What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2024-02-07 compared with 2023-02-08 · 98 added, 78 removed, 195 unchanged (47% of the section changed)

8 unchanged sentences

The Company is exposed to political, economic, military and other risks related to operating in countries outside the United States, and changes in general economic conditions, geopolitical conditions, U.S.

trade policies and other factors beyond the Company’s control may adversely impact our business and operating results.

trade policies and other factors beyond the Company’s control may adversely impact its business and operating results.

The Company’s operations and performance depend significantly on global, regional and U.S.

9 unchanged sentences

Other countries where we operate or sell our products have changed, and may continue to change, their own policies on trade as well as business and foreign investment in their respective countries.

For example, we have manufacturing facilities in certain jurisdictions that are authorized to operate under preferential duty and/or tariff programs that provide for reduced tariffs and/or eased import and export regulations and are subject to compliance with the terms of such programs, which have become stricter.

Failure to comply with the terms of such programs could increase our manufacturing costs and adversely affect our business, operating results and financial condition.

Additionally, it is possible that U.S.

policy changes and uncertainty about such changes could increase market volatility and currency exchange rate fluctuations.

As a result of these dynamics, we cannot predict the impact to our business of any future changes to the U.S.’s or other countries’ trading relationships or the impact of new laws or regulations adopted by the U.S.

As a result of these dynamics, we cannot predict the

impact to our business of any future changes to the U.S.’s or other countries’ trading relationships or the impact of new laws or regulations adopted by the U.S.

or other countries.

4 unchanged sentences

Federal Reserve or other international central banking systems, foreign currency fluctuations, significant income tax changes and inflationary pressures;

● intergovernmental conflicts or actions, including, but not limited to, armed conflict, trade wars, cyberattacks and acts of terrorism or war, including the continuing military conflict between Russia and Ukraine and escalating tensions in bordering countries within the Eurozone;

● intergovernmental and other conflicts or actions, including, but not limited to, armed conflict, such as the ongoing military conflicts between Ukraine and Russia as well as Israel and Hamas, trade wars, cyberattacks and acts of terrorism or war;

● employment regulations and local labor conditions, including increases in employment costs, particularly in low-cost regions in which the Company currently operates;

5 unchanged sentences

● changes in assumptions, such as discount rates, along with lower than expected investment returns and performance related to the Company’s benefit plans.

We may be negatively impacted by adverse public health developments, including epidemics and pandemics, such as the COVID-19 pandemic.

We may be negatively impacted by adverse public health developments, including epidemics and pandemics.

Any outbreaks of contagious diseases and other adverse public health developments in countries where we operate could have a material and adverse effect on our business, operations, financial condition, liquidity and results of operations.

Since early 2020, the COVID-19 pandemic has disrupted our offices and manufacturing facilities around the world, as well as the facilities of our suppliers, customers and our customers’ contract manufacturers.

These disruptions have included, and may continue to include, government regulations that inhibit our ability to operate certain of our facilities in the ordinary course, travel restrictions, supplier constraints, supply chain interruptions, logistics challenges and limitations, labor disruptions and reduced demand from certain customers.

During much of 2022, COVID-19 outbreaks in China resulted in local or regional government-imposed lockdowns and restrictions, which impacted the ability of several of our operations and manufacturing facilities to operate in the ordinary course.

As of December 31, 2022, there continue to be isolated COVID-19 outbreaks in certain regions of the world, particularly in China.

There can be no assurance that the COVID-19 pandemic will not have a material and adverse effect on our business, operations, financial condition, liquidity and results of operations in the future.

The Company and certain of its suppliers and customers have experienced difficulties obtaining certain raw materials and components, and the cost of most of the Company’s raw materials and components is increasing.

Beginning in early 2020 and continuing through 2022, the COVID-19 pandemic disrupted our offices and manufacturing facilities around the world, as well as the facilities of our suppliers, customers and our customers’ contract manufacturers.

These disruptions included government regulations that inhibited our ability to operate certain of our facilities in the ordinary course, travel restrictions, supplier constraints, supply chain interruptions, logistics challenges and limitations, labor disruptions and reduced demand from certain customers.

Future disruptions from similar harmful public health developments could have a material adverse impact on our business, operations, financial condition, liquidity and results of operations.

The Company and certain of its suppliers and customers have experienced difficulties obtaining certain raw materials and components, and the cost of certain of the Company’s raw materials and components is increasing.

