What changed in this filing

/stocks — the workspaceLOADING

Item 1A. Risk Factors

2023-02-22 compared with 2022-02-24 · 117 added, 72 removed, 309 unchanged (38% of the section changed)

10 unchanged sentences

While we continue to actively monitor the pandemic and take steps to mitigate the risks posed by its spread, there is no guarantee that our efforts will mitigate the adverse impacts of COVID-19 or will be effective.

The pandemic has adversely affected, and is expected to continue to adversely affect, certain elements of our business, including our supply chain and production levels.

The pandemic has adversely affected, and is expected to continue to adversely affect, certain elements of our business, including our supply chain, transportation networks, and production levels.

As of December 31, 2022, all of our manufacturing operations are operational.

However, we are unable to predict if there will be additional government-imposed restrictions on our ability to operate in future periods.

However, due to the numerous uncertainties that have arisen from the pandemic, including the likelihood of resurgences and the emergence and spread of variants, we are unable to predict if there will be additional government-imposed restrictions on our ability to operate in future periods.

Additionally, our ability to continue to manufacture products is highly dependent on our ability to maintain the safety and health of our factory employees.

4 unchanged sentences

The COVID-19 pandemic has disrupted the global supply chain to a certain extent and availability of raw materials, particularly electronic parts.

The disruption in the supply chain has resulted in increased freight costs, raw material costs, and labor costs from the ongoing inflationary environment.

Because we strive to limit the volume of raw materials and component parts on hand, our business could be adversely affected if we were unable to obtain these raw materials and components from our suppliers in the quantities we require or on favorable terms.

We continue to monitor the situation, assessing possible implications on our operations, supply chain, liquidity, cash flow and customer orders, and will continue taking actions in an effort to mitigate adverse consequences.

Recognizing the unprecedented

nature, scale and uncertainty associated with this global health crisis, the duration and extent of the ongoing impacts cannot be reasonably estimated at this time .

Although we believe in most cases that we could identify alternative suppliers, or alternative raw materials or component parts, the sometimes lengthy and expensive regulatory authority and OEM certification processes could prevent efficient replacement of a supplier, raw material, or component part.

Recognizing the unprecedented nature, scale and uncertainty associated with this global health crisis, the duration and extent of the ongoing impacts cannot be reasonably estimated at this time .

RISKS RELATED TO OUR OPERATIONS

1 unchanged sentence

We store sensitive data, including intellectual property, proprietary business information, and confidential employee information on our servers and databases.

The COVID-19 pandemic has caused us to modify our business practices, including empowering many of our office-based associates to work productively from home on a hybrid basis when appropriate to do so.

The COVID-19 pandemic has caused us to modify our business practices, including empowering many of our office-based associates to work productively from home on a hybrid basis.

As a result, we are increasingly dependent upon our information systems to operate our business.

Our ability to effectively manage our business depends on the security, reliability, and adequacy of our information systems.

In addition, various privacy and securities laws require us to manage and protect sensitive and confidential information, including personal data of our employees, from disclosure.

In addition, various privacy and cybersecurity laws and regulations, both in the U.S.

and globally, require us to manage and protect sensitive and confidential information, including personal data of our employees, from disclosure.

For example, the European Union’s General Data Protection Regulation, which became effective in May 2018, extends the scope of the European Union data protection laws to all companies processing data of European Union residents, regardless of the company’s location.

Additionally, we have incurred, and expect to continue to occur, additional costs to comply with increased cybersecurity protections for our customers, including the U.S.

Despite our implementation of firewalls, switchgear, and other network security measures, our servers, databases, and other systems may be vulnerable to computer hackers, physical or electronic break-ins, sabotage, computer viruses, worms, and similar disruptions from unauthorized tampering with our computer systems.

We continue to review and enhance our computer systems as well as provide training to our employees in an attempt to prevent unauthorized and unlawful intrusions, but in the future, it is possible that we may not be able to prevent all intrusions.

