9 unchanged sentences
The loss of business from any of our major customers, whether by the cancellation of existing contracts, the failure to obtain new business or lower overall demand for our services, could adversely impact our revenue and results of operations.
−Removed: We may not meet our growth and productivity objectives.
+Added: We may not meet our growth and productivity objectives and maintain our capital allocation strategy.
Our goals for profitability and growth rely upon a number of assumptions, including our ability to make successful investments to grow and further develop our business and simplify our operations.
3 unchanged sentences
Additionally, emerging business and delivery models may unfavorably impact demand and profitability for our solutions or services.
−Removed: If we are unable to find partners to develop cutting-edge innovations in a highly competitive and rapidly
−Removed: evolving environment or are unable to implement and integrate such innovations with sufficient speed and versatility, we could fail in our ongoing efforts to maintain and increase our revenue and profit margins.
+Added: If we are unable to find, and maintain relationships with, partners to develop cutting-edge innovations in a highly competitive and rapidly evolving environment or are unable to implement and integrate such innovations with sufficient speed and versatility, we could fail in our ongoing efforts to maintain and increase our revenue and profit margins, achieve and sustain our targeted growth rates or improve our market share, operating margins and competitive position generally or in specific markets or services.
+Added: Our ability and decisions to return capital to shareholders depend on a variety of factors, including our ability to maintain and increase operating margins, cash flow generated from operations, our cash and investment balances, our net income and our overall liquidity position, as well as our debt balance, potential alternative uses of cash and anticipated future economic conditions and financial results.
+Added: Failure to carry out our capital allocation strategy may adversely impact shareholders’ perception of our business and the trading price of our common stock.
Competition in the markets in which we operate may adversely impact our results of operations.
1 unchanged sentence
companies that use labor-based models and leverage talent pools primarily in lower-cost countries that have grown to offer a broad range of services with a worldwide presence;
−Removed: and advisory-focused system integrators specializing in bringing together disparate technology environments.
−Removed: Our competitiveness is based on factors including quality of services, technical skills and capabilities, industry knowledge and experience, financial value, ability to innovate, intellectual property and methods, contracting flexibility, and speed of execution.
+Added: and advisory-focused system integrators
+Added: specializing in bringing together disparate technology environments.
+Added: Our competitiveness is based on factors including quality of services, technical skills and capabilities, industry knowledge and experience, financial value, ability to innovate and respond to rapid and continuing changes in technology to serve the evolving needs of our customers, intellectual property and methods, contracting flexibility, and speed of execution.
If we are unable to compete based on such factors, our results of operations and business prospects could be harmed.
7 unchanged sentences
Our business employs a wide variety of products and services from a number of suppliers and partners around the world.
−Removed: Our relationships with them are critical to our ability to provide many of our services and solutions, and our relationships with alliance partners allow us to enter new markets and take advantage of existing ecosystems built and sustained by our alliance partners.
−Removed: There can be no assurance that we will be able to maintain such relationships or that the financial terms of our relationships will remain affordable.
+Added: Our relationships with them are critical to our ability to provide many of our services and solutions, and our relationships with various alliance partners allow us to enter new markets and take advantage of existing ecosystems built and sustained by our alliance partners.
+Added: There can be no assurance that we will be able to develop and maintain such relationships, that the products and services will be available on the expected timelines or for anticipated prices, or that the financial terms of our relationships will remain affordable.
Among other things, such partners may in the future decide to compete with us, form exclusive or more favorable arrangements with our competitors or otherwise reduce our access to their products or services.
If we are not able to maintain, or realize the expected benefits from, our relationships for any reason, we may be less competitive, and our ability to offer attractive services and solutions to address the needs and demands of our customers and our results of operations could be adversely affected.
+Added: Any performance failure on the part of our critical suppliers or alliance partners, or the discontinuance by such suppliers or alliance partners of technologies or services that we have relied on them to provide for our customers, could impact our performance or require us to engage alternative third parties to perform the services at our cost or to perform them ourselves, any of which could deprive us of potential revenue or adversely impact our profitability.