The Company uses basic materials like aluminum, steel, copper, titanium, metal alloys, gold, silver, palladium and plastic resins in its manufacturing processes as well as a variety of components and relies on third-party suppliers to secure these materials and components.

While the Company does not currently anticipate significant, broad-based difficulties in obtaining raw materials or components necessary for production, in 2021 and 2022, there were supply chain and logistical challenges that impacted the global economy, including our Company, and caused and continue to cause supply constraints and commodity price increases on certain raw materials and components used by the Company.

In addition, recent inflationary pressures have been exacerbated by decreased availability of, and increased prices for, freight and logistics, including air, sea and ground freight.

The Company may not be able to pass along increased raw material or component prices to its customers, and may not be able to procure and obtain sufficient quantities of raw materials and components at acceptable prices from our suppliers.

Accordingly, any future delays, disruptions, and supply and pricing risks could affect our ability to meet customer demand for our products or our profitability from selling those products, which could have an adverse effect on our business, results of operations and financial condition.

While the Company does not currently anticipate significant, broad-based difficulties in obtaining raw materials or components necessary for production, inflationary pressures and logistical challenges may impact the cost and availability of certain raw materials and components used by the Company and result in supply shortages for discrete raw materials or components, which could be further exacerbated by increased commodity prices and additional inflation.

Moreover, the Company may not be able to pass along any increased raw material or component prices to its customers and may not be able to procure and obtain sufficient quantities of raw materials and components timely and at acceptable prices from our suppliers.

In limited instances, we depend on a single source of supply or participate in commodity markets that may be served by a limited number of suppliers.

Delays in obtaining supplies may result from a number of factors affecting our suppliers, and any delay could impair our ability to deliver products to our customers.

The cost and availability of raw materials may fluctuate significantly due to external factors including, but not limited to, product scarcity, disruptions caused by climate change and adverse weather conditions, commodity market fluctuations, currency fluctuations, governmental policies and regulations such as trade tariffs and import restrictions, as well as pandemics and epidemics (such as, but not limited to, the COVID-19 pandemic), which may, in turn, negatively impact our results of operations and financial condition.

Cybersecurity incidents affecting our information technology systems could disrupt business operations or cause the release of highly sensitive confidential information, resulting in adverse impacts to our reputation and operating results and potentially leading to litigation and/or governmental investigations and fines.

Cybersecurity threats and techniques used to disrupt operations and gain unauthorized access to our information technology systems, including, but not limited to, malware, phishing, credential harvesting, ransomware and other increasingly sophisticated attacks, continue to expand and evolve globally, making it difficult to detect and prevent such threats from impacting the Company.

Globally, there continues to be an increased volume of cyber threats, ransomware attempts and social engineering attacks such as phishing and impersonation, and attackers increasingly use tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.

In addition, the COVID-19 pandemic has increased cybersecurity risk as a result of global remote working dynamics that may continue into the future and present additional risk that threat actors will engage in social engineering (for example, phishing) and exploit vulnerabilities in corporate and non-corporate networks.

Delays in obtaining supplies may result from a number of factors affecting our suppliers, and any delay could impair our

ability to deliver products to our customers.

The cost and availability of raw materials may fluctuate significantly due to external factors including, but not limited to, product scarcity, war or other armed conflict, logistical challenges, disruptions caused by climate change and adverse weather conditions, commodity market fluctuations, currency fluctuations, governmental policies and regulations such as trade tariffs and import restrictions, as well as pandemics and epidemics (as was the case with the COVID-19 pandemic), which may, in turn, negatively impact our results of operations and financial condition.

Cybersecurity incidents affecting our information technology systems could disrupt business operations or cause the release of highly sensitive confidential or personal information, resulting in adverse impacts to our reputation and operating results and potentially leading to litigation and/or governmental investigations, fines and other penalties.

We rely on our information technology systems for critical operations and face numerous and evolving cybersecurity threats and techniques used to disrupt operations and gain unauthorized access to these systems.

These threats may arise from diverse threat actors such as state-sponsored organizations and opportunistic hackers and hacktivists, as well as through diverse attack vectors, including, but not limited to, malware, social engineering/phishing, credential harvesting, ransomware, malfeasance by insiders, human or technological error and other increasingly sophisticated attacks.

