What changed in this filing

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Item 1A. Risk Factors

2025-03-03 compared with 2024-02-28 · 164 added, 102 removed, 827 unchanged (24% of the section changed)

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government priorities and spending levels more broadly may negatively impact our business and could have a material adverse impact on our business, financial condition and results of operations.

• Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts.

• Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-materials type contracts.

In particular, fixed-price contracts subject us to the risk of loss in the event of cost overruns or higher than anticipated inflation.

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• Our international business exposes us to additional risks, including risks related to geopolitical conflicts, including the war in Israel, and economic factors, laws and regulations.

• Our efforts to localize our business operations in new territories present significant challenges and could adversely affect our growth strategy and our financial performance.

• A failure to attract and retain technical and other key personnel could reduce our revenues and our operational effectiveness.

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• CFIUS may modify, delay or prevent our future acquisition or investment activities.

• Our ultimate majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions.

• Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage mergers and acquisitions or change of control transactions.

• Risks related to ownership of our common stock.

Risks Relating to Our Business

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defense spending priorities, what challenges budget reductions will present for the defense industry, whether annual appropriations bills for all agencies will be enacted for U.S.

government fiscal year 2024 and thereafter, and how the Biden administration will approach those decisions through the budgeting process.

government’s budget deficit and the national debt could significantly affect government budgeting priorities and could have an adverse impact on our business, financial condition and results of operations in a number of ways, including the following:

government fiscal year 2025 and thereafter, and how the current administration will approach those decisions through the budgeting process.

Additionally, the current U.S.

administration has discussed various changes to defense spending levels ranging from across-the-board percentage cuts, to a change in spending allocations in favor of new priorities, and potential increases in the top-line spending profile.

It remains unclear whether and to what extent the DoD’s budget may change and, if it does, to what extent our business, financial condition and results of operations may be affected.

Additionally, the U.S.

government’s budget deficit and the national debt could also significantly affect government budgeting priorities and could have an adverse impact on our business, financial condition and results of operations in a number of ways, including the following:

government could reduce or delay its spending on, or reprioritize its spending away from, defense programs in which we participate;

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government agencies due to changes in the definition of “inherently governmental” work, such as proposals to limit contractor access to sensitive or classified information and work assignments.

Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts.

Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-materials type contracts.

In particular, fixed-price contracts subject us to the risk of loss in the event of cost overruns or higher than anticipated inflation.

We generate revenue through various fixed-price, cost-plus and time-and-material contracts.

We generate revenue through various fixed-price, cost-plus and time-and-materials contracts.

For a general description of our U.S.

government contracts and subcontracts, including a discussion of revenue generated thereunder and of cost-reimbursable versus fixed-price contracts please see Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in this Annual Report.

government contracts and subcontracts, including a discussion of revenue generated thereunder and of cost-reimbursable versus fixed-price contracts, see Part II, Item 7, “ Management’s Discussion and Analysis of Financial Condition and Results of Operations ” in this Annual Report.

For the years ended December 31, 2024, 2023, and 2022, approximately 84%, 84% and 87%, respectively, of our revenue was derived from fixed-price contracts.

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We require a facility security clearance to perform on classified contracts for the DoD and certain other agencies of the U.S.

Security clearances are subject to regulations and requirements including, among others, the National Industrial Security Program Operating Manual (the “NISPOM”), which specifies the requirements for the protection of classified information released or disclosed in connection with classified U.S.

connection with classified U.S.

government contracts.

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If we were to violate the terms and requirements of the NISPOM or such industrial security regulations (which apply to us under the terms of classified contracts), or if one or more of our facility or personnel security clearances is invalidated or terminated, we may not be able to continue to perform our existing classified contracts and may not be able to enter into new classified contracts, which could adversely affect our revenues.

forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S.

Failure to comply with the NISPOM or other security requirements may result in loss of access to classified information and subject us to civil and criminal penalties and administrative sanctions, including termination of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S.

government, which could have a material adverse impact on our business, financial condition and results of operations.

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Proxy agreements, including ours, typically have limited duration and need to be renewed on a regular basis.

For additional information on the terms and requirements of the proxy agreement, see “— Risks Relating to Our Status under the Proxy Agreement — We operate under a proxy agreement with the DoD that regulates significant areas of our governance.

For additional information on the terms and requirements of the proxy agreement, see “— Risks Relating to Our Ownership and Status under the Proxy Agreement — We operate under a proxy agreement with the DoD that regulates significant areas of our governance.

If we fail to comply with the proxy agreement our classified U.S.

government contracts could be terminated, which could have a material adverse impact on our business, financial condition and results of operations .”

While we currently mitigate FOCI under the interim proxy agreement, the DoD reserves the right to impose such additional security safeguards as it believes necessary in order to prevent unauthorized access to classified and controlled unclassified information and any U.S.

While we currently mitigate FOCI under the interim proxy agreement, the DoD reserves the right to terminate the proxy agreement or impose such additional security safeguards as it believes necessary in order to prevent unauthorized access to classified and controlled unclassified information and any U.S.

government agency may deny or revoke our access to classified and controlled unclassified information under its jurisdiction if it considers it necessary to protect national security.

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Additionally, our U.S.

government contracts are heavily regulated and subject to audit and negative audit findings which could result in the termination of these or other contracts or the failure to receive future awards, see “— Risks Relating to Our Business — We operate in a highly regulated environment and are routinely audited and reviewed by the U.S.

government contracts are heavily regulated and subject to audit and negative audit

findings which could result in the termination of these or other contracts or the failure to receive future awards, see “— Risks Relating to Our Business — We operate in a highly regulated environment and are routinely audited and reviewed by the U.S.

government and its agencies .”

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They could also ultimately result in termination of a contract (or contracts) for convenience or reduced future orders.

Furthermore, President Trump issued an Executive Order in January 2025, which requires, in relevant part, that every Federal contract or grant award include a clause that requires the contractor or grant recipient to (1) agree that its compliance with all applicable federal anti-discrimination laws is material to the government’s payment decisions on such contract or grant for purposes of the False Claims Act, and (2) certify that it does not operate any programs promoting diversity, equity and inclusion that violate any applicable federal anti-discrimination laws.