Further, changes in the business condition (financial or otherwise) of our suppliers or partners could subject us to losses and affect our ability to bring our offerings to market.
1 unchanged sentence
Any defective products or inadequate services received from suppliers or partners could reduce the reliability of our services and harm our reputation.
−Removed: If we are not able to continue addressing and adapting to technological developments and trends that serve customer demands, our growth plans, market share and financial performance could be negatively affected.
−Removed: Our growth strategy depends in part on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology, offerings and industry standards to serve the evolving demands of our customers.
−Removed: If we fail to respond successfully to technology challenges and customer demands in a timely or cost-effective manner or fail to effectively leverage new technologies into our services and solutions, or if our competitors or other third parties respond to such challenges more quickly or successfully than we do, the demand for our services and solutions may diminish.
+Added: If we are not able to continue addressing and adapting to technological developments and trends that serve customer demands or drive efficiency, our growth plans, market share and financial performance could be negatively affected.
+Added: Our growth strategy depends in part on our ability to continue to develop and implement services and solutions that anticipate and respond to rapid and continuing changes in technology, offerings and industry standards to serve the evolving demands and needs of our customers.
+Added: If we fail to respond and adapt successfully to technology developments and trends and customer demands in a timely or cost-effective manner or fail to effectively leverage new technologies into our services and solutions, or if our competitors or other third parties respond to such challenges more quickly or successfully than we do, the demand for our services and solutions may diminish.
We have made and expect to continue to make investments in new technologies, including in AI and generative AI.
We sometimes dedicate a significant amount of resources to our development efforts before knowing to what extent our investments will result in services and solutions the market will accept.
−Removed: In addition, investments in technology systems may not deliver the benefits or perform as expected, or may be
−Removed: replaced or become obsolete more quickly than expected, which could result in operational difficulties or additional costs.
−Removed: If we do not sufficiently invest in new technologies and adapt to industry developments, if we are unable to commercialize them in our services and solutions, evolve, expand and scale them with sufficient speed and versatility, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected.
+Added: The adoption and use of new technologies that are still in their early stages, such as AI and generative AI capabilities, involve significant risks and uncertainties.
+Added: In addition, investments in technology systems, capabilities, talent and resources may not deliver the benefits or perform as expected, may be replaced or
+Added: become obsolete more quickly than expected, or may reduce or replace some of our current services and offerings, which could result in operational difficulties or additional costs.
+Added: If we do not sufficiently invest in new technologies and adapt to industry developments, if we are unable to commercialize them in our services and solutions, evolve, expand and scale them effectively with sufficient speed and versatility, or if we do not make the right strategic investments to respond to these developments and successfully drive innovation, our results of operations and our ability to develop and maintain a competitive advantage and to execute on our growth strategy could be negatively affected.
If we are unable to attract and retain key personnel and other skilled employees, our business could be harmed.
4 unchanged sentences
Skilled and experienced personnel in the areas where we compete often are in high demand, and competition for their talents is often intense.
−Removed: Our inability to retain skilled employees could intensify the adverse impact of a shortage of critical skills.
+Added: Our inability to attract and retain skilled employees could intensify the adverse impact of a shortage of critical skills necessary to serve our customers, keep pace with the rapid and continuous technological changes in our industry and further our growth strategy, including talent trained in AI, machine learning, software engineering and other market-leading skills and capabilities in new technologies.
Changing demographics and labor workforce trends also may result in a shortage of or insufficient knowledge and skills.
1 unchanged sentence
Any failure to attract, integrate, motivate and retain these employees could harm our business.
−Removed: Alternatively, from time to time, we may have more people than we need in certain skill sets, geographies or compensation levels.
+Added: If we are unable to hire or deploy employees with the needed skillsets or at scale to meet customer demand or if we are unable to adequately equip our employees with the skills needed, our business could be adversely affected and we may not be able to meet key objectives to further our growth strategy.