The occurrence of some of these risks may be increased due to the increase in remote working by our employees due to the COVID-19 pandemic.

We continue to review and enhance our computer systems as well as provide training to our employees in an attempt to prevent unauthorized and unlawful intrusions.

However, it is possible that we may not be able to prevent all intrusions.

Such intrusions could result in our network security or computer systems being compromised and possibly result in the misappropriation or corruption of sensitive information or cause disruptions in our services.

5 unchanged sentences

We may also not be able to maintain insurance coverage in the future at an acceptable cost.

Any liability for which third-party indemnification is not available that is not covered by insurance could have a material adverse effect on our business, financial condition, and results of operations.

Any liability for which third-party indemnification is not available and not covered by insurance could have a material adverse effect on our business, financial condition, and results of operations.

In addition, an accident caused by one of our products could damage our reputation for selling quality products.

3 unchanged sentences

The majority of our contracts contain provisions which expose us to potential liability for warranty claims made by customers or third parties with respect to products that have been designed, manufactured, or serviced by us or our suppliers.

Material product warranty obligations could have a material adverse effect on our business, financial condition, and results of operations.

If we fail to satisfy our contractual obligations, our contracts may be terminated and we may incur significant costs or liabilities, including liquidated damages and penalties.

In general, our contracts may be terminated for our failure to satisfy our contractual obligations.

In addition, some of our contracts contain substantial liquidated damages provisions and financial penalties related to our failure to satisfy our contractual obligations.

Our inability to sufficiently satisfy contractual obligations could have a material adverse effect on our reputation, business, financial condition, results of operations, and cash flows.

While we maintain insurance coverage with respect to certain liability claims, that insurance coverage may not be adequate to cover all claims that may arise, or we may not be able to maintain adequate insurance coverage in the future at an acceptable cost.

Material product warranty obligations not covered by insurance or that exceed our established reserves could have a material adverse effect on our business, financial condition, and results of operations.

Our earnings and margins depend in part on subcontractor performance, as well as raw material and component availability and pricing.

1 unchanged sentence

At times subcontractors perform services that we provide to our customers.

Our supply chain has been and may continue to be impacted by the COVID-19

We depend on these subcontractors and suppliers to meet their contractual obligations in full compliance with customer requirements.

Our supply chain has been and may continue to be impacted by the COVID-19 pandemic as well as other geo-political events, such as China’s relationship with the United States and Taiwan.

Particularly, the market for electronic components is experiencing increased demand and a global shortage of semiconductors and other electronic items, creating substantial uncertainty regarding the timing of our suppliers’ production of key components for our products, which is adversely impacting the timing of sales in our Defense Electronics segment.

We expect that these delays and shortages will continue in 2023, and that such shortages could result in delays in shipments to our customers during the period of such shortages.

We depend on subcontractors and suppliers to meet their contractual obligations in full compliance with customer requirements.

Nonperformance or underperformance by subcontractors and suppliers could materially impact our ability to perform obligations to our customers, which could result in a customer terminating our contract for default, expose us to liability, and substantially impair our ability to compete for future contracts and orders.

1 unchanged sentence

If a sole-source supplier should cease or otherwise be unable to deliver such components, our operating results could be adversely impacted.

In addition, our supply networks can sometimes experience price fluctuations.

Our ability to perform our obligations as a prime contractor may be adversely affected if one or more of these suppliers are unable to provide the agreed-upon supplies or perform the agreed-upon services in a timely and cost-effective manner.

In addition, supply chain constraints and improving economic conditions have resulted in sustained increases in the prices we pay for many of the components and raw materials used in our products.

Furthermore, we are experiencing higher labor costs due to increased competition for personnel in many regions in which we operate as well as general inflationary conditions, including higher shipping costs, labor shortages, and rising energy prices.

We expect inflationary pressures to persist in 2023 .

Our ability to perform our obligations as a prime contractor may be adversely affected if one or more of these suppliers is unable to provide the agreed-upon supplies or perform the agreed-upon services in a timely and cost-effective manner.

