company to warehouse distillate after production. additionally, we observed a sample of customer-owned barrels to determine they were marked with unique identifiers separating them from company-owned inventory and were ready for physical transfer to the customer upon request. also, to evaluate that the company does not have the ability to use the product or direct to another customer, we inspected underlying documentation for the same sample of bill and hold transactions to determine legal title to the product had transferred to the customer.initial measurement of luxco distributor relationships and certain trade name indefinite-lived intangible assets as discussed in note 4 to the consolidated financial statements, on april 1, 2021, the company acquired luxco, inc. and its affiliated companies (luxco) in a business combination. as a result of the transaction, the company acquired certain intangible assets, including distributor relationships and trade names with acquisition-date fair values of $41,400 thousands and $178,100 thousands, respectively.we identified the evaluation of the acquisition-date fair values of distributor relationships and certain trade names as a critical audit matter. a high degree of subjective auditor judgment was required to evaluate certain significant assumptions used in the valuation models that were applied to determine the fair value of these intangible assets, specifically the forecasted revenue growth rates, including the terminal growth rates, and the royalty rates. changes in these assumptions could have had a significant impact on the fair values of these intangible assets.the following are the primary procedures we performed to address this critical audit matter. we evaluated the design and tested the operating effectiveness of certain internal controls related to the company’s acquisition-date valuation process, 38including controls related to the development of the above significant assumptions. we evaluated the reasonableness of the revenue growth rates by comparing the company’s estimates of forecasted revenue growth to luxco’s historical actual results and industry reports. we performed sensitivity analyses over the revenue growth rates to assess the effect of changes in those assumptions on the company’s determination of fair value. we involved valuation professionals with specialized skills and knowledge, who assisted in:• evaluating the revenue terminal growth rates by comparing the forecasted rates to publicly available market and industry data• evaluating the trade name royalty rates by comparing the rates determined by the company to publicly available market data for comparable transactions./s/ kpmg llp we have served as the company’s auditor since 2008.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not f-2table of contentsalter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.revenue recognition - estimated costs to complete license and research and development ("r&d") services performance obligation as discussed in notes 2 and 8 to the consolidated financial statements, $46.7 million of the company’s total revenues for the year ended december 31, 2020 was generated from license and r&d services. for the company’s license and r&d services, control transfers over time; accordingly, management recognizes revenue based on the extent of progress in each period towards completion of the performance obligation. the selection of the measure of progress towards completion requires management judgment and is based on the nature of the products or services to be provided. as disclosed by management, the company uses the cost-to-cost method to measure progress for its contracts because management believes that measure best depicts the transfer of control to the customer, which occurs as the company incurs costs on the contracts.under the cost-to-cost method, the extent of progress towards completion is based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation, which includes both the actual costs already incurred and the estimated costs to complete. revenues are recognized proportionately as costs are incurred. due to the nature of the work required to be performed on the performance obligation, management’s estimation of costs at completion is complex and requires significant judgment. management has disclosed that there are many factors that can affect the accuracy of cost estimates, including, but not limited to, the availability and costs of labor and materials resources, and productivity.the principal considerations for our determination that performing procedures relating to revenue recognition – estimated costs to complete license and r&d services performance obligation is a critical audit matter are the significant judgment by management when developing the estimated costs to complete the performance obligation. this in turn led to significant auditor judgment, subjectivity and effort in performing procedures to evaluate management's estimate of the costs to complete the performance obligation.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included, among others, evaluating and testing management’s process for determining the estimate of costs at completion, which included evaluating the reasonableness of significant assumptions, including the estimated expected labor costs used by management and considering the factors that can affect the accuracy of those estimates. evaluating the reasonableness of significant assumptions used involved assessing management’s ability to reasonably estimate costs to complete the performance obligation by (i) performing a comparison of the originally estimated costs and actual costs incurred on similar completed contracts; (ii) evaluating the timely identification of circumstances that may warrant a modification to the estimated costs to complete, including actual costs in excess of estimates; and (iii) testing management’s process for evaluating the company’s ability to properly execute the work plan and design phases consistent with customer expectations for completing the performance obligation./s/ kesselman & kesselman certified public accountants (isr.)a member of pricewaterhouse coopers international limited tel aviv, israel march 30, 2021we have served as the company’s auditor since 2000.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.property and casualty insurance loss and loss expense reserves - refer to note 4 to the financial statements.critical audit matter description the company’s property and casualty insurance loss and loss expense reserves for long-tailed lines of business, such as workers’ compensation, commercial casualty and certain other liability lines (referred to as “loss and loss expense reserves”), are determined by the company using actuarial methods, models, assumptions, and judgment to estimate the reserves ("actuarial estimates") required to pay for and settle all outstanding insured claims, including incurred but not reported (ibnr) claims, as of the financial statement date. the actuarial estimates of loss and loss expense reserves are subject to review and adjustment by company management.loss and loss expense reserves are inherently uncertain as to timing and amount and the recorded loss and loss expense reserves may vary materially from the actual ultimate cost of claims. given the subjectivity in estimating ultimate loss and loss expense reserves, due to uncertainties concerning the future emergence of loss and loss expenses, inflation trends, and the judicial environment, among other factors, auditing loss and loss expense reserves involved an especially high degree of auditor judgment, including the need to involve our actuarial specialists.how the critical audit matter was addressed in the audit our audit procedures related to loss and loss expense reserves included the following, among others: •we tested the effectiveness of controls related to loss and loss expense reserves, including those over the review of methods, models, assumptions and judgments used, and management’s review of the estimates.•we tested the underlying data that served as the basis for the actuarial analysis, including historical claims data, to test the reasonableness of key inputs to the actuarial estimates.•with the assistance of our actuarial specialists, we used the company’s claims data and other inputs, to develop a range of independent estimates for the loss and loss expense reserves. we used these independent estimates to assess the reasonableness of the company’s reserves by comparing our estimates to the company’s recorded loss and loss expense reserves.•we compared the company’s prior year estimates of expected incurred losses to actual experience during the current year to identify potential bias in the determination of loss and loss expense reserves./s/ deloitte & touche llp cincinnati, ohio february 24, 2022 we have served as the company’s auditor since 1980.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.self-insurance liabilities (general and professional liability claims) - refer to notes 2 and 18 to the financial statements critical audit matter description the company's self-insurance liabilities for general and professional liability claims totaled $69.7 million at december 31, 2021. the company develops information about the size of the ultimate claims based on historical experience, current industry information, and actuarial analysis.the determination of case reserves for known general and professional liability claims, which is used in developing the actuarial estimated liability, is highly subjective. given the significant judgments in estimating the case reserves for known claims, we have determined the reserve for general and professional liabilities to be a critical audit matter. this required a high degree of auditor judgment and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management estimates of case reserves for known claims.how the critical audit matter was addressed in the audit our audit procedures relating to management’s judgment regarding the estimation of the reserve for general and professional liability claims included the following, among others:•we tested the effectiveness of controls over the reserve for general and professional liabilities, including those over the determination of the case reserves for known claims.•we obtained an understanding of the factors considered and assumptions made by management and the actuaries in developing the estimate of the general and professional liability reserves, the sources of data relevant to these factors and assumptions and the procedures used to obtain the data, and the methods used to calculate the estimate.•we performed a retrospective review in which we compared the current portion of the total liability at the end of the prior year with what was actually paid in the current year in order to assess the ability of the company to forecast the timing of reserve payouts.•we tested known case reserves by making selections and obtaining the associated notice of claim and settlement support (if applicable), as well as inquiring with the company as to the nature of each case reserve selection and the judgment rationale for the established reserve amount. additionally, we selected external legal counsel and inquired about open cases handled by each legal firm and evaluated whether the information received from external legal counsel supported the known case reserves. /s/ deloitte & touche llp costa mesa, california february 9, 2022we have served as the company's auditor since 1999.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. evaluation of impairment on real estate investments held and used description of the matter at december 31, 2019, the company’s real estate investments (land, building, and improvements) held and used totaled $5.0 billion. as discussed in note 2 to the consolidated financial statements, the company reviews its real estate investments held and used periodically for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. the company considers factors such as expected future undiscounted cash flows, estimated residual value, and market trends (such as the effects of leasing demand and competition) in assessing recoverability of these investments. key assumptions used in estimating future cash flows and fair values include recently quoted bid or ask prices, sale prices of comparable investments, contractual and comparable market rents, leasing assumptions, capitalization rates, and expectations for the use of the asset. a real estate investment held and used is considered impaired if its carrying value exceeds its estimated undiscounted cash flows, and the impairment is calculated as the amount by which the carrying value of the asset exceeds its estimated fair value. auditing management’s evaluation of impairment on real estate investments held and used is judgmental due to the estimation required in determining undiscounted cash flows that can be generated from the investment and determining estimated fair value when the investment is not 59 table of contents deemed recoverable from those estimated future cash flows. in particular, the impairment evaluation is sensitive to the investment’s estimated residual value that is derived from the key assumptions stated above, which can be affected by expectations about future market or economic conditions, demand, and competition. how we addressed the matter in our audit we obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the company’s impairment evaluation process. this included controls over management’s review of the key assumptions underlying the undiscounted cash flows and the fair value determination. to test the company’s evaluation of impairment of real estate investments, we performed audit procedures that included, among others, testing the key assumptions used by management in its recoverability analysis and in determining the fair value of investments that were impaired. we compared the key assumptions to observable market transaction information published by independent industry research sources to assess whether the assumptions were market supported. we involved a valuation specialist to assist in evaluating the key assumptions listed above. as part of our evaluation, we assessed the historical accuracy of management’s estimates and performed sensitivity analyses of key assumptions to evaluate the changes in the valuation of certain properties that would result from changes in the assumptions or using alternative valuation techniques. in addition, we performed procedures to evaluate the completeness and accuracy of the data utilized in management’s impairment analysis. we also assessed information and events subsequent to the balance sheet date, if any, to corroborate certain of the key assumptions used by management. purchase accounting for acquisitions of real estate investments description of matter the company recorded $1.3 billion in acquisition value of real estate investments during 2019. as discussed in note 2 to the consolidated financial statements, the company allocates the purchase price of real estate acquisitions to land, building, improvements, equipment, and intangibles for properties acquired with an in-place lease, based on their relative fair values. the company considers certain key assumptions to estimate the fair value of the components of the tangible property acquired including comparable market values for land, building, and improvements. the determination of the value of intangible assets and liabilities primarily relates to the contractual lease terms, estimates of the fair market rental rates, discount rates, and estimates of costs to carry and obtain a tenant. auditing management’s purchase accounting for the company’s 2019 acquisitions of real estate investments is complex due to the judgmental nature of numerous assumptions made by management when determining the estimated fair value of the components of the tangible and intangible assets and liabilities acquired. how we addressed the matter in our audit we obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the company’s real estate investments acquisitions process. this included controls over management’s review of the key assumptions underlying the fair value estimates. to test the company’s purchase accounting for acquisitions of real estate investments, we performed audit procedures that included, among others, reading the purchase agreements, evaluating the key assumptions and methods used in developing the estimated fair value of real estate acquisitions, and testing the recording of the assets and liabilities acquired. we evaluated, among other things, the key assumptions listed above, and the underlying data used by the company in developing the tangible and intangible assets and liabilities. we compared the key assumptions to observable market transaction information published by independent industry research sources to assess whether the assumptions were market supported. we involved valuation specialists to assist in evaluating those assumptions to corroborate them with observable market information or other sources for selected acquisitions. /s/ ernst & young llp we have served as the company’s auditor since 2003.

critical audit matter the critical audit matter communicated below is a matter arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.realization of past due receivable as described further in note 1 to the financial statements, the company has $17.3 million in accounts receivable due from a customer located in india, that are past due under the original sales terms. the company is actively working with the customer and representatives in india to arrange payment of the remaining balance. management expects to collect the net remaining balance outstanding of this receivable. in the event that the company’s efforts to work with the customer and representatives in india prove unsuccessful, management may seek payment through other remedies in the agreement. as of december 31, 2020, the company recorded an allowance for doubtful accounts of $3.1 million for this receivable. management will continue to evaluate the collectability of this receivable as more information becomes available. if the company’s efforts to collect the outstanding balance under the terms of the agreement are not successful, the company may recognize an additional allowance for all, or substantially all, of the remaining $14.2 million balance in a future period. we identified the realization of this receivable as a critical audit matter.the principal considerations for our determination that the realization of this receivable is a critical audit matter are due to the consideration of various qualitative factors used in the company’s evaluation of the realization of this receivable, including economic and business conditions in india, current operations of the customer, timing and adequacy of government funding, the status of current negotiations, and projections related to future cash flows. these factors considered by management require a high degree of judgment and subjectivity and are difficult to ascertain.our audit procedures related to the realization of this receivable included the following, among others. •we tested the design and operating effectiveness of key controls related to estimating the realization of the receivable.36 •we obtained and tested the company’s key inputs and assumptions used to estimate the realization of the receivable. •we obtained and read operational communication, to the extent available, between the company and the customer during calendar 2020 and 2021. we also obtained evidence of company inquiries with the customer to collect the receivable and the customer responses. •we confirmed the receivable balance as of november 30, 2020 and noted no activity of the customer balance to december 31, 2020. •we obtained letters from the company’s internal and external legal counsel which discussed the company’s rights under the contract and counsel’s opinion regarding the status of this collection contingency. /s/ grant thornton llp we have served as the company’s auditor since 2019.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. valuation of portfolio investments—certain level 3 portfolio investments in loans, preferred equity, and equity interests valued using significant unobservable inputs developed by management as described in notes 2 and 4 to the consolidated financial statements, $2,075 million of the company’s $2,484 million total investments at fair value as of december 31, 2020 represent level 3 portfolio investments in loans, preferred equity, and equity interests for which significant unobservable inputs were developed by management. for certain of these investments, management used the income approach to determine fair value. with respect to unquoted portfolio investments, management values each investment considering, among other measures, discounted cash flow models. management applied significant judgment in determining the fair value of these investments, which involved the development and use of significant unobservable inputs. the significant unobservable inputs used in the income approach are the comparative yield and discount rate. the principal considerations for our determination that performing procedures relating to the valuation of certain level 3 portfolio investments in loans, preferred equity, and equity interests for which significant unobservable inputs were developed by management is a critical audit matter are the significant judgment by management to determine the fair value of these investments which included the development and use of significant unobservable inputs related to the comparative yields and discount rates; this in turn led to a high degree of auditor subjectivity, judgment and effort in performing procedures to evaluate the audit evidence obtained related to the valuation, and the audit effort involved the use of professionals with specialized skill and knowledge. 114table of contents addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the valuation of certain level 3 portfolio investments in loans, preferred equity, and equity interests for which a significant unobservable input was developed by management, including controls over the company’s methods, data, comparative yields, and discount rates. these procedures also included, among others, testing management’s process for determining the fair value of the investments, which included evaluating the appropriateness of management’s discounted cash flow models, testing the data used in the models and provided by management, and evaluating the reasonableness of the comparative yields and discount rates used in the models. evaluating the reasonableness of management’s comparative yields and discount rates involved evaluating whether the comparative yields and discount rates used by management considered (i) company specific information, (ii) market information and (iii) subordination of the debt for investments in loans. professionals with specialized skill and knowledge were used to assist in developing an independent fair value range for certain investments and comparison of management’s estimate to each of the independently developed fair value ranges. developing the independent fair value range involved testing the data used in the models and developing significant unobservable inputs in order to evaluate the reasonableness of management’s fair value estimate for a portion of the level 3 investments. for investments where management’s process for determining the fair value was tested, professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of comparative yields and discount rates used by management for certain investments. /s/ pricewaterhouse coopers llp boston, massachusetts february 24, 2021 we have served as the company’s auditor since 2016.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) related to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion or the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. revenue recognition description of the matter as described in note 2 to the financial statements, the company recognizes revenue mainly from the resale of software products, maintenance and professional consulting services. the company enters into contracts with customers that may include combinations of products and services, which are generally distinct and recorded as separate performance obligations. revenue is recognized when control of the distinct performance obligation is transferred. for example, product revenue is recognized at a point in time while maintenance and professional consulting services revenue is recognized over time. auditing the company’s revenue is a critical audit matter due to the effort required to analyze the high volume of transactions, significance of the total amounts recognized as revenue, and timing of when revenue is recognized. how we addressed the matter in our audit our audit procedures related to the company’s revenue recognition included, among others, selecting a sample of recorded revenue transactions and examining customer source documents for each selection, including the contract or agreement and invoices and payment support. in addition, we evaluated management’s application of the company’s accounting policy, tested the mathematical calculation of revenue and associated timing of revenue recognized in the financial statements. /s/ friedman llp we have served as the company’s auditor since 2004.

critical audit matters the critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.revenue recognition and contract balances - appliance and license useful life — refer to notes 1, 8, and 10 to the financial statements critical audit matter description the company recognizes revenue for contracts that contain a renewal option, which is a material right, over the contractual term with the allocated value of the renewal option recognized over the period between the end of the initial contractual term and the end of the estimated useful life of the related appliance and license. the costs of revenue and commissions for such contracts are also recognized based on this estimated useful life. we identified appliance and license useful life as a critical audit matter because the determination of this estimated useful life of the appliance and license requires significant judgment based on the company’s evaluation of historical renewals, technology refresh cycle, and management’s expectation of future trends. this required a high degree of auditor judgment and an increased extent of effort to perform qualitative evaluations of these assumptions. how the critical audit matter was addressed in the audit our audit procedures related to the estimated appliance and license useful life included the following, among others:74•we tested the effectiveness of controls over the company’s determination of the estimated appliance and license useful life.•we evaluated the methods and assumptions used by management to determine the estimated useful life by:◦testing the underlying data that served as the basis for the analysis including information regarding actual historical renewals.◦recalculating the quantitative historical renewal information in the company’s analysis◦assessing qualitative factors including product refresh cycle, technology life and evaluating whether historical renewal of the license and hardware is indicative of the estimated useful life based on internal or external information available, including interviews with company personnel and reviews of company product road maps and industry publications. ◦evaluating the reasonableness of management’s overall conclusion discontinued operations – control premium used for goodwill allocation — refer to notes 1 and 2 to the financial statements critical audit matter description on october 8, 2021, the company sold the assets and liabilities of the fire eye products business in exchange for total cash consideration of $1.2 billion and recorded a gain on divestiture of $1.2 billion. the assets and liabilities sold were recorded at the lower of the then current carrying value or estimated fair value, less costs to sell. fair value is determined based on external data available or management’s estimates, depending upon the nature of the assets and liabilities. goodwill was allocated to the fire eye products business based on the relative fair values of the fire eye products business and the remaining business. the fair value of the business was determined based on the company’s market capitalization and management’s estimate of the control premium a buyer would pay to obtain control of the business.we identified the control premium used in the allocation of goodwill as a critical audit matter because it required management judgment. this required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to the control premium.how the critical audit matter was addressed in the audit our audit procedures related to the control premium used for goodwill allocation included the following, among others:•we tested the effectiveness of controls over the estimation of the control premium used for goodwill allocation. •we assessed the reasonableness of the control premium used for goodwill allocation by inquiring with management to understand how the premium was determined, comparing the premium to comparable market transactions, and evaluating the reasonableness of internal and external factors management considered in estimating the control premium. •we evaluated management’s methodology for estimating the control premium. •we involved our valuation specialists to audit the assumptions used in the determination of the control premium./s/ deloitte & touche llp san jose, california march 1, 2022 we have served as the company's auditor since 2010.