+Added: Alternatively, from time to time, as a result of technological developments or changes in demand, we may have more people than we need in certain skill sets, geographies or compensation levels.
In such cases, we have, and may in the future, rebalance our workforce, including reducing the rate of new hires and increasing involuntary terminations, which actions could negatively impact employee engagement and retention.
−Removed: Due to our global presence, our business and operations could be adversely impacted by economic, political, public health and other conditions.
−Removed: We are a globally integrated company and have operations worldwide.
−Removed: Our results of operations could be affected by economic and political changes in those countries and by macroeconomic changes, including recessions, inflation, currency fluctuations between the U.S.
+Added: Due to our global presence, our business and operations could be adversely impacted by economic, geopolitical, public health and other conditions.
+Added: We are a globally integrated company doing business worldwide.
+Added: Our results of operations have been and could in the future be affected by unfavorable, volatile or uncertain economic and geopolitical conditions and by macroeconomic changes, including recessions, inflation, currency fluctuations between the U.S.
dollar and non-U.S.
−Removed: currencies and adverse changes in trade relationships among those countries.
+Added: currencies, capital controls and adverse changes in trade relationships among those countries.
Further, international trade disputes could create uncertainty.
−Removed: Tariffs and international trade sanctions resulting from these disputes could affect our ability to move goods and services across borders, or could impose added costs to those activities.
+Added: Tariffs, international trade sanctions and other controls on imports or exports resulting from these disputes could affect our ability to move goods and services across borders, or could impose added costs to those activities.
Measures taken to date by us to mitigate these impacts could be made less effective should trade sanctions or tariffs change.
In addition, any widespread outbreak of an illness, pandemic or other local or global health issue, natural disasters including those that could be related to climate change impacts, or uncertain political climates, international hostilities, geopolitical conflict or any terrorist activities, could adversely affect customer demand, our operations and supply chain, and our ability to source and deliver solutions to our customers.
−Removed: For example, the COVID-19 pandemic created significant volatility, uncertainty and economic disruption.
In the current macroeconomic environment, customers continue to balance short-term challenges and opportunities for transformation.
8 unchanged sentences
We face a number of risks when pricing our contracts, as many of our projects entail the coordination of operations and workforces in multiple locations and utilizing workforces with different skill sets and competencies across geographically diverse service locations.
−Removed: In addition, revenues from a small portion of our contracts are recognized using the percentage-of-completion method, which requires estimates of total costs at completion, fees earned on the contract, or both.
+Added: In addition, revenues from a small portion of our contracts are recognized using the cost-to-cost method, which requires estimates of total costs at completion, fees earned on the contract, or both.
This estimation process, particularly due to the technical nature of the services being performed and the long-term nature of certain contracts, is complex and involves significant judgment.
2 unchanged sentences
Furthermore, if we fail to accurately estimate the effort, costs or time required to complete a contract, the profitability of our contracts may be materially and adversely affected.
+Added: If we are not able to increase our margins as anticipated, we may not be able to meet key objectives to further our growth strategy.
Service delivery issues could adversely impact our business and operating results.
6 unchanged sentences
Certain customer work requires the use of unique and complex structures and alliances, some of which require us to assume responsibility for the performance of third parties whom we do not control.
+Added: In addition, as the Company continues to identify opportunities to reduce its overall cost structure and increase operating efficiencies, including through site rationalization initiatives, if we do not effectively manage such efforts and our infrastructure capacity requirements, it could adversely impact our ability to effectively and efficiently deliver our services.
Any of these factors could adversely affect our ability to perform and subject us to additional liabilities, which could have an adverse effect on our relationships with customers and on our results of operations.
Risks from acquisitions and dispositions include integration challenges, failure to achieve objectives, the assumption of liabilities and higher debt levels.
−Removed: We may decide to make acquisitions and dispositions in furtherance of our strategy.
+Added: We have made, and may continue to make, acquisitions and dispositions in furtherance of our strategy.
