What changed in this filing

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Item 1A. Risk Factors

2025-02-26 compared with 2024-02-28 · 195 added, 174 removed, 353 unchanged (51% of the section changed)

R ISKS R ELATED T O O U R B USINES S

We have expanded our international operations, which subjects us to economic, political and other risks.

With the Chubb Acquisition in January 2022, our international operations have been greatly expanded.

We have significantly expanded our pre-Chubb Acquisition presence in Europe and Canada (including in the United Kingdom ("U.K.") and the Netherlands), and we have acquired ongoing operations in new markets across Europe and the Asian-Pacific region (including France, Australia, and Hong Kong).

R ISKS R ELATED T O O U R B USINESS

We operate in international markets, which subjects us to economic, political and other risks.

Approximately 38% of our revenue was derived from areas outside the United States for the year ended December 31, 2024.

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• changes to existing or new domestic or international tax laws;

• trade protection measures, such as tariff increases, and import and export licensing and control requirements;

• trade protection measures, such as tariff increases, and import and export licensing and control requirements, which may, among other things, increase commodity prices of materials used as components of supplies or materials utilized in all of our operations, particularly in light of the stated trade policies of the new U.S.

presidential administration;

• potentially negative consequences from fluctuations in foreign currency exchange rates;

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• laws and regulations governing our employee relations, including occupational health and safety matters and employee compensation and benefits matters;

• our ability to comply with, and the costs of compliance with, anti-bribery laws such as the Foreign Corrupt Practices Act and similar local anti-bribery laws;

• uncertainties regarding legal or judicial systems, including inconsistencies between and within laws, regulations and decrees, and judicial application thereof, and delays in the judicial process;

• difficulty in recruiting and retaining trained personnel in our international operations;

• our ability to comply with, and the costs of compliance with, laws and regulations governing international business operations, including restrictions on transactions with certain countries, governments, entities and individuals subject to U.S.

economic sanctions or export restrictions, and anti-bribery laws such as the Foreign Corrupt Practices Act and similar local anti-bribery laws.

Our international operations subject us to laws, regulations, and interpretations which are complex, may restrict our business dealings, and are frequently changing.

For example, we must comply with applicable trade sanctions and export controls, including those administered by the U.S.

Department of Treasury's Office of Foreign Assets Control and the U.S.

Commerce Department's Bureau of Industry and Security.

In addition, applicable U.S.

anti-corruption laws, including but not limited to the U.S.

Foreign Corrupt Practices Act (“FCPA”) and the U.K.

Foreign Corrupt Practices Act and the U.K.

Bribery Act, generally prohibit us from, among other things, corruptly making payments for the purpose of obtaining or retaining business.

We pursue opportunities in certain parts of the world and in certain industries that may experience corruption, and in certain circumstances, compliance with these laws may conflict with longstanding local customs and practices.

Our policies mandate compliance with all applicable anti-corruption laws.

Our policies mandate compliance with all applicable anti-corruption and trade controls laws.

We have policies and procedures designed to ensure that our employees and intermediaries who work for us outside the United States comply with these laws, and we otherwise require such employees and intermediaries to comply with these laws.

However, there can be no assurance that such policies, procedures and other requirements will protect us from liability under the FCPA or other similar laws for actions taken by our employees or intermediaries;

However, there can be no assurance that such policies, procedures and other requirements will protect us from violating these regulations in every transaction in which we may engage, or protect us from liability under U.S.

or international laws for actions taken by our employees or intermediaries;

moreover, detecting, investigating and resolving actual or alleged violations of such laws is expensive and could consume significant time and attention of our senior management, in-country management, and other personnel.

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This in turn could have a material adverse effect on our financial condition, results of operations, and cash flows.

We are implementing new enterprise resource planning systems.

Our failure to implement such systems successfully, on time and on budget could have a material adverse effect on us.