critical audit matters the critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accounts or disclosures to which they relate.intangible water assets — impairment — refer to note 3 to the financial statements critical audit matter description the company’s intangible water assets are accounted for as indefinite-lived intangible assets. accordingly, until an asset is sold, it is not amortized, that is, its value is not charged as an expense in the consolidated statement of operations over time, but the asset is carried at cost and reviewed for impairment, at least annually during the fourth quarter, and more frequently if a specific event occurs or there are changes in circumstances which suggest that the asset may be impaired. such events or changes may include lawsuits, court decisions, regulatory mandates, and economic conditions, including interest rates, demand for residential and commercial real estate, changes in population, and increases or decreases in prices of similar assets. if the carrying value exceeds the fair value, an impairment loss is recognized equal to the difference. once an asset is sold, the value is charged to cost of real estate and water assets sold in the company’s consolidated statement of operations.33when the company calculates the fair value of intangible water assets, they use a discounted cash flow model, under which the future net cash flows from the asset are forecasted and then discounted back to their present value, using a weighted average cost of capital approach to determine the appropriate discount rate. preparing these cash flow models requires the company to make significant assumptions about revenues and expenses as well as the specific risks inherent in the assets. the company conducts extensive reviews utilizing the most recent information available; however, the review process inevitably involves the use of significant estimates and assumptions, especially the estimated current asset pricing, potential price escalation, income tax rates, discount rates, absorption rates and timing, and demand for these assets. these models are sensitive to minor changes in any of the input variables.there were no material impairment losses recorded on intangible water assets during the year ended december 31, 2020. total intangible water assets balance was $120.4 million as of december 31, 2020, of which $107.2 million is located within the region of northern nevada.we identified the estimated discount rate and absorption rate assumptions within the company’s discounted cash flow model utilized to determine impairment of intangible water assets located within the region of northern nevada as a critical audit matter because of the significant estimates and assumptions management makes to evaluate the recoverability of those intangible water assets. this required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s discounted future cash flows analysis.how the critical audit matter was addressed in the audit our audit procedures related to the discounted future cash flows analysis included the following, among others: •with the assistance of our fair value specialists, we evaluated the discounted future cash flows analysis, including estimates of discount rates and absorption rates by (1) evaluating the appropriateness of the valuation methodology, (2) assessing the reasonableness of the discount rate and absorption rate assumptions used by management and (3) testing the mathematical accuracy of the discounted future cash flows analysis.•we evaluated the reasonableness of management’s discounted future cash flows analysis by comparing management’s projections to the company’s historical results and external market sources.income taxes — realizability of deferred tax assets — refer to note 7 to the financial statements critical audit matter description the company recognizes deferred income taxes for tax attributes and for differences between the financial statement and tax basis of assets and liabilities at enacted statutory tax rates in effect for the years in which the deferred tax liability or asset is expected to be settled or realized. a valuation allowance is provided to offset deferred tax assets if, based upon the available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. future realization of deferred tax assets depends on the existence of sufficient taxable income of the appropriate character. sources of taxable income considered in the evaluation of deferred tax asset realization include future reversals of deferred tax assets and liabilities, expected future taxable income, taxable income in prior carryback years if permitted under the tax law, and tax planning strategies. management has recorded valuation allowances for those deferred tax assets not expected to be realized. as the company has achieved a sufficient history of sustained profitability, including taxable income in appropriate jurisdictions, a portion of the valuation allowance was reduced by $9.3 million during the year ended december 31, 2020. management has determined that it is more likely than not that sufficient taxable income will be generated in the future to realize certain of its deferred tax assets. the company maintains valuation allowances of $58.1 million as of december 31, 2020 for deferred tax assets not expected to be realized in the future.we identified management’s determination that it is more likely than not that sufficient taxable income will be generated in the future to realize deferred tax assets as a critical audit matter because of the significant judgments and estimates management makes related to taxable income across multiple jurisdictions. this required a high degree of auditor judgment and an increased extent of effort, including the need to involve our income tax specialists, when performing audit procedures to evaluate the reasonableness of management’s estimates of taxable income.how the critical audit matter was addressed in the audit34our audit procedures related to the determination that it is more likely than not that certain of the company’s deferred tax assets will be realized included the following, among others: •we evaluated the reasonableness of the methods, assumptions, and judgments used by management to determine whether a deferred tax asset would be realized in the future.•with the assistance of our income tax specialists, we evaluated whether the sources of management’s estimated taxable income were of the appropriate character and sufficient to utilize the deferred tax assets under the relevant tax law.•we evaluated management’s ability to accurately estimate taxable income by comparing actual results to management’s historical estimates and evaluating whether there have been any changes that would affect management’s ability to accurately estimate taxable income.•we tested the reasonableness of management’s estimates of taxable income by comparing the estimates to: –expiration dates or carryforward periods of tax attributes.–available and intended tax planning strategies.–internal budgets.–historical taxable income, as adjusted for nonrecurring items.–internal communications to management and the board of directors.–forecasted information included in company press releases.–management’s history of carrying out its stated plans and its ability to carry out its plans considering contractual commitments or available financing.•we evaluated whether the estimates of future taxable income were consistent with evidence obtained in other areas of the audit./s/ deloitte & touche llp las vegas, nevada march 12, 2021we have served as the company’s auditors since 1997.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.revenue recognition — refer to notes 1 and 21 to the financial statements critical audit matter description certain of the company’s contracts with customers involve multiple performance obligations and may contain embedded leases, which are assessed for classification and are typically recognized either as sales type leases or as operating leases. when the company enters into such arrangements, the contract’s transaction price is allocated to the contract performance obligations and the lease component based upon the relative standalone selling price. these conclusions could impact the timing of revenue recognition.60additionally, the company’s contracts with customers may be modified over the course of the contract term which may change the scope, price, or both, of the existing contract. contract modifications are reviewed to determine whether they should be accounted for as part of the original contract, the termination of an existing contract and the creation of a new contract, or as a separate contract. if the contract modification is part of the existing contract, a cumulative adjustment to revenue is recorded. if the contract modification represents the termination of the existing contract and the creation of a new contract, the modified transaction price is allocated to the prospective performance obligations and any embedded lease components. if a contract modification modifies an embedded lease component and the modification is not accounted for as a separate contract, the classification of the lease is reassessed.given these factors related to complex new contracts with customers and modifications of such contracts in the current fiscal year, the related audit effort in evaluating complex revenue arrangements was significant and required a high degree of auditor judgment.how the critical audit matter was addressed in the audit our audit procedures related to the company’s revenue recognition for complex new and modified revenue arrangements included the following:•we tested the effectiveness of internal controls related to the review of revenue recognition conclusions for new and modified contracts.•we analyzed the population of material revenue arrangements that were new or modified during the year and performed the following procedures on the arrangements that were determined to be complex:–obtained and read the customer contract and evaluated management’s identification of performance obligations and embedded lease components, if applicable.–if applicable, evaluated management’s conclusions regarding lease classification.–evaluated management’s determination of standalone selling price for the identified performance obligations and lease components.–recalculated the transaction price and tested the allocation of transaction price to each performance obligation and lease component.–evaluated the pattern of delivery and revenue recognition timing for each performance obligation and lease component. /s/ deloitte & touche llp mclean, virginia may 25, 2022we have served as the company's auditor since at least 1965;

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. valuation of deferred consideration description of the matter at december 31, 2020, the company recorded a current deferred consideration liability of $17,374,000 and a long-term deferred consideration liability of $212,763,000 and for the year ended december 31, 2020, the company recorded a loss on the revaluation of deferred consideration of $56,821,000. as more fully described in notes 2, 5 and 12 to the consolidated financial statements, deferred consideration represents an obligation of the company for fixed payments of physical gold bullion to a third party into perpetuity that is carried at fair value. the company values deferred consideration using a discounted cash flow model and the significant unobservable inputs used are the discount rate, the perpetual growth rate and the extrapolated forward-looking gold prices. f-2 table of contents auditing the company’s valuation of deferred consideration was complex due to the significant estimation required in determining the fair value of the current and long-term liability. in particular, the fair value estimate was sensitive to the significant unobservable inputs described above which are affected by future economic and market conditions and thus require significant judgment. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s deferred consideration fair value process. this included controls over management’s review of the significant unobservable inputs described above and the completeness and accuracy of the inputs to the valuation model. to test the estimated fair value of the deferred consideration liability, our audit procedures included, among others, reading the terms of the gold royalty agreement to make gold payments, evaluating the company’s selection of its fair value methodology, testing the significant unobservable inputs used in the model, evaluating the clerical accuracy of the valuation model and testing the completeness and accuracy of the underlying data used by the company to determine fair value. for example, we agreed underlying data used in management’s valuation model to source documents and/or publicly available data, such as the gold royalty agreement and third-party gold price projections. in addition, we involved our valuation specialists to assist in our evaluation of the company’s valuation model and the discount rate used by the company, to calculate an independent estimate of the fair value of the company’s deferred consideration liability which we compared to the company’s fair value estimate and to assist in performing a sensitivity analysis of the significant unobservable inputs to evaluate the change in the fair value estimate that would result from changes in these inputs. etfs indefinite-lived intangible assets – assessment of carrying value description of the matter at december 31, 2020, the company held indefinite-lived intangible assets related to rights to advisory agreements in connection with the etfs acquisition, with an aggregate carrying value of $601,247,000. as described in notes 2 and 26 to the consolidated financial statements, these assets were assessed for impairment based upon a quantitative test. indefinite-lived intangible assets are impaired if their estimated fair values are less than their carrying values. the company determined the fair value of its etfs intangible assets using an income approach (discounted cash flow analysis) with significant unobservable inputs that included the weighted average cost of capital and projected revenue growth rates. auditing the company’s quantitative impairment assessment for its etfs indefinite-lived intangible assets was complex due to the significant unobservable inputs required in determining fair value. in particular, the fair value estimate of the etfs indefinite-lived intangible assets was sensitive to the significant unobservable inputs described above which are affected by future economic and market conditions and thus require significant judgment. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s indefinite-lived intangible asset impairment assessment process. this included controls around management’s review of the significant unobservable inputs described above and the completeness and accuracy of the inputs to the valuation model. f-3 table of contents to test the company’s quantitative impairment assessment of etfs indefinite-lived intangible assets, our audit procedures included, among others, evaluating the company’s selection of its fair value methodology, testing the significant unobservable inputs used in the valuation model, evaluating the clerical accuracy of the valuation model and testing the completeness and accuracy of the underlying data used by the company to determine fair value. for example, we agreed to our audit workpapers the etfs cash flows which were used as a data point in the discounted cash flow analysis. we compared the projected revenue growth rates to the company’s historical results and to those of other guideline public companies in the same industry. in addition, we assessed the accuracy of the company’s historical projections by comparing them to actual operating results. we involved our valuation specialists to assist in our evaluation of the company’s valuation model, the weighted average cost of capital used by the company and the comparability of the guideline public companies selected by the company and to calculate an independent estimate of the indefinite-lived intangible assets which we compared to the company’s fair value estimate. /s/ ernst & young llp we have served as the company’s auditor since 2010.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.revenue recognition - identifying, evaluating and accounting for terms and conditions in contracts with customers as described in note 1 to the consolidated financial statements, the company generates revenue in the form of software license and related maintenance fees, cloud services and other service fees. the company’s contracts with customers often contain multiple performance obligations. management accounts for individual performance obligations separately if they are distinct. management applies significant judgment in identifying and accounting for each performance obligation as a result of evaluating the terms and conditions in contracts. as disclosed by management, the company’s revenue was $2.2 billion for the fiscal year ended january 31, 2021.the principal considerations for our determination that performing procedures relating to revenue recognition, specifically the identification, evaluation and accounting for terms and conditions in contracts with customers, is a critical audit matter are the significant judgment by management in identifying, evaluating and accounting for terms and conditions in contracts with customers. this in turn led to significant auditor judgment and effort in performing procedures and evaluating audit evidence related to whether terms and conditions in contracts were appropriately identified, evaluated and accounted for by management.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the identification and evaluation of the contractual terms and conditions that impact the identification of performance obligations and determination of revenue recognition. these procedures also included, among others, (i) testing the completeness and accuracy of management’s identification and evaluation of the terms and conditions in contracts with customers by examining revenue arrangements on a test basis, and (ii) testing management’s process for identifying and evaluating the terms and conditions in contracts with customers, including management’s identification of the performance obligations and determination of the impact of those terms and conditions on revenue recognition./s/ pricewaterhouse coopers llp san jose, california march 31, 2021we have served as the company’s auditor since 2010.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.indefinite-lived tradename impairment assessment for skip hop and osh kosh as described in notes 2 and 6 to the consolidated financial statements, the company’s consolidated indefinite-lived tradename balance was $305.2 million as of january 2, 2021, which includes the osh kosh tradename of $70.0 million and the skip hop tradename of $15.0 million. management performs a review for potential impairment annually as of the last day of each fiscal year or whenever significant events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. if the carrying amount exceeds the fair value of the tradename, an impairment charge is recognized in the amount of the excess. due to the decrease in the company’s market capitalization, lower than expected actual sales, and lower projected sales and profitability primarily due to the impacts from the outbreak of covid-19, management concluded that impairment indicators existed for the first quarter of fiscal 2020. as a result, during the first quarter of fiscal 2020, management conducted an interim quantitative impairment assessment which indicated an impairment charge of $15.5 million and $11.0 million related to the osh kosh and skip hop tradename assets, respectively.management determines fair value of the tradename using a discounted cash flow model that uses the relief- from-royalty method. significant assumptions in the impairment model includes estimates of revenue growth rates, terminal value, discount rate, and royalty rate.the principal considerations for our determination that performing procedures relating to the indefinite-lived tradename impairment assessment for osh kosh and skip hop is a critical audit matter are (i) the significant judgment by management when determining the fair value of the tradenames; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to estimates of revenue growth rates, terminal values, discount rates, and royalty rates; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s indefinite- lived tradename impairment assessments, including controls over the valuation of the company’s skip hop and osh kosh indefinite-lived tradenames. these procedures also included, among others, (i) testing management’s process for determining the fair value estimate of the skip hop and osh kosh tradenames, (ii) evaluating the appropriateness of the relief-from-royalty method, (iii) testing the completeness and accuracy of underlying data used in the estimate, and (iv) evaluating the significant assumptions used by management related to revenue growth rates, terminal values, discount rates, and royalty rates. evaluating management’s assumptions related to revenue growth rates involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the tradename, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. professionals with specialized skill and knowledge were used to assist in the evaluation of the company’s relief-from-royalty method, terminal value, the discount rate, and royalty rate assumptions.goodwill impairment assessment for other international reporting unit as described in notes 2 and 6 to the consolidated financial statements, the company’s consolidated goodwill balance was $211.8 million as of january 2, 2021, and the goodwill associated with the other international reporting unit was $11.5 million. management performs a review for potential impairment annually as of the last day of each fiscal year or whenever significant events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. if the carrying amount exceeds the fair value of the reporting unit, an impairment charge is recognized in the amount of the excess. due to the decrease 44in the company’s market capitalization, lower than expected actual sales, and lower projected sales and profitability primarily due to the impacts from the outbreak of a covid-19, management concluded that impairment indicators existed for the first quarter of fiscal 2020. as a result, during the first quarter of fiscal 2020, management conducted an interim quantitative impairment assessment which indicated a goodwill impairment charge of the other international reporting unit of $17.7 million. management determines fair value of the reporting unit using a discounted cash flows (“income approach”) and relevant data from guideline public companies (“market approach”). significant assumptions in the income approach includes estimates of revenue growth and profitability, terminal value, discount rate, and an implied control premium.the principal considerations for our determination that performing procedures relating to the goodwill impairment assessment for the other international reporting unit are (i) the significant judgment by management when determining the fair value measurement of the reporting unit; (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to estimates of revenue growth and profitability, terminal value, discount rate, and implied control premium; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the company’s other international reporting unit. these procedures also included, among others, (i) testing management’s process for determining the fair value estimate of the other international reporting unit, (ii) evaluating the appropriateness of the income and market approaches, (iii) testing the completeness and accuracy of underlying data used in the estimate, and (iv) evaluating the reasonableness of significant assumptions related to revenue growth and profitability, terminal value, discount rate and implied control premium. evaluating management’s assumptions related to revenue growth and profitability involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. professionals with specialized skill and knowledge were used to assist in the evaluation of the company’s income and market approaches and the terminal value, discount rate, and implied control premium assumptions./s/ pricewaterhouse coopers llp atlanta, georgia february 26, 2021we have served as the company’s auditor since at least 1968.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.revenue recognition - chargeback reserve- refer to note 1 and note 4 to the financial statements critical audit matter description the company recognizes revenue for product sales net of a reserve for estimated chargebacks. chargebacks are the difference between prices the company charges distribution customers and contracted prices the company has with the end-customer which are processed as credits to the distribution customers.chargebacks are accounted for as variable consideration when determining the transaction price for purposes of recognizing revenue. the company estimates and reserves for chargebacks as a reduction of revenue at the time of sale to its distribution customers using information available at that time, including customer agreements and historical experience. accounts receivables as of december 31, 2019 of $202 million and net sales for the year ended december 31, 2019 of $1,266 million are recorded net of estimated chargebacks. given the subjectivity and complexity of evaluating management’s assumptions used in the determination of the chargeback reserve, including the amount of monthly sales to distribution customers and the time to settle chargeback obligations, auditing the chargeback reserve requires a high degree of auditor judgment and an increased extent of effort. 49how the critical audit matter was addressed in the audit our audit procedures related to the chargeback reserves included the following, among others:•we tested the effectiveness of controls related to chargeback reserves, management’s assessment of assumptions related to estimating the provision for chargeback reserves, and the processing and monitoring of chargeback transactions.•we tested chargeback estimates for purposes of determining whether net revenue recognized at the time of sale was recorded in the proper period.•we evaluated the methods and assumptions used by management to estimate the chargeback reserve by:◦analyzing trends in chargeback provision as a percent of revenues and the chargeback reserve as a percent of revenues.◦testing the underlying data, including historical sales to distributor customers and chargeback settlements with distributor customers, that are utilized as the basis for the chargeback reserve, to test whether the inputs to the estimate were reasonable.◦developing an expectation of the chargeback reserve based on our evaluation of the amount of monthly sales to distribution customers and the time to settle chargeback obligations and comparing our expectation to the amount recorded by management. ◦performing a retrospective review comparing management’s estimates of the expected chargeback reserves to actual amounts incurred subsequent to management’s estimates to assess management’s ability to reasonably estimate these obligations and to identify potential bias in management’s assessment of the reserve. /s/ deloitte & touche llp costa mesa, california march 2, 2020 we have served as the company's auditor since 2008

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.distributed antenna systems (“das”) revenue material right evaluation as described in note 2 to the consolidated financial statements, revenue of the das segment for the year-ended december 31, 2019 was $97 million, the majority of which is subject to the material right evaluation. management generally recognizes revenue related to the company’s single performance obligation for its das customer contracts monthly over the contract term once the customer has the ability to access the das network and the company commences maintenance on the das network. the company’s contract fee structure generally includes a non-refundable upfront fee and management evaluates whether customer options to renew services give rise to a material right that should be accounted for as a separate performance obligation because of those non-refundable upfront fees. management applied significant judgment in determining whether the customer options to renew services give rise to a material right that should be accounted for as a separate performance obligation.the principal considerations for our determination that performing procedures relating to the das revenue material right evaluation is a critical audit matter are there was significant judgment by management in determining whether customer options to renew services give rise to a material right. this in turn led to a high degree of auditor judgment and subjectivity related to performing procedures to evaluate management’s assessment as to whether a material right exists. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the analysis performed by management to determine whether a material right exists within the das customer contracts. these procedures also included, among others, testing management’s process for identifying, evaluating, and accounting for performance obligations, including determining whether customer options to renew services give rise to a material right, and testing the completeness and accuracy of management’s identification and evaluation of the performance obligations by examining contracts on a test basis./s/ pricewaterhouse coopers llp los angeles, california march 2, 2020we have served as the company’s auditor since 2002,