The Executive Order increases our compliance risk through an increased risk of civil False Claims Act liability if our current practices are deemed to violate the federal anti-discrimination laws.

We operate in a highly regulated environment and are routinely audited and reviewed by the U.S.

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government and its agencies, such as the Defense Contract Audit Agency (“DCAA”), Defense Contract Management Agency, the DoD Inspector General, and others.

These agencies review performance on government contracts, direct and indirect rates and pricing practices, and compliance

with applicable contracting and procurement laws, regulations and standards.

These agencies review performance on government contracts, direct and indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards.

They also review compliance with government standards for our business systems and the adequacy of our internal control systems and policies.

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These regulations and other requirements increase our performance and compliance costs and risks and regularly evolve.

New laws, regulations or procurement requirements or changes to current ones (including, for example, evolving and strengthening regulations related to cybersecurity, privacy, recovery of employee compensation costs, counterfeit and/or substitute parts, anti-human trafficking, organizational conflicts of interest, specialty metals and conflict minerals) can significantly increase our costs and risks and negatively affect our results of operations.

tariffs imposed or threatened to be imposed on other countries and any retaliatory actions taken by such countries) can significantly increase our costs and risks and negatively affect our results of operations.

If we fail to comply with procurement regulations or other requirements, we may be subject to civil and/or criminal penalties and/or administrative sanctions, which may include termination or modification of contracts, forfeiture of profits, suspension of payments, fines and suspension or prohibition from doing business with the U.S.

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We (including our subcontractors and others with whom we do business) are also subject to, and expected to perform in compliance with, a vast array of federal, state, local and international laws, regulations and requirements related to our industry, our products and the businesses we operate.

(which includes anti-boycott provisions), the False Claims Act, the Federal Acquisition Regulation, the FCPA, the Lobbying Disclosure Act, the Procurement Integrity Act, the Truthful Cost or Pricing Data Act, the Foreign Trade Regulations, the Foreign Investment Risk Review Modernization Act, the International Emergency Economic Powers Act, the Trading with the Enemy Act, and Executive Orders and regulations, administered by the U.S.

These laws and regulations include, but are not limited to, the Anti-Kickback Act, the Arms Export Control Act, including the ITAR, the Communications Act, the Defense Federal Acquisition Regulations, the EAR (which includes anti-boycott provisions), the False Claims Act, the Federal Acquisition Regulation, the FCPA, the Lobbying Disclosure Act, the Procurement Integrity Act, the Truthful Cost or Pricing Data Act, the Foreign Trade Regulations, the Foreign Investment Risk Review Modernization Act, the International Emergency Economic Powers Act, the Trading with the Enemy Act, and Executive Orders and regulations, administered by the U.S.

Department of the Treasury, Office of Foreign Assets Control, as well as rules and regulations administered by the U.S.

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These organizational conflicts of interest regulations have led to increased bid protests related to arguments to disqualify or overturn awards based on conflict grounds.

Considerable uncertainty exists regarding future legislation and regulations as the current administration has issued changing guidance on a wide array of topics including the Executive Order issued in January 2025, which requires, in relevant part, that every Federal contract or grant award include a clause that requires the contractor or grant recipient to (1) agree that its compliance with all applicable federal anti-discrimination laws is material to the government’s payment decisions on such contract or grant for purposes of the False Claims Act, and (2) certify that it does not operate any programs promoting diversity, equity and inclusion that violate any applicable federal anti-discrimination laws.

Future legislation and regulations may increase the restrictions in current organizational conflicts of interest regulations and rules.

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Our industry has experienced, and we expect will continue to experience, significant changes to business practices globally as a result of an increased focus on affordability, efficiencies, business systems, recovery of costs and a reprioritization of available defense funds to key areas for future defense spending.

For example, the current administration implemented an Executive Order in January 2025 creating the Department of Government Efficiency which has the stated purpose of modernizing Federal technology and software to maximize governmental efficiency and productivity.

These initiatives and changes to procurement practices may change the way U.S.

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Changes in procurement practices favoring incentive-based fee arrangements, different award criteria, non-traditional contract provisions and government contract negotiation offers also may affect our results of operations and predictability.

government has been pursuing and may continue to pursue these and other policies that could negatively impact our profitability and adversely impact our business, financial condition and results of operations.

government has been pursuing and may continue to pursue these and other

policies that could negatively impact our profitability and adversely impact our business, financial condition and results of operations.

We use estimates in pricing and accounting for many of our programs, and changes in our estimates could adversely impact our business, financial condition and results of operations.

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We evaluate bookings which we define as the total value of contract awards received from the U.S.

government for which it has

appropriated funds and legally obligated such funds to the Company through a contract or purchase order, plus the value of contract awards and orders received from customers other than the U.S.

government for which it has appropriated funds and legally obligated such funds to the Company through a contract or purchase order, plus the value of contract awards and orders received from customers other than the U.S.

As of December 31, 2024, our total remaining contract value was approximately $8,509 million with bookings of $4,077 million.

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a contract’s funding or scope could be reduced, modified, delayed, de-obligated or terminated early, including as a result of a lack of appropriated funds or cost cutting initiatives and other efforts to reduce U.S.

government spending and/or the automatic federal defense spending cuts required by sequestration;

government spending

and/or the automatic federal defense spending cuts required by sequestration;

in the case of funded backlog, the period of performance for the contract has expired or the U.S.

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We may be required to obtain the consent of US Holding in order to obtain financing and there is no guarantee that their consent will be granted.

See “— Risks Relating to Our Status under the Proxy Agreement — Our ultimate majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their majority ownership in us may discourage change of control transactions .” The existing debt obligations of Leonardo S.p.A., which contain restrictions applicable to subsidiaries of Leonardo S.p.A., including us, may also negatively impact our ability to obtain additional financing on terms acceptable to us, if at all.

See “— Risks Relating to Our Ownership and Status under the Proxy Agreement — Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their majority ownership in us may discourage change of control transactions .” The existing debt obligations of Leonardo S.p.A., which contain restrictions applicable to subsidiaries of Leonardo S.p.A., including us, may also negatively impact our ability to obtain additional financing on terms acceptable to us, if at all.

In addition, any decline in the ratings of our corporate credit or any indications from the rating agencies that their ratings on our corporate credit are under surveillance or review with possible negative implications could adversely impact our ability to access capital.

