What changed in this filing

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Item 1A. Risk Factors

2026-02-12 compared with 2025-02-13 · 80 added, 81 removed, 351 unchanged (31% of the section changed)

7 unchanged sentences

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

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.

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

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

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

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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 incur, 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 various cyber and other security threats, including those caused by computer hackers, physical or electronic break-ins, sabotage, computer viruses, malware, worms, and similar disruptions from unauthorized access and tampering with our computer systems, including through social engineering such as phishing attacks, coordinated denial-of-service attacks, and similar incidents .

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

To the extent artificial intelligence capabilities improve and are increasingly adopted, they may be used to identify vulnerabilities and produce advanced cybersecurity attacks, and vulnerabilities may be introduced from the use of artificial intelligence by us, our customers, suppliers and other business partners and third-party providers.

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

While we carry cyber insurance, we still may be required to expend significant capital and resources to protect against, remediate, or alleviate problems caused by such intrusions.

Any such intrusion could cause us to be non-compliant with applicable laws or regulations, subject us to legal claims or proceedings, disrupt our operations, damage our reputation, and cause a loss of confidence in our products and services, any of which could have a material adverse effect on our business, financial condition, and results of operations.

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

A failure to comply with these requirements could negatively impact our business and financial condition.

Potential product liability risks exist from the products that we sell.

We may be exposed to liabilities for personal injury, death, or property damage due to the failure of a product that we have sold.

We typically agree to indemnify our customers against certain liabilities resulting from the products we sell, and any third-party indemnification we seek from our suppliers and our liability insurance may not fully cover our indemnification obligations to customers.

We typically agree to indemnify our customers against certain liabilities resulting from the products we sell, and any third-

party indemnification we seek from our suppliers and our liability insurance may not fully cover our indemnification obligations to customers.

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

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We believe that our customers consider safety and reliability as key criteria in selecting our products and believe that our reputation for quality assurance is a significant competitive strength.

If an accident were to be caused by one of our products, or if we were to

otherwise fail to maintain a satisfactory record of safety and reliability, our ability to retain and attract customers may be materially adversely affected.

If an accident were to be caused by one of our products, or if we were to otherwise fail to maintain a satisfactory record of safety and reliability, our ability to retain and attract customers may be materially adversely affected.

We are subject to liability under warranty obligations .

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

Our businesses depend on suppliers and subcontractors for raw materials and components.

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

Our supply chain has been and may continue to be impacted by a wide variety of factors, including labor and material shortages as well as geopolitical events, such as the Russia-Ukraine war, and China’s relationship with the United States and Taiwan.

Our businesses depend on suppliers and subcontractors for raw materials and components, as well as services that we provide to our customers.

Our supply chain has been and may continue to be impacted by a wide variety of factors, including supplier capacity constraints, sanctions and trade restrictions and other governmental regulatory actions or inactions, labor and material shortages as well as tariffs and other geopolitical events, such as the Russia-Ukraine war and China’s relationship with the United States and Taiwan.

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 that we require.

We also 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.

Generally, raw materials and purchased components are available from a number of different suppliers, though several suppliers are our sole source of certain components.

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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.

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

Our business involves risks associated with complex manufacturing processes.

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Moreover, the competitive nature of our businesses requires us to continuously implement process changes intended to achieve product improvements and manufacturing efficiencies.

These process changes may at times result in production delays, quality concerns, and increased costs.

These process changes may at times result

in production delays, quality concerns, and increased costs.

Any disruption of operations at our facilities due to equipment failures or process interruptions could have a material adverse effect on our business.

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Implementing our acquisition strategy involves risks, and our failure to successfully implement this strategy could have a material adverse effect on our business.

As part of our capital allocation strategy, we aim to grow our business by selectively pursuing acquisitions and technologies that supplement our organic growth.

We are continuing to actively pursue additional acquisition opportunities, some of which may be material to our business and financial performance.

As part of our capital allocation strategy, we aim to grow our business by selectively pursuing acquisitions and technologies that supplement our organic growth, some of which may be material to our business and financial performance.

Although we have been successful with this strategy in the past, we may not be able to grow our business in the future through acquisitions for several reasons, including:

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Our future success will depend, in part, on our ability to develop new technologies.

Virtually all products produced and sold by us are highly engineered and require sophisticated manufacturing and system-integration techniques and capabilities.

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

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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.

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.

Furthermore, while we do not currently use artificial intelligence (“AI”) in the design and development of our products, we may seek to utilize AI in the future.

The development, deployment, and integration of AI technologies presents risks, challenges, and potential unintended consequences that could affect our business.