Cyberattacks continue to expand and evolve, making it difficult to detect and prevent such threats from impacting the Company.

Globally, there continues to be an increased volume of cyber threats, ransomware attempts and social engineering attacks, such as phishing and impersonation, and attackers increasingly use tools and techniques that are designed to circumvent controls, avoid detection, and remove or obfuscate forensic evidence.

In addition, the rise of artificial intelligence and machine learning has led to more sophisticated and deceptive attacks.

Attackers can manipulate systems in new ways and more easily perform functions at scale.

As a result, we may be unable to detect, investigate, remediate, or recover from future attacks or incidents, or avoid a material adverse impact to our business.

In addition, global remote working dynamics continue to present additional risk that threat actors will engage in social engineering (for example, phishing) and exploit vulnerabilities in corporate and non-corporate networks.

Ransomware attacks have become easier to execute, and with the rise of ransomware as a service, it has become an increasingly popular business model to lease or sell ransomware variants to anyone willing to pay the fee.

The Company has been and expects to continue to be a target of various cybersecurity attacks, including, but not limited to, ransomware attacks.

There can be no assurance that our cybersecurity risk management program and processes, including our policies, controls or procedures, will be fully complied with or effective in protecting our information technology systems.

The Company and third-party providers upon whom we may rely for certain information technology services have been, and expect to continue to be, a target of various cybersecurity attacks, including, but not limited to, ransomware attacks.

While the impact of such attacks has not been material, future cybersecurity incidents could lead to unauthorized access to and potentially impair the Company’s information technology systems, products, customers, suppliers and third-party service providers.

Cybersecurity incidents could potentially result in the disruption of our business operations and/or misappropriation, destruction or corruption of critical data and confidential or proprietary information.

Cybersecurity events could also result in the loss of or inability to access confidential information and critical business, financial or other data, and/or cause the release of highly sensitive confidential information.

Cybersecurity incidents could also result from unauthorized parties gaining access to our systems or information through fraudulent or other means of deceiving our employees, suppliers or third-party service providers.

Despite providing training to employees as well as implementing preventative security measures to prevent, detect, address and mitigate these threats, our or key third-party information technology systems and infrastructure are still susceptible to disruptions from cybersecurity incidents, ransomware attacks, security breaches, computer viruses, security vulnerabilities or “bugs” in software or hardware, outages, systems failures, natural disasters, adverse public health developments, or other catastrophic events, any of which could include reputational damage, loss of our intellectual property, release of highly sensitive confidential information, the inability to access critical data and other operational disruption, litigation with third parties and/or governmental investigations and fines, among other things, which could have a material adverse effect on our business, financial condition and results of operations.

Our and key third-party information technology systems and infrastructure are susceptible to disruptions from cybersecurity incidents, ransomware attacks, security breaches, computer viruses, security vulnerabilities or “bugs” in software or hardware, outages, systems failures, natural disasters, adverse public health developments, or other catastrophic events, any of which could result in reputational damage that may cause the loss of existing or future customers, the loss of our intellectual property, the release of highly sensitive confidential or personal information, the inability to access critical data and other operational disruptions, litigation with third parties (including class actions) and/or governmental investigations and fines, among other things, which could have a material adverse effect on our business, financial condition and results of operations.

Finally, we cannot guarantee that any costs and liabilities incurred in relation to an attack or incident will be covered by our existing insurance policies or that applicable insurance will be available to us in the future on economically reasonable terms or at all.

We and our business partners maintain significant amounts of data electronically in locations around the world.

This data relates to all aspects of our business, including financial information and current and future products under development, and also contains certain customer, supplier, partner and employee data, such as sensitive personal data.

We maintain systems and processes designed to protect this data, but notwithstanding such protective measures, there is a risk of intrusion, cyberattacks or tampering that could compromise the integrity and privacy of this data or make the data inaccessible to us.

In addition, in certain cases, in order to conduct business, we outsource to third-party business partners.

We generally obtain assurances from those parties that they have systems and processes in place to protect our data, and where applicable, that they will take steps to protect our data;

nonetheless, those partners may also be subject to data intrusion or a cyberattack.

There is a risk of intrusion, cyberattacks or tampering that could compromise the integrity and privacy of this data or make the data inaccessible to us.

In addition, in certain cases, in order to conduct business, we outsource to

third-party business partners.