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The requirements of being a public company may strain our resources and divert management’s attention, and the increases in legal, accounting and compliance expenses may be greater than we anticipate.

In 2022, we became a public company, and as such, have incurred, and will continue to incur, significant legal, accounting and other expenses that we did not incur as a private company.

subject to the reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC and the listing standards of the Nasdaq Stock Exchange (the “Nasdaq”), including changes in corporate governance practices and the establishment and maintenance of effective disclosure and financial controls.

In 2022, we became a public company, and as such, have incurred, and may continue to incur, legal, accounting and other expenses that we did not incur as a private company.

We are subject to the reporting requirements of the Exchange Act and are required to comply with the applicable requirements of the Sarbanes-Oxley Act of 2002 (“Sarbanes-Oxley”) and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as the rules and regulations subsequently implemented by the SEC and the listing standards of the Nasdaq Stock Exchange (the “Nasdaq”), including changes in corporate governance practices and the establishment and maintenance of effective disclosure and financial controls.

Compliance with these rules and regulations can be burdensome.

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We expect that a majority of the business that we seek will be awarded through competitive bidding.

government has increasingly relied on certain types of contracts that are

subject to multiple competitive bidding processes, including multi-vendor Indefinite Delivery Indefinite Quantity (“IDIQ”), Government wide Acquisition Contracts, General Services Administration Schedule and other multi-award contracts, which has resulted in greater competition and increased pricing pressure.

Many of our larger competitors have significantly greater financial resources than we do and have more extensive or more specialized engineering, manufacturing and marketing capabilities than we do in some areas, including as a result of substantial industry consolidation, which increased the market share of certain of our competitors and enabled them to take advantage of economies of scale and develop new technologies.

government has increasingly relied on certain types of contracts that are subject to multiple competitive bidding processes, including multi-vendor Indefinite Delivery Indefinite Quantity (“IDIQ”), Government wide Acquisition Contracts, General Services Administration Schedule and other multi-award contracts, which has resulted in greater competition and increased pricing pressure.

Our customers’ requirements change and evolve regularly.

Accordingly, our future performance depends, in part, on our ability to adapt to changing customer needs rapidly, identify emerging technological trends, develop and manufacture innovative products and services efficiently and bring those offerings to market quickly at cost-effective prices.

This includes efforts to provide solutions that integrate capabilities and resources.

Artificial Intelligence technologies have rapidly developed, and our business may be adversely affected if we cannot successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner.

some areas, including as a result of substantial industry consolidation, which increased the market share of certain of our competitors and enabled them to take advantage of economies of scale and develop new technologies.

These larger competitors may also benefit from supply chain leverage and pricing flexibility, including, in some cases, the ability to price contracts at a loss, due to their size.

Larger competitors, for example, may decide to pursue contracts typically won by mid-tier contractors, such as us.

Additionally, our smaller competitors may have lower overhead rates than we do, enabling them to compete effectively on pricing against mid-tier contractors such as us.

A number of these competitors are also our suppliers and customers.

Additionally, some customers, including the DoD, are increasingly purchasing “off the shelf” components from commercial suppliers in lieu of using traditional defense contractors to design and manufacture such items.

Many of our smaller competitors may be able to adapt more quickly to new market opportunities or customer requirements, and focus their resources on developing and commercializing specific technologies or targeting particular market segments.

These smaller competitors may be able to:

innovate more rapidly or create disruptive technologies that could diminish the demand for our products or services;

offer competitive products at lower prices, often due to lower overhead or more efficient operational structures;

form strategic alliances, including with large and established companies, that enhance their product offerings or go-to market strategies;

or secure funding from venture capital, private equity or other financing sources that support aggressive growth or market penetration strategies.

An increase in competition from these smaller companies may force us to lower our prices or increase our spending on research and development, sales, and marketing, which could have a deleterious effect on our operating margins and profitability.

As these companies continue to expand, their scale and scope may also grow, potentially allowing them to compete more directly and effectively against us.

Our failure to compete effectively with these smaller, innovative companies can reduce our market share and materially impact our business, financial condition, and operating results.

We may not be able to continue to win competitively awarded contracts or to obtain task orders under multi-award contracts.

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We rely on the strength of our relationships with other industry participants, including major prime contractors and small businesses, to form strategic alliances and we have entered, and expect to continue to enter into joint venture, teaming, partnership, subcontractor and other arrangements.

These activities involve risks and uncertainties, including the risk that a joint venture or applicable entity fails to satisfy its obligations, which may result in certain liabilities to us from guarantees and other commitments, the challenges in achieving strategic objectives and expected benefits of the business arrangement, the risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts and the business arrangements generally.

risk of conflicts arising between us and our partners and the difficulty of managing and resolving such conflicts and the business arrangements generally.

In some cases, these relationships are subject to exclusivity arrangements which subject us to the risk that we may be forced to forego superior opportunities with a different partner.

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Additionally, the U.S.

Department of

Justice and Federal Trade Commission have periodically and increasingly focused on ensuring competition in government acquisition and could challenge a teaming arrangement.

Department of Justice and Federal Trade Commission have periodically and increasingly focused on ensuring competition in government acquisition and could challenge a teaming arrangement.

If any of our existing relationships with our industry partners were impaired or terminated, or if we are unable to enter into future arrangements, we could also experience significant delays in the development of new products ourselves, and we would incur additional development costs.

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Some of our suppliers, from time to time, experience financial and operational difficulties, which may impair their ability to supply the materials, components, subsystems and services that we require.

For example, we have recently witnessed shortages of castings as well as electronic components that are used in automotive, cell phones and other electronics.

Shortages of similar components that we use could negatively impact our supply chain and manufacturing processes, as well as our ability to deliver on our contracts.

In addition, our supply chain may be disrupted by trade conflicts and tariffs imposed on products, as well as other external events, including natural disasters, extreme weather conditions, future medical epidemics or pandemics, acts of terrorism, cyber-attacks and labor disputes, governmental actions and legislative or regulatory changes, such as product certification or stewardship requirements, sourcing restrictions, product authenticity and climate change or greenhouse gas emission standards.

For example, we have recently witnessed shortages of germanium, as well as other raw materials, castings and electronic components that are used in our products.

Shortages within our supply chain of these and similar materials and components that we use could negatively impact our supply chain and manufacturing processes, as well as our ability to deliver on our contracts.

In addition, our supply chain may be disrupted by trade conflicts and tariffs imposed on products (including recent U.S.

tariffs imposed or threatened to be imposed on other countries and any retaliatory actions taken by such countries), as well as other external events, including natural disasters, extreme weather conditions, future medical epidemics or pandemics, acts of terrorism, cyber-attacks and labor disputes, governmental actions and legislative or regulatory changes, such as product certification or stewardship requirements, sourcing restrictions, product authenticity and climate change or greenhouse gas emission standards.

These or any further political or governmental developments or health concerns could result in social, economic and labor instability.

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We may have disputes with our subcontractors or suppliers, material supply constraints or problems, or component, subsystems or services problems in the future.

Also, our subcontractors and other suppliers may not be able to acquire or maintain the quality of the materials, components, subsystems and services they supply, which might result in greater product returns, service problems and warranty claims and could harm our business, financial condition and results of operations.

claims and could harm our business, financial condition and results of operations.

Further, warranty claims brought by our customers related to third-party components and materials may arise after our ability to bring corresponding warranty claims against such suppliers expire, which could result in costs to us.

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From time to time, we use components for which there is only one supplier, and that supplier may be unable to meet our needs.

The inability of our suppliers to perform, or their inability to perform adequately, could also result in the need for us to transition to alternate suppliers, which could

result in significant incremental cost and delay or the need for us to provide other resources to support our existing suppliers.

The inability of our suppliers to perform, or their inability to perform adequately, could also result in the need for us to transition to alternate suppliers, which could result in significant incremental cost and delay or the need for us to provide other resources to support our existing suppliers.

Each of these subcontractor and supplier risks could have a material adverse impact on our business, financial condition and results of operations.

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Accordingly, we may be unable to anticipate these techniques or to implement adequate security barriers or other preventative measures.

Thus, it is impossible for us to entirely mitigate this risk, and there can be no assurance that future cybersecurity incidents will not have a material negative impact on us.

Thus, it is impossible for us to entirely mitigate this risk, and there can be no assurance that future cybersecurity incidents will not have a material

negative impact on us.

A security breach or other significant disruption involving these types of information and IT networks and related systems could:

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Any of these events could have a material adverse effect on our business, financial condition and results of operations.

We conduct significant business and manufacturing activities in Israel and have business activities in regions that experience heightened geopolitical tension and frequent incidents of terror and conflict.

The ongoing threats of terrorism, acts of war, or armed hostilities in these areas pose a persistent risk that could result in harm to our personnel, damage to our property, or disruption of our operations.

Potential consequences of such events include:

• Temporary or prolonged disruptions to our operations, including manufacturing, R&D facilities, or other crucial aspects of our business.

• Increased security costs and heightened challenges in maintaining the safety and security of our personnel and assets.

• Additional difficulties in transporting and distributing our products, which may result in delays or loss of sales.

• Interruptions in the availability of local infrastructure critical to our operations, including electricity, telecommunications, and water supply.

• Challenges in attracting and retaining skilled employees, particularly those not willing to work in high-risk areas due to personal safety concerns.

Uncertainty and instability in these regions can also adversely impact local and global markets, potentially leading to reduced demand for our products or fluctuations in the pricing of key inputs.

Moreover, our business may suffer from:

• The hindrance or limitation of insurance coverage for losses resulting from acts of war or terrorism, potentially leading to significant uninsured liabilities.

• Increased difficulties in obtaining financing, as lenders may view our operations as high-risk due to their location in or connection to these regions.

• The occurrence of any terrorist acts, armed conflicts, or escalations in hostilities can have a severe impact on our business, results of operations, and financial condition.

It could also lead to significant volatility in the financial markets, affecting our stock price and investor confidence.

Although we have developed contingency plans aimed at ensuring the continuity of our operations during times of crisis, there can be no assurance that these plans will be fully effective in mitigating the risks posed by terrorism and geopolitical uncertainties in these regions.

Our future success will depend on our ability to respond to the rapid technological changes in the markets in which we compete, and our ability to introduce new or enhanced products and to enter into new markets.

The markets in which we compete are characterized by rapid technological developments and frequent new product introductions, enhancements and modifications.

Our ability to develop new products and technologies that anticipate changing customer requirements, reduce costs and otherwise retain or enhance our competitive position in existing and new markets will be an important factor in our future results from operations.

This includes efforts to provide solutions that integrate Artificial Intelligence technologies that have rapidly developed, and our business may be adversely affected if we cannot successfully integrate the technology into our internal business processes and product and service offerings in a timely, cost-effective, compliant and responsible manner.

Additionally, our ability to develop other new products and technologies that anticipate changing customer requirements, reduce costs and otherwise retain or enhance our competitive position in existing and new markets will be an important factor in our future results of operations.

We will continue to make substantial capital expenditures and incur significant R&D costs aimed at improving our manufacturing capability, reducing costs, and developing and introducing new products and enhancements.

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In addition, our products cannot be tested and proven in all situations and are otherwise subject to unforeseen problems.

Examples of unforeseen problems that could negatively affect revenue, schedule and results of operations include premature failure of products that cannot be accessed for repair or replacement, failure to perform in anticipated or unanticipated battlefield conditions, unintended explosions or similar events, problems with design, quality and workmanship, inadequate delivery of

subcontractor components or services and degradation of product performance.

These failures could result, either directly or indirectly, in loss of life or property.

These failures could

result, either directly or indirectly, in loss of life or property.

Among the factors that may affect revenue and results of operations could be inaccurate cost estimates, design issues, human factors, unforeseen costs and expenses not covered by insurance or indemnification from the customer, diversion of management focus in responding to unforeseen problems, loss of follow-on work, and, in the case of certain contracts, repayment to the government customer of contract cost and fee payments we previously received, or replacement obligations.

See also “ — Risks Relating to Our Business — Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-material type contracts.

See also “ — Risks Relating to Our Business — Our results of operations and cash flows are substantially affected by our mix of fixed-price, cost-plus and time-and-materials type contracts.

