1 unchanged sentence
Our business, financial condition, operating results and cash flows may be impacted by a number of factors.
−Removed: In addition to the factors affecting our business identified elsewhere in this Report, the most significant factors affecting our operations include the following:
+Added: In addition to the factors affecting our business identified elsewhere in this Report, the material risk factors affecting our operations include the following:
+Added: Risks Related to Our Business
• Our industry is cyclical and a decline in the production levels of our major customers, particularly with respect to models for which we are a significant supplier, or the financial distress of one or more of our major customers could adversely affect our financial performance.
2 unchanged sentences
Automotive sales and production can also be affected by the age of the vehicle fleet and related scrappage rates, labor relations issues, fuel prices, regulatory requirements, government initiatives, trade agreements, tariffs and other non-tariff trade barriers, the availability and cost of credit, the availability of critical components needed to complete the production of vehicles, restructuring actions of our customers and suppliers, facility closures and increased competition, as well as consumer preferences regarding vehicle size, configuration and features, including alternative fuel vehicles, changing consumer attitudes toward vehicle ownership and usage, such as ride sharing and on-demand transportation, and other factors.
−Removed: Due to the overall global economic conditions in 2019, the automotive industry experienced a decline in global customer sales and production volumes.
+Added: Due to the overall global economic conditions in 2020, largely as a result of the COVID-19 pandemic, the automotive industry experienced a decline in global customer sales and production volumes.
In 2020, global vehicle production decreased 17% as compared to 2019.
In Asia, vehicle production decreased 12%, including 5% in China and 23% in India.
−Removed: Vehicle production also decreased 4% in both North America and Europe and Africa.
+Added: Vehicle production also decreased 20% and 22% in North America and Europe and Africa, respectively.
As a result, we have experienced and may continue to experience reductions in orders from our customers in certain regions.
2 unchanged sentences
We may not be successful in such diversification.
+Added: • Pandemics or disease outbreaks, such as COVID-19, have disrupted, and may continue to disrupt, our business, which could adversely affect our financial performanc e.
+Added: Pandemics or disease outbreaks, such as COVID-19, have disrupted, and may continue to disrupt, the global economy.
+Added: The COVID-19 pandemic led to a dramatic reduction in economic activity worldwide.
+Added: International, federal, state and local public health and governmental authorities have taken and may continue to take extraordinary actions to contain and combat the outbreak and spread of COVID-19 throughout most regions of the world, including travel bans, quarantines, "stay-at-home" orders and similar mandates that have caused many individuals to substantially restrict their daily activities and many businesses to curtail or cease normal operations.
+Added: The automotive industry was particularly negatively impacted by the situation with a sudden and sharp decline in consumer demand and automotive manufacturers suspending or severely limiting automobile production globally during portions of 2020.
+Added: In 2020, we experienced, and we may continue to experience, reductions in orders from our customers globally, which in turn adversely affected, and may continue to affect, our financial performance.
+Added: This reduction in orders may be further exacerbated by a continued global economic downturn resulting from the pandemic, which could decrease consumer demand for vehicles or result in the financial distress of one or more of our customers or suppliers.
+Added: As described in more detail under "Our industry is cyclical and a decline in the production levels of our major customers, particularly with respect to models for which we are a significant supplier, or the financial distress of one or more of our major customers could adversely affect our financial performance" above and "Adverse developments affecting or the financial distress of one or more of our suppliers could adversely affect our financial performance" below, decreases in consumer demand for automotive vehicles, declines in the production levels of our major customers, financial distress of one or more of our major customers or suppliers or other adverse developments affecting one or more of our suppliers, could adversely affect our financial performance.
+Added: In addition, if COVID-19 were to affect a significant amount of the workforce employed or operating at our facilities, we could experience delays or the inability to produce and deliver products to our customers on a timely basis.
+Added: Unprecedented industry disruptions related to the COVID-19 pandemic impacted operations in every region of the world.
+Added: As described in more detail under "Our substantial international operations make us vulnerable to risks associated with doing business in foreign countries" below, our substantial international operations make us vulnerable to risks associated with doing business in foreign countries.
+Added: While all of our global manufacturing plants have resumed production, we may experience unexpected delays or obstacles, such as higher employee absenteeism, supply chain disruptions or government mandates, that may hamper our ability to operate our facilities.
+Added: Further, we may not be able to operate at optimal levels of efficiency given new work rules and procedures implemented to protect our employees.
+Added: The suspension of production at our manufacturing facilities, or difficulties or inefficiencies in production, would likely adversely impact our future results of operations, financial condition and liquidity, and that impact may be material.