In 2024, we began implementing new enterprise resource planning (“ERP”) systems, which are designed in part to support our future growth and more fully optimize our existing processes by harmonizing our systems and phasing out legacy systems at various businesses we have acquired over the years, and will continue to implement the new systems in phases across our various entities on a worldwide basis over the next few years.

ERP implementations are complex, time-consuming, labor intensive, and involve substantial expenditures on system software and implementation activities.

ERP implementations also require transformation of business and financial processes to realize the benefits of the ERP systems.

Any such implementation involves risks inherent in the conversion to a new information technology system, including loss

of information and potential disruption to our field operations.

The implementations and maintenance of the new ERP systems have required, and will continue to require, the investment of significant financial and people resources and the implementations may be subject to delays and cost overruns.

In addition, we may not be able to successfully complete the implementations of the new ERP systems without experiencing difficulties, or even if successfully implemented, we may not fully realize the anticipated benefits.

Any disruptions, delays or deficiencies in the design and implementation or the ongoing maintenance of the new ERP systems could adversely affect our ability to provide the services and perform the business and reporting functions described above, and otherwise operate our business.

Additionally, if we do not effectively implement the ERP systems as planned or the systems do not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess it adequately could be delayed.

Improperly managed projects or project delays may result in additional costs or claims against us, which could have a material adverse effect on our financial condition, operating results, and cash flows.

The quality of our performance on any given project depends in large part upon the ability of the project manager(s) to manage relationships and the project itself and to timely assert contractual remedies and deploy appropriate resources, including both third-party contractors and our own personnel.

Our results of operations, cash flows and liquidity could be adversely affected if a project manager or our personnel miscalculate the resources or time needed to complete a project with capped or fixed fees, or the resources or time needed to meet contractual milestones.

Additionally, delays on a particular project, including delays in designs, engineering information or materials provided to us by the customer or a third party, delays or difficulties in equipment and material delivery, schedule changes, delays from failure to timely obtain permits or rights-of-way or to meet other regulatory requirements, weather-related delays, governmental, industry, political and other factors, some of which are beyond our control, could result in cancellations or deferrals of project work, which could lead to a decline in revenue, or, for project deferrals, could cause us to incur costs for standby pay, and could lead to personnel shortages on other projects scheduled to commence at a later date.

We are a decentralized company and place significant decision-making authority with our subsidiaries’ management, supported by certain integrated policies and processes.

We believe our practice of conferring significant authority upon the management of our subsidiaries has been important to our successful growth and has allowed us to be responsive to opportunities and to our customers’ needs.

We seek to maintain business continuity within our subsidiaries while identifying and implementing operational efficiencies, cost synergies, and integration of organizational processes across these companies.

This balance presents certain risks, including the risk we would be slower to identify a misalignment between a subsidiary’s and our overall business strategy or shared processes.

If an operating subsidiary fails to follow our shared company policies and processes, including those relating to compliance with applicable laws, we could be subjected to risks of noncompliance with applicable regulations.

As part of our business, we have entered into joint venture arrangements and likely will continue to do so.

Our participation in joint ventures exposes us to liability and/or harm to our reputation for failures of our partners.

The purpose of our joint ventures is typically to combine skills and resources to allow for the proposing on and performance of particular projects.

Success of these jointly performed projects can be adversely affected by the performance of our joint venture partners, over whom we may have little or no control.

Differences in opinions or views between us and our joint venture partners could result in delayed decision-making or failure to agree on material issues that could adversely affect the business and operations of our joint ventures.

Additionally, the failure by a joint venture partner to comply with applicable laws, regulations or client requirements could negatively impact our business.

We and our joint venture partners are generally jointly and severally liable for all liabilities and obligations of our joint ventures.

If a joint venture partner fails to perform or is financially unable to bear its portion of required capital contributions or other obligations, including liabilities stemming from claims or lawsuits, we could be required to make additional investments, provide additional services or pay more than our proportionate share of a liability to make up for our partner’s shortfall.

