What changed in this filing

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Item 1A. Risk Factors

2022-02-23 compared with 2021-03-03 · 60 added, 53 removed, 363 unchanged (24% of the section changed)

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The risks described below highlight some of the factors that have affected, and in the future could affect, our operations.

Although the risks are organized by heading, and each risk is

described separately, many of the risks are interrelated.

Additional risks we do not yet know of, or that we currently think are immaterial, may also affect our operations.

You should not interpret the disclosure of any risk factor to imply that the risk has not

already materialized.

If any of the events or circumstances described in the following risks actually occurs, our business, financial condition, results of operations and cash flows could be affected and our stock price could decline.

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• changes in the demand for our services;

• schedule delays, equipment and materials availability and increasing insurance, equipment, labor and material costs related to the continued market disruption from the COVID-19 pandemic and regulatory slowdowns;

• the timing and integration of acquisitions and the magnitude of the related acquisition and integration costs;

• the loss of a major customer;

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• payment risk associated with the financial condition of our customers;

• increases in design and construction costs that we are unable to pass through to our customers;

• increases in design, construction and operating costs, due to inflation or other unforeseen causes, that we are unable to pass through to our customers;

• the termination or expiration of existing agreements;

• regional and general economic conditions and the condition of the financial markets;

• the inability to secure future sufficient funding to finance operations, fund growth or to provide the required financial resources certain large projects may require;

• losses experienced in our operations not otherwise covered by insurance;

• the timing and integration of acquisitions and the magnitude of the related acquisition and integration costs;

• costs we incur to support growth internally or otherwise;

• availability of qualified labor for specific projects;

• supply chain interruptions, including as a result of natural disasters, wildfires, weather, labor disputes, pandemic outbreak of disease, fire or explosions and power outages;

• liabilities associated with participation in joint ventures related to third party failures;

• the inability to secure sufficient funding to finance continuing operations, fund growth or to provide the required financial resources certain large projects may require;

• significant fluctuations in foreign currency exchange rates;

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• the availability of equipment;

• supply chain interruptions, including as a result of natural disasters, wildfires, weather, labor disputes, pandemic outbreak of disease, fire or explosions and power outages;

• impairment of goodwill or intangible assets;

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Our inability to successfully execute or integrate acquisitions or joint ventures may have an adverse impact on our growth strategy and business.

From time to time, our business strategy may include expanding our presence in the industries we serve through strategic acquisitions of companies or entry into joint ventures that complement or diversify our business.

The number of acquisition targets that meet our criteria may be limited.

From time to time, our business strategy includes expanding our presence in the industries we serve through strategic acquisitions of companies or entry into joint ventures that complement or diversify our business.

Future acquisition targets that meet our criteria may be limited.

We may also face competition for acquisition opportunities, and other potential acquirers may offer more favorable terms or have greater financial resources available for potential acquisitions.

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We may not realize the anticipated benefits and synergies of an acquisition, and our attempts at integrating an acquired business may not be successful.

Acquisitions or joint ventures may expose us to operational and financial challenges and risks, including the disruption of our ongoing business;

Acquisitions or joint ventures may expose us to operational and financial challenges and risks, including:

• the disruption of our ongoing business;

• significant diversion of resources and management’s attention from our existing business;

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Additionally, if any of our customers do not proceed with the completion of projects or default on their payment obligations, or if we encounter disputes with our customers with respect to the adequacy of billing support, we may face difficulties in collecting payment of amounts due to us for the costs previously incurred.

In some instances, these claims can be the subject of lengthy legal proceedings, and it is difficult to accurately predict when or if they will be fully

A failure to promptly recover on these types of claims could have a negative impact on our business, financial condition, results of operations and cash flows.

In some instances, these claims can be the subject of lengthy legal proceedings, and it is difficult to accurately predict when or if they will be fully resolved.

A failure to promptly recover on these types of claims in the future could have a negative impact on our business, financial condition, results of operations and cash flows.

