What changed in this filing

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Item 1A. Risk Factors

2023-02-23 compared with 2022-02-24 · 71 added, 63 removed, 300 unchanged (31% of the section changed)

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Economic downturns have historically led to reductions in demand for our services.

Negative conditions in the credit markets, including rising interest rates, may adversely impact our ability to operate our business.

Negative conditions in the credit markets, including rising interest rates, may adversely impact our results of operations and 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.

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General concerns about the fundamental soundness of domestic and foreign economies may also cause ultimate customers to defer projects even if they have credit available to them.

A prolonged stagnation or weakening in financial and macroeconomic conditions, including as a result of the COVID-19 pandemic, could therefore have a significant adverse effect on our revenues and profitability.

A prolonged stagnation or weakening in financial and macroeconomic conditions, including rising interest rates, supply chain challenges, inflation, and any continuing impacts of the COVID-19 pandemic, could therefore have a significant adverse effect on our revenues and profitability.

We are exposed to market risk for changes in interest rates for borrowings under our credit facilities, which bear interest at variable rates.

Throughout 2022, the Federal Reserve Board significantly increased the federal funds rate, further raised it in February 2023, and has indicated that rate increases are likely to continue through the remainder of 2023.

Increases in benchmark interest rates impact our interest expense and cost of capital, which may adversely impact our ability to make payments on outstanding debt, raise additional funds through the issuance of debt, fund capital expenditures or other liquidity needs.

Any of these impacts may adversely affect our liquidity, results of operations, and financial position.

For further information on our outstanding debt and borrowing rates, refer to Note 9 - Debt of the notes to consolidated financial statements included in Item 8.

Financial Statements and Supplementary Data.

Many of our clients depend on the availability of credit to help finance their capital and maintenance projects.

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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.

In addition, macroeconomic conditions, influenced by a variety of events and circumstances, can also affect customer demand for our services within these businesses.

In addition, macroeconomic conditions, influenced by a variety of events and circumstances, can also affect customer demand for our services within these businesses and lower prices and production volumes, or perceived risk thereof, typically results in the curtailment or deferral of spending by our customers.

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.

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.

On the other hand, the Russian invasion of Ukraine in February 2022 and the resulting supply chain disruptions and sanctions

imposed on Russian oil and gas exports caused the prices of crude oil and natural gas to increase significantly for several months.

While higher prices for our customers’ products may increase demand for our services, significant increases in the price or demand for crude oil may also result in the short-term curtailment or deferral of spending by our customers, as facility downtime to perform certain of the services we provide comes at a higher opportunity cost.

Continued uncertain conditions within these markets, including the impact of geopolitical instability and the lingering impacts of the COVID-19 pandemic, could 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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Because we are dependent on the timing and funding of new awards, we are therefore vulnerable to changes in our clients’ markets and investment decisions.

Our business may be adversely affected by significant reductions in government spending or delays or disruptions in the government appropriations process.

Our business may be adversely affected by significant reductions in government spending, delays or disruptions in the government appropriations process or the failure to fund or implement recent legislation, including the CHIPS and Science Act of 2022 and the Inflation Reduction Act, both of which could benefit our business.

Some of our businesses derive a significant portion of their revenues from federal, state, and local governmental agencies.

As a result, reduced or delayed spending by the federal government and/or state and local governments may have a material and adverse impact on our business, financial condition, results of operations, and cash flows.

Significant reductions in spending aimed at reducing federal, state, or local budget deficits, the absence of a bipartisan agreement on the federal government's budget, renewed focus on budget deficits following recent increases in government spending in response to the COVID-19 pandemic, personnel reductions, the closure of government facilities and offices, or other changes in budget priorities could result in the deferral, delay, disruption, or cancellation of projects or contracts that we might otherwise have sought to perform.

Significant reductions in spending aimed at reducing federal, state, or local budget deficits, the absence of a bipartisan agreement on the federal government's budget or raising the debt ceiling, renewed focus on budget deficits following recent increases in government spending in response to the COVID-19 pandemic, personnel reductions, the closure of government facilities and offices, or other changes in budget priorities could result in the deferral, delay, disruption, or cancellation of projects or contracts that we might otherwise have sought to perform.

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.

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.

Volatility in the prices or availability of certain materials and equipment used in our businesses and those of our customers, including as a result of inflation, geopolitical instability, 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.

Further, the timing of our price increases may lag the timing of the underlying increases in commodity or material prices.

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.

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.

For example, we experienced supply chain delays, including long lead times for certain materials and equipment, as well as an escalation in material and fuel prices, to varying degrees throughout 2021 and 2022.

These disruptions, which are anticipated to persist throughout 2023, resulted in declines in gross profit and gross profit margin for certain of our operations.