Further, if our partners experience cost overruns or project performance issues that we are unable to adequately address, the customer may terminate the project, which could result in legal liability to us, harm our reputation and reduce our profit or increase our loss on a project.

could lead to a decline in revenue, or, for project deferrals, could cause us to incur costs for standby pay, and could lead to personnel shortages on other projects scheduled to commence at a later date.

R ISKS R ELATED T O A CQUISITIONS

Our business strategy includes acquiring companies and making investments that complement our existing businesses.

Our business strategy includes acquiring companies and making investments that complement our existing businesses or expand into adjacent industries.

These acquisitions and investments could be unsuccessful or consume significant resources, which could adversely affect our operating results.

We expect to continue to evaluate the acquisition of strategic businesses, service lines, and technologies with the potential to strengthen our industry position or enhance our existing offerings.

We expect to continue to evaluate the acquisition of strategic businesses, service lines, and technologies with the potential to strengthen our industry position, enhance our existing offerings, or expand into adjacent industries.

However, we cannot assure you that we will identify or successfully complete suitable acquisitions in the future or that completed acquisitions will be successful.

Acquisitions that do not achieve the intended strategic or operational benefits could adversely affect our operating results and may result in an impairment charge.

Under certain circumstances, it may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently into our current business operations.

Acquisitions and investments may involve significant cash expenditures, the incurrence of debt, operating losses and expenses that could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may also face competition for acquisition opportunities, and other potential acquirers may offer more favorable terms or have greater financial resources available for potential acquisitions.

This competition may further limit our acquisition opportunities or raise the prices of acquisitions and make them less accretive, or possibly not accretive, to us.

Furthermore, the increased antitrust scrutiny of and compliance requirements for potential acquisitions, including by the Federal Trade Commission and Department of Justice under the Hart-Scott Rodino Act, the Sherman Act, the Clayton Act, or other applicable laws, could negatively impact the cost and timing of or our ability to complete certain potential acquisitions.

Failure to consummate future acquisitions could negatively affect our business and growth strategies.

Under certain circumstances, it may be difficult for us to complete transactions quickly and to integrate acquired operations efficiently into our current business operations, and we may not be able to do so successfully or within the anticipated costs or timeframe.

Acquisitions and investments may involve significant cash expenditures, the incurrence of debt, expenses, and operating losses that could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Acquisitions involve numerous other risks, including:

(i) diversion of management’s time and attention from daily operations;

(ii) difficulties integrating acquired businesses, technologies and personnel into our business;

(iii) inability to obtain required regulatory approvals;

(iv) inability to obtain required financing on favorable terms or, if so obtained, risks associated with incurrence of additional indebtedness;

(iv) potential loss of key employees, key contractual relationships, or key customers of acquired companies or from our existing businesses;

and (v) assumption of the liabilities and exposure to unforeseen liabilities of acquired companies (including environmental, employee benefits, safety and health and third party property and casualty liabilities).

• diversion of management’s time and attention from daily operations;

• difficulties and unanticipated issues integrating acquired businesses, operations, systems, technology infrastructure, and personnel into our business;

• inability to obtain required regulatory approvals;

• inability to obtain required financing on favorable terms or, if so obtained, risks associated with incurrence of additional indebtedness;

• potential loss of key employees, key contractual relationships, or key customers of acquired companies or from our existing businesses;

• costs and expenses of acquisitions, including fees paid to financial, legal and accounting advisors, facilities and systems implementation or consolidation costs, severance and other potential employment-related costs, including severance payments that may be made to former employees of acquired businesses;

• an increase in the scope, geographic diversity and complexity of our current operations, and the need to coordinate geographically dispersed organizations;

• becoming subject to, and future changes in, additional laws and regulations as a result of an acquisition;

• complexities that may arise from any entry into new or adjacent markets or business lines as a result of an acquisition;

• failure to recognize the expected synergies of any acquisition;

• failure of the acquired business to meet our expectations, which may cause our financial results to differ from our own or the investment community’s expectations;

• potential need to negotiate with labor unions of the employees of acquired companies;

• assumption of the liabilities and exposure to unforeseen liabilities of acquired companies (including environmental, employee benefits, safety and health and third party property and casualty liabilities);

• other risks and liabilities arising from the prior operations of an acquired business, such as performance, operational, safety, cybersecurity, environmental, workforce or other compliance or tax issues, some of which we may not have discovered or accurately estimated during our due diligence and may not be covered by indemnification obligations or insurance.