Given that laws and regulations around AI are continuously evolving, our obligation to comply with them could entail significant costs, negatively affect our business, or hinder our ability to incorporate certain AI capabilities into our operations and products.

We operate in highly competitive markets.

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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.

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

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

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Government’s budget deficits, spending priorities, and possible political pressure to reduce U.S.

Government military spending, each of which could cause the Department of Defense budget to remain unchanged or to decline.

Government military spending, each of which could cause the DoW budget to remain unchanged or to decline.

Generally, an increase in the level of concern over the country’s safety tends to increase defense budgets.

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Decreases in U.S.

defense spending, changes in the allocation of defense spending, or the expiration or termination of certain aerospace and defense programs on which we have content could result in a reduction in our revenues and earnings and could have a material adverse effect on our business, financial condition, and results of operations.

lawmakers on several occasions have passed legislation to raise the federal debt ceiling, including the suspension to the federal debt ceiling in June 2023, which allowed the U.S.

government to cover its debt obligations until January 1, 2025.

Because Congress failed to further suspend or increase the debt ceiling, the debt ceiling was reinstated on January 1, 2025.

Department of the Treasury has announced that, since then, it has been using extraordinary measures to prevent the U.S.

government’s default on its payment obligations, and to extend the time that the U.S.

government has to raise its statutory debt limit, reinstate a suspension or otherwise resolve its funding situation.

If extraordinary measures are exhausted prior to legislation being enacted to resolve the funding situation, the U.S.

government may not be able to fulfill its funding obligations.

This 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.

defense spending, changes

in the allocation of defense spending, or the expiration or termination of certain aerospace and defense programs on which we have content could result in a reduction in our revenues and earnings and could have a material adverse effect on our business, financial condition, and results of operations.

lawmakers on several occasions have passed legislation to raise the federal debt ceiling, the most recent of which was through the passage on July 4, 2025 of the One Big Beautiful Bill Act ("OBBBA"), which raised the federal debt ceiling by $5 trillion.

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.

government contracts, even if the U.S.

government is unable to make timely payments.

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

Our sales to large commercial aircraft manufacturers, such as Boeing, Airbus, and related OEM suppliers, as well as manufacturers of business jets, 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, high interest rates, the retirement of older aircraft, regulatory changes, outbreak of infectious disease such as COVID-19, terrorist attacks, labor strikes such as the International Association of Machinists and Aerospace workers union work stoppage at Boeing, geopolitical events, conflicts and wars (including the Russia-Ukraine war), general economic conditions (including cost inflation), worldwide airline profits, and backlog levels, all of which can be unpredictable and are outside our control.

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

Our sales to large commercial aircraft manufacturers, such as Boeing, Airbus, and related OEM suppliers, as well as manufacturers of business jets, 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, high interest rates, the retirement of older aircraft, regulatory changes, outbreak of infectious disease such as COVID-19, terrorist attacks, labor strikes such as the International Association of Machinists and Aerospace workers union work stoppages at Boeing, geopolitical events, conflicts and wars (including the Russia-Ukraine war), general economic conditions (including cost inflation), worldwide airline profits, and backlog levels, all of which can be unpredictable and are outside of 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 cancelled or delayed the purchases of new aircraft.

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

Furthermore, as companies and employees become accustomed to working remotely, there is a risk that business travel and the associated flight hours may be impacted.

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

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Backlog represents products or services that our customers have contractually committed to purchase from us.

Total backlog includes both funded (unfilled orders for which funding is authorized, appropriated, and contractually obligated by the customer) and unfunded backlog (firm orders for which funding has not been appropriated and/or contractually obligated by the customer).

We are a subcontractor to prime contractors for the vast majority of our government business.

As such, substantially all amounts in backlog are funded.

As we are a subcontractor to prime contractors for the vast majority of our government business, substantially all amounts in backlog are funded.

Backlog excludes unexercised contract options and potential orders under ordering type contracts (e.g.

Indefinite Delivery / Indefinite Quantity).

Backlog is adjusted for changes in foreign exchange rates and is reduced for contract cancellations and terminations in the period in which they occur.

Backlog as of December 31, 2024 was $3.4 billion.

Further, it is adjusted for changes in foreign exchange rates and is reduced for contract cancellations and terminations in the period in which they occur.

Backlog as of December 31, 2025 was approximately $4.1 billion.

Backlog is subject to fluctuations and is not necessarily indicative of future sales.

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We must comply with and are affected by laws and regulations relating to the award, administration, and performance of U.S.

Government contracts.