+Added: During the COVID-19 pandemic, our reliance on internet technology has increased due to the number of employees working remotely.
+Added: This reliance has resulted in increased cybersecurity risks, including the risk that we fail to appropriately maintain the security of the data we hold.
+Added: See "A disruption in our information technology systems, or those of our customers or suppliers, including a disruption related to cybersecurity, could adversely affect our financial performance" below.
+Added: As described in more detail under "Our existing indebtedness and the inability to access capital markets could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance" below, the volatility created by COVID-19 could adversely affect our access to the debt and capital markets.
+Added: In addition, our ability to continue implementing important strategic initiatives and capital expenditures may be reduced as we devote time and other resources to responding to the impacts of the COVID-19 pandemic.
+Added: COVID-19 continues to spread in most regions of the world and the extent to which our financial performance will be adversely affected will depend on future developments, which are highly uncertain and cannot be predicted, including, but not limited to, the duration and spread of the pandemic, its severity, the effectiveness of actions to vaccinate populations, contain the virus or treat its impact and how quickly and to what extent normal economic and operating conditions can resume.
+Added: Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts on our business and financial performance as a result of its global economic impact, including a recession that has occurred or may occur in the future, which will likely result in lower demand for new vehicles for a period of time, as new vehicle sales are typically correlated with positive consumer confidence and low unemployment.
+Added: The COVID-19 pandemic may also exacerbate other risks disclosed herein, including, but not limited to, our competitiveness, demand for our products and shifting consumer preferences.
• The loss of business with respect to, or the lack of commercial success of, a vehicle model for which we are a significant supplier could adversely affect our financial performance.
51 unchanged sentences
In addition, the automotive industry has attracted, and will continue to attract, non-traditional entrants as a result of the evolving nature of the automotive vehicle market, including autonomous vehicles, ride sharing and on-demand transportation.
−Removed: Further, the global automotive industry is experiencing a period of significant technological change, including a focus on environmentally sustainable products.
−Removed: As a result, the success of portions of our business requires us to develop, acquire and/or incorporate new technologies.
+Added: Further, the global automotive industry is experiencing a period of significant technological change, including a focus on environmentally sustainable vehicles and subcomponents.
+Added: As a result, the success of portions of our business requires us to develop, acquire and/or incorporate new technologies and depends not only on our customers' ability to execute their strategies to exploit these technologies but also on the adoption of such technologies by end consumers.
Such technologies are subject to rapid obsolescence.
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Operating a joint venture requires us to operate the business pursuant to the terms of the agreement that we entered into with our partners, including additional organizational formalities, as well as to share information and decision making.
−Removed: Additional risks associated with joint ventures include one or more partners failing to satisfy contractual obligations, conflicts arising between us and any of our partners, a change in the ownership of any of our partners and less of an ability to control compliance with applicable rules and regulations, including the Foreign Corrupt Practices Act and
−Removed: related rules and regulations.
+Added: Additional risks associated with joint ventures include one or more partners failing to satisfy contractual obligations, conflicts arising between us and any of our partners, a change in the ownership of any of our partners and less of an ability to control compliance with applicable rules and regulations, including the Foreign Corrupt Practices Act and related rules and regulations.
Additionally, our ability to sell our interest in a joint venture may be subject to contractual and other limitations.
7 unchanged sentences
Our inability to effectively manage the timing, quality and costs of these new program launches could adversely affect our financial condition, operating results and cash flows.
−Removed: Our existing indebtedness and the inability to access capital markets could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance.
−Removed: As of December 31, 2019 , we had approximately $2.3 billion of outstanding indebtedness, as well as $1.75 billion available for borrowing under our revolving credit facility.
−Removed: As of December 31, 2019 , there were no amounts outstanding under our revolving credit facility.
−Removed: The debt instruments governing our indebtedness contain covenants that may restrict our business activities or our ability to execute our strategic objectives, and our failure to comply with these covenants could result in a default under our indebtedness.
−Removed: We also lease certain buildings and equipment under non-cancelable lease agreements with terms exceeding one year, which are accounted for as operating leases.
−Removed: Additionally, any downgrade in the ratings that rating agencies assign to us and our debt may ultimately impact our access to capital markets.
−Removed: Our inability to generate sufficient cash flow to satisfy our debt and lease obligations, to refinance our debt obligations or to access capital markets on commercially reasonable terms could adversely affect our financial condition, operating results and cash flows.
−Removed: Changes affecting the availability of the London Inter-bank Offered Rate ("LIBOR") may have consequences for us that cannot yet be reasonably predicted.