Additionally, any such claims may harm our future relationships with our customers.

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These actions may seek, among other things, compensation for alleged personal injury, workers’ compensation, employment discrimination, sexual harassment, workplace misconduct and other employment-related damages, breach of contract, property damage, environmental liabilities, multiemployer pension plan withdrawal liabilities, punitive damages, consequential damages, and civil penalties or other losses or injunctive or declaratory relief.

In addition, we generally indemnify our customers for claims related to the services we provide and actions we take under our contracts, and, in some instances, we may be allocated risk through our contract terms for actions by our customers,

subcontractors or other third parties.

Because our services in certain instances may be integral to the operation and performance of our customers’ infrastructure, we have been and may become subject to lawsuits or claims for any failure of the systems that we work on, even if our services are not the cause of such failures, and we could be subject to civil and criminal liabilities to the extent that our services contributed to any property damage, personal injury or system failure.

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Business — Backlog” for a discussion on how we calculate backlog for our business.

Our insurance has limits and exclusions that may not fully indemnify us against certain claims or losses, including claims resulting from wildfires or other natural disasters, and the unavailability or cancellation of third party insurance coverages would increase our overall risk exposure and could disrupt our operations.

We maintain insurance coverages from third party insurers as part of our overall risk management strategy because some of our contracts require us to maintain specific insurance coverage limits.

Although we maintain insurance policies with respect to automobile liability, general liability, workers’ compensation, our employee group health program, and other types of coverages, these policies are subject to high deductibles, and we are self-insured up to the amount of those deductibles.

Our insurance has limits and exclusions that may not fully indemnify us against certain claims or losses, including claims resulting from wildfires or other natural disasters and an increase in cost, or the unavailability or cancellation of third-party insurance coverages would increase our overall risk exposure and may reduce our profitability.

We maintain insurance coverages from third party insurers as part of our overall risk management strategy and most of our customer contracts require us to maintain specific insurance coverage limits.

We maintain insurance policies with respect to automobile liability, general liability, employer’s liability, workers’ compensation, our employee group health program, and other types of coverages, but these policies are subject to high deductibles, and we are self-insured up to the amount of those deductibles.

Insurance losses are accrued based upon our estimates of the ultimate liability for claims reported and an estimate of claims incurred but not yet reported.

Insurance liabilities are difficult to assess and estimate due to unknown factors, including the severity of an injury, the determination of our liability in proportion to other parties, estimates of incidents not reported and the effectiveness of our safety programs, and as a result, our actual losses may exceed our estimates.

Therefore, there can be no assurance that our current or past insurance coverages will be sufficient or effective under all circumstances or against all claims and liabilities to which we may be subject.

Insurance liabilities are difficult to assess and estimate due to unknown factors, including the frequency and severity of injuries, the magnitude of damage to or loss of property or the environment, the determination of our liability in proportion to other parties, estimates of incidents not reported and the effectiveness of our safety programs, and as a result, our actual losses may exceed our estimates.

There can be no assurance that our current or past insurance coverages will be sufficient or effective under all circumstances or against all claims and liabilities to which we may be subject.

We generally renew our insurance policies on an annual basis;

therefore, deductibles and levels of insurance coverages may change in future periods.

There can be no assurance that any of our existing insurance coverages will be renewed upon the expiration of the coverage period or that future coverage will be affordable at the required limits.

In addition, insurers may fail, cancel our coverage, determine to exclude certain items from coverage, or otherwise be unable to provide us with adequate insurance coverage.

There can be no assurance that any of our existing insurance coverages will be renewed upon the expiration of the coverage period or that future coverage will be available at reasonable and competitive rates or at the required limits.

The cost of our insurance has significantly increased and may continue to increase in the future.

In addition, insurers may fail, cancel our coverage, increase the cost of coverage, determine to exclude certain items from coverage, or otherwise be unable to provide us with adequate insurance coverage.

We may not be able to obtain certain types of insurance or incremental levels of insurance in scope or amount sufficient to cover liabilities we may incur.

For example, due to the recent increase in wildfire losses and related insurance claims, insurers have reduced coverage availability and increased the cost of insurance coverage for such events in recent years, and our current levels of coverage may not be sufficient to cover potential losses.

If our risk exposure increases as a result of adverse changes in our insurance coverages, we could be subject to increased liabilities that could negatively affect our business, financial condition, results of operations and cash flow.

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Furthermore, we perform a significant amount of services for customers that operate electrical power infrastructure assets in locations and climates that are more susceptible to wildfires or other natural disasters.

In locations or environments where claims have been higher than normal, insurance may become difficult or impossible to obtain.

Our contracts may require us to indemnify our customers, project owners and others for injury, damage or loss arising out of our presence at our customers’ location, regardless of fault, or the performance of our work and provide for warranties for materials and workmanship.

In locations or environments where claims have become more frequent or severe in recent years, insurance may become difficult or impossible to obtain.

Our contracts may require us to indemnify our customers, project owners and other parties for injury, damage or loss arising out of our presence at our customers’ location, or in the performance of our work, in both cases regardless of fault, and provide for warranties for materials and workmanship.

We may also be required to name the customer and others as an additional insured under our insurance policies.

We maintain limited insurance coverage against these and other risks associated with our business.

This insurance may not protect us against liability for certain events, including events involving pollution, professional liability, losses resulting from business interruption or acts of terrorism or damages from breach of contract by us.

We cannot guarantee that our insurance will be adequate in risk coverage or policy limits to cover all losses or liabilities that we may incur.

This insurance may not protect us against liability for certain events, and we cannot guarantee that our insurance will be adequate in risk coverage or policy limits to cover all losses or liabilities that we may incur.

Any future damages caused by our services that are not covered by insurance or are in excess of policy limits could have a material adverse effect on our business, financial position, results of operations and cash flows.

Risks associated with operating in the Canadian market could restrict our ability to expand and harm our business and prospects.

There are numerous inherent risks in conducting our business in a different country including, but not limited to, potential instability in markets, political, economic or social conditions, and difficult or additional legal and regulatory requirements applicable to our operations.

Limits on our ability to repatriate earnings, exchange controls, and complex U.S.

and Canadian laws and treaties including laws related to the U.S.

Foreign Corrupt Practices Act (“FCPA”) and similar laws could also adversely impact our operations.

Changes in the value of the Canadian dollar could increase or decrease the U.S.

dollar value of our profits earned or assets held in Canada or potentially limit our ability to reinvest earnings from our operations in Canada to fund the financing requirements of our operations in the United States.

These risks could restrict our ability to provide services to Canadian customers or to operate our Canadian business profitably, and could negatively impact our results.

We also are exposed to currency risks relating to the translation of certain monetary transactions, assets and liabilities.

Changes in tax laws or our interpretations of tax laws could materially impact our income tax liabilities.

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An uninsured or underinsured claim could have an adverse impact on our business, financial condition, results of operations and cash flows.

Risks associated with operating in the Canadian market could restrict our ability to expand and harm our business and prospects.

Limits on our ability to repatriate earnings, exchange controls, and complex U.S.

and Canadian laws and treaties including laws related to the U.S.

Foreign Corrupt Practices Act (“FCPA”) and similar laws could also adversely impact our operations.

Changes in the value of the Canadian dollar could increase or decrease the U.S.

These risks could restrict our ability to provide services to Canadian customers or to operate our Canadian business profitably, and could negatively impact our results.

We also are exposed to currency risks relating to the translation of certain monetary transactions, assets and liabilities.

Health outbreaks such as the COVID-19 pandemic may have an adverse impact on our business, employees, liquidity, financial condition, results of operations and cash flows.

While the ongoing COVID-19 pandemic has disrupted global supply chains and created significant volatility and disruption of financial markets, we have continued to operate without substantial interruption, as most of our operations are considered essential.

However, future changes to our business, implementation of required, health and safety protocols and other potential impacts from the COVID-19 pandemic or other future health outbreaks could result in higher operating costs and could adversely impact our business, including certain operational, reporting, accounting or other processes.

In addition, an extended period of remote work arrangements could impair our ability to effectively manage our business, and introduce additional operational risks, including but not limited to cybersecurity risks and increased vulnerability to security breaches, cyber-attacks, computer viruses, ransomware, or other similar events and intrusions.

As our response to the COVID-19 pandemic continues to evolve, we are unable to predict the ultimate impact at this time and the pandemic could adversely affect, our business, financial condition, results of operations and cash flows.

Such effects may be material and the potential impacts include, but are not limited to:

• disruptions in our supply chain due to transportation delays, travel restrictions, raw material cost increases and shortages, and closures of businesses or facilities;

• reductions in our operating effectiveness due to workforce disruptions resulting from “shelter-in-place” and “stay-at-home” orders, and the unavailability of key personnel necessary to conduct our business activities;

• volatility in the global financial markets, which could have a negative impact on our ability to access capital and additional sources of financing in the future.

As the situation surrounding COVID-19 continues to remains fluid, and given its inherent uncertainty, the pandemic may have an adverse impact on our business.

Should health outbreaks or the ongoing COVID-19 pandemic conditions worsen or persist for a prolonged period, any of the above factors and others that are currently unknown, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, we cannot predict the future impact that the COVID-19 pandemic will have on our customers and suppliers, and any adverse impacts on these parties may have a material adverse impact on our business.

Third Party Partner Risks

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Successful completion of our contracts may depend on whether our subcontractors successfully fulfill their contractual obligations.

If our subcontractors fail to perform their contractual obligations as a result of financial or other difficulties, or if our

subcontractors fail to meet the expected completion dates or quality standards, we may be required to incur additional costs or provide additional services in order to make up such shortfall and we may suffer damage to our reputation.

If our subcontractors fail to perform their contractual obligations as a result of financial or other difficulties, or if our subcontractors fail to meet the expected completion dates or quality standards, we may be required to incur additional costs or provide additional services in order to make up such shortfall and we may suffer damage to our reputation.

Our participation in joint ventures and other projects with third parties may expose us to liability for failures of our partners.

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• quality issues requiring rework.

An increase in the prices of certain materials and commodities used in our business could adversely affect our business.

An increase in the prices or availability of certain materials and commodities used in our business could adversely affect our business.

For certain contracts, we are exposed to market risk of increases in certain commodity prices of materials, such as copper and steel, which are used as components of supplies or materials utilized in all of our operations.

We are also exposed to the availability of these materials which have been impacted by the supply-chain disruption from the COVID-19 pandemic and regulatory slowdowns.

In addition, our customers’ capital budgets may be impacted by the prices of certain materials, and reduced customer spending could lead to fewer project awards and more competition.

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trade relationships with other countries or the imposition of tariffs.

We are also exposed to increases in energy prices, particularly as they relate to gasoline prices for our fleet vehicles.

We are also exposed to increases in energy prices, particularly as they relate to fuel prices for our fleet vehicles.

While we believe we can increase our prices to adjust for some price increases in commodities, there can be no assurance that price increases of commodities, if they were to occur, would be recoverable.

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Current or future market conditions, including losses incurred in the construction industry or as a result of large corporate bankruptcies, as well as changes in our sureties’ assessment of our operating and financial risk, could cause our surety providers and lenders to decline to issue or renew, or substantially reduce the amount of, bid or performance bonds for our work and could increase our costs associated with collateral.

actions could be taken on short notice.

These actions could be taken on short notice.

If our surety providers or lenders were to limit or eliminate our access to bonding, letters of credit or guarantees, our alternatives would include seeking capacity from other sureties and lenders, finding more business that does not require bonds or allows for other forms of collateral for project performance, such as cash.

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If we were to experience an interruption or reduction in the availability of bonding capacity as a result of these or any other reasons, we may be unable to compete for or work on certain projects that would require bonding.

COVID-19 Risks

COVID-19 may have an adverse impact on our business, employees, liquidity, financial condition, results of operations and cash flows.

In response to the COVID-19 pandemic and related mitigation measures, we implemented changes in our business in an effort to protect our employees and customers, and to support appropriate health and safety protocols, including implementing remote, alternative and flexible work arrangements, where possible.

In the future these changes and other impacts from COVID-19 could result in higher operating costs and could adversely impact our business, including certain operational, reporting, accounting or other processes.

As our response to the pandemic continues to evolve, we may incur additional costs and could experience adverse impacts to our business, each of which may be significant.

We have focused on controlling our costs and capital expenditures to preserve our ability to continue to fund our operations and may need to take additional actions to reduce spending in the future.

Although we are unable to predict the ultimate impact of the COVID-19 pandemic at this time, the pandemic could adversely affect, our business, financial condition, results of operations and cash flows.

Such effects may be material and the potential impacts include, but are not limited to:

• disruptions in our supply chain due to transportation delays, travel restrictions, raw material cost increases and shortages, and closures of businesses or facilities;

• volatility in the global financial markets, which could have a negative impact on our ability to access capital and additional sources of financing in the future.

The situation surrounding COVID-19 remains fluid, and given its inherent uncertainty, the pandemic may have an adverse impact on our business in the near term.

Should these conditions persist for a prolonged period, the COVID-19 pandemic, including any of the above factors and others that are currently unknown, may have a material adverse effect on our business, financial condition, results of operations and cash flows.

In addition, we cannot predict the impact that COVID-19 will have on our customers and suppliers, and any adverse impacts on these parties may have a material adverse impact on our business.

Employee Risks

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The failure of these systems to operate effectively or problems with transitioning to upgraded or replacement systems could cause delays and reduce the efficiency of our operations, which could have a material adverse effect on our business, financial position, results of operations and cash flows, and significant costs could be incurred to remediate any problem.

In addition, the risk of cyber-based attacks is heightened with many of our employees working and accessing our technology infrastructure remotely as a result of the COVID-19 pandemic.

Increased IT security threats and more sophisticated computer crimes, including advanced persistent threats, computer viruses, ransomware, other types of malicious code, hacking, phishing and social engineering schemes designed to provide access to our networks or data, pose a potential risk to the security of our IT systems, networks and services, as well as the confidentiality, availability and integrity of our data.

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This could also impact the cost and availability of cyber insurance to us.

Additionally, due to recent increases in cyber losses by the insurance industry, cyber insurance coverage may be limited and/or subject to a significant increase in cost.

Furthermore, our relationships with, and access provided to, third parties and their vendors may create difficulties in anticipating and implementing adequate preventative measures or mitigating harms after an attack or breach occurs.

If an actual or perceived breach of our security occurs, the public perception of the effectiveness of our security measures could be harmed and we could lose customers.

Any of these disruptions or breaches of security would have a material adverse effect on our business, financial position, results of operations and cash flows.

During the normal course of business, we have experienced and expect to continue to experience attempts to compromise our information and communications technology and related systems.

To date, no cybersecurity incident or attack has had a material impact on our business or results of operations.

If a material, actual or perceived breach of our security occurs, the public perception of the effectiveness of our security measures could be harmed and we could lose customers.

Any such material disruptions or breaches of security would have a material adverse effect on our business, financial position, results of operations and cash flows.

In addition, current and future laws and regulations governing data privacy and the unauthorized disclosure of confidential information may pose complex compliance challenges and/or result in additional costs.

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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