Given the complexity involved in determining the significant assumptions used in calculating the GTN U.S. rebate accruals, auditing these estimates involved especially subjective judgment. Our audit procedures related to GTN U.S. rebate accruals included the following, among others: As more fully disclosed in Note 7 to the financial statements, the Company recognizes certain income tax benefits associated with transactions between its U.S. operating companies and related foreign affiliates. These income tax benefits are estimated based on transfer pricing agreements, third-party transfer pricing studies, and the Company’s judgment as to whether it is more-likely-than-not the benefits will be realized. Tax benefits that may not ultimately be realized by the Company, as determined by its judgment, are accrued for as unrecognized tax benefit liabilities. The amounts recognized as unrecognized tax benefit liabilities related to U.S. transfer pricing may be significantly affected in subsequent periods due to various factors, such as changes in tax law, identification of additional relevant facts, or a change in the Company’s judgment regarding measurement of the tax benefits upon ultimate settlement with the taxing authorities. Given the complexity associated with assumptions used to calculate unrecognized tax benefit liabilities related to U.S. transfer pricing, coupled with the significant judgments made by the Company in their determination, auditing these estimates involved especially subjective judgment. Our audit procedures related to unrecognized tax benefit liabilities related to U.S. transfer pricing included the following, among others: • We evaluated the appropriateness and consistency of the Company’s methods and assumptions used in the identification, recognition, measurement, and disclosure of unrecognized tax benefit liabilities. • We tested the effectiveness of internal controls over the review of the underlying assumptions and key inputs into the Company’s process to calculate unrecognized tax benefit liabilities. • We obtained an understanding of the Company’s related party transactions and transfer pricing policies. • We tested the mathematical accuracy of the unrecognized tax benefit liabilities. • We tested the completeness of unrecognized tax benefit liabilities. • We tested the reasonableness of the underlying tax positions and amounts accrued for a selection of unrecognized tax benefit liabilities by reviewing the Company’s evaluation of the relevant facts and tax law associated with the tax position, and testing the significant assumptions and inputs used to calculate the unrecognized tax benefit liabilities by reference to third party data, information produced by the entity, our understanding of transfer pricing principles and tax laws, and inquires of management. • We evaluated whether the Company had appropriately considered new information that could significantly change the recognition, measurement or disclosure of the unrecognized tax benefit liabilities. • We involved income tax specialists and audit professionals with industry experience to assist us in performing our auditing procedures. • We evaluated the appropriateness and consistency of the Company’s methods and assumptions used to calculate GTN U.S. rebate accruals. • We tested the effectiveness of internal controls over the review of the Company’s estimation model, including underlying assumptions and key inputs into the Company’s process to calculate GTN U.S. rebate accruals. • We tested the mathematical accuracy of GTN U.S. rebate accruals. • We tested significant assumptions and key inputs used to calculate GTN U.S. rebate accruals. • We evaluated the Company’s ability to estimate GTN U.S. rebate accruals accurately by comparing actual amounts incurred for GTN U.S. rebate accruals to historical estimates. • We tested the overall reasonableness of the GTN U.S. rebate accruals recorded at period end by developing an expectation for comparison to actual recorded balances. • We involved audit professionals with industry and quantitative analytics experience to assist us in performing our auditing procedures. Taxes - Unrecognized Tax Benefit Liabilities for U.S. Transfer Pricing - Refer to “Note 7- Income Taxes” to the financial statements How the Critical Audit Matter Was Addressed in the Audit Critical Audit Matter Description How the Critical Audit Matter Was Addressed in the Audit 124