−Removed: Our operations and financial results are subject to various risks and uncertainties, which may materially and adversely affect our business, financial condition, and results of operations, and the actual outcome of matters as to which forward-looking statements are made in this Annual Report on Form 10-K.
+Added: Our operations and financial results are subject to various risks and uncertainties.
+Added: Any of the following risks could have a material adverse effect on our business, financial condition, results of operations, or prospects, and the actual outcome of matters as to which forward-looking statements are made in this Annual Report on Form 10-K.
In such case, the trading price for DXC common stock could decline, and you could lose all or part of your investment.
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Future performance and historical trends may be adversely affected by the risks discussed in this section.
−Removed: Other variables and risks and uncertainties not currently known or that are currently expected to be immaterial may also materially and adversely affect our business, financial condition, and results of operations or the price of shares of our common stock in the future.
+Added: Other variables and risks and uncertainties not currently known or that are currently expected to be immaterial may also have a material adverse effect on our business, financial condition, results of operations, or prospects, or on the price of shares of our common stock in the future.
Risk Factor Summary
Risks Related to Our Business
−Removed: • We may not succeed in our strategic objectives.
+Added: • If we do not effectively manage and improve our sales organization, we may have difficulty acquiring new customers or increasing sales to existing customers.
+Added: • We may fail to develop and expand service offerings to address emerging demands and technological trends and remain competitive.
+Added: • Our ability to provide customers with competitive services is dependent on our ability to attract and retain qualified personnel.
+Added: • Risks associated with artificial intelligence, including our adoption, deployment, and governance of AI technologies, could adversely affect our business.
+Added: • If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, or if we or third parties fail to deliver on commitments to our customers, the profitability of our contracts may be adversely affected.
+Added: • Systems failures, catastrophic events, and resulting interruptions in the availability of our products or services could harm our business.
• We are vulnerable to security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data.
−Removed: • We are subject to obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data.
−Removed: • We are vulnerable to product and service quality issues.
−Removed: • We may fail to continue to develop and expand service offerings to address emerging demands in the highly competitive markets we serve.
−Removed: • We may fail to compete in certain markets or continue to expand our capacity, and are subject to risks, in certain offshore locations.
−Removed: • We may fail to maintain our credit rating, manage working capital, refinance and raise additional capital.
−Removed: • Changes to our business model may be hard to understand by the market and we may fail to meet our guidance.
−Removed: • Our business and financial results could be materially adversely affected by public health crises.
−Removed: • Our indebtedness could have a material adverse effect on our financial condition and results of operations.
−Removed: • We may fail to accurately estimate the cost of services and the timeline for completion of contracts.
−Removed: • We or our third parties may fail to deliver on commitments or otherwise breach obligations to our customers.
+Added: • Failure to comply with obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data could adversely affect our business.
+Added: • Our business operations are subject to various and changing federal, state, local and foreign laws and regulations that could result in costs or sanctions that adversely affect our business.
+Added: • Failure to maintain our credit rating, manage our indebtedness, and raise additional capital for future needs could adversely affect our liquidity and financial condition.
+Added: • We are exposed to risks inherent to our international operations, including fluctuations in exchange rates and geopolitical conflicts.
+Added: • Prolonged periods of inflation and related economic conditions could adversely affect our profitability and results of operations.
+Added: • We face aggressive competition and may fail to compete effectively in certain markets.
+Added: • We may fail to maintain and grow our customer relationships over time or to comply with customer contracts or government contracting regulations or requirements.
+Added: • Our strategic transactions may prove unsuccessful.
+Added: • The price of our securities may be volatile.
+Added: • Disruption of our supply chain or increases in procurement costs, including as a result of ongoing trade tensions and tariff charges, could adversely impact our business.
• We are subject to a series of risks relating to climate change and natural disasters.
−Removed: and increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could also adversely impact our business.
−Removed: • We may fail to attract and retain qualified personnel.
−Removed: • Prolonged periods of inflation have an adverse effect on general economic conditions and consumer budgeting, and could adversely impact our profitability and results of operations.
−Removed: • Our international operations are exposed to risks, including fluctuations in exchange rates.
−Removed: • Failure to comply with federal, state, local and foreign laws and regulations could result in costs or sanctions that adversely affect our business.
−Removed: Social and environmental responsibility regulations, policies and provisions, as well as customer and investor demands, may adversely affect our relationships with customers and investors.
−Removed: • Our restructuring plans may not benefit us and may adversely affect our business.
+Added: • Increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business.
• We may be subject to intellectual property related risks and may fail to procure necessary third-party licenses.
−Removed: • Disruption of our supply chain or increases in procurement costs, including as a result of ongoing trade tensions and tariff charges, could adversely impact our business.
+Added: • Our restructuring plans may not benefit us and may adversely affect our business.
• We may fail to maintain effective disclosure controls and internal control over financial reporting.
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• Pending litigations may have a material and adverse impact on our profitability and liquidity.
−Removed: • Disruptions in the credit markets may reduce our customers' access to credit and increase the costs to our customers of obtaining credit, and our hedging program is subject to counterparty default risk.
−Removed: • We may not achieve revenue and profit objectives if we fail to competitively bid on our projects effectively.
−Removed: • If our customers experience financial difficulties, we may not be able to collect our receivables.
−Removed: • We may fail to maintain and grow our customer relationships over time or to comply with customer contracts or government contracting regulations or requirements.
−Removed: • Our strategic transactions may prove unsuccessful.
−Removed: • Changes in tax rates, tax laws, and uncertainty of tax examinations could affect our results of operations.
−Removed: • The price of our securities may be volatile.
+Added: • Changes in tax rates, tax laws, and uncertainty of tax examinations could affect our results of operations and liquidity.
Risks Related to Our Completed Strategic Transactions
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Risks Related to Our Business
−Removed: We may not succeed in our strategic objectives, which could adversely affect our business, financial condition, results of operations and cash flows.
−Removed: Our strategic priorities are focused on our customers, optimizing costs and seizing the market.
−Removed: We may not be able to implement our strategic priorities in accordance with our expectations for a variety of reasons, including failure to execute on our plans in a timely fashion, lack of adequate skills, ineffective management, inadequate incentives, customer resistance to new initiatives, inability to control costs or maintain competitive offerings.
−Removed: We also cannot be certain that executing on our strategy will generate the benefits we expect.
−Removed: If we fail to execute successfully on our strategic priorities, or if we pursue strategic priorities that prove to be unsuccessful, our business, financial position, results of operations and cash flows may be materially and adversely affected.
+Added: If we do not effectively manage and improve our sales organization, we may have difficulty acquiring new customers or increasing sales to existing customers, and our business and results of operations may be adversely affected.
+Added: We depend on our sales organization to obtain new customers, expand relationships with existing customers, and drive revenue growth.
+Added: There is significant competition for sales personnel with the skills, industry knowledge, and technical expertise that we require, and our ability to achieve revenue growth will depend, in large part, on our success in recruiting, training, and retaining sufficient numbers of qualified sales personnel.
+Added: We may face structural challenges within our sales organization that could adversely impact our performance, including fragmentation in our sales operating model, inconsistent sales enablement, limited visibility into client relationships and pipeline, and challenges in managing and developing sales talent.
+Added: If we are unable to address such structural issues effectively, we may experience underperformance across key sales metrics, including win rates, pipeline development, and overall sales productivity, and we may be unable to attract and retain high-performing sales personnel.
+Added: If we are unable to structure our sales organization effectively, hire and train sufficient numbers of qualified sales personnel, address existing structural deficiencies, or align our compensation programs with our strategic priorities, or if our sales personnel are not successful in obtaining new customers or increasing sales to our existing customer base, our business, operating results, and prospects may be materially and adversely affected.
+Added: We may fail to develop and expand our service offerings to address emerging business demands and technological trends and remain competitive.
+Added: Our ability to develop and implement innovative technology solutions that meet evolving customer needs and industry standards in analytics, software engineering, applications, business process services, digital cloud, IT outsourcing and consulting, and in areas such as artificial intelligence ("AI"), automation, Internet of Things and software as-a-service solutions, among others, in a timely or cost-effective manner, will impact our ability to retain and attract customers and our future revenue growth and earnings.
+Added: The markets we serve are highly competitive and characterized by rapid technological change.
+Added: If we are unable to continue to execute our strategy or if we are unable to commercialize our services and solutions, expand and scale them with sufficient speed and versatility, our growth, productivity objectives and profit margins could be negatively affected.
+Added: Technological developments may materially affect the cost and use of technology by our customers.
+Added: Some of these technologies have reduced and replaced some of our traditional services and solutions and may continue to do so in the future.
+Added: Technological developments have caused, and may in the future cause, customers to delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies.
+Added: In addition, markets for new technologies, such as AI, may not develop as we have anticipated.
+Added: If we do not make the right strategic investments to respond to these developments, our ability to develop and maintain a competitive advantage and to execute our growth strategy could be negatively affected.
+Added: Our products and services are highly technical and complex and may contain errors, defects or security vulnerabilities that cannot be discovered before a product or service is released, installed and used by customers.
+Added: If errors, malfunctions, defects or disruptions in service are experienced by customers or in our operations, they could impact customers' business operations and harm our operating results and reputation, which harm may not be fully cured by our subsequent remediation efforts.
+Added: In addition, our liability insurance may not adequately cover liabilities incurred, and uncovered losses could be large and harm our financial condition.
+Added: Our ability to provide customers with competitive services is dependent on our ability to attract and retain qualified personnel.
+Added: Our ability to grow and provide our customers with competitive services is partially dependent on our ability to attract and retain highly motivated people with the skills necessary to serve our customers.
+Added: As competition for highly skilled employees in our industry has grown increasingly intense, we have experienced, and may experience in the future, higher than anticipated levels of employee attrition.
+Added: These risks to attracting and retaining the necessary talent may be exacerbated by labor constraints and inflationary pressures on employee wages and benefits.
+Added: Additionally, we may be unable to hire or retain talent who are trained in artificial intelligence, machine learning and advanced algorithms, to keep pace with the rapid and continuous technological changes in our industry.
+Added: Immigration laws in the countries in which we operate are subject to legislative changes, as well as to variations in the standards of application and enforcement due to political forces and economic conditions.
+Added: Changes in immigration laws or varying applications of immigration laws to limit the availability of certain work visas in the U.S.
+Added: may impact our ability to hire talent that we need to enhance our products and services and for our operations.
+Added: It is also difficult to predict the political and economic events that could affect immigration laws, or the restrictive impact they could have on obtaining or renewing work visas for our international personnel.
+Added: The loss of personnel could impair our ability to perform under certain contracts, which could have a material adverse effect on our consolidated financial position, results of operations and cash flows.
+Added: Additionally, the inability to adequately develop and train personnel and assimilate key new hires or promoted employees could have a material adverse effect on relationships with third parties, our financial condition and results of operations and cash flows.
+Added: We also must manage leadership development and succession planning throughout our business.
+Added: Any significant leadership change and accompanying senior management transition involves inherent risk and any failure to ensure a smooth transition could hinder our strategic planning, execution and future performance.
+Added: While we strive to mitigate the negative impact associated with changes to our senior management team, such changes may cause uncertainty among investors, employees, customers, creditors and others concerning our future direction and performance.
+Added: If we fail to effectively manage our leadership changes, including ongoing organizational and strategic changes, our business, financial condition, results of operations, cash flows and reputation, as well as our ability to successfully attract, motivate and retain key employees, could be harmed.
+Added: In addition, uncertainty around future employment opportunities, facility locations, organizational and reporting structures, and other related concerns may impair our ability to attract and retain qualified personnel.
+Added: If employee attrition is high, it may adversely impact our ability to realize the anticipated benefits of our strategic priorities.
+Added: If we do not hire, train, motivate, and effectively utilize employees with the right mix of skills and experience in the right geographic regions and for the right offerings to meet the needs of our customers, our financial performance and cash flows could suffer.
+Added: For example, if our employee utilization rate is too low, our profitability, and the level of engagement of our employees could decrease.
+Added: If that utilization rate is too high, it could have an adverse effect on employee engagement and attrition and the quality of the work performed, as well as our ability to staff projects.
+Added: If we are unable to hire and retain enough employees with the skills or backgrounds needed to meet current demand, we may need to redeploy existing personnel, increase our reliance on subcontractors or increase employee compensation levels, all of which could also negatively affect our profitability.
+Added: In addition, if we have more employees than necessary with certain skill sets or in certain geographies, we may incur increased costs as we work to rebalance our supply of skills and resources with customer demand in those geographies.
+Added: Our business is primarily non-unionized, but we have unions and works councils in Europe, Australia, South Korea, South America and Canada, which from time to time may constrain our operational flexibility and efficiency in implementing business decisions and introducing new technologies, tools or processes within our desired timeframe.
+Added: Activism of employee populations could result in higher costs and operational changes to establish new relationships with worker representatives.
+Added: Risks associated with artificial intelligence, including our adoption, deployment, and governance of AI technologies, could adversely affect our business, reputation, financial condition, and results of operations.
+Added: We are integrating AI, including generative AI and other advanced or autonomous AI systems, into our internal operations, service offerings, and client solutions.
+Added: We have made, and expect to continue to make, significant investments in developing, deploying, and supporting AI capabilities, including our Fast Track portfolio of AI-enabled solutions.
+Added: Our ability to realize the expected benefits of these investments depends on a number of factors, including our ability to develop commercially viable AI‑enabled offerings, attract and retain personnel with relevant expertise, and deploy AI technologies responsibly across the enterprise.
+Added: If we are unable to develop, adopt, scale, or effectively integrate AI technologies, or if the AI‑enabled solutions we bring to market do not achieve sufficient customer acceptance, our competitive position, growth, and financial performance could be adversely affected.