Those partners may also be subject to data intrusion or a cyberattack.

Any compromise of the data could substantially disrupt our operations, impact future business opportunities, harm our customers, employees and other business partners, damage our reputation, violate applicable laws, regulations, policies and contractual obligations and subject us to potentially significant costs and liabilities, including litigation or other enforcement actions.

The regulatory environment surrounding information security and privacy is increasingly demanding, with frequent imposition of new and changing requirements, privacy laws and regulations around the world, for example, in the European Union, People’s Republic of China, and the state of California, which impose significant obligations for companies on how they collect, store, protect, process and transfer personal data and can impose significant fines for non-compliance.

The potential for fines and other related costs in the event of a breach of or non-compliance with any existing and forthcoming information security or privacy laws and requirements may have an adverse effect on our financial results.

The regulatory environment surrounding information security and privacy is increasingly demanding, with frequent imposition of new and changing requirements.

Privacy laws and regulations around the world including, for example, in the European Union (“EU”), People’s Republic of China, the state of California, and several other U.S.

states, impose significant obligations for companies on how they collect, store, protect, process and transfer personal information and can impose significant fines for non-compliance.

In addition, in March 2022, the U.S.

enacted the Strengthening American Cybersecurity Act, which imposes cyber incident and ransomware attack response protocols for businesses operating in numerous core industry sectors of the U.S.

The potential for fines, penalties, and other related costs in the event of a breach of or non-compliance with any existing and forthcoming information security or privacy laws and requirements may have an adverse effect on our financial results.

For further discussion of the Company’s risk management, strategy, and governance around cybersecurity, refer to Part I, Item 1C.

Cybersecurity herein.

The Company may be negatively impacted by extreme weather conditions and natural catastrophic events, including those caused or intensified by climate change and global warming.

From time to time, extreme weather conditions and natural disasters have negatively impacted, and may continue to negatively impact, portions of our operations, as well as the operations of our suppliers, vendors, customers and distributors.

Such unpredictable weather conditions and natural disasters including, but not limited to, earthquakes, fires, floods, hurricanes, tornadoes , and stronger and longer-lasting weather patterns, and their consequences and effects have, in the past, temporarily disrupted our business operations both in the United States and abroad.

These events could cause some of the Company’s operations to suffer from supply chain disruptions and potential delays in fulfilling customer orders or order cancellations altogether, lost business and sales, changing costs or availability of insurance, and/or property damage or harm to our people, each and all of which could have an adverse effect on our business, operations, financial condition and results of operations.

Such unpredictable weather conditions and natural disasters including, but not limited to, severe storms, earthquakes, fires, droughts, floods, hurricanes, tornadoes , and stronger and longer-lasting weather patterns, including heat waves and freezes and ambient temperature or precipitation changes, and their consequences and effects have, in the past, temporarily disrupted our business operations both in the United States and abroad.

These events could cause some of the Company’s operations to suffer from supply chain disruptions and potential delays in fulfilling customer orders or order cancellations altogether, lost business and sales, increased costs, energy and water scarcity, changing costs or availability of insurance, and/or property damage or harm to our people, each and all of which could have an adverse effect on our business, operations, financial condition and results of operations.

Increasing scrutiny and expectations regarding ESG matters could result in additional costs or risks or otherwise adversely impact our business.

Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices.

Companies across industries continue to face increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices.

Expectations regarding voluntary and potential mandatory ESG initiatives and disclosures may result in increased costs, changes in demand for certain products, enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition or results of operations.

27 unchanged sentences

RISKS RELATED TO OUR END MARKETS

The Company encounters competition in substantially all areas of our business.

The Company encounters competition in all areas of our business.

The Company competes primarily on the basis of technology innovation, product quality and performance, price, customer service and delivery time.

2 unchanged sentences

There can be no assurance that the Company will be able to compete successfully against existing or new competition, and the inability to do so may result in price reductions, reduced margins, or loss of market share, any of which could have an adverse effect on the Company’s business, financial condition and results of operations.

The Company is dependent on end market dynamics to sell its products, particularly in the communications, automotive and military end markets.

The Company is dependent on end market dynamics to sell its products, and our operating results could be adversely affected by cyclical and reduced demand in any of these markets.

The Company is dependent on end market dynamics to sell its products, particularly in the communications, automotive and defense end markets.