In particular, fixed-price contracts subject us to the risk of loss in the event of cost overruns or higher than anticipated inflation .” and “ — Risks Relating to Our Business — We use estimates in pricing and accounting for many of our programs, and changes in our estimates could adversely impact our business, financial condition and results of operations .”

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In addition, misconduct involving data security lapses resulting in the compromise of personal information or the improper use of our customers’ sensitive, export-controlled, or classified information could result in remediation costs, regulatory sanctions against us and serious harm to our reputation and could adversely impact our ability to continue to contract with the U.S.

We are subject to environmental laws and regulations, and our ongoing operations may expose us to environmental liabilities affecting our reputation, business, financial condition and results of operations.

Our operations are subject to federal, state, foreign and local environmental and health and safety laws and regulations.

As a result, we have been involved from time to time in administrative or legal proceedings relating to environmental matters.

We cannot assure you that the aggregate amount of future clean-up costs and other environmental liabilities will not be material.

We could be subject to potentially significant fines or penalties, including criminal sanctions, if we fail to comply with these requirements.

Additionally, we have made and will continue to be required to make significant capital and other expenditures in order to comply with these laws and regulations.

The requirements of these laws and regulations are complex, change frequently and could become more stringent in the future.

We cannot predict what environmental legislation or regulations will be enacted in the future, how existing or future laws or regulations will be administered or interpreted or what environmental conditions may be found to exist.

Our products and services are also used in nuclear-related activities (including providing components for nuclear-powered platforms and sensors used in nuclear applications) and used in support of nuclear-related operations of third parties.

Our business also involves the handling, transportation, storage and disposal of potentially dangerous chemicals and unstable materials and is subject to hazards inherent in such activities including chemical spills, storage tank leaks, discharges or releases of toxic or hazardous substances or gases and other hazards incident to the handling, transportation, storage and disposal of dangerous chemicals.

Also, in the future, contamination may be found to exist at our current or former facilities or at off-site locations to which we or certain companies that we have acquired or previously owned may have sent waste, and we could be held liable for such contamination.

The remediation of such contamination, or the enactment of more stringent laws or regulations or more strict interpretation of existing laws and regulations, may require us to make additional expenditures, and could decrease the amount of free cash flow available to us for other purposes, including capital expenditures, R&D and other investments and could have a material adverse impact on our business, financial condition and results of operations.

Our business, financial condition, and results of operations could be materially adversely affected by climate change regulations.

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In addition, restrictions on carbon dioxide or other greenhouse gas emissions could result in significant costs such as higher energy costs and the passing down of carbon taxes, emission cap-and-trade programs, and renewable portfolio standards by utility companies.

The cost of complying, or of failing to

comply, with these and other climate change and emissions regulations could have an adverse impact on our business, financial condition and results of operations.

The cost of complying, or of failing to comply, with these and other climate change and emissions regulations could have an adverse impact on our business, financial condition and results of operations.

The outcome of litigation, arbitration, investigations, claims, disputes, enforcement actions and other legal proceedings in which we are involved from time to time is unpredictable, and an adverse decision in any such matter could have a material adverse impact on our business, financial condition and results of operations.

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An adverse resolution or outcome of any of these investigations, claims, disputes, enforcement actions, litigation and other legal proceedings could have an adverse impact on our business, financial condition and results of operations.

From time to time, the Company may deem it appropriate to take legal action (or threaten to take such action) against a customer, supplier, former employee, subcontractor or other industry participant to protect its contractual and other legal rights.

From time to time, the Company may deem it appropriate to take legal action (or threaten to

take such action) against a customer, supplier, former employee, subcontractor or other industry participant to protect its contractual and other legal rights.

The outcome of such litigation is inherently uncertain, often costly and could adversely impact the Company’s commercial relationships and reputation.

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Our international business is subject to both U.S.

and foreign laws and regulations, which may include, without limitation, laws and regulations relating to import-export controls, (such as the ITAR, EAR, and customs laws), tariffs, embargoes, technology transfer restrictions, government contracts and procurement, data privacy and protection, investment, exchange rates and controls, the FCPA and other anti-corruption laws, including the UK Bribery Act and the Canadian Corruption of Foreign Public Officials Act, Article 5 of the Israeli Penal Law of 1977, the anti-boycott provisions under the EAR, U.S.

tariffs imposed or threatened to be imposed on other countries and any retaliatory actions taken by such countries), embargoes, technology transfer restrictions, government contracts and procurement, data privacy and protection, investment, exchange rates and controls, the FCPA and other anti-corruption laws, including the UK Bribery Act and the Canadian Corruption of Foreign Public Officials Act, Article 5 of the Israeli Penal Law of 1977, the anti-boycott provisions under the EAR, U.S.

economic sanctions administered by the Office of Foreign Assets Control and other federal agencies, labor and employment, works councils and other labor groups, anti-human trafficking, taxes, environment, immunity, security restrictions and intellectual property.

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Our international business may be impacted by changes in U.S.

and foreign national policies and priorities, and geopolitical relationships, any of which may be influenced by changes in the threat environment, political leadership, geopolitical uncertainties, world events, acts of terrorism, bilateral and multi-lateral relationships, government budgets, and economic and political factors more generally, and any of which could impact funding for programs, alter export authorizations, or delay purchasing decisions or customer payments.

funding for programs, alter export authorizations, or delay purchasing decisions or customer payments.

These changes may affect the defense spending priorities and procurement policies of foreign governments which may affect our international military sales.

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In addition, the majority of our foreign costs are denominated in local currencies.

Over time, an increasing portion of our contracts with paid customers outside of the United States may be denominated in local currencies.

Over time, an increasing portion of our contracts with paid customers outside of the U.S.

may be denominated in local currencies.

Therefore, fluctuations in the value of the U.S.

dollar and foreign currencies may affect our results of operations when translated into U.S.

We do not currently engage in currency-hedging activities to limit the risk of exchange rate fluctuations.

We do not currently engage in significant currency-hedging activities to limit the risk of exchange rate fluctuations.

However, in the future, we may use derivative instruments, such as foreign currency forward and option contracts, to hedge certain exposures to fluctuations in foreign currency exchange rates.