We cannot be sure that we will be able to successfully complete the integration process without substantial costs, delays, disruptions or other operational or financial problems.

Failure to successfully integrate acquired businesses could adversely impact our business, financial condition, results of operations and cash flows.

Any acquisitions or investments may ultimately harm our business or financial condition, as such acquisitions may not be successful and may ultimately result in impairment charges.

We may not realize the expected benefits of the Chubb Acquisition because of integration and transition difficulties or other challenges.

On January 3, 2022, we closed the Chubb Acquisition.

The success of the Chubb Acquisition depends, in part, on our ability to successfully integrate and operate the Chubb business in conjunction with our existing life safety businesses and transition from the services and systems provided by the seller.

While we have largely been successful in replacing services provided by the seller in the Chubb Acquisition with capabilities and systems within APG or third parties, integrating legacy Chubb, new third party systems with APG's current systems could pose operational challenges that impact the business.

The potential difficulties of integrating the operations of the Chubb business include, among others:

• continued unanticipated issues in integrating personnel, operations, systems and technology infrastructure, particularly after the end of the transitional services provided by the seller;

• coordinating geographically dispersed organizations;

• changes in applicable laws and regulations or conditions imposed by regulators;

On June 3, 2024, the Company expanded into a new market of elevators and escalators upon completing our acquisition of Elevated Facility Services Group ("Elevated").

Elevated is a premier provider of contractually based services for all major brands of elevator and escalator equipment.

The success of the Elevated Acquisition depends, in part, on our ability to successfully integrate and operate the Elevated business in conjunction with our existing life safety businesses and transition from the services and systems provided by the seller.

The potential difficulties of integrating the operations of the Elevated business include, among others:

continued unanticipated issues in integrating personnel, operations, systems and technology infrastructure;

changes in applicable laws and regulations or conditions imposed by regulators in a market we are not experienced in;

deploying internal controls over financial reporting;

• operating risks inherent in the Chubb business and our existing life safety businesses;

• realizing the expected synergies from the Chubb Acquisition.

We may not accomplish the integration of the Chubb business smoothly, successfully or within the anticipated costs or timeframe.

We have incurred and expect to incur additional non-recurring costs associated with the integration of Chubb into our business.

These costs and expenses include fees paid to financial, legal and accounting advisors, facilities and systems implementation or consolidation costs, severance and other potential employment-related costs, including severance payments that may be made to certain Chubb employees.

In addition, the Chubb business may not meet our expectations, causing our financial results to differ from our own or the investment community’s expectations.

operating risks inherent in the Elevated business and our existing businesses.

We may not accomplish the integration of the Elevated business smoothly, successfully or within the anticipated costs or timeframe.

In addition, the Elevated business may not meet our expectations, causing our financial results to differ from our own or the investment community’s expectations.

Any of these factors could have a negative effect on our financial condition, results of operations, and cash flows.

F INANCIA L R ISKS

Higher interest rates increase the interest costs on our credit facilities and on our other floating rate indebtedness and could impact adversely our ability to refinance existing indebtedness or to sell assets.

Interest payments for certain of our indebtedness, including borrowings under the credit facilities are based on floating rates.

As a result, an increase in interest rates will reduce our cash flow available for other corporate purposes.

Higher interest rates could also limit our ability to refinance existing indebtedness and increase interest costs on any indebtedness that is refinanced.