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.f-2table of contents real estate impairment description of the matter the company’s real estate held for investment, net and related intangible assets and liabilities totaled $1.4 billion as of december 31, 2020. as more fully described in note 2 to the consolidated financial statements, the company monitors if there are indicators of potential impairment which suggest that the carrying value of real estate and related intangible assets and liabilities may not be recoverable. if indicators are present, the company tests for recoverability by comparing the expected future undiscounted cash flows to the carrying amount of the asset group. if based on this analysis the assets are not believed to be recoverable, an impairment loss is recognized for the difference between the estimated fair value and the carrying amount. as of december 31, 2020, the company did not record any impairment related to its real estate held for investment.auditing the company’s real estate impairment assessment was challenging due to the high degree of subjectivity in evaluating management’s identification of indicators of potential impairments and the related assessment of the severity of such indicators in determining whether a triggering event has occurred that requires the company to evaluate the recoverability of real estate held for investment. in particular, the impairment indicators were based on qualitative and quantitative factors for the specific real estate investments. such factors include, but were not limited to, assessment of management’s intended hold period and disposition strategy, a significant decrease in the market price of a real estate investment, a significant decline in expected operating cash flows, current industry and market trends, and other factors including bona fide purchase offers received from third parties.how we addressed the matter in our audit we performed audit procedures to test management’s identification of events or changes in circumstances that might indicate that the carrying amount of a real estate investment might not be recoverable, and to test management’s assessment of the severity of such indicators for each real estate investment. such procedures include, among others, obtaining evidence to corroborate management’s judgments and searching for contrary evidence such as significant declines in operating results, market and economic trends, disposition strategies, natural disasters, or market effects of the covid-19 pandemic. as part of our procedures we involved our valuation specialists to evaluate management’s judgments as compared to market support.purchase price allocation for pacific oak strategic opportunity reit ii, inc.description of the matter during the year ended december 31, 2020, the company completed the acquisition of pacific oak strategic opportunity reit ii, inc. (“posor ii”) for a purchase price of $280.5 million. as more fully described in note 3 to the consolidated financial statements, the transaction was accounted for as a business combination, and the acquired assets and assumed liabilities were recorded at their respective fair values.auditing management’s accounting for its acquisition of posor ii was complex and subjective due to the significant estimation required by management in determining the fair values of the real estate investments, which principally consisted of land, building and improvements, and related intangibles. the company used discounted cash flow analyses, market comparable data and replacement cost data, to estimate the fair value of the acquired assets and assumed liabilities. the significant assumptions used to estimate the fair value of the acquired real estate investments included, but were not limited to, capitalization rates, discount rates, market lease and average daily rates, revenue growth rates, and occupancy. these significant assumptions could be affected by future economic and market conditions.how we addressed the matter in our audit to test the estimated fair value of the real estate investments acquired, we performed audit procedures that included, among others, assessing the fair value methodologies used and testing the significant assumptions discussed above and testing the underlying data used by the company in its analysis. we compared the significant assumptions used by management to current industry and economic trends, and other relevant factors. we involved a valuation specialist to assist us in evaluating the significant assumptions described above, as well as to assist in evaluating sales comparisons for other recent transactions based on similar location, property type and size used in management’s analysis./s/ ernst & young llp we have served as the company’s auditor since 2008.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. determination of expected lease end date for united states government leases with one-year renewal options and/or early termination rights as described in notes 2 and 5 to the consolidated financial statements, total lease revenue from continuing operations for the year ended december 31, 2021 was $553.7 million and a significant portion of the company’s leases are with the united states government, which represented 26% of the fixed lease revenues for the year ended december 31, 2021. the majority of united states government leases contain one-year renewal options and/or provide for early termination rights. the company recognizes minimum rental payments on a straight-line basis over the terms of each lease. the lease term of a lease includes the noncancellable periods of the lease along with periods covered by: (1) a tenant option to extend the lease if the tenant is reasonably certain to exercise that option; (2) a tenant option to terminate the lease if the tenant is reasonably certain not to exercise that option; and (3) an option to extend (or not to terminate) the lease in which exercise of the option is controlled by the company as the lessor. when assessing the expected lease end date, management uses judgment in contemplating the significance of any penalties a tenant may incur should it choose not to exercise any existing options to extend the lease or exercise any existing options to terminate the lease; and economic incentives for the tenant based on any existing contract, asset, entity or market-based factors in the lease. the principal considerations for our determination that performing procedures relating to the determination of the expected lease end date for united states government leases with one-year renewal options and/or early termination rights is a critical audit matter are the significant judgments by management when determining the expected lease end date for the united states government leases with one-year renewal options and/or early termination rights, which in turn led to a high degree of auditor judgment, subjectivity and audit effort in performing procedures and evaluating audit evidence relating to the determination of such expected lease end dates.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the revenue recognition for leases, including controls over the determination of the expected lease end dates for united states government leases with one-year renewal options and/or early termination rights. these procedures also included, among others, testing management’s process for determining the expected lease end date for a sample of united states government leases with one-year renewal options and/or early termination rights, including evaluating the reasonableness of significant assumptions utilized by management, related to the significance of any penalties a tenant may incur should it choose not to exercise any existing options to extend the lease or exercise any existing options to terminate the lease; and economic incentives for the tenant based on any existing contract, asset, entity or market-based factors in the lease. evaluating the assumptions included evaluating whether the assumptions used were reasonable considering past experience with the tenant and the rental property and whether the assumptions were consistent with evidence obtained in other areas of the audit. /s/ pricewaterhouse coopers llp baltimore, maryland february 22, 2022 we have served as the company’s auditor since 1997.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.valuation of level 3 mortgage revenue bonds and mortgage revenue bonds held in trust as described in note 24 to the consolidated financial statements, the estimated fair value of the partnership’s investments in mortgage revenue bonds and mortgage revenue bonds held in trust (collectively referred to as “mr bs”) is $793.5 million or approximately 57% of the partnership’s total assets as of december 31, 2021. management estimates the fair value of mr bs based upon prices obtained from a third-party pricing service, which are estimates of market prices. there is no active trading market for the mr bs, and price quotes for the mr bs are not available. the valuation methodology of the partnership’s third-party pricing service incorporates commonly used market pricing methods. the valuation methodology considers the underlying characteristics of each mrb as well as other quantitative and qualitative characteristics including, but not limited to, market interest rates, illiquidity, legal structure of the borrower, collateral, seniority to other obligations, operating results of the underlying property, geographic location, and property quality. these characteristics are used to estimate an effective yield for each mrb. the mrb fair value is estimated using a discounted cash flow and yield to maturity or call analysis by applying the effective yield to contractual cash flows. 64 the principal considerations for our determination that performing procedures relating to the valuation of level 3 mr bs is a critical audit matter are the significant judgment by management to determine the fair value of these investments, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence relating to the effective yield based on the applicable underlying characteristics of each mrb, and the audit effort involved the use of professionals with specialized skill and knowledge.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included, among others (i) testing the completeness and accuracy of data used in the valuation provided by management; (ii) evaluating the appropriateness of management’s valuation methodology; and (iii) the involvement of professionals with specialized skill and knowledge to assist in developing an independent range of fair value estimates and comparison of management’s estimate to the independently developed range. developing the independent range involved developing a range of independent effective yields based on the applicable underlying characteristics of each mrb./s/ pricewaterhouse coopers llp chicago, illinois february 24, 2022we have served as the partnership’s auditor since 2016.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. accounting for the effects of regulatory matters as described in note 4 to the consolidated financial statements, the company’s regulated utility operations are subject to accounting standards for the effects of certain types of regulation. as of december 31, 2020, there was $481 million of regulatory assets and $532 million of regulatory liabilities recorded. regulatory assets represent incurred costs that have been deferred as they are probable for recovery in customer rates. regulatory liabilities represent obligations to make refunds to customers and amounts collected in rates for which the related costs have not yet been incurred. management assesses quarterly whether regulatory assets and liabilities meet the criteria for probability of future recovery or deferral. as disclosed by management, these standards require the company to reflect the effect of regulatory decisions in its financial statements. this assessment considers factors such as, but not limited to, changes in the regulatory environment and recent rate orders to other regulated entities under the same jurisdiction. if future recovery or refund of costs becomes no longer probable, the assets and liabilities would be recognized in current period net income or other comprehensive income. the principal consideration for our determination that performing procedures relating to the company’s accounting for the effects of regulatory matters is a critical audit matter is the significant judgment by management in determining the recoverability of costs; this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence obtained related to the recoverability of costs. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s implementation of new regulatory orders, changes to existing regulatory orders, and assessing the recoverability of costs. these procedures also included, among others, evaluating (i) the reasonableness of management’s assessment of impacts arising from correspondence with regulators and changes in laws and regulations, (ii) management’s judgments related to the recoverability of regulatory assets and the establishment of regulatory liabilities, and (iii) the sufficiency of the disclosures in the consolidated financial statements. testing the regulatory assets and liabilities involved considering the provisions and formulas outlined in rate orders, other regulatory correspondence, and application of relevant regulatory precedents. /s/ pricewaterhouse coopers llp minneapolis, minnesota february 17, 2021 we have served as the company’s auditor since 1963.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.accounting for the effects of rate regulation as described in notes 2 and 4 to the consolidated financial statements, the company’s consolidated regulatory assets and liabilities balances were $1,067 million and $1,608 million, respectively, as of december 31, 2021. the company’s regulated utilities are subject to regulation by multiple state utility commissions and the company follows authoritative accounting principles required for rate regulated utilities, which requires the effects of rate regulation to be reflected in the company’s consolidated financial statements. as disclosed by management, for each regulatory jurisdiction where the company conducts business, the company assesses, at the end of each reporting period, whether the regulatory assets continue to meet the criteria for probable future recovery and regulatory liabilities continue to meet the criteria for probable future settlement. this assessment includes consideration of factors such as changes in regulatory environments, recent rate orders (including recent rate orders on recovery of a specific or similar incurred cost to other regulated entities in the same jurisdiction) and the status of any pending or potential legislation.the principal considerations for our determination that performing procedures relating to accounting for the effects of rate regulation is a critical audit matter are the significant judgment by management in accounting for regulatory assets and liabilities relative to whether regulatory assets continue to meet the criteria for probable future recovery and regulatory liabilities continue to meet the criteria for probable future settlement as a result of changes in regulatory environments, recent rate orders, and the status of any pending or potential legislation. this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing audit procedures and evaluating audit evidence obtained relating to management’s judgments.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the company’s regulatory accounting process, including controls over management’s assessment and consideration of factors related to the probability of future recovery or settlement. these procedures also included, among others, evaluating the reasonableness of management’s judgments regarding the probability of recovery and settlement based on the company’s correspondence with regulators, status of regulatory proceedings, past practices, and other relevant information; evaluating the related accounting and disclosure implications; and evaluating regulatory assets and liabilities balances based on provisions and formulas outlined in rate orders and other correspondence with the company’s regulators./s/ pricewaterhouse coopers llp philadelphia, pennsylvania february 16, 2022we have served as the company’s auditor since 1948.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. inventory valuation & contract manufacturer/supplier liabilities70table of contents description of the matter as discussed in note 1 of the consolidated financial statements, the company’s inventories are stated at the lower of cost (computed using the first-in, first-out method) and net realizable value. the company’s inventory balance totaled $244 million on december 31, 2019. the company records a provision when inventory is determined to be in excess of anticipated demand, or obsolete, to adjust inventory to its estimated realizable value. the company records a contract manufacturer/supplier liability and a corresponding charge for non-cancellable, non-returnable purchase commitments with contract manufacturers or suppliers for quantities in excess of the company’s demand forecasts, or that are considered obsolete. auditing management’s assessment of net realizable value for inventory and contract manufacturer/supplier liabilities was complex and highly judgmental due to the assessment of management’s estimates of forecasted product demand, which can be impacted by changes in overall customer demand, changes in the timing of the introduction and customer adoption of new products, adjustments to manufacturing and engineering schedules, and overall general economic and market conditions. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s determination of the net realizable value of inventory and the contract manufacturer/supplier liability. this included controls over the preparation of the demand and production forecasts, and the evaluation of the accuracy and completeness of the inventory provision and contract manufacturer/supplier liability.to test the inventory provision and contract manufacturer/supplier liability, we performed audit procedures that included, among others, assessing the company’s methodology over the computation of the provision and liability, testing the significant assumptions and the underlying inputs used by the company in its analysis including historical sales trends, expectations regarding future sales, changes in the company’s business, customer base, product roadmap and other relevant factors. income taxes - intra-entity transfer of intellectual property description of the matter as discussed in note 10 to the consolidated financial statements, on december 31, 2019, the company completed an intra-entity transaction to sell its non-americas economic and beneficial intellectual property ("ip") rights in exchange for a non-interest-bearing note of $3.4 billion. as a result of the transaction, tax basis in the ip transferred equal to the fair market value of the qualifying ip resulted in the recognition of a deferred tax asset of $429.1 million, which was largely offset by a deferred tax liability of $343.3 million associated with future us tax on foreign earnings for the difference in the local tax basis and us gaap book basis of the ip rights.auditing the tax basis resulting from the intra-entity transfer of intellectual property was complex and highly judgmental due to the significant estimation required to determine the fair value of the intellectual property transferred. in particular, the fair value estimate was sensitive to significant assumptions, such as changes in the revenue growth rate, gross margin, profit before tax margin, tax rate discount for non-exclusivity, terminal value and weighted average cost of capital, which are affected by expectations about future market or economic conditions, particularly those in emerging markets. 71table of contents how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the accounting for the intra-entity transfer of intellectual property, including controls over management’s review of underlying agreements, estimation of fair value and evaluation of the related tax laws applicable to the transfer of intellectual property.to test the estimated fair value of intellectual property transferred, we performed audit procedures that included, among others, assessing methodologies and testing the significant assumptions discussed above and the underlying data used by the company in its analysis. we involved our valuation specialists in assessing the valuation methodology applied and evaluating certain significant assumptions. when evaluating the significant assumptions used to determine the fair value of intellectual property, we compared the assumptions to the past performance, selected guideline companies, third party analyst expectations for the industry, and current and forecasted market trends. we also assessed the historical accuracy of management’s estimates and performed sensitivity analyses of significant assumptions to evaluate the changes in the fair value of intellectual property transferred that would result from changes in the assumptions.we involved our tax professionals, who assisted in evaluating the company’s interpretation and application of tax laws and regulations, and the company’s compliance with the intercompany agreements, which were executed as part of the transfer./s/ ernst & young llp we have served as the company's auditor since 2008.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 49acquisition of compassionate care hospice - valuation of certain intangible assets as discussed in notes 2 and 3 to the consolidated financial statements, the company accounts for acquisitions using the acquisition method of accounting. assets acquired are measured at fair value on the acquisition date using various valuation methods. the company acquired compassionate care hospice (cch) for the purchase price of $327.9 million, net of cash acquired of $6.7 million, on february 1, 2019. intangible assets acquired in connection with this transaction include medicare licenses, certificates of need, trade name and non-compete agreements. we identified the valuation of certain intangible assets, which consist of medicare licenses, trade name, and non-compete agreements, acquired in the cch transaction as a critical audit matter. subjective auditor judgment was required to evaluate the identification of intangible assets acquired, valuation methodologies, and significant assumptions used in the valuation of these certain intangible assets. specifically, the significant assumptions include projected revenue growth rates, projected earnings before interest, taxes, depreciation and amortization (ebitda), and the discount rate. these assumptions relate to the future performance of the acquired business and changes to these assumptions could have a significant effect on the company’s estimate of fair value of the intangible assets. the primary procedures we performed to address this critical audit matter included the following. we tested certain internal controls over the company’s acquisition accounting process, including controls over the identification of intangible assets acquired, assessment of the valuation methodologies, and the development of the significant assumptions used in the valuation of the intangible assets. we read the purchase agreement to identify the significant terms, conditions, and intangible assets acquired. we evaluated the company’s projected revenue growth rates and projected ebitda by comparing such assumptions to those of cch’s peers and to industry reports. additionally, we compared the company’s projected revenue growth rates and projected ebitda to cch’s and the company’s historical actual results. we involved valuation professionals with specialized skills and knowledge, who assisted in:•evaluating the company’s identification of intangible assets acquired;•assessing the valuation methodologies used by the company in the valuation analysis; and•evaluating the weighted average cost of capital (wacc), which was used by the company to determine the discount rate, by comparing the company's inputs to the wacc to publicly available data for comparable entities and assessing the resulting wacc.revenue recognition - evaluation of the non-contractual revenue adjustment estimates for home health and hospice as discussed in note 2 to the consolidated financial statements, the company determines the transaction price based on gross charges for services provided, reduced by contractual revenue adjustments and an estimate for non-contractual revenue adjustments. non-contractual revenue adjustments are recorded for self-pay, uninsured patients, and other payors by major payor class based on historical collection experience, evaluated for current economic conditions. adjustments resulting from payment reviews and adjustments arising from the inability to obtain applicable billing documentation, authorizations or face-to-face documentation are factors that are relevant to the estimate of ultimate collection. the non-contractual revenue adjustments represent the difference between amounts billed and amounts the company expects to collect based on its collection history with similar payors. we identified the evaluation of the non-contractual revenue adjustment estimates noted above for home health and hospice as a critical audit matter. subjective and complex auditor judgment was required to evaluate the method and historical collection experience used by the company when developing the non-contractual revenue adjustment estimate. specifically, the significant judgments relate to evaluating the relevance and reliability of historical collection experience to the determination of the estimate, include evaluation of current conditions, trends, and other factors. 50the primary procedures we performed to address this critical audit matter included the following. we tested certain internal controls related to the company’s revenue process, including controls over the method and significant judgments for estimating non-contractual revenue adjustments noted above. we assessed the outcome of the estimation of non-contractual revenue adjustments in the prior period consolidated financial statements to identify circumstances or conditions that are relevant to the determination of the current year estimate. we also evaluated current conditions, trends, and other factors relevant to the estimation of ultimate collection to assess the current year methodology and relevance of historical collection experience in determining the current year estimate. /s/ kpmg llp we have served as the company's auditor since 2002.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.the impact of proved oil, natural gas, and natural gas liquids (ngl) reserves on net oil and gas properties as described in note 3 to the consolidated financial statements, the company’s consolidated proved oil and gas properties balance was $4,743.5 million as of december 31, 2020, and depletion, depreciation, amortization and accretion expense was $332.3 million for the year ended december 31, 2020. as disclosed by management, estimates of proved reserves are based on the quantities of oil, natural gas and ngl, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible from a given date forward from known reservoirs under existing economic conditions, operating methods and government regulations prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation. the accuracy of reserve estimates is a function of the quality and quantity of available data; interpretation of that data; accuracy of various mandated economic assumptions; and judgment of the independent reserve engineer. the company follows the successful efforts method of accounting for oil and gas properties. under this method of accounting, all property acquisition costs and development costs are capitalized when incurred and depleted on a units-of-production basis over the remaining life of proved reserves and proved developed reserves, respectively. oil, natural gas and ngl reserve estimates require significant judgments in the evaluation of all available geological, geophysical, engineering and economic data. the data for a given field may change substantially over time as a result of numerous factors including, but not limited to, additional development activity, production history, projected future production, economic assumptions relating to commodity prices, operating expenses, severance and other taxes, capital expenditures and remediation costs and these estimates are inherently uncertain. independent petroleum engineers prepare a reserve and economic evaluation of all of the company’s properties on a well-by-well basis.78table of contents the principal considerations for our determination that performing procedures relating to the impact of proved oil, natural gas, and ngl reserves on net oil and gas properties is a critical audit matter are (i) the significant judgment by management, including the use of specialists, when developing the estimates of proved oil, natural gas and ngl reserves, which in turn led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the data, methods, and assumptions used by management and its specialists in developing the estimates of proved oil, natural gas, and ngl reserves and the assumptions applied to the data related to the projected future production, commodity prices, future development costs, and operating expenses. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. the work of management’s specialists was used in performing the procedures to evaluate the reasonableness of proved oil, natural gas, and ngl reserves. as a basis for using this work, the specialists’ qualifications were understood and the company’s relationship with the specialists was assessed. the procedures performed also included evaluation of the methods and assumptions used by the specialists, tests of the data used by the specialists, and an evaluation of the specialists’ findings. these procedures also included, among others, testing the completeness and accuracy of data related to commodity prices, future development costs, and operating expenses. additionally, these procedures included evaluating whether the assumptions applied to the data related to projected future production, commodity prices, future development costs, and operating costs were reasonable considering the past performance of the company.impairment assessments of certain net oil and gas properties as described in notes 2, 3, and 11 to the consolidated financial statements, as of december 31, 2020, the company’s proved crude oil and gas properties were approximately $4,743.5 million, which includes impairment expense related to oil and gas properties of $197.9 million for the year then ended. proved oil and gas properties are reviewed for impairment annually or when events and circumstances indicate a possible decline in the recoverability of the carrying amount of such property. for all of its fields, the company estimates the expected future cash flows of its oil and gas properties and compares these undiscounted cash flows to the carrying amount of the oil and gas properties to determine if the carrying amount is recoverable. if the carrying amount exceeds the estimated undiscounted future cash flows, the company will write down the carrying amount of the oil and gas properties to fair value. to determine fair value, the company uses an income approach analysis based on the net discounted future cash flows of proved property. the company calculates the estimated fair values of its proved property oil and gas assets using a discounted future cash flow model. significant inputs associated with the calculation of discounted future net cash flows include estimates of (i) recoverable reserves, (ii) future operating and development costs, (iii) future commodity prices, and (iv) a market-based weighted average cost of capital. the company recognized $3.6 million related to impairment of the proved oil and gas properties in the company’s northern field and $194.3 million related to assets in one of the company’s core dj basin fields, as the fields’ fair values did not exceed the carrying amounts associated with the proved oil and gas properties.the principal considerations for our determination that performing procedures relating to the impairment assessments of certain net oil and gas properties is a critical audit matter are (i) the significant judgment by management when developing the undiscounted and net discounted future cash flow analyses for the impairment assessments, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s assumptions related to recoverable reserves, future operating and development costs, future commodity prices, and the market-based weighted average cost of capital, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included, among others (i) testing management’s process for developing the undiscounted and net discounted future cash flow analyses; (ii) evaluating the appropriateness of the undiscounted and net discounted cash flow analyses; (iii) testing the completeness and accuracy of the underlying data used in the models; and (iv) evaluating the significant assumptions used by management related to recoverable reserves, future operating and development costs, future commodity prices, and the market-based weighted average cost of capital. evaluating the reasonableness of management’s assumptions related to (i) future operating and development costs involved consideration of the past and anticipated performance of the company and (ii) future commodity prices involved consideration of observable market data. the work of specialists was used in performing the procedures to evaluate the reasonableness of the recoverable reserves, as stated in the critical audit matter titled “the impact of proved oil, natural gas, and natural gas liquids (ngl) reserves on net oil and gas properties”. as a basis for using this work, the specialists’ qualifications were understood and the company’s relationship with the specialists was assessed. the procedures performed also included evaluation of the methods and assumptions used by the specialists, tests of the data used by the specialists and an evaluation of the specialists’ findings. professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the market-based weighted average cost of capital./s/ pricewaterhouse coopers llp denver, colorado march 18, 2021we have served as the company’s auditor since 2014.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.97table of contents pension and other postretirement benefit obligations description of the matter at december 31, 2020, the company’s aggregate defined benefit pension and other postretirement benefit obligation was $1,100.4 million and exceeded the fair value of defined benefit pension and other postretirement plan assets of $877.2 million, resulting in an unfunded defined benefit pension and other postretirement benefit obligation of $223.2 million. as explained in note 1, significant accounting policies, note 15, retirement benefit plans, and note 16, other postretirement benefit plans, to the consolidated financial statements, the company recognizes actuarial gains and losses immediately through net periodic benefit cost upon the annual remeasurement in the fourth quarter, or on an interim basis if specific events trigger a remeasurement, through updating the estimates used to measure the defined benefit pension and other postretirement benefit obligation and plan assets to reflect the actual return on plan assets and updated actuarial assumptions. auditing the pension and other postretirement benefit obligations is complex and required the involvement of specialists due to the highly judgmental nature of certain of the actuarial assumptions (e.g., discount rate) used in the measurement process. these assumptions had a significant effect on the projected benefit obligation and net periodic benefit costs recognized.how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s accounting for the measurement of pension and other postretirement obligations. for example, we tested controls over management’s review of the defined benefit pension and other postretirement benefit obligation calculations, the relevant data inputs and the significant actuarial assumptions used in the calculations. to test the defined benefit pension and other postretirement benefit obligation, our audit procedures included, among others, evaluating the methodology used, the significant actuarial assumptions discussed above, and the underlying data used by the company. we compared the actuarial assumptions used by management to historical trends and evaluated the change in the defined benefit pension and other postretirement benefit obligation from prior year due to the change in service cost, interest cost, plan amendments, actuarial losses (gains), benefits paid and other activities. in addition, we involved an actuarial specialist to assist with our procedures. for example, we evaluated management’s methodology for determining the discount rate that reflects the maturity and duration of the benefit payments and is used to measure the defined benefit pension and other postretirement benefit obligation. in certain instances, as part of this assessment, we compared the projected cash flows to prior year and compared the current year benefits paid to the prior year projected cash flows. we also tested the completeness and accuracy of the underlying data, including the participant data used in the determination of the projected benefit obligation./s/ ernst & young llp we have served as the company’s auditor since 1910.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.capitalized internal-use software development costs description of the matter as more fully described in note 2 to the consolidated financial statements, the company capitalizes certain internal-use software development costs incurred during development stage activities, if direct and incremental, until the software is substantially complete and ready for its intended use. the company capitalizes certain costs related to internal-use software upgrades and enhancements when it is probable the expenditures will result in significant additional functionality. as of december 31, 2020, the company had capitalized internal-use software development costs of $79 million, net of amortization.auditing the company's capitalization of internal-use software development costs was an area of complexity because management’s determination of which costs qualify for capitalization requires significant judgment, as only those costs incurred during development stage activities can be capitalized in accordance with the applicable accounting standards.67how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s internal-use software development costs process. this included testing controls over management’s determination of which projects and costs qualify for capitalization in accordance with the applicable accounting standards.our audit procedures included, among others, inspecting underlying documentation to evaluate the nature of the costs incurred, the projects and phase of development to which the costs relate, and that the costs incurred in the development phase of software production are properly capitalized in accordance with the applicable accounting standards. we also inquired of project managers for significant projects to gather additional evidence for this evaluation.accounting for issuance of convertible notes description of the matter as more fully described in note 9 to the consolidated financial statements, in may 2020, the company issued convertible senior notes in an aggregate principal amount of $345 million (the convertible notes). the convertible notes were classified as a liability and the conversion feature was bifurcated and classified in equity based on the respective estimated fair values of the liability and equity components. the company concluded the fair value of the liability and equity components were $288 million and $57 million, respectively.the company applied a discounted cash flow model to determine the fair value of the debt instrument, absent the conversion feature. this model required discounting the contractual cash flows of the convertible notes at a risk-adjusted yield that incorporates assumptions of the time value of money corresponding to the remaining term of the convertible notes and the credit risk of the company. the significant assumptions in the fair value determination included the convertible notes’ effective yield and expected volatility. auditing the company's determination of fair value of the liability component of the convertible notes was complex due to significant estimation uncertainty in estimating the fair value of the debt instrument, absent the conversion feature. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over management’s process for determining the fair value of the liability component, including management’s review of the model and significant assumptions used in the fair value calculation. our audit procedures included utilizing a valuation specialist to assist in evaluating the fair value methodology and the significant valuation assumptions applied by the company in estimating the fair value of the liability component. to test the convertible notes’ effective yield and expected volatility, we evaluated completeness and accuracy of the underlying data supporting the significant assumptions and estimates, assessed whether management’s assumptions were consistent with publicly available information and evaluated entity-specific adjustments made by the company. additionally, to test the effective yield, we performed a comparative calculation using market data and our internally developed models./s/ ernst & young llp we have served as the company’s auditor since 2004.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or 38disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.revenue recognition - estimated total cost at completion on fixed-price contracts as described in note 1 to the consolidated financial statements, approximately 61% of total net sales of $2,073 million are from fixed-price revenue contracts for the year ended december 31, 2020. these contracts present the risk of unreimbursed cost overruns, potentially resulting in lower than expected contract profits and margins. the company recognizes revenue as each performance obligation is satisfied. the majority of the company’s aerospace and defense performance obligations are satisfied over time either as the service is provided, or as control transfers to the customer. transfer of control is evidenced by the company’s contractual right to payment for work performed to date plus a reasonable profit on contracts with highly customized products that have no alternative use to the company. management measures progress on substantially all its performance obligations using the cost-to-cost method, which management believes best depicts the transfer of control of goods and services to the customer. under the cost-to-cost method, management records revenues based upon costs incurred to date relative to the total estimated cost at completion. recognition of revenue and profit on long-term contracts requires the use of assumptions and estimates related to the total contract value, the total cost at completion, and the measurement of progress towards completion for each performance obligation. due to the nature of the programs, developing the estimated total contract value and total cost at completion for each performance obligation requires the use of significant judgment. as described in note 1, factors considered in estimating the work to be completed include, but are not limited to, labor productivity, the nature and technical complexity of the work to be performed, availability and cost volatility of materials, subcontractor and vendor performance, warranty costs, volume assumptions, anticipated labor agreements, inflationary trends, schedule and performance delays, availability of funding from the customer, and the recoverability of costs incurred outside the original contract included in any estimates to complete. the principal considerations for our determination that performing procedures relating to revenue recognition - estimated total cost at completion on fixed-price contracts is a critical audit matter are the significant judgment by management when estimating the total cost at completion for such contracts; this in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate significant assumptions used in management’s estimated total cost at completion for fixed-price contracts related to labor productivity, the nature and technical complexity of the work to be performed, availability and cost volatility of materials, subcontractor and vendor performance, and schedule and performance delays. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls over the development of estimated total cost at completion on fixed-price contracts. these procedures also included, among others, testing management’s process for the estimate of its total cost at completion for a sample of contracts, which included testing inception-to-date actual costs, and evaluating the reasonableness of significant assumptions related to labor productivity, the nature and technical complexity of the work to be performed, availability and cost volatility of materials, subcontractor and vendor performance, and schedule and performance delays. evaluating the reasonableness of significant assumptions involved assessing management’s ability to reasonably estimate the total cost to complete on fixed-price contracts by (i) performing a comparison of estimated labor and material costs to complete to agreements with third parties or actual costs incurred on the sampled contract or similar completed contracts, (ii) evaluating the timely identification of circumstances that may warrant a modification to estimated total cost to complete, and (iii) testing management’s process for identifying and estimating risks that could result in schedule or performance delays./s/ pricewaterhouse coopers llp sacramento, california february 18, 2021we have served as the company’s auditor since 2006.

critical audit matter the critical audit matter communicated below is amatter arising from the current period audit of the financial statements that were communicated or required to be communicated to theaudit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on theconsolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separateopinions on the critical audit matter or on the accounts or disclosures to which it relates. controls and procedures - material weakness- refer to item 9a to the form 10-k critical audit matter description management has identified the following control deficiencies:(1) the company has not properly segregated duties as one or two individuals initiate, authorize, and complete all transactions. the companyhas not implemented measures that would prevent the individuals from overriding the internal control system. (2) the company uses accountingsoftware that neither prevent erroneous or unauthorized changes to previous reporting periods or provide an adequate audit trail of entriesmade in the accounting software. (3) due to the size of the company and limited personnel, the company has not hired an individual withthe appropriate level of knowledge, experience and training in financial reporting. given these deficiencies in the lack of proper segregationof duties, weakness within accounting software, and lack of technical accounting expertise which have a pervasive impact to all financialaccount balances and disclosures, a significant change in our audit plan was required with an increase in audit effort. f-2 how the critical audit matter was addressed inthe audit our audit procedures related to mitigating the risksof the internal control deficiencies include the following:·performed a primarily substantive audit over significant account balancesand disclosures. utilized original source documents for audit evidence, rather than system reports or other information. ·performed additional procedures to mitigate any increased fraud risks, including:1)lowered the threshold for investigating differences between recorded amounts and independent expectationsdeveloped by us that we would have otherwise used,2)increased the number of selections we would have otherwise made if the company’s controls were designedand operating effectively,3)utilized experienced staff on the engagement team and emphasized the heightened fraud risks with the teammembers, and4)performed procedures in verifying the accuracy and completeness for disbursements transactions, inclusiveof any potential related party considerations. going concern –refer to note 13 to the consolidated financial statements critical audit matter description the determination as to whether the company can continue as a going concern includes consideration of management’s operating plan and anticipated timing of future cashflows. management is required to make subjective judgments and assumptions in concluding on going concern uncertainty. auditing the company’s goingconcern assessment is complex because it involves a high degree of auditor judgment to assess the reasonableness of the cash flow forecastsused in the company’s going concern analysis. in particular, the cash flows are sensitive to changes related to significant assumptions,such as the estimation of the future cash to be used in operations and the ability of the company to secure additional financing. how the critical audit matter was addressed inthe audit our audit procedures related to analyzing the abilityto continue as a going concern include the following:·gained an understanding of the internal controls related to the company’sgoing concern assessment, ·evaluated the reasonableness of the company’s forecasted operating expensesby obtaining an understanding of the company’s operations and strategy, inquiring about the company’s research and developmentactivities, comparing the forecasted operating expenses to historical operating expenses, assessing expected costs, and confirmed anydeferral of expenses with the payee, and ·assessed management’s ability to forecast operating expenses by comparingprior year forecasts to actual financial results. we have served as the company’s auditor since 2014.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.valuation of indefinite-lived intangibles description of the matter at january 1, 2022, the company’s indefinite-lived intangible assets were $718.1 million, which included $296.0 million for the sperry trade name. as discussed in notes 1 and 4 of the consolidated financial statements, indefinite-lived intangibles are tested for impairment at least annually. auditing management’s annual impairment test for the sperry trade name was complex due to the significant estimation uncertainty required in determining the fair value of the sperry trade name indefinite-lived intangible asset. the significant assumptions used to estimate the fair value of the sperry trade name included the forecasted revenue growth, ebitda margin, and discount rate. these significant assumptions are forward-looking and could be affected by future economic and market conditions. changes in these assumptions could have a significant impact on the fair value of the sperry trade name, the amount of any impairment charge, or both.71how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of company’s controls over the sperry trade name impairment review process. for example, we tested controls that address the risk of material misstatement relating to the valuation of the trade name, including management’s review of the significant assumptions described above and the completeness and accuracy of the data used to develop such estimates.to test the estimated fair value of the sperry trade name, our audit procedures included, among others, assessing the appropriateness of the valuation model used, evaluating the significant assumptions discussed above, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. we compared the financial projections to current industry and economic trends and the historical accuracy of management’s estimates. we involved our valuation specialists to assist in our evaluation of the company's model, valuation methodology and the discount rate.valuation of sweaty betty trade name and trademark intangible asset in the acquisition of lady of leisure invest co limited description of the matter as discussed in note 19 to the consolidated financial statements, during the year ended january 1, 2022, the company completed the acquisition of lady of leisure invest co limited (which owns the sweaty betty brand and activewear business, referred to herein as “sweaty betty”) for a total purchase price of approximately $417.4 million. the acquisition was accounted for as a business combination. the consideration paid in the acquisition must be allocated to the acquired assets and liabilities assumed generally based on their fair value with the excess of the purchase price over those fair values allocated to goodwill.auditing the company’s accounting for its acquisition of sweaty betty was complex due to the significant estimation uncertainty involved in estimating the fair value of the trade name and trademark intangible asset. the total fair value ascribed to the trade name and trademark intangible amounted to $346.4 million. the company used the multi-period excess earnings method to value the trade name and trademark. the significant assumptions used to estimate the fair value of trade name and trademark included the forecasted revenue growth, ebitda margin and discount rate. these significant assumptions are forward-looking and could be affected by future economic and market conditions.how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of the company’s controls over its accounting for the acquisition of sweaty betty. for example, we tested controls that address the risks of material misstatement relating to the valuation of the trade name and trademark intangible asset, including management’s review of the methods and significant assumptions used to develop such estimates.to test the estimated fair value of the acquired trade name and trademark intangible asset, our audit procedures included, among others, assessing the appropriateness of the valuation methodologies used, evaluating the significant assumptions discussed above, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. we compared the financial projections to current industry and economic trends, the historic financial performance of the acquired business, and forecasted performance of guideline public companies. we also performed sensitivity analyses to evaluate the changes in the fair value of the intangible assets that would result from changes in the significant assumptions. we involved our valuation specialist to assist in evaluating the methodologies used to estimate the fair value of the trade name and trademark intangible asset and to test certain significant assumptions, including the discount rate./s/ ernst & young llp we have served as the company’s auditor since at least 1933,

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.agreements and transactions with affiliates – refer to notes 1, 2, 8, 12, and 13 to the financial statements3critical audit matter description the company is a subsidiary in a global group structure and agreements directly between the company and other affiliates, or indirectly between affiliates that the company does not control, can have a significant impact on recorded amounts or disclosures in the company's financial statements, including any commitments and contingencies between the company and affiliates or, potentially, third parties. performing audit procedures to evaluate the company’s identification of upstream affiliate relationships, transactions, and commitments and contingencies outside of the u.s. and the impact of such matters on the financial statements represents a critical audit matter because of the increased auditor judgment necessary to perform audit procedures related to these matters and evaluate the results of those procedures.how the critical audit matter was addressed in the audit our audit procedures related to the company’s identification of upstream affiliate relationships, transactions, and commitments and contingencies outside of the u.s. and the impact of such matters on the financial statements included the following, among others: •we tested the effectiveness of controls over the company’s affiliate process, including controls over the identification of the company’s affiliate relationships, transactions, and commitments and contingencies outside of the u.s.•we read publicly available financial filings and news sources related to the company and its affiliates outside of the u.s. and listened to the parent company (ciner resources lp) quarterly investor relations calls for information related to potential new affiliates and transactions between the company and affiliates.•we inspected director and executive officer questionnaires from the parent company directors and officers to identify any affiliate matters.•we searched the general ledger for potential transactions with affiliates.•we read significant new or amended agreements and contracts of the company to identify new affiliate relationships, transactions, or commitments and contingencies, and evaluated management’s analyses regarding the accounting and disclosure of such arrangements. •we inquired of executive officers, key members of management, and the board of managers regarding affiliate relationships, transactions and commitments and contingencies. •we confirmed with the ultimate parent company that the affiliate relationships, transactions, and commitments and contingencies identified and disclosed by the company were complete. /s/ deloitte & touche llp atlanta, georgia march 15, 2021we have served as the company’s auditor since 2008.

critical audit matters the critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.sales of services - revenue recognition on certain long-term service agreements - refer to notes 1 and 8 to the financial statements critical audit matter description the company enters into long-term service agreements with certain customers, predominately within the aviation and power segments. these agreements require the company to provide maintenance services for customer assets over the contract term, which generally range from 5 to 25 years. revenue for these agreements is recognized using the percentage of completion method, based on costs incurred relative to total estimated costs over the contract term. as part of the revenue recognition process, the company estimates both customer payments that are expected to be received and costs to perform maintenance services over the contract term. key estimates that require significant judgment from management include: (a) how the customer will utilize the assets covered over the contract term; (b) the expected timing and extent of future maintenance and overhaul services; (c) the future cost of materials, labor, and other resources; and (d) forward looking information concerning market conditions, including the potential for early retirements of assets, and expected cost improvement.given the complexity involved with evaluating the key estimates, which includes significant judgment necessary to estimate customer payments and future costs, auditing these assumptions required a high degree of auditor judgment and extensive audit effort, including the involvement of professionals with specialized skills and industry knowledge.how the critical audit matter was addressed in the audit our auditing procedures over the key estimates described above related to the amount and timing of revenue recognition of the long-term service agreements, predominately within the aviation and power segments, included the following, among others: •we tested the effectiveness of controls over the revenue recognition process for the long-term service agreements, including controls over management’s key estimates.•we evaluated management’s risk assessment process through observation of key meetings and processes addressing contract status and current market conditions including the timely incorporation of changes that affect total estimated costs to complete the contract and future billings.2021 form 10-k 44•we evaluated the appropriateness and consistency of management’s methods and key assumptions applied in recognizing revenue and developing cost estimates.•we tested management’s utilization assumptions for the assets covered over the contract term, which impact the estimated timing and extent of future maintenance and overhaul services by comparing current estimates to historical information and projected market conditions.•we tested management’s process for estimating the timing and amount of costs associated with maintenance, overhaul, and other major events throughout the contract term, including comparing estimates to historical cost experience, performing a retrospective review, conducting analytical procedures, and utilizing specialists to evaluate engineering studies and statistical models used by the company to estimate the useful life of certain components of the installed equipment.premium deficiency testing - future policy benefits – refer to notes 1 and 11 to the financial statements critical audit matter description the company performs premium deficiency testing to assess the adequacy of future policy benefit reserves on an annual basis or whenever events or changes in circumstances indicate that a premium deficiency event may have occurred. significant uncertainties exist in testing cash flow projections in the premium deficiency test for these insurance contracts, including consideration of a wide range of possible outcomes of future events over the life of the insurance contracts that can extend for long periods of time.given the significant judgments made by management in estimating the cash flow projections used in the premium deficiency test, including the determination of certain key assumptions, auditing the premium deficiency test required a high degree of auditor judgment and an increased extent of effort, including the involvement of our actuarial specialists. key assumptions impacting the cash flow projections that are sensitive and are more subjective requiring significant judgment by management are discount rate, rate of changes in morbidity, and future long-term care premium rate increases.how the critical audit matter was addressed in the audit our audit procedures, which included the involvement of our actuarial specialists, related to the premium deficiency analysis included the following, among others:•we tested the effectiveness of controls related to the premium deficiency test process, including controls over the development of key assumptions and management’s judgments related to the development of the cash flow projections.•we tested the underlying data for completeness and accuracy, including historical cash flows and experience study data, that served as the basis for the actuarial estimates. •we evaluated the key assumptions by considering historical actual experience, sensitivity analyses, relevant industry data when available, and management’s basis for changes or lack of change in key assumptions.•we performed recalculations to assess that the key assumptions were reflected in the cash flow projections.•we evaluated the impact of updated key assumptions to the projected cash flows and the overall conclusion for the premium deficiency test./s/ deloitte & touche llp boston, massachusetts february 11, 2022we have served as the company's auditor since 2020.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. qualitative factors used in the allowance for loan losses as described further in notes 1 and 6 to the financial statements, the company’s allowance for loan losses has two components – a specific reserve and a general reserve. the calculation of the general reserve considers the company’s historical loss experience, adjusted for qualitative factors based on general economic conditions and other qualitative risk factors both internal and external to the company. such qualitative factors include current local economic conditions and trends including unemployment, changes in lending staff, policies and procedures, changes in credit concentrations, changes in the trends and severity of problem loans and changes in trends in volume and terms of loans. as disclosed by management, these qualitative factors serve to compensate for additional areas of uncertainty inherent in the portfolio that are not reflected in the company’s historic loss experience. we identified the qualitative factors used in the allowance for loan losses as a critical audit matter.the principal consideration for our determination that the qualitative factors used in the allowance for loan losses is a critical audit matter is the application of qualitative factors to the company’s historical loss experience. the application of qualitative factors to the historical loss experience requires management to exert significant judgment regarding estimates and assumptions related to assessment of various economic conditions and other trends and their associated impact on the company’s allowance for loan losses, and as such requires a high degree of effort and subjective auditor judgment when auditing the estimate. 1our audit procedures related to the allowance for loan losses included the following, among others:•we tested the design and operating effectiveness of management’s review control over the allowance for loan losses, which included assessing the necessity and application of qualitative factors.•we evaluated management’s process for determining the allowance for loan losses. this included considering the reasonableness of the qualitative factors applied in the allowance for loan loss calculation by analyzing both corroborating and contradictory information from internal and publicly available information.•we utilized publicly available financial information to compare the company’s allowance for loan losses to a relevant peer group.fair value adjustments recorded in purchase accounting as described further in note 25 to the financial statements, the company completed the acquisition of green bancorp, inc. (“green”) on january 1, 2019. the company accounted for this acquisition under the acquisition method of accounting for business combinations. accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values. the determination of the fair values of identified intangible assets and the loan portfolio required management to make significant estimates and assumptions. we identified the identification and valuation of the core deposit intangible asset and the fair value adjustments to the performing and purchased credit impaired (pci) loan portfolios acquired as a critical audit matter.the principal consideration for our determination that the identification and valuation of the core deposit intangible asset and the fair value adjustments to the performing and pci loan portfolios is a critical audit matter is that there were significant judgments made by management to estimate these fair values. auditing these amounts required a high degree of auditor judgment and an increased extent of effort, including the involvement of specialists, when performing audit procedures to evaluate the reasonableness of inputs and assumptions used in these valuations. our audit procedures related to the valuation of the core deposit intangible assets and the loan portfolio included the following, among others:•we assessed the design and operating effectiveness of management’s review controls relating to the review of key inputs and assumptions used in the valuation of assets acquired, including the identified intangible assets and the loan portfolio. these assumptions include discount rates, default risk, prepayment rates, and attrition rates. •with the assistance of specialists, we evaluated the valuation methodologies and valuation assumptions used by management to develop fair value estimates by:◦we compared inputs used in the valuation models by agreeing them to source documents on a sample basis and verified the mathematical accuracy of the calculations.◦we evaluated on a sample basis significant assumptions used in the fair value models.◦we evaluated the appropriateness of the fair value models, including whether information used in the models is consistent with the evidence obtained in other areas of the audit.assessment of the disclosure of expected transition effect from the adoption of asc 326 on the allowance for loan losses as described further in note 3 to the financial statements under recent accounting pronouncements, the company has disclosed the estimated increase to the allowance for loan losses resulting from the adoption of asu 2016-13, financial instruments – credit losses (asc 326). this standard became effective for the company on january 1, 2020. upon adoption, the amendments in asc 326 will be recognized through a cumulative-effect adjustment to retained earnings. the standard replaces the existing incurred loss impairment guidance with a new impairment model known as the current expected credit loss (cecl) model, which is based on expected credit losses. for assets held at amortized cost basis, asc 326 eliminates the probable initial recognition threshold in current gaap and, instead, requires an entity to reflect its current estimate of expected credit losses over the contractual life of assets within its scope. the company will implement a discounted cash flow method or a loss-rate method to estimate expected credit losses for its loan portfolio held for investment that was not previously designated as pci. the company will utilize a probability of default/loss given default model to estimate expected credit losses for purchased credit deteriorated (“pcd”) loan portfolio. the company’s approach will also consider qualitative adjustments. we identified the assessment of the disclosure of the company’s expected transition effect to the allowance for loan losses from the adoption of asc 326 as a critical audit matter.the principal consideration for our determination assessment of the disclosure of the company’s expected transition effect to the allowance from the adoption of asc 326 is a critical audit matter is that there were significant judgments made by management to arrive at this estimate. this required a high degree of auditor judgment and increased extent of effort, including the need to involve specialists, when performing audit procedures to evaluate the cecl transition effect disclosure.our audit procedures related to the implementation of asc 326 included the following, among others: 2•we tested the design and operating effectiveness of controls relating to management’s implementation of asc 326, which included, amongst others, development of the company’s cecl methodology, controls over model development and validation, approval of key factors and assumptions, and the calculation of the cecl transition effective disclosure.•we tested management’s process for determining certain key assumptions used in the asc 326 estimate, which included, among others, segmentation of the loan portfolio, model selection, and obtaining complete and accurate information to develop reasonable and supportable forecasts. •with the assistance of our specialists, we evaluated the company’s estimation method for adherence to asc 326 and evaluated the model development and validation used by the company to estimate the cecl transition effect disclosure for the company’s primary discounted cash flow model./s/ grant thornton llp we have served as the company’s auditor since 2014.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.csx 2020 form 10-k p.47csx corporationpart ii item 8. financial statements and supplementary data report of independent registered public accounting firm, continued depreciation policies for assets utilizing the group-life method description of the matter at december 31, 2020, assets depreciated under the group-life method comprised 87% of total gross fixed assets of $45.5 billion. as discussed in note 6 of the consolidated financial statements, the group-life method aggregates assets with similar lives and characteristics into groups and depreciates each of these groups as a whole. when using the group-life method, an underlying assumption is that each group of assets, as a whole, is used and depreciated to the end of the group’s recoverable life. the company utilizes different depreciable asset categories to account for depreciation expense for the railroad assets that are depreciated under the group-life method.under the group-life method, depreciation studies are completed to review asset service lives, salvage values, accumulated depreciation and other factors related to group assets. depreciation studies are performed every three years for equipment assets and every six years for road and track assets. a depreciation study was performed in 2019 for equipment assets and 2020 for road and track assets. the most recent depreciation studies are reviewed by management each year to determine if there have been significant factors that result in changes to the group-life method key assumptions. auditing depreciation expense for assets subject to the group-life method was complex and required the involvement of specialists due to the nature of the methods used in the depreciation studies to determine the useful service lives and salvage values of the company’s assets. these methods have a significant effect on depreciation expense.how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s process related to the assessment of periodic depreciation studies of its group-life assets. for example, we tested controls over management’s review of the depreciation study for road and track assets and review of depreciation expense and useful lives. we also tested controls over management’s review of asset activity and assumptions that could impact the most recent depreciation study of equipment assets.to test the estimated useful lives and salvage values of the company’s group-life assets, we performed audit procedures that included, among others: obtaining the periodic depreciation studies provided by the company’s third-party specialist and subsequent updates by management; assessing the completeness and accuracy of the data provided to the third-party specialist and used by management; and including a specialist on our team to evaluate the methods used by the third-party specialist and management in determining the average service lives and salvage values of assets to perform the depreciation studies. we compared the significant methods used by management to those used throughout the industry and within other depreciation studies. we also assessed the historical accuracy of management’s estimates via retrospective review and independently calculated a sample of the annual depreciation rates./s/ ernst & young llp we have served as the company’s auditor since 1981.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. allocating revenue in contracts with multiple performance obligations f-1 description of the matter as described in note 1 to the consolidated financial statements, many of the company's contracts with customers contain multiple performance obligations, which are accounted for separately if they are distinct. in such cases, the transaction price is allocated to the separate performance obligations based on their relative standalone selling prices. management estimates the standalone selling prices based on the company’s overall pricing objectives and considers significant pricing practices, including discounting, geographical location, the size and volume of transactions, the customer type, price lists, and historical standalone sales. the company analyzes standalone selling prices on a periodic basis to identify if it has experienced significant changes in standalone selling prices. in contracts which include multiple products or services, auditing the identification of distinct performance obligations and the allocation of transaction price is challenging. for example, contracts containing nonstandard terms and conditions require judgment in identifying the distinct performance obligations in the contract, and the appropriate timing of revenue recognition for such performance obligations. management’s estimates of the standalone selling prices used to allocate the transaction price are sensitive to changes in management’s business practices, such as pricing strategies. such changes can have a significant impact on the determination of standalone selling price. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company's process to identify performance obligations and allocate the transaction price to those performance obligations, including the underlying assumptions related to the estimation of standalone selling prices. our audit procedures also included, among others, an evaluation of management’s assessment of performance obligations. in conjunction with this assessment, we inspected a sample of customer contracts and reviewed management’s assessment of nonstandard terms and identification of performance obligations. we then tested the period over which management determined the revenue associated with each performance obligation should be recognized, as well as the standalone selling prices assigned to those performance obligations for purposes of allocating the transaction price. in testing the company’s estimate of standalone selling prices, we evaluated the accuracy and completeness of the underlying data used in management's analysis. this evaluation included assessing the effect of the company’s pricing practices for various transaction sizes and volumes across different customer types and geographical locations. business combinations description of the matter as discussed in note 3 to the consolidated financial statements, during 2019, the company acquired portfolium, inc. (“portfolium”) and mastery connect, inc. (“mastery connect”) for total purchase consideration of $43.4 million and $44.6 million, respectively. auditing the company’s accounting for these business combinations was complex due to the significant estimation required by management in determining the fair value of the acquired intangible assets. the significant estimation was primarily due to the judgmental nature of the inputs to the valuation models used to measure the fair value of these intangible assets, as well as the sensitivity of the respective fair values to the underlying significant assumptions. the company used the discounted cash flow method to measure the fair value of these intangible assets. significant assumptions used in these valuation models included forecasted revenue and expenses, discount rates and the technology obsolescence rates. each were considered highly subjective, as they represented estimates of future performance and other future company activity, which can vary significantly from past performance, and can be affected by third-party competition and technological innovation, among other factors. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company's acquisition accounting process, including controls over review of forecasts, and other significant assumptions. among other procedures, we read the purchase agreements and assessed the completeness of identified intangible assets. we also evaluated forecasts used in determining the acquisition date fair values. we considered the historical accuracy of management’s estimates in other acquisitions. we tested the significant assumptions used in the valuation models and tested the completeness and accuracy of the underlying data supporting the assumptions and estimates. we compared the significant assumptions, including prospective financial information, to the historical performance of the acquired entities and other comparable guideline companies within the same industry. we involved valuation specialists to assist in our evaluation of the selection of the valuation model and the significant assumptions used in the model, and to assist us in performing mathematical checks of the valuation. /s/ ernst & young llp we have served as the company’s auditor since 2012.

critical audit matters thecritical audit matters communicated below are matters arising fromthe current period audit of the financial statements that werecommunicated or required to be communicated to the audit committeeand that: (1) relate to accounts or disclosures that are materialto the financial statements and (2) involved our especiallychallenging, subjective, or complex judgments. the communication ofcritical audit matters does not alter in any way our opinion on thefinancial statements, taken as a whole, and we are not, bycommunicating the critical audit matters below, providing separateopinions on the critical audit matters or on the accounts ordisclosures to which they relate. revenue recognized from commission sales with general electric healthcare (gehc) description of the matter asdiscussed in notes a and c to the consolidated financialstatements, the company, through its wholly-owned subsidiary vaso healthcare (vhc), was appointed the exclusive representativefor the sale of gehc diagnostics imaging equipment to specificmarket segments and recognized commission revenue when theunderlying equipment/services have been delivered/completed by gehc. vhc has a total commission revenue of $22,865 (in thousands)for the year ended december 31, 2020, and 100% of it is with gehc. f-2 weidentified the testing of commission revenue generated from gehc asa critical audit matter. specifically, the commission revenue iscalculated through complicated formula including order data fromvarious files obtained from gehc monthly and is stored in a excelfile and based on the one master agreement and various subsequentamendments between gehc and the company. the audit of the excelfile requires significant efforts from auditors due to the volumeof data, the size of the file, and the complexity of the formulasinside of the file. how we addressed the matter in our audit duringthe audit, we obtained an understanding of the design andimplementation of the internal control over the revenue recognitionprocess including certain general computer controls, applicationscontrols and monitor controls and tested access control of themaster excel worksheet. for selected orders based on our judgment,we inspected the company’s master file, traced the datasource to the various files that are further directly confirmedwith gehc, tested the formula for its accuracy and reasonablenessand agreed the commission rates and incentives to the agreementsbetween gehc and further confirmed with gehc on the incentives asto which sales region achieved the incentive target. /s/malone bailey llp www.malonebaily.com we haveserved as the company’s auditor since june 2019.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.gain on sale of the respiratory business divestiture as described in note 4 to the consolidated financial statements, the company entered into a definitive agreement to sell certain product lines within its global respiratory product portfolio to medline industries, inc. (the “respiratory business divestiture”). in connection with the respiratory business divestiture, the company also entered into ancillary agreements with medline to help facilitate the transfer of the business, including a manufacturing and supply transition agreement (the “msta”). in june 2021, after completing the initial phase of the respiratory business divestiture, $33.8 million of the proceeds received were attributed to the company’s performance obligations pursuant to the msta. the resulting liability was measured as the excess of the estimated fair value of the services to be performed over the estimated proceeds management expects to receive over the msta term. the significant assumption used to estimate the fair value of the services to be performed is the selection of an appropriate gross margin based on comparable companies. additionally, management attributed $35.7 million of the company’s americas, emea and asia reportable operating segments’ goodwill to the divested respiratory business based on the fair value of the divested respiratory business relative to the fair value of certain of the company’s reporting units. the fair values were estimated by management using a combination of the discounted cash flows based on projected future earnings (income approach) and market multiples of publicly traded companies in similar lines of business (market approach). the more significant judgments and assumptions used by management in determining fair value using the income approach include the amount and timing of expected future cash flows, and the discount rate that was used to estimate the present value of the future cash flows. the more significant judgments and assumptions used by management in determining fair value using the market approach include the determination of appropriate revenue and ebitda market multiples based on the selection of appropriate comparable companies.the principal considerations for our determination that performing procedures relating to the gain on sale of the respiratory business divestiture is a critical audit matter are (i) the significant judgment by management in developing the fair values of the msta liability and reporting units, (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the selection of appropriate gross margin based on comparable companies for the msta liability, and the discount rate in determining the fair value using the income approach and the revenue and ebitda market multiples in determining the fair value using the market approach for the reporting units and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the accounting for the divestiture, including controls over management’s valuation of the msta liability and the fair value of the divested respiratory business relative to the fair value of certain of the company’s reporting units. these procedures also included, among others, (i) reading the divestiture agreement, (ii) testing management’s process for developing the fair value estimates, (iii) evaluating the appropriateness of the income and market approaches, (iv) testing the completeness and accuracy of underlying data used in the approaches; and (v) evaluating the reasonableness of significant assumptions related to the gross margin for the msta liability, and the discount rate in determining the fair value using the income approach and the revenue and ebitda market multiples in determining the fair value using the market approach for the reporting units. evaluating these assumptions involved evaluating whether the assumptions used were reasonable considering past performance of f-4the business and consistency with external market and industry data. professionals with specialized skill and knowledge were used to assist in the evaluation of the company’s income and market approaches and the gross margin, discount rate and revenue and ebitda market multiples assumptions./s/ pricewaterhouse coopers llp philadelphia, pennsylvania march 1, 2022we have served as the company’s auditor since 1962.

critical audit matter the critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. f-2 table of contents research and development expenses — cut-off — refer to note 2(v) to the financial statements critical audit matter description as disclosed in the consolidated statements of operations, for the year ended december 31, 2021, the company incurred significant research and development (“r&d”) expenses of approximately usd 573 million. a large portion of the company’s r&d expenses are comprised of service fees paid to contract research organizations (“cr os”) and contract manufacturing organizations (“cm os”) (collectively referred as “outsourced service providers”). the r&d activities contracted with these outsourced service providers are documented in detailed agreements and are generally performed over an extended period. there are also typically several milestones pertaining to the services in one agreement, therefore allocation of the service expenses to the appropriate financial reporting period based on the progress of the r&d projects involved judgement and estimation. we identified cut-off of r&d activities as a critical audit matter due to the potential significance of misstatements to the financial statements that could arise from not accruing r&d expenses incurred for services provided by the outsourced service providers in the appropriate reporting period. how the critical audit matter was addressed in the audit our audit procedures related to the cut-off of research and development expenses included the following, among others: • we tested the effectiveness of key controls over the accrual of the r&d expenses payable to the outsourced service providers. • we obtained and read the key terms set out in the research agreements with outsourced service providers and evaluated the completion status with reference to the progress reported by the representatives of the outsourced service providers, on a sample basis, to determine whether the service fees were recorded based on respective contract sums, progress and/or milestones achieved. • we sent audit confirmations to outsourced service providers, on a sample basis, to confirm the amount of the r&d service fees incurred for the year ended december 31, 2021 and the amounts payable under the contracts as of december 31, 2021. • we selected projects from the open contract list as of december 31, 2021 on a sample basis, made inquiries of responsible personnel regarding the project status and inspected invoices and other communications from the outsourced service providers to identify potential additional outsourced service providers and related unrecorded r&d expenditures. /s/ deloitte touche tohmatsu certified public accountants llp shanghai, the people’s republic of china march 1, 2022 we have served as the company’s auditor since 2017.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.contingencies — asbestos-related reserves —rockwell —refer to note 22 to the financial statements critical audit matter description reserves related to these claims consist of the projected indemnity and defense costs of pending and future asbestos-related claims. the company engaged a third-party advisor with experience in assessing asbestos-related liabilities to conduct a study to estimate its potential undiscounted liability for pending and future asbestos-related claims. as of october 3, 2021, the best estimate of the company’s obligation for asbestos-related claims over the next 37 years is $60 million.we identified asbestos-related reserves for rockwell as a critical audit matter because estimating projected indemnity and defense costs of pending and future asbestos-related claims involves significant estimation by management due to variables that are difficult to predict. this required a high degree of auditor judgment and an increased extent of effort, including the need to involve our actuarial specialists, when performing audit procedures to evaluate whether the asbestos-related reserves were appropriately recorded as of october 3, 2021.48how the critical audit matter was addressed in the audit our audit procedures related to the asbestos-related reserves for rockwell included the following, among others: •we tested the effectiveness of controls related to asbestos-related reserves, including management’s controls over estimating projected indemnity and defense costs of pending and future asbestos-related claims.•we assessed the qualifications, experience, and objectivity of management’s third-party advisor.•we tested the underlying data that served as the basis for the actuarial analysis, including historical claims, to test the inputs to the actuarial estimate for completeness and accuracy.•we compared management’s prior-year projected indemnity and defense costs of pending and future asbestos-related claims to actuals incurred during the current year to identify potential bias in the determination of the reserve, as well as to assess management’s ability to estimate the reserve. •with the assistance of our actuarial specialists that have experience in the area of asbestos-related reserves, we assessed the reasonableness of the valuation methodology and significant assumptions. /s/deloitte & touche llp deloitte & touche llp detroit, michigan november 17, 2021we have served as the company's auditor since 1996.

critical audit matter the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. reserves for excess, obsolete and slow-moving inventories description of the matter as described in notes 2 and 5 to the consolidated financial statements, the company assesses the valuation of inventories each reporting period based on the lower of cost or net realizable value. the company establishes reserves for excess, obsolete and slow-moving inventories after evaluation of historical sales, current economic trends, forecasted sales, product lifecycles and 41table of contentscurrent inventory levels. the assessment is both quantitative and qualitative. as of december 31, 2020, the company had inventories of $5.6 million, net of reserves for excess, obsolete and slow-moving inventories. auditing management's estimates for excess, obsolete and slow-moving inventories required subjective auditor judgment and evaluation of the reasonableness of significant assumptions used in developing the reserves as detailed above, as well as the inputs and related calculations related to historical sales and on-hand inventories. how we addressed the matter in our audit we obtained an understanding and evaluated the design of internal controls over the company's reserves for excess, obsolete and slow-moving inventories, including management's assessment of the assumptions and data underlying the reserve calculation. our substantive audit procedures included, among others, testing the logic and integrity of calculations within management’s analysis; testing the completeness and accuracy of underlying data used, including inventory quantities, carrying costs and the estimate of net realizable value by product; and evaluating the reasonableness of management’s assumptions related to demand forecasts, estimated reserve percentages and qualitative considerations involving, among others, the implications of the covid-19 pandemic and new or revised operational strategies. evaluating the reasonableness of management’s assumptions involved (i) comparing historical sales by product, used as a basis for future demand, to audited sales subledgers on a sample basis, (ii) performing sensitivity analyses on reserve percentages applied to categories of projected demand to evaluate the changes in the reserve that would result from changes in the assumption, (iii) holding discussions with senior management to determine whether strategic or operational changes in the business were consistent with the projections of future demand that were utilized as basis for the reserves recorded, (iv) corroborating management’s qualitative considerations through review of recent sales transactions, including those subsequent to year-end, and order backlog and deferrals on a sample basis, and (v) testing declines in the reserve and evaluating whether such declines were the result of the sale or write-off of inventory or the result of changes in the significant assumptions used to the develop the reserve./s/ gbq partners, llc we have served as the company's auditor since 2019.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. accrued clinical trial and related costs as described in notes 2 and 4 to the consolidated financial statements, the company recorded $11.1 million in accrued clinical trial and related costs as of december 31, 2020. accrued clinical trial and related costs are estimated using data such as patient enrollment, clinical site activations or information provided by outside service providers regarding their actual costs incurred. management determined accrual estimates through reports from and discussions with clinical personnel and outside service providers as to the progress of trials, or the services completed. the principal considerations for our determination that performing procedures relating to accrued clinical trial and related costs is a critical audit matter are the judgment by management in evaluating the data used in developing the accrued clinical trial and related cost estimates, which in turn led to a high degree of auditor judgment and effort in performing procedures to evaluate audit evidence obtained related to patient enrollment, clinical site activations and services rendered by outside service providers used by management in developing the estimates. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the completeness and accuracy of clinical trial accruals, including controls relating to the reliability of data used in the development of the estimates. these procedures also included, among others, (1) testing management’s process for developing the estimated accrued clinical trial and related costs, (2) evaluating the appropriateness of the approach used by management to develop the estimates, (3) testing the completeness and accuracy of the data used in developing the estimates, including data related to patient enrollment, clinical site activations and services rendered by outside service providers, (4) confirming clinical costs and contracted fees with the clinical vendors on a test basis, and (5) examining clinical vendor contracts on a test basis to evaluate the completeness of costs considered in the estimates. /s/ pricewaterhouse coopers llp san jose, california march 1, 2021 we have served as the company’s auditor since 2016.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. as discussed in note 1 to the financial statements, the company had a going concern due to a continual net loss, stockholders’ deficiency and cash used in operations. auditing management’s evaluation of a going concern can be a significant judgment given the fact that the company uses management estimates on future revenues and expenses which are not able to be substantiated. to evaluate the appropriateness of the going concern, we examined and evaluate the financial information that was the initial cause along with management’s plans to mitigate the going concern and management’s disclosure on going concern. /s/ m&k cpas, pllc we have served as the company’s auditor since 2021.

critical audit matter the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.indefinite-lived tradename impairment assessment for skip hop as described in notes 2 and 7 to the consolidated financial statements, the company’s consolidated indefinite-lived tradename balance was $331.7 million as of december 28, 2019, which includes the skip hop tradename of $26.0 million. management performs a review for potential impairment annually as of the last day of each fiscal year or whenever significant events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. if the carrying amount exceeds the fair value of the tradename, an impairment charge is recognized in the amount of the excess. management conducted an interim impairment assessment in the third quarter of fiscal 2019 which indicated an impairment charge of the skip hop tradename of $19.1 million, $10.5 million, and $1.2 million in the u.s. wholesale, international, and u.s. retail segments, respectively. the carrying value of the company's indefinite-lived skip hop tradename asset after the impairment charge was$26.0 million. management determines fair value of the tradename using a discounted cash flow model that uses the relief from-royalty method. significant assumptions in the impairment model includes estimates of revenue growth rates, terminal value, discount rate, and royalty rate. the principal considerations for our determination that performing procedures relating to the indefinite-lived tradename impairment assessment for skip hop is a critical audit matter are that there was significant judgment by management when determining the fair value of the tradename. this in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating audit evidence related to evaluating management’s significant assumptions, including estimates of revenue growth rates, terminal value, discount rate, and royalty rate. in addition, the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing these procedures and evaluating the audit evidence obtained. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s indefinite-lived tradename impairment assessments, including controls over the relief-from-royalty valuation of the company’s indefinite-lived tradenames. these procedures also included, among others, (i) testing management’s process for determining the fair value estimate of tradenames valued using the relief-from-royalty method, (ii) evaluating the appropriateness of the relief-from-royalty method, (iii) testing the completeness, accuracy, and relevance of underlying data used in the estimate, and (iv) evaluating the significant assumptions used by management, including revenue growth rates, terminal value, discount rate, and royalty rate. evaluating management’s assumptions related to revenue growth rates and terminal value involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the tradename, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. professionals with specialized skill and knowledge were used to assist in the evaluation of the company’s relief-from-royalty method, including the discount rate and the royalty rate./s/ pricewaterhouse coopers llp atlanta, georgia february 24, 2020we have served as the company's auditor since at least 1968.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements; and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter, in any way, our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 55 table of contents  allowance for loan losses (all) description of the matter the company’s loan portfolio totaled $920.9 million as of december 31, 2021, and the associated all was $12.9 million. as discussed in notes a and c to the consolidated financial statements, determining the amount of the all requires significant judgment about the collectability of loans, which includes an assessment of quantitative factors such as historical loss experience within each risk category of loans and testing of certain commercial loans for impairment. management applies additional qualitative adjustments to reflect the inherent losses that exist in the loan portfolio at the balance sheet date that are not reflected in the historical loss experience. qualitative adjustments are made based upon changes in lending policies and practices, national and local economic trends and conditions, trends in the nature and volume of the loan portfolio, experience, ability, and depth of lending staff and management, levels of and trends in delinquency, non-accruals, and charge-offs, changes in quality of credit risk and oversight of board of directors, changes in underlying value of collateral, concentrations of credit, and external factors such as competition, law, and regulations. auditing the company’s all involved a high degree of subjectivity due to the judgment involved in management’s determination of commercial loan credit risk ratings and identification and measurement of qualitative factor adjustments included in the estimate of the allowance for loan losses. how we addressed the matter in our audit we gained an understanding of the company’s process for establishing the all, including the qualitative adjustments made to the all. we evaluated the design and tested the operating effectiveness of controls over the company’s all process, which included, among others, management’s review and approval controls designed to assess the need and level of qualitative adjustments to the all, as well as the reliability of the data utilized to support management’s assessment. to test the qualitative adjustments, we evaluated the appropriateness of management’s methodology and assessed whether all relevant risks were reflected in the all and the need to consider qualitative adjustments, including the potential effect of covid-19 on the adjustments. 56 table of contents  allowance for loan losses (all) (continued) regarding the measurement of the qualitative adjustments, we evaluated the completeness, accuracy, and relevance of the data and inputs utilized in management’s estimate. we evaluated the inputs and data to the company’s historical loan performance data and third-party macroeconomic data. furthermore, we analyzed the changes in the components of the qualitative reserves relative to changes in external market factors, the company’s loan portfolio, and asset quality trends, which included the evaluation of management’s ability to capture and assess relevant data from both external sources and internal reports on loan customers affected by the covid-19 pandemic and the supporting documentation for substantiating revisions to qualitative factors. we also utilized internal credit review specialists to perform procedures on a sample of commercial loans to test the company’s credit risk ratings by comparing key attributes used in the determination of the credit risk rating to supporting documentation such as borrowers’ financial statements, underlying collateral, financial health of the guarantor, and loan payment history. we have served as the company’s auditor since 2005.

critical audit matters the critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. inventory – cannabis costing — refer to notes 2 and 5 to the financial statements critical audit matter description inventory is comprised of raw materials, finished goods and work-in-progress for cannabis and hemp products. cost includes expenditures directly related to the manufacturing process as well as suitable portions of related production overheads, based on normal operating capacity. inventory is stated at the lower of cost or net realizable value, determined using weighted average cost. for cannabis inventory, costs include pre-harvest, post-harvest, shipment and fulfillment, as well as related accessories. the nature of the process for cannabis inventory costing is manual and requires management to use complex spreadsheet models updated monthly (“models”) to calculate a month by month ongoing cost of inventory. in addition, the models must use a variety of inputs and source data in order to calculate cost. auditing the cost of inventory required an increased extent of audit effort.how the critical audit matter was addressed in the audit our audit procedures related to the cost of cannabis inventory included the following, among others: •evaluated the complex spreadsheet models, and the inputs to such models, used to calculate the cost of cannabis inventory by: o evaluating the incorporation of the source data into the models, testing the formulas used and testing the computational accuracy.126 o testing purchases used in the models to third party source documentation. o testing production costs used in the models to actual costs incurred. o performing independent calculations of key inputs used in the models and comparing to inputs used by management. o testing management’s allocation of indirect costs between inventory products by assessing the appropriateness of the allocation method, recalculating the allocations and on a sample basis testing the underlying allocations by tracing to source documents. o testing production quantities used in the models by physically observing and verifying inventory quantities. •as a result of the company’s material weakness identified by the company in the “control activity” component of internal control – integrated framework (2013) issued by coso, we increased the extent of inventory physical observations and verifications, increased the extent of testing where sampling methodology was used, and utilized third party source documents in the performance of our testing procedures.goodwill and indefinite-lived intangible assets— refer to notes 2, 11 and 12 to the financial statements critical audit matter description the company performs an annual assessment of the impairment for goodwill and indefinite-lived intangible assets, or a more frequent assessment when events or circumstances indicate that the fair value of a reporting unit is less than its carrying value and an impairment may have occurred. as at december 31, 2020, the company performed their annual assessment including a quantitative assessment. this assessment required management to make significant estimates and judgements relating to forecasted revenues, gross margins and operating margins, and discount rate. changes in these assumptions could have a significant impact on either the fair value of the hemp reporting unit, the amount of any goodwill and indefinite-lived intangible assets impairment charge, or both. the fair value of the hemp reporting unit was determined to exceed its carrying value and no impairment charge was recorded. performing audit procedures to evaluate if the fair value of the hemp reporting unit exceeded its carrying value required a high degree of auditor judgment and an increased extent of audit effort, including involving fair value specialists.how the critical audit matter was addressed in the audit our audit procedures related to the evaluation of the fair value of the hemp reporting unit against its carrying value included the following, among others: •evaluated management’s ability to accurately forecast revenues, gross margins and operating margins by comparing actual results to management’s historical forecasts. •with the assistance of fair value specialists, developed an independent discounted cash flow model to estimate the fair value of the hemp reporting unit by: o determining forecasted revenues, gross margins and operating margins by considering: ▪historical revenues, gross margins and operating margins; ▪internal communications with management; ▪underlying analyses detailing business strategies and growth plans; ▪analyst and industry reports for the company and peer companies operating in food and / or cbd. o determining an appropriate discount rate based on source information, industry data and benchmarks. •compared the independent estimate of the fair value of the hemp reporting until against its carrying value./s/ deloitte llp chartered professional accountants vancouver, canada february 19, 2021we have served as the company's auditor since 2017.

critical audit matters thecritical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicatedor required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financialstatements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit mattersdoes not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical auditmatters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. revenuerecognition and completeness— refer to note 2 to the financial statements critical audit matter description the company has a substantial increase in revenue generating activities, from an increasing number of sources, and is dependent on third-partyinfluencers creating and publishing agreed upon media subject to varying timelines not always directly under the company’s directcontrol. the nature of the company’s contracts with customers require consideration of whether the company acts as either the principalor agent in the contracts, which includes subjective analysis of the level of control the company maintains related to the contracts. howthe critical audit matter was addressed in the audit ouraudit procedures related to evaluating the company’s revenue and revenue recognition policy and related accounts included the following,among others: ●confirmation with contractors/agencies responsible for connecting the company to customers. ●independent assessment of whether the company’s conclusion that it maintains control in its revenue generating contracts is reasonable, and as such, gross presentation of revenue is appropriate. ●reviewed revenue from all sources on a monthly basis and inquired as to any activity that was not consistent with our expectations based on our understanding of the company and its operations. ●performed analytical procedures of revenue and cash receipt activities surrounding year end to determine any unusual fluctuations that required further inquiry or substantiation. ●testing of a sample of revenue transactions during year, including transactions near year end, to determine the agreed-upon media was completed and released and recorded in the appropriate period. fruci& associated ii, pllc we have served as the company’s auditor since 2020.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. valuation of patient services accounts receivable – allowance for contractual adjustments and uncollectibles as described in notes 3 and 5 to the consolidated financial statements, patient service revenue is recognized at the time services are provided by the company’s affiliated physicians. payments for services rendered are generally less than billed charges. contractual adjustments result from the difference between the physician rates for services performed and the reimbursements by third-party payors for such services. patient service revenue is presented net of an estimated provision for contractual adjustments and uncollectibles. management estimates the allowance for contractual adjustments and uncollectibles on accounts receivable based upon historical experience and other factors, including days sales outstanding for accounts receivable, evaluation of expected adjustments and delinquency rates, past adjustments and collection experience in relation to amounts billed, an aging of accounts receivable, current contract and reimbursement terms, changes in payor mix and other relevant information. patient services accounts receivable makes up a significant portion of the company’s consolidated net accounts receivable balance of $241.9 million as of december 31, 2020. the principal considerations for our determination that performing procedures relating to valuation of patient services accounts receivable—allowance for contractual adjustments and uncollectibles is a critical audit matter is the significant judgment by management to determine the estimated allowance to adjust the patient services accounts receivable to the amount that will be collected in the future under the terms of third-party payor contracts, which in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating the audit evidence obtained related to the valuation of patient services accounts receivable. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the valuation of patient accounts receivable, which included controls over management’s model, data, and assumptions used to estimate the allowance for contractual adjustments and uncollectibles from third parties. these procedures also included, among others, (i) evaluating management’s process for developing the allowance for contractual adjustments and uncollectibles; (ii) testing the completeness and accuracy of underlying data used in the model; (iii) evaluating the historical accuracy of management’s process for 76 table of contents developing the estimate of the amount which will ultimately be collected by comparing actual cash collections to the previously recorded patient services accounts receivable; and (iv) developing an independent expectation of the amount expected to be collected by management. developing an independent expectation involved calculating the percentage of cash collections as compared to the recorded patient services accounts receivable balance as of the end of the prior year and comparing that percentage to management’s collection expectation used to determine the current year allowance for contractual adjustments and uncollectibles. pricewaterhouse coopers llp miami, florida february 18, 2021 we have served as the company’s auditor since 1999.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.claims accruals — refer to note 1 to the financial statements critical audit matter description the company is self-insured for various claims, which primarily relate to accident-related claims for personal injury, collision, and comprehensive compensation, along with workers’ compensation. claims accruals represent accruals for 37table of contentspending claims, including adverse development of known claims, as well as incurred but not reported claims. the claims accruals are based on estimated or expected losses for claims considering the nature and severity of each claim, historical trends, advice from third-party administrators and insurers, consultation with actuarial experts, the specific facts of individual cases, the jurisdictions involved for each case, estimates of future claims development, the fluctuations in the number and severity of claims, and the legal and other costs to settle or defend the claims. at december 31, 2020 and 2019, the company had an accrual of $144.2 million and $143.5 million, respectively, for estimated claims net of reinsurance receivables.the subjectivity of estimating the claim accruals for pending claims and incurred but not reported claims, requires a high degree of auditor judgement and an increased extent of effort. this includes the need to involve our actuarial specialists when performing audit procedures to evaluate whether claims accruals are appropriately stated as of december 31, 2020.how the critical audit matter was addressed in the audit our audit procedures related to the claims accruals included the following, among others: •we tested the effectiveness of internal controls related to claims accruals, including those over the projected development of known claims and incurred but not reported claims.•we evaluated the methods and assumptions used by management to estimate claims accruals by: ◦testing the underlying data that served as the basis for the actuarial analysis, including reconciling the claims data to the company’s actuarial analysis, testing the annual exposure data, and testing current year claims and payment data. ◦comparing management’s selected claims accrual estimates to the range provided by their third-party actuary and to historical trends.◦with the assistance of our actuarial specialists, we developed an independent range of estimates of the claims accruals, utilizing loss development factors from the company’s historical data and industry claim development factors, and compared our estimated range to management’s recorded reserve. /s/ deloitte & touche llp milwaukee, wisconsin february 19, 2021we have served as the company’s auditor since 2002.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. contingencies associated with compliance matters as discussed in note 14 to the consolidated financial statements, the company is involved in various ongoing compliance matters, including compliance with export laws and regulations. such matters required judgment to determine the likelihood of potential loss in consideration of whether a contingent liability and/or disclosure was necessary.we identified the evaluation of contingencies associated with compliance matters as a critical audit matter. evaluation of the company’s judgments regarding a compliance matter, including any required recognition of a liability and/or associated disclosure involved a high degree of subjective auditor judgment. in particular, subjective auditor judgment was required related to evaluating communication with relevant government agencies and precedent in similar matters, which impact the expected outcome.50the following are the primary procedures we performed to address this critical audit matter. we evaluated the design and tested the operating effectiveness of a certain internal control related to the company’s evaluation of contingencies and related disclosures, and specifically uncertainties impacting the assessment of the expected outcome of a compliance matter. we evaluated amounts recorded and disclosures made by:•inquiring of members of the company’s legal department and external counsel for updates on ongoing matters•obtaining and reading letters directly from the company’s external legal counsel that described the nature of outstanding compliance matters.•inspecting relevant correspondence between the company and the governmental agencies related to compliance matters•analyzing relevant publicly available information about the company, its competitors, and the industry regarding compliance matters of a similar nature to identify precedence in the evaluation of the expected outcome.uncertain tax positions in certain foreign taxing jurisdictions as discussed in notes 1 and 15 of the consolidated financial statements, the company operates in multiple foreign tax jurisdictions. in the ordinary course of business there are many transactions and calculations where the ultimate tax determination is uncertain. a tax position is recorded when a determination is made that it is more likely than not the position is sustainable upon examination based on the technical merits of the position. we identified the company’s identification and assessment of uncertain tax positions in certain foreign taxing jurisdictions as a critical audit matter. this critical audit matter required challenging auditor judgment due to the nature and subjectivity of the applicable tax rules and/or their interpretation in each foreign jurisdiction.the following are the primary procedures we performed to address this critical audit matter. we evaluated the design and tested the operating effectiveness of controls related to the determination of meeting the more likely than not threshold on potential uncertain tax positions. to evaluate the tax positions, we:•inspected external information and correspondence from foreign tax authorities on open tax examinations and tax assessments issued•inquired with external counsel through confirmations to understand matters, status, and facts relevant to tax positions.we also involved international tax professionals with specialized skills and knowledge in foreign tax law, who assisted in:•inspecting management prepared tax positions and external tax opinion documentation and comparing to interpretation of tax law•inspecting other relevant cases and evaluating the impact to the company’s positions•performing independent evaluation of tax positions and assumptions and comparing the results to the company’s position, challenging the need for an uncertain tax position liability and disclosure•inquiring of external counsel through confirmations and meetings to update current status and facts of matters relevant to the probability of the outcome of uncertain tax positions./s/ kpmg llp we have served as the company’s auditor since 2002.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. f-1 revenue recognition – refer to note 1 to the financial statements critical audit matter description the company recognizes revenue upon transfer of control of promised services to customers in an amount that reflects the consideration the company expects to receive in exchange for those services. the company primarily sells software solutions, cloud-based services and consulting services to major wireless network and cable operators. significant judgement is exercised by the company in determining revenue recognition, and includes the following: •determination of whether promised services are capable of being distinct and are distinct in the context of the company’s customer contracts which leads to whether they should be accounted for as individual or combined performance obligations. •determination of prices for each distinct performance obligation, including for products and services sold separately. •determination of the timing of when revenue is recognized for each distinct performance obligation either over time or at a point in time. we identified revenue recognition as a critical audit matter because of the significant judgements required by management. this required a high degree of auditor judgement and an increased extent of effort when performing audit procedures to evaluate whether revenue was appropriately recognized. how the critical audit matter was addressed in the audit our audit procedures related to the company’s revenue recognition included the following, among others: •we selected a sample of recorded revenue transactions and performed the following procedures: o obtained customer source documents and agreed them against the respective contract, related amendments, if any, or statement of work, if applicable, for each selection, to test if the contractual terms of the agreement have been appropriately applied to each selection. o evaluated management’s application of each step within the revenue accounting guidance and tested revenue recognition for specific performance obligations, including the allocation of pricing. o tested the mathematical accuracy of management’s calculations of revenue and associated timing of revenue recognized in the financial statements. f-2 business combination – refer to note 2 to the financial statements critical audit matter description the company completed an acquisition accounted for as a business combination during fiscal 2021: avast plc’s family safety mobile business (“avast”) for a total purchase price of $72.7 million, inclusive of contingent consideration. auditing the company’s accounting for its acquisition of avast was complex and involved auditor judgement and specialized skills due to the significant management estimation required in determining the fair value of intangible assets, which were valued and recorded at $38 million. the significant estimation was primarily due to the judgmental nature of the inputs to the valuation model and the sensitivity of the fair value to certain underlying significant assumptions, in particular, the projections of future revenue. how the critical audit matter was addressed in the audit our audit procedures related to the company’s estimated fair value of the intangible assets and contingent consideration included the following, among others: •involvement of personnel with specialized valuation knowledge to assist us in the assessment of the valuation methodology and model used by the company, and evaluating the assumptions used in the valuation, including royalty rates and discount rates. •compared the revenue forecast assumptions to current industry, market and economic trends, assumptions used to value similar assets in other acquisitions, and to historical results of the acquired business. •evaluated the reasonableness of management’s assumptions with regard to intangible assets amortization methods primarily through comparison to prior acquisitions and to guideline companies within the same industry. /s/ singer lewak llp we have served as the company’s auditor since 2005.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. 32table of contents valuation of goodwill description of the matter at march 31, 2021, the company’s goodwill was $331.2 million. as discussed in notes 2 and 9 of the consolidated financial statements, goodwill is qualitatively assessed and quantitatively tested, when necessary, for impairment at least annually at the reporting unit level. for its fiscal 2021 annual impairment test, the company qualitatively tested goodwill impairment for the rest of products reporting unit which had goodwill of $321.5 million. auditing management's qualitative assessment for goodwill impairment for the rest of products reporting unit was complex and highly judgmental due to the significant judgments required in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. in particular, the qualitative assessment requires management to assess the totality of events and circumstances such as macroeconomic conditions, industry and market conditions, overall financial performance, as well as other drivers of fair value and make judgments, on the basis of the weight of evidence, about the significance of all identified events and circumstances in the context of determining whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s goodwill impairment review process. our procedures included, among others, testing management’s review and assessment of the qualitative factors considered in its evaluation. to test the company’s qualitative assessment for goodwill impairment, we performed audit procedures that included, among others, inspecting the analysis prepared by management and evaluating the evidence gathered by management in support of its assessment of the events and circumstances discussed above. we considered the results of management’s most recent quantitative test as well as events that have occurred since that test was performed. we compared forecasts utilized by management in its most recent quantitative test to actual results. we inspected and analyzed other third-party evidence about, among other things, macroeconomic conditions and their expected trends, long-term growth rates, as well as industry and market conditions and their expected trends. we evaluated the evidence of these conditions and trends that had been gathered by management by agreeing the financial data presented by management to underlying financial records, as well as comparing market conditions and expected trends to economic and industry data. we also inspected evidence about other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, or litigation and qualitatively assessed the impact of those events on the fair value of the company’s rest of products reporting unit.in addition, we analyzed trends in the company’s stock price to identify changes in the indicated fair value of the company and compared the company’s stock quotes to quoted market price from other independent sources, and we analyzed the company’s weighted average cost of capital and compared it to the weighted average cost of capital used by management in its most recent quantitative test.product liabilities and related legal costs description of the matter at march 31, 2021 the company’s liability for asbestos-related product liability claims and related legal costs was $15.0 million. as discussed in note 16 to the consolidated financial statements, the company is involved in asbestos-related litigation the cost of which is paid through a wholly-owned captive insurance company. auditing management's estimate of its reserves for asbestos-related product liabilities is complex and highly judgmental due to the significant estimation and judgment required in determining the ultimate outcomes of the cases asserted against the company and in determining the ultimate costs for the company to defend against such claims. in particular, the estimated product liability reserve is sensitive to significant assumptions such as case dismissal rates, the number of years case activity might continue, legal and other costs to defend claims. the cost to defend claims takes into consideration the extent to which insurance carriers, under pre-existing insurance policies and pursuant to a legal settlement, are covering future indemnity payments and sharing in payment of future legal defense costs.33table of contents how we addressed the matter in our audit we obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the company’s product liability estimation process. our procedures included, among others, testing management’s review of significant assumptions used for purposes of calculating the estimated liability. to test the estimated liability for asbestos-related product liability claims, we performed audit procedures that included, among others, testing the completeness and accuracy of the asbestos-related claims data underlying the estimated liability. we compared forecasts of legal defense costs and dismissal ratios utilized by management in prior year reserve estimates to actual defense costs incurred and the actual ratios of asbestos claims asserted to claims dismissed. we inspected analyses prepared by the company to support the current forecasts of defense costs and dismissal ratios. we inspected correspondence from the company’s internal counsel as to the number and status of outstanding claims asserted and correspondence from external counsel to evaluate the information provided by management. we involved a specialist to assist with our procedures and to develop an independent range of asbestos-related product liability reserves, which we compared to the company’s recorded amount./s/ ernst & young llp we have served as the company’s auditor since at least 1917,

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.regulatory assets and liabilities - impact of rate regulation on the financial statements — refer to notes 4 and 10 to the consolidated financial statements.critical audit matter description the company is subject to rate regulation by state utility regulatory agencies, which have jurisdiction with respect to the rates of electric and natural gas distribution companies in colorado. the company is also subject to the jurisdiction of the federal energy regulatory commission for its wholesale electric operations, hydroelectric generation licensing, accounting practices, wholesale sales for resale, transmission of electricity in interstate commerce, compliance with north american electric reliability corporation standards, asset transactions and mergers and natural gas transactions in interstate commerce, (collectively with state utility regulatory agencies, the “commissions”). management has determined it meets the requirements under accounting principles generally accepted in the united states of america to prepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. accounting for the economics of rate regulation affects multiple financial statement line items and disclosures, including property, plant and equipment, regulatory assets and liabilities, operating revenues and expenses, and income taxes.the company is subject to regulatory rate setting processes. rates are determined and approved in regulatory proceedings based on an analysis of the company’s costs to provide utility service and a return on, and recovery of, the company’s investment in assets required to deliver services to customers. accounting for the company’s regulated operations provides that rate-regulated entities report assets and liabilities consistent with the recovery of those incurred costs in rates, if it is probable that such rates will be charged and collected. the commissions’ regulation of rates is premised on the full recovery of incurred costs and a reasonable rate of return on invested capital. decisions by the commissions in the future will impact the accounting for regulated operations, including decisions about the amount of allowable costs and return on invested capital included in rates and any refunds that may be required. in the rate setting process, the company’s rates result in the recording of regulatory assets and liabilities based on the probability of future cash flows. regulatory assets generally represent incurred or accrued costs that have been deferred because future recovery from customers is probable. regulatory liabilities generally represent amounts that are expected to be refunded to customers in future rates or amounts collected in current rates for future costs. 23table of contents we identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support its assertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of future regulatory orders on the financial statements. management judgments include assessing the likelihood of (1) recovery in future rates of incurred costs, (2) a disallowance of part of the cost of recently completed plant, and 3) a refund due to customers. given that management’s accounting judgments are based on assumptions about the outcome of future decisions by the commissions, auditing these judgments required specialized knowledge of accounting for rate regulation and the rate setting process due to its inherent complexities.how the critical audit matter was addressed in the audit our audit procedures related to the uncertainty of future decisions by the commissions included the following, among others:•we tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costs deferred as regulatory assets, and (2) a refund or a future reduction in rates that should be reported as regulatory liabilities. we also tested the effectiveness of management’s controls over the recognition of regulatory assets or liabilities and the monitoring and evaluation of regulatory developments that may affect the likelihood of recovering costs in future rates or of a future reduction in rates.•we evaluated the company’s disclosures related to the impacts of rate regulation, including the balances recorded and regulatory developments.•we read relevant regulatory orders issued by the commissions for the company, regulatory statutes, interpretations, procedural schedules and memorandums, filings made by intervenors, experts’ testimony and other publicly available information to assess the likelihood of recovery in future rates or of a future reduction in rates based on precedents of the commissions’ treatment of similar costs under similar circumstances. we also evaluated regulatory filings for any evidence that intervenors are challenging full recovery of the cost of any capital projects. if the full recovery of project costs is being challenged by intervenors, we evaluated management’s assessment of the probability of a disallowance. we evaluated the external information and compared to the company’s recorded regulatory assets and liabilities for completeness.•we obtained management’s analysis and correspondence from counsel, as appropriate, regarding regulatory assets or liabilities not yet addressed in a regulatory order to assess management’s assertion that amounts are probable of recovery or a future reduction in rates. /s/ deloitte & touche llp minneapolis, minnesota february 23, 2022we have served as the company’s auditor since 2002.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. goodwill impairment assessment as described in notes 2 and 8 to the consolidated financial statements, the company’s consolidated goodwill balance was $438 million as of december 31, 2021. management tests for goodwill impairment using a fair-value approach at the reporting unit level annually, or earlier, if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. the company performs an annual goodwill impairment assessment for its reporting units as of december 31 each year. under the impairment assessment, if the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to the amount of the excess carrying amount of the reporting unit over its fair value. this impairment is limited to the total amount of goodwill allocated to that reporting unit. the fair value of reporting units was estimated using a discounted cash flows technique, which includes certain management assumptions, such as estimated future cash flows, estimated growth rates and discount rates. as disclosed by management, the estimated fair value of the reporting units significantly exceeds the carrying value. the principal considerations for our determination that performing procedures relating to the goodwill impairment assessment is a critical audit matter are the significant judgment by management when developing the fair value measurement of the reporting units, which in turn led to a high degree of auditor judgment and effort in performing procedures and evaluating management’s significant assumptions related to the estimated growth rates. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the valuation of the company’s reporting units. these procedures also included, among others, (i) testing management’s process for developing the fair value estimates; (ii) evaluating the appropriateness of the discounted cash flow models; (iii) testing the completeness and accuracy of underlying data used in the models; and (iv) evaluating the significant assumptions used by management related to the estimated growth rates. evaluating management’s 53 table of contentsassumptions related to estimated revenue growth rates involved evaluating whether the growth rates used by management were reasonable considering the current and past performance of the reporting units and whether those growth rates were consistent with evidence obtained in other areas of the audit. /s/ pricewaterhouse coopers llp boston, massachusetts february 24, 2022we have served as the company’s auditor since 1994.

critical audit matter the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. allowance for credit losses as described in notes 2 and 3 to the consolidated financial statements, the company’s allowance for credit losses was $6.2 million at march 31, 2021. the company calculates the allowance using their trailing six-month net charge-offs as a percentage of average finance receivables, annualized and adjusts for qualitative factors, as necessary, such as the composition of its portfolio, current economic conditions, estimated net realizable value of the underlying collateral, delinquency, non-performing assets, and bankrupt accounts. management utilizes significant judgment in determining probable incurred losses and in identifying and evaluating qualitative factors. we identified the allowance for credit losses, specifically the qualitative factors and the reasonableness of the trailing six-month net charge-offs as a percentage of average finance receivables, annualized, as a critical audit matter as auditing management’s assumptions for the adequacy of the allowance for credit losses required a high degree of subjectivity, auditor judgment and increased extent of audit effort in evaluating these assumptions.35 our audit procedures related to the company’s allowance for credit losses included the following procedures, among others: a.we tested the completeness and accuracy of data inputs utilized by the company to calculate the historical trailing six-month net charge-off calculations. b.we recomputed the mathematical accuracy of the quantitative calculations used by the company. c.we evaluated the reasonableness of the company’s calculations of probable losses by comparing past historical estimates with actual loss experience in subsequent periods. d.we evaluated management’s delinquency and past-due calculations for finance receivables by re-performing the company’s loan system calculations on a sample of finance receivables and performing analytical review procedures over the company’s historical and current delinquency trends and historical losses. e.we evaluated key assumptions and qualitative factors identified by the company by comparing to internal and external sources for the consumer finance industry. /s/ rsm us llp we have served as the company's auditor since 2018.

critical audit matters the critical audit matters communicated below are the matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to the accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. a significant deficiency was noted related to the overall lack of internal controls over financial reporting. the company has weak internal controls because the company does not have employees, and the size of the company does not lend itself to the ability to design and implement effective internal controls. /s/ kwco, pckwco, pc we have served as the company’s auditor since 2011.

critical audit matters the critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.goodwill – cit medical reporting unit – refer to notes 1 and 12 to the financial statements critical audit matter description the company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. the company determines the fair value of its reporting units using the income approach utilizing the discounted cash flow method and market approach utilizing the public company market multiple method. the determination of the fair value using the discounted cash flow method requires management to make significant estimates and assumptions related to forecasts of future revenues and earnings before interest, taxes, depreciation, and amortization (ebitda) margins, and the discount rate. the determination of the fair value using the market approach requires management to make significant assumptions related to market revenue multiples and ebitda multiples from within a peer public company group. the fair value of the cit medical reporting unit exceeded its carrying values and, therefore, no impairment was recognized. 36 table of contents given the significant judgments management makes to estimate the fair value of cit medical reporting unit, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions related to forecasts of future revenues and ebitda margins, selection of the discount rate, and the selection of multiples applied to revenue and ebitda required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. how the critical audit matter was addressed in the audit our audit procedures related to the forecasts of future revenues and ebitda margins (“forecasts”), the selection of the discount rate, and the selection of comparable market revenue and ebitda multiples for the cit medical reporting unit included the following procedures: •we tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the cit medical reporting unit, such as controls related to management’s forecasts and the selection of discount rates and comparable market revenue and ebitda multiples. •we evaluated the reasonableness of management’s forecasts by comparing the forecasts to (1) historical results of the company and its industry, (2) internal communications to management, and (3) forecasted information included in industry reports of the company and companies in its peer group.•with the assistance of our fair value specialists, we evaluated the discount rate, including testing the underlying source information and the mathematical accuracy of the calculations, and developing a range of independent estimates and comparing those to the discount rate selected by management.•with the assistance of our fair value specialists, we evaluated the revenue and ebitda multiples, including testing the underlying source information and mathematical accuracy of the calculations, and evaluating the appropriateness of the company’s selection of companies in its peer public company group. acquisitions – asp henry holdings, inc. – intangible assets – refer to notes 1 and 3 to the financial statements critical audit matter description the company completed the acquisition of asp henry holdings, inc. (“henry”) for $1,605.6 million on september 1, 2021. the company accounted for the acquisition under the acquisition method of accounting for business combinations. accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their respective fair values, including trade names of $219.3 million and customer relationships of $915.9 million. the company has not yet finalized the allocation of the purchase price to the fair value of the tangible assets, intangible assets and liabilities acquired. management estimated the fair value of the trade names using the relief from royalty method and customer relationships using the multi-period excess earnings method. the fair value determination of the trade names required management to make significant estimates and assumptions related to future revenues and the selection of the royalty rate and discount rate. the fair value determination of the customer relationships required management to make significant estimates and assumptions related to future revenues attributable to existing customers, future ebitda margins and the selection of the customer attrition rate and discount rate. we identified the purchase accounting valuations of the trade names and customer relationships for henry as a critical audit matter because of the significant estimates and assumptions management makes to fair value these assets. this required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists, when performing audit procedures to evaluate the reasonableness of management’s forecasts of future revenues, future ebitda margins, and the selection of the royalty rate, customer attrition rate, and discount rate. 37 table of contents how the critical audit matter was addressed in the audit our audit procedures related to the forecasts of future revenues, future ebitda margins, and the selection of the royalty rate, customer attrition rate, and discount rate for the trade names and customer relationships included the following:•we tested the effectiveness of controls over the valuation of the trade names and customer relationships, including management’s controls over forecasts of future revenues, future ebitda margins, and the selection of the royalty rate, customer attrition rate, and discount rate. •we assessed the reasonableness of management’s forecasts of future revenues and future ebitda margins by comparing the projections to historical results and certain peer companies. •with the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology; (2) customer attrition rate by testing the mathematical accuracy of the rate used and testing the completeness and accuracy of the underlying data supporting the attrition rate assumption; (3) royalty rate by testing the mathematical accuracy of the rate and comparing it to market observations; and (4) discount rates, which included testing the source information underlying the determination of the discount rate, testing the mathematical accuracy of the calculations and developing a range of independent estimates and comparing those to the discount rate selected by management. /s/ deloitte & touche llp phoenix, arizona february 17, 2022we have served as the company’s auditor since 2017.

critical audit matter the critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates. estimate of allowance for loan losses – reserves related to loans collectively evaluated for impairment as described in notes a and c to the financial statements, the company’s allowance for loan losses (“all”) totaled $3,169,000 relating to loans collectively evaluated for impairment (general reserve). the company estimated the general reserve using the historical loss method which utilizes historical loss rates of pools of loans with similar risk characteristics applied to the respective loan pool balances. these amounts are then adjusted for certain qualitative factors related to current economic and general conditions currently observed by management. we identified the estimate of the general reserve portion of the all as a critical audit matter because auditing this portion of the all required significant auditor judgment and involved significant estimation uncertainty requiring industry knowledge and experience. the primary audit procedures we performed to address this critical audit matter included:• we tested the completeness and accuracy of the data used by management to calculate historical loss rates.• we tested the completeness and accuracy of the data used by management in determining qualitative factor adjustments, including the reasonable and supportable factors, by agreeing them to internal and external information.• we analyzed the qualitative factors in comparison to historical periods to evaluate the directional consistency in relation to the bank’s loan portfolio and local economy. /s/ wipfli llp we have served as the company’s auditor since 2006.

critical audit matters the critical audit matters communicated below are matters arising from the current period of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. preferred stock and option issuance description of the matter as described in note 8 to the consolidated financial statements, on february 3, 2019, the company issued 200,000 shares (“initial issuance”) of newly designated series b convertible preferred stock at a price of $1,000 per share (“preferred stock”) along with an option to the purchaser to purchase up to an additional 50,000 shares of preferred stock (“option”), which was exercised prior to its maturity. the $200.0 million of cash proceeds from the initial issuance was bifurcated between the option and preferred stock at the time of issuance based on a relative fair value allocation approach. auditing the valuation of the preferred stock and option was complex and required the involvement of specialists due to the judgmental nature of the assumptions (e.g., stock price volatility, maturity, discount of the conversion option) and the fair value model (e.g., lattice-model) used in the measurement process. these assumptions have a significant effect on the fair value measurement of the option. how we addressed the matter in our audit we tested controls related to the measurement and valuation of the option and preferred stock. for example, we tested controls over management’s review of the valuation estimate, the significant valuation assumptions, and the data inputs (e.g., coupon rate, conversion ratio). the procedures included testing controls over management’s evaluation of the assumptions, including reviews of the stock price volatility and the discount rate. our control testing also considered management’s review over the completeness and accuracy of the underlying data used in evaluating the measurement and valuation of the option and preferred stock. to test the measurement and valuation of the option and preferred stock, our audit procedures included, among others, evaluating the valuation methodology used, the significant assumptions discussed above, and the underlying data used by management. we involved a valuation specialist to assist with these procedures. for example, to evaluate the volatility rate, we recalculated the mathematical accuracy of the lookback period of the company’s publicly traded equity for the various terms, and, to evaluate the discount rate we calculated a synthetic credit rating using a regression analysis. 65table of contents measurement and valuation of reserve for franchisee notes receivable description of the matter as described in note 2 and 16 to the consolidated financial statements, the company has a reserve for franchisee notes receivable of $3.6 million (“reserve for franchisee notes receivables”) against a gross balance of franchisee notes receivables of $44.4 million at december 29, 2019. the reserve for franchisee notes receivables is recorded to reduce the outstanding notes receivable to their net realizable values based on a review of each franchisee’s economic performance and market conditions after consideration of the fair value of the company’s collateral rights (e.g., underlying franchisee business, property and equipment) and any guarantees. auditing the valuation of the reserve for franchisee notes receivables is challenging due to the judgment inherent in estimating the fair value of the company’s collateral rights, which has a significant effect on the measurement of the reserve for franchisee notes receivables. how we addressed the matter in our audit we tested management’s controls related to the measurement and valuation of the reserve for franchisee notes receivables. for example, we tested controls over management’s review of the progression of outstanding notes receivable and the reserve for franchisee notes receivable and the overall review of the adequacy of the reserve for franchisee notes receivable. where judgment was exercised by management, our audit procedures included testing controls over management’s evaluation of the assumptions, including the fair value of the collateral rights and guarantees where collateral was taken or personal guarantee given in connection with issuance of the applicable note. our control testing also considered management’s review over the completeness and accuracy of the underlying data used in evaluating the measurement and valuation of the reserve for franchisee notes receivables. to test the measurement and valuation of the reserve for franchisee notes receivables, our audit procedures included, among others, evaluating the status of collection of scheduled payments for outstanding notes receivables, analyzing unit economics for franchisees to identify indicators of their financial health, evaluating the estimates of collateral value, and the underlying data used by management. for example, to evaluate the estimates of collateral value, we compared management’s estimates to those of recently executed market transactions to understand potential market adjustments within the estimation process. measurement and valuation of insurance reserves description of the matter as described in note 2 to the consolidated financial statements, as of december 29, 2019, the company has $75.2 million accrued for self-insurance reserves (“insurance reserves”). the company is self-insured for certain obligations up to stated retention levels under its retention programs related to workers’ compensation, automobile, property and general liability programs and judgments and estimates are used by the company in determining the potential value associated with reported claims and for events that have occurred but have not been reported. 66table of contents auditing the valuation of the insurance reserves was highly judgmental and complex due to the significant uncertainty in estimating the potential value of reported claims, estimating the number and potential value of incurred but not reported claims and the use of actuarial valuation methods. the reserve estimate is sensitive to actuarial assumptions (e.g., future emergence of losses, incurred but not reported claims) used to estimate the ultimate liability for reported claims and to estimate the fair value of claims that have been incurred but have not been reported. how we addressed the matter in our audit we tested controls related to the measurement and valuation of the insurance reserves. for example, we tested controls over management’s review of the assumptions and methods used to establish the estimate, the underlying data, significant actuarial assumptions and the related reconciliations. to test the measurement and valuation of the insurance reserves, our audit procedures included, among others, performing transactional testing over the completeness and accuracy of claims data and vouching payments made to third parties. furthermore, we involved our actuarial specialists to assist in the evaluation of the key assumptions and methodologies used by management to determine the insurance reserves. /s/ ernst & young llp we have served as the company’s auditor consecutively since 2019.

critical audit matter the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. allowance for loan losses – economic conditions qualitative factor as more fully described in note a and note c to the consolidated financial statements, the company’s allowance for loan losses represents management’s best estimate of probable incurred losses in the loan portfolio. the allowance consists of a specific component which relates to individually impaired loans and a general component. for the general component, management performs a quantitative and qualitative analysis to determine the general reserve portion of the allowance for loan losses. the quantitative component consists of historical loss experience determined by portfolio segment and is based on the actual loss history experienced by the company. the total loan portfolio’s actual loss experience is supplemented with qualitative factors based on the risks present for each portfolio segment. these qualitative factors include consideration of the following: levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions (economic conditions); industry conditions; and effects of changes in credit concentrations. the most significant qualitative factor considered as of december 31, 2021 was the economic conditions. management exercised significant judgment when assessing the economic conditions qualitative factor in estimating the allowance for loan losses. 46report of independent registeredpublic accounting firm we identified auditing the economic conditions qualitative factor component of the allowance for loan losses as a critical audit matter because auditing management’s assessment of the economic conditions qualitative factor required significant auditor judgment.the primary audit procedures we performed to address this critical audit matter included the following:•evaluated the relevance and reliability of data used in the development of the economic conditions qualitative factor•evaluated management’s judgments and assumptions used to determine the economic conditions qualitative factor for reasonableness•performed data validation of inputs and tested mathematical accuracy of management’s calculation of the economic conditions qualitative factor /s/crowe llp crowe llp we have served as the company’s auditor since 1992.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. goodwill impairment assessment—north america and europe reporting units as described in notes 1 and 7 to the consolidated financial statements, the company’s consolidated goodwill balance and goodwill balance for the north america and europe reporting units were $20,040 million, $6,474 million and $8,544 million, respectively, as of december 31, 2021. as disclosed by management, goodwill is assigned to reporting units and tested for impairment at least annually, in the second quarter of the fiscal year, and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. during the second quarter of 2021, teva conducted a quantitative analysis of the north america and europe reporting units as part of its annual goodwill impairment test and utilized the assistance of an independent valuation expert. no goodwill impairment charge was recorded during the second quarter of 2021. management determines the fair value of its reporting units using the income approach. within the income approach, the method used is the discounted cash flow method. for the impairment assessments, management started with a forecast of all the expected net cash flows associated with the reporting unit, which includes the application of a terminal value, and then applied a discount rate to arrive at a net present value amount. key estimates include the revenue growth rates (including revenue for austedo) taking into consideration industry and market conditions, terminal growth rate and the discount rate. market conditions for the north america reporting unit include estimates related to the resolution of the opioids and price fixing litigation. the principal considerations for our determination that performing procedures relating to the goodwill impairment assessment for the north america and europe reporting units is a critical audit matter are (i) the significant judgment by management when determining the fair value of the reporting units; (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions related to the revenue growth rates, discount rate, terminal growth rate and estimates related to the resolution of the opioid, pricing and market allocation litigation for the north america reporting unit; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s goodwill impairment assessment, including controls over the 87 table of contents valuation of the north america and europe reporting units. these procedures also included, among others, (i) testing management’s process for determining the fair value estimate; (ii) evaluating the appropriateness of the discounted cash flow model; (iii) testing the completeness, accuracy and relevance of underlying data used in the model; and (iv) evaluating the significant assumptions used by management related to the revenue growth rates, discount rate, terminal growth rate and estimates related to the resolution of the opioid, pricing and market allocation litigation for the north america reporting unit. evaluating management’s assumptions related to the revenue growth rates and terminal growth rate involved evaluating whether the assumptions used by management were reasonable considering (i) the current and past performance of the reporting unit, (ii) the consistency with external market and industry data, and (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit. evaluating management’s assumption related to estimates related to the resolution of the opioid, pricing and market allocation litigation for the north america reporting unit involved obtaining and evaluating letters of audit inquiry with internal and external legal counsel and discussing the status of significant known actual and potential litigation with the company’s internal and external legal counsel. professionals with specialized skill and knowledge were used to assist in the evaluation of management’s discounted cash flow model and the discount rate assumption. sales reserves and allowances (“sr&a”)—rebates, chargebacks and medicaid in the united states as described in notes 1 and 3 to the consolidated financial statements, the amount of consideration to which the company expects to be entitled varies as a result of rebates, chargebacks, and other sr&a that the company offers to its customers and their customers, as well as the occurrence or nonoccurrence of future events, including milestone events. a minimum amount of variable consideration is recorded by the company concurrently with the satisfaction of performance obligations to the extent that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. as of december 31, 2021, consolidated sr&a for rebates, chargebacks and medicaid were $3,594 million. provisions for chargebacks involve estimates of usage by retailers and other indirect buyers with varying contract prices for multiple wholesalers. the provision for chargebacks varies in relation to changes in product mix, pricing and the level of inventory at the wholesalers. provisions are calculated using historical chargeback experience and/or expected chargeback levels for new products and anticipated pricing changes. provisions for rebates are estimated based on the specific terms in each agreement based on historical trends and expected sales. provisions for medicaid are based on historical trends of rebates paid, as well as on changes in wholesaler inventory levels and increases or decreases in sales. the principal considerations for our determination that performing procedures relating to sr&a for rebates, chargebacks and medicaid in the united states is a critical audit matter are (i) the significant judgment by management due to the significant measurement uncertainty involved in developing the reserves, as the reserves are based on assumptions developed using contractual and mandated terms with customers, historical experience, and projected market conditions in the us; and (ii) a high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s significant assumptions, related to wholesaler inventory levels and expected chargeback levels. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to sr&a for rebates, chargebacks and medicaid in the united states, including controls over the assumptions used by management to estimate the reserves. these procedures also included, among others, (i) developing independent estimates of the reserves using third party information, the contractual or mandated terms of the specific rebate or chargeback programs, and the historical trends of payments and comparing the independent estimates to management’s estimates; (ii) evaluating the reasonableness of significant assumptions used by management related to wholesaler inventory levels and expected chargeback levels; and (iii) testing the completeness, accuracy, and relevance of underlying data used to estimate the reserves, including testing actual claims processed by the company. 88 table of contents opioid, pricing and market allocation litigation in the united states as described in notes 1, 11 and 12 to the consolidated financial statements, management evaluates litigation contingencies and records a provision in its financial statements to the extent that it concludes that a contingent liability is probable and the amount thereof is estimable. such contingencies include those related to opioid, pricing and market allocation litigation in the united states. as of december 31, 2021, the company’s consolidated provision for legal settlements and loss contingencies was $2,710 million, which included an estimated settlement provision recorded in connection with the remaining opioid cases. the principal considerations for our determination that performing procedures relating to opioid, pricing and market allocation litigation in the united states is a critical audit matter are the significant judgment by management when assessing the likelihood of a loss being incurred and when determining whether a reasonable estimate of the loss or range of loss for each claim can be made, which in turn led to high degree of auditor judgment, subjectivity and effort in performing procedures and evaluating management’s assessment of the loss contingencies associated with these legal matters. in addition, the audit effort involved the use of professionals with specialized skill and knowledge. addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to management’s evaluation of the loss contingencies relating to opioid, pricing and market allocation litigation in the united states, including controls over determining whether a loss is probable and whether the amount of loss can be reasonably estimated, as well as financial statement disclosures. these procedures also included, among others, (i) gaining an understanding of the company’s process around the accounting and reporting for these legal matters; (ii) obtaining and evaluating the letters of audit inquiry with internal and external legal counsel; (iii) discussing the status of significant known actual and potential litigation with the company’s internal legal counsel; (iv) evaluating the reasonableness of management’s assessment regarding whether a loss is probable and whether the amount of loss can be reasonably estimated; and (v) evaluating the sufficiency of the company’s litigation contingency disclosures. professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of the factual investigation performed by management and their advisors with respect to pricing and market allocation allegations. /s/ kesselman & kesselman kesselman & kesselman certified public accountants (isr.) a member of pricewaterhouse coopers international limited tel-aviv, israel february 9, 2022 we have served as the company’s auditor since at least 1976.

critical audit matter the critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. valuation of common stock warrant liabilities as described further in note 9 to the consolidated financial statements, the company had $4 million of common stock warrant liabilities as of december 31, 2021. at each balance sheet date, management determines the estimated fair value of common stock warrant liabilities using a monte carlo valuation method. the following qualitative information is used by management to determine the fair value measurement of the common stock warrant liabilities: stock price, exercise price, risk-free rate, volatility, and the warrants term in years. we identified the valuation of common stock warrant liabilities as a critical audit matter. the principal considerations for our determination that the valuation of common stock warrant liabilities is a critical audit matter are that (i) there was significant judgment by management when determining the estimated volatility, risk-free interest rate, and the expected life of the common stock warrants, and (ii) the audit effort involved the use of professionals with specialized skill and knowledge to assist in performing procedures and evaluating the audit evidence obtained from these procedures. our audit procedures related to the valuation of common stock warrant liabilities included the following, among others. ● we tested the design of controls over the valuation of common stock warrant liabilities and gained an understanding of the valuation credentials and industry expertise of the third-party valuation group and valuation methodologies used. ● we tested the schedule of fully dilutive shares used to value common stock warrants by confirming outstanding common stock with the third-party transfer agent and testing the conversion value of preferred stock and dividend issuances. ● with the assistance of grant thornton internal valuation specialists, we tested management’s and the third-party’s process for determining the fair value of common stock warrants, including evaluating significant assumptions used, testing supporting documents, and assessing reasonableness by comparing to historical trends and industry expectations. certain key inputs/assumptions tested by us included the following: o volatility o risk-free interest rate o warrant terms /s/ grant thornton llp we have served as the company’s auditor since 2018.

critical audit matter the critical audit mattercommunicated below is a matter arising from the current period audits of the financial statements that was communicated or required tobe communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statementsand (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alterin any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below,providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. going concern – disclosure the financial statementsof the company are prepared on a going concern basis, which assumes that the company will continue in operation for the foreseeable futureand, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations. as noted in “going concern considerations” above, the company has a history of recurring net losses, a significant accumulated deficit and currentlyhas net working capital deficit. the company has contractual obligations, such as commitments for repayments of accounts payable, accruedliabilities, notes payable, convertible notes payable, and amounts due under capital lease (collectively “obligations”). currently,management’s forecasts and related assumptions illustrate their ability to meet the obligations through management of expenditures,implementation of a new operational direction, obtaining additional debt financing, and issuance of capital stock for additional fundingto meet its operating needs. should there be constraints on the ability to implement its new business operations or access financing throughstock issuances, the company will continue to manage cash outflows and meet the obligations through debt financing. f-2 we identified management’sassessment of the company’s ability to continue as a going concern as a critical audit matter. management made judgments to concludethat it is probable that the company’s plans will be effectively implemented and will provide the necessary cash flows to fund the company’s obligations as they become due. specifically, the judgments with the highest degree of impact and subjectivity in determiningit is probable that the company’s plans will be effectively implemented include its ability to manage expenditures, its abilityto access funding from the capital market, its ability to obtain debt financing, and the successful implementation of its new operationaldirection. auditing the judgments made by management required a high degree of auditor judgment and an increased extent of audit effort. addressing the matterinvolved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements.these procedures included the following, among others: (i) evaluating the probability that the company will be able to access fundingfrom the capital market; (ii) evaluating the probability that the company will be able to manage expenditures (iii) evaluating the probabilitythat the company will be able to obtain debt financing, and (iv) evaluating the planned implementation of its new business operationaldirection. /s/ pinnacle accountancy group of utah we have served as the company’s auditor since 2021.

critical audit matter the critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matters or on the account or disclosure to which they relate.65table of contents renewable identification numbers (“ri ns”) obligation description of the matter as of december 31, 2021, the company’s ri ns obligation was $278.9 million, comprised of the current obligation of $200.1 million and the long-term obligation of $78.8 million. as described in notes 3 and 7 to the consolidated financial statements, the ri ns obligation is an estimated provision for the purchase of ri ns in order to satisfy the u.s. environmental protection agency’s (“epa”) annual requirement to blend renewable fuels into certain transportation fuel products pursuant to the renewable fuel standard.auditing management’s ri ns obligation was complex and judgmental due to estimation uncertainty in the company’s determination of the fair value of the ri ns obligation under the renewable fuel standard. the complexity and estimation uncertainty was primarily due to the calculation of the ri ns shortage and the independent pricing assumptions, respectively.how we addressed the matter in our audit we obtained an understanding, evaluated the design, and tested the operating effectiveness of controls over the ri ns obligation estimation process. for example, we tested controls over management’s review of the methodology used to calculate the obligation and the ri ns shortage and independent pricing assumptions, as noted above.to audit the company’s ri ns obligation, our audit procedures included, among others, evaluating the appropriateness of management’s methodology to calculate the ri ns obligation under the renewable fuel standard including testing the completeness and accuracy of the underlying data used by management in estimating the fair value of the obligation. we involved our specialists to assist in our evaluation of management’s methodology. additionally, we compared the spot prices utilized by the company in their estimate of the ri ns obligation to an independent pricing source. we have served as the company’s auditor since 2002.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 48 table of contents revenue on certain contracts recognized over time – refer to notes 2 and 3 to the financial statements critical audit matter description the company recognizes revenue from the majority of its installation contracts when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the company expects to be entitled to in exchange for those goods or services. for contracts that are not complete at the reporting date (“uncompleted contracts”), the company recognizes revenue over time utilizing a cost-to-cost input method, as the company believes this represents the best measure of when goods and services are transferred to the customer. when this method is used, the company estimates the cost to complete individual contracts and records as revenue that portion of the total contract price that is considered complete based on the relationship of costs incurred to date to total anticipated costs. under the cost-to-cost method, the estimated costs to complete each contract requires judgment and can change throughout the duration of a contract due to contract modifications and other factors impacting job completion. the costs related to earned revenue include all direct material and labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools and repairs. the company’s estimation process for determining revenues for uncompleted contracts accounted for under the cost-to-cost approach is based upon historical experience, the professional judgment and knowledge of the company’s project management, operational and financial professionals, and an assessment of the key underlying factors, such as the value of executed contracts, change orders, and related contract costs, that may impact the revenues and costs of uncompleted contracts. given the judgments necessary to estimate the relationship between executed contract value and contract costs, auditing the amount of revenue recognized for uncompleted contracts involves a high degree of auditor judgment. how the critical audit matter was addressed in the audit our audit procedures related to estimated revenue recognized on uncompleted contracts included the following, among others: •we tested the effectiveness of the company’s controls over the determination of uncompleted contract revenue, including those over estimated total costs and revenues recognized through performance obligations. •we inquired of project managers, observed selected projects, and evaluated the reasonableness of management’s ability to accurately estimate costs by comparing incurred contract costs on uncompleted contracts to management’s projections. •we compared accounting records to executed contracts and change orders to verify accuracy of contract values in the company’s estimates. •we considered the impact of change orders and other related contract costs that may impact the determination of revenue and estimated costs to completion. •we tested the mathematical accuracy of the company’s calculation of revenue recognized over time. •we selected a sample of contract costs incurred as of december 31, 2019, agreed the costs to supplier invoices or other supporting documents, and evaluated whether the costs were properly allocated to the contracts included in management’s calculation of revenue recognized over time. •we developed an expectation of revenue for uncompleted contracts with remaining performance obligations as of december 31, 2019 based on (1) consideration of incurred contract costs and (2) results realized by the company on completed contracts. we compared this expectation to the company’s revenue recognized on uncompleted contracts at december 31, 2019. /s/ deloitte & touche llp columbus, ohio february 27, 2020 we have served as the company’s auditor since 2013.

critical audit matters thecritical audit matter communicated below is a matter arising from the current period audit of the financial statements that werecommunicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are materialto the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication ofcritical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, bycommunicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts ordisclosures to which it relates. revenue recognition – estimated total contract costs descriptionof the matter asdescribed in note 2 and note 5 to the financial statements the company recognizes revenue from non-refundable, upfront fee allocatedto a license, when such license is transferred to the customer through collaboration arrangements and the customer is able touse and benefit from the license. for licenses that are combined with other promises, the company utilizes judgment to assessthe nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over timeor at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. the company uses the input method, with estimated costs to satisfy the performance obligation being the input, as the best measureof the transfer of control of the performance obligation. managementuses significant assumptions and estimates when determining the total estimated costs expected upon satisfying the performanceobligation, which in turn led to significant auditor judgment, subjectivity and effort in performing procedures to evaluate thetotal estimate of the costs expected upon satisfying the performance obligation. how we addressed the matter in our audit addressingthe matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on theconsolidated financial statements. these procedures included, among others, (i) obtaining an understanding ofmanagement’s process in developing the cost estimates (ii) discussion with the company’s clinical and manufacturingpersonnel to understand the estimates used in developing the cost estimates (iii) evaluating the appropriateness of changesto management’s estimates of total costs to satisfy the performance obligation; (iv) performing retrospective reviewof the estimates to determine the effectiveness of management’s estimation process; (v) evaluating whether the cost estimatesused by management were reasonable considering consistency with company-specific data; and (vi) determining the reasonablenessof the inputs, assumptions and model used in management’s estimation process.. /s/marcum llp marcumllp wehave served as the company’s auditor since 2015.

critical audit matters the critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.revenue recognition - identifying and evaluating terms and conditions in contracts as described in note 2 to the consolidated financial statements, the company applies the five step revenue recognition framework to recognize revenue from contracts with customers. management applies judgment in identifying and evaluating any terms and conditions in contracts which may impact revenue recognition. the company has $161 million of total revenue for the year ended september 30, 2020 generated from contracts with customers.the principal considerations for our determination that performing procedures relating to revenue recognition, specifically the identification and evaluation of terms and conditions in contracts, is a critical audit matter are the significant judgment by management when identifying and evaluating terms and conditions in contracts that impact revenue recognition, which in turn led to a high degree of auditor judgment, subjectivity and effort in performing procedures to evaluate whether terms and conditions in contracts were appropriately identified and evaluated by management.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of controls relating to the revenue recognition process, including controls relating to the identification and evaluation of terms and conditions in revenue contracts that impact revenue recognition. these procedures also included, among others, evaluating the appropriateness of management’s identification and evaluation of the terms and conditions in revenue contracts by examining contracts with customers on a test basis and evaluating management’s determination of the impact of those terms and conditions on revenue recognition.convertible note transaction as described in notes 2 and 9 to the consolidated financial statements, the company issued $172.5 million aggregate principal amount of 2.652% convertible senior notes in may 2020. the nature of the convertible senior notes (the “notes”) required management to separate the notes into liability and equity components. the carrying amount of the liability component is calculated by measuring the fair value of a similar debt instrument that does not have an associated convertible feature. the carrying amount of the equity component representing the conversion option was determined by deducting the fair value of the liability component from the principal amount of the notes. the principal considerations for our determination that performing procedures relating to the convertible note transaction is a critical audit matter are (i) the significant judgment by management in determining the fair value of the notes, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the estimated interest rate of a similar debt instrument that does not have an associated convertible feature, which is a significant assumption in determining the fair value of the notes, as well as the accounting for the conversion option and other embedded features, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. these procedures included testing the effectiveness of the controls over the accounting for the convertible notes transactions as well as valuation of the convertible notes, including the control over the management’s valuation method, significant assumptions, and data. these procedures also included, among others, reading the agreements and evaluating the accounting for the convertible notes transaction, evaluating the methodology used by 55table of contentsmanagement to determine the liability by measuring the fair value of a similar note that does not have an associated conversion feature, and evaluating management’s selection of the interest rate of a comparable non-convertible note. professionals with specialized skill and knowledge were used to assist in evaluating whether the interest rate of a comparable non-convertible note used by management was reasonable considering consistency with external market data./s/ pricewaterhouse coopers llp san jose, california november 20, 2020 we have served as the company’s auditor since 2007.

critical audit matters the critical audit matter communicated below arises from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which they relate.fair value of investments in life insurance policies as described further in note 5 and note 7 to the financial statements, the fair value of the company’s investments in life insurance policies is determined as the net present value of the life insurance portfolio’s future expected cash flows (policy f-1table of contentsbenefits to be received and required future premium payments) that incorporates life expectancy estimates obtained when the policy was purchased and current discount rate assumptions. we identified fair value of investments in life insurance policies as a critical audit matter.the principal considerations for our determination that fair value of investments in life insurance policies is a critical audit matter are that this asset is valued using unobservable inputs that require a high level of management judgment and fluctuations to such inputs could have a material impact on the financial statements. as a result, obtaining sufficient appropriate audit evidence related to the fair value measurement required significant auditor judgement to evaluate the reasonableness of unobservable inputs used in the valuation.our audit procedures related to the fair value of investments in life insurance policies included the following, among others:•we tested the design and operating effectiveness of relevant controls over management’s process relating to the fair value measurement of investments in life insurance policies.•with the assistance of external valuation specialists, we considered results of the company’s actual-to-expected (“a2e”) mortality cash flow experience, available third-party service provider reports for future premium streams, available market information, other available information to further corroborate overall valuation and sampled life insurance policy information in order to evaluate the following key fair value inputs:◦life expectancy, utilizing portfolio mortality multiplier methodology which is updated based on the a2e analysis◦estimated premium payments◦age of insured◦face amount of policies◦discount rate/s/ grant thornton llp we have served as the company’s auditor since 2020.

critical audit matters the critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which they relate.valuation of investments as described in notes 2, 3, 4 and 6 to the consolidated financial statements, the company’s investments consist of privately held debt and equity instruments that lack observable market prices. all of company’s investments are measured at fair value using unobservable inputs and assumptions, and as such the company’s investments as of december 31, 2020 are classified as level 3 within the fair value hierarchy as described in note 6. determining the fair value of the level 3 investments requires management to make significant judgments about the valuation methodologies (e.g. market approach vs. income approach) and inputs and assumptions used in the fair value calculation, including, but not limited to, revenue and ebitda multiples, market yields, discounts for lack of marketability, underlying cash flows, and the impact of economic conditions brought about by the covid-19 pandemic. as of december 31, 2020, total level 3 investments had a fair value of $633.34 million. we identified the valuation of investments as a critical audit matter because of the judgments necessary for management to select and apply valuation techniques and assumptions, the high degree of auditor judgment involved, and the extensive audit effort involved in testing the valuations. our audit procedures related to the valuation of the company’s investments included the following, among others:controlled and non-controlled investments•we obtained an understanding of and evaluated the methods and significant assumptions management used to value the company’s investment portfolio. f-1•we performed an evaluation of certain valuation inputs (e.g. portfolio company revenue and ebitda) used in the company’s december 31, 2019 valuations by comparing those key inputs used in the prior year valuation to portfolio company 2019 audited financial statements and/or schedules prepared by the portfolio company for a sample of investments. •we tested the completeness and accuracy of information used in the valuations through inspection of portfolio company financial statements and/or schedules prepared by the portfolio company.•we obtained management’s valuation analyses and considered the qualitative considerations made in determining each valuation, including, but not limited to, understanding portfolio company outlook, underlying cash flows, macroeconomic factors, liquidity and leverage characteristics, and other factors. we then compared this information to the valuation calculation in assessing the reasonableness of the fair value calculations. •with the assistance of our valuation specialists, we evaluated the reasonableness of the methods and assumptions used by management, including the validity of observable market data used in the valuation (e.g. comparable guideline public company multiples) as well as market yields (including discounts for lack of marketability). for certain investments, with the assistance of our valuation specialists, we developed a range of independent enterprise value estimates and evaluated against the enterprise values determined by management. additionally, we considered the external specialist report engaged by management in valuing the company’s certain privately held investments.sba unguaranteed non-affiliate investments – performing loans and non-performing loans•we obtained an understanding of and evaluated the methods and assumptions management uses to value the sba unguaranteed non-affiliate investments performing and non-performing loans. •we tested the completeness and accuracy of information used in the valuations by agreeing the total amount in the schedules to the trial balance. •with the assistance of our valuation specialists, we evaluated the reasonableness of the methods and assumptions used by management in the valuation of performing loans (discount rate, default rate, prepayment rate, cost of servicing, etc.) and performed a recalculation for a sample of loans to ensure validity of the valuation model. •with the assistance of our valuation specialist, we evaluated the reasonableness of the methods and assumptions used by management in the valuation of non-performing loans (prepayment rate, probability of default, time to liquidate and recovery rate). valuation of servicing assets as described in notes 2, 5 and 6 to the consolidated financial statements, servicing assets are measured at fair value. company’s servicing assets are measured at fair value using unobservable inputs and assumptions, and as such the company’s servicing assets as of december 31, 2020 are classified as level 3 within the fair value hierarchy as described in note 2. determining the fair value of the level 3 servicing assets requires management to make significant judgments about the valuation methodologies and inputs and assumptions used in the fair value calculation, including, but not limited to, servicing costs, default rate, prepayment rate, and the impact of economic conditions brought about by the covid-19 pandemic. as of december 31, 2020, total level 3 servicing assets had a fair value of $26.06 million. we identified the valuation of servicing assets as a critical audit matter because of the judgments necessary for management to select and apply valuation techniques and assumptions, the high degree of auditor judgment involved, and the extensive audit effort involved in testing the valuations. our audit procedures related to the valuation of the servicing assets included the following, among others:•we obtained an understanding of and evaluated the methods and assumptions management uses to value the servicing assets. •we tested the completeness and accuracy of information used in the valuations by agreeing the total principal balance of the loans sold in the schedules to the loan subledger. •with the assistance of externally engaged valuation specialist, developed an independent estimate of fair value for servicing assets as of december 31, 2020.•we evaluated the significant assumptions (e.g. discount rate, prepayment rate, default rate and cost of service) used by externally engaged valuation specialist for reasonableness./s/ rsm us llp we have served as the company's auditor since 2013.

critical audit matters thecritical audit matters communicated below are matters arising from the current period audit of the consolidated financial statementsthat were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that arematerial to the consolidated financial statements and (2) involved especially challenging, subjective, or complex judgments. the communicationof critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we arenot, by communicating the critical audit matters below, providing a separate opinion on the critical audit matters or on the accountsor disclosures to which they relate. f-1 business combinations critical audit matter description asdescribed in notes 2 and 3 to the consolidated financial statements, the company accounts for its business combination using the acquisitionmethod of accounting. under the acquisition method, the assets acquired, and the liabilities assumed, and the consideration transferredare recorded at the date of acquisition at their respective values. finite-lived intangible assets are amortized over the expected lifeof the asset. any excess of the purchase price over the estimated fair values of the net assets acquired is recorded as goodwill. the company purchased j.p. kush and associates, inc. for a total purchase price of $3,644,166 in 2021, which resulted in $2,064,200 of finite-livedintangible assets and $1,288,552 of goodwill. the company utilized a valuation consultant to calculate the purchase price allocation.the process for estimating fair values of identifiable intangible assets and certain tangible assets of the j.p. kush and associates, inc. acquisitionrequires management to make significant estimates and assumptions, including estimating future cash flows, selection of different valuationmethods, volatility factors and discount rates. weidentified the estimation of the identifiable intangible assets and purchase price allocation as a critical audit matter. auditing management’sjudgments regarding the selection of valuation methods, significant estimates related to assumptions including the selection of the discountrates, volatility factors and future cash flows, required a high degree subjectivity and an increased extent of effort, including theneed to involve a firm employed valuation specialists. howthe critical matter was addressed in the audit theprimary audit procedures we performed to address this critical audit matter included: -obtaining an understanding over the company's business combinations process, including management's review of the significant assumptionsand determination of fair value methods utilized. -utilizing a firm employed valuation specialist with the skills and knowledge to assist in: (i) evaluating the reasonableness of thepurchase price allocation methodology used by management to determine the fair value of the consideration transferred and the tangibleassets acquired, (ii) evaluating management's significant assumptions including comparing to third party market data, (iii) performingrecalculations of the methods utilized by management. -testing the completeness and accuracy of the underlying data utilized by management. warrant commitment critical audit matter description asdescribed in notes 2 and 13 to the consolidated financial statements, on december 22, 2021 the company entered into a securities purchase agreement with several institutional buyers for the purchase of common shares, preferred shares and series b warrants. under asc 480, distinguishing liabilities from equity, it is required to be initiallymeasured and subsequently remeasured, at fair value as an asset or liability with changes in fair value recognized in earnings. an option pricing model wasutilized to calculate the fair value of the warrant commitment as of december 22, 2021 and december31, 2021. the company recorded $17,652,808 of non-operating unrealized losses within recognition and change in fair value of warrantcommitment on the consolidated statement of operations for the year ended december31, 2021, related to initial recognition of the warrant commitment and subsequent changes in its fair value through december 31, 2021. f-2 weidentified managements’ judgments used to determine the fair value of the warrant commitment as a critical audit matter. auditing management’s judgment and assumptions related to the options pricing model inputs including the selection of volatility factors,expected term, risk-free rate and asset price, involved a high degree of auditor judgement and an increased extent of effort, including the need to involve a firm employed valuation specialists. howthe critical matter was addressed in the audit theprimary audit procedures we performed to address this critical audit matter included: -obtaining an understanding over the company's capital raise process, including management's review of the securities purchase agreement,significant assumptions and determination of fair value methods utilized. -utilizing a firm employed valuation specialist with the skills and knowledge to assist in: (i) evaluating the reasonableness of the optionspricing model used by management to determine the fair value of the warrant commitment, (ii) evaluating management's significant assumptionsincluding comparing to third party market data and warrant expectation studies, recalculate common stock volatility (iii) performing recalculationsof the model utilized by management and recalculations of inputs under other option pricing models to compare values. -testing the completeness and accuracy of the underlying data utilized by management. wehave served as the company’s auditor since 2020.

critical audit matter the critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. the communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. oil and gas properties, depletion and amortization and impairment of long-lived assets - refer to note 1 to the financial statements critical audit matter description as described in note 1 to the financial statements, oil and gas properties are accounted for using the successful efforts method. depletion and amortization of the cost of proved oil and gas properties are calculated using the units-of-production method. proved developed reserves are used as the base for depleting capitalized costs associated with successful exploratory well costs, development costs and related facilities, other than offshore platforms. the sum of proved developed and proved undeveloped reserves is used as the base for depleting or amortizing leasehold acquisition costs and costs to construct offshore platforms and associated asset retirement costs. also, the fund reviews the carrying value of its oil and gas properties for impairment whenever events and circumstances indicate that the recorded carrying value of its oil and gas properties may not be recoverable. recoverability is evaluated by comparing estimated future net undiscounted cash flows to the carrying value of the oil and gas properties at the time of the review. if the carrying value exceeds the estimated future net undiscounted cash flows, the carrying value of the oil and gas properties is impaired, and written down to fair value. f-2 table of contents estimates of proved reserves are key components of the fund’s most significant estimates involving its rate for recording depletion and amortization and estimated future cash flows of oil and gas properties used to test for impairment. annually, the fund engages an independent petroleum engineering firm to perform a comprehensive study of the fund’s proved properties to determine the quantities of reserves and the period over which such reserves will be recoverable. the fund’s estimates of proved reserves are based on the quantities of oil and natural gas that geological and engineering data demonstrate, with reasonable certainty, to be recoverable in future years from known reservoirs under existing economic and operating conditions. the fund’s oil and gas properties, net balance was $8 million as of december 31, 2021 and depletion and amortization expense recognized was $2.3 million for the period ended december 31, 2021. no impairment was recognized during 2021. we identified the impact of the oil and natural gas reserve quantities on the oil and gas properties and depletion and amortization financial statement line items and the evaluation of impairment of long-lived assets as a critical audit matter due to the significant judgments made by the fund. the significant judgments made by the fund include the use of specialists to develop and evaluate the fund’s oil and natural gas reserve quantities, future cash flows, reserve risk weightings, future development costs, and future oil and natural gas commodity prices. auditing these significant judgments required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists. how the critical audit matter was addressed in the audit our audit procedures related to the fund’s estimates and assumptions related to oil and natural gas reserve quantities included the following, among others: • we evaluated the reasonableness of the fund’s oil and natural gas reserve quantities by performing the following procedures:   o comparing the fund’s oil and natural gas reserve quantities to historical production volumes. o evaluating the reasonableness of the methodology used and the production volume decline curve. o understanding the experience, qualifications and objectivity of management’s expert, an independent petroleum engineering firm. o comparing forecasts of proved undeveloped oil and natural gas reserves to historical conversions of proved undeveloped oil and natural gas reserves and communication from third-party well operators. • we evaluated management’s assessed reserve risk weighting associated with the development of proved, probable and possible oil and natural gas reserve quantities by comparing the assessed risk to industry surveys.   • we evaluated the reasonableness of future development costs by comparing such costs to the approval for expenditures, historical well cost data and communication from third-party well operators. f-3 table of contents    • we evaluated, with the assistance of our fair value specialists, the reasonableness of future oil and natural gas commodity prices by performing the following procedures:   o understanding the methodology utilized by management for development of the future oil and natural gas commodity prices. o comparing the future oil and natural gas commodity prices to an independently determined range of prices.   o comparing management’s future oil and natural gas commodity prices to published forward pricing indices and third-party industry sources. • we evaluated the future oil and natural gas commodity prices by comparing future oil and natural gas commodity price differentials to historical realized price differentials.   /s/ deloitte & touche llp parsippany, new jersey february 28, 2022 we have served as the fund's auditor since 2008.