Such transactions can present significant challenges and risks, and there can be no assurances that we will identify or manage such transactions successfully or that strategic opportunities will be available to us on acceptable terms or at all.
2 unchanged sentences
If we do acquire other companies, we may not realize all the economic benefit from those acquisitions, which could cause an impairment of goodwill or intangible assets.
−Removed: We could be adversely impacted by our business with government customers.
+Added: We could be adversely impacted by our business with foreign, state and local government customers.
Our customers include numerous governmental entities within and outside the United States, including foreign governments and U.S.
1 unchanged sentence
Some of our agreements with these customers are subject to periodic funding approval or other government budgetary issues.
−Removed: Funding reductions or delays could adversely impact public sector demand for our services and can result in payment delays, payment reductions or contract terminations, any of which would have an adverse effect on our business, financial condition, results of operations and/or cash flows.
+Added: Funding reductions, delays or work stoppages could adversely impact public sector demand for our services and can result in payment delays, payment reductions or contract terminations, any of which would have an adverse effect on our business, financial condition, results of operations and/or cash flows.
Also, government contracts are generally subject to extensive and evolving procurement regulations and tend to have additional requirements beyond commercial contracts and, for example, may contain provisions providing for higher liability limits for certain losses and non-performance.
19 unchanged sentences
We maintain information, including confidential and proprietary information, in digital form regarding our business and the business of our customers, business partners, vendors, employees, contractors and other third parties.
−Removed: We also rely on third-party vendors to provide certain digital services in connection with our business.
+Added: We also rely on third-party vendors to provide certain digital services in connection with our business and our delivery of services to customers.
There are numerous and evolving risks relating to cybersecurity, data governance and privacy, including risks originating from intentional acts of criminal hackers, nation states and hacktivists;
from intentional and unintentional acts of customers, business partners, vendors, employees, contractors, competitors and other third parties;
−Removed: and from errors and omissions in processes or technologies, as well as the risks associated with an increase in the number of customers, business partners, vendors, employees, contractors and other third parties working remotely.
−Removed: Computer hackers and others routinely attack the security of technology products, services, systems and networks using a wide variety of methods, including ransomware or other malicious software and attempts to exploit vulnerabilities in hardware, software and infrastructure.
−Removed: Attacks also include social engineering to fraudulently induce customers, business partners, vendors, employees, contractors and other third parties to disclose information, transfer funds or unwittingly provide access to systems or data.
−Removed: We are at risk of security breaches not only of our own services, systems and networks, but also those of customers, business partners, vendors, employees, contractors and other third parties.
−Removed: Cyber threats are continually evolving, making it more challenging to defend against certain threats and vulnerabilities that can persist undetected over extended periods of time.
−Removed: Our services, systems and networks, including cloud-based systems and other third-party systems and technologies that we maintain on behalf of our customers, may be used in critical Company, customer or third-party operations, and involve the storage, processing and transmission of sensitive data, including proprietary or confidential data, regulated data, personal information and intellectual property of employees, customers and others.
−Removed: These services, systems and networks are also used by customers in heavily regulated industries, including those in the financial services, healthcare, critical infrastructure and government sectors.
−Removed: Cybersecurity attacks or other security incidents relating to our systems or those of our vendors could result in, for example, one or more of the following:
+Added: and from errors, vulnerabilities and omissions in infrastructure, technology products, services and solutions that we use, as well as the risks associated with the number of customers, business partners, vendors, employees, contractors and other third parties working remotely.
+Added: Computer hackers and others routinely attempt to exploit and attack the security of technology products, services, systems and networks using a wide variety of methods, including ransomware or other malicious software and attempts to exploit vulnerabilities and flaws in hardware, software and infrastructure, technology products, services and solutions.
+Added: Attacks also include social engineering to fraudulently induce customers, business partners, vendors, employees, contractors and other third parties to unwittingly disclose information, transfer funds or provide access to systems or data.
+Added: We are at risk of security breaches not only of our own infrastructure, networks and services, but also those of customers, business partners, vendors, employees, contractors and other third parties.
+Added: Cyber threats and attacks are increasing in number and sophistication and continually evolving, particularly with the expanding availability of AI and generative AI tools and technologies, making it more challenging to defend against certain threats, attacks and vulnerabilities that can persist undetected over extended periods of time.
+Added: Our technology infrastructure, products, services and solutions, including other third-party systems and technologies that we use to deliver our services or maintain on behalf of our customers, may be used in critical Company, customer or third-party operations, and involve the storage, processing and transmission of sensitive data, including proprietary or confidential data, regulated data, personal information and intellectual property of employees, customers and others.
+Added: These products, services and solutions are also used by customers in heavily regulated industries, including those in the financial services, healthcare, critical infrastructure and government sectors.
+Added: Cybersecurity attacks or other security incidents relating to our technology infrastructure, products, services and solutions or those of our vendors could result in, for example, one or more of the following:
unauthorized access to, disclosure, modification, misuse, loss or destruction of Company, customer or other third-party data or systems;
4 unchanged sentences
The cost and operational consequences of responding to cybersecurity incidents and implementing remediation measures could be significant.
−Removed: In our industry, security vulnerabilities are increasingly discovered, publicized and exploited across a broad range of hardware, software or other infrastructure, elevating the risk of attacks and the potential cost of response and remediation for us and our customers.
−Removed: In addition, the fast-paced, evolving, pervasive and sophisticated nature of certain cyber threats and vulnerabilities, including increased risks posed by generative AI, and the scale and complexity of our business and infrastructure, make it possible that certain threats or vulnerabilities will be undetected or unmitigated in time to prevent or minimize the impact of an attack on us or our customers.
+Added: In our industry, vulnerabilities in technology infrastructure, products, services and solutions are increasingly discovered, publicized and exploited, elevating the risk of attacks and the potential cost of response and remediation for us and our customers.
+Added: The increasing number and sophistication of cyber threats, attacks and vulnerabilities, and the scale and complexity of our business and infrastructure, make it possible that certain threats, attacks or vulnerabilities will be undetected or unmitigated in time to prevent or minimize the impact on us or our customers.
Cybersecurity risk to us and our customers also depends on factors such as the actions, practices and investments of customers, business partners, vendors, employees, contractors and other third parties.
2 unchanged sentences
While we continue to monitor for, identify, investigate, respond to, remediate and develop plans to quickly recover from cybersecurity incidents, notwithstanding our efforts, we may experience a cybersecurity incident in the future that may have a material adverse impact on the Company.
−Removed: As we are a global enterprise, the regulatory environment with regard to cybersecurity, data governance and privacy issues to which we are subject is increasingly complex and will continue to impact our business, including through increased risk, increased compliance costs, and expanded or otherwise altered compliance obligations.
−Removed: As our reliance on data grows, the potential impact of regulations on our business, risks and reputation will grow accordingly.
−Removed: The enactment and expansion of cybersecurity, data governance and privacy laws and regulations around the globe, including an increased focus on international data transfer mechanisms and supply chain management;
−Removed: the lack of harmonization of such laws and regulations;
−Removed: the increase in associated litigation and enforcement activity;
−Removed: the potential for damages, fines and penalties;
−Removed: and the potential regulation of emerging and new technologies, such as AI and generative AI, will continue to result in increased compliance costs and increased risks.
+Added: As we are a global enterprise, the regulatory environment with regard to cybersecurity, data governance, privacy, AI and other issues to which we are subject is increasingly complex and will continue to impact our business, including through increased risk, increased compliance costs, and expanded or otherwise altered compliance obligations.
+Added: The enactment and expansion of cybersecurity, data governance, privacy, AI and other laws and regulations around the globe, including an increased focus on international data transfer mechanisms and supply chain management, the lack of harmonization of such laws and regulations, the increase in associated litigation and enforcement activity, the potential for damages, fines and penalties, and enacted or potential regulation of emerging and new technologies, such as AI and generative AI, will continue to result in increased compliance costs and increased risks.
