What changed in this filing

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Item 1A. Risk Factors

2022-03-02 compared with 2021-03-03 · 22 added, 21 removed, 297 unchanged (13% of the section changed)

6 unchanged sentences

The company’s business and financial performance, including collection of its accounts receivable, may be adversely affected by current and future economic conditions that may cause a decline in business and consumer spending, a reduction in the availability of credit and decreased growth of its existing customers, resulting in customers electing to delay the replacement of aging equipment.

Higher energy costs, rising interest rates, weakness in the residential construction, housing and home improvement markets, financial market volatility, recession and acts of terrorism may also adversely affect the company’s business and financial performance.

Higher energy costs, rising interest rates, weakness in the residential construction, housing and home improvement markets, financial market volatility, inflation, recession and acts of terrorism may also adversely affect the company’s business and financial performance.

Additionally, the company may experience difficulties in scaling its operations due to economic pressures in the U.S.

5 unchanged sentences

The transition period ended on December 31, 2020.

Although the U.K.

and the European Union have entered into a trade and cooperation agreement (the “TCA”), which came into full force on May 1, 2021, significant parts of the U.K.

economy are not addressed in detail by the TCA and a number of issues have been the subject of further bilateral negotiations since the beginning of 2021.

The potential future impact of Brexit remains unclear and could adversely impact certain areas of labor and trade in addition to creating further short-term uncertainty and currency volatility.

In the absence of a future trade deal, the U.K.’s trade with the European Union and the rest of the world would be subject to tariffs and duties set by the World Trade Organization.

Additionally, the movement of goods between the U.K.

and the remaining member states of the European Union will be subject to additional inspections and documentation checks, leading to possible delays at ports of entry and departure.

These changes to the trading relationship between the U.K.

and European Union would likely result in increased cost of goods imported into and exported from the U.K.

Changes to the trading relationship between the U.K.

and the European Union could result in increased cost of goods imported into and exported from the U.K.

and may decrease the profitability of the company's U.K.

15 unchanged sentences

Business and Operational Risks

The COVID-19 pandemic has, and likely will continue to, adversely impact and pose risks to the company, the nature and extent of which are highly uncertain and unpredictable.

The COVID-19 pandemic has adversely impacted, and likely will continue to, adversely impact and pose risks to the company, the nature and extent of which are highly uncertain and unpredictable.

The company is monitoring the global outbreak of the COVID-19 pandemic and taking steps to mitigate the risks posed by its spread, including working with its customers, employees, suppliers and other stakeholders.

The pandemic is adversely affecting, and is expected to continue to adversely affect, the company's financial results, condition and outlook.

The pandemic has adversely affected, and is expected to continue to adversely affect, the company's financial results, condition and outlook.

Certain elements of the company's business (including its supply chain, distribution systems, production levels and research and development activities) and operations have been negatively impacted due to significant portions of the company's workforce being unable to work effectively due to quarantines, government orders and guidance, facility closures, illness, travel restrictions, implementation of precautionary measures and other restrictions.

2 unchanged sentences

The pandemic has also increased the risk related to the company's ability to ensure business continuity during a potential disruption, including increased cybersecurity attacks related to the work-from-home environment.

Furthermore, the pandemic has impacted and may further impact the broader economies of affected countries, including negatively impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates and interest rates, all of which could continue to negatively impact the company.

Due to the speed with which the situation is developing, the global breadth of the pandemic's spread and the range of governmental and community reactions, there is uncertainty around the pandemic's ultimate impact and the timing of recovery.

Furthermore, the pandemic has impacted and may further impact the broader economies of affected countries, including adversely impacting economic growth, the proper functioning of financial and capital markets, foreign currency exchange rates, inflation and interest rates, all of which could continue to negatively impact the company.

Due to the global breadth of the pandemic's spread and the range of governmental and community reactions, there is uncertainty around the pandemic's ultimate impact and the timing of recovery, including as a result of the emergence of new COVID-19 variants, uncertainty regarding vaccine effectiveness on certain variants and vaccine availability.

Therefore, the pandemic could lead to an extended disruption of economic activity and the impact on the company's consolidated results of operations, financial position and cash flows could be material.

2 unchanged sentences

The company now has and may continue to have a significant amount of indebtedness.

At January 2, 2021, the company had $1,729.6 million of borrowings and $10.9 million in letters of credit outstanding.

At January 1, 2022, the company had $2.4 billion of borrowings and $2.7 million in letters of credit outstanding.

In August 2020, the company issued $747.5 million aggregate principal amount of 1.00% Convertible Senior Notes due 2025 (the "Convertible Notes"), which bear interest semi-annually in arrears and mature on September 1, 2025 unless they are redeemed, repurchased or converted prior to such date in accordance with their terms.

16 unchanged sentences

• make investments;

• make capital expenditures and enter into leases;

• acquire or dispose of assets.

• merge or consolidate;

• acquire, dispose of, or lease assets.

These restrictive covenants, among others, could negatively affect the company’s ability to finance its future capital needs, engage in other business activities or withstand a future downturn in the company’s business or the economy.

Under the company’s current credit agreement, the company is required to maintain certain specified financial ratios and meet financial tests, including certain ratios of leverage and interest coverage.

Under the company’s current credit agreement, the company is required to maintain certain specified financial ratios and meet financial tests, including certain ratios of secured leverage and interest coverage.

The company’s ability to comply with these requirements may be affected by matters beyond its control, and, as a result, there can be no assurance that the company will be able to meet these ratios and tests.

9 unchanged sentences

The capped call transactions expose the company to counterparty risk and may affect the value of the company's common stock.

In connection with the issuance of the Convertible Notes, the company entered into capped call transactions with certain financial institutions, referred to as the capped call counterparties.

In connection with the Convertible Notes, the company has entered into and may in the future enter into, capped call transactions with certain financial institutions, referred to as the capped call counterparties.

The capped call transactions are expected generally to reduce or offset the potential dilution upon conversion of the Convertible Notes and/or offset any cash payments the company is required to make in excess of the principal amount of the Convertible Notes, as the case may be, with such reduction and/or offset subject to a cap.

From time to time, the capped call counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivative transactions with respect to the company's common stock and/or purchasing or selling the company's common stock in secondary market transactions prior to the maturity of the Convertible Notes.

This activity could cause a decrease in the market price of the company's common stock.

Any such activity could cause a decrease in the market price of the company's common stock.

In addition, the capped call counterparties are financial institutions, and the company is subject to the risk that one or more of the capped call counterparties may default or otherwise fail to perform, or may exercise certain rights to terminate, their obligations under the capped call transactions.

58 unchanged sentences

A significant increase in the price of steel or any other commodity, due to tariffs or otherwise, would adversely affect the company’s operating results.

In addition, unanticipated delays in delivery of raw materials and component inventories by suppliers—including delays due to capacity constraints, labor disputes, impaired financial condition of suppliers, natural disasters, extreme weather patterns and climate change, pandemics or other events outside our control— may increase the company's production costs, cause delays in the shipment of products or impair the ability of the company to satisfy customer demand.

In addition, we have experienced disruptions to parts of our supply chain as a result of COVID-19.

Unanticipated delays in delivery of raw materials and component inventories by suppliers—including delays due to capacity constraints, labor disputes, impaired financial condition of suppliers, natural disasters, extreme weather patterns and climate change, pandemics or other events outside our control— may increase the company's production costs, cause delays in the shipment of products or impair the ability of the company to satisfy customer demand.

An interruption in or the cessation of an important supply by any third party and the company’s inability to make alternative arrangements in a timely manner, or at all, could have a material adverse effect on the company’s business, financial condition and operating results.

The company faces risks related to health epidemics and other widespread outbreaks of contagious disease, which could significantly disrupt its operations and impact its operating results.

The spread of COVID-19 and other contagious diseases, or other adverse public health developments, could have a material and adverse effect on our business operations.

These could include disruptions or restrictions on our ability to travel, as well as temporary closures of our facilities or the facilities of our suppliers or customers.

The spread of COVID-19 and other contagious diseases, or other adverse public health developments, has had, and will likely continue to have, a material and adverse effect on our business operations.

These effects have included and could continue to include disruptions or restrictions on our ability to travel, as well as temporary closures of our facilities or the facilities of our suppliers or customers.

Any disruption of our suppliers or customers would likely impact our sales and operating results.

66 unchanged sentences

• political, social, and economic instability and disruptions;

• labor unrests;

• labor unrests or shortages;

• potential for nationalization of enterprises;

75 unchanged sentences

Government mandates, standards or regulations intended to reduce greenhouse gas emissions or projected climate change impacts have resulted in, and are likely to continue resulting in, increased energy, manufacturing, transportation and raw material costs.

Governmental requirements directed at regulating greenhouse gas emissions could cause us to incur expenses that we cannot recover or that will require us to increase the price of products we sell to the point that it impacts demand for those products.

Governmental requirements directed at regulating greenhouse gas emissions could cause us to incur expenses that we cannot recover or that will require us to increase the price of products we sell, which could impact the demand for those products.

Unfavorable tax law changes and tax authority rulings may adversely affect financial results.

16 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.

What changed 10-K

Item 1A. Risk Factors