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 Russia’s invasion of Ukraine and the resulting supply chain disruptions and sanctions on Russian exports, an increase in trade protection measures such as tariffs, or 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.

On the other hand, because certain of our construction and service offerings are designed to improve energy efficiency in our clients’ operations, or to assist in the generation of new sources of renewable energy, such as wind, solar, and geothermal generation, decreases in the costs of traditional energy sources such as oil and natural gas, including as a result of recessionary pressure and reduced demand, may lower our customers’ demand for efficiency improvements and alternative energy sources, which could have an adverse effect on our financial position, results of operations, and cash flows.

Business and Operational Risk Factors

The loss of one or a few customers could have an adverse effect on us.

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.

Although we provide services to a diverse portfolio of end markets and 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.

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.

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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.

Adverse weather conditions, particularly during the winter season, could impact our construction services operations as those conditions affect our ability to safely and efficiently perform work outdoors in certain regions of the United States, adversely affecting the revenues and profitability of those operations.

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.

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Our business may be affected by the work environment.

We perform our work under a variety of conditions, including but not limited to, difficult terrain, difficult site conditions, and busy urban centers where delivery of materials and availability of labor may be impacted, clean-room environments where strict procedures must be followed, and sites which contain harsh or hazardous conditions, especially at chemical plants, refineries and other process facilities.

We perform our work under a variety of conditions, including but not limited to, difficult terrain, challenging site conditions, busy urban centers where delivery of materials and availability of labor may be impacted, clean-room environments where strict procedures must be followed, and sites which contain harsh or hazardous conditions, especially at chemical plants, refineries, and other process facilities.

Performing work under these conditions can increase the cost of such work or negatively affect efficiency and, therefore, our profitability.

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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.

The actual cost of labor and materials, however, may vary from the costs we originally estimated, something which we have experienced and may continue to experience due to inflationary pressures, supply chain challenges, and rising interest rates.

These variations, along with other risks, inherent in the execution of projects subject to fixed price contracts, may cause actual gross profits from projects to differ from those we originally estimated and could result in reduced profitability or losses on projects.

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We have operations in the United Kingdom, which in 2022 accounted for approximately 4% of our revenues.

Our reported financial position and results of operations are exposed to the effects (both positive and negative) that fluctuating exchange rates have on the process of translating the financial statements of our United Kingdom operations, which are denominated in local currencies, into the U.S.

For example, for the year ended December 31, 2022, revenues and operating income of our United Kingdom building services segment were negatively impacted by $53.5 million and $3.1 million, respectively, when compared to the results for the year ended December 31, 2021, as a result of unfavorable exchange rate movements.

The factors that impact exchange rate fluctuation, including macroeconomic and geopolitical conditions, are outside the control of the Company.

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The determination of such estimated liabilities and their appropriateness are reviewed and updated at least quarterly.

However, these liabilities are difficult to assess and estimate due to many relevant factors, the effects of which are often unknown, including the severity of an injury or damage, the determination of liability in proportion to other parties, the timeliness of reported claims, the effectiveness of our risk management and safety programs, and the terms and conditions of our insurance policies.

However, these liabilities are difficult to assess and estimate due to many relevant

factors, the effects of which are often unknown, including the severity of an injury or damage, the determination of liability in proportion to other parties, the timeliness of reported claims, the effectiveness of our risk management and safety programs, and the terms and conditions of our insurance policies.

Our accruals are based upon known facts, historical trends and our reasonable estimate of future expenses, and we believe such accruals are adequate.

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External market conditions, including catastrophic losses resulting from an increase in severe weather events and the prolonged pandemic, among other factors, have resulted in an insurance market that is characterized by higher premiums, diminished capacity, and more conservative underwriting.

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.

If these market conditions persist, or if we experience an increase in the number or severity of claims incurred, 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.

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.

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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.

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.

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, or we may be liable to our customers based on the terms of our contracts, which may require us to provide indemnification to them.

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.

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This competition may limit our ability to pursue acquisition opportunities.

Additionally, circumstances beyond our control, such as the COVID-19 pandemic, has and may continue to hinder our ability to pursue and complete acquisitions.

Additionally, circumstances beyond our control, such as rising interest rates, inflation and the ongoing impacts of the COVID-19 pandemic, may hinder our ability to pursue and complete acquisitions.

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:

(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.

(a) effectively conduct due diligence to identify and mitigate 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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We rely upon security measures, products, and services to attempt to secure our information technology systems and the confidential, proprietary, and sensitive information they contain.

However, our information technology systems and those of our customers and third-party providers are subject to cyber-attacks, hacking, other intrusions, failure, and damage, which result in operational disruption and could result in information misappropriation, such as theft of intellectual property or inappropriate disclosure of customer data or confidential or personal information.