Any additional costs and penalties associated with increased compliance, enforcement and risk reduction could make certain offerings less profitable or increase the difficulty of bringing certain offerings to market.
11 unchanged sentences
Compliance with diverse legal requirements is costly and time-consuming and requires significant resources.
−Removed: New and changing laws can also adversely affect the Company’s business by limiting the Company’s ability to offer a service or feature to customers, imposing changes to the design of the Company’s products and services, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain and business.
+Added: New and changing laws can also adversely affect the Company’s business by limiting the Company’s ability to offer a
+Added: service or feature to customers, imposing changes to the design of the Company’s products and services, impacting customer demand for the Company’s products and services, and requiring changes to the Company’s supply chain and business.
New and changing laws and regulations can also create uncertainty about how such laws and regulations will be interpreted and applied.
3 unchanged sentences
Changes in laws and regulations could also mandate significant and costly changes to the way we implement our services or could impose additional taxes on our services.
−Removed: For example, changes in laws and regulations to limit using off-shore resources in connection with our work or to penalize companies that use off-shore resources, which have been proposed from time to time in various jurisdictions, could adversely affect our results of operations.
−Removed: Such changes may result in contracts being terminated or work being transferred on-shore, resulting in greater costs to us.
−Removed: Additionally, changes in laws and regulations, including expanding export controls and sanctions resulting from geopolitical developments, could impact our business, including imposing limits on where we can conduct operations, parties with whom we can conduct business, and the nature of work that can be performed.
+Added: Changes in laws and regulations, including expanding controls on imports and exports and sanctions resulting from geopolitical developments, could impact our business, including imposing limits on where we can conduct operations, parties with whom we can conduct business, and the nature of work that can be performed.
Such changes may result in limitations on existing or future business operations in certain markets, and violations of such laws and regulations could result in significant fines, penalties and enforcement actions.
5 unchanged sentences
The Organization for Economic Cooperation and Development (the “OECD”) continues to issue guidelines that are different, in some respects, than long-standing international tax principles.
−Removed: As countries unilaterally amend their tax laws to adopt certain parts of the OECD guidelines, this may increase tax uncertainty and may adversely impact our income taxes.
−Removed: Local country, state, provincial or municipal taxation may also be subject to review and potential override by regional, federal, national or similar forms of government, which may also adversely impact our income taxes.
+Added: Local country adoption of some or all of these rules may increase tax uncertainty and may adversely impact our income taxes.
+Added: Furthermore, local country, state, provincial or municipal taxation may also be subject to review and potential override by regional, federal, national or similar forms of government, which may also adversely impact our income taxes.
In addition, we are subject to periodic examinations of our domestic and foreign tax returns by taxing authorities in the jurisdictions in which we do business.
3 unchanged sentences
In addition, our former Parent may obtain, or may seek to obtain, indemnity from us for judgments against it relating to events that occurred prior to the Separation pursuant to agreements put in place in connection with the Separation.
−Removed: The risks associated with such legal proceedings are described in more detail in Note 13 – Commitments and Contingencies in the financial statements elsewhere in this report.
+Added: The risks associated with known significant legal proceedings are described in more detail in Note 14 – Commitments and Contingencies in the financial statements elsewhere in this report.
We believe that we have adopted appropriate risk management and compliance programs.
4 unchanged sentences
In addition, if we were to violate or become liable under these laws and regulations our reputation could be harmed, which could have a negative impact on demand for our products and services.
−Removed: Expectations relating to environmental, social and governance considerations could expose us to potential liabilities, increased costs and reputational harm.
−Removed: There has been an increasing focus by governments, regulators, investors, employees, customers and other stakeholders on environmental, social and governance considerations relating to businesses.
−Removed: This includes climate change and carbon emissions, human rights, diversity, equity and inclusion, responsible supply chain management, ethics, cybersecurity and privacy concerns.
−Removed: We have established and publicly announced certain goals, commitments and
−Removed: initiatives that reflect our current plans and aspirations on corporate citizenship matters, which are based on available data and estimates and are not guarantees that we will be able to achieve them.
−Removed: The implementation of these goals, commitments and initiatives is subject to numerous risks, many of which are beyond our control.
+Added: Expectations relating to environmental, social and governance initiatives and considerations could expose us to potential liabilities, increased costs and reputational harm.
+Added: Over the past few years, governments, regulators, investors, employees, customers and other stakeholders have focused on environmental, social and governance initiatives and considerations relating to businesses.
+Added: This includes matters relating to climate change and carbon emissions, human rights, diversity, equity and inclusion, responsible supply chain management, ethics, cybersecurity and privacy.
+Added: At the same time, a number of stakeholders, government entities, regulators and lawmakers have expressed contrary views and expectations, including the proposal or enactment of “anti-ESG” legislation, regulation, policies and enforcement priorities, which may result in scrutiny, reputational risk, lawsuits or market access restrictions.
+Added: Conflicting regulations and requirements, and a lack of harmonization of legal and regulatory environments across the jurisdictions in which we operate, may create enhanced compliance risks and costs.
+Added: We have established and publicly announced certain goals, commitments and initiatives that reflect our current plans and aspirations on corporate citizenship matters, which are based on available data and estimates.
+Added: There are no guarantees that we will be able to achieve these goals and commitments.
+Added: The implementation of these goals, commitments and initiatives is subject to numerous risks, many of which are beyond our control, and in the future we may determine that further pursuit of them in light of changing circumstances is impracticable or inadvisable.
Examples of such risks include but are not limited to:
34 unchanged sentences
Additionally, large changes in currency exchange rates relative to our functional currencies can increase the costs of our services to customers relative to local competitors, thereby causing us to lose existing or potential customers to these local competitors.
−Removed: Risks Relating to our Spin-off from IBM
−Removed: If the Spin-off were determined not to qualify as tax-free for U.S.
−Removed: federal income tax purposes, we could have an indemnification obligation to IBM, which could adversely affect our business, financial condition and results of operations.
−Removed: If the Distribution were determined not to qualify for non-recognition of gain or loss under Section 355 and related provisions of the Internal Revenue Code of 1986 (the “Code”), each stockholder that is subject to U.S.
−Removed: federal income tax who received our common stock in the Distribution would generally be treated as having received a distribution in an amount equal to the fair market value of our common stock received, which would generally result in:
−Removed: (i) a taxable dividend to such stockholder to the extent of that such stockholder’s pro rata share of IBM’s current or accumulated earnings and profits;
−Removed: (ii) a reduction in such stockholder’s basis (but not below zero) in IBM common stock to the extent the amount received exceeds the stockholder’s share of IBM’s earnings and profits;
−Removed: and (iii) taxable gain from the exchange of IBM common stock to the extent the amount received exceeded the sum of such stockholder’s share of IBM’s earnings and profits and such stockholder’s basis in its IBM common stock.
−Removed: If, as a result of any of our representations being untrue or our covenants being breached, the Spin-off were determined not to qualify for non-recognition of gain or loss under Section 355 and related provisions of the Code, we could be required to indemnify IBM for the resulting taxes and related expenses.
−Removed: Those amounts could be material.
−Removed: Any such indemnification obligation could adversely affect our business, financial condition and results of operations.
−Removed: In addition, if we or our stockholders engaged in transactions that resulted in a 50% or greater change by vote or value in the ownership of our stock during the four-year period beginning on the date that begins two years before the date of the Distribution, the Distribution would generally be taxable to IBM, but not to its stockholders, under Section 355(e) of the Code, unless it were established that such transactions and the Distribution were not part of a plan or series of related transactions.