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customers may also include terms and reflect legal requirements that create additional risks including the risk of non-payment or delayed payment by foreign customers and governments.

They may include industrial cooperation agreements requiring specific in-country purchases, investments, manufacturing agreements or other operational or financial obligations, including

offset obligations, and provide for significant penalties if we fail to meet such requirements.

They may include industrial cooperation agreements requiring specific in-country purchases, investments, manufacturing agreements or other operational or financial obligations, including offset obligations, and provide for significant penalties if we fail to meet such requirements.

They may also require us to enter into letters of credit, performance or surety bonds, bank guarantees and/or other financial arrangements to secure our performance obligations.

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This may increase the risk to our employees, subcontractors or other third parties, and/or increase the risk of a wide range of liabilities, as well as loss of property or damage to our products.

We are also closely monitoring developments in the war between Israel and Hamas that began on October 7, 2023.

At this time, the conflict has the potential to evolve quickly creating uncertainty in the broader Middle East region, along with the potential for disruptions to our Israeli operations in the region including, but not limited to workforce calls for duty, transportation and other logistical impacts and reduced customer confidence.

The ongoing conflicts in Israel and the broader Middle East region have the potential to evolve quickly creating uncertainty along with the potential for disruptions to our Israeli operations in the region

including, but not limited to, workforce calls for duty, transportation and other logistical impacts and reduced customer confidence.

The occurrence and impact of these factors is difficult to predict, but one or more of them could negatively impact our business, financial condition and results of operations.

Our efforts to penetrate new territories present significant challenges and could adversely affect our growth strategy and our financial performance.

Our initiatives to localize our business operations in new territories could be hindered by local government policies favoring domestic companies, potentially impacting our competitive position and market share.

In pursuit of business in new geographical markets, we face the risk that local governments may give preferential treatment to domestic firms.

Such preferences can be reflected through a range of policies and practices including, but not limited to, subsidies to local companies, preferential procurement policies, tax advantages, and regulatory requirements designed to protect or promote local industries.

As part of our strategy to tap into emerging markets and expand our global footprint, we may localize our business operations in several new territories.

While this expansion presents growth opportunities, it also exposes us to various risks inherent in unfamiliar markets, including:

compliance and regulatory risk;

cultural and language differences;

operational challenges;

economic and political instability;

foreign currency exchange risk:

risk of intellectual property infringement;

market competition and consumer preferences;

as well as talent acquisition and integration risk.

The expansion into new territories requires substantial management attention and financial resources, and any setbacks encountered in these new markets could delay or impede our growth strategy.

If we are not able to successfully manage the risks of international expansion, or our investments in these regions do not yield expected returns, our business, financial condition, and operating results may be adversely affected.

We may not be successful in obtaining the export licenses necessary to conduct certain operations abroad, and Congress may prevent proposed sales to certain foreign governments.

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could negatively impact our business, financial condition and results of operations.

Additionally, our cross-border manufacturing and the associated exportation of goods may lead to operational disruptions and increased costs, which could have a material adverse effect on our business, financial condition and results of operations.

Cross-border manufacturing operations and the subsequent export of goods to various markets around the world exposes us to a variety of risks that may affect our ability to produce and deliver products efficiently and may also impact our cost structure.

A failure to attract and retain technical and other key personnel could reduce our revenues and our operational effectiveness.

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Changes in future business or other market conditions could cause business investments and/or recorded goodwill or other long-term assets to become impaired, resulting in substantial losses and write-downs that would adversely affect our business, financial condition and results of operations.

As of December 31, 2023 and 2022, we had goodwill and other intangible assets, net of accumulated amortization, of $1,389 and $1,408 million, respectively, which represented 35% and 38%, respectively, of our total assets.

As of December 31, 2024 and 2023, we had goodwill and other intangible assets, net of accumulated amortization, of $1,370 million and $1,389 million, respectively, which represented 33% and 35%, respectively, of our total assets.

Our goodwill is subject to an impairment test on an annual basis and is also tested whenever events and circumstances indicate that goodwill may be impaired.

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Future acquisitions may require us to obtain additional equity or debt financing, which may not be available on favorable terms or at all.

Finally, we may be required to obtain various government approvals and/or the consent of US Holding in order to pursue certain material transactions and there is no guarantee that their consent will be granted See “— Risks Relating to Our Status under the Proxy Agreement — Our ultimate majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions .”

Pandemics, epidemics, disease outbreaks and health emergencies, such as the COVID-19 pandemic, have had, and future public health crises could have, an adverse impact on our business, financial condition and results of operations.

The Company faces risks related to pandemics, health epidemics and other outbreaks of communicable disease which could significantly disrupt operations, and may materially and adversely affects our business, financial conditions and results of operations.

The Company faces risks related to pandemics, health epidemics and other outbreaks of communicable disease which could significantly disrupt operations, and may materially and adversely affect our business, financial conditions and results of operations.

If a new health epidemic or outbreak were to occur, we could experience broad and varied effects similar to the impact of COVID-19, including adverse impacts to our workforce and supply chain, inflationary pressures and increased costs, schedule or production delays, market volatility and other financial ramifications.

The extent to which a pandemic or epidemic will impact us in the future will depend on numerous evolving factors and developments that we are unable to predict, including:

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governmental, business and other actions (which could include limitations on our operations or mandates to provide products, systems or services);

the continued success of measures taken by governmental authorities worldwide to stabilize the markets and support economic growth, which is unknown and may

not be sufficient to address future market dislocations or avert severe and prolonged reductions in economic activity;

the continued success of measures taken by governmental authorities worldwide to stabilize the markets and support economic growth, which is unknown and may not be sufficient to address future market dislocations or avert severe and prolonged reductions in economic activity;

the impacts on our supply chain;

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In addition, disruptions in the credit or financial markets or impacts on our credit ratings from the pandemic could adversely affect our ability to access capital on favorable terms and continue to meet our liquidity needs, all of which are highly uncertain and cannot be predicted.

On September 9, 2021, President Biden released an executive order (“EO”) that required all employees of federal contractors to be vaccinated.

On October 19, 2022, the Office of Management and Budget (“OMB”) and the Safer Federal Workforce Task Force issued guidance confirming that the U.S government would not take action to enforce the EO.

In January 2023, the U.S.

government announced its intention to end the public health (and national) emergency declarations as of May 2023.

However, there can be no assurances that the federal government will not seek to enforce the requirements of the EO or subsequently issue a similar EO in response to COVID-19 or a future pandemic .

If the EO or a similar EO is ultimately enforced, there is a risk that some of our employees will not comply and will need to be dismissed.

Our employees are highly skilled, have critical knowledge, and in some cases have security clearances that allow them to work on highly sensitive programs.

These employees will not be easy to replace.

If we are unable to attract and retain a qualified workforce, we may be unable to maintain our competitive position and it could have a material adverse impact on our business, reputation, financial condition and results of operations.

We have significant operations in locations that could be materially and adversely impacted in the event of a natural disaster or other significant disruption.

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In the event of such a natural disaster or other disruption, we could experience disruptions or interruptions to our operations or the operations of our suppliers, subcontractors, distributors, resellers or customers, including inability of employees to work, destruction of facilities, and/or loss of life, all of which could materially increase our costs and expenses, delay or decrease orders and revenue from our customers and have a material adverse impact on our business, financial condition and results of operations.

Our operations are subject to federal, state, foreign and local environmental and health and safety laws and regulations.

As a result, we have been involved from time to time in administrative or legal proceedings relating to environmental matters.

We cannot assure you that the aggregate amount of future clean-up costs and other environmental liabilities will not be material.

We could be subject to potentially significant fines or penalties, including criminal sanctions, if we fail to comply with these requirements.

Additionally, we have made and will continue to be required to make significant capital and other expenditures in order to comply with these laws and regulations.

The requirements of these laws and regulations are complex, change frequently and could become more stringent in the future.

The remediation of such contamination, or the enactment of more stringent laws or regulations or more strict

interpretation of existing laws and regulations, may require us to make additional expenditures, and could decrease the amount of cash flows available to us for other purposes, including capital expenditures, R&D and other investments and could have a material adverse impact on our business, financial condition and results of operations.

Our leases may be terminated or we may be unable to renew our leases on acceptable terms and if we wish to relocate, we may incur additional costs if we terminate a lease.

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If we are unable to renew our facility leases, we may close or relocate a facility, which could subject us to construction and other costs and risks, which in turn could have a material adverse effect on our business, financial condition and results of operations, including significant capital expenses that may materially impact our results of operations and ability to meet certain contractual schedule commitments.

Additionally, we may have to seek qualification of any new facilities in order to

meet customer or contractual requirements.

Additionally, we may have to seek qualification of any new facilities in order to meet customer or contractual requirements.

We would also have to obtain facility security clearances for the new facility in order to continue to perform on classified contracts.

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We cannot predict the consequences of future geopolitical events, but they may adversely affect the markets in which we operate, our ability to insure against risks, our operations or our results of operations.

Changes in the U.S.

government and other nations’ administration and their associated shifts in policy and priorities could also impact our operations and market conditions.

Our business may be impacted by foreign policy actions taken by governments such as tariffs, sanctions, embargoes, export and import controls and other trade restrictions, which can affect the demand for and our ability to sell our products and services, cause disruptions or cost increases to our supply chain, and ultimately adversely affect our business.

Ongoing instability and current conflicts in global markets, including in Eastern Europe, the Middle East and Asia, and the potential for other conflicts and future terrorist activities and other recent geopolitical events throughout the world, including the conflict in Ukraine, the U.S.

military withdrawal from Afghanistan, new or increased tariffs or sanctions and potential trade wars have created and continue to create economic and political uncertainties and impacts that could have a material adverse impact on our business, financial condition and results of operations.

military withdrawal from Afghanistan, new or increased tariffs (including recent U.S.

tariffs imposed or threatened to be imposed on other countries and any retaliatory actions taken by such countries) or sanctions and potential trade wars have created and continue to create economic and political uncertainties and impacts that could have a material adverse impact on our business, financial condition and results of operations.

These matters cause uncertainty in the world’s financial and insurance markets and may significantly increase the political, economic and social instability in the geographic areas in which we operate.

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If credit in financial markets outside of the U.S.

tightened, it could adversely affect the ability of our customers and suppliers to obtain financing and could result in a decrease in or cancellation of orders for our products, systems and services or impact the ability of our customers to make payments.

tightened, it could adversely affect the ability of our customers and

suppliers to obtain financing and could result in a decrease in or cancellation of orders for our products, systems and services or impact the ability of our customers to make payments.

These matters may cause us to incur increased costs or experience difficulty with future borrowings under our credit facilities or in the debt capital markets, future issuances of common stock or other equity securities or otherwise with financing our operating, investing (including any future acquisitions) or financing activities.

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government’s requirements, including the DoD’s National Industrial Security Program Operating Manual, for our facility security clearances, which are prerequisites to our ability to perform on classified contracts for the U.S.

government .” Furthermore, the combination of the Italian state beneficially owning approximately 30.2% of Leonardo S.p.A.’s voting

power (through its ownership of approximately 30.2% of the outstanding ordinary shares of Leonardo S.p.A.), and the governance of Leonardo S.p.A.

government .” Furthermore, the combination of the Italian state beneficially owning approximately 30.2% of Leonardo S.p.A.’s voting power (through its ownership of approximately 30.2% of the outstanding ordinary shares of Leonardo S.p.A.), and the governance of Leonardo S.p.A.

itself, has led DRS to be deemed to be controlled by a foreign government by certain U.S.

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Proxy agreements, including ours, typically have limited duration and need to be renewed on a regular basis.

Compliance with the proxy agreement requires a significant commitment of resources and management and Board oversight, and the DoD may impose additional security safeguards that it believes necessary to adequately safeguard classified and controlled unclassified information, which could make it more difficult for us to comply with the proxy agreement or adversely impact the manner in which we operate our business.

could make it more difficult for us to comply with the proxy agreement or adversely impact the manner in which we operate our business.

Under the proxy agreement we are required to prepare and submit an annual implementation and compliance report to the DCSA including detailed information with respect to the manner in which we comply with the proxy agreement including with respect to classified information, any acts of noncompliance and other matters specified by DCSA.

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government could have a material adverse impact on our business, financial condition and results of operations.

” Therefore, if we fail to comply with the terms of the proxy agreement and the DoD imposes any of the above remedies, this could have a material adverse impact on our business, financial

condition and results of operations.

” Therefore, if we fail to comply with the terms of the proxy agreement and the DoD imposes any of the above remedies, this could have a material adverse impact on our business, financial condition and results of operations.

CFIUS may modify, delay or prevent our future acquisition or investment activities.

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Foreign-government-controlled investors may be subject to a higher level of CFIUS scrutiny than non-foreign-government-controlled investors.

Additionally, future foreign investments in us could be within the jurisdiction of CFIUS and, given the nature of our business, may trigger a mandatory CFIUS notification requirement or warrant voluntary notification to CFIUS, impacting our ability to attract such investment.

Additionally, future foreign

investments in us could be within the jurisdiction of CFIUS and, given the nature of our business, may trigger a mandatory CFIUS notification requirement or warrant voluntary notification to CFIUS, impacting our ability to attract such investment.

Further, CFIUS may decide to block, delay, or impose material conditions on any such future foreign investment in us that it reviews.

Because we are deemed to be controlled by a foreign company, we are required to mitigate FOCI through our proxy agreement.

Our ultimate majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage change of control transactions.

Our indirect majority stockholder, Leonardo S.p.A., may have interests that are different from, or conflict with, those of our other stockholders, and their significant ownership in us may discourage mergers and acquisitions or change of control transactions.

The proxy agreement provides that the shares of our common stock owned directly by US Holding and indirectly by Leonardo S.p.A.

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In exercising their power as proxy holders, the proxy holders are directed to act to protect the legitimate economic interests of our stockholders and in a manner consistent with their fiduciary duties, but they are not generally required to follow instructions of Leonardo S.p.A., US Holding or us.

directors who are not proxy holders (and who are selected from candidates proposed by US Holding after reasonable consultation with our nominating and corporate governance committee, and subject to DCSA’s approval in certain circumstances), any changes or amendments to our certificate of incorporation or bylaws, the sale or disposal of our property, assets or business, our incurrence of debt or any pledge, mortgage or encumbrance of any of our assets, or any other matter affecting us, other than as described below.

The proxy agreement provides that the proxy holders may vote for or consent to in, their sole and absolute discretion, without consultation with US Holding or Leonardo S.p.A., the election of additional directors who are not proxy holders (and who are selected from candidates proposed by US Holding after reasonable consultation with our nominating and corporate governance committee, and subject to DCSA’s approval in certain circumstances), any changes or amendments to our certificate of incorporation or bylaws, the sale or disposal of our property, assets or business, our incurrence of debt or any pledge, mortgage or encumbrance of any of our assets, or any other matter affecting us, other than as described below.

However, the proxy holders may only vote for or consent to the following matters with the express written approval of US Holding:

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or its affiliates could pursue business interests that are detrimental to us but beneficial to themselves or to other companies in which they invest or with whom they have a material relationship.

Conflicts of interest could also arise with respect to business

opportunities that could be advantageous to Leonardo S.p.A., and they may pursue acquisition opportunities that may be complementary to our business.

Conflicts of interest could also arise with respect to business opportunities that could be advantageous to Leonardo S.p.A., and they may pursue acquisition opportunities that may be complementary to our business.

As a result, those acquisition opportunities may not be available to us.

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nor US Holding have an obligation to offer us corporate opportunities.

As a result of these relationships the interests of our ultimate majority stockholder, Leonardo S.p.A., may not coincide with our interests or the interests of the other holders of our common stock.

As a result of these relationships the interests of our indirect majority stockholder, Leonardo S.p.A., may not coincide with our interests or the interests of the other holders of our common stock.

So long as Leonardo S.p.A.

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This influence, including the requirement in our proxy agreement for approval by the proxy holders and our majority stockholder of mergers and consolidations, may also discourage change of control transactions.

Changes in the leadership at our ultimate majority stockholder could create uncertainty and potentially exacerbate these risks.

Changes in the leadership at our indirect majority stockholder could create uncertainty and potentially exacerbate these risks.

Our amended and restated certificate of incorporation provides that we waive any interest or expectancy in corporate opportunities presented to Leonardo S.p.A.

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or its agents, stockholders, members, partners, affiliates or subsidiaries, with the exception of the proxy holders, will generally be liable to us or any of our subsidiaries for breach of any fiduciary or other duty by reason of the fact that such person pursues, acquires or participates in such corporate opportunity, directs such corporate opportunity to another person or fails to present such corporate opportunity, or information regarding such corporate opportunity, to us or our subsidiaries.

To the fullest extent permitted by law, by becoming a stockholder in our company, stockholders will be deemed to have notice of and consented to this provision of our amended and restated certificate of incorporation.

To the fullest extent permitted by law, by becoming a stockholder in our company, stockholders will be deemed to have notice of and

consented to this provision of our amended and restated certificate of incorporation.

This will allow Leonardo S.p.A.

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and its affiliates with services in support of its U.S.

operations (aside from us), including services related to tax,

financial and accounting support, legal support, trade compliance, marketing and, communications on an arm’s-length basis.

operations (aside from us), including services related to tax, financial and accounting support, legal support, trade compliance, marketing and, communications on an arm’s-length basis.

Under the tax allocation agreement, we are responsible for administering certain U.S.

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however, we cannot assure you that we will be able to obtain the services at the same or better levels or at the same or lower costs directly from third-party providers.

Risks Related to Ownership of our Common Stock

There can be no assurance that we will continue to pay or increase our dividend or to repurchase shares of our common stock.

Additionally, there can be no assurance that we will not accelerate our dividend or repurchase of our common stock.

Cash dividend payments and share repurchases are subject to limitations under applicable laws and the discretion of our Board of Directors and are determined after considering then-existing conditions, including earnings, other operating results and capital requirements and cash deployment alternatives.

Additionally, the declaration of a cash dividend payment is contingent upon consent by our indirect majority stockholder.

The timing and amount of share repurchases under Board of Directors approved share repurchase plans may differ from stated expectations and is within the discretion of management and will depend on many factors, including our ability to generate sufficient cash flows from operations in the future or to borrow money from available financing sources, our results of operations, capital requirements and applicable law.

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