While we have attempted to mitigate the effects of increased costs through price increases, there are no assurances that higher prices can effectively be passed through to our customers, or that we will be able to fully offset the effects of higher raw materials costs through price increases on a timely basis.

25 unchanged sentences

• We may experience problems in retaining customers or integrating customer bases;

• We may experience increased capital requirements;

• There could be insufficient internal controls over financial activities or financial reporting at an acquired company that could impact us on a consolidated basis;

• We may encounter difficulties in entering new markets in which we may have little or no experience.

While we conduct financial and other due diligence in connection with our acquisitions and generally seek some form of protection, such as indemnification from the seller, insurance coverage, and sometimes placing a portion of the purchase price in escrow or a cash holdback to cover potential liabilities, such acquired companies may have weaknesses or liabilities that are not accurately assessed or brought to our attention at the time of the acquisition.

Further, indemnities, insurance or escrow/holdback arrangements may not fully cover such matters.

Failure to successfully implement our acquisition strategy, including successfully integrating acquired businesses, could have a material adverse effect on our business, financial condition, and results of operations.

2 unchanged sentences

The commercial and government markets in which we operate are characterized by rapidly changing technologies.

The product and program needs of our government and commercial customers change and evolve regularly.

Accordingly, our future performance depends in part on our ability to:

identify emerging technological trends in our current and target markets;

develop and manufacture competitive products, systems, and services;

enhance our offerings by adding technological innovations that differentiate our products, systems, and services from those of our competitors;

and develop, manufacture, and bring those products, systems, and service to market quickly at cost-effective prices.

In addition, product and program needs of our government and commercial customers change and evolve regularly.

Accordingly, to remain competitive in the future, we will need to continue to invest financial resources, including through internal research and development, acquisitions, or other teaming arrangements, to:

(a) identify emerging technological trends in our current and target markets;

(b) develop and manufacture competitive products, systems, and services;

(c) enhance our offerings by adding technological innovations that differentiate our products, systems, and services from those of our competitors;

and (d) develop, manufacture, and bring those products, systems, and service to market quickly at cost-effective prices.

These expenditures could divert our attention and resources from other projects, and we cannot be sure that these expenditures will ultimately lead to the timely development of new offerings and technologies or identification of and expansion into new markets.

Due to the design complexity of our products, we may, in the future, experience delays in completing the development and introduction of new products.

Any delays could result in increased costs of development or deflect resources from other projects.

In addition, there can be no assurance that the market for our products will develop or continue to expand or that we will be successful in newly identified markets as we currently anticipate.

We operate in highly competitive markets.

Many of our products and services are sold in highly competitive markets and are affected by varying degrees of competition.

Many of our products and services are sold in highly competitive markets, and are affected by varying degrees of competition, including competition for hiring and retaining skilled labor.

We compete against companies that often have higher sales volumes and greater financial, technological, research and development, human, and marketing resources than we have.

These companies may also price their products and services below our selling prices, which could exert downward pressure on our product pricing and margins.

As a result, they may be better able to withstand the effects of periodic economic downturns, including withstanding the current global pandemic.

In addition, some of our largest customers could develop the capability to manufacture products or provide services similar to products that we manufacture or services that we provide.

This would result in these customers supplying their own products or services and competing directly with us for sales of these products or services, all of which could significantly reduce our revenues.

This would result

in these customers supplying their own products or services and competing directly with us for sales of these products or services, all of which could significantly reduce our revenues.

Furthermore, we are facing increased international competition and cross-border consolidation of competition.

Our management believes that the principal points of competition in our markets are technology, product quality, product performance, price, technical expertise, timeliness of delivery, superior customer service and support, and continued certification under customer quality requirements and assurance programs.

If consolidation of our competition continues to occur, we would expect the competitive pressures we face to increase.

Our management believes that the principal points of competition in our markets are technology, price, product quality, product performance, sufficient supply of necessary components, technical expertise, timeliness of delivery, superior customer service and support, and continued certification under customer quality requirements and assurance programs.