−Removed: If the Distribution were taxable to IBM due to such a 50% or greater change in ownership of our stock, IBM would recognize a gain equal to the excess of the fair market value on the Distribution Date of our common stock distributed to IBM stockholders over IBM’s tax basis in our common stock, and we generally would be required to indemnify IBM for the tax on such gain and related expenses.
−Removed: Those amounts could be material.
−Removed: Any such indemnification obligation could adversely affect our business, financial condition and results of operations.
−Removed: We may experience difficulties as we continue to integrate and update our new enterprise resource planning (“ERP”) system, and we have identified deficiencies in our internal control related to the information technology general controls in our new ERP environment, which, if not remediated appropriately or timely, could result in adverse effects to the Company.
−Removed: During the fiscal year ended March 31, 2024, we implemented a new enterprise resource planning system (“ERP”), which replaced the financial and administrative systems that were provided by IBM following the Spin-off.
−Removed: As discussed in Part II, Item 9A, in the course of preparing this Annual Report on Form 10-K, management identified certain control deficiencies associated with the Company’s current year implementation of our ERP in the area of our information technology general control (“ITGCs”) related to (i) user access and segregation of duty controls that restrict
−Removed: user and privileged access to appropriate personnel;
−Removed: (ii) program development and change management controls;
−Removed: and (iii) certain computer operations controls that, when aggregated, are considered to be a material weakness, as that term is defined in the relevant standards.
−Removed: While the Company has found no evidence that the deficiencies gave rise to systems changes that were improper or impacted our financial statements for the fiscal year ended March 31, 2024, management is implementing remedial measures with additional controls and procedures to address the deficiencies.
−Removed: To the extent management is unable to remediate the identified issue timely, our ability to record, process and report financial information accurately, and to prepare financial statements within required time periods, could be adversely affected, which could subject us to litigation or investigations requiring management resources and other expenses, and could negatively affect investor confidence.
−Removed: As we continue to integrate and update our ERP, we may experience delays, increased costs, the diversion of management’s attention from day-to-day business operations and other difficulties.
−Removed: Extended delays could also introduce operational and business risk, including cybersecurity risks, business operations risks and other complications.
−Removed: We continue to face a number of risks related to our separation from IBM, which could adversely affect our business, results of operations and financial condition.
−Removed: In connection with the Separation, we and IBM entered into various transaction agreements related to the Spin-off.
−Removed: These agreements also govern our relationship with IBM following the Spin-off.
−Removed: We rely on IBM to satisfy its performance obligations under these agreements.
−Removed: Since the Spin-off, certain contractual disputes have arisen between us and IBM.
−Removed: We and IBM have commenced arbitration proceedings related to certain of these matters.
−Removed: If the outcome of those arbitrations is unfavorable to Kyndryl, if a mutually acceptable commercial resolution cannot be found, if the terms of any resolution of these matters are unfavorable to us, or if IBM is unable or unwilling to satisfy its respective obligations under these agreements, including indemnification obligations, our business, results of operations and financial condition could be adversely affected.
Risks Relating to Our Common Stock and the Securities Market
8 unchanged sentences
These and other provisions of our Amended and Restated Certificate of Incorporation, Amended and Restated By-Laws and Delaware law may discourage, delay or prevent certain types of transactions involving an actual or a threatened acquisition or change in control, including unsolicited takeover attempts, even though the transaction may offer our stockholders the opportunity to sell their shares of our common stock at a price above the prevailing market price.
−Removed: Our Board believes these provisions will protect our stockholders from coercive or otherwise unfair takeover tactics by requiring potential acquirers to negotiate with the Board and by providing the Board with more time to assess any acquisition proposal.
+Added: Our Board believes these provisions will protect our stockholders from coercive or otherwise unfair takeover
+Added: tactics by requiring potential acquirers to negotiate with the Board and by providing the Board with more time to assess any acquisition proposal.
These provisions will apply even if the offer may be considered beneficial by some stockholders and could delay or prevent an acquisition that the Board determines is not in our and our stockholders’ best interests.
9 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.