However, our information technology systems and data, and that of our customers and third-party providers, are subject to cyber-attacks, hacking, nation state threats, and other intrusions, encryption, erasure, failure, and damage, which could result in operational disruption and information misappropriation, such as theft of intellectual property or inappropriate disclosure of customer data or confidential or personal information.

On February 15, 2020, for example, we became aware of an infiltration and encryption of portions of our information technology network.

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However, we may not anticipate or combat all types of potential disruptions or breaches.

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.

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.

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.

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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.

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.

state privacy laws pose increasingly complex compliance challenges and could potentially elevate our compliance costs.

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If our surety companies were to limit or eliminate our access to bonding, our alternatives would include seeking bonding capacity from other surety companies, increasing business with clients that do not require bonds, or posting other forms of collateral for project performance, such as letters of credit, parent company guarantees, or cash.

We may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all.

However, we may be unable to secure these alternatives in a timely manner, on acceptable terms, or at all.

Accordingly, if we were to experience an interruption or reduction in the availability of bonding, we may be unable to compete for or work on certain projects.

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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.

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.

While no impairment was recognized during 2022 or 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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Because of the inherent limitations of all such systems, our internal controls over financial reporting may not always prevent or detect misstatements.

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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and negatively impact our financial position and results of operations.

Our efforts to comply with evolving laws, regulations, and reporting standards may increase our general and administrative expenses, divert management time and attention, or limit our operational flexibility, all of which could have a material adverse effect on our business, financial position, and results of operations.

Our efforts to comply with evolving laws, regulations, and reporting standards may increase our general and administrative expenses, divert management time and attention, or limit our operational

flexibility, all of which could have a material adverse effect on our business, financial position, and results of operations.

Many of our non-public competitors and competitors operating solely in the U.S.

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Our failure to comply with environmental laws could result in significant liabilities.

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.

Our operations are subject to various laws, including environmental laws and regulations, among which many deal with the handling and disposal of 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 or exposure to such substances, including mold, lead paint, and asbestos, has and may in the future, expose us to various claims, including claims by third parties, as well as remediation costs and fines.

We own and lease many facilities.

Some of these facilities contain hazardous materials, such as lead and asbestos, and fuel storage tanks, which may be above or below ground.

If these tanks were to leak, we could be responsible for the cost of remediation as well as potential fines.

Some of these facilities contain hazardous materials, such as asbestos, and fuel storage tanks, which may be above or below ground.

If there is a release of such hazardous materials, or these tanks were to leak, we could be responsible for the cost of remediation as well as potential fines.

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.

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Our failure to comply with anti-bribery statutes, such as the Foreign Corrupt Practices Act and the U.K.

Bribery Act of 2010 could result in fines, criminal penalties, and other sanctions that could have an adverse effect on our business.

Bribery Act of 2010, or sanction regulations, could result in fines, criminal penalties, and other sanctions that could have an adverse effect on our business.

Foreign Corrupt Practices Act (the “FCPA”), the U.K.

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.

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.

However, there is no assurance that our policies and procedures to ensure compliance with the FCPA, the Bribery Act, and similar anti-bribery laws, will eliminate the possibility of liability under such laws for actions taken by our employees, agents, and intermediaries.

If we were found to be liable for violations under the FCPA, the Bribery Act, or similar anti-bribery laws, either due to our own acts or omissions or due to the acts or omissions of others, we could incur substantial legal expenses and suffer civil and criminal penalties or other sanctions, which could have a material adverse effect on our business, financial condition, and results of operations, as well as our reputation.

In addition, whether or not such expenses, penalties, or sanctions are actually incurred, the actual or alleged violation of the FCPA, the Bribery Act, or any similar anti-bribery laws could have a negative impact on our reputation.

In addition, sanctions against foreign persons and entities have increased in recent years, especially as a result of the war in the Ukraine.

Our policies require that all of our employees, subcontractors, vendors, and agents worldwide must comply with applicable anti-bribery and sanction laws.

However, there is no assurance that our policies and procedures to ensure compliance with the FCPA, the Bribery Act, and similar anti-bribery and sanction laws, will eliminate the possibility of liability under such laws for actions taken by our employees, agents, and intermediaries.

If we were found to be liable for violations under the FCPA, the Bribery Act, or similar anti-bribery or sanction laws, either due to our own acts or omissions or due to the acts or omissions of others, we could incur substantial legal expenses and suffer civil and criminal penalties, which could have a material adverse effect on our business, financial condition, and results of operations, as well as our reputation.