The Company is dependent on end market dynamics to sell its products, and its operating results could be adversely affected by cyclical and reduced demand in any of these markets.

Approximately 37% of the Company’s 2023 net sales came from sales to the communications industry.

1 unchanged sentence

Approximately 23% of the Company’s net sales came from the automotive industry.

The automotive industry has historically experienced significant downturns during periods of deteriorating global or regional economic or credit conditions.

The automotive industry has historically experienced significant downturns during periods of deteriorating global or regional economic or credit conditions, or as a result of prolonged work stoppages or other disputes with labor unions.

The communications and automotive end markets are also dominated by large customers that regularly exert price pressures on their suppliers, including the Company.

Approximately 9% of the Company’s net sales came from sales to the military end market.

Approximately 11% of the Company’s net sales came from sales to the defense end market.

Accordingly, the Company’s sales are affected by changes in the defense budgets of the U.S.

and foreign governments, which are subject to political and budgetary fluctuations and constraints.

foreign governments, which are subject to political and budgetary fluctuations and constraints.

Periodic downturns in any of our customers’ end markets can significantly reduce demand for certain of our products, which could have a material adverse effect on the Company’s business, financial condition and results of operations.

1 unchanged sentence

The Company has at times experienced difficulties and unanticipated expenses in connection with purchasing and integrating newly acquired businesses.

The Company has completed a number of acquisitions in recent years, including two in 2022.

The Company has completed numerous acquisitions in recent years, including 10 in 2023.

The Company anticipates that it will continue to pursue acquisition opportunities as part of its growth strategy.

3 unchanged sentences

or retaining key employees, suppliers and distributors.

In certain limited cases, the Company has pursued indemnification claims against seller(s) of an acquired business for pre-acquisition liabilities, breaches of representations, warranties or covenants or for other reasons provided for in the relevant acquisition agreement.

To the extent we pursue indemnification claims against the seller(s) of any acquired business, such seller(s) may successfully contest such claims and/or may not have the financial capacity to compensate us for such claims or such claims may otherwise be difficult or impractical to enforce.

In certain limited cases, the Company has pursued indemnification claims against seller(s) of an acquired business or sought recovery under third party insurance policies for pre-acquisition liabilities, breaches of representations, warranties or covenants or for other reasons provided for in the relevant acquisition agreement or insurance policy.

To the extent we pursue indemnification claims against such seller(s) or insurers, such seller(s) or insurers may successfully contest such claims and/or may not have the financial capacity to compensate us for such claims, or such claims may otherwise be difficult or impractical to enforce.

We cannot predict or guarantee whether and to what extent anticipated cost savings, benefits, margin improvements and growth prospects will be achieved from recent or future acquisitions.

4 unchanged sentences

However, if the financial performance of the Company’s businesses were to decline significantly, the Company could incur a material non-cash charge to its income statement for the impairment of goodwill and other intangible assets.

Furthermore, we cannot provide assurance that impairment charges in the future will not be required if the expected cash flow estimates as projected by management do not occur, especially if an economic recession occurs and continues for a lengthy period or becomes severe, or if acquisitions and investments made by the Company fail to achieve expected returns.

Furthermore, we cannot provide assurance that impairment charges in the future will not be required if the expected cash flow estimates as projected by management do not occur, especially if an economic recession occurs and continues for a lengthy period or becomes more severe, or if acquisitions and investments made by the Company fail to achieve expected returns.

RISKS RELATED TO OUR LIQUIDITY AND CAPITAL RESOURCES

6 unchanged sentences

A breach of any of these covenants could result in a default under the Revolving Credit Facility and the Term Loan.

Upon the occurrence of an event of default under the Revolving Credit Facility or the 2022 Term Loan, the lenders could terminate all commitments to extend further credit and elect to declare amounts outstanding thereunder to be immediately due and payable which could result in the acceleration of certain of the Company’s other indebtedness and the Company not having sufficient assets to repay the Revolving Credit Facility, the 2022 Term Loan and such other indebtedness.

As of December 31, 2022, the Company had approximately $632.8 million of outstanding borrowings under the U.S.

Commercial Paper Program, and no outstanding borrowings under the Revolving Credit Facility, 2022 Term Loan and Euro Commercial Paper Program.