+Added: Our AI‑enabled offerings and internal AI tools may produce inaccurate, incomplete, biased, or otherwise flawed outputs, including as a result of limitations or deficiencies in training data, algorithmic design, system architecture, or implementation.
+Added: Such outputs could result in operational errors, flawed decision‑making, customer dissatisfaction, reputational harm, or claims of discrimination, bias, or violation of applicable law.
+Added: We may also face allegations that our use of AI infringes, misappropriates, or otherwise violates third‑party intellectual property rights, or that AI‑generated outputs incorporate protected or proprietary content.
+Added: The legal framework governing the ownership, use, and protectability of AI‑generated works remains uncertain and continues to evolve across jurisdictions, which could limit the value or usability of our AI‑enabled deliverables and expose us to infringement, misappropriation, or other legal claims.
+Added: Many of our AI‑enabled offerings and internal tools rely on third‑party AI platforms, foundation models, cloud‑hosted AI services, or other vendor‑provided technologies.
+Added: Defects, service interruptions, security vulnerabilities, changes in licensing terms, pricing, or usage restrictions, or the discontinuation or modification of support by these third‑party providers could disrupt our service delivery, degrade the quality or reliability of our offerings, or require us to identify, integrate, or transition to alternative solutions on short notice.
+Added: In addition, we may have limited visibility into the design, training data, or operational parameters of third‑party AI systems, which may constrain our ability to identify, explain, mitigate, or remediate errors, biases, or other deficiencies in their outputs.
+Added: Our clients may expect us to assume responsibility for the performance, reliability, and compliance of solutions that incorporate third‑party AI components and may be unwilling to accept contractual limitations or exclusions of liability offered by AI platform providers, which could expose us to risks or liabilities that we cannot fully control or mitigate.
+Added: AI technologies are increasingly presenting substantially heightened cybersecurity, information security, and data privacy risks.
+Added: AI systems may be vulnerable to adversarial manipulation, data poisoning, prompt injection, model extraction, or other evolving or novel attack vectors.
+Added: The use of AI in connection with personal data, confidential information, or automated decision‑making processes may trigger additional obligations under data protection, consumer protection, employment, or sector‑specific laws relating to transparency, consent, human oversight, data minimization, explainability, and lawful processing.
+Added: Any failure, or perceived failure, to comply with applicable requirements could result in regulatory scrutiny or enforcement actions, fines or penalties, contractual disputes, litigation, or reputational harm.
+Added: The legal and regulatory environment governing AI is rapidly evolving and differs significantly across jurisdictions.
+Added: Various jurisdictions in which we operate have adopted, proposed, or are considering AI‑specific legislation, regulations, and regulatory guidance, including the EU Artificial Intelligence Act, U.S.
+Added: executive orders and federal agency initiatives, and various U.S.
+Added: These frameworks may impose obligations relating to risk classification, transparency, documentation, human oversight, conformity assessments, record‑keeping, or registration, and may require us to modify our products, services, internal processes, or business practices.
+Added: Regulatory requirements may develop unevenly, change frequently, or be interpreted inconsistently across jurisdictions, increasing compliance complexity, operational burden, and cost.
+Added: While we have implemented governance and risk assessment processes intended to monitor and address AI‑related regulatory developments, there can be no assurance that these efforts will be sufficient to address all applicable requirements, anticipate regulatory changes, or mitigate all associated risks.
+Added: In addition, the rapid adoption of AI technologies by our clients and competitors may reduce demand for certain of our traditional services.
+Added: Clients may increasingly use AI‑driven tools to develop, customize, operate, or maintain technology solutions internally, reducing their reliance on third‑party service providers.
+Added: If a significant number of our existing or prospective clients adopt AI as a substitute for services we currently provide, or if competitors deploy AI‑enabled offerings more effectively or efficiently than we do, our revenues, growth prospects, and results of operations could be materially and adversely affected.
+Added: If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, or if we or third parties fail to deliver on commitments to our customers, the profitability of our contracts may be materially and adversely affected.
+Added: Our commercial contracts are typically awarded on a competitive basis.
+Added: Our bids are based upon, among other items, the expected cost to provide the services.
+Added: We generally provide services under time and materials contracts, unit-price contracts, fixed-price contracts, and consumption-based or resource-unit pricing arrangements, under which customers are billed based on their usage of defined service units.
+Added: We are dependent on our internal forecasts and predictions about our projects and the marketplace and, to generate an acceptable return on our investment in these contracts, we must be able to accurately estimate our costs to provide the services required by the contract and to complete the contracts in a timely manner.
+Added: We face a number of risks when pricing and executing our contracts, as many of our projects entail the coordination of operations and workforces in multiple locations and utilizing workforces with different skill sets and competencies across geographically diverse service locations.
+Added: In addition, revenues from some of our contracts are recognized using the percentage-of-completion method, which requires estimates of total costs at completion, fees earned on the contract, or both.
+Added: This estimation process, particularly due to the technical nature of the services being performed and the long-term nature of certain contracts, is complex and involves significant judgment.
+Added: Adjustments to original estimates are often required as work progresses, experience is gained, and additional information becomes known, even though the scope of the work required under the contract may not change.
+Added: If we fail to accurately estimate our costs or the time required to complete a contract, the profitability of our contracts may be materially and adversely affected.
+Added: Some IT service agreements require significant investment in the early stages that is expected to be recovered through billings over the life of the agreement.
+Added: These agreements often involve the construction of new IT systems and the development and deployment of new technologies.
+Added: Substantial performance risk exists in each agreement with these characteristics, and some or all elements of service delivery under these agreements are dependent upon successful completion of the development, construction, and deployment phases.
+Added: Failure to perform satisfactorily under these agreements may expose us to legal liability, result in the loss of customers or harm our reputation, which could harm the financial performance of our IT services business.
+Added: Our contracts are complex and, in some instances, may require that we partner with other parties, including software and hardware vendors, to provide the complex solutions required by our customers.
+Added: Our ability to deliver the solutions and provide the services required by our customers is dependent on our and our partners' ability to meet our customers' delivery schedules, which is affected by a multitude of factors, including climate change.
+Added: If we or our partners fail to deliver services or products on time, our ability to complete the contract may be adversely affected.
+Added: If any third-party providers unexpectedly terminate our agreement, we would be forced to incur additional expenses to locate alternative providers and may experience outages or disruptions to our service.
+Added: In addition, many public cloud infrastructure providers have also entered into strategic partnerships with our competitors.
+Added: These alliances may result in more compelling product and service offerings than those we offer.
+Added: Additionally, our customers may perform audits or require us to perform audits and provide audit reports with respect to the controls and procedures that we use in the performance of services for such customers.
+Added: Our ability to acquire new customers and retain existing customers may be adversely affected and our reputation could be harmed if we receive a qualified opinion, or if we cannot obtain an unqualified opinion in a timely manner, with respect to our controls and procedures in connection with any such audit.
+Added: We could also incur liability if our controls and procedures, or the controls and procedures we manage for a customer, were to result in an internal control failure or impair our customer's ability to comply with its own internal control requirements.
+Added: If we or our partners fail to meet our contractual obligations or otherwise breach obligations to our customers, we could be subject to legal liability, which may have a material and adverse impact on our revenues and profitability.
+Added: Systems failures, catastrophic events, and resulting interruptions in the availability of our products or services could harm our business, damage our reputation, and subject us to substantial liability.
+Added: Our systems, operations, and the third-party infrastructure on which we rely, including data center facilities and cloud storage services, are vulnerable to damage or interruption from a variety of sources, including hardware and software defects or malfunctions, cyberattacks, human error, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses or other malware, criminal acts, sabotage, geopolitical events, public health emergencies, and other catastrophic occurrences.
+Added: Some of our systems are not fully redundant, and our disaster recovery planning may not be sufficient for all eventualities, and there can be no assurance that our efforts to improve our business continuity and disaster recovery programs will be sufficient to address all potential disruptions.
+Added: We also rely on third-party service providers, including data center operators and cloud service providers, that could terminate or decline to renew their agreements with us, materially change their terms, experience financial difficulties, or be acquired by our competitors, any of which could result in service interruptions to our customers and difficulty transitioning to alternative providers on short notice.
+Added: A prolonged interruption in the availability or functionality of our products and services could materially harm our business and reputation.
+Added: If any system failure or similar event results in damages to our customers or their business partners, these customers or partners could seek compensation from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address.
+Added: We may not carry business interruption insurance sufficient to compensate us for all losses that may result from such interruptions.
We could be held liable for damages, our reputation could suffer, and our business may be materially impacted due to service interruptions from security breaches, cyber-attacks, other cybersecurity events or incidents or disclosure of confidential information or personal data.
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Any of the foregoing, or a combination of the foregoing, could have a material impact on our results of operations or financial condition.
−Removed: We regularly experience cyber events and sometimes have security incidents, including unauthorized efforts to access our IT Systems, and we expect such attacks and incidents to continue in varying degrees.
+Added: We regularly experience cyber events and sometimes have security incidents, including unauthorized access to our IT Systems, and we expect such attacks and incidents to continue in varying degrees.
While incidents experienced thus far have not resulted in material disruption to our business, it is possible that we or a critical service provider could suffer a severe attack or incident, with potentially material adverse effects on our business, reputation, customer relations, results of operations or financial condition.
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Threat actors are increasingly sophisticated and using tools and techniques, including AI, designed to circumvent security controls, to evade detection and to remove or obfuscate forensic evidence, which makes it more difficult for us to detect, identify, investigate, contain or recover from, future cyberattacks and security incidents.
−Removed: Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments increase the likelihood that our encryption and other algorithms that we use to protect our data and that of customers, including sensitive customer transaction data, may fail.
−Removed: Computer programmers and hackers have deployed and may continue to develop and deploy ransomware, malware and other malicious software programs through phishing and other methods that attack our products.
−Removed: Given the nature of complex systems, hardware, software and services like ours, and the scanning tools that we deploy across our infrastructure, environment and products, we regularly identify and track security vulnerabilities.
+Added: Advances in computer capabilities, new discoveries in the field of cryptography or other events or developments will diminish the strength of our encryption and other algorithms that we use to protect our data and that of customers, including sensitive customer transaction data.
We cannot guarantee that, in all instances, we can comprehensively apply patches or confirm that measures are in place to mitigate or otherwise manage vulnerabilities before they can be exploited by a threat actor.
−Removed: In other situations, vulnerabilities persist even after we have issued security patches because our customers may fail to apply patches or update their systems to newer software versions.
If threat actors are able to exploit critical vulnerabilities before patches are installed or mitigating measures are implemented, compromises could impact our and our customers’ IT Systems and data.
−Removed: From time to time, we also identify security vulnerabilities and deficiencies to our IT Systems from risk assessments, penetration testing, internal audit activities and third-party reports.
−Removed: Remediation of such vulnerabilities and deficiencies is a continuous process, and there is no guarantee that such remediation efforts will be successful.
−Removed: Sophisticated hardware, software and applications produced or procured from third parties, notwithstanding our third-party risk management process and our efforts to test and remediate cyber vulnerabilities before integrating them into our IT systems, may still contain defects in design or manufacture, including “bugs” or other vulnerabilities that may be exploited.
−Removed: We have acquired and may continue to acquire companies with cybersecurity vulnerabilities and/or unsophisticated security measures, which exposes us to cybersecurity, operational, and financial risks.
−Removed: In addition, continued remote and hybrid working arrangements present potentially increased risk associated with security vulnerabilities present in non-corporate and home networks.
−Removed: And, as we and various third parties continue to explore and integrate AI into various products and services, we are likely exposed to new and unknown cybersecurity risks and threats.
A party, whether an insider or a third party operating outside the Company, who is able to circumvent our security measures or those of our contractors, partners or vendors could access our IT Systems, or those of a critical third party, and misappropriate proprietary information, the confidential data of our customers, employees or business partners or cause interruption in our or their operations.
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Delayed sales, lower margins or loss of customers resulting from these disruptions could reduce our revenues, increase our expenses, damage our reputation, and adversely affect our stock price.
−Removed: Compliance, or failure to comply, with obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data could adversely affect our financial condition, results of operations and cash flows.
+Added: Failure to comply with obligations arising under new or existing laws, regulations, and customer contracts relating to the privacy, security and handling of personal data could adversely affect our financial condition, results of operations and cash flows.
We receive, store or otherwise process personal data related to our customers, employees and other individuals (including end-customers and employees of our customers) in order to run our business and are subject to a variety of laws, regulations, and contractual obligations relating to the privacy, security and handling of personal data.
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Some of our customers have sought, and may continue to seek, to contractually impose certain strict data privacy and information security obligations on us.
−Removed: To the extent our customers are required by laws, rules, or regulations to impose such contractual obligations on us, we may have limited ability to reject them or negotiate them in our favor.
−Removed: Moreover, some of our customer contracts may not limit our liability for the loss of confidential information (including personal data), data breaches or other cybersecurity incidents or other business impact.
+Added: Some of our customer contracts may not limit our liability for the loss of confidential information (including personal data), data breaches or other cybersecurity incidents or other business impact.
+Added: In addition, we rely on third-party service providers, subcontractors, cloud providers and other vendors to support our operations, and failures by such third parties to comply with applicable privacy or security obligations may expose us to regulatory enforcement, contractual claims or reputational harm.
If we are unable to adequately address these concerns, our business and results of operations could suffer.
The regulatory landscape in these areas continues to evolve rapidly, varying in requirements, restrictions and potential legal risk, requiring additional investment in compliance programs.
+Added: This includes evolving requirements relating to the use of AI, automated decision-making and advanced analytics involving personal data, which may impose additional obligations relating to transparency, governance, data minimization and lawful use of data, and could limit or delay our ability to deploy certain solutions or require additional compliance investment.