−Removed: We have outstanding debt with variable interest rates based on LIBOR.
−Removed: Advances under our revolving credit facility and our term loan facility generally bear interest based on (i) the Eurocurrency Rate (as defined in our credit agreement and calculated using LIBOR) or (ii) the ABR (as defined in our credit agreement).
−Removed: The LIBOR benchmark has been the subject of national, international and other regulatory guidance and proposals to reform.
−Removed: In July 2017, the United Kingdom Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021.
−Removed: These reforms may cause LIBOR to perform differently than it has in the past, and LIBOR may ultimately cease to exist after 2021.
−Removed: Alternative benchmark rates may replace LIBOR and could affect our debt securities, debt payments and receipts.
−Removed: At this time, it is not possible to predict the effect of any changes to LIBOR, any phase out of LIBOR or any establishment of alternative benchmark rates.
−Removed: Any new benchmark rate will likely not replicate LIBOR exactly, which could impact our contracts that terminate after 2021.
−Removed: There is uncertainty about how applicable law and the courts will address the replacement of LIBOR with alternative rates on variable rate retail loan contracts and other contracts that do not include alternative rate fallback provisions.
−Removed: If LIBOR ceases to exist after 2021, the interest rates on our revolving credit facility and our term loan facility will be based on the ABR, which may result in higher interest rates.
−Removed: In addition, any changes to benchmark rates may have an uncertain impact on our cost of funds and our access to the capital markets, which could impact our results of operations and cash flows.
−Removed: Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our securities.
• Significant changes in discount rates, the actual return on pension assets and other factors could adversely affect our financial performance.
4 unchanged sentences
Although pension expense and pension contributions are not directly related, the key economic indicators that affect pension expense also affect the amount of cash that we will contribute to our pension plans.
−Removed: Because interest rates and the values of these pension assets
−Removed: have fluctuated and will continue to fluctuate in response to changing market conditions, pension and other postretirement benefit expense in subsequent periods, the funded status of our pension plans and the future minimum required pension contributions, if any, could adversely affect our financial condition, operating results and cash flows.
+Added: Because interest rates and the values of these pension assets have fluctuated and will continue to fluctuate in response to changing market conditions, pension and other postretirement benefit expense in subsequent periods, the funded status of our pension plans and the future minimum required pension contributions, if any, could adversely affect our financial condition, operating results and cash flows.
• Impairment charges relating to our goodwill and long-lived assets could adversely affect our financial performance.
9 unchanged sentences
Our financial performance depends, in part, on our ability to successfully execute our strategic objectives.
−Removed: Our objectives are to deliver superior long-term stockholder value by investing in our business to grow and improve our competitive position, while maintaining a strong and flexible balance sheet and returning cash to our stockholders.
+Added: Our objectives are to deliver superior long-term stockholder value by investing in innovation to drive business growth and profitability, while maintaining a strong balance sheet and returning excess cash to our stockholders.
Various factors, including the industry environment and the other matters described herein and in Part II — Item 7, "Management’s Discussion and Analysis of Financial Condition and Results of Operations," including "— Forward-Looking Statements," could adversely affect our ability to execute our strategic objectives.
2 unchanged sentences
Moreover, there can be no assurances that, even if implemented, our strategic objectives will be successful.
+Added: Risks Related to Our Indebtedness
+Added: • Our existing indebtedness and the inability to access capital markets could restrict our business activities or our ability to execute our strategic objectives or adversely affect our financial performance.
+Added: As of December 31, 2020, we had approximately $2.3 billion of outstanding indebtedness, as well as $1.75 billion available for borrowing under our revolving credit facility.
+Added: As of December 31, 2020, there were no amounts outstanding under our revolving credit facility.
+Added: The debt instruments governing our indebtedness contain covenants that may restrict our business activities or our ability to execute our strategic objectives, and our failure to comply with these covenants could result in a default under our indebtedness.
+Added: We also lease certain buildings and equipment under non-cancelable lease agreements with terms exceeding one year, which are accounted for as operating leases.
+Added: Additionally, any downgrade in the ratings that rating agencies assign to us and our debt may ultimately impact our access to capital markets.
+Added: Our inability to generate sufficient cash flow to satisfy our debt and lease obligations, to refinance our debt obligations or to access capital markets on commercially reasonable terms could adversely affect our financial condition, operating results and cash flows.
+Added: • Changes affecting the availability of the London Inter-bank Offered Rate ( " LIBOR " ) may have consequences for us that cannot yet be reasonably predicted.
+Added: We have outstanding debt with variable interest rates based on LIBOR.
+Added: Advances under our revolving credit facility and our term loan facility generally bear interest based on (i) the Eurocurrency Rate (as defined in our credit agreement and calculated using LIBOR) or (ii) the ABR (as defined in our credit agreement).
+Added: The LIBOR benchmark has been the subject of national, international and other regulatory guidance and proposals to reform.
+Added: In July 2017, the United Kingdom Financial Conduct Authority (the authority that regulates LIBOR) announced that it intends to stop compelling banks to submit rates for the calculation of LIBOR after 2021.
+Added: These reforms may cause LIBOR to perform differently than it has in the past, and LIBOR may ultimately cease to exist after 2021.
+Added: Alternative benchmark rates may replace LIBOR and could affect our debt securities, debt payments and receipts.
+Added: At this time, it is not possible to predict the effect of any changes to LIBOR, any phase out of LIBOR or any establishment of alternative benchmark rates.
+Added: Any new benchmark rate will likely not replicate LIBOR exactly, which could impact our contracts that terminate after 2021.
+Added: There is uncertainty about how applicable law and the courts will address the replacement of LIBOR with alternative rates on variable rate retail loan contracts and other contracts that do not include alternative rate fallback provisions.
+Added: If LIBOR ceases to exist after 2021, the interest rates on our revolving credit facility and our term loan facility will be based on the ABR, which may result in higher interest rates.
+Added: In addition, any changes to benchmark rates may have an uncertain impact on our cost of funds and our access to the capital markets, which could impact our results of operations and cash flows.
+Added: Uncertainty as to the nature of such potential changes may also adversely affect the trading market for our securities.
+Added: Legal and Regulatory Risks
• A disruption in our information technology systems, or those of our customers or suppliers, including a disruption related to cybersecurity, could adversely affect our financial performance.
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Moreover, because the techniques used to gain access to or sabotage systems often are not recognized until launched against a target, we may be unable to anticipate the methods necessary to defend against these types of attacks, and we cannot predict the extent, frequency or impact these attacks may have on us.
−Removed: To the extent that our business is interrupted, including the vehicle systems and components that we supply to our customers or our plant operations, or data is lost, destroyed or inappropriately used or disclosed, such disruptions could adversely affect our competitive position, relationships with our customers, financial condition, operating results and cash
−Removed: flows and/or subject us to regulatory actions, including those contemplated by data privacy laws and regulations like the European Union General Data Privacy Regulation and California Consumer Privacy Act, or litigation.
+Added: To the extent that our business is interrupted, including the vehicle systems and components that we supply to our customers or our plant operations, or data is lost, destroyed or inappropriately used or disclosed, such disruptions could adversely affect our competitive position, relationships with our customers, financial condition, operating results and cash flows and/or subject us to regulatory actions, including those contemplated by data privacy laws and regulations like the European Union General Data Privacy Regulation and California Consumer Privacy Act, or litigation.
In addition, we may be required to incur significant costs to protect against the damage caused by these disruptions or security breaches in the future.
We are also dependent on security measures that some of our customers, suppliers and other third-party service providers take to protect their own systems and infrastructures.
−Removed: Any security breach of any of these third-parties' systems could result in unauthorized access to our or our customers’ or suppliers' sensitive data or our own information technology systems, cause us to be non-compliant with applicable laws or regulations, subject us to legal claims or proceedings, disrupt our operations, damage our reputation or cause a loss of confidence in our products or services, any of which could adversely affect our financial performance.
+Added: Any security breach of any of these third-parties' systems could result in unauthorized access to our or our customers’ or suppliers' sensitive data or our own information technology systems, cause us to be non-compliant with applicable laws or regulations, subject us to legal claims or proceedings, disrupt our
+Added: operations, damage our reputation or cause a loss of confidence in our products or services, any of which could adversely affect our financial performance.
• A significant product liability lawsuit, warranty claim or product recall involving us or one of our major customers could adversely affect our financial performance.
15 unchanged sentences
• We are subject to regulation of our international operations that could adversely affect our financial performance.
−Removed: We are subject to many laws governing our international operations, including those that prohibit improper payments to government officials and restrict where we can do business and what information or products we can supply to certain countries, including but not limited to the Foreign Corrupt Practices Act and the U.S.
+Added: We are subject to many laws governing our international operations, such as those that pertain to data privacy, prohibit improper payments to government officials and restrict where we can do business and what information or products we can supply to or purchase from certain countries or third parties, including but not limited to the Foreign Corrupt Practices Act and the U.S.
Export Administration Act.
−Removed: Violations of these laws, which are complex and often difficult to interpret and apply, could result in significant criminal penalties or sanctions that could adversely affect our business, financial condition, operating results and cash flows.
+Added: Violations of these laws, which are complex, may conflict with laws of other jurisdictions and often are difficult to interpret and apply, could result in significant fines, criminal penalties or sanctions that could adversely affect our reputation, business, financial condition, operating results and cash flows.
• We are required to comply with environmental laws and regulations that could cause us to incur significant costs.
−Removed: Our manufacturing facilities are subject to numerous laws and regulations designed to protect the environment, and we expect that additional requirements with respect to environmental matters will be imposed on us in the future.
+Added: Our manufacturing facilities are subject to numerous laws and regulations designed to protect the environment, and we expect that additional requirements with respect to environmental matters will be imposed on us and our customers in the future.
Material future expenditures may be necessary if compliance standards change or material unknown conditions that require remediation are discovered.
8 unchanged sentences
As a result of changes to U.S.
−Removed: administrative policy, among other possible changes, there may be (i) changes to existing trade agreements;
−Removed: (ii) greater restrictions on free trade generally;
−Removed: and (iii) significant increases in tariffs on goods imported into the United States.
−Removed: The United States, Mexico and Canada signed the United States-Mexico-Canada Agreement ("USMCA"), the successor agreement to the North American Free Trade Agreement ("NAFTA").
−Removed: It is expected that the USMCA will become effective by January 1, 2021.
−Removed: On January 15, 2020, the United States signed the "Phase 1" trade agreement with China.
−Removed: It remains unclear what the U.S.
−Removed: administration or foreign governments, including China, will or will not do with respect to tariffs, the USMCA or other international trade agreements and policies.
+Added: administrative policy, among other possible changes, there may be (i) changes in policies pertaining to the environment;
+Added: (ii) changes to existing trade agreements;
+Added: (iii) greater restrictions on free trade generally;
+Added: and (iv) significant increases in customs duties and tariffs on goods imported into the United States.
+Added: The United States, Mexico and Canada signed a new trade agreement, the United States-Mexico-Canada Agreement ("USMCA"), which serves as the successor agreement to the North American Free Trade Agreement ("NAFTA").
+Added: The USMCA became effective on July 1, 2020.
+Added: There can be no assurance that the ongoing transition from NAFTA to USMCA will not adversely affect our business.
+Added: The United States still maintains significant tariffs on most imports from China.
+Added: It remains unclear what specific actions the new U.S.
+Added: administration may take to resolve trade-related issues with China and other countries.
A trade war, other governmental action related to tariffs or international trade agreements, changes in U.S.
1 unchanged sentence
• Changes in the United Kingdom's economic and other relationships with the European Union could adversely affect us.
−Removed: On January 31, 2020, the United Kingdom formally withdrew from the European Union.
−Removed: Pursuant to the Withdrawal Agreement Bill, the United Kingdom will remain in the European Union's free market and customs union until December 31, 2020.
−Removed: On January 1, 2021, the United Kingdom will withdraw from the free market and customs union, and trade between the European Union and the United Kingdom will be subject to border controls.
−Removed: During the transition, the parties will negotiate a free trade agreement to manage future trade in goods and services.
−Removed: However, it is possible that an agreement will not be reached within the transition period, and there remains significant uncertainty about the terms of the future trade relationship between the European Union and the United Kingdom.
+Added: In December 2020, the United Kingdom finalized a free trade agreement with the European Union, the EU-UK Trade and Cooperation Agreement ("TCA"), to manage future bilateral trade and formally completed its withdrawal from the European Union.
+Added: Thus, effective January 1, 2021, trade between the European Union and the United Kingdom is now subject to border controls and imported goods must meet bilateral content rules as set out in the TCA to qualify for duty-free trade.
We have significant operations in both the European Union and the United Kingdom.
1 unchanged sentence
Our supply chain and that of our customers are highly integrated across the European Union and the United Kingdom, and we are highly dependent on the free flow of goods in those regions.
−Removed: The ongoing uncertainty and imposition of border controls on trade between the European Union and the United Kingdom could negatively impact our competitive position, supplier and customer relationships and financial performance.
−Removed: The ultimate effects of the United Kingdom's withdrawal from the European Union on us will depend on the specific terms of any agreement the European Union and the United Kingdom reach to provide future access to each other’s respective markets.
+Added: We have implemented procedures to manage our supply chains with the new border controls and to comply with the TCA’s bilateral content rules.
+Added: However, there can be no assurance that the new border controls and content rules will not adversely impact our competitive position, supplier and customer relationships and financial performance.
ITEM 1B – UNRESOLVED STAFF COMMENTS
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.