If we are unable to compete successfully with existing or new competitors in these areas, we may experience a material adverse effect on our business, financial condition, and results of operations.

20 unchanged sentences

At other times, spending by the military can decrease.

In August 2011, Congress enacted the Budget Control Act of 2011 (BCA), which imposed spending caps and certain reductions in defense spending over a ten-year

period through 2021.

In August 2011, Congress enacted the Budget Control Act of 2011 (BCA), which imposed spending caps and certain reductions in defense spending over a ten-year period through 2021.

These spending caps and reductions, referred to as sequestration, went into effect in March 2013.

6 unchanged sentences

In the event that one or more of our programs are reduced, delayed, or terminated for which we provide products and services, we may experience a reduction in our revenues and earnings and a material adverse effect on our business, financial condition, and results of operations.

The BBA also temporarily suspended the public debt limit through July 31, 2021, which Congress temporarily extended through December 3, 2021.

The BBA also temporarily suspended the public debt limit through July 31, 2021.

However, on December 16, 2021, President Biden signed legislation into law increasing the debt ceiling by $2.5 trillion, which is expected to allow the U.S.

government to cover its debt obligations into fiscal year 2023.

government to cover its debt obligations until at least July of 2023 unless Congress takes legislative action to further extend or increase it.

Failure by Congress to further suspend or increase the debt ceiling could delay or result in the loss of contracts for the procurement of our products and services, and we may be asked or required to continue to perform for some period of time on certain of our U.S.

2 unchanged sentences

A downturn in the aircraft market could adversely affect our business.

Our sales to large commercial aircraft manufacturers are cyclical in nature and can be adversely affected by a number of factors, including current and future passenger traffic levels, increasing fuel and labor costs, environmental concerns, inclusive of climate change, intense price competition, the retirement of older aircraft, regulatory changes, outbreak of infectious disease such as the COVID-19 pandemic, terrorist attacks, general economic conditions, worldwide airline profits, and backlog levels, all of which can be unpredictable and are outside our control.

Our sales to large commercial aircraft manufacturers are cyclical in nature, and can be adversely affected by a number of factors, including current and future passenger traffic levels, increasing fuel and labor costs, environmental concerns (inclusive

of climate change), intense price competition, the retirement of older aircraft, regulatory changes, outbreak of infectious disease such as the COVID-19 pandemic, terrorist attacks, geopolitical events, conflicts and wars (including the Russia-Ukraine conflict), general economic conditions (including cost inflation), worldwide airline profits, and backlog levels, all of which can be unpredictable and are outside our control.

For example, the COVID-19 pandemic drastically reduced air traffic as travel restrictions and social distancing measures were implemented to help control the spread of the virus.

The reduced air traffic applied financial pressures on airlines, who, in order to preserve cash and liquidity, dramatically reduced flight hours and delayed the purchases of new aircraft.

Although U.S.

domestic air travel has increased during 2021, international travel has not yet begun to recover at the same pace.

Given the uncertain length of this pandemic and associated restrictions to travel long distances, the commercial market may shift away from wide-body aircraft.

Furthermore, as companies and employees become accustomed to working remotely, business travel and the associated flight hours may not reach the pre-pandemic levels.

domestic air travel continues to recover, international travel utilizing wide-body aircraft will take longer to fully recover.

Furthermore, as companies and employees become accustomed to working remotely, business travel and the associated flight hours may not reach pre-pandemic levels.

As such, we believe the commercial market may shift away from wide-body aircraft.

Any decrease in demand resulting from a downturn in the aerospace market could adversely affect our business, financial condition, and results of operations.

23 unchanged sentences

These fines and penalties could be imposed for failing to follow procurement integrity and bidding rules, employing improper billing practices or otherwise failing to follow cost accounting standards, receiving or paying kickbacks, or filing false claims.

We have been, and expect to continue to be, subjected to audits and investigations by government agencies.

The failure to comply with the terms of our government

contracts could harm our business reputation.

We have been, and expect to continue to be, subjected to audits, reviews, and investigations by government agencies.

The failure to comply with the terms of our government contracts could harm our business reputation.

It could also result in our progress payments being withheld.

36 unchanged sentences

We include documentation with our products sold to aircraft manufacturing customers certifying that each part complies with applicable regulatory requirements and meets applicable standards of airworthiness established by the FAA or the equivalent regulatory agencies in other countries.

In order to sell our products, the Corporation as well as the products that we manufacture must also be certified by our individual OEM customers.

In order to sell our products, we as well as the products that we manufacture must also be certified by our individual OEM customers.

If any of the material authorizations or approvals qualifying us to supply our products is revoked or suspended, then the sale of such product would be prohibited by law, which would have an adverse effect on our business, financial condition, and results of operations.

3 unchanged sentences

Our business and facilities are subject to numerous federal, state, local, and foreign laws and regulations relating to the use, manufacture, storage, handling, and disposal of hazardous materials and other waste products.

W e may also be subject to increasingly stringent environmental standards in the future, particularly as greenhouse gas emissions and climate change regulations and initiatives increase.

Environmental laws generally impose liability for investigation, remediation, and removal of hazardous materials and other waste products on property owners and those who dispose of materials at waste sites, whether or not the waste was disposed of legally at the time in question.

1 unchanged sentence

We are required to contribute to the costs of the investigation and remediation and to establish reserves in our financial statements for future costs deemed probable and estimable.

Although we have estimated and reserved for future environmental remediation costs, the final resolution of these liabilities may significantly vary from our estimates and could potentially have an adverse effect on our results of operations and financial position.

results of operations and financial position.

We are also subject to worker health and safety requirements as well as various state and local public health laws, rules, regulations and orders related to COVID-19, including mask and social distancing requirements.

6 unchanged sentences

In addition, plaintiffs in many types of actions may seek punitive damages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief.

These proceedings could result in substantial cost and may require us to devote substantial resources to defend ourselves.

These proceedings could result in substantial cost and may require us to devote substantial resources to defend ourselves and distract our management from the operation of our business.

Moreover, any insurance or indemnification rights that we may have may be insufficient or unavailable to protect us against such losses.

The ultimate resolution of these matters through settlement, mediation, or court judgment could have a material impact on our financial condition, results of operations, and cash flows.

7 unchanged sentences

Increasing focus on environmental, social, and governance responsibility may impose additional costs on us and expose us to new risks.

Regulators, stockholders, and other interested constituencies have focused increasingly on the environmental, social, and governance practices of companies.

Our customers may require us to implement environmental, social, or governance responsibility procedures or standards before they continue to do business with us.

Additionally, we may face reputational challenges in the event that our environmental, social, or governance responsibility procedures or standards do not meet the standards set by certain constituencies.

Regulators, stockholders, and other interested constituencies have focused increasingly on corporate responsibility, specifically related to the environmental, social, and governance (ESG), practices of companies, including climate change.

Some investors have used, and may continue to use, ESG criteria to guide their investment strategies, and may not invest in us, or divest their holdings of us, if they believe our policies relating to ESG matters are inadequate.

Our customers may also require us to implement environmental, social, or governance responsibility procedures or standards before they continue to do business with us.

Additionally, we may face reputational challenges if our environmental, social, or governance responsibility procedures or standards do not meet the standards set by certain constituencies.

The occurrence of any of the foregoing could have a material adverse effect on our business, financial condition, and results of operations.

4 unchanged sentences

Doing business in foreign countries is subject to numerous risks, including without limitation:

political and economic instability and potential for social unrest, the uncertainty of the ability of non-U.S.

customers to finance purchases, restrictions on the repatriation of funds, restrictive trade policies, tariff regulations, difficulties in obtaining export and import licenses, government financed competition, changes in the local labor-relations climate, economic conditions in local markets, health concerns (including the COVID-19 pandemic), complying with foreign regulatory and tax requirements that are subject to change, and limitations on our ability to enforce legal rights and remedies.

(a) political and economic instability and potential for social unrest;

(b) the uncertainty of the ability of non-U.S.

customers to finance purchases;

(d) restrictive trade policies;

(e) tariff regulations;

(f) difficulties in obtaining export and import licenses;

(g) government financed competition;

(h) changes in the local labor-relations climate;

(i) economic conditions in local markets, including changes in inflation;

(j) health concerns (including the COVID-19 pandemic);

(k) complying with foreign regulatory and tax requirements that are subject to change;

and (l) limitations on our ability to enforce legal rights and remedies.

For example, i n response to Russia’s invasion of Ukraine, the United States, along with the European Union, has imposed restrictive sanctions on Russia, Russian entities, and Russian citizens.

We are subject to these governmental sanctions and export controls, which may subject us to liability if we are not in

full compliance with applicable laws.

Further, implementation of new tariff schemes by various governments, such as those implemented by the United States and China in recent years, could potentially increase the costs of our materials, increase our cost of production, and ultimately increase the landed cost of our products sold from one country into another country.

While these factors or the impact of these factors are difficult to predict, any one or more of these factors could adversely affect our operations.

There has been, and may continue to be, significant volatility in global stock markets and foreign currency exchange rates that result in the strengthening of the U.S.

dollar against foreign currencies in which we conduct business.

To the extent that foreign sales are transacted in foreign currencies and we do not enter into currency hedge transactions, we are exposed to risk of losses due to fluctuations in foreign currency exchange rates, particularly for the British Pound, Euro, and Canadian dollar.

3 unchanged sentences

Changes in domestic or foreign income tax laws and regulations, or their interpretation, could result in higher or lower income tax rates assessed or changes in the taxability of certain revenues or the deductibility of certain expenses, thereby affecting our income tax expense and profitability.

The Biden administration announced in 2021 several tax proposals to fund new government investments in infrastructure, healthcare, and education, among others.

Certain of these proposals involve an increase in the domestic corporate tax rate, which if implemented could have a material impact on our future results of operations and cash flows.

In both 2021 and 2022, the Biden administration announced, and in certain cases has enacted, several tax proposals to fund new government investments in infrastructure, healthcare, and education, among others.

Certain of these proposals involve an incre ase in the domestic corporate tax rate, which if implemented could have a material impact on our future results of operations and cash flows.

On August 16, 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law, with tax provisions primarily focused on implementing a 15% minimum tax on global adjusted financial statement income and a 1% excise tax on share repurchases.

Certain provisions of the IRA will become effective beginning in fiscal 2023.

We have evaluated the impact of the IRA on our business, and deem it to be immaterial.

In addition, on March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was enacted in response to the COVID-19 pandemic.

The CARES Act, among other things, included certain changes in tax law intended to stimulate the U.S.

economy in light of the COVID-19 pandemic, including temporary beneficial changes to the treatment of net operating losses, interest deductibility limitations, and payroll tax matters.

economy due to the COVID-19 pandemic, including temporary beneficial changes to the treatment of net operating losses, interest deductibility limitations, and payroll tax matters.

The CARES Act is subject to interpretation and implementation guidance by both federal and state tax authorities, as well as amendments and technical corrections.

11 unchanged sentences

Long-term contract accounting requires judgment relative to assessing risks, estimating contract revenues and costs, and making assumptions for schedule and technical issues.

Due to the size and nature of many of our contracts, the estimation of total

revenues and costs at completion is complicated and subject to many variables.

For example, assumptions have to be made regarding the length of time to complete the contract as costs also include expected increases in wages and prices for materials.

Similarly, assumptions have to be made regarding the future impact of efficiency initiatives and cost reduction efforts.

Incentives, awards, price escalations, liquidated damages, or penalties related to performance on contracts are considered in estimating revenue and profit rates and are recorded when there is sufficient information to assess anticipated performance.

Due to the size and nature of many of our contracts, the estimation of total revenues and costs at completion is complicated and subject to many variables.

For example, assumptions must be made regarding the length of time to complete the contract, as costs also include expected increases in wages and prices for materials.

Similarly, assumptions must be made regarding the future impact of efficiency initiatives and cost reduction efforts.

Incentives, awards, price escalations, liquidated damages, or penalties related to performance on contracts are considered in estimating revenue and profit rates using either the expected value method or most likely amount method.

It is possible that materially different amounts could be obtained, because of the significance of the judgments and estimation processes described above, if different assumptions were used or if the underlying circumstances were to change.

11 unchanged sentences

As of December 31, 2022, we had $1.3 billion of debt outstanding.

Our level of debt could have significant consequences for our business including:

requiring us to use our cash flow to pay the principal and interest on our debt;

reducing funds available for acquisitions and other investments in our business;

making us vulnerable to economic downturns and increases in interest rates;

limiting us from obtaining additional debt;

and impacting our ability to pay dividends.

Our level of debt could have significant consequences for our business.

For example, our indebtedness could require us to use a substantial portion of our cash flows from operations to pay the principal and interest on our debt, thereby reducing funds available for working capital, acquisitions, dividends, capital expenditures, and other investments in our business, including investments in technology and research and development;

make us vulnerable to economic downturns and increases in interest rates;

limit us from obtaining additional debt;

limit our flexibility in planning for, or reacting to, changes in the industries in which we compete;

and place us at a competitive disadvantage compared to our competitors, some of whom have lower debt service obligations and greater financial resource than we do.

We self-insure health benefits and may be adversely impacted by unfavorable claims experience.

26 unchanged sentences

Therefore, we may not be able to retain our existing management and technical personnel or fill new management or technical positions or vacancies created by expansion or turnover at our existing compensation levels.

Although we have entered into change of control agreements with some members of senior management, we do not have employment contracts with our key executives.

Although we have entered into change of control agreements with some members of senior management,

we do not have employment contracts with our key executives.

As some of our key executives approach retirement age, we have made a concerted effort to reduce the effect of the loss of our senior management personnel through management succession planning.

2 unchanged sentences

On September 9, 2021, President Biden directed the Department of Labor’s Occupational Safety and Health Administration (“OSHA”) to issue an Emergency Temporary Standard (“ETS”) requiring that all employers with at least 100 employees ensure that their employees are fully vaccinated for COVID-19 or obtain a negative COVID-19 test at least once a week.

President Biden also issued an Executive Order requiring certain COVID-19 precautions for government contractors and their subcontractors, including mandatory employee vaccination, with exemptions only for medical or religious reasons.

On November 4, 2021, the OSHA issued an emergency regulation to carry out this mandate, which was expected to take effect on January 4, 2022.

However, the U.S.

Supreme Court issued a nationwide stay prohibiting OSHA from enforcing or implementing the ETS.

However, OSHA withdrew the ETS on January 26, 2022 as an enforceable emergency temporary standard following the U.S.

Supreme Court issuing a nationwide stay prohibiting OSHA from enforcing or implementing the ETS.

OSHA explicitly did not withdraw the ETS as a proposed rule, such that it is possible that a permanent rule regarding COVID-19 vaccination and testing requirements will ultimately be issued by OSHA following a formal rulemaking process.

These requirements for federal contractors have been the subject of multiple lawsuits and enforcement has been enjoined nationwide, with appeals from those decisions pending in multiple federal appellate courts.

It is not currently possible to predict the impact on our business of a permanent OSHA rule, or the requirements for government contractors and their subcontractors, to the extent that such OSHA rule and requirements for federal contractors are ultimately implemented and enforced.

But many states and localities are free to impose vaccine requirements.

21 unchanged sentences

Global economic conditions may adversely affect our business, operating results and financial condition.

Although we currently generate significant operating cash flows, which combined with access to the credit markets provides us with significant discretionary funding capacity, global macroeconomic uncertainty, including the economic downturn caused by the COVID-19 pandemic, the ongoing trade disputes between the United States and China, the United Kingdom’s withdrawal from the European Union, and uncertainty regarding the stability of global credit and financial markets could affect our ability to fund our operations.

Although we currently generate significant operating cash flows, which combined with access to the credit markets provides us with significant discretionary funding capacity, global macroeconomic uncertainty, including the economic downturn caused by the COVID-19 pandemic, the ongoing trade disputes between the United States and China, the United Kingdom’s withdrawal from the European Union, the Russia-Ukraine conflict (including related sanctions as well as measures taken in response to

such sanction), inflationary pressures, global supply chain disruptions, and uncertainty regarding the stability of global credit and financial markets could affect our ability to fund our operations.

In addition, certain of our customers and suppliers could be affected directly by an economic downturn and could face credit issues or cash flow problems that could give rise to payment delays, increased credit risk, bankruptcies, and other financial hardships, which could impact customer demand for our products as well as our ability to manage normal commercial relationships with our customers and suppliers.

2 unchanged sentences

Approximately 7% of our workforce is employed under collective bargaining agreements, which from time to time are subject to renewal and negotiation.

We cannot ensure that we will be successful in negotiating new collective bargaining agreements, that such negotiations will not result in significant increases in the cost of labor, or that a breakdown in such negotiations will not result in the disruption of our operations.

We cannot ensure that we will be successful in negotiating new collective bargaining agreements, that such negotiations will not result in significant increases in the cost of labor, including healthcare, pensions, or other benefits, or that a breakdown in such negotiations will not result in the disruption of our operations, including by way of strikes or work stoppages.

Although we have generally enjoyed good relations with both our unionized and non-unionized employees, we may experience an adverse impact on our operating results if we are subject to labor actions.

Future terror attacks, war, natural disasters, climate change-related events, pandemic diseases (including the COVID-19 pandemic), or other events beyond our control could adversely impact our businesses.

Despite our concerted effort to minimize risk to our production capabilities and corporate information systems and to reduce the effect of unforeseen interruptions through insurance or other risk transfer mechanisms, such as our business continuity planning and disaster recovery plans, we could be adversely impacted by terror attacks, war, natural disasters such as hurricanes, floods, tornadoes, climate change-related events, pandemic diseases such as COVID-19, or other events such as strikes by the workforce of a significant customer or supplier.

Future terror attacks, war (including the Russia-Ukraine conflict), natural disasters, climate change-related events, pandemic diseases (including the COVID-19 pandemic), or other events beyond our control could adversely impact our businesses.

Despite our concerted effort to minimize risk to our production capabilities and corporate information systems and to reduce the effect of unforeseen interruptions through insurance or other risk transfer mechanisms, such as our business continuity planning and disaster recovery plans, we could be adversely impacted by terror attacks, war (including the Russia-Ukraine conflict), natural disasters such as earthquakes, hurricanes, floods, tornadoes, ice storms, climate change-related events, pandemic diseases such as COVID-19, or other events such as strikes by the workforce of a significant customer or supplier.

Several of our facilities, because of their locations, could be subject to catastrophic loss caused by the aforementioned natural disasters.

G lobal climate change may aggravate natural disasters and increase severe weather events that affect our business operations.

These risks could negatively impact demand for or supply of our products and could also cause disruption to our facilities or systems, which could also interrupt operational processes and adversely impact our ability to manufacture our products and provide services and support to our customers.

We operate facilities in areas of the world that are exposed to natural disasters.

Financial difficulties of our customers, delays by our customers in production of their products, high fuel prices, the concern of another major terrorist attack, and the overall decreased demand for our products could adversely affect our operating results and financial condition.

The insurance we maintain may be insufficient to cover our losses, and any incidents may result in loss of, or increased costs of, such insurance.

In addition, while our existing disaster recovery and business continuity plans (including those relating to our information technology systems) are well designed, they may not be fully responsive to, or minimize losses associated with, catastrophic events.

As a result, any business disruption could negatively affect our business, operating results, or financial condition.

Unresolved Staff Comments.

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