In addition, whether or not such expenses, penalties, or sanctions are actually incurred, the actual or alleged violation of the FCPA, the Bribery Act, or any similar anti-bribery or sanction laws could have a negative impact on our reputation.

Opportunities within the government sector could lead to increased governmental rules and regulations applicable to us.

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We cannot be certain that we will be able to maintain an adequate skilled labor force necessary to operate efficiently and to support our business strategy or that labor expenses will not increase as a result of a shortage in the supply of these skilled personnel.

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.

Labor shortages or increased labor costs could impair our ability to provide services to our customers, maintain our business, or grow our revenues.

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 ongoing impacts of the COVID-19 pandemic, and competition for labor from our competitors in the markets we serve.

Labor shortages or increased labor costs, such as those currently being experienced throughout the United States and United Kingdom, could impair our ability to provide services to our customers, maintain our business, or grow our revenues.

Proposed rules by the Federal Trade Commission to eliminate almost all non-competition agreements with employees, if implemented, may also impact retention of key employees by reducing barriers to individuals with such agreements leaving to work for our competitors.

Our unionized workforce could adversely affect our operations;

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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.

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.

While we have invested in programs to mitigate the risk that these events disrupt our ability to serve our customers, and also maintain insurance coverage to offset the costs which could result, these events pose inherent risks regardless of where or how we conduct our business.

For example, severe weather or a catastrophic natural disaster could negatively impact our and our customers’ offices, facilities, or job sites.

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Several states and geographic regions in the United States have also adopted legislation and regulations to reduce emissions of GHGs.

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

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.

Additional legislation or regulation by the federal government or state and local governments or agencies, 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 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.

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.

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We cannot predict with certainty what the effect of such regulation may be on us or our customers.

In addition, in March 2022, the SEC proposed new rules that would require significant climate-related disclosures by public companies, including evaluation and disclosure of material climate-related risks and opportunities, GHG emissions inventory, climate-related targets and goals, and financial impacts of physical and transition risks (the “SEC Climate Rules”).

If the SEC Climate Rules take effect, in whole or in part, our legal, accounting, and other compliance expenses may increase significantly, and compliance efforts may divert management time and attention.

We may also be exposed to legal or regulatory action or claims as a result of these new regulations.

All of these risks could have a material adverse effect on our business, financial position, and/or stock price.

We may be unable to achieve our current or future climate commitments and targets, or we may incur substantial costs in meeting such targets.

To help mitigate the impacts of GHG emissions on climate change, EMCOR has established initial carbon-based fuel consumption and GHG emission reduction targets.

To help mitigate the impacts of GHG emissions on climate change, EMCOR has established initial carbon-based fuel consumption and GHG emission reduction targets and committed to setting science-based GHG emissions targets.

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.

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(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;

(d) the outcome of research efforts and future technology developments, including alternate or more fuel efficient vehicles for our fleet, such as hybrid or electric vehicles, the availability of which has been impacted by the global shortage in supply of vehicles generally;

(e) regulations and requirements that restrict or prohibit our ability to impose requirements on third party contractors;

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Public health emergencies, epidemics, or pandemics, including the COVID-19 pandemic, impact our business.

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.

The continuing 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.

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.

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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;

the potential for additional variants of the virus that are more virulent, contagious, or against which current vaccines are less effective;

the duration and extent of containment and mitigation measures that continue to be imposed or recommended;

The extent to which the COVID-19 pandemic or another epidemic, pandemic or public health emergency could impact our business and results of operations in the future remains highly uncertain and will be affected by a number of factors.

These include the duration and extent of the pandemic, epidemic or public health emergency;

the potential for additional viruses or variants of viruses that are more virulent, contagious, or against which current vaccines are less effective;

the duration and extent of containment and mitigation measures;

the widespread adoption and long-term efficacy of vaccines and the availability and efficacy of other treatments;

the cost and/or disruption of testing that may be required of our employees either by customer requirements or government mandates;

the continued impact of the pandemic on economic activity, including on planning and funding for construction projects and our customers’ demand for our services;

the impact of the pandemic, epidemic or other public health emergency on economic activity, including on planning and funding for construction projects and our customers’ demand for our services;

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;

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the ability of our customers to pay us for services rendered;

any further closures of our and our customers’ offices and facilities;

and any additional project delays or shutdowns.

Customers may also continue to delay decision-making, delay planned work, or seek to terminate existing agreements.

any closures of our and our customers’ offices and facilities;

and any project delays or shutdowns.

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

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.

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.

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.

As we are self-insured for employee-related healthcare claims, this new requirement could result in an additional expense for the Company.

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.

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.

Additionally, as many of our employees continue to 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.

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.

Terrorist attacks and other catastrophic events could disrupt our operations and services .

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What changed 10-K

Item 1A. Risk Factors