Upon the occurrence of an event of default under the Revolving Credit Facility or the Term Loan, the lenders could terminate all commitments to extend further credit and elect to declare amounts outstanding thereunder to be immediately due and payable, which could result in the acceleration of certain of the Company’s other indebtedness and the Company not having sufficient assets to repay indebtedness under the Revolving Credit Facility, the Term Loan and such other debt instruments.

As of December 31, 2023, the Company had no borrowings outstanding under the Revolving Credit Facility, Term Loan, U.S.

Commercial Paper Program and Euro Commercial Paper Program.

However, the Company borrowed under the U.S.

Commercial Paper Program throughout much of 2023, and the Company may make additional borrowings under any of its debt instruments from time to time.

In addition to these credit agreements, the Company’s various senior notes also impose certain obligations on the Company and prohibit various actions by the Company unless it satisfies certain financial requirements.

1 unchanged sentence

The Company relies on the global capital markets, and an inability to access those markets on favorable terms could adversely affect the Company’s results.

The Company has used the global capital markets to invest in its business and make strategic acquisitions.

If general economic and capital market conditions deteriorate significantly, it could impact the Company’s ability to access the capital markets.

The Company has used the global capital markets to raise capital to invest in its business and make strategic acquisitions.

The capital and credit markets have experienced significant volatility in the past.

Market conditions could make it more difficult to access capital to finance capital investments, acquisitions and other initiatives including dividends and share repurchases, which could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

If general economic and capital market conditions deteriorate significantly, it could become more difficult to access capital to finance capital investments, acquisitions and other initiatives including dividends and share repurchases, which could have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

In addition, if the credit rating agencies that rate the Company’s debt were to downgrade the Company’s credit rating, it would likely increase the Company’s cost of capital and make it more difficult for the Company to obtain new financing and access capital markets, which could also have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows.

2 unchanged sentences

The Company monitors its mix of fixed-rate and variable-rate debt, as well as its mix of short-term and long-term debt.

As of December 31, 2022, approximately $640 million, or 14%, of the Company’s outstanding borrowings were subject to floating interest rates, primarily from borrowings under the U.S.

Commercial Paper Program.

As a result of recent increases in the federal funds rate by the U.S.

Federal Reserve, t he floating interest rates related to our U.S.

Commercial Paper Program increased substantially over the course of 2022, a trend that could continue throughout 2023.

C onsequently, the Company currently expects the floating interest rates related to its U.S.

Commercial Paper Program (as well as its Revolving Credit Facility and 2022 Term Loan, to the extent either are drawn upon in the future) to continue to increase in the first quarter of 2023 and potentially beyond, which is expected to result in increased interest expense in 2023 as compared to 2022 .

As of December 31, 2023, less than 1% of the Company’s outstanding borrowings were subject to floating interest rates.

As a result of increases in the federal funds rate by the U.S.

Federal Reserve beginning in early 2022 and through the middle of 2023, t he floating interest rates related to our U.S.

Commercial Paper Program (as well as our Revolving Credit Facility and Term Loan, to the extent either are drawn upon in the future) have increased substantially over this same period, a trend that could continue into 2024 and potentially beyond.

To the extent that interest rates related to this floating rate debt increase further and the Company borrows under any of these floating interest rate instruments in the future, interest expense and interest payments would increase.

There can be no assurance that interest rates will not change significantly from current levels.

6 unchanged sentences

As a result of the need to comply with these laws and regulations, we are subject to increased risks of governmental investigations, civil fraud actions, criminal prosecutions, whistleblower lawsuits and other enforcement actions.

For example, in August 2018, we received a subpoena from the U.S.

Department of Defense, Office of the Inspector General, requesting documents from certain of the Company’s Military and Aerospace businesses pertaining to certain products that are purchased or used by the U.S.

In connection with this investigation, during the third quarter of 2022, in a meeting with representatives of the U.S.

government, it was alleged that the Company likely violated various provisions of federal law, including violations under the civil False Claims Act, as discussed more fully in Note 14 of the Notes to Consolidated Financial Statements.

laws and regulations to which we are subject include, but are not limited to, Export Administration Regulations, the Federal Acquisition Regulation, the False Claims Act, International Traffic in Arms Regulations, regulations from the Bureau of Alcohol, Tobacco and Firearms and the FCPA.

We are subject to a wide range of similar laws and regulations in other countries throughout the world.