This could impact our strategies regarding the use of new technologies, such as artificial intelligence, and availability of previously collected data.
+Added: In addition, restrictions on cross-border transfers of personal data, data localization requirements, or changes to international data transfer mechanisms may increase operational complexity, require modifications to our global delivery model, or limit our ability to process data in certain jurisdictions.
For example, we are subject to the General Data Protection Regulation (“GDPR”), among other regulations, imposing comprehensive data privacy compliance obligations in relation to our collection and use of “personal data” and can include significant financial penalties for non-compliance.
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While we strive to comply with all applicable data protection laws and regulations, as well as internal privacy policies, any failure or perceived failure to comply or any misappropriation, loss or other unauthorized disclosure of confidential or sensitive information may result in legal proceedings or actions against us or the loss of customers, which could potentially have an adverse effect on our business, reputation and results of operations.
−Removed: Product and service quality issues could impact our business, operating results and financial condition.
−Removed: Our products and services are highly technical and complex and may contain errors, defects or security vulnerabilities that cannot be discovered before a product or service is released, installed and used by customers.
−Removed: If errors, malfunctions, defects or disruptions in service are experienced by customers or in our operations, they could impact customers’ business operations and harm our operating results and reputation, which harm may not be fully cured by our subsequent remediation efforts.
−Removed: In addition, our liability insurance may not adequately cover liabilities incurred, and uncovered losses could be large and harm our financial condition.
−Removed: Our ability to continue to develop and expand our service offerings to address emerging business demands and technological trends, including our ability to sell differentiated services and compete in the highly competitive markets we serve, may impact our future growth.
−Removed: If we are not successful in meeting these business challenges, our results of operations and cash flows may be materially and adversely affected.
−Removed: Our ability to develop and implement innovative technology solutions that meet evolving customer needs and industry standards in analytics, software engineering, applications, business process services, digital cloud, IT outsourcing and consulting, and in areas such as AI, automation, Internet of Things and software as-a-service solutions, among others, in a timely or cost-effective manner, will impact our ability to retain and attract customers and our future revenue growth and earnings.
−Removed: The markets we serve are highly competitive and characterized by rapid technological change.
−Removed: If we are unable to continue to execute our strategy or if we are unable to commercialize our services and solutions, expand and scale them with sufficient speed and versatility, our growth, productivity objectives and profit margins could be negatively affected.
−Removed: Technological developments may materially affect the cost and use of technology by our customers.
−Removed: Some of these technologies have reduced and replaced some of our traditional services and solutions and may continue to do so in the future.
−Removed: For example, we have been integrating AI, particularly generative AI, into our services and solutions to meet client demand and to maintain competitiveness in a highly competitive and rapidly evolving market.
−Removed: We have made substantial investments in developing and supporting AI capabilities and services, and we anticipate making further investments in the future.
−Removed: If we are unable to quickly develop, adopt, and deploy generative AI technologies, we risk falling behind our industry competitors.
−Removed: Furthermore, generative AI is changing how we identify, recruit, hire, retain, and deploy our professionals, as well as how we price their services.
−Removed: Our clients may increasingly expect that we integrate generative AI with human delivery teams to develop solutions at lower costs compared to traditional, human-only approaches.
−Removed: Customers may be less inclined to pay premium rates for human labor if they perceive that the same services can be delivered more cost-effectively through generative AI.
−Removed: This could prompt clients to explore alternative providers or seek price reductions, which may negatively impact our results of operations and financial performance.
−Removed: The AI algorithms that we use may be flawed or may be based on datasets that are biased or insufficient, and our AI features may not achieve sufficient levels of accuracy or may have unintended consequences, including allegations of bias, discrimination, legal and regulatory violations, or violation of third-party intellectual property rights.
−Removed: There is no guarantee that our products or services that integrate AI capabilities will achieve market acceptance and help us maintain or enhance our competitive position.
−Removed: We encounter aggressive competition from numerous and varied competitors.
−Removed: Our competitiveness is based on factors including technology (including building AI capabilities into our offerings), innovation, performance, price, quality, reliability, brand, reputation, range of products and services, account relationships, customer training, service and support and security.
−Removed: If we are unable to compete based on such factors, we could lose customers or we may experience reduced profitability from our customers and our results of operations and business prospects could be harmed.
−Removed: Technological developments have caused, and may in the future cause, customers to delay spending under existing contracts and engagements and to delay entering into new contracts while they evaluate new technologies.
−Removed: Such delays can negatively impact our results of operations if the pace and level of spending on new technologies by some of our customers are not sufficient to make up any shortfall by other customers.
−Removed: Our growth strategy focuses on responding to these types of developments by driving innovation that will enable us to expand our business into new growth areas.
−Removed: However, markets for new technologies, such as AI, may not develop as we have anticipated.
−Removed: If we do not sufficiently invest in new technology and adapt to industry developments, or evolve and expand our business at sufficient speed and scale, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our services and solutions, our results of operations, and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected.
−Removed: We have a large portfolio of services and we need to allocate financial, personnel and other resources across all services while competing with companies that have smaller portfolios or specialize in one or more of our service lines.
−Removed: As a result, we may invest less in certain business areas than our competitors do, and competitors may have greater financial, technical and marketing resources available to them compared to the resources allocated to our services.
−Removed: Industry consolidation may also affect competition by creating larger, more homogeneous and
−Removed: potentially stronger competitors in the markets in which we operate.
−Removed: Additionally, competitors may affect our business by entering into exclusive arrangements with existing or potential customers or suppliers.
−Removed: Companies with whom we have alliances in certain areas may be or become competitors in other areas.
−Removed: In addition, companies with whom we have alliances also may acquire or form alliances with competitors, which could reduce their business with us.
−Removed: If we are unable to effectively manage these complicated relationships with alliance partners, our business and results of operations could be adversely affected.
−Removed: We face aggressive price competition and may have to lower prices to stay competitive, while simultaneously seeking to maintain or improve revenue and gross margin.
−Removed: This price competition may continue to increase from emerging companies that sell products and services into the same markets in which we operate.
−Removed: In addition, competitors who have a greater presence in some of the lower-cost markets in which we compete, or who can obtain better pricing, more favorable contractual terms and conditions, may be able to offer lower prices than we are able to offer.
−Removed: If we experience pressure from competitors to lower our prices, we may have lower than expected profit margins and lost business opportunities if we are unable to match the price declines.
−Removed: Our cash flows, results of operations and financial condition may be adversely affected by these and other industry-wide pricing pressures.
−Removed: Our ability to compete in certain markets we serve is dependent on our ability to continue to expand our capacity in certain offshore locations.
−Removed: However, as our presence in these locations increases, we are exposed to risks inherent to these locations which may adversely affect our revenue and profitability.
−Removed: A significant portion of our application outsourcing and software development activities has been shifted to India and other lower-cost locations.
−Removed: As a result, we are exposed to the risks inherent in operating in India or other locations, including (1) a highly competitive labor market for skilled workers, which may result in significant increases in labor costs, as well as shortages of qualified workers in the future, (2) currency exchange risks, and (3) the possibility that the U.S.
−Removed: Federal Government or the European Union (the "EU") may enact legislation that creates significant disincentives for customers to locate certain of their operations offshore, which would reduce the demand for the services we provide in such locations and may adversely impact our cost structure and profitability.
−Removed: In addition, India has experienced, and other countries may experience, political instability, civil unrest and hostilities with neighboring countries.
−Removed: Negative or uncertain political climates in countries or locations where we operate, including but not limited to, military activities or civil hostilities, criminal activities and other acts of violence, infrastructure disruption, natural disasters or other conditions could adversely affect our operations or cause us to exit certain markets.
+Added: Our business operations are subject to various and changing federal, state, local and foreign laws and regulations that could result in costs or sanctions that adversely affect our business and results of operations.
+Added: Social and environmental responsibility regulations, policies and provisions, as well as customer and investor demands, may adversely affect our relationships with customers and investors.
+Added: We operate in 60 countries in an increasingly complex regulatory environment.
+Added: Among other things, we provide complex industry-specific insurance processing in the United Kingdom ("U.K."), which is regulated by authorities in the U.K.
+Added: and elsewhere, such as the U.K.'s Financial Conduct Authority and His Majesty's Treasury and the U.S.
+Added: Department of Treasury, which increases our exposure to compliance risk.
+Added: In addition, businesses in the countries in which we operate are subject to local, legal and political environments and regulations including with respect to employment, tax, statutory supervision and reporting and trade restriction, along with industry regulations such as regulation by bank regulators in the U.S.
+Added: These regulations and environments are also subject to change.
+Added: With respect to employment, we are subject to complex and evolving employment and labor laws across the jurisdictions in which we operate, including laws governing wages, hours, overtime, leave entitlements, benefits, payroll practices, and employee classifications.
+Added: Compliance with these requirements is complicated by the number and variety of legal frameworks and instruments applicable to our workforce, as well as by the use of multiple payroll and timekeeping systems across our operations, particularly following acquisitions or organizational changes.
+Added: Changes in law, regulation, or judicial interpretation, including with respect to calculation methodologies for employee entitlements, may increase our compliance obligations or retroactively expand our exposure for prior periods.
+Added: Any failure, or perceived failure, to comply with applicable employment laws could result in claims for back-pay or other remediation, regulatory investigations or enforcement actions, civil penalties, increased compliance costs, and reputational harm, which may individually or in the aggregate have a material impact on our financial performance.
+Added: Adjusting business operations to changing environments and regulations may be costly and could potentially render the particular business operations uneconomical, which may adversely affect our profitability or lead to a change in the business operations.
+Added: Notwithstanding our best efforts, we may not be in compliance with all regulations in the countries in which we operate at all times and may be subject to sanctions, penalties or fines as a result.
+Added: These sanctions, penalties or fines may materially and adversely impact our profitability.
We are subject to the U.S.
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In addition, detecting, investigating and resolving actual or alleged violations of the FCPA or other anti-bribery violations is expensive and could consume significant time and attention of our senior management.
−Removed: Failure to maintain our credit rating and ability to manage working capital, refinance and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets.
+Added: We are subject to economic sanctions, export controls, and other trade restrictions imposed by the United States, the European Union, and other jurisdictions in which we operate.
+Added: These requirements may limit our ability to provide services, deploy technology, or conduct business in certain markets or with certain customers, and may require us to modify our operations or forego business opportunities.
+Added: These laws and regulations are complex, change frequently, and may be applied or interpreted differently across jurisdictions.
+Added: Any failure, or perceived failure, to comply with applicable sanctions or export control requirements could result in significant fines, penalties, reputational harm, increased compliance costs, or other adverse impacts on our business and results of operations.
+Added: Our operations are also subject to a broad array of domestic and international environmental, health, and safety laws and regulations, including laws addressing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, and the clean-up of contaminated sites.
+Added: Certain laws may also impose liability without regard to fault or the legality of the original conduct.
+Added: Environmental costs and accruals are presently not material to our operations, cash flows or financial position;
+Added: and, we do not currently anticipate material capital expenditures for environmental control facilities.
+Added: However, our failure to comply with these laws or regulations can result in civil, criminal or regulatory penalties, fines, and legal liabilities;
+Added: suspension, delay or alterations of our operations;
+Added: damage to our reputation;
+Added: and restrictions on our operations or sales.
+Added: Our business could also be affected if new environmental legislation is passed which impacts our current operations and business.
+Added: For example, if we are unable to comply with fast-moving regulatory requirements, we could be disqualified from requests for proposal processes, leading to a loss of sales as well as unfavorable operating cost impacts.
+Added: In addition, changing expectations from stakeholders and the evolving landscape of regulatory and disclosure requirements regarding ESG could affect our business.
+Added: We are subject to, and anticipate becoming increasingly subject to, laws, regulations, and international agreements concerning ESG, such as the European Union's Corporate Sustainability Reporting Directive (CSRD) and California's climate change disclosure requirements.
+Added: As these new laws, regulations, treaties and national and global initiatives are adopted and implemented regionally or throughout the world, we expect to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors.
+Added: Other laws, regulations, treaties or initiatives in response to climate change, including, but not limited to, the introduction of a carbon tax, could result in increased operational costs associated with air pollution requirements and increased compliance and energy costs, which could harm our business and results of operations by increasing our expenses or requiring us to alter our business operations.
+Added: Moreover, we may experience loss of market share if we are unable to provide competitive products and services that incorporate climate-change mitigations, and if we are unable to achieve and sustain a carbon-neutral business model in a meaningful time frame, we could lose stockholder or customer confidence, resulting in loss of business and loss of access to the financial markets.
+Added: As a result of the complexity and rapid development of AI, it is also the subject of evolving review by various governmental and regulatory agencies around the world.
+Added: Various jurisdictions where we operate are considering applying or have applied, their intellectual property, cybersecurity, data protection, and other laws to AI and/or are considering or have proposed or enacted general legal frameworks and policies on AI, such as the EU Artificial Intelligence Act (the "EU AI Act") and the U.S.'s Executive Orders and U.S.
+Added: state laws, some of which may be conflicting.
+Added: We may not always be able to determine the impact relevant laws, regulations, standards, or market perception of their requirements may have on our business and otherwise respond to these frameworks.
+Added: Given the rapidly evolving nature of the legal and regulatory environment surrounding AI, our AI features and our use, training, and implementation of AI could subject us to new or enhanced governmental or regulatory scrutiny, product restrictions, social and ethical issues, negative consumer perceptions and reputational harm, intellectual property disputes, compliance costs, and other issues, including issues related to cybersecurity and data privacy.
+Added: Certain AI-related regulations, such as the EU AI Act, could impose obligations on our business that may require us to change our products or business practices to comply.
+Added: AI-related regulations may develop at different rates and inconsistently across jurisdictions, and require us to expend significant resources or cause delays or disruptions to our offerings.
+Added: Failure to maintain our credit rating, manage our indebtedness, and raise additional capital for future needs could adversely affect our liquidity, capital position, borrowing cost, and access to capital markets.
We currently maintain investment grade credit ratings with Moody's Investors Service, Fitch Rating Services, and Standard & Poor's Ratings Services.
Our credit ratings are based upon information furnished by us or obtained by a rating agency from its own sources and are subject to revision, suspension, or withdrawal by one or more rating agencies at any time.
−Removed: Rating agencies may place our ratings on negative outlook or credit watch, or take downgrade actions, due to factors including adverse changes in macroeconomic conditions, such as a global or regional recession, trade policy uncertainty (including tariff impositions or escalations), or broader credit market trends.
−Removed: Rating agencies may review the ratings assigned to us due to developments that are beyond our control, including potential new standards requiring the agencies to reassess rating practices and methodologies.
+Added: Rating agencies may place our ratings on outlook or credit watch with negative implications, or take downgrade actions, due to factors beyond our control such as adverse changes in the geopolitical environment, structural shifts like AI, macroeconomic conditions, trade policy actions (including tariff impositions or escalations), broader credit market trends, or potential new standards requiring the agencies to reassess rating practices and methodologies.
Ratings agencies may consider changes in credit ratings based on changes in expectations about future profitability and cash flows even if short-term liquidity expectations are not negatively impacted.
−Removed: If changes in our credit ratings were to occur, it could result in higher interest costs under certain of our credit facilities.
−Removed: It would also cause our future borrowing costs to increase and limit our access to capital markets.
−Removed: For example, we fund a portion of our working capital requirements in the U.S.
−Removed: and European commercial paper markets from time to time.
−Removed: Any downgrade below our current rating would, absent changes to current market liquidity, substantially reduce or eliminate our ability to access that source of funding and could otherwise negatively impact the perception of our company by lenders and other third parties.
+Added: If changes in our credit ratings were to occur, it could result in higher interest costs under certain of our credit facilities and the 4.25% €650 million Senior Notes.
+Added: It could also cause our future borrowing costs to increase and limit our access to capital markets.
+Added: Any downgrade below our current rating could also negatively impact the perception of our company by lenders and other third parties.
In addition, certain of our major contracts provide customers with a right of termination in certain circumstances in the event of a rating downgrade below investment grade.
There can be no assurance that we will be able to maintain our credit ratings, and any additional actual or anticipated changes or downgrades in our credit ratings, including any announcement that our ratings are under review for a downgrade, may have a negative impact on our liquidity, capital position, and access to capital markets.
−Removed: Our liquidity is a function of our ability to successfully generate cash flows from a combination of efficient operations and continuing operating improvements, access to capital markets and funding from third parties.
−Removed: In addition, like many multinational regulated enterprises, our operations are subject to a variety of tax, foreign exchange and regulatory capital requirements in different jurisdictions that have the effect of limiting, delaying or increasing the cost of moving cash between jurisdictions or using our cash for certain purposes.
−Removed: Our ability to maintain sufficient liquidity going forward is subject to the general liquidity of and on-going changes in the credit markets as well as general economic, financial, competitive, legislative, regulatory and other market factors that are beyond our control.
−Removed: An increase in our borrowing costs, limitations on our ability to access the global capital and credit markets or a reduction in our liquidity can adversely affect our financial condition and results of operations.
−Removed: It is difficult to predict the impact of increased borrowing costs on us, our third-party partners or customers or economic markets more broadly, which have been and will continue to be highly dependent upon the actions of governments and businesses in response to macroeconomic events, and the effectiveness of those actions.
−Removed: Such actions may impact our ability, desire, or the timing of seeking funding for various investment opportunities.
−Removed: In addition, volatility and disruption in banking and capital markets can adversely affect our ability to refinance, and increase the cost of refinancing, some or all of our debt.
−Removed: Disruptions in the financial markets can also adversely affect our lenders, insurers, customers, and other counterparties.
−Removed: Our total liquidity depends in part on the availability of funds under the revolving credit facility and our other financing agreements.
−Removed: The failure of any lender’s ability to fund future draws on our revolving credit facility or our other financing arrangements could reduce the amount of cash we have available for operations and additional capital for future needs.
−Removed: Information regarding our credit ratings is included in Part II, Item 7 of this Annual Report on Form 10-K under the caption "Liquidity and Capital Resources."
−Removed: If industry or equity research analysts have difficulty in understanding the changes to our business model, or we fail to meet our publicly announced financial guidance, our stock price and trading volume could decline.
−Removed: Given the complexity of implementing our strategic priorities and the uncertain global economic conditions, we may not be able to progress on our strategic priorities in accordance with our expectations, and it is likely that our prior forecasts will prove to be incorrect.
−Removed: Additionally, industry and equity research analysts that publish reports about our business may not accurately capture and reflect our turnaround progress.
−Removed: As a result, we may fail to meet their expectations.
−Removed: If our financial results fail to meet our publicly announced financial guidance or market expectations, equity research analysts could downgrade our common stock or publish unfavorable research that could cause our stock price or trading volume to decline, potentially significantly.
−Removed: Our business and financial results have been adversely affected and could continue to be materially adversely affected by public health crises.
−Removed: Public health crises, such as the COVID-19 pandemic, have caused disruptions in global economies, financial and commodities markets and rapid shifts in governmental and public health policies.
−Removed: Negative impacts to our business have occurred, and may occur in the future, including disruptions or restrictions on our employees’ ability to work effectively, as well as temporary closures of our facilities or the facilities of our customers or our subcontractors, or the requirements to deliver our services remotely.
−Removed: If a business interruption occurs and we are unsuccessful in our continuing efforts to minimize the impact of these events, our business, results of operations, financial position, and cash flows could be materially adversely affected.
−Removed: Any future economic downturn induced by a public health crisis, depending upon its severity and duration, could also lead to a deterioration of worldwide credit and financial markets that could negatively affect the financial health of customers, lower their demand for our services, limit their ability or willingness to pay us in a timely manner and our ability to obtain external financing to fund our operations and capital expenditures, result in losses on our holdings of cash and investments due to failures of financial institutions and other parties, and result in a higher rate of losses on our accounts receivables due to credit defaults.
−Removed: We have indebtedness, which could have a material adverse effect on our business, financial condition and results of operations.
−Removed: We have indebtedness totaling approximately $3.9 billion as of March 31, 2025 (including capital lease obligations).
+Added: We have indebtedness totaling approximately $3.6 billion as of March 31, 2026.
We may incur substantial additional indebtedness in the future for many reasons, including to fund acquisitions.
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There can be no assurance that our business will generate sufficient cash flow from operations, or that current or future borrowings will be sufficient to meet our current debt obligations and to fund other liquidity needs.
−Removed: If we are unable to accurately estimate the cost of services and the timeline for completion of contracts, the profitability of our contracts may be materially and adversely affected.
−Removed: Our commercial contracts are typically awarded on a competitive basis.
−Removed: Our bids are based upon, among other items, the expected cost to provide the services.
−Removed: We generally provide services under time and materials contracts, unit-price contracts, fixed-price contracts, and multiple-element software sales.
−Removed: We are dependent on our internal forecasts and predictions about our projects and the marketplace and, to generate an acceptable return on our investment in these contracts, we must be able to accurately estimate our costs to provide the services required by the contract and to complete the contracts in a timely manner.
−Removed: We face a number of risks when pricing our contracts, as many of our projects entail the coordination of operations and workforces in multiple locations and utilizing workforces with different skill sets and competencies across geographically diverse service locations.
−Removed: In addition, revenues from some of our contracts are recognized using the percentage-of-completion method, which requires estimates of total costs at completion, fees earned on the contract, or both.
−Removed: This estimation process, particularly due to the technical nature of the services being performed and the long-term nature of certain contracts, is complex and involves significant judgment.
−Removed: Adjustments to original estimates are often required as work progresses, experience is gained, and additional information becomes known, even though the scope of the work required under the contract may not change.
−Removed: If we fail to accurately estimate our costs or the time required to complete a contract, the profitability of our contracts may be materially and adversely affected.
−Removed: Some ITO services agreements contain pricing provisions that permit a customer to request a benchmark study by a mutually acceptable third party.
−Removed: The benchmarking process typically compares the contractual price of services against the price of similar services offered by other specified providers in a peer comparison group, subject to agreed-upon adjustment, and normalization factors.
−Removed: Generally, if the benchmarking study shows that the pricing differs from the peer group outside a specified range, and the difference is not due to the unique requirements of the customer, then the parties will negotiate in good faith appropriate adjustments to the pricing.
−Removed: This may result in the reduction of rates for the benchmarked services performed after the implementation of those pricing adjustments, which could harm the financial performance of our services business.
−Removed: Some IT service agreements require significant investment in the early stages that is expected to be recovered through billings over the life of the agreement.
−Removed: These agreements often involve the construction of new IT systems and communications networks and the development and deployment of new technologies.
−Removed: Substantial performance risk exists in each agreement with these characteristics, and some or all elements of service delivery under these agreements are dependent upon successful completion of the development, construction, and deployment phases.
−Removed: Failure to perform satisfactorily under these agreements may expose us to legal liability, result in the loss of customers or harm our reputation, which could harm the financial performance of our IT services business.
−Removed: Performance under contracts, including those on which we have partnered with third parties, may be adversely affected if we or the third parties fail to deliver on commitments or otherwise breach obligations to our customers.
−Removed: Our contracts are complex and, in some instances, may require that we partner with other parties, including software and hardware vendors, to provide the complex solutions required by our customers.
−Removed: Our ability to deliver the solutions and provide the services required by our customers is dependent on our and our partners' ability to meet our customers' delivery schedules, which is affected by a multitude of factors, including climate change.
−Removed: If we or our partners fail to deliver services or products on time, our ability to complete the contract may be adversely affected.
−Removed: If any third-party providers unexpectedly terminate our agreement, we would be forced to incur
−Removed: additional expenses to locate alternative providers and may experience outages or disruptions to our service.
−Removed: In addition, many public cloud infrastructure providers have also entered into strategic partnerships with our competitors.
−Removed: These alliances may result in more compelling product and service offerings than those we offer.
−Removed: Additionally, our customers may perform audits or require us to perform audits and provide audit reports with respect to the controls and procedures that we use in the performance of services for such customers.
−Removed: Our ability to acquire new customers and retain existing customers may be adversely affected and our reputation could be harmed if we receive a qualified opinion, or if we cannot obtain an unqualified opinion in a timely manner, with respect to our controls and procedures in connection with any such audit.
−Removed: We could also incur liability if our controls and procedures, or the controls and procedures we manage for a customer, were to result in an internal control failure or impair our customer’s ability to comply with its own internal control requirements.
−Removed: If we or our partners fail to meet our contractual obligations or otherwise breach obligations to our customers, we could be subject to legal liability, which may have a material and adverse impact on our revenues and profitability.
+Added: Our liquidity is a function of our ability to successfully generate cash flows from a combination of efficient operations and continuing operating improvements, access to capital markets and funding from third parties.
+Added: In addition, like many multinational regulated enterprises, our operations are subject to a variety of tax, foreign exchange and regulatory capital requirements in different jurisdictions that have the effect of limiting, delaying or increasing the cost of moving cash between jurisdictions or using our cash for certain purposes.
+Added: Our ability to maintain sufficient liquidity going forward is subject to the general liquidity of and on-going changes in the credit markets as well as general economic, financial, competitive, legislative, regulatory and other market factors that are beyond our control.
+Added: An increase in our borrowing costs, limitations on our ability to access the global capital and credit markets or a reduction in our liquidity can adversely affect our financial condition and results of operations.
+Added: It is difficult to predict the impact of increased borrowing costs on us, our third-party partners or customers or economic markets more broadly, which have been and will continue to be highly dependent upon the actions of governments and businesses in response to macroeconomic events, and the effectiveness of those actions.
+Added: Such actions may impact our ability, desire, or the timing of seeking funding for various investment opportunities.
+Added: In addition, volatility and disruption in banking and capital markets can adversely affect our ability to refinance, and increase the cost of refinancing, some or all of our debt.
+Added: Disruptions in the financial markets can also adversely affect our lenders, insurers, customers, and other counterparties.
+Added: Our total liquidity depends in part on the availability of funds under the revolving credit facility and our other financing agreements.
+Added: The failure of any lender's ability to fund future draws on our revolving credit facility or our other financing arrangements could reduce the amount of cash we have available for operations and additional capital for future needs.
+Added: We enter into foreign currency forward contracts and interest rate swaps with a number of counterparties.
+Added: As a result, we are subject to the risk that the counterparty to one or more of these contracts defaults on its performance under the contract.
+Added: During an economic downturn, the counterparty's financial condition may deteriorate rapidly and with little notice and we may be unable to take action to protect our exposure.
+Added: In the event of a counterparty default, we could incur significant losses, which may harm our business and financial condition.
+Added: In the event that one or more of our counterparties becomes insolvent or files for bankruptcy, our ability to eventually recover any losses suffered as a result of that counterparty's default may be limited by the liquidity of the counterparty.
+Added: Information regarding our credit ratings is included in Part II, Item 7 of this Annual Report on Form 10-K under the caption "Liquidity and Capital Resources."
+Added: We are exposed to risks inherent to our international operations, including fluctuations in exchange rates, and geopolitical conflicts and disruptions can adversely affect our sales and operations.
+Added: A significant portion of our application outsourcing and software development activities has been shifted to India and other lower-cost locations.
+Added: As a result, we are exposed to the risks inherent in operating in India or other locations, including (1) a highly competitive labor market for skilled workers, which may result in significant increases in labor costs, as well as shortages of qualified workers in the future, (2) currency exchange risks, and (3) the possibility that the U.S.
+Added: Federal Government or the European Union (the "EU") may enact legislation that creates significant disincentives for customers to locate certain of their operations offshore, which would reduce the demand for the services we provide in such locations and may adversely impact our cost structure and profitability.
+Added: India has experienced, and other countries may experience, political instability, civil unrest and hostilities with neighboring countries.
+Added: Rising tensions in the geopolitical climate, including the ongoing conflict between Russia and Ukraine, the current hostilities in the Middle East, and other negative or uncertain political climates in countries or locations where we or our customers operate, including but not limited to, military activities or civil hostilities, criminal activities and other acts of violence, infrastructure disruption, natural disasters or other conditions could adversely affect our sales and operations, and otherwise materially impair our ability to deliver services or fulfill contractual obligations or cause us to exit certain markets.
+Added: Our exposure to currencies other than the U.S.
+Added: dollar may impact our results, as they are expressed in U.S.
+Added: Currency variations also contribute to variations in sales of products and services in affected jurisdictions.
+Added: While historically we have partially mitigated currency risk, including exposure to fluctuations in currency exchange rates by matching costs with revenues in a given currency, our exposure to fluctuations in other currencies against the U.S.
+Added: dollar increases, as revenue in currencies other than the U.S.
+Added: dollar increases.
+Added: Approximately 75% of revenues earned during fiscal 2026 were derived from sales denominated in currencies other than the U.S.
+Added: dollar and are expected to continue to represent a significant portion of our revenues.
+Added: Also, we believe that our ability to match revenues and expenses in a given currency will decrease as more work is performed at offshore locations that use a different currency from where we generate our revenue.
+Added: We may use forward and option contracts to protect against currency exchange rate risks.
+Added: The effectiveness of these hedges will depend on our ability to accurately forecast future cash flows, which may be particularly difficult during periods of uncertain demand and highly volatile exchange rates.
+Added: We may incur significant losses from our hedging activities due to factors such as demand volatility and currency variations.
+Added: In addition, certain or all of our hedging activities may be ineffective, may expire and not be renewed or may not offset the adverse financial impact resulting from currency variations.
+Added: Losses associated with hedging activities may also impact our revenues and to a lesser extent our cost of sales and financial condition.
+Added: Our future business and financial performance could suffer due to a variety of international factors, including:
+Added: • ongoing instability or changes in a country's or region's economic or geopolitical and security conditions,including inflation, recession, interest rate fluctuations, and actual or anticipated military or political conflict, civil unrest, crime, political instability, human rights concerns, and terrorist activity;
+Added: • natural or man-made disasters, industrial accidents, public health issues, cybersecurity incidents, interruptions of service from utilities, transportation or telecommunications providers, or other catastrophic events;
+Added: • longer collection cycles and financial instability among customers;
+Added: • trade regulations and procedures and actions affecting production, pricing and marketing of products, including policies adopted by countries that may champion or otherwise favor domestic companies and technologies over foreign competitors;
+Added: • local labor conditions and regulations;
+Added: • managing our geographically dispersed workforce;
+Added: • changes in the international, national or local regulatory and legal environments;
+Added: • differing technology standards or customer requirements;
+Added: • difficulties associated with repatriating earnings generated or held abroad in a tax-efficient manner;
+Added: • changes in tax laws.
+Added: Prolonged periods of inflation and related economic conditions could adversely affect our profitability, results of operations, and cash flow.
+Added: Prolonged periods of inflation, wage increases, or other cost escalation may adversely affect general economic conditions, customer budgeting, and our profitability, particularly in customer contracts where our ability to pass through increased costs is limited.
+Added: We generally provide services under time and materials contracts, unit-price contracts, fixed-price contracts, and consumption‑based or resource‑unit pricing arrangements.
+Added: In many of our contracts, we bear the risk of cost overruns, completion delays, resource requirements, wage inflation and adverse movements in exchange rates.
+Added: Many of our contracts include cost‑of‑living adjustment provisions or pricing assumptions designed to address inflationary pressures, often based on broad‑based indices, or incorporate anticipated cost increases into the contract pricing.
+Added: However, these mechanisms may not fully offset all cost increases, particularly where inflationary pressures, wage increases, or other cost escalations differ materially from underlying assumptions or occur more rapidly than anticipated.
+Added: In addition, certain contracts may not provide for price adjustments for inflation or abnormal escalation, or such adjustments may be subject to caps, delays, or other limitations.
+Added: If inflation, cost escalation, or other pricing pressures exceed our expectations or the protections available under our contracts, our costs of service delivery may increase without a corresponding increase in revenue, which could materially and adversely affect our profitability, results of operations, and cash flow.
+Added: Inflation and government actions intended to combat inflation may also increase market volatility and have an adverse effect on the financial market and general economic conditions.
+Added: In periods of economic uncertainty, our customers may reduce spending, experience difficulty budgeting for external IT services, delay procurement decisions, or delay payment for services already provided.
+Added: We may also experience longer sales cycles or increased difficulty closing new deals in the event of an economic slowdown.
+Added: Any of these factors could adversely affect our revenues, profitability, results of operations, and cash flow.
+Added: We face aggressive competition and may fail to compete effectively in certain markets.
+Added: We encounter aggressive competition from numerous and varied competitors.
+Added: Our competitiveness is based on factors including technology, innovation, performance, price, quality, reliability, brand, reputation, range of products and services, account relationships, customer training, service and support and security.
+Added: If we are unable to compete based on such factors, we could lose customers or we may experience reduced profitability from our customers and our results of operations and business prospects could be harmed.
+Added: We have a large portfolio of services and we need to allocate financial, personnel and other resources across all services while competing with companies that have smaller portfolios or specialize in one or more of our service lines.
+Added: As a result, we may invest less in certain business areas than our competitors do, and competitors may have greater financial, technical and marketing resources available to them compared to the resources allocated to our services.
+Added: Industry consolidation may also affect competition by creating larger, more homogeneous and potentially stronger competitors in the markets in which we operate.
+Added: Additionally, competitors may affect our business by entering into exclusive arrangements with existing or potential customers or suppliers.
+Added: Companies with whom we have alliances in certain areas may be or become competitors in other areas.
+Added: In addition, companies with whom we have alliances also may acquire or form alliances with competitors, which could reduce their business with us.
+Added: If we are unable to effectively manage these complicated relationships with alliance partners, our business and results of operations could be adversely affected.
+Added: We face aggressive price competition and may have to lower prices to stay competitive, while simultaneously seeking to maintain or improve revenue and gross margin.
+Added: If we experience pressure from competitors to lower our prices, we may have lower than expected profit margins and lost business opportunities if we are unable to match the price declines.
+Added: We devote significant resources to establish relationships with our customers and implement our offerings and related services, particularly in the case of large enterprises that often request or require specific features or functions specific to their particular business profile.
+Added: Accordingly, our results of operations depend in substantial part on our ability to deliver a successful customer experience and persuade customers to maintain and grow their relationship with us over time.
+Added: If we are not successful in implementing an offering or delivering a successful customer experience, including achieving cost and staffing levels that meet our customers' expectations, customers could terminate or elect not to renew their agreements with us and our operating results may suffer.
+Added: Contracts with customers may include unique and specialized performance requirements.
+Added: In particular, our contracts with federal, state, provincial, and local governmental customers are generally subject to various procurement regulations, contract provisions, and other requirements relating to their formation, administration, and performance, including the maintenance of necessary security clearances.
+Added: Our customers' contracts with U.S.
+Added: government agencies are also subject to audits and investigations, which may include a review of performance on contracts, pricing practices, cost structure, and compliance with applicable laws and regulations.
+Added: Any failure on our part to comply with the specific provisions in customer contracts or any violation of government contracting regulations or other requirements could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments, and, in the case of government contracts, fines and suspension from future government contracting.
+Added: Such failures could also cause reputational damage to our business.
+Added: In addition, we may be subject to qui tam litigation brought by private individuals on behalf of the government relating to government contracts, which could include claims for treble damages.
+Added: Further, any negative publicity with respect to customer contracts or any related proceedings, regardless of accuracy, may damage our business by harming our ability to compete for new contracts.
+Added: Our customers' contracts with the U.S.
+Added: federal government and related agencies are also subject to issues with respect to federal budgetary and spending limits or matters and may be affected by staffing and resource reductions and funding authorizations.
+Added: Any changes to the fiscal policies of the U.S.
+Added: federal government may decrease overall government funding, result in delays in the procurement of products and services due to lack of funding, cause the U.S.
+Added: federal government and government agencies to reduce their purchases under existing contracts, or cause them to exercise their rights to terminate contracts at-will or to abstain from exercising options to renew contracts, any of which would have an adverse effect on our business, financial condition, results of operations and/or cash flows.
+Added: Additionally, impasses impacting the U.S.
+Added: federal government's ability to reach an agreement on the federal budget, debt ceiling or extended U.S.
+Added: federal government shut downs could result in material payment delays, payment reductions or contract terminations by the U.S.
+Added: federal government, which in turn may adversely impact the results of operations and financial condition of our government contractor customers and cause those customers to become unable to meet their obligations under contracts with us, or reduce their demand for our products and services, which could have an adverse effect on our financial condition, results of operations and/or cash flows.
+Added: We derive significant revenues and profit from government contracts that are awarded through competitive bidding processes.
+Added: We expect that most of the non-U.S.
+Added: government business we seek in the foreseeable future will be awarded through competitive bidding.
+Added: Competitive bidding is expensive and presents a number of risks, including:
+Added: • the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that may or may not be awarded to us;
+Added: • the need to estimate accurately the resources and costs that will be required to service any contracts we are awarded, sometimes in advance of the final determination of their full scope and design;
+Added: • the expense and delay that may arise if our competitors protest or challenge awards made to us pursuant to competitive bidding;
+Added: • the requirement to resubmit bids protested by our competitors and in the termination, reduction, or modification of the awarded contracts;
+Added: • the opportunity cost of not bidding on and winning other contracts we might otherwise pursue.
+Added: Over the course of a contract term, a customer's financial condition may decline and limit its ability to pay its obligations.
+Added: This could cause our cash collections to decrease and bad debt expense to increase.
+Added: While we may resort to alternative methods to pursue claims or collect receivables, these methods are expensive and time consuming and successful collection is not guaranteed.
+Added: Failure to collect our receivables or prevail on claims would have an adverse effect on our profitability and cash flows.
+Added: If our customer contracts are terminated, if we are suspended or disbarred from government work, or our ability to compete for new contracts is adversely affected, our financial performance could suffer.
+Added: Our strategic transactions may prove unsuccessful and our profitability may be materially and adversely affected.
+Added: At any given time, we may be engaged in discussions or negotiations with respect to one or more transactions, including acquisitions, divestitures or spin-offs, strategic partnerships or other transaction involving one or more of our businesses.
+Added: Any of these transactions could be material to our business, financial condition, results of operations and cash flows.
+Added: We may ultimately determine not to proceed with any transaction for commercial, financial, strategic or other reasons.
+Added: As a result, we may not realize benefits expected from exploring one or more strategic transactions, may realize benefits further in the future or those benefits may ultimately be significantly smaller than anticipated, which could adversely affect our business, financial condition, results of operations and cash flows.
+Added: In addition, we may fail to complete transactions.
+Added: Closing transactions is subject to uncertainties and risks, including the risk that we may be unable to satisfy conditions to closing, such as regulatory and financing conditions and the absence of material adverse changes to our business.
+Added: For acquisitions, our inability to successfully integrate the operations we acquire and leverage these operations to generate substantial cost savings, as well as our inability to avoid revenue erosion and earnings decline, could have a material adverse effect on our results of operations, cash flows and financial position.
+Added: In order to achieve successful acquisitions, we will need to:
+Added: • integrate the operations and business cultures, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with existing operations and systems;
+Added: • maintain third-party relationships previously established by acquired companies;
+Added: • attract and retain senior management and key personnel at acquired businesses;
+Added: • manage new business lines, as well as acquisition-related workload.
+Added: Existing contractual restrictions may limit our ability to engage in certain integration activities for varying periods.
+Added: We may not be successful in meeting these or any other challenges encountered in connection with historical and future acquisitions.
+Added: Even if we successfully integrate, we cannot predict with certainty if or when these cost and revenue synergies, growth opportunities and benefits will occur, nor the extent to which they actually will be achieved.
+Added: In addition, the quantification of previously announced synergies expected to result from an acquisition is based on significant estimates and assumptions that are subjective in nature and inherently uncertain.
+Added: Realization of any benefits and synergies could be affected by a number of factors beyond our control, including, without limitation, general economic conditions, increased operating costs, regulatory developments and other risks.
+Added: In addition, future acquisitions could require dilutive issuances of equity securities and/or the assumption of contingent liabilities.
+Added: The occurrence of any of these events could adversely affect our business, financial condition and results of operations.
+Added: Divestiture transactions also involve significant challenges and risks, including:
+Added: • the potential loss of key customers, suppliers, vendors and other key business partners;
+Added: • declining employee morale and retention issues affecting employees, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or perceived expectations;
+Added: • difficulty in making new and strategic hires of new employees;
+Added: • diversion of management time and a shift of focus from operating the businesses to transaction execution considerations;
+Added: • customers delaying or deferring decisions or ending their relationships with us;
+Added: • the need to provide transition services, which may result in stranded costs and the diversion of resources and focus;
+Added: • the need to separate operations, systems (including accounting, management, information, human resources and other administrative systems), technologies, products and personnel, which is an inherently risky and potentially lengthy and costly process;
+Added: • the inefficiencies and lack of control that may result if such separation is delayed or not implemented effectively, and unforeseen difficulties and expenditures that may arise as a result including potentially significant stranded costs;
+Added: • our desire to maintain an investment grade credit rating may cause us to use cash proceeds, if any, from any divestitures or other strategic transactions that we might otherwise have used for other purposes in order to reduce our financial leverage;
+Added: • the inability to obtain necessary regulatory approvals or otherwise satisfy conditions required in order to consummate any such transactions;
+Added: • our dependence on accounting, financial reporting, operating metrics and similar systems, controls and processes of divested businesses could lead to challenges in preparing our consolidated financial statements or maintaining effective financial control over financial reporting;
+Added: • contractual terms limiting our ability to compete for or perform certain contracts or services.
+Added: We have also entered into and intend to identify and enter into additional strategic partnerships with other industry participants that will allow us to expand our business.
+Added: However, we may be unable to identify attractive strategic partnership candidates or complete these partnerships on terms favorable to us.
+Added: In addition, if we are unable to successfully implement our partnership strategies or our strategic partners do not fulfill their obligations or otherwise prove disadvantageous to our business, our investments in these partnerships and our anticipated business expansion could be adversely affected.
+Added: The price of our securities is subject to market and other conditions and may be volatile.
+Added: Our stock price may be volatile and subject to change based on a variety of factors, many of which are beyond our control, including changes in investment community equity analysts' earnings estimates, valuation methodologies and recommendations, our credit ratings, inflationary pressures, broader macroeconomic conditions, and the resulting impact on customer demand.
+Added: We periodically provide forward-looking financial guidance regarding our expected future performance, including projections for revenue, earnings, margins and cash flow.
+Added: If our actual results fail to meet our publicly announced guidance or market expectations, or if we reduce future guidance even while meeting current projections, our stock price and trading volume could be negatively impacted, potentially significantly.
+Added: In addition, speculation, investor perception, and market sentiment over our results of operations, financial condition and execution of our strategic priorities, as well as announcements relating to new products or technologies, major transactions, litigation developments, or management changes involving us, our competitors, or our customers, may cause fluctuations in our stock price.
+Added: A significant decline in our stock price could expose us to the risk of securities class action lawsuits, stockholder derivative lawsuits or other actions by stockholders, which may result in substantial costs and divert management's attention and resources, which may adversely affect our business.
+Added: Activist shareholders may from time to time acquire stakes in our common stock and advocate for changes to our corporate governance, strategic direction, capital allocation policies, management or board composition that may not align with the interests of our long-term shareholders.
+Added: Responding to proxy contests, public campaigns or other activist initiatives could be costly and time-consuming, divert the attention of our board of directors and senior management from the pursuit of our business strategies, and require us to incur significant legal, public relations and advisory expenses.
+Added: Such activities could also create perceived uncertainties as to our strategic direction and may adversely affect our business, operating results, stock price as well as our ability to attract and retain qualified employees, customers and business partners.
+Added: We issue debt securities from time to time, with a variety of different maturities and in different currencies.
+Added: The value of our debt securities fluctuates based on many factors, including the methods employed for calculating principal and interest, the maturity of the securities, the aggregate principal amount of securities outstanding, the redemption features, the level, direction and volatility of interest rates, changes in exchange rates, exchange controls, governmental and stock exchange regulations and other factors over which we have little or no control.
+Added: Disruption of our supply chain or increases in procurement costs could adversely impact our business.
+Added: Delays and shortages of certain necessary components to the services and solutions we offer our clients, whether caused by natural disasters, pandemics, geopolitical events, armed hostilities, labor strikes, or transportation delays, may increase component delivery lead times and costs to source available components and delay the delivery of our hardware products and services, which may adversely affect our ability to comply with our contracts and our ability to support our existing customers and our growth through sales to new customers.
+Added: In addition, suppliers may fail or refuse to honor their contractual commitments to us, whether due to their own supply constraints, receipt of more favorable offers, or other reasons, which could impair our ability to meet our obligations to our customers, and our ability to compel supplier performance or recover damages in such circumstances may be limited.
+Added: In the event of a component shortage or interruptions at a supplier, we may not be able to develop alternate sources quickly, cost effectively, or at all.
+Added: Furthermore, the ongoing global uncertainty, including trade tensions and tariff changes as well as armed hostilities, may also impact the cost and availability of materials or products from certain regions, particularly those reliant on international suppliers.
+Added: We may not be able to quickly replace or secure alternative suppliers, and we may be forced to absorb higher costs, reduce margins, or adjust our pricing.
+Added: Supply chain interruptions could harm our relationships with our customers, prevent us from acquiring new customers, harm our operational efficiency, financial performance, and reputation, and materially and adversely affect our business.
We are subject to a series of risks relating to climate change and natural disasters, which may affect our worldwide business operations and financial results.
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Additionally, our customers’ facilities may be impacted by climate change-related weather events or effects, which may impact our ability to serve our customers.
−Removed: While we may take various actions to mitigate our business risks associated with climate change, this may require us to incur substantial costs and may not be successful, due to, among other things, the uncertainty associated with the longer-term projections associated with managing climate risks.
−Removed: Any of the foregoing could have a material adverse effect on our financial condition and results of operations.
+Added: While we may take various actions to mitigate our business risks associated with climate change, this may require us to incur costs and may not be successful, due to, among other things, the uncertainty associated with the longer-term projections associated with managing climate risks.
Additionally, we expect to be subject to increased regulations, reporting requirements, standards or expectations regarding the environmental impacts of our business.
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Such ESG matters may also impact our suppliers and customers, which may augment or cause additional impacts on our business, financial condition or results of operations.
−Removed: Our ability to provide customers with competitive services is dependent on our ability to attract and retain qualified personnel.
−Removed: Our ability to grow and provide our customers with competitive services is partially dependent on our ability to attract and retain highly motivated people with the skills necessary to serve our customers.
−Removed: As competition for highly skilled employees in our industry has grown increasingly intense, we have experienced, and may experience in the future, higher than anticipated levels of employee attrition.
−Removed: These risks to attracting and retaining the necessary talent may be exacerbated by labor constraints and inflationary pressures on employee wages and benefits.
−Removed: Additionally, we may be unable to hire or retain talent who are trained in artificial intelligence, machine learning and advanced algorithms, to keep pace with the rapid and continuous technological changes in our industry.
−Removed: Immigration laws in the countries in which we operate are subject to legislative changes, as well as to variations in the standards of application and enforcement due to political forces and economic conditions.
−Removed: Changes in immigration laws or varying applications of immigration laws to limit the availability of certain work visas in the U.S.
−Removed: may impact our ability to hire talent that we need to enhance our products and services and for our operations.
−Removed: It is also difficult to predict the political and economic events that could affect immigration laws, or the restrictive impact they could have on obtaining or renewing work visas for our international personnel.
−Removed: The loss of personnel could impair our ability to perform under certain contracts, which could have a material adverse effect on our consolidated financial position, results of operations and cash flows.
−Removed: Additionally, the inability to adequately develop and train personnel and assimilate key new hires or promoted employees could have a material adverse effect on relationships with third parties, our financial condition and results of operations and cash flows.
−Removed: We also must manage leadership development and succession planning throughout our business.
−Removed: Any significant leadership change and accompanying senior management transition involves inherent risk and any failure to ensure a smooth transition could hinder our strategic planning, execution and future performance.
−Removed: While we strive to mitigate the negative impact associated with changes to our senior management team, such changes may cause uncertainty among investors, employees, customers, creditors and others concerning our future direction and performance.
−Removed: If we fail to effectively manage our leadership changes, including ongoing organizational and strategic changes, our business, financial condition, results of operations, cash flows and reputation, as well as our ability to successfully attract, motivate and retain key employees, could be harmed.
−Removed: In addition, uncertainty around future employment opportunities, facility locations, organizational and reporting structures, and other related concerns may impair our ability to attract and retain qualified personnel.
−Removed: If employee attrition is high, it may adversely impact our ability to realize the anticipated benefits of our strategic priorities.
−Removed: If we do not hire, train, motivate, and effectively utilize employees with the right mix of skills and experience in the right geographic regions and for the right offerings to meet the needs of our customers, our financial performance and cash flows could suffer.
−Removed: For example, if our employee utilization rate is too low, our profitability, and the level of engagement of our employees could decrease.
−Removed: If that utilization rate is too high, it could have an adverse effect on employee engagement and attrition and the quality of the work performed, as well as our ability to staff projects.
−Removed: If we are unable to hire and retain enough employees with the skills or backgrounds needed to meet current demand, we may need to redeploy existing personnel, increase our reliance on subcontractors or increase employee compensation levels, all of which could also negatively affect our profitability.
−Removed: In addition, if we have more employees than necessary with certain skill sets or in certain geographies, we may incur increased costs as we work to rebalance our supply of skills and resources with customer demand in those geographies.
−Removed: Our business is primarily non-unionized, but we have unions and works councils in Europe, Australia, South Korea, South America and Canada, which from time to time may constrain our operational flexibility and efficiency in implementing business decisions and introducing new technologies, tools or processes within our desired timeframe.
−Removed: Activism of employee populations could result in higher costs and operational changes to establish new relationships with worker representatives.
−Removed: Prolonged periods of inflation have an adverse effect on general economic conditions and consumer budgeting, which could impact our profitability and have a material adverse effect on our business and results of operations, especially for customer contracts where we do not have adequate inflation protections.
−Removed: We generally provide services under time and materials contracts, unit-price contracts, fixed-price contracts, and multiple-element software sales.
−Removed: In many of our contracts, we bear the risk of cost overruns, completion delays, resource requirements, wage inflation and adverse movements in exchange rates in connection with these contracts.
−Removed: Certain, but not all, of these contracts provide for price adjustments for inflation or abnormal escalation.
−Removed: However, if one or more raw materials or components for our products (e.g., semiconductors) were to experience an isolated price increase without inflationary impacts on the broader economy, we may not be entitled to inflation protection under those contracts.
−Removed: Inflation and government efforts to combat inflation could increase market volatility and have an adverse effect on the financial market and general economic conditions.
−Removed: In a time of uncertainty, our customers may reduce spending or have difficulty in budgeting for external IT services, delay procurement of products and services from us or delay their payment for products and services we have already provided, and we may have difficulty closing new deals in the event of an economic slowdown, all of which could adversely affect our profitability, results of operations and cash flow.
−Removed: Our international operations are exposed to risks, including fluctuations in exchange rates, which may be beyond our control.
−Removed: Our exposure to currencies other than the U.S.
−Removed: dollar may impact our results, as they are expressed in U.S.
−Removed: Currency variations also contribute to variations in sales of products and services in affected jurisdictions.
−Removed: While historically we have partially mitigated currency risk, including exposure to fluctuations in currency exchange rates by matching costs with revenues in a given currency, our exposure to fluctuations in other currencies against the U.S.
−Removed: dollar increases, as revenue in currencies other than the U.S.
−Removed: dollar increases.
−Removed: Approximately 72% of revenues earned during fiscal 2025 were derived from sales denominated in currencies other than the U.S.
−Removed: dollar and are expected to continue to represent a significant portion of our revenues.
−Removed: Also, we believe that our ability to match revenues and expenses in a given currency will decrease as more work is performed at offshore locations that use a different currency from where we generate our revenue.
−Removed: We may use forward and option contracts to protect against currency exchange rate risks.
−Removed: The effectiveness of these hedges will depend on our ability to accurately forecast future cash flows, which may be particularly difficult during periods of uncertain demand and highly volatile exchange rates.
−Removed: We may incur significant losses from our hedging activities due to factors such as demand volatility and currency variations.
−Removed: In addition, certain or all of our hedging activities may be ineffective, may expire and not be renewed or may not offset the adverse financial impact resulting from currency variations.
−Removed: Losses associated with hedging activities may also impact our revenues and to a lesser extent our cost of sales and financial condition.
−Removed: Our future business and financial performance could suffer due to a variety of international factors, including:
−Removed: • ongoing instability or changes in a country’s or region’s economic or geopolitical and security conditions, including inflation, recession, interest rate fluctuations, and actual or anticipated military or political conflict, civil unrest, crime, political instability, human rights concerns, and terrorist activity;
−Removed: • natural or man-made disasters, industrial accidents, public health issues, cybersecurity incidents, interruptions of service from utilities, transportation or telecommunications providers, or other catastrophic events;
−Removed: • longer collection cycles and financial instability among customers;
−Removed: • trade regulations and procedures and actions affecting production, pricing and marketing of products, including policies adopted by countries that may champion or otherwise favor domestic companies and technologies over foreign competitors;
−Removed: • local labor conditions and regulations;
−Removed: • managing our geographically dispersed workforce;
−Removed: • changes in the international, national or local regulatory and legal environments;
−Removed: • differing technology standards or customer requirements;
−Removed: • difficulties associated with repatriating earnings generated or held abroad in a tax-efficient manner and
−Removed: • changes in tax laws.
−Removed: Our business operations are subject to various and changing federal, state, local and foreign laws and regulations that could result in costs or sanctions that adversely affect our business and results of operations.
−Removed: Social and environmental responsibility regulations, policies and provisions, as well as customer and investor demands, may adversely affect our relationships with customers and investors.
−Removed: We operate in over 60 countries countries in an increasingly complex regulatory environment.
−Removed: Among other things, we provide complex industry-specific insurance processing in the U.K., which is regulated by authorities in the U.K.
−Removed: and elsewhere, such as the U.K.’s Financial Conduct Authority and His Majesty’s Treasury and the U.S.
−Removed: Department of Treasury, which increases our exposure to compliance risk.
−Removed: In addition, businesses in the countries in which we operate are subject to local, legal and political environments and regulations including with respect to employment, tax, statutory supervision and reporting and trade restriction, along with industry regulations such as regulation by bank regulators in the U.S.
−Removed: These regulations and environments are also subject to change.
−Removed: Additionally, the rapid evolution and increased adoption of AI technologies and our obligations to comply with emerging laws and regulations may require us to develop additional AI-specific compliance programs.
−Removed: Adjusting business operations to changing environments and regulations may be costly and could potentially render the particular business operations uneconomical, which may adversely affect our profitability or lead to a change in the business operations.
−Removed: Notwithstanding our best efforts, we may not be in compliance with all regulations in the countries in which we operate at all times and may be subject to sanctions, penalties or fines as a result.
−Removed: These sanctions, penalties or fines may materially and adversely impact our profitability.
−Removed: Our operations are also subject to a broad array of domestic and international environmental, health, and safety laws and regulations, including laws addressing the discharge of pollutants into the air and water, the management and disposal of hazardous substances and wastes, and the clean-up of contaminated sites.
−Removed: Certain laws may also impose liability without regard to fault or the legality of the original conduct.
−Removed: Environmental costs and accruals are presently not material to our operations, cash flows or financial position;
−Removed: and, we do not currently anticipate material capital expenditures for environmental control facilities.
−Removed: However, our failure to comply with these laws or regulations can result in civil, criminal or regulatory penalties, fines, and legal liabilities;
−Removed: suspension, delay or alterations of our operations;
−Removed: damage to our reputation;
−Removed: and restrictions on our operations or sales.
−Removed: Our business could also be affected if new environmental legislation is passed which impacts our current operations and business.
−Removed: For example, if we are unable to comply with fast-moving regulatory requirements, we could be disqualified from requests for proposal processes, leading to a loss of sales as well as unfavorable operating cost impacts.
−Removed: In addition, changing expectations from stakeholders and the evolving landscape of regulatory and disclosure requirements regarding ESG could affect our business.
−Removed: We are subject to, and anticipate becoming increasingly subject to, laws, regulations, and international agreements concerning ESG, such as the European Union's Corporate Sustainability Reporting Directive (CSRD) and California's climate change disclosure requirements.
−Removed: As these new laws, regulations, treaties and national and global initiatives are adopted and implemented regionally or throughout the world, we may be required to comply or potentially face market access limitations, fines or reputational injury, and we expect to incur significant additional costs to comply and impose increased oversight obligations on our management and board of directors.
−Removed: Other laws, regulations, treaties or initiatives in response to climate change, including, but not limited to, the introduction of a carbon tax, could result in increased operational costs associated with air pollution requirements and increased compliance and energy costs, which could harm our business and results of operations by increasing our expenses or requiring us to alter our business operations.
−Removed: Moreover, we may experience loss of market share if we are unable to provide competitive products and services that incorporate climate-change mitigations, and if we are unable to achieve and sustain a carbon-neutral business model in a meaningful time frame, we could lose stockholder or customer confidence, resulting in loss of business and loss of access to the financial markets.
−Removed: We are also subject to risks associated with ESG regulations.
−Removed: Divergent ESG interests across the various jurisdictions where we operate may expose us to increased legal, financial or reputational risks related to our ESG practices.
−Removed: Our inability to keep pace with any ESG regulations, trends and developments or failure to meet the expectations, including, but not limited to, any expectations resulting from goals we have established, or interests of our clients and investors, could adversely affect our business and reputation and could result in undesirable investor actions or customer or talent retention and attraction issues.
−Removed: For more information, see our risk factor “Increased scrutiny of, and evolving expectations for, sustainability and ESG initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business."
−Removed: We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business.
−Removed: We have implemented several restructuring plans and may continue to implement cost-takeout measures to realign our cost structure with the changing nature of our business and to achieve operating efficiencies to reduce our costs.
−Removed: We may not be able to obtain the costs savings and benefits that were initially anticipated in connection with our restructuring plans.
−Removed: Furthermore, even if we are successful with our cost-takeout efforts, we may not see the benefits of such efforts on our financial condition, results of operations and cash flows.
−Removed: Additionally, as a result of our restructuring, we may experience a loss of continuity, loss of accumulated knowledge and/or inefficiency during transitional periods, which in the past have caused issues with our service delivery.
−Removed: Reorganization and restructuring can require a significant amount of management and other employees' time and focus, which may divert attention from operating and growing our business.
−Removed: There are also significant costs associated with restructuring which can have a significant impact on our earnings and cash flow.
−Removed: Furthermore, cost-takeout measures require compliance with numerous laws and regulations, including local labor laws.
−Removed: We may face wrongful termination, discrimination or other legal claims from affected employees that require us to incur substantial costs to defend against, and such claims may significantly increase our severance costs.
−Removed: If we fail to achieve some or all of the expected benefits of restructuring, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.
−Removed: For more information about our restructuring plans, see Note 12 - "Restructuring Costs."
We may inadvertently infringe on the intellectual property rights of others and be exposed to claims for damages, and our intellectual property rights may be infringed by third parties.
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Our inability to procure third-party licenses required for the operation of our products and service offerings may result in decreased revenue or increased costs.
−Removed: Many of our products and service offerings depends on the continued performance and availability of software licensed from third-party vendors under our contractual arrangements.
+Added: Many of our products and service offerings depend on the continued performance and availability of software licensed from third-party vendors under our contractual arrangements.
Because of the nature of these licenses and arrangements, there can be no assurance that we would be able to retain all of these intellectual property rights upon renewal, expiration or termination of such licenses or that we will be able to procure, renew or extend such licenses on commercially reasonable terms which may result in increased costs.
Certain of our licenses are concentrated in one or more third-party licensors where multiple licenses are up for renewal at the same time, which could decrease our ability to negotiate reasonable license fees and could result in our loss of rights under such licenses.
−Removed: Disruption of our supply chain or increases in procurement costs could adversely impact our business.
−Removed: Delays and shortages of certain necessary components to the services and solutions we offer our clients,
−Removed: whether caused by natural disasters, pandemics, geopolitical events, labor strikes, or transportation delays, may increase component delivery lead times and costs to source available components and delay the delivery of our hardware products and services, which may adversely affect our ability to comply with our contracts and our ability to support our existing customers and our growth through sales to new customers.
−Removed: In the event of a component shortage or interruptions at a supplier, we may not be able to develop alternate sources quickly, cost effectively, or at all.
−Removed: Furthermore, the ongoing global uncertainty, including trade tensions and tariff changes, may also impact the cost and availability of materials or products from certain regions, particularly those reliant on international suppliers.
−Removed: We may not be able to quickly replace or secure alternative suppliers, and we may be forced to absorb higher costs, reduce margins, or adjust our pricing.
−Removed: Supply chain interruptions could harm our relationships with our customers, prevent us from acquiring new customers, harm our operational efficiency, financial performance, and reputation, and materially and adversely affect our business.
+Added: We may not achieve some or all of the expected benefits of our restructuring plans and our restructuring may adversely affect our business.
+Added: We have implemented several restructuring plans and may continue to implement cost-takeout measures to realign our cost structure with the changing nature of our business and to achieve operating efficiencies to reduce our costs.
+Added: Our restructuring efforts may involve workforce reductions and increased reliance on automation, AI and other technology-driven solutions to enhance productivity and maintain operational efficiency, and may require additional investments in technology, infrastructure and related capabilities.
+Added: We may not be able to obtain the costs savings and benefits that were initially anticipated in connection with our restructuring plans.
+Added: Furthermore, even if we are successful with our cost-takeout efforts, we may not see the benefits of such efforts on our financial condition, results of operations and cash flows.
+Added: If we pursue workforce reductions, our ability to successfully operate with a reduced workforce may depend in part on the successful deployment, performance and employee adoption of these automation and AI-driven solutions.
+Added: Such technologies may not perform as expected, prove more costly or time-consuming to deploy than anticipated, create new operational vulnerabilities or cybersecurity exposures, or fail to enhance productivity as expected.
+Added: Additionally, as a result of our restructuring, we may experience a loss of continuity, loss of accumulated knowledge and/or inefficiency during transitional periods, which in the past have caused issues with our service delivery.
+Added: Restructuring actions could also increase the risk of operational disruptions, service delivery issues, internal control weaknesses or other operational challenges, especially during periods of organizational transition, as responsibilities are reassigned and processes are adjusted.
+Added: Reorganization and restructuring can require a significant amount of management and other employees' time and focus, which may divert attention from operating and growing our business.
+Added: There are also significant costs associated with restructuring which can have a significant impact on our earnings and cash flow.
+Added: Furthermore, cost-takeout measures require compliance with numerous laws and regulations, including local labor laws.
+Added: We may face wrongful termination, discrimination or other legal claims from affected employees that require us to incur substantial costs to defend against, and such claims may significantly increase our severance costs.
+Added: If we fail to achieve some or all of the expected benefits of restructuring, it could have a material adverse effect on our competitive position, business, financial condition, results of operations and cash flows.
+Added: For more information about our restructuring plans, see Note 12 - "Restructuring Costs."
We may be exposed to negative publicity and other potential risks if we are unable to maintain effective disclosure controls and internal control over financial reporting.
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If the projected cash flows of a particular contract are not adequate to recover the unamortized cost balance of the asset group, the balance is adjusted in the tested period based on the contract's fair value.
−Removed: Either of these impairments could materially affect our reported net earnings.
+Added: We also assess deferred tax assets for realizability.
+Added: If profitability and other factors are insufficient to support recognition of our deferred tax assets, we may be required to impair our deferred tax assets with a valuation allowance.
+Added: Any of these impairments could materially affect our reported net earnings.
We may not be able to pay dividends or repurchase shares of our common stock in accordance with our announced intent or at all.
6 unchanged sentences
There can be no guarantee that we will achieve our financial goals in the amounts or within the expected time frame, or at all.
−Removed: Our ability to declare future dividends or repurchase shares will depend on our future financial performance, which in turn depends on the successful implementation of our strategy and on financial, competitive, regulatory and other factors, general economic conditions, demand and prices for our services and other factors specific to our industry or specific projects, many of which are beyond our control.
−Removed: Therefore, our ability to generate cash flow depends on the performance of our operations and could be limited by decreases in our profitability or increases in costs, regulatory changes, capital expenditures or debt servicing requirements.
−Removed: Any failure to achieve our financial goals could negatively impact our reputation, harm investor confidence in us, and cause the market price of our common stock to decline.
We are defendants in pending litigation that may have a material and adverse impact on our profitability and liquidity.
4 unchanged sentences
In addition, such legal proceedings may make it more difficult to finance our operations.
−Removed: We are also subject to continuous examinations of our income tax returns by tax authorities.
+Added: We are also subject to continuous examinations of our income tax returns by tax authorities and have several matters pending in U.S.
Although we believe our tax estimates are reasonable, the final results of any tax examination or related litigation could be materially different from our related historical income tax provisions and accruals.
Adverse developments in an audit, examination or litigation related to previously filed tax returns, or in the relevant jurisdiction’s tax laws, regulations, administrative practices, principles and interpretations could have a material effect on our results of operations and cash flows in the period or periods for which that development occurs, as well as for prior and subsequent periods.
−Removed: For more details, including on current tax examinations of our income tax returns by tax authorities, see Note 14 – “Income Taxes.”
−Removed: We may be adversely affected by disruptions in the credit markets, including disruptions that reduce our customers' access to credit and increase the costs to our customers of obtaining credit.
−Removed: The credit markets have historically been volatile and therefore it is not possible to predict the ability of our customers to access short-term financing and other forms of capital.
−Removed: If a disruption in the credit markets were to occur, it could pose a risk to our business if customers or suppliers are unable to obtain financing to meet payment or delivery obligations to us.
−Removed: In the event that one or more customers or suppliers' defaults on its payment or delivery obligations, we could incur significant losses, which may harm our business, reputation, results of operations, cash flows and financial condition.
−Removed: In addition, customers may decide to downsize, defer or cancel contracts, which could negatively affect our revenues.
−Removed: Our hedging program is subject to counterparty default risk.
−Removed: We enter into foreign currency forward contracts and interest rate swaps with a number of counterparties.
−Removed: As a result, we are subject to the risk that the counterparty to one or more of these contracts defaults on its performance under the contract.
−Removed: During an economic downturn, the counterparty's financial condition may deteriorate rapidly and with little notice and we may be unable to take action to protect our exposure.
−Removed: In the event of a counterparty default, we could incur significant losses, which may harm our business and financial condition.
−Removed: In the event that one or more of our counterparties becomes insolvent or files for bankruptcy, our ability to eventually recover any losses suffered as a result of that counterparty's default may be limited by the liquidity of the counterparty.
−Removed: We derive significant revenues and profit from contracts awarded through competitive bidding processes, which can impose substantial costs on us and we may not achieve revenue and profit objectives if we fail to bid on these projects effectively.
−Removed: We derive significant revenues and profit from government contracts that are awarded through competitive bidding processes.
−Removed: We expect that most of the non-U.S.
−Removed: government business we seek in the foreseeable future will be awarded through competitive bidding.
−Removed: Competitive bidding is expensive and presents a number of risks, including:
−Removed: • the substantial cost and managerial time and effort that we spend to prepare bids and proposals for contracts that may or may not be awarded to us;
−Removed: • the need to estimate accurately the resources and costs that will be required to service any contracts we are awarded, sometimes in advance of the final determination of their full scope and design;
−Removed: • the expense and delay that may arise if our competitors protest or challenge awards made to us pursuant to competitive bidding;
−Removed: • the requirement to resubmit bids protested by our competitors and in the termination, reduction, or modification of the awarded contracts;
−Removed: • the opportunity cost of not bidding on and winning other contracts we might otherwise pursue.
−Removed: If our customers experience financial difficulties, we may not be able to collect our receivables, which would materially and adversely affect our profitability and cash flows from operations.
−Removed: Over the course of a contract term, a customer's financial condition may decline and limit its ability to pay its obligations.
−Removed: This could cause our cash collections to decrease and bad debt expense to increase.
−Removed: While we may resort to alternative methods to pursue claims or collect receivables, these methods are expensive and time consuming and successful collection is not guaranteed.
−Removed: Failure to collect our receivables or prevail on claims would have an adverse effect on our profitability and cash flows.
−Removed: If we are unable to maintain and grow our customer relationships over time, our operating results and cash flows will suffer.
−Removed: Failure to comply with customer contracts or government contracting regulations or requirements could adversely affect our business, results of operations and cash flows.
−Removed: We devote significant resources to establish relationships with our customers and implement our offerings and related services, particularly in the case of large enterprises that often request or require specific features or functions specific to their particular business profile.
−Removed: Accordingly, our results of operations depend in substantial part on our ability to deliver a successful customer experience and persuade customers to maintain and grow their relationship with us over time.
−Removed: If we are not successful in implementing an offering or delivering a successful customer experience, including achieving cost and staffing levels that meet our customers’ expectations, customers could terminate or elect not to renew their agreements with us and our operating results may suffer.
−Removed: Contracts with customers may include unique and specialized performance requirements.
−Removed: In particular, our contracts with federal, state, provincial, and local governmental customers are generally subject to various procurement regulations, contract provisions, and other requirements relating to their formation, administration, and performance, including the maintenance of necessary security clearances.
−Removed: Our customers' contracts with U.S.
−Removed: government agencies are also subject to audits and investigations, which may include a review of performance on contracts, pricing practices, cost structure, and compliance with applicable laws and regulations.
−Removed: Any failure on our part to comply with the specific provisions in customer contracts or any violation of government contracting regulations or other requirements could result in the imposition of various civil and criminal penalties, which may include termination of contracts, forfeiture of profits, suspension of payments, and, in the case of government contracts, fines and suspension from future government contracting.
−Removed: Such failures could also cause reputational damage to our business.
−Removed: In addition, we may be subject to qui tam litigation brought by private individuals on behalf of the government relating to government contracts, which could include claims for treble damages.
−Removed: Further, any negative publicity with respect to customer contracts or any related proceedings, regardless of accuracy, may damage our business by harming our ability to compete for new contracts.
−Removed: Our customers' contracts with the U.S.
−Removed: federal government and related agencies are also subject to issues with respect to federal budgetary and spending limits or matters and may be affected by staffing and resource reductions and funding authorizations.
−Removed: Any changes to the fiscal policies of the U.S.
−Removed: federal government may decrease overall government funding, result in delays in the procurement of products and services due to lack of funding, cause the U.S.
−Removed: federal government and government agencies to reduce their purchases under existing contracts, or cause them to exercise their rights to terminate contracts at-will or to abstain from exercising options to renew contracts, any of which would have an adverse effect on our business, financial condition, results of operations and/or cash flows.
−Removed: Additionally, impasses impacting the U.S.
−Removed: federal government’s ability to reach an agreement on the federal budget, debt ceiling or extended U.S.
−Removed: federal government shut downs could result in material payment delays, payment reductions or contract terminations by the U.S.
−Removed: federal government, which in turn may adversely impact the results of operations and financial condition of our government contractor customers and cause those customers to become unable to meet their obligations under contracts with us, or reduce their demand for our products and services, which could have an adverse effect on our financial condition, results of operations and/or cash flows.
−Removed: If our customer contracts are terminated, if we are suspended or disbarred from government work, or our ability to compete for new contracts is adversely affected, our financial performance could suffer.
−Removed: Our strategic transactions may prove unsuccessful and our profitability may be materially and adversely affected.
−Removed: At any given time, we may be engaged in discussions or negotiations with respect to one or more transactions, including acquisitions, divestitures or spin-offs, strategic partnerships or other transaction involving one or more of our businesses.
−Removed: Any of these transactions could be material to our business, financial condition, results of operations and cash flows.
−Removed: We may ultimately determine not to proceed with any transaction for commercial, financial, strategic or other reasons.
−Removed: As a result, we may not realize benefits expected from exploring one or more strategic transactions, may realize benefits further in the future or those benefits may ultimately be significantly smaller than anticipated, which could adversely affect our business, financial condition, results of operations and cash flows.
−Removed: In addition, we may fail to complete transactions.
−Removed: Closing transactions is subject to uncertainties and risks, including the risk that we may be unable to satisfy conditions to closing, such as regulatory and financing conditions and the absence of material adverse changes to our business.
−Removed: For acquisitions, our inability to successfully integrate the operations we acquire and leverage these operations to generate substantial cost savings, as well as our inability to avoid revenue erosion and earnings decline, could have a material adverse effect on our results of operations, cash flows and financial position.
−Removed: In order to achieve successful acquisitions, we will need to:
−Removed: • integrate the operations and business cultures, as well as the accounting, financial controls, management information, technology, human resources and other administrative systems, of acquired businesses with existing operations and systems;
−Removed: • maintain third-party relationships previously established by acquired companies;
−Removed: • attract and retain senior management and key personnel at acquired businesses;
−Removed: • manage new business lines, as well as acquisition-related workload.
−Removed: Existing contractual restrictions may limit our ability to engage in certain integration activities for varying periods.
−Removed: We may not be successful in meeting these or any other challenges encountered in connection with historical and future acquisitions.
−Removed: Even if we successfully integrate, we cannot predict with certainty if or when these cost and revenue synergies, growth opportunities and benefits will occur, nor the extent to which they actually will be achieved.
−Removed: In addition, the quantification of previously announced synergies expected to result from an acquisition is based on significant estimates and assumptions that are subjective in nature and inherently uncertain.
−Removed: Realization of any benefits and synergies could be affected by a number of factors beyond our control, including, without limitation, general economic conditions, increased operating costs, regulatory developments and other risks.
−Removed: In addition, future acquisitions could require dilutive issuances of equity securities and/or the assumption of contingent liabilities.
−Removed: The occurrence of any of these events could adversely affect our business, financial condition and results of operations.
−Removed: Divestiture transactions also involve significant challenges and risks, including:
−Removed: • the potential loss of key customers, suppliers, vendors and other key business partners;
−Removed: • declining employee morale and retention issues affecting employees, which may result from changes in compensation, or changes in management, reporting relationships, future prospects or perceived expectations;
−Removed: • difficulty in making new and strategic hires of new employees;
−Removed: • diversion of management time and a shift of focus from operating the businesses to transaction execution considerations;
−Removed: • customers delaying or deferring decisions or ending their relationships with us;
−Removed: • the need to provide transition services, which may result in stranded costs and the diversion of resources and focus;
−Removed: • the need to separate operations, systems (including accounting, management, information, human resources and other administrative systems), technologies, products and personnel, which is an inherently risky and potentially lengthy and costly process;
−Removed: • the inefficiencies and lack of control that may result if such separation is delayed or not implemented effectively, and unforeseen difficulties and expenditures that may arise as a result including potentially significant stranded costs;
−Removed: • our desire to maintain an investment grade credit rating may cause us to use cash proceeds, if any, from any divestitures or other strategic transactions that we might otherwise have used for other purposes in order to reduce our financial leverage;
−Removed: • the inability to obtain necessary regulatory approvals or otherwise satisfy conditions required in order consummate any such transactions;
−Removed: • our dependence on accounting, financial reporting, operating metrics and similar systems, controls and processes of divested businesses could lead to challenges in preparing our consolidated financial statements or maintaining effective financial control over financial reporting;
−Removed: • contractual terms limiting our ability to compete for or perform certain contracts or services.
−Removed: We have also entered into and intend to identify and enter into additional strategic partnerships with other industry participants that will allow us to expand our business.
−Removed: However, we may be unable to identify attractive strategic partnership candidates or complete these partnerships on terms favorable to us.
−Removed: In addition, if we are unable to successfully implement our partnership strategies or our strategic partners do not fulfill their obligations or otherwise prove disadvantageous to our business, our investments in these partnerships and our anticipated business expansion could be adversely affected.
−Removed: Changes in U.S.
−Removed: tax legislation may materially affect our financial condition, results of operations and cash flows.
−Removed: The 2017 Tax Cuts & Jobs Act ("TCJA") significantly changed the federal income taxation of U.S.
−Removed: corporations, including by reducing the U.S.
−Removed: corporate income tax rate, limiting interest deductions, permitting immediate expensing of certain capital expenditures, adopting elements of a territorial tax system, imposing a one-time transition tax (or “repatriation tax”) on all undistributed earnings and profits of certain U.S.-owned foreign corporations, revising the rules governing net operating losses and the rules governing foreign tax credits, introducing new anti-base erosion provisions and the ability to expense research and experimentation costs.
−Removed: Many of these changes were effective immediately, without any transition periods or grandfathering for existing transactions, while other changes, such as the requirement to capitalize research and development costs became effective for tax years beginning after December 31, 2021 and became applicable to the Company starting in fiscal year 2023.
−Removed: Additionally, starting in fiscal year 2027, certain foreign earnings and earnings that may be subject to the Base Erosion and Anti-Abuse Tax may be subject to higher U.S.
−Removed: The repatriation tax resulted in a material amount of additional U.S.
−Removed: tax liability, the majority of which was reflected as an income tax expense in fiscal 2018, when the tax legislation was enacted, despite the fact that the resulting tax may be paid over eight years.
+Added: For more details, including on current tax examinations of our income tax returns by tax authorities and on matters pending in U.S.
+Added: Tax Court, see Note 14 – “Income Taxes.”
Changes in tax rates, tax laws and the timing and outcome of tax examinations could affect our future results.
−Removed: Our future effective tax rates, which are largely driven by the mix of our global earnings and the differing statutory tax rates in the jurisdictions where we operate, are subject to change as a result of changes in statutory tax rates enacted in those jurisdictions, or by changes in the valuation of deferred tax assets and liabilities, or by changes in tax laws or their interpretation or tax policy initiatives and reforms under consideration, such as those reflected in the OECD/G20 Inclusive Framework on Base Erosion and Profit Sharing or other projects.
−Removed: In January 2019, the Organization for Economic Co-operation and Development (“OECD”) announced further work in continuation of its Base Erosion and Profit Shifting project, focusing on two “pillars.” Pillar One provides a framework for the reallocation of certain residual profits of multinational enterprises to market jurisdictions where goods or services are used or consumed.
−Removed: Pillar Two consists of two interrelated rules referred to as Global Anti-Base Erosion (“GloBE”) Rules, which operate to impose a minimum tax rate of 15% calculated on a jurisdictional basis.
−Removed: Such rules have been or may be implemented in many jurisdictions.
−Removed: When and how these Pillar Two rules are adopted or enacted by the various countries in which we do business could increase tax complexity and uncertainty and may adversely affect our provision for income taxes in the U.S.
−Removed: jurisdictions.
−Removed: The OECD is also issuing guidelines that are different, in some respects, than current international tax principles.
−Removed: If countries amend their tax laws to adopt all or part of the OECD guidelines, this may increase our provision for income taxes.
−Removed: We cannot predict whether the U.S.
−Removed: Congress or any other governmental body, whether in the United States or in other jurisdictions, will enact new tax legislation (including increases to tax rates), whether the Internal Revenue Service (“IRS”) or any other tax authority will issue new regulations or other guidance, whether the OECD or any other intergovernmental organization will publish any guidelines on global taxation or whether member states will implement such guidelines, nor can we predict what effect such legislation, regulations or international guidelines might have on our income tax provision.
+Added: Our future effective tax rates, which are largely driven by the mix of our global earnings and the differing statutory tax rates in the jurisdictions where we operate, are subject to change as a result of changes in statutory tax rates enacted in those jurisdictions, or by changes in the valuation of deferred tax assets and liabilities, or by changes in tax laws or their interpretation or tax policy initiatives and reforms under consideration, such as those reflected in the Organization for Economic Cooperation and Development ("OECD")/G20 Inclusive Framework on Base Erosion and Profit Sharing or other projects.
+Added: The OECD has issued model rules for a new global minimum tax.
+Added: Local country adoption of these rules may increase tax uncertainty and may adversely impact the company's income taxes.
+Added: Additionally, starting in fiscal year 2027, certain foreign earnings and earnings that may be subject to the Base Erosion and Anti-Abuse Tax may be subject to higher U.S.
We are subject to the continuous examination of our income tax returns by the IRS and other tax authorities.
40 unchanged sentences
These obligations and potential tax liabilities could be substantial.
−Removed: General Risk Factor
−Removed: The price of our securities is subject to market and other conditions and may be volatile.
−Removed: Our stock price is subject to changes in financial analysts’ earnings estimates, valuation and recommendations, our credit ratings and other factors beyond our control such as the inflationary pressures, other macroeconomic factors and the impact on customer demand.
−Removed: Speculation and market sentiment over our results of operations, financial condition and implementation of our strategic priorities can also cause changes in our stock price.
−Removed: addition to economic, political and market conditions, our stock price may be adversely impacted if our financial results are inconsistent with earlier projections or market expectations, announcements of new products or new technologies by us, our competitors or our customers, or announcements of major transactions, litigation developments or management changes.
−Removed: A significant drop in our stock price could expose us to the risk of securities class action lawsuits, stockholder derivative lawsuits or other actions by stockholders, which may result in substantial costs and divert management’s attention and resources, which may adversely affect our business.
−Removed: We issue debt securities from time to time, with a variety of different maturities and in different currencies.
−Removed: The value of our debt securities fluctuates based on many factors, including the methods employed for calculating principal and interest, the maturity of the securities, the aggregate principal amount of securities outstanding, the redemption features, the level, direction and volatility of interest rates, changes in exchange rates, exchange controls, governmental and stock exchange regulations and other factors over which we have little or no control.
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.