−Removed: Our business is subject to a variety of risks, including the risks described below as well as adverse business and market conditions and risks associated with foreign operations.
+Added: Our business is subject to a variety of risks, including the risks described below as well as adverse business and market conditions and risks associated with our operations.
The risks and uncertainties described below are not the only ones facing us.
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Economic downturns have historically led to reductions in demand for our services.
−Removed: Negative conditions in the credit markets may adversely impact our ability to operate our business.
+Added: Negative conditions in the credit markets, including rising interest rates, may adversely impact our ability to operate our business.
The level of demand from our clients for our services has been, in the past, adversely impacted by slowdowns in the industries we service, as well as in the economy in general.
−Removed: When the general level of economic activity has been reduced from historical levels, certain of our ultimate customers have delayed or cancelled projects or capital spending, especially with respect to more profitable private sector work, and such slowdowns adversely affect our ability to grow, reducing our revenues and profitability.
+Added: When the general level of economic activity has been reduced from historical levels, certain of our ultimate customers have delayed or canceled projects or capital spending, especially with respect to more profitable private sector work, and such slowdowns adversely affect our ability to grow, reducing our revenues and profitability.
A number of economic factors, including financing conditions, the prices of commodities, and energy prices, have, in the past, adversely affected the industries we serve and our ultimate customers’ ability or willingness to fund expenditures.
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Many of our clients depend on the availability of credit to help finance their capital and maintenance projects.
−Removed: At times, tightened availability of credit has negatively impacted the ability of existing and prospective ultimate customers to fund projects we might otherwise perform, particularly those in the more profitable private sector.
+Added: At times, tightened availability of credit or increased interest rates have negatively impacted the ability of existing and prospective ultimate customers to fund projects we might otherwise perform, particularly those in the more profitable private sector.
As a result, our ultimate customers may defer such projects for an unknown, and perhaps lengthy, period.
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Certain of our businesses, including those within our United States industrial services segment, are exposed to risks associated with the oil and gas industry.
−Removed: These risks, which are not subject to our control, include volatility in the price and production of crude oil, the development of and consumer demand for alternative energy sources, and legislative and regulatory actions.
+Added: These risks, which are not subject to our control, include volatility in the price and production of crude oil, the development of and consumer demand for alternative energy sources, including as a result of a change in consumer preference, or in an effort to reduce greenhouse gas emissions or combat climate change, and legislative and regulatory actions.
Specifically, lower prices and production volumes, or perceived risk thereof, typically results in the curtailment or deferral of spending by our customers.
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For example, during 2020, the escalation of geopolitical tensions between the Organization of Petroleum Exporting Countries (OPEC) and Russia contributed to a significant drop in the price of crude oil, impacting customers in the energy sector and the demand for certain of our services.
−Removed: Continued unfavorable conditions within these markets could further negatively impact our financial position, results of operations, and cash flows.
+Added: Continued unfavorable conditions within these markets, including the impact of sustained lower demand for refined products as a result of the COVID-19 pandemic, could further negatively impact our financial position, results of operations, and cash flows.
Our business is vulnerable to the cyclical nature of the markets in which our clients operate and is dependent upon the timing and funding of new awards.
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These potential events could impact the level of demand for our services and our ability to execute, complete, and receive compensation for our current contracts, or bid for and enter into new contracts with governmental agencies.
−Removed: An increase in the prices of certain materials used in our businesses and protectionist trade measures could adversely affect our businesses.
+Added: An increase in the prices or availability of certain materials used in our businesses, including as a result of inflation, and protectionist trade measures could adversely affect our businesses.
We are exposed to market risk of increases in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in our operations.
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While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable.
−Removed: Additionally, our fixed price contracts do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to such projects.
+Added: Additionally, our fixed price contracts generally do not allow us to adjust our prices and, as a result, increases in material or fuel costs could reduce our profitability with respect to projects in progress.
+Added: For example, during 2021, certain of our operations experienced declines in gross profit and gross profit margin as a result of supply chain disruptions, including long lead times for certain materials and equipment, as well as an escalation in material and fuel prices, and such supply chain disruptions and price escalations have continued into 2022.
Fluctuations in energy prices as well as in commodity prices of materials, whether resulting from fluctuations in market supply or demand, or geopolitical conditions, including an increase in trade protection measures such as tariffs and the disruption, modification, or cancellation of multilateral trade agreements, may adversely affect our customers and as a result cause them to curtail the use of our services.
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The loss of one or a few customers could have an adverse effect on us.
−Removed: Although we have long-standing relationships with many of our significant clients, our clients may unilaterally reduce, fail to renew, or terminate their contracts with us at any time.
−Removed: A loss of business from a significant client, or a number of significant clients, could have a material adverse effect on our business, financial position, and results of operations.
+Added: Although we have long-standing relationships with many of our significant customers, our customers may unilaterally reduce, fail to renew, or terminate their contracts with us at any time.
+Added: A loss of business from a significant customer, or a number of significant customers, could have a material adverse effect on our business, financial position, and results of operations.
Our industry is highly competitive.