Government contract laws and regulations affect how we do business with our customers and, in some instances, impose added costs on our business.

These regulations and other requirements regularly evolve, and new laws, regulations or procurement requirements or changes to current ones could significantly increase our costs and risks and reduce our profitability.

A violation of specific laws and regulations could also result in the imposition of fines and penalties, the termination of our contracts, or debarment from bidding on contracts.

Government contracts, which in some instances, impose added costs on our business.

These regulations and other requirements regularly evolve, and new laws, regulations or procurement requirements or changes to current ones could further significantly increase our costs and risks and reduce our profitability.

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

A violation of specific laws and regulations could also result in the imposition of fines and penalties, the termination of our contracts, debarment from bidding on contracts, harm to our business reputation, or result in our progress payments being withheld.

These fines and penalties could be imposed, for example, by 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, 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.

In some instances, these laws and regulations impose terms or rights that are more favorable to the government than those typically available to commercial parties in negotiated transactions.

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Government contracts typically span one or more base years and multiple option years.

Government generally has the right to not exercise option periods and may not exercise an option period if the agency is not satisfied with

our performance on the contract or does not receive funding to continue the program.

Government generally has the right to not exercise option periods and may not exercise an option period if the agency is not satisfied with our performance on the contract or does not receive funding to continue the program.

Government procurement may adversely affect our cash flow or program profitability.

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We have contracts and operations in many parts of the world subject to United States and foreign laws and regulations, including the False Claims Act, regulations relating to import-export control (including the International Traffic in Arms Regulation promulgated under the Arms Export Control Act), sanctions programs implemented by the Office of Foreign Assets Control of the U.S.

Department of Treasury, technology transfer restrictions, repatriation of earnings, exchange controls, the Foreign Corrupt Practices Act, the U.K.

Department of Treasury ("OFAC"), technology transfer restrictions, repatriation of earnings, exchange controls, the Foreign Corrupt Practices Act, the U.K.

Anti-Bribery Act, and the anti-boycott provisions of the U.S.

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From time to time, we may file voluntary disclosure reports with the U.S.

Department of State, the Department of Energy, and the Department of Commerce regarding certain violations of U.S.

export control laws and regulations discovered by us in the course of our business activities, employee training, or internal reviews and audits.

Department of State, the Department of Energy, the Department of Commerce, and the Department of Treasury regarding certain violations of U.S.

export control laws and regulations and OFAC sanctions discovered by us in the course of our business activities, employee training, or internal reviews and audits.

To date, our voluntary disclosures have not resulted in a fine, penalty, or export privilege denial or restriction that has had a material adverse impact on our financial condition or ability to export.

Our failure, or failure by our sales representatives or consultants to comply with these laws and regulations could result in administrative, civil, or criminal liabilities and could, in the extreme case, result in suspension or debarment from government contracts or suspension of our export privileges, which could have a material adverse effect on our business.

Any significant disruption in the commercial nuclear power industry could adversely affect our business .

Any significant disruption in the commercial nuclear power industry, including delays in the development of small modular reactors, could adversely affect our results of operations or future outlook.

Market demand for, and our ability to supply products and services to the commercial nuclear industry is dependent on the continued operation of nuclear power plants globally and, to a lesser extent, on the construction of new nuclear power plants.

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Government, the Department of Energy, the Nuclear Regulatory Commission, and other agencies in foreign jurisdictions.

In the event of non-compliance, these agencies might increase regulatory oversight, impose fines or shut down operations, depending on their assessment of the severity of the noncompliance.

In the event of non-compliance, these agencies might increase regulatory oversight, impose fines, or shut down operations, depending

on their assessment of the severity of the noncompliance.

In addition, new or revised security and safety requirements promulgated by these agencies could necessitate substantial capital and other expenditures.

The Price-Anderson Act (“PPA”) promotes the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and U.S.

The Price-Anderson Act promotes the nuclear industry by offering broad indemnification to commercial nuclear power plant operators and U.S.

Department of Energy (“DOE”) contractors for liabilities arising out of nuclear incidents at power plants licensed by the Nuclear Regulatory Commission (“NRC”) and at DOE nuclear facilities.

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The Price-Anderson Act indemnification provisions may not apply to all liabilities that we might incur while performing services as a contractor for the DOE and the nuclear power industry.

If an incident or evacuation is not covered under the Price-Anderson Act’s indemnification provisions, we could be

held liable for damages, regardless of fault.

If an incident or evacuation is not covered under the Price-Anderson Act’s indemnification provisions, we could be held liable for damages, regardless of fault.

In addition, if such indemnification authority is not applicable in the future, for instance, our business could be adversely affected if the owners and operators of nuclear power plants fail to retain our services in the absence of commercially adequate insurance and indemnification.

We offer similar services in other jurisdictions outside the U.S.

We offer similar services in other jurisdictions outside the United States.

For those jurisdictions, varying levels of nuclear liability protection is provided by international treaties, and/or domestic laws, such as the Nuclear Liability and Compensation Act of Canada and the Nuclear Installations Act of the United Kingdom, insurance and/or assets of the nuclear installation operators (some of which are backed by governments) as well as under appropriate enforceable contractual indemnifications and hold-harmless provisions.

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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.

From time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which are usually more stringent than existing regulations.

In addition, from time to time, the FAA or equivalent regulatory agencies in other countries propose new regulations or changes to existing regulations, which are usually more stringent than existing regulations.

If these proposed regulations are adopted and enacted, we may incur significant additional costs to achieve compliance, which could have a material adverse effect on our business, financial condition, and results of operations.

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We are currently addressing environmental remediation at certain current and former facilities, and we have been named as a potentially responsible party along with other organizations in a number of environmental clean-up sites and may be named in connection with future sites.

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.

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.

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From time to time, we are involved in lawsuits and regulatory actions brought or threatened against us in the ordinary course of business.

These actions and proceedings may involve claims for, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, or breach of contract.

These actions and proceedings may involve claims for, among other things, asbestos and environmental exposures, intellectual property matters, copyright infringement, compensation for alleged personal injury, workers’ compensation, employment and employee benefit matters, government contract issues, commercial or contract disputes, and acquisitions or divestitures.

We also may be subject to class action lawsuits, such as those involving allegations of violations of the Fair Labor Standards Act and state wage and hour laws.

Due to the inherent uncertainties of litigation, we cannot accurately predict the ultimate outcome of any such actions or proceedings.

The outcome of litigation, particularly class action lawsuits and regulatory actions, is difficult to assess or quantify, as plaintiffs may seek recovery of very large or indeterminate amounts in these types of lawsuits, and the magnitude of the potential loss may remain unknown for substantial periods of time.

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 and distract our management from the operation of our business.

Due to the inherent uncertainties of litigation, the ultimate outcome is difficult to assess or quantify, as plaintiffs may seek recovery of very large or indeterminate amounts in these types of lawsuits, including punitive damages, civil penalties, consequential damages or other losses, or injunctive or declaratory relief, and the magnitude of the potential loss may remain unknown for substantial periods of time.

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

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

(j) health concerns

(including COVID-19 or any of its variants);

(j) health concerns (including COVID-19 or any of its variants);

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

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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.

Further, implementation of new tariff schemes by various governments, such as those implemented by the United States, Canada, 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.

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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 .

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 corporate tax on global adjusted financial statement income and a 1% excise tax on share repurchases.

Certain provisions of the IRA became effective in the beginning of fiscal 2023.

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

On July 4, 2025, the U.S.

government enacted the OBBBA, which extended various expiring tax provisions from the Tax Cuts and Jobs Act of 2017 ("TCJA") and introduced a variety of other substantial tax law changes.

For Curtiss-Wright, the most significant impact relates to the immediate expensing of research and development expenditures in 2025, reducing total estimated 2025 tax payments.

There was no material impact to the Corporation's 2025 effective tax rate.

Further, changes in the tax laws of foreign jurisdictions where we operate could arise as a result of the base erosion and profit shifting project undertaken by the Organization for Economic Co-operation and Development ("OECD").

In December 2022, the European Union ("EU") member states reached an agreement to implement the 15% minimum corporate tax component ("Pillar Two") of the OECD’s tax reform initiative with certain aspects effective January 1, 2024, and other aspects effective January 1, 2025.

Further, on January 5, 2026, the OECD released a comprehensive package for a “side-by-side arrangement” with respect to Pillar Two global minimum tax rules that includes new administrative guidance.

Legislative changes to address Pillar Two are being adopted by taxing authorities in countries where we do business.

Based on the Corporation’s preliminary assessments, it does not expect Pillar Two to have a material impact on its effective tax rate nor on its consolidated results of operation, financial position, and cash flows.

Based on the Corporation’s assessments, it does not expect Pillar Two to have a material impact on its effective tax rate nor on its consolidated results of operation, financial position, and cash flows.

Furthermore, the amount of income taxes paid by us is subject to examination by U.S.

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Due to the size and nature of many of our contracts, the estimation of total net sales 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 and allocated fixed costs.