We have and may continue to enter into agreements such as floating-to-fixed interest rate swaps, caps, floors and other hedging contracts in order to hedge against the cash flow effects of changes in interest rates for floating rate debt.

As of December 31, 2024, the Company had $1,840 million notional amount outstanding in interest rate swap agreements that exchange a variable rate of interest for a fixed rate over the term of the agreement.

However, we may not maintain interest rate swaps with respect to all of our floating rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

In addition, these agreements expose us to the risk that other parties to the agreements will not perform or that the agreements will be unenforceable.

Adverse developments in the credit markets could adversely affect the funding of significant projects and therefore reduce demand for our services.

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Our management is responsible for establishing and maintaining adequate internal control over financial reporting.

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 in accordance with accounting principles generally accepted in the United States of America ("U.S.

As previously disclosed in our Annual Reports on Form 10-K for the years ended December 31, 2023 and 2022, management identified material weaknesses related to our internal control over financial reporting.

While management was successful in completing its multi-year remediation of prior year material weaknesses within the legacy business, the establishment of internal controls over financial reporting at certain subsidiaries of the recently acquired Chubb fire and security business and the inability of a third-party service organization to provide a service auditors’ report led to the identification of new material weaknesses.

As a result and in connection with our preparation of our consolidated financial statements herein for the year ended December 31, 2023, we and our independent registered public accounting firm identified material weaknesses in financial reporting.

Under standards established by the United States Public Company Accounting Oversight Board, a material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of annual or interim consolidated financial statements will not be prevented or detected and corrected on a timely basis.

We cannot assure you that we have identified all, or that we will not in the future have additional, material weaknesses.

If we fail to remediate the material weaknesses or if we otherwise fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable when required in the future to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected, and we could become subject to litigation or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

Our substantial indebtedness may adversely affect our cash flow and our ability to operate our business and fulfill our obligations under our indebtedness.

While we believe we have remediated all material weaknesses previously identified, we cannot assure that we will not have additional material weaknesses in the future.

If we have additional material weaknesses in the future and fail to establish and maintain effective control over financial reporting, our ability to accurately and timely report our financial results could be adversely affected.

If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected, and we could become subject to litigation or investigations by the stock exchange on which our securities are listed, the SEC or other regulatory authorities, which could require additional financial and management resources.

Our indebtedness may adversely affect our cash flow and our ability to operate our business and fulfill our obligations under our indebtedness.

As of December 31, 2024, on a consolidated basis, we had $2,157 million in principal amount of debt outstanding under our credit facilities, $614 million of senior notes, and other indebtedness totaling approximately $5 million.

Our substantial indebtedness could have significant effects on our operations.

Our indebtedness could have significant effects on our operations.

For example, it may:

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Any such arrangements could, in turn, increase the risk that our leverage may adversely affect our future financial and operating flexibility and thereby impact our ability to pay cash distributions at expected rates.

Interest payments for certain of our indebtedness, including borrowings under the credit facilities are based on floating rates.

As a result, an increase in interest rates will reduce our cash flow available for other corporate purposes.

Higher interest rates could also limit our ability to refinance existing indebtedness and increase interest costs on any indebtedness that is refinanced.

As of December 31, 2023, the Company had $1,120 million notional amount outstanding in interest rate swap agreements that exchange a variable rate of interest for a fixed rate over the term of the agreement.

However, we may not maintain interest rate swaps with respect to all of our floating rate indebtedness, and any swaps we enter into may not fully mitigate our interest rate risk.

In addition, these agreements expose us to the risk that other parties to the agreements will not perform or that the agreements will be unenforceable.

We are effectively self-insured against many potential liabilities.

We are self-insured against many potential liabilities.

We are insured through a wholly-owned insurance captive and third party carriers.

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Certain of our coverages are subject to large deductibles or have high self-insured retention amounts, our policies do not cover all possible claims, and certain legacy risks at Chubb were assumed without insurance coverage.

we are effectively self-insured for a substantial number of actual and potential claims.

Accordingly, we are effectively self-insured for a substantial number of actual and potential claims.

Additionally, if our estimates of liability for current or IBNR claims are substantially undervalued, we may incur unexpected losses higher than our reserves which we believe are adequate.

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The determination of such estimated liabilities and their appropriateness are reviewed and updated at least quarterly.

In connection with the Chubb claims, we estimated the exposure to loss presented by such claims, negotiated an adjustment to the purchase price in connection with these anticipated costs and made associated accruals.

In connection with the Chubb claims, we estimated the exposure to loss presented by such claims,

negotiated an adjustment to the purchase price in connection with these anticipated costs and made associated accruals.

However, claims liabilities are difficult to assess and estimate due to many relevant factors, the effects of which are often unknown, including the severity of an injury or damage, the determination of liability in proportion to other parties, the timeliness of reported claims, the effectiveness of our risk management and safety programs and the terms and conditions of our insurance policies.

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Government contractors must comply with many regulations and other requirements that relate to the award, administration and performance of these contracts, and government contracts are subject to audit.

A violation of these laws

and regulations could result in imposition of fines and penalties, the termination of a government contract or debarment from proposing on government contracts in the future.

A violation of these laws and regulations could result in imposition of fines and penalties, the termination of a government contract or debarment from proposing on government contracts in the future.

Further, despite our decentralized nature, a violation at one of our locations could impact other locations’ ability to propose on and perform government contracts.

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Prohibition against proposing on future government contracts could have an adverse effect on our consolidated financial condition and results of operations.

Changes in spending or budgetary priorities or delays in contract awards may materially adversely affect our business, financial condition and results of operations.

We perform work through various subsidiaries to the U.S.

federal government through government contracts.

We also undertake projects for non-governmental customers who receive some level of federal funding for those projects.

Levels of U.S.

federal government spending are difficult to predict and subject to significant risk.

Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the spending priorities of the new U.S.

presidential administration and Congress and what challenges budget and expenditure reductions and reforms on federal governmental processes will present for us, our customers and our industry generally.

Pressures on and uncertainty surrounding the U.S.

federal government’s budget, and potential changes in budgetary priorities and spending levels, could adversely affect the funding for the work we provide under government contracts and the federally-funded projects we undertake for our customers, and could delay contracting or payment decisions by our customers or result in the federal government not renewing contracts with us.

federal government spending levels for the work we provide to the federal government, for the funding of the projects of our customers or for other programs may not be sustained, and future spending and program authorizations may not increase or may decrease or shift to programs in areas where we do not provide services or are less likely to be awarded contracts.

In the event the budgets or budgetary priorities of the U.S.

federal government entities with which we do business are delayed, decreased or underfunded, or if the same occurs with respect to the federally-funded projects we undertake for our customers, our consolidated revenues and results of operations could be materially and adversely affected.

Our backlog is subject to reduction or cancellation, and revenues may be realized in different periods than initially reflected in our backlog.

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R ISKS R ELATED T O O UR W ORKFORCE

Our unionized workforce and related obligations could adversely affect our operations.

As of December 31, 2023, approximately 48% of our employees were covered by collective bargaining agreements in the U.S.

or similar employment and labor obligations in other countries in which we conduct business.

The terms of these agreements limit our discretion in the management of covered employees and our ability to nimbly implement changes to meet business needs.

In addition, our employees in certain countries in Europe are subject to works council arrangements, exposing us to potential delays in implementing changes, works council claims and litigation.

There can be no assurance that our non-unionized employees will not become members of a union or become covered by a collective bargaining agreement, including through an acquisition of a business whose employees are subject to such an agreement.

Certain of our unionized employees have participated in strikes and work stoppages in the past, and we cannot be certain that strikes or work stoppages will not occur in the future.

In the current inflationary environment, negotiations over union wage rates or increase in benefits may slow or derail contract renegotiations, which may lead to potential strikes or work stoppages.

Strikes or work stoppages could adversely impact relationships with our customers and could cause us to lose business and experience a decline in revenues.

Our ability to complete future acquisitions also could be adversely affected because of our union status.

For instance, our union agreements may be incompatible with the union agreements of a business we want to acquire, and some acquisition targets may decline to become affiliated with a union-based company.

Moreover, certain of our customers, where permissible by law, may require or prefer a non-union workforce, and they may reduce the amount of work assigned to us if our non-union labor crews become unionized, which could negatively affect our financial condition, results of operations and cash flows.

We maintain a workforce based upon current and anticipated workloads.

We could incur significant costs and reduced profitability from underutilization of our workforce if we do not receive future contract awards, if contract awards are delayed, or if there is a significant reduction in the level of services we provide.

Shortages of skilled labor could impede our ability to provide timely, cost-effective services to our customers.

Our estimates of future performance and results of operations depend, among other factors, on whether and when we receive new contract awards, which affect the extent to which we are able to utilize our workforce.

The rate at which we utilize our workforce is affected by a variety of factors, including our ability to forecast the need for our services, our ability to maintain an appropriately sized workforce, our ability to transition employees from completed projects to new projects or between internal business groups, our ability to manage attrition, and our need to devote resources to non-chargeable activities such as training or business development.

While our estimates are based upon our good faith judgment, professional knowledge and experience, these estimates may not be accurate and may frequently change based on newly available information.

In the case of large-scale projects where timing is often uncertain, it is particularly difficult to predict whether and when we will receive a contract award.

The uncertainty of contract award timing can present difficulties in matching our workforce size to our project needs.

If an expected contract award is delayed or not received, we could incur significant costs and reduced profitability resulting from underutilization of our workforce, redundancy of facilities, or from efforts to right-size our workforce and/or operations, which could reduce our profitability and cash flows.

Conversely, we have in the past, and may from time to time in the future, face a shortage of skilled workers.

Any significant deterioration in employee relations, shortages of labor or increases in labors costs at any of our businesses could have a material adverse effect on our business, financial condition and results of operations.

Competition in the market for labor could drive up our costs, reduce our profitability, or impact our ability to deliver timely service to our customers.

Our pension commitments and obligations to make cash contributions to meet our obligations in certain pension plans subject us to risks.

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Plans in these classifications must adopt measures to improve their funded status through a funding improvement or rehabilitation plan, as applicable, which may require additional contributions from employers (which may take the form of a surcharge on benefit contributions) and/or modifications to retiree benefits.

The amount of additional funds, if any, that we may be obligated to contribute to these plans in the future cannot be estimated due to uncertainty of the future levels of work that

require the specific use of union employees covered by these plans, as well as the future contribution levels and possible surcharges on contributions applicable to these plans.

In connection with the Chubb Acquisition, we also maintain defined benefit pension plans outside of the U.S.

The amount of additional funds, if any, that we may be obligated to contribute to these plans in the future cannot be estimated due to uncertainty of the future levels of work that require the specific use of union employees covered by these plans, as well as the future contribution levels and possible surcharges on contributions applicable to these plans.

We also maintain defined benefit pension plans outside of the U.S.

defined benefit pension plans include both funded and unfunded plans.

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If these investments do not perform well or are not managed properly and their values decline significantly, it could result in a coverage shortfall for these pension obligations and therefore significantly increase our pension obligations.

In December 2024, we entered into a non-binding agreement in principle with the Trustees of the two pension plans in the U.K.

to proceed with wind-up of the plans contingent on certain conditions.

If all conditions are met and we execute the final wind-up, it may have a non-cash impact on our results of operations.

Our future contribution obligations and potential withdrawal liability exposure with respect to our pension plans could increase significantly based on the investment and actuarial performance of those plans, the insolvency of other companies that contribute to those plans (in the case of multiemployer plans), and other factors.