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Certain of our competitors have lower overhead cost structures and, therefore, are able to provide their services at lower rates than we are currently able to provide.
+Added: Our project and service work is frequently awarded through a competitive bidding process, which is standard in our industry.
+Added: We are constantly competing for contracts based on pricing, schedule, and technical expertise.
+Added: Competition can place downward pressure on our contract prices and profit margins, which may make it difficult to win the project or force us to accept contractual terms and conditions that are less favorable to us, thereby increasing the risk that, among other things, we may not realize profit margins at the same rates we have seen in the past or may become responsible for costs or other liabilities we have not incurred in the past.
In addition, some of our competitors have greater resources than we do.
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We cannot be certain that our existing or prospective customers will continue to outsource building services in the future.
+Added: If we are unable to compete effectively, we may experience a loss of market share, reduced profitability, or both, which if significant, could have a material adverse effect on our business, financial condition, and results of operations.
+Added: Refer also to “Business - Competition” in Item 1 of this Form 10-K.
We are a decentralized company, which presents certain risks.
While we believe decentralization has enhanced our growth and enabled us to remain responsive to opportunities and to our customers’ needs, it necessarily places significant control and decision-making powers in the hands of local management.
−Removed: This presents various risks, including the risk that we may be slower or less able to identify or react to problems affecting a key business than we would in a more centralized environment.
+Added: This presents various risks, including the risk that we may be slower or less able to identify or react to external market conditions or problems affecting a key business than we would in a more centralized environment.
Our business may be affected by weather conditions.
Adverse weather conditions, particularly during the winter season, could impact our construction services operations as those conditions affect our ability to perform efficient work outdoors in certain regions of the United States, adversely affecting the revenues and profitability of those operations.
−Removed: However, the absence of snow in certain regions of the United States during the winter could also cause us to experience reduced revenues and profitability in our United States building services segment, which has meaningful snow removal operations.
+Added: However, the absence of snow in certain regions of the United States during the winter could also cause us to experience reduced revenues and profitability in our United States building services segment, as a portion of their revenues is generated from snow removal contracts.
In addition, cooler than normal temperatures during the summer months could reduce the need for our services, particularly in our businesses that install or service air conditioning units, and result in reduced revenues and profitability during the period that such unseasonal weather conditions persist.
−Removed: As severe weather and its related impacts, such as hurricanes, flooding, and wildfires, become increasingly common, our, or our customers’ operations, may be disrupted, which could result in increased operational costs or project delays and cancellations.
−Removed: While we have invested in programs to mitigate the risk that natural disasters disrupt our ability to serve our customers, extended periods of disruptions could have an adverse effect on our results of operations.
Our business may be affected by the work environment.
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We must estimate the total costs of a particular project to bid for fixed price contracts.
+Added: Cost and scheduling estimates are based on a number of assumptions, including those about future economic conditions, commodity and other materials pricing, cost and availability of labor, equipment, and materials, and supply chain efficiency, among other factors.
The actual cost of labor and materials, however, may vary from the costs we originally estimated.
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For other arrangements, including those within our government services operations, the terms of our contracts may include provisions which require us to achieve certain minority participation or small or disadvantaged business “set-aside” goals.
−Removed: Such requirements have become more frequent in recent years and we expect them to be increasingly prevalent, and more strictly enforced in the near future, especially given the recent change of administration in Washington, D.C.
+Added: Such requirements have become more frequent in recent years and we expect them to be increasingly prevalent, and more strictly enforced in the near future, especially under the current administration in Washington, D.C.
If we subsequently fail to meet such guarantees, or comply with such provisions, we may be held responsible for costs resulting from such failures, including payment of penalties or liquidated or other damages.
To the extent that any of these events occur, the total costs of a project could exceed the original estimated costs, and we would experience reduced profits or, in some cases, a loss.
−Removed: Many of our contracts, especially our building services contracts for governmental and non-governmental entities, may be canceled or delayed on short notice, and we may be unsuccessful in replacing such contracts if they are canceled or as they are completed or expire.
+Added: Many of our contracts, especially our building and industrial services contracts, may be canceled or delayed on short notice, and we may be unsuccessful in replacing such contracts if they are canceled or as they are completed or expire.
We could experience a decrease in revenues, net income, and liquidity if any of the following occur:
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• we fail to reduce operating and overhead expenses consistent with any decrease in our revenues.
+Added: Uncertainty surrounding the timing of contract awards, or project cancellations or delays, can also present difficulties in matching our workforce size with contract needs.
+Added: In some cases, in anticipation of contract awards, we maintain and bear the cost of a ready workforce that is larger than necessary under our existing contract portfolio.
+Added: When a contract is canceled or delayed, or an anticipated contract award is not received, it may result in lower profitability as a result of labor under-utilization, or additional costs resulting from reductions in staff, which could have a material adverse effect on our business, financial condition, and results of operations.
We may be unsuccessful in generating internal growth.
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The factors that impact exchange rate fluctuation, including macroeconomic and geopolitical conditions, are outside the control of the Company.
−Removed: For example, it is unclear at this time what effect, if any, the United Kingdom’s exit from the European Union may have on such exchange rates.
As part of our risk management strategy, we are effectively self-insured against certain potential liabilities.
−Removed: Although we maintain insurance policies with respect to a broad range of risks, including automobile liability, general liability, workers’ compensation, and employee group health, these policies do not cover all possible claims and certain of the policies are subject to large deductibles and retentions.
+Added: Although we maintain insurance policies with respect to a broad range of risks, including automobile liability, general liability, workers’ compensation, and employee-related healthcare, these policies do not cover all possible claims and certain of the policies are subject to large deductibles and retentions.
In addition, we maintain a wholly-owned captive insurance subsidiary to manage certain of our insurance liabilities.
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If these market conditions persist, insurance carriers may be unwilling, in the future, to provide our current levels of coverage without a significant increase in insurance premiums, self-insured retention limits, or collateral requirements to cover our obligations to them.
−Removed: Increased collateral requirements may be in the form of additional letters of credit and/or cash, and an increase in collateral requirements could significantly reduce our liquidity.
+Added: Increased collateral requirements may be in the form of additional letters of credit, surety bonds, and/or cash, and an increase in collateral requirements could significantly reduce our liquidity.
If insurance premiums or self-insured retention limits increase, and/or if insurance claims are higher than our estimates, our profitability could be adversely affected.
−Removed: Our inability to identify and acquire desirable businesses or to successfully integrate those companies acquired could adversely affect our business and results of operations.
+Added: Failure to provide our services in accordance with professional standards or contractual requirements could expose us to significant monetary damages.
+Added: Our services often involve professional judgments regarding the planning, design, development, construction, or operations and management of complex facilities.
+Added: Although we have adopted a range of insurance, risk management, and risk avoidance programs designed to reduce potential liabilities, a catastrophic event at one of our project sites or a completed project, resulting from the services we have performed, could result in significant professional or product liability and warranty or other claims against us, as well as reputational harm.
+Added: These liabilities could exceed our insurance limits or impact our ability to obtain insurance in the future.
+Added: Further, even where insurance coverage applies, such policies have limits and deductibles or retentions, which could result in our assumption of exposure for certain amounts with respect to any claim filed against us.
+Added: In addition, customers or subcontractors who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to uphold their obligations to us.
+Added: An uninsured claim, either in part or in whole, as well as any claim covered by insurance but subject to a policy limit, high deductible and/or retention, could have a material adverse effect on our business, financial condition, and results of operations.
+Added: Our business strategy relies, in part, on acquisitions to sustain our growth, and these transactions present certain risk and uncertainties.
As part of our growth strategy, we acquire companies that expand, complement, and/or diversify our businesses.
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Further, realization of the anticipated benefits of an acquisition, and avoiding or mitigating the potential risks associated with an acquisition, will depend, among other things, upon our ability to:
−Removed: (a) effectively conduct due diligence to identify potential problems at companies we propose to acquire, (b) recognize incompatibilities or other obstacles to successful integration of the acquired business with our other operations, and (c) gain greater efficiencies and scale that will translate into reduced costs in a timely manner.
+Added: (a) effectively conduct due diligence to identify potential problems at companies we propose to acquire, (b) recognize incompatibilities or other obstacles to the successful integration of the acquired business with our other operations, and (c) gain greater efficiencies and scale that will translate into reduced costs or anticipated synergies in a timely manner.
However, there can be no assurance that an acquisition we may make in the future will provide the benefits anticipated when entering into the transaction.
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Many contracts are subject to cancellation or suspension on short notice at the discretion of the client, and the contracts in our remaining performance obligations are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to the contract.
+Added: The risk of contracts included in our remaining performance obligations being delayed or canceled generally increases during economic slowdowns or in response to significant fluctuations in commodity prices.
Accordingly, there is no assurance that revenue from remaining performance obligations will actually be realized.
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therefore, variations of actual results from our assumptions may reduce our profitability.
−Removed: As discussed in further detail in Note 3 - Revenue from Contracts with Customers of the notes to consolidated financial statements included in Item 8.
−Removed: Financial Statements and Supplementary Data, revenue is recognized as performance obligations are satisfied and earnings or losses recognized on individual contracts are based on estimates of contract price, costs, and profitability.
+Added: As discussed in further detail in the “Critical Accounting Policies and Estimates” section included in Item 7.
+Added: Management’s Discussion and Analysis of Financial Condition and Results of Operations, revenue is recognized as performance obligations are satisfied and earnings or losses recognized on individual contracts are based on estimates of contract price, costs, and profitability.
Changes in estimates of transaction prices as well as estimated costs are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made.
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This attack temporarily disrupted our use of the impacted systems.
−Removed: As part of our investigation into this incident, we engaged outside security experts, who did not identify any exfiltration of customer or employee data or any inappropriate access to our accounting or finance systems.
−Removed: We maintain insurance coverage for these types of incidents;
−Removed: such policies, however, may not completely provide coverage for, or completely offset, the costs of this infiltration or other such incidents.
+Added: While we maintain insurance coverage for these types of incidents, such policies may not completely provide coverage for, or completely offset, the costs associated with such incidents.
We are continuously developing and enhancing our controls, processes, and practices designed to protect our systems, computers, software, data, and networks from attack, damage, or unauthorized access.
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However, we may not anticipate or combat all types of potential disruptions or breaches.
−Removed: If any of these events were to occur, we could be required to expend additional capital and other resources, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants.
−Removed: Additionally, as many of our employees continue to access our systems remotely, as a result of the COVID-19 pandemic and the associated business or facility closures or reduced or staggered in-person attendance, we may be subject to heightened security risks, including the risks of cyber-attacks.
−Removed: See the risk factor entitled “Public health emergencies, epidemics, or pandemics, including the novel coronavirus, impact our business” under General Risk Factors below.
−Removed: The proper functioning of our information technology systems could also be impacted by other causes and circumstances beyond our control, including the decision by software vendors to discontinue further development, integration, or long-term software maintenance support for our information systems, or hardware interruption, damage or disruption as a result of power outages, natural disasters, or computer network failures.
+Added: If any of these events were to occur, we could be required to expend additional capital and other
+Added: resources, including costs to deploy additional personnel and protection technologies, train employees, and engage third-party experts and consultants.
+Added: Additionally, as many of our employees use our information technology systems to collaborate with colleagues in different geographic locations and periodically access our systems remotely, we may be subject to heightened security risks, including the risks of cyber-attacks.
+Added: The proper functioning of our information technology systems could also be impacted by other causes and circumstances beyond our control, including malware embedded in third party applications, the decision by software vendors to discontinue further development, integration, or long-term software maintenance support for our information systems, or hardware interruption, damage or disruption as a result of power outages, natural disasters, or computer network failures.
Key business processes are subject to interruption to the extent that our information technology systems, or those of our customers or third-party providers, are disabled for a long period of time.
Such operational disruptions and/or misappropriation or inappropriate disclosure of information could result in lost or reduced revenues, negative publicity, loss of customers or contracts, or business delays that could have a material adverse effect on our business, financial position, and results of operations.
+Added: In addition, new or evolving laws and regulations governing data privacy and the unauthorized disclosure of confidential information, including the European Union General Data Protection Regulation ("GDPR"), the California Consumer Privacy Act, and other emerging U.S.
+Added: state privacy laws pose increasingly complex compliance challenges and could potentially elevate our compliance costs.
+Added: Any failure to comply with these laws and regulations could result in significant penalties and legal liability, and increased costs in this area could have a negative impact on our financial condition, results of operations, and cash flow.
Financial Risk Factors
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Increases in the costs of surety bonds could also adversely impact our profitability.
−Removed: Our results of operations could be adversely affected as a result of goodwill and other identifiable intangible asset impairments.
+Added: Our results of operations could be adversely affected as a result of goodwill and identifiable intangible asset impairments.
When we acquire a business, we record an asset called “goodwill” equal to the excess of the consideration transferred over the fair value of the net tangible and identifiable intangible assets acquired.
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Impairment may result from a deterioration in macroeconomic conditions, declining financial performance, deterioration in the operational environment, or changes in the manner in which acquired assets are used.
−Removed: As a result of certain of these conditions, we recognized $232.8 million of impairment charges during the second quarter of 2020.
+Added: While no impairment was recognized during 2021, we recorded $232.8 million of impairment charges during 2020 as a result of certain of these conditions.
Significant judgment is required in determining whether goodwill and indefinite-lived intangible assets are impaired and assumptions utilized for purposes of our impairment testing may change in future periods.
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It is not possible at this time to determine if any future impairment charge will result or, if it does, whether such a charge would be material to our results of operations.
−Removed: For further discussion of our impairment testing, see “Application of Critical Accounting Policies - Goodwill, Identifiable Intangible Assets, and Other Long-Lived Assets” included in Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations.
+Added: For further discussion of our impairment testing, see Note 8 - Goodwill, Identifiable Intangible Assets, and Other Long-Lived Assets included in Item 8.
+Added: Financial Statements and Supplementary Data.
Failure to maintain effective internal controls over financial reporting could adversely impact our ability to timely and accurately report financial results and comply with our reporting obligations, which could materially affect our business.
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Because of the inherent limitations of all such systems, our internal controls over financial reporting may not always prevent or detect misstatements.
−Removed: Failure to maintain effective internal control over financial reporting could adversely affect our ability to accurately and timely report financial results, to prevent or detect fraud, or to comply with the requirements of the SEC or the Sarbanes-Oxley Act of 2002, which could necessitate a restatement of our financial statements, and/or result in an investigation, or the imposition of sanctions, by regulators.
+Added: Failure to maintain effective internal control over financial reporting could adversely affect our ability to accurately and timely report financial results, to prevent or detect fraud, or to comply with the requirements of the SEC or the Sarbanes-Oxley Act of 2002, which could necessitate a restatement of our financial statements, and/or result in an investigation, or the imposition of sanctions, by
Such failure could additionally expose us to litigation and/or reputational harm, impair our ability to obtain financing, or increase the cost of any financing we obtain.
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In addition, our United Kingdom operations are subject to laws and regulations that are in some cases different from those of the United States, including labor laws such as the U.K.
−Removed: Modern Slavery Act and laws and regulations governing information collected from employees, customers and others, specifically the European Union’s General Data Protection Regulation.
−Removed: These laws and regulations, and the economic, financial, political, and regulatory impact of the United Kingdom’s decision to leave the European Union, could increase the cost and complexity of doing business in the U.K.
+Added: Modern Slavery Act and laws and regulations governing information collected from employees, customers and others, specifically the GDPR.
+Added: These laws and regulations could increase the cost and complexity of doing business in the U.K.
and negatively impact our financial position and results of operations.
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Our failure to comply with environmental laws could result in significant liabilities.
−Removed: Our operations are subject to various laws, including environmental laws and regulations, among which many deal with the handling and disposal of asbestos and other hazardous or universal waste products, PCBs, per- and polyfluoroalkyl substances (PFAS) and fuel storage.
+Added: Our operations are subject to various laws, including environmental laws and regulations, among which many deal with the handling and disposal of asbestos and other hazardous or universal waste products, polychlorinated biphenyls (PCBs), per- and polyfluoroalkyl substances (PFAS) and fuel storage.
A violation of such laws and regulations, or a release of such substances, has and may in the future, expose us to various claims, including claims by third parties, as well as remediation costs and fines.
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As a part of our business, we also install fuel storage tanks and are sometimes required to deal with hazardous materials, all of which may expose us to environmental liability.
−Removed: In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or leaks, the imposition of new clean-up requirements, or the exposure of our employees or other contractors to hazardous materials, could require us to incur significant costs or become the basis for new or increased liabilities that could harm our financial position and results of operations, although certain of these costs might be covered by insurance.
+Added: In addition, new laws and regulations, stricter enforcement of existing laws and regulations, the discovery of previously unknown contamination or leaks, exposure to or the release of materials subsequently identified as hazardous by a governmental authority, the imposition of new clean-up requirements, or the exposure of our employees or other contractors to hazardous materials, could require us to incur significant costs or become the basis for new or increased liabilities that could harm our financial position and results of operations, although certain of these costs might be covered by insurance.
In some instances, we have obtained indemnification or covenants from third parties (including predecessors or lessors) for such clean-up and other obligations and liabilities, and we believe such indemnities and covenants are adequate to cover such obligations and liabilities.
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From time to time, we are a party to lawsuits and other legal proceedings, most of which occur in the normal course of our business.
−Removed: These actions and proceedings may involve actual or threatened claims by customers, employees or other third parties for, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, breach of contract, property damage, or other general commercial disputes.
+Added: These actions and proceedings may involve actual or threatened claims by customers, employees, or other third parties for, among other things, compensation or indemnification for alleged personal injury, workers’ compensation, employment discrimination, breach of contract, property damage, or other general commercial disputes.
In addition, we have been, and may in the future be, subject to class action claims alleging violations of the Fair Labor Standards Act and state wage and hour laws.
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Legal Proceedings and Note 15 - Commitments and Contingencies of the notes to consolidated financial statements included in Item 8.
−Removed: Financial Statements and Supplementary Data, for more information regarding legal proceedings in which we are involved.
+Added: Financial Statements and Supplementary Data, for more information regarding any significant legal proceedings in which we are involved.
We may incur liabilities or suffer negative financial impacts relating to occupational, health, and safety matters.
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While we have invested, and will continue to invest, substantial resources in our robust occupational, health, and safety programs, many of our businesses involve a high degree of operational risk, and there can be no assurance that we will avoid significant exposure.
−Removed: These hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment, and other consequential damages, and could lead to suspension of operations, large damage claims, reputational harm, and, in extreme cases, criminal liability.
+Added: These hazards can cause personal injury and loss of life, severe damage to or destruction of property and equipment, and other consequential damages, and could lead to suspension of operations, large damage claims, an increase in employee turnover, and, in extreme cases, criminal liability.
+Added: Any of the foregoing could result in financial losses or reputational harm, which could have a material adverse impact on our business, financial condition, and results of operations.
Our customers seek to minimize safety risks on their sites and they frequently review the safety records of contractors during the bidding process.
−Removed: If our safety record were to substantially deteriorate over time, we might become ineligible to bid on certain work and our customers could cancel our contracts and/or not award us future business.
+Added: Accordingly, if our safety record were to substantially deteriorate over time, we might become ineligible to bid on certain work and our customers could cancel our contracts and/or not award us future business.
Our failure to comply with anti-bribery statutes such as the Foreign Corrupt Practices Act and the U.K.
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Bribery Act of 2010 (the “Bribery Act”), and similar anti-bribery laws in other jurisdictions generally prohibit companies and their intermediaries from making improper payments to foreign officials for the purpose of obtaining or retaining business or securing an improper advantage.
−Removed: We conduct a limited amount of business in a few countries that have experienced corruption to some degree.
+Added: From time to time, we conduct a limited amount of business in a few countries that have experienced corruption to some degree.
Our policies require that all of our employees, subcontractors, vendors, and agents worldwide must comply with applicable anti-bribery laws.
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Government agencies may review a contractor’s performance under its contracts, cost structure, and compliance with applicable laws, regulations, and standards.
−Removed: If government agencies determine through these audits or reviews that costs
−Removed: are improperly allocated to specific contracts, they will not reimburse the contractor for those costs or may require the contractor to refund previously reimbursed costs.
+Added: If government agencies determine through these audits or reviews that costs are improperly allocated to specific contracts, they will not reimburse the contractor for those costs or may require the contractor to refund previously reimbursed costs.
If government agencies determine that we are engaged in improper activity, we may be subject to civil and criminal penalties and debarment or suspension from doing business with the government.
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Our ability to grow and maintain productivity and profitability will be limited by our ability to employ, train, and retain skilled personnel necessary to meet our requirements.
−Removed: We are dependent upon our project managers and field supervisors who are responsible for managing our projects, and there can be no assurance that any individual will continue in his or her capacity for any particular period of time.
+Added: We are dependent upon a workforce of approximately 34,000 employees, including our project managers and field supervisors who are responsible for managing our projects, and there can be no assurance that any individual will continue in his or her capacity for any particular period of time.
The loss of such qualified employees could have an adverse effect on our business.
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The availability and costs to adequately train and maintain a skilled labor force could be impacted by factors we cannot control, including changes in the unemployment rate, prevailing wage rates, benefit costs, the COVID-19 pandemic, and competition for labor from our competitors in the markets we serve.
−Removed: Labor shortages or increased labor costs could impair our ability to maintain our business or grow our revenues.
−Removed: The uncertainty of contract award timing or project delays can also present difficulties in managing our workforce size.
−Removed: Our inability to efficiently manage our workforce may require us to incur costs resulting from excess staff, reductions in staff, or redundancies that could have an adverse impact on our business, financial condition, results of operations, and cash flows.
+Added: Labor shortages or increased labor costs could impair our ability to provide services to our customers, maintain our business, or grow our revenues.
Our unionized workforce could adversely affect our operations;
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Strikes or work stoppages likely would adversely impact our relationships with our customers and could have a material adverse effect on our financial position, results of operations, and cash flows.
−Removed: We contribute to approximately 200 multiemployer pension plans based upon wages paid to our union employees that could result in our being responsible for a portion of the unfunded liabilities under such plans.
−Removed: Our potential liability for unfunded liabilities could be material.
+Added: We contribute to approximately 200 multiemployer pension plans.
Under the Employee Retirement Income Security Act, we may become liable for our proportionate share of a multiemployer pension plan’s underfunding if we cease to contribute to that pension plan or significantly reduce the employees in respect of which we make contributions to that pension plan.
+Added: Our potential liability for unfunded liabilities could be material.
See Note 14 - Retirement Plans of the notes to consolidated financial statements included in Item 8.
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• we are subject to provisions of Delaware law, which prohibit us from engaging in any of a broad range of business transactions with an “interested stockholder” for a period of three years following the date such stockholder becomes classified as an interested stockholder.
+Added: Climate Change Related Risk Factors
+Added: Climate change and related environmental issues could have a material adverse impact on our business, financial condition, and results of operations.
+Added: Climate change related events, such as increased frequency and severity of storms, floods, wildfires, droughts, hurricanes, freezing conditions, and other natural disasters, may have an adverse impact on our business, financial condition, and results of operation.
+Added: While we have invested in programs to mitigate the risk that these events disrupt our ability to serve our customers, these events pose inherent risks regardless of where or how we conduct our business.
+Added: For example, severe weather or a catastrophic natural disaster could negatively impact our and our customers’ offices, facilities, or job sites.
+Added: Access to clean water and reliable energy where we conduct our business is also critical to our operations.
+Added: Accordingly, severe weather events or natural disasters have the potential to disrupt our and our customers’ businesses and may cause us to experience work stoppages, project delays or cancellations, financial losses, and additional costs to resume operations, in addition to potential adverse impacts on the health and safety of our workforce and their ability to work or travel.
+Added: Further, climate change poses direct physical risks to infrastructure across the industry sectors we serve, both as a result of chronic environmental changes, such as rising sea levels and temperatures, as well as acute events, such as hurricanes, droughts, and wildfires.
+Added: These impacts and the costs to address them could result in fewer resources for strategic investment by our customers, which could result in a decrease in demand for certain of our services.
+Added: Any of these events could have a material adverse impact on our business, financial condition, and results of operations.
+Added: We may be affected by market or regulatory responses to climate change.
+Added: Growing public concern about climate change has resulted in the increased focus of local, state, regional, national, and international regulatory bodies on greenhouse gas (“GHG”) emissions and climate change issues.
+Added: Legislation to regulate GHG emissions has periodically been introduced in the U.S.
+Added: Congress, and there has been a wide-ranging policy debate, both in the United States and internationally, regarding the impact of these gases and possible means for their regulation.
+Added: The Biden Administration has made climate change and the limitation of GHG emissions one of its primary objectives, including a renewed commitment to the Paris Agreement and a Nationally Determined Contribution under such agreement that aims to reduce U.S.
+Added: emissions by 50-52%, compared to a 2005 baseline, by 2030.
+Added: Several states and geographic regions in the United States have also adopted legislation and regulations to reduce emissions of GHGs.
+Added: Additional legislation or regulation by these states and regions, the federal government, and/or any international agreements to which the United States may become a party, that control or limit GHG emissions, or otherwise seek to address climate change, could result in increased compliance costs for us and our clients or have other impacts on our
+Added: clients, including those who are involved in the exploration, production, or refining of fossil fuels, or who emit greenhouse gases through the combustion of fossil fuels, or through the mining, manufacture, utilization, or production of materials or goods.
+Added: Such policy changes could increase the costs of projects for our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the need for certain of our services, which could in turn have a material adverse effect on our business, financial condition, and results of operations.
+Added: However, policy changes and climate legislation could also increase the overall demand for our services as our clients and partners work to comply with these policies, such as by decarbonizing their industries, transitioning from fossil fuels to renewable energy sources, reducing their energy consumption, and developing integrated and sustainable solutions, all of which could have a positive impact on our business.
+Added: We cannot predict with certainty what the effect of such regulation may be on us or our customers.
+Added: We may be unable to achieve our current or future climate commitments and targets, or we may incur substantial costs in meeting such targets.
+Added: To help mitigate the impacts of GHG emissions on climate change, EMCOR has established initial carbon-based fuel consumption and GHG emission reduction targets.
+Added: However, achievement of such targets, or similar targets that may be established in the future, is subject to risks and uncertainties, many of which are outside of our control.
+Added: These risks and uncertainties include, but are not limited to:
+Added: (a) our ability to execute our operational strategies and achieve our goals within the currently projected costs and the expected timeframes;
+Added: (b) the availability and cost of alternative fuels, electrical charging infrastructure, off-site renewable energy, and other materials and components;
+Added: (c) unforeseen design, operational, and technological difficulties;
+Added: (d) the outcome of research efforts and future technology developments, including the availability of alternate or more fuel efficient vehicles for our fleet, including hybrid or electric vehicles;
+Added: (e) regulations and requirements that restrict or prohibit our ability to impose requirements on third party contractors;
+Added: (f) an acquisition of or merger with another company that has not adopted similar targets and goals or whose progress towards reaching its goals is not as advanced as ours;
+Added: and (g) the pace of recovery from the COVID-19 pandemic, which could result in fluctuations in our fuel consumption and GHG emissions in a given period.
+Added: In addition, we could be required to expend amounts in future periods as we continue to work towards achieving our targets, which may have a material effect on our business, financial condition, results of operations, or liquidity.
General Risk Factors
−Removed: Public health emergencies, epidemics, or pandemics, including the novel coronavirus, impact our business.
−Removed: The impact of the global spread of COVID-19, and the responses of governments, businesses, and individuals to combat it, have caused significant volatility, uncertainty, and economic disruption, which has and will continue to adversely impact our operations and those of our customers and clients.
−Removed: In March 2020, the World Health Organization characterized COVID-19 as a global pandemic, and the President declared a national emergency concerning the COVID-19 outbreak.
−Removed: Government authorities in the United States and United Kingdom have recommended or imposed certain social distancing, quarantine, and isolation measures to varying degrees, with many such measures impacting large portions of the population.
+Added: Public health emergencies, epidemics, or pandemics, including the COVID-19 pandemic, impact our business.
+Added: The impact of the global spread of COVID-19, and the responses of governments, businesses, and individuals to combat it, have caused significant volatility, uncertainty, and economic disruption, which has and may continue to adversely impact our operations and those of our customers.
+Added: Government authorities in the United States and United Kingdom have at various times recommended or imposed certain social distancing, quarantine, and isolation measures to varying degrees, with many such measures impacting large portions of the population.
These measures have included limitations on travel and mandatory cessation of certain business activities, some of which have been relaxed or adjusted and others of which remain in effect.
−Removed: Both the outbreak and the containment and mitigation measures have a serious adverse impact on the economy, the severity and duration of which are uncertain.
−Removed: The extent to which government stabilization efforts will mitigate the consequences to the economy is difficult to predict and the scope, scale, and effectiveness of any additional stimulus measures remains unknown.
−Removed: Although we have established a pandemic response plan and procedures, our workforce and ongoing operations have been, are, and may continue to be impacted by the COVID-19 pandemic.
+Added: Both the outbreak and the containment and mitigation measures resulted in serious adverse impacts on the economy, some of which are ongoing, and both the severity and duration of those impacts and the extent and pace of economic recovery continue to remain uncertain.
+Added: Our workforce and ongoing operations have been, are, and may continue to be impacted by the COVID-19 pandemic.
For example, we have experienced disruptions that have impacted our ability to perform our work.
−Removed: Such impacts include, but are not limited to, access restrictions and temporary job site shutdowns, reduced labor efficiency resulting from adherence to physical distancing and other enhanced safety protocols mandated at the majority of our worksite locations, and the deferral of maintenance and service projects by our customers.
+Added: Such impacts include, but are not limited to, access restrictions and temporary job site shutdowns, reduced labor efficiency resulting from adherence to physical distancing, quarantine, and isolation requirements due to illness or exposure to an infected person, and other enhanced safety protocols mandated at the majority of our worksite locations, and the deferral of maintenance and service projects by our customers.
The extent to which the COVID-19 pandemic will continue to impact our business and results of operations remains highly uncertain and will be affected by a number of factors.
These include the duration and extent of the pandemic;
−Removed: the duration and extent of imposed or recommended containment and mitigation measures;
−Removed: the extent, duration, and effective execution of ongoing government stabilization and recovery efforts;
−Removed: the timing, availability, efficacy, adoption, and distribution of vaccines or other preventative treatments;
−Removed: the continued impact of the pandemic on economic activity, including on construction projects, our customers’ demand for our services, and our vendors’ ability to supply us with raw materials;
+Added: the potential for additional variants of the virus that are more virulent, contagious, or against which current vaccines are less effective;
+Added: the duration and extent of containment and mitigation measures that continue to be imposed or recommended;
+Added: the widespread adoption and long-term efficacy of vaccines and the availability and efficacy of other treatments;
+Added: the cost and/or disruption of testing that may be required of our employees either by customer requirements or government mandates;
+Added: the continued impact of the pandemic on economic activity, including on planning and funding for construction projects and our customers’ demand for our services;
+Added: supply chain disruptions or commodity price volatility that could impact our and our vendors’ ability to source the supplies and materials needed to operate our business;
our ability to effectively operate, including as a result of travel restrictions and mandatory business and facility closures;
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and any additional project delays or shutdowns.
−Removed: Customers may also slow down decision-making, delay planned work, or seek to terminate existing agreements.
+Added: Customers may also continue to delay decision-making, delay planned work, or seek to terminate existing agreements.
Any of these events could have a material adverse effect on our business, financial condition, results of operations, and/or stock price.
−Removed: Additionally, as many of our employees continue to access our systems remotely, as a result of the COVID-19 pandemic and the associated business or facility closures or reduced or staggered in-person attendance, we may be subject to heightened security risks, including the risks of cyber-attacks.
+Added: While the emergency temporary standard requiring employers with 100 or more employees to ensure their workforce is fully vaccinated or to require unvaccinated workers to produce a negative test result on at least a weekly basis (the “ETS”) has been withdrawn by the Occupational Safety and Health Administration (“OSHA”), and Executive Order 14042 mandating vaccination for all federal contractors and subcontractors is currently stayed by the courts, it is unclear whether OSHA or another federal agency will mandate vaccination and/or testing.
+Added: Costs related to any mandatory testing, including both the costs of tests and the costs to compensate employees for the time to undergo such testing, will likely represent a substantial expense to the Company, which could have a material adverse effect on our business, financial condition, and/or results of operations to the extent that a significant portion of our workforce does not choose to become vaccinated.
+Added: On January 10, 2022, the Biden Administration announced that it would require insurance companies and group health plans to cover the cost of at-home COVID-19 tests.
+Added: As we are self-insured for employee-related healthcare claims, this new requirement could result in an additional expense for the Company.
+Added: It is not possible at this time to determine the impact of this new requirement or whether it could have a material adverse effect on our financial condition and/or results of operations.
+Added: Additionally, as many of our employees periodically access our systems remotely, in part as a result of the COVID-19 pandemic and the potential business or facility closures or reduced or staggered in-person attendance, we may be subject to heightened security risks, including the risks of cyber-attacks.
Further, if any of our key personnel are unable to perform their duties for a period of time, including as a result of illness, our results of operations could be adversely affected.
−Removed: Furthermore, our business, financial condition, results of operations, and/or stock price could be adversely affected in the future by the effects of another epidemic or pandemic, or otherwise by the spread of contagious diseases other than COVID-19.
+Added: Our business, financial condition, results of operations, and/or stock price could also be adversely affected in the future by the effects of another epidemic or pandemic, or otherwise by the spread of contagious diseases other than COVID-19.
Such effects could be similar to those of the COVID-19 pandemic or could impact our business in different ways, including supply-chain disruptions, restrictions on our ability to provide services in the regions affected, adverse impacts on our workforce, and impacts to the U.S.
or global economy or financial markets generally.
−Removed: Natural disasters, terrorist attacks and other catastrophic events could disrupt our operations and services .
−Removed: Natural disasters, acts of terrorism and other catastrophic events, and the actions taken by the United States and/or other governments or actors in response to such events, may result in property damage, supply disruption, or economic dislocations throughout the country.
+Added: Terrorist attacks and other catastrophic events could disrupt our operations and services .
+Added: Acts of terrorism and other catastrophic events, and the actions taken by the United States and/or other governments or actors in response to such events, may result in property damage, supply disruption, or economic dislocations throughout the country.
Although it is not possible to predict such events or their consequences, these events could increase the volatility of our financial results due to decreased demand and unforeseen costs, with partial or no corresponding compensation from clients.
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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.