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 and allocated fixed costs.

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

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In addition, we are required to make an annual measurement of plan assets and liabilities, which may result in a significant change to equity through a reduction or increase to other comprehensive income.

For a discussion regarding how our financial statements can be affected by pension and other

postretirement benefit plans accounting policies, see “Management’s Discussion and Analysis—Critical Accounting Estimates and Policies—Pension and Other Postretirement Benefits” in Part II, Item 7 of this Form 10-K.

For a discussion regarding how our financial statements can be affected by pension and other postretirement benefit plans accounting policies, see “Management’s Discussion and Analysis—Critical Accounting Estimates and Policies—Pension and Other Postretirement Benefits” in Part II, Item 7 of this Form 10-K.

Although U.S.

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Although there are no immediate effects on our operations with respect to USMCA, we cannot predict future developments in the political climate involving the United States, Mexico and Canada, and thus, these may have an adverse and material impact on our operations and financial growth.

The United States and other countries have levied tariffs and taxes on certain goods, such as those implemented by the United States and China in recent years.

The USMCA is subject to renewal in 2026 and the U.S.

government has recently indicated that it intends to negotiate changes to the USMCA with the Mexican and Canadian governments.

The effects of such negotiations and any changes to the USMCA may negatively impact our operations in Mexico and Canada, and may significantly and materially increase our costs by increasing the cost of shipping products from our facilities in Mexico and in Canada.

The United States and other countries have levied tariffs and taxes on certain goods, such as those implemented by the United States, Canada, and China in recent years.

Some of our products are included in these tariffs.

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Our price increases may not be sufficient to fully offset the impact of the tariffs, and result in lowering our margin on products sold.

government increases or implements additional tariffs, or if additional tariffs or trade restrictions are implemented by other countries, the resulting trade barriers could have a significant adverse impact on our suppliers, our customers and on our business.

government increases or implements additional tariffs, or if additional tariffs

or trade restrictions are implemented by other countries, the resulting trade barriers could have a significant adverse impact on our suppliers, our customers and on our business.

We are not able to predict future trade policy of the U.S.

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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, the ongoing trade disputes between the United States and China, armed conflicts around the world, such as those in Ukraine and Israel, and any conflict or threatened conflict between China and Taiwan (including the imposition of related sanctions by the United States and other countries as well as measures taken in response to such sanctions), inflationary pressures, rising interest rates, labor shortages, 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.

Historically, we have not been significantly impacted by inflation, with increases in raw material costs or payroll costs generally offset through lean manufacturing activities or pricing initiatives.

However, in recent history, we have experienced heightened pressures in our costs of material, services, and especially labor, consistent with the overall high rates of inflation.

We have consistently focused on mitigating inflation through pricing and operational excellence initiatives, and generally have been able to offset these cost increases, as a portion of our contracts contain terms and conditions that enable us to pass inflationary price increases to our customers.

In those cases whereby inflationary increases are not contractually stipulated, we aim to actively negotiate price increases.

We have consistently made annual investments in capital that deliver efficiencies and cost savings, while continuing to focus on negotiating better contract terms, especially on long-term agreements.

While the historical benefits of these efforts have generally offset the margin impact of competitive pricing conditions in the markets that we serve, 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 costs through price increases on a timely basis.

Although we have significant discretionary funding capacity through our generation of significant operating cash flows coupled with access to the credit markets, our ability to fund our operations could be negatively impacted by the following factors:

(a) global macroeconomic uncertainty, (b) the ongoing trade disputes between the United States, Canada, and China, (c) armed conflicts around the world, such as those in Ukraine, (d) any conflict or threatened conflict between China and Taiwan (including the imposition of related sanctions by the United States and other countries as well as measures taken in response to such sanctions), (e) any prolonged future U.S.

government shutdown, (f) inflationary pressures, (g) rising interest rates, (h) labor shortages, (i) global supply chain disruptions, and (j) uncertainty regarding the stability of global credit and financial markets.

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 har dships, which could impact customer demand for our products as well as our ability to manage normal commercial relationships with our customers and suppliers.

Depending on their severity and duration, the effects and consequences of a global economic downturn could have an adverse impact on our results of operations and financial condition.

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Future terror attacks, war (including the Russia-Ukraine war), natural disasters, climate change-related events, 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 war), natural disasters such as earthquakes, hurricanes, floods, tornadoes, ice storms, climate change-related events, or other events such as strikes by the workforce of a significant customer or supplier (e.g., the International Association of Machinists and Aerospace workers union work stoppage at Boeing).

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

15 unchanged sentences

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