For example, th e Company reached an agreement in August 2023 with the U.S.

government related to an investigation of alleged violations by the Company of the civil False Claims Act.

Although the Company did not admit to any liability under the terms of the settlement agreement, the Company agreed to pay the U.S.

government a settlement amount, ending the government’s investigation and releasing the Company from further liability for the issues under investigation .

laws and regulations to which we are subject include, but are not limited to, the Export Administration Regulations, the Federal Acquisition Regulation, the False Claims Act, International Traffic in Arms Regulations, regulations from the Bureau of Alcohol, Tobacco and Firearms and the FCPA.

Moreover, we are subject to a wide range of similar laws and regulations in other countries throughout the world.

Failure, or the perceived failure, to comply with applicable requirements also could harm our reputation and our ability to compete for future government contracts or sell commercial equivalent products.

7 unchanged sentences

Furthermore, the U.S.

government periodically audits our governmental contract costs,

which could result in fines, penalties or adjustment of costs and prices under the contracts.

government periodically audits our governmental contract costs, which could result in fines, penalties or adjustment of costs and prices under the contracts.

Any such fines, penalties or payment adjustments resulting from such audits could adversely affect our reputation, business, operations, financial condition, liquidity, and results of operations.

6 unchanged sentences

These laws and regulations are complex, may change frequently and with limited notice, have generally become more stringent over time and have intensified under recent U.S.

administrations, especially in light of recent tensions with China.

administrations, especially in light of ongoing tensions between the U.S.

For example, in 2019, the U.S.

19 unchanged sentences

Companies will be required to reassess their valuation allowances for certain affected deferred tax assets in the period of enactment but will not need to remeasure deferred tax balances for the related tax accounting implications of the CAMT.

The impact of these provisions, which became effective for Amphenol beginning on January 1, 2023, is dependent on several factors, including interpretive regulatory guidance, which has not yet been released.

Th e IRA provisions, which became effective for Amphenol beginning on January 1, 2023 , did not have a material impact on the Company during the year ended December 31, 2023.

However, the full impact of these provisions in the future depends on several factors, including interpretive regulatory guidance, which has not yet been released.

The Organization for Economic Co-operation and Development (OECD)/G20 Inclusive Framework, known as Pillar Two, provides guidance for a global minimum tax.

This guidance lays out a common approach for adopting the global minimum tax and enacting local legislation codifying the provisions that all 142 countries in the Inclusive Framework agreed to by consensus.

The EU member states have agreed to adopt these rules in two stages with the first component effective on January 1, 2024, while the second component will be effective January 1, 2025.

countries have enacted or are expected to enact legislation on a similar timeline.

Certain countries in which we operate have already enacted legislation to adopt the Pillar Two framework, while several other countries are expected to also implement similar legislation with varying effective dates in the future.

When and how this framework is adopted or enacted by the various countries in which we do business will increase tax complexity and may increase uncertainty and adversely affect our provision for income taxes in the U.S.

jurisdictions.

Any future changes in tax laws, regulations, accounting standards for income taxes and/or other tax guidance, including related interpretations associated with the IRA or otherwise, could materially impact the Company’s current and non-current tax liabilities, along with deferred tax assets and liabilities, and consequently, our financial condition, results of operations or cash flows.

1 unchanged sentence

We rely on patent and trade secret laws, copyright, trademark, confidentiality procedures, controls and contractual commitments to protect our intellectual property rights.

Despite our efforts, these protections may be limited and, from time to time, we encounter difficulties in protecting our intellectual property rights, particularly in certain countries

outside the U.S.

Despite our efforts, these protections may be limited and, from time to time, we encounter difficulties in protecting our intellectual property rights, particularly in certain countries outside the U.S.

We cannot provide assurance that the patents that we hold or may obtain will provide meaningful protection against our competitors.

18 unchanged sentences

The Company is subject to environmental laws and regulations that could adversely affect our business.

The Company operates in both the United States and various foreign jurisdictions, and we must comply with locally enacted laws and regulations addressing health, safety and environmental matters in such jurisdictions in which we manufacture and/or sell our products.

manufacture and/or sell our products.

Certain operations of the Company are subject to locally enacted environmental laws and regulations that govern the discharge of pollutants into the air and water, as well as the handling and disposal of solid and hazardous wastes.

The Company and its operations may be subject to liabilities, regardless of fault, for investigative and/or remediation efforts on such matters that may arise at any of the Company’s former or current properties, either owned or leased.

For example, as disclosed in Note 14 of the Notes to Consolidated Financial Statements, the Company was named as one of several defendants in four separate lawsuits filed in the State of Indiana relating to a manufacturing site in Franklin, Indiana where the Company has been conducting an environmental clean-up effort under the direction of the United States Environmental Protection Agency.

All the costs incurred by the Company relating to these lawsuits as well as all costs associated with the clean-up effort at the manufacturing site have been reimbursed by the former owner pursuant to an indemnification agreement entered into in connection with the acquisition of the manufacturing site as part of a larger acquisition that led to the establishment of the Company’s business in 1987.

Environmental liabilities can result from the use of hazardous materials in production, the disposal of products, damages associated with the use of any of our products or other related matters.

We cannot be certain as to the potential impact of any changes to environmental conditions or environmental policies that may arise in any of our jurisdictions.

Our failure to comply with these local environmental laws and regulations could result in fines or other

punitive damages and/or modifications to our production processes as well as subject us to reputational harm, any of which could adversely impact our financial position, results of operations, or cash flows.

Our failure to comply with these local environmental laws and regulations could result in fines or other punitive damages and/or modifications to our production processes as well as subject us to reputational harm, any of which could adversely impact our financial position, results of operations, or cash flows .

The Company is subject to, and may continue to be subject to, incremental costs, risks and regulations associated with efforts to combat the negative effects of climate change.

5 unchanged sentences

Given our global manufacturing presence, any future regulations relating to GHG emissions and/or other climate change-related laws and regulations, beyond initiatives already in process at the Company, could subject us to additional and/or unforeseen compliance costs and limitations, increased energy and raw material costs and incremental capital expenditure requirements.

In addition, there may be additional mandatory climate-related reporting obligations, and potentially GHG emissions reduction requirements, which would likely result in increased corporate- and operational general and administrative efforts and associated costs and expenses.

Any future regulatory changes in any of the countries in which we operate could result in transition risks to the Company, including, but not limited to:

In addition, governmental bodies are increasingly adopting and considering adopting additional mandatory climate-related reporting obligations, and potentially GHG emissions reduction requirements, and these regulatory developments, to the extent we are subject to them, will likely result in increased corporate and operational general and administrative efforts and associated costs and expenses.

There have been various new laws around the world that have been passed and will require additional ESG-related disclosure.

For example, in Europe, the EU finalized the Corporate Sustainability Reporting Directive (“CSRD”), which introduces more prescriptive sustainability reporting requirements for EU companies as well as certain non-EU companies, and will apply to all in-scope companies by January 1, 2028.

In the United States, the SEC has proposed climate-related disclosure rules that have not yet been enacted as of the date of this report, and certain states have begun to pass their own ESG-related laws.

For example, on October 7, 2023, the governor of California signed and enacted into law two climate-related disclosure bills ( SB-253, Climate Corporate Data Accountability Act and SB-261, Greenhouse Gases:

Climate-Related Financial Risk ), which will require compliance as early as 2026.

Any future regulatory changes in any of the jurisdictions in which we operate could result in transition risks to the Company, including, but not limited to:

(i) the nature and timing of any requirement to lower GHG emissions and adopt more energy-efficient energy use, which could result in changes or disruptions to the way the Company operates, (ii) financial risks where the compliance with such regulations requires unforeseen capital expenditures and becomes costly or financially burdensome, (iii) legal risks associated with the failure to adapt to or comply with future climate change-related regulations, (iv) risks of climate litigation associated with our disclosures and/or operations;

(v) risks associated with the implementation of any new technologies required to comply with such regulations, which could impede our ability to innovate new products, meet customer and market demand or compete on pricing and quality in the market, and/or (vi) reputational risks associated with our customers’ and investors’ perceptions of the Company and their preferences for maintaining relationships with companies with lower emissions, all of which could harm our reputation in the marketplace.

Unresolved Staff Comments

(v) risks associated with the implementation of any new technologies required to comply with such regulations, which could impede our ability to develop new products, meet customer and market demand or compete on pricing and quality in the market, and/or (vi) reputational risks associated with our customers’ and investors’ perceptions of the Company and their preferences for maintaining relationships with companies with lower emissions, all of which could harm our reputation in the marketplace.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors