What changed in this filing

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Item 1A. Risk Factors

2026-02-17 compared with 2025-02-19 · 67 added, 84 removed, 237 unchanged (39% of the section changed)

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Unplanned events may interrupt our manufacturing operations, which may adversely affect our business.

The manufacturing of our products is subject to unplanned events such as explosions, fires, inclement weather, natural disasters, accidents, equipment failures, labor disruptions, transportation interruptions, supply interruptions, public health issues (including pandemics and quarantines), riots, civil insurrection or social unrest, looting, protests, strikes, and street demonstrations.

The manufacturing of our products is subject to unplanned events such as explosions, fires, inclement weather, natural disasters, accidents, equipment failures, or labor disruptions that may be caused by, among other factors, changes in immigration policy, transportation interruptions, supply interruptions, public health issues (including pandemics and quarantines), riots, civil insurrection or social unrest, looting, protests, strikes, and street demonstrations.

During the year ended December 31, 2025, fire interruptions reduced production by less than 1%, but future fire or other operational interruptions could significantly curtail the production capacity of a facility for a period of time.

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There may be labor unrest or disputes, including strikes and work stoppages, among workers at various transportation providers and in industries affecting the transportation industry, including those that are unionized, like the railroad industry.

If any of our third-party transportation providers were to fail to deliver the goods we manufacture or distribute in a timely manner, including as a result of the impacts arising from global pandemics or worsening economic conditions, we may be unable to sell those products at full value or at all.

Similarly, if any of these providers were to fail to deliver raw materials to us in a timely manner, we may be unable to manufacture our products in response to customer demand.

If any of our third-party transportation providers were to fail to deliver the goods we manufacture or distribute in a timely manner, or fail to deliver raw materials to us in a timely manner, it could impact our ability to manufacture and deliver our products, or to sell those products at full value or at all.

In addition, if any of these third parties were to cease operations or cease doing business with us, we may be unable to replace them at a reasonable cost.

Any failure of a third-party transportation provider to deliver raw materials or finished products in a timely manner could harm our reputation, impact our ability to manufacture and deliver our products, negatively affect our customer relationships and have a material adverse effect on our financial condition and results of operations.

In addition, an increase in transportation rates and oil and/or fuel surcharges could materially and adversely affect financial results, including profitability.

Further, an increase in transportation rates and oil and/or fuel surcharges could materially and adversely affect financial results, including profitability.

Our reliance on third-party wholesale distribution channels could impact our business.

We offer our products directly and through a variety of third-party wholesale distributors and dealers.

Adverse changes in the financial or business condition of these wholesale distributors and dealers or our customers, including as a result of the impacts arising from global pandemics, geopolitical conflicts, supply chain disruptions, or inflation, could subject us to losses and affect our ability to bring our products to market.

Adverse changes in the financial or business condition of these wholesale distributors and dealers or our customers, including as a result of the impacts arising from tariffs, geopolitical conflicts, supply chain disruptions, or inflation, could subject us to losses and affect our ability to bring our products to market.

One or more of our customers may experience financial difficulty, file for bankruptcy protection, or go out of business as a result of general market conditions or various other events, which could result in an increase in customer financial difficulties that affect us.

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Cybersecurity risks related to the technology used in our operations and other business processes, as well as security breaches of Company, customer, consumer, employee, or vendor information, could adversely affect our business.

We rely on various information technology systems to capture, process, store, and report data and interact with customers, consumers, vendors, and employees.

We rely on various information technology systems to capture, process, store, and report data and interact with customers, consumers, employees, and vendors.

Despite careful security and controls design, implementation, updating, and internal and independent third-party assessments, our information technology systems, and those of our third-party providers, could become subject to security breaches, cyber-attacks, ransomware attacks, employee misconduct, computer viruses, unauthorized access attempts, phishing, social engineering, misplaced or lost data, programming and/or human errors or other similar events.

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While we have security measures in place that are designed to protect customer and other sensitive information and the integrity of our information technology systems and prevent data loss and other security breaches, our security measures or those of our third-party service providers may not be sufficiently broad in scope to protect all relevant information, may not function as planned, or may be breached as a result of third-party action, employee or vendor error, malfeasance, or otherwise.

While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured.

Because the techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently or may be designed to remain dormant until a predetermined triggering event and often are not recognized until launched against a target, we may be unable to anticipate these techniques or implement sufficient control measures to defend against these techniques.

The rapid evolution and increased adoption of generative artificial intelligence (AI) is further increasing risks in this area, including by making fraud detection more difficult, particularly with detection devices that use voice recognition or authentication.

The rapid evolution and increased adoption of generative artificial intelligence (AI) is further increasing risks in this area, including by making cyberattacks more difficult to detect, contain or mitigate and making fraud detection more difficult, particularly with detection devices that use voice recognition or authentication.

Once a security incident is identified, we may be unable to fully remediate or otherwise respond to such an incident in a timely manner, which may cause us to incur remediation or other costs or subject us to demands to pay a ransom fee.

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the potential inadvertent or unauthorized release of our confidential or proprietary information resulting from the use (whether or not authorized) of AI or machine learning tools by our employees, contractors, agents, representatives, vendors or customers;

the potential loss of our intellectual property rights or our potential infringement of the intellectual property rights of third parties resulting from the use (whether or not authorized) of AI or machine learning tools in our operations;

and potential legal or reputational harms due to insufficient or flawed data, insufficient quality control, or unlawful bias or discrimination associated with the use of AI or machine learning tools.

the potential loss of our intellectual property or our potential infringement of the intellectual property rights of third parties resulting from the use (whether or not authorized) of AI or machine learning tools in our operations;

and potential legal or reputational harms due to insufficient or flawed data, inaccurate or misleading outputs, insufficient quality control, or unlawful bias or discrimination associated with the use of AI or machine learning tools.

In addition, the AI tools we may incorporate into certain aspects of our operations may not generate the intended efficiencies and may impact our business results.

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Steps taken by the U.S.

government to apply new, or increase existing, tariffs on certain products and materials imported into the United States could potentially disrupt our existing supply chains and impose additional costs on our business, including costs with respect to raw materials upon which our business depends.

Additionally, potential retaliatory tariffs imposed by other countries in response to U.S.

government to apply new, or increase existing, tariffs on certain products and materials imported into the U.S.

could potentially disrupt our existing supply chains and have imposed, and could continue to impose, additional costs on our business, including costs with respect to raw materials upon which our business depends.

Additionally, potential tariffs imposed by other countries in response to U.S.

trade policies could adversely affect our ability to export products from the United States to key international markets, leading to decreased sales and profitability.

Such retaliatory tariffs could also increase the cost of certain components and materials that we import into the United States, further straining our supply chain and impacting our overall financial performance.

Such retaliatory tariffs could also increase the cost of certain components and materials that we import into the U.S., further straining our supply chain and impacting our overall financial performance.

Our international operations and sourcing of materials could be harmed by a variety of factors, including:

• recessionary trends in international markets;

• legal and regulatory changes and the burdens and costs of our compliance with a variety of laws, including but not limited to export controls, import and customs trade restrictions, tariffs (including tariffs applicable to goods imported into the United States from China, Mexico, Canada, Colombia, or other countries), and regulations related to public health matters;

• increases in transportation costs or transportation delays;

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If any of these or other factors were to render the conduct of our business in a particular country undesirable or impractical, our business, financial condition, or results of operations could be materially adversely affected.

In 2025, the U.S.

government announced significant changes to U.S.

trade policy, including the implementation or planned imposition of new or increased tariffs and trade barriers on a broad range of goods imported from international markets, as well as the potential modification or termination of existing trade agreements between the U.S.

and certain other countries.

In response, certain countries have imposed, or are considering, retaliatory tariffs on U.S.

Changing trade policy in the U.S.

and other countries could continue to increase the cost of certain raw materials or components that are critical to our manufacturing process, which could have a material negative impact on our manufacturing costs and our overall financial performance.

For the year ended December 31, 2025, we incurred $8 million in expenses related to new or increased tariffs.

While we do not consider the impact on our 2025 financial results to be material, and impact from increased tariffs are not currently expected to be material in 2026, given the rapid changes and growing uncertainty relating to the global tariff landscape, the potential impact of these factors on our future operational and financial performance is uncertain and our sales and our competitive position within the U.S.

market and in markets outside the U.S.

could be negatively impacted.

We may pursue acquisitions, divestitures, joint ventures, capital investments and other corporate strategic transactions from time to time.

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These and other risks associated with corporate strategic transactions we may pursue may be unpredictable and beyond our control and could have a material adverse impact on our financial position, reputation, operating results and cash flows.

The impact of new ongoing or escalated military and geopolitical conflicts and tensions, including the conflict between Russia and Ukraine and the conflict in Israel and the surrounding areas, on the global economy, energy supplies and raw materials may prove to negatively impact our business and operations.

The global economy has been negatively impacted by the ongoing military conflict between Russia and Ukraine.

Furthermore, governments in the United States and several European and Asian countries have imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia.

Although we have no operations in Russia or Ukraine, we have experienced shortages in materials and increased costs for transportation, energy, and raw material due in part to the negative impact of the Russia-Ukraine military conflict on the global economy.

The scope and duration of the military conflict in Ukraine is uncertain and hard to predict.

Further escalation of geopolitical tensions related to the military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business and supply chain.

The impact of new ongoing or escalated military and geopolitical conflicts and tensions on the global economy, energy supplies and raw materials may prove to negatively impact our business and operations.

Our business could be negatively affected by the impact of new or ongoing military or geopolitical conflicts on international markets and the global economy.

The impact of the ongoing conflict in Israel and surrounding areas and/or escalation thereof and the tensions between the United States and China and between China and Taiwan could include increased volatility in financial and commodity markets, increased energy prices, increased maritime shipping costs, supply chain disruptions, a higher level of general market and macroeconomic instability, and violent protests or political or social unrest in areas outside the immediate conflict area, among other things.

The impact of ongoing conflicts and/or escalation thereof could include increased volatility in financial and commodity markets, increased energy prices, increased maritime shipping costs, supply chain disruptions, a higher level of general market and macroeconomic instability, increased cyber attacks and violent protests or political or social unrest in areas outside the immediate conflict area, among other things.

These conflicts and tensions and other military or geopolitical conflicts or tensions that may arise in the future could materially adversely affect our operations, financial position, and results.

Our business, financial condition, and results of operations have been, and may again be, adversely affected by global pandemics or other health emergencies.

The extent to which global pandemics and/or other health emergencies would impact our business, financial condition, cash flows, and results of operations in the future is uncertain and will depend on numerous evolving factors beyond our control.

Global pandemics and/or other health emergencies may have a material adverse effect on our business or our supply of raw materials, production, distribution channels, and customers, including business shutdowns or disruptions for an indefinite period of time, reduced operations, labor shortages and disruptions, restrictions on manufacturing or shipping products or reduced consumer demand.

We are subject to physical, operational, transitional, and financial risks associated with climate change and global, regional, and local weather conditions, and with legal, regulatory, and market responses to climate change.

There has been an increased focus, including from investors, the general public and U.S.

and foreign governmental and nongovernmental authorities, regarding environmental, social, and governance (ESG) matters, including with respect to climate change, greenhouse gas emissions, packaging and waste, sustainable supply chain practices, deforestation, and land, energy, and water use.

Evolving opinions from these groups with respect to ESG matters may impact reporting requirements with respect to ESG metrics, expectations that such metrics will be voluntarily disclosed by companies such as ours, and opinions as to whether we should make commitments, set targets, or establish goals, and take action to meet them.

While we have voluntarily provided certain disclosures with respect to various ESG matters, including climate change, we cannot predict whether such disclosures will be considered satisfactory by our stakeholders or relevant governmental or nongovernmental authorities.

Additionally, we cannot predict the extent to which a change in monitoring, assessing, or reporting of ESG matters may impact our operations, financial conditions and results.

There has been an evolving focus, including from investors, the general public, and U.S.

and foreign governmental and nongovernmental authorities, regarding sustainability matters, including with respect to climate change, greenhouse gas emissions, packaging and waste, sustainable supply chain practices, deforestation, and land, energy, and water use.

We cannot predict whether our disclosures or performance will be considered satisfactory or the extent to which a change in monitoring, assessing, or reporting of sustainability may impact our operations, financing condition, and results.

The unpredictability and frequency of natural disasters such as hurricanes, earthquakes, hailstorms, wildfires, snow, ice storms, the spread of disease, and insect infestations could affect the supply of raw materials or cause variations in their costs, or variations in transportation-related costs.

In addition, global climate change may increase the frequency or intensity of extreme weather events, such as storms, floods, heat waves, and other events that could affect our facilities and demand for our products.

Governmental regulations or restrictions intended to reduce greenhouse gas emissions and other climate change impacts are emerging and present potential transition risks.

Increased restrictions and regulations could increase operating costs and compliance costs or require expenditures on additional technology, all of which could adversely affect our results of operation.

In particular, the State of California passed the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act which could impose broad climate-related disclosure obligations on certain companies doing business in California, including us, starting in 2026.

Additionally, the State of California recently passed the Voluntary Carbon Market Disclosures Business Regulation Act, which mandates certain disclosures in connection with claims regarding greenhouse gas emissions.

Such disclosure obligations may apply to us.

The SEC has also recently enacted climate change disclosures that have been voluntarily stayed pending litigation, and, if ultimately implemented, could significantly increase compliance burdens, associated regulatory costs, and complexity.

We believe that we are in compliance in all material respects with existing climate-related regulations and such compliance has not had a material impact on our business;

however, the costs of complying with increased regulations and transitioning to a lower-carbon economy may result in expenses that could materially impact our business.

Given the rapidly changing nature of environmental laws and regulations, we cannot predict the impact such restrictions may have on our operations.

Our suppliers and the third parties we rely on for transportation may also be impacted by increased ESG reporting requirements or risks associated with the transition to a lower carbon economy, which may adversely impact their ability to provide us with goods and services.

If our suppliers or the third parties we rely on for transportation are unable to comply with environmental laws and regulations, we may be unable to meet consumer demands at the same cost or in a timely fashion.

Our reputation may be adversely affected if we are not able to achieve our ESG priorities or otherwise meet the expectations of our stakeholders with respect to ESG matters.

Our suppliers and the third parties we rely on for transportation may also be impacted by evolving sustainability reporting requirements or risks associated with the transition to a lower carbon economy, which may adversely impact their ability to provide us with goods and services and we may be unable to meet consumer demands at the same cost or in a timely fashion.

Our reputation may be adversely affected if we are not able to achieve our sustainability and corporate responsibility priorities or otherwise meet the expectations of our stakeholders with respect to these matters.

We strive to deliver shared value through our business.

Our diverse group of stakeholders hold us accountable to ensure we continue to demonstrate progress with respect to industry-specific ESG priorities.

From time to time, we announce certain aspirations and priorities relevant to ESG matters.

We periodically publish information about our ESG priorities, strategies, and progress on our corporate website and in public filings.

Achievement of these priorities and strategies is subject to risks and uncertainties, many of which are outside of our control, and it is possible that we may not achieve all our ESG priorities or certain of our stakeholders might not be satisfied with our efforts regarding ESG matters.

Certain challenges we face in meeting our ESG priorities are also captured within our voluntary sustainability report contained on our website, which is not incorporated by reference into and does not form any part of this annual report on Form 10-K or our other filings with the SEC.

Perceived failures or delays in meeting our ESG priorities could adversely affect public perception of our business, employee morale or customer or stakeholder support, and may negatively impact our financial condition and results of operations.

From time to time, we announce certain aspirations and priorities relevant to these matters and publish information about our sustainability and corporate responsibility priorities, strategies, and progress on our corporate website, our sustainability report and in public filings (none of which are incorporated by reference into and do not form any part of this annual report on Form 10-K or our other filings with the SEC unless expressly incorporated by reference).

Achievement of these priorities and strategies is subject to risks and uncertainties, many of which are outside of our control, and it is possible that we may not achieve all our priorities or certain of our stakeholders might not be satisfied with our efforts regarding these matters.

Perceived failures or delays in meeting our sustainability and corporate responsibility priorities could adversely affect public perception of our business, employee morale or customer or stakeholder support, and may negatively impact our financial condition and results of operations.

Stakeholder expectations regarding sustainability practices are diverse, rapidly changing, and may impact reporting requirements, voluntary disclosures, and the setting of goals and commitments.

Developing, sharing and acting on sustainability initiatives, and collecting, measuring, and reporting related data, can be costly, difficult, and time-consuming.

Any failure or perceived failure by us in this regard could adversely impact our business and reputation.

INDUSTRY RISK FACTORS

Our business primarily relies on North American new home construction and repair, which are impacted by risks associated with fluctuations in the housing market.

Our business primarily relies on North American new home construction and repair and remodeling, which are impacted by risks associated with fluctuations in the housing market.

Downward changes in the general economy, the housing market, or other business conditions could adversely affect our results of operations, cash flows, and financial condition.

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Adverse changes in any of these conditions generally, or in any of the markets where we operate, could decrease demand for our products and could adversely impact our businesses by:

causing consumers to delay or decrease homeownership;

making consumers more price-conscious, resulting in a shift in demand to smaller homes;

causing consumers to delay or decrease homeownership or relocation;

making consumers more price-conscious, resulting in a shift in demand to smaller or less expensive homes;

making consumers more reluctant to make investments in their existing homes;

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We have a high degree of product concentration in OSB, which is subject to commodity pricing and associated price volatility.

OSB accounted for about 43% of our North American net sales in each of 2024 and 2023, and 57% in 2022.

OSB accounted for about 33% of our North American net sales in 2025 and 43% in each of 2024 and 2023.

We expect OSB sales to continue to account for a substantial portion of our revenues and profits in the future.

The concentration of our business in the OSB market further increases our sensitivity to commodity pricing and price volatility.

The concentration of our business in the OSB market increases our sensitivity to commodity pricing and price volatility.

Historical prices for our commodity products have been volatile, and we, like other participants in the building products industry, have limited influence over the timing and extent of price changes for our commodity products.

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Our results of operations may be adversely affected by potential shortages of raw materials and increases in raw material costs .

We purchase various raw materials, including, among others, wood, wood-based, and resin products, which are subject to price fluctuations that could materially increase our manufacturing costs.

Further, some of our suppliers have consolidated and other suppliers may do so in the future.

Combined with increased demand, such consolidation could increase the price of our supplies and raw materials.

The most significant raw material used in our operations is wood fiber.

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OSB product prices are largely driven by the ratio of overall OSB demand to industry capacity.

Therefore, we are unable to determine to what extent, if any, we will be able to pass any future OSB raw material cost increases through to our customers through product price increases.

Our inability to pass increased costs through to our customers could have a material adverse effect on our financial condition, results of operations, and cash flows.

In addition, supply disruptions in resin or wood fiber may impact our ability to produce our products or may cause production costs to increase.

We are unable to determine to what extent, if any, we will be able to pass any future OSB raw material cost increases through to our customers through product price increases.

Furthermore, supply disruptions in resin or wood fiber may impact our ability to produce our products or may cause production costs to increase.

Our inability or unwillingness to pass increased costs through to our customers could have a material adverse effect on our financial condition, results of operations, and cash flows.

Development of Canadian provincial forest lands, from which we obtain wood fiber, can be subject to constitutionally protected Indigenous treaty, Aboriginal title, or Aboriginal rights of recognized Indigenous groups in Canada.

Most lands in British Columbia and Quebec are not covered by treaties or by resolved Aboriginal land claims, and as a result, the claims of these Indigenous groups relating to provincial forest lands are largely left unresolved.

In areas where there are treaties, such as in Manitoba, where LP operates, provincial governments are required by law to consult with Indigenous nations regarding land use development projects including, forest management plans and operations.

Provincial governments are required by law to consult with Indigenous nations regarding land use development projects, including forest management plans and operations permits.

Canadian provincial governments are actively engaged in consultations or negotiations with Indigenous groups.

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or foreign authorities could also have an adverse impact on our reputation, business, financial condition, and results of operations.

Regulatory and statutory changes applicable to us or our customers, including changes in effective tax rates or tax law, could adversely affect our financial condition and results of operations.

Regulatory and statutory changes applicable to us or our customers, including changes in tax law or effective tax rates, could adversely affect our financial condition and results of operations.

We, and many of our customers, are subject to various national, state and local laws, rules, and regulations .

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There can be no assurance that the outcomes from these examinations will not have a material adverse effect on our business, financial condition, and results of operations, or that our provision for income taxes will be sufficient.

We are also exposed to changes in tax law, as well as any future regulations issued and changes in interpretations of tax laws, which can impact our current and future years' tax provisions.

For example, Canada, Brazil and various other countries have enacted or committed to enacting substantial changes to numerous long-standing tax principles impacting how large multinational enterprises are taxed in an effort to limit perceived base erosion and profit shifting incentives.

In particular, the Organization for Economic Cooperation and Development (OECD) has developed an Inclusive Framework on Base Erosion and Profit Shifting, including Pillar Two model rules applicable to large multinational corporations which would establish a global per-country minimum tax of 15%.

While the United States has not enacted legislation to adopt Pillar Two and it is uncertain if it will do so in the future, certain countries in which we operate have enacted such legislation.

Specifically, the Canadian government enacted legislation in 2024 implementing aspects of the OECD’s minimum tax rules effective in the 2024 fiscal year and released draft legislation proposed to implement further aspects effective for the 2025 fiscal year.

In addition, in 2024, the Brazilian National Congress approved legislation implementing a tax measure to take effect in the 2025 fiscal year that is largely aligned with certain aspects of the OECD’s minimum tax rules under the Pillar Two framework.

No other jurisdictions in which LP operates have enacted Pillar Two legislation at this time.

At this time, we do not expect Pillar Two legislation to have a material impact on our effective tax rate or our consolidated results of operations, financial position, or cash flows.

The Company will continue to monitor future developments to determine any potential impact in the countries in which it operates.

We are also exposed to changes in tax laws, as well as any future regulations issued and changes in interpretations of tax laws, which can impact our current and future years' tax provisions.

We monitor tax legislation changes on a global basis, including changes arising as a result of the Organization for Economic Cooperation and Development’s multi-jurisdictional plan of action to address base erosion and profit shifting, commonly referred to as the Pillar Two Inclusive Framework and the 2025 One Big Beautiful Bill Act (“The Tax Act”) with effective dates of enacted provisions ranging from 2025 through 2027.

Both Pillar Two and The Tax Act are discussed further in "Note 6, Income Taxes" of the Notes to the Consolidated Financial Statements included in Item 8 of this annual report on Form 10-K.

The effect of any other tax law changes or regulations and interpretations, as well as any additional tax legislation in the U.S.

or other jurisdictions in which we operate, could have a material adverse effect on our business, financial condition, and results of operations.

In addition, our products and markets are subject to extensive and complex local, state, federal, and foreign statutes, ordinances, rules, and regulations.

In addition, our products and markets are subject to extensive and complex federal, local, state, and foreign statutes, ordinances, rules, and regulations.

These mandates, including building design and safety and construction standards and zoning requirements, affect the cost, selection, and quality requirements of building components, such as the structural panel and siding products that we manufacture and sell, and often provide broad discretion to governmental authorities as to the types and quality specifications of products used in new home construction and repair and remodeling projects.

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Covenants and events of default in our debt instruments could limit our ability to undertake certain types of transactions and adversely affect our liquidity.

Our Credit Agreement (as defined below) and the indenture governing our 2029 Senior Notes (as defined below) contain a number of restrictive covenants that impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interests, including, among others, restrictions on our ability to incur indebtedness, grant liens to secure indebtedness, engage in sale and leaseback transactions, and merge or consolidate or sell all or substantially all of our assets.

In addition, restrictive covenants in our Credit Agreement require us to maintain specified financial ratios and satisfy other financial condition tests.

Our Amended Credit Agreement (as defined below) and the indenture governing the 2029 Senior Notes (as defined below) contain a number of restrictive covenants that impose operating and financial restrictions on us and may limit our ability to engage in acts that may be in our long-term best interests, including, among others, restrictions on our ability to incur indebtedness, grant liens to secure indebtedness, engage in sale and leaseback transactions, and merge or consolidate or sell all or substantially all of our assets.

In addition, restrictive covenants in our Amended Credit Agreement require us to maintain specified financial ratios and satisfy other financial condition tests.

Our ability to meet those financial ratios and tests can be affected by events beyond our control, and we may be unable to meet them.

A breach of the covenants or restrictions under our Credit Agreement or under the indenture governing our 2029 Senior Notes could result in an event of default under the applicable indebtedness.

A breach of the covenants or restrictions under our Amended Credit Agreement or under the indenture governing the 2029 Senior Notes could result in an event of default under the applicable indebtedness.

Such a default may allow our creditors to accelerate the related debt.

A payment default or an acceleration following an event of default under our Credit Agreement or our indenture governing our 2029 Senior Notes could trigger an event of default under the other indebtedness obligation, as well as any other debt to which a cross-acceleration or cross-default provision applies, which could result in the principal of and the accrued and unpaid interest on all such debt becoming due and payable ahead of schedule.

In addition, an event of default under our Credit Agreement could permit the lenders under our Amended Credit Facility (as defined below) to terminate all commitments to extend further credit under that facility.

A payment default or an acceleration following an event of default under our Amended Credit Agreement or our indenture governing the 2029 Senior Notes could trigger an event of default under the other indebtedness obligation, as well as any other debt to which a cross-acceleration or cross-default provision applies, which could result in the principal of and the accrued and unpaid interest on all such debt becoming due and payable ahead of schedule.

In addition, an event of default under our Amended Credit Agreement could permit the lenders under our Amended Credit Facility (as defined below) to terminate all commitments to extend further credit under that facility.

Furthermore, if we were unable to repay any amounts due and payable under our Amended Credit Facility, those lenders could proceed against the collateral granted to them to secure that indebtedness, to the extent any such collateral is granted thereunder.

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In addition, our financial results, our level of indebtedness, and our credit ratings could adversely affect the availability and terms of any additional or replacement financing.

More detailed descriptions of our Credit Agreement and the indenture governing our 2029 Senior Notes are included in filings made by us with the SEC, along with the documents themselves, copies of which are filed as exhibits to this annual report on Form 10-K and which provide the full text of these covenants.

Changes in interest rates may adversely affect our earnings and cash flows.

Pursuant to the Amended Credit Facility effective in November 2022, our senior indebtedness transitioned from bearing interest at a variable interest rate using a London Interbank Offered Rate (LIBOR) benchmark to one that uses a Term SOFR Rate, a forward-looking term rate currently published by CME Group Benchmark Administration Limited based upon the Secured Overnight Financing Rate (SOFR) as a benchmark rate.

SOFR is the preferred alternative rate for LIBOR that has been identified by the Alternative Reference Rates Committee, a U.S.-based group convened by the Federal Reserve and the Federal Reserve Bank of New York.

SOFR is calculated based on short-term repurchase agreements, backed by U.S.

Treasury securities.

SOFR is calculated differently from LIBOR and has certain inherent differences from LIBOR, which could give rise to uncertainties, including the limited historical data and volatility in the benchmark rates.

Because of these and other differences, there is no assurance that SOFR will perform in the same way as LIBOR would have performed at any time, and there is no guarantee that it is a comparable substitute for LIBOR.

Uncertainty as to the nature of such potential changes, alternative reference rates, including SOFR, or other reforms may adversely affect the trading market for LIBOR- or SOFR-based securities, including ours.

As a result, our interest expense may increase, our ability to refinance some or all of our existing indebtedness may be affected, and our available cash flow may be adversely affected.

More detailed descriptions of our Amended Credit Agreement and the indenture governing the 2029 Senior Notes are included in filings made by us with the SEC, along with the documents themselves, copies of which are filed as exhibits to this annual report on Form 10-K and which provide the full text of these covenants.

We are subject to interest rate risk under our Amended Credit Facility.

Borrowings under our Amended Credit Facility are at variable rates of interest based on (a) a “base rate” plus a margin of 0.500% to 1.500% or (b) Adjusted Term SOFR (i.e., Term SOFR Rate plus an adjustment of 0.10%), which is based upon the Secured Overnight Financing Rate (SOFR), plus a margin of 1.500% to 2.500%, and therefore expose us to interest rate risk.

The “base rate” is the highest of (i) the Federal funds rate plus 0.5%, (ii) the U.S.

prime rate, and (iii) one-month Adjusted Term SOFR plus 1.0%.

Our cash, cash equivalents and investments could be adversely affected if the financial institutions in which we hold our cash, cash equivalents and investments fail.

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These risks include but are not limited to the following, in addition to the other risks described above:

• changes in general and global economic conditions, including impacts from rising inflation, supply chain disruptions, new, ongoing, or escalated geopolitical or military conflicts or tensions including the conflict between Russia and Ukraine, the conflict in Israel and the surrounding areas, tensions between the United States and China and tensions between China and Taiwan, and global pandemics and/or health emergencies;

• changes in general and global economic conditions, including impacts from rising inflation, supply chain disruptions, new, ongoing, or escalated geopolitical or military conflicts or tensions;

• compliance with a wide variety of health and safety laws and regulations and changes to such laws and regulations;

• the exertion of influence over us, individually or collectively, by a few entities with concentrated ownership of our stock;

• new or modified legislation related to health care, data privacy, climate change or cybersecurity;

• new or modified legislation related to health care, data privacy, AI, climate change or cybersecurity;

• compliance with Section 404 of the Sarbanes-Oxley Act of 2002, including the potential impact of compliance failures;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors