What changed in this filing

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Item 1A. Risk Factors

2023-02-23 compared with 2022-02-24 · 104 added, 76 removed, 190 unchanged (49% of the section changed)

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These economic, seasonal and industry downturns have been characterized by diminished product demand, excess manufacturing capacity and, in some cases, lower average selling prices.

Therefore, any significant downturn in our customers’ businesses or in global economic conditions could result in a reduction in demand for our products and could adversely affect our results of operations or financial condition.

Therefore, any significant downturn in our customers’ businesses, industry conditions, or in global economic conditions could result in a reduction in demand for our products and could adversely affect our results of operations or financial condition.

Although a majority of our sales are within North America, a large part of our financial performance is dependent upon a healthy economy beyond North America because we have a significant amount of sales abroad and our customers sell their products abroad.

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The demand for our products and our customers’ products is directly affected by such fluctuations.

In addition, our customers could decide to move some or all of their production to locations that are more remote from our facilities, and this could reduce demand for our products.

We cannot assure you that events having an adverse effect on the industries in which we operate will not occur or continue, such as a downturn in the European, Asian Pacific, particularly Chinese, Latin American, or other world economies, increases in interest rates, unfavorable currency fluctuations or prolonged effects of the 2019 Novel Coronavirus (COVID-19) pandemic.

Economic conditions in other regions of the world, predominantly Asia and Europe, can adversely impact the balance between global supply and demand for our chemical products and increase the amount of products produced and made available for export to North America.

In addition, our customers could decide to move some or all of their production to locations that are more remote from our facilities, and this could reduce demand for our

Any significant increased product supply could put downward pressure on our product pricing, negatively impacting our profitability.

Pricing Pressure—Our profitability could be reduced by declines in average selling prices of our products, particularly chlorine and chlorine derivatives and caustic soda.

Pricing Pressure—Our profitability could be reduced by declines in average selling prices of our products.

Our industries and each of our business segments experience fluctuating supply and demand, particularly in our Chlor Alkali Products and Vinyls segment, which can result in changes in selling prices.

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Nevertheless, we cannot assure you that increased pricing pressure will not impact our operating results in the future during these periods.

Another factor influencing demand and pricing for chemical products is the price of natural gas.

Higher natural gas prices increase our customers’ and competitors’ manufacturing costs, and depending on the ratio of crude oil to natural gas prices, could make our customers less competitive in world markets.

Another factor influencing demand and pricing for chemical products is the price of energy.

In the chemical industries in which we operate, price is one of the major supplier selection criterion.

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If our efforts are not successful and a substantial imbalance occurred, we might need to take actions that could have a material adverse impact on our business, results of operations and financial condition.

We cannot assure you that pricing or profitability in the future will be comparable to any particular historical period, including the most recent period shown in our operating results.

We cannot assure you that the chemical industry will not

experience adverse trends in the future, or that our business, financial condition, and results of operations will not be adversely affected by them.

Our Epoxy segment is also subject to changes in operating results as a result of pricing pressures.

Selling prices of epoxy materials are affected by changes in raw material costs, including energy, propylene and benzene, customer demand, and global fluctuations in supply and demand.

Periods of supply/demand imbalances, particularly changes in trade flows within Asia Pacific markets, particularly China, can result in increased pricing pressure on our epoxy products.

Declines in average selling prices of products of our Epoxy segment could adversely affect our business, financial condition, and results of operations.

Our Winchester segment is also subject to pricing pressures.

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Declines in average selling prices of products of our Winchester segment could adversely affect our business, financial condition, and results of operations.

Change in Operating Model—Our operating results could be negatively impacted if we do not successfully execute our operating model in our chemicals businesses.

In late 2020, we adopted a strategic operating model in our chemicals businesses that prioritizes ECU margins over sales volume.

This model represents a change to our Chlor Alkali Products and Vinyls and Epoxy businesses.

We cannot assure you that pricing or profitability in the future will be comparable to any particular historical period, including the most recent period shown in our operating results.

We cannot assure you that the chemical industry or ammunition industry will not experience adverse trends in the future, or that our business, financial condition, and results of operations will not be adversely affected by them.

Strategic Operating Model—Our operating results could be negatively impacted if we do not successfully execute our operating model in our chemicals businesses.

Our strategic operating model in our chemicals businesses prioritizes ECU margins over sales volume.

Adopted in late 2020, this model represents a change to how our Chlor Alkali Products and Vinyls and Epoxy businesses traditionally operated over the years.

To mitigate exposure and maximize value from the entire ECU, the model necessitates managing production rates to the weaker side of the ECU.

The execution of the model may not be successful.

The execution of the model may not be successful over time.

For example, we may not be able to consistently achieve higher margins or the margin improvement achieved might be more than offset by the impact from lower sales volumes, either of which could have a material adverse effect on our operating results and cash flows.

In addition, we take actions from time to time designed to complement our operating model, such as purchase for re-sale transactions (which we sometimes refer to as “parlaying activities”) that may not improve our operating results and could adversely impact our business if these activities are not successfully implemented.

In addition, we take actions from time to time designed to complement our operating model, such as purchase for re-sale transactions

(which we sometimes refer to as “parlaying activities”) that may not improve our operating results and could adversely impact our business if these activities are not successfully implemented.

Some of our assets were designed to operate at consistently high operating rates.

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Certain of our facilities are dependent on feedstocks, services, and related infrastructure provided by third parties, which are provided pursuant to long-term contracts.

Any failure of those third parties to perform their obligations under those agreements or disagreements regarding the performance under those agreements could adversely affect the operation of the affected facilities and our business, financial condition and results of operations, or result in diversion of management’s attention or our resources from other business matters.

Any failure of those third parties to perform their obligations under those agreements or disagreements regarding the performance under those agreements or inability to renew such agreements at acceptable terms could adversely affect the operation of the affected facilities and our business, financial condition and results of operations, or result in diversion of management’s attention or our resources from other business matters.

If we are required to obtain an alternate source for these feedstocks or services, we may not be able to obtain equally favorable pricing and terms.

Additionally, we may be forced to pay additional transportation costs or to invest in capital projects for pipelines or alternate facilities to accommodate railcar or other delivery methods or to replace other services.

A vendor may choose, subject to existing contracts, to modify its relationship due to general economic concerns or concerns relating to the vendor or us, at any time.

A vendor may choose, subject to existing contracts, to modify its relationship with us due to general economic concerns or concerns relating to the vendor or us, at any time.

Any significant change in the terms that we have with our key suppliers could materially and adversely affect our business, financial condition and results of operations, as could significant additional requirements from suppliers that we provide them additional security in the form of prepayments or posting letters of credit.

Production Hazards—Our facilities are subject to operating hazards, which may disrupt our business.

We are dependent upon the continued safe and reliable operation of our production facilities.

Our production facilities are subject to hazards associated with the manufacture, handling, storage and transportation of chemical materials and products and ammunition, including leaks and ruptures, explosions, fires, inclement weather and natural disasters, unexpected utility disruptions or outages, unscheduled downtime, equipment failure, information technology systems interruptions or failures, terrorism, transportation interruptions, transportation incidents involving our chemical products, chemical spills and other discharges or releases of toxic or hazardous substances or gases and environmental hazards.

Due to the integrated nature of our large chemical sites, an event at one plant could impact production across multiple plants at a facility.

From time to time in the past, we have had incidents that have temporarily shut down or otherwise disrupted our manufacturing, causing production delays and resulting in liability for workplace injuries and fatalities.

Some of our operations involve the manufacture and/or handling of a variety of explosive and flammable materials.

Use of our products by our customers could also result in liability if an explosion, fire, spill or other accident were to occur.

We cannot assure you that we will not experience these types of incidents in the future or that these incidents will not result in production delays or otherwise have a material adverse effect on our business, financial condition or results of operations.

We have a substantial presence near the U.S.

Gulf Coast and a significant portion of our manufacturing facilities, similar to our competitors and customers, are structured near major bodies of water.

Major hurricanes, or other weather-related events, have caused significant disruption in our operations on the U.S.

Gulf Coast, logistics across the region and the supply of certain raw materials, which have had an adverse impact on volume and cost for some of our products.

Additionally, we are are exposed to increasing climate-related risks and uncertainties, many of which are outside of our control.

Climate change could result in more frequent severe weather events, potential changes in precipitation patterns and extreme variability in weather patterns, which could disrupt our operations as well as those of our customers and suppliers.

Severe weather conditions or other natural phenomena in the future, including those resulting from climate change, could negatively affect our results of operations.

We maintain risk management strategies, including but not limited to levels of insurance associated with property, casualty and business interruption.

Such insurance may not cover all of the risks associated with the hazards of our business and is subject to limitations, including deductibles and maximum liabilities covered.

We may incur losses beyond the limits, or outside the coverage, of our insurance policies.

We may also be unable to continue to maintain our existing insurance or obtain comparable insurance at a reasonable cost.

Third-Party Transportation—We rely heavily on third-party transportation, which subjects us to risks and costs that we cannot control, and which risks and costs may have a material adverse effect on our financial position or results of operations.

We rely heavily on railroad, truck, marine vessel, barge and other shipping companies to transport finished products to customers and to transport raw materials to the manufacturing facilities used by each of our businesses.

These transport operations are subject to various hazards and risks, including extreme weather conditions, work stoppages and operating hazards, as well as domestic and international transportation and maritime regulations.

In addition, the methods of transportation we utilize, including shipping chlorine and other chemicals by railroad and by barge, may be subject to additional, more stringent and more costly regulations in the future.

If we are delayed or unable to ship finished products or unable to obtain raw materials as a result of any such new or modified regulations or public policy changes related to transportation safety, or these transportation companies’ failure to operate properly, or if there are significant changes in the cost of these services due to new additional regulations, or otherwise, we may not be able to arrange efficient alternatives and timely means to obtain raw materials or ship goods, which could result in a material adverse effect on our business, financial position or results of operations.

If any third-party railroad that we utilize to transport chlorine and other chemicals ceases to transport certain hazardous materials, or if there are significant changes in the cost of shipping hazardous materials by rail or otherwise, we may not be able to arrange efficient alternatives and timely means to deliver our products or at all, which could result in a material adverse effect on our business, financial position or results of operations.

Raw Materials—Availability of purchased feedstocks and energy, and the volatility of these costs, impact our operating costs and add variability to earnings.

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In addition, many of our long-term contracts contain provisions that allow our suppliers to limit the amount of raw materials shipped to us below the contracted amount in force majeure or similar circumstances.

If we are required to obtain alternate sources for raw materials because our suppliers are unwilling or unable to perform under raw material supply agreements or if a supplier terminates its agreements with us, we may not be able to obtain these raw materials from alternative suppliers or obtain new long-term supply agreements on terms comparable or as favorable to us.

Production Hazards—Our facilities are subject to operating hazards, which may disrupt our business.

We are dependent upon the continued safe and reliable operation of our production facilities.

Due to the integrated nature of our large chemical sites, an event at one plant could impact production across multiple plants at a facility.

Some of our operations involve the manufacture and/or handling of a variety of explosive and flammable materials.

Use of our products by our customers could also result in liability if an explosion, fire, spill or other accident were to occur.

Major hurricanes, or other weather-related events, have caused significant disruption in our operations on the U.S.

Gulf Coast, logistics across the region and the supply of certain raw materials, which have had an adverse impact on volume and cost for some of our products.

Due to the substantial presence we have on the U.S.

Gulf Coast, similar severe weather conditions or other natural phenomena in the future could negatively affect our results of operations, for which we may not be fully insured.

If we are required to obtain alternate sources for raw materials because our suppliers are unwilling or unable to perform under raw material supply agreements or if a supplier terminates or is unwilling to renew its agreements with us, we may not be able to obtain these raw materials from alternative suppliers or obtain new long-term supply agreements on terms comparable or as favorable to us.

Information Security—A failure of our information technology systems, or an interruption in their operation due to internal or external factors including cyber-attacks, could have a material adverse effect on our business, financial condition or results of operations.

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Failure of any one or more than one of our information technology systems could be caused by internal or external events, such as incursions by intruders or hackers, computer viruses, cyber-attacks, failures in hardware or software, or power or telecommunication fluctuations or failures.

The failure of our information technology systems to perform as anticipated for any reason or any significant breach of security could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, increased costs or loss of important information, any of which could have a material adverse effect on our business, financial condition or results of operations.

The failure of our information technology systems to perform as anticipated for any reason or any significant breach of security could disrupt our business and result in numerous adverse consequences, including reduced effectiveness and efficiency of operations, increased costs or loss of important information, or loss of sales, any of which could have a material adverse effect on our business, financial condition or results of operations.

We have technology and information security processes, periodic external service and service provider reviews, insurance policies and disaster recovery plans in place to mitigate our risk to these vulnerabilities.

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Ability to Attract and Retain Qualified Employees—We must attract, retain and motivate key employees, and the failure to do so may adversely affect our business, financial condition or results of operations.

We feel our success depends on hiring, retaining and motivating key employees, including executive officers.

We believe our success depends on hiring, retaining and motivating key employees, including executive officers.

Our future success depends in part on our ability to identify and develop talent throughout the organization who adopt and successfully execute our strategic operating model.

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Acquisitions and joint venture transactions involve numerous risks, including difficulty determining appropriate valuation, integrating operations, technologies, services and products of the acquired businesses, personnel turnover and the diversion of management’s attention from other business matters.

The nature of a joint venture requires us to work cooperatively with unaffiliated third parties.

Differences in views among joint venture participants may result in delayed decisions or failure to agree on major decisions.

If these differences cause the joint ventures to deviate from their business plans or fail to achieve their desired operating performance, our results of operations could be adversely affected.

In addition, we may be unable to achieve anticipated benefits from these transactions in the time frame that we anticipate, or at all, which could adversely impact our business, financial condition and results of operations.

Indebtedness—Our indebtedness could adversely affect our financial condition.

As of December 31, 2021, we had $2,779.3 million of indebtedness outstanding.

Outstanding indebtedness does not include amounts that could be borrowed under our $800.0 million senior revolving credit facility, under which $799.6 million was available for borrowing as of December 31, 2021 because we had issued $0.4 million of letters of credit.

As of December 31, 2021, our indebtedness represented 51.2% of our total capitalization and $201.1 million of our indebtedness was due within one year.

Despite our level of indebtedness, we expect to continue to have the ability to borrow additional debt, but we cannot be certain that additional debt will be available on terms acceptable to us or at all.

Our indebtedness could have important consequences, including but not limited to:

• limiting our ability to fund working capital, capital expenditures, and other general corporate purposes;

• limiting our ability to accommodate growth by reducing funds otherwise available for other corporate purposes, which in turn could prevent us from fulfilling our obligations under our indebtedness;

• limiting our operational flexibility due to the covenants contained in our debt agreements;

• to the extent that our debt is subject to floating interest rates, increasing our vulnerability to fluctuations in market interest rates;

• limiting our ability to pay cash dividends;

• limiting our flexibility for, or reacting to, changes in our business or industry or economic conditions, thereby limiting our ability to compete with companies that are not as highly leveraged;

• increasing our vulnerability to economic downturns.

Our ability to generate sufficient cash flow from operations to make scheduled payments on our debt will depend on a range of economic, competitive and business factors, many of which are outside our control.

There can be no assurance that our business will generate sufficient cash flow from operations to make these payments.

If we are unable to meet our expenses and debt obligations, we may need to refinance all or a portion of our indebtedness before maturity, sell assets or issue additional equity.

We may not be able to refinance any of our indebtedness, sell assets or issue additional equity on commercially reasonable terms or at all, which could cause us to default on our obligations and impair our liquidity.

Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our debt obligations on commercially reasonable terms, would have a material adverse effect on our business, financial condition and results of operations, as well as on our ability to satisfy our debt obligations.

International Sales and Operations—We are subject to risks associated with our international sales and operations that could have a material adverse effect on our business or results of operations.

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Any one or more of the above factors could have a material adverse effect on our business, financial condition or results of operations.

COVID-19 Pandemic—The COVID-19 pandemic and the global response to the pandemic, including without limitation complying with governmental mandates, could have a material adverse impact on our business, financial condition, or results of operations.

Public Health Crisis—A pandemic, epidemic, or other outbreak of infectious disease, including the COVID-19 pandemic and the global response to the pandemic, including without limitation complying with governmental mandates, could have a material adverse impact on our business, financial condition, or results of operations.

The COVID-19 global pandemic, and the various governmental, business, and consumer responses to this pandemic, have caused significant disruptions in the U.S.

and global economies, which negatively impacted the demand for several of the products produced by our Chlor Alkali Products and Vinyls and Epoxy businesses during 2020 resulting in lower volumes and pricing.

As a result, the COVID-19 pandemic has significantly impacted our results of operations and could continue to have negative impacts on our business.

and global economies, which negatively impacted the demand for several of the products produced by our Chlor Alkali Products and Vinyls and Epoxy businesses.

The COVID-19 pandemic has significantly impacted our results of operations and could continue to have negative impacts on our business.

These impacts could include plant closures or operating reductions, volatility and decrease in demand for our products, and supply chain interruptions.

These impacts could become more widespread or prolonged as the pandemic continues.

These impacts could become more widespread or prolonged as the pandemic continues or evolves over time.

The extent to which the COVID-19 pandemic impacts our results will depend on future developments that are outside of our control and highly uncertain, including the severity and duration of the pandemic, emerging variants, vaccine and booster effectiveness, the domestic and international actions that are taken in response, including mandates implemented at the local, state and federal levels, and the extent and severity of any resulting economic or industry downturn.

Other public health crises, including but not limited to pandemics, including additional COVID-19 variants, epidemics or other outbreaks of infectious diseases, and the various governmental, business, and consumer responses to the public health crisis could have a material adverse effect on our business, financial condition or results of operations.

Indebtedness—Our indebtedness could adversely affect our financial condition.

As of December 31, 2022, we had $2,580.7 million of indebtedness outstanding.

Outstanding indebtedness does not include amounts that could be borrowed under our $1,200.0 million Senior Revolving Credit Facility.

As of December 31, 2022, our indebtedness represented 50.4% of our total capitalization and $9.7 million of our indebtedness was due within one year.

Our indebtedness could have important consequences, including but not limited to:

• limiting our ability to fund working capital, capital expenditures, and other general corporate purposes;

• limiting our operational flexibility due to the covenants contained in our debt agreements;

• to the extent that our debt is subject to floating interest rates, increasing our vulnerability to fluctuations in market interest rates;

• limiting our ability to pay cash dividends;

• limiting our ability to approve or execute share repurchase programs;

• limiting our flexibility for, or reacting to, changes in our business or industry or economic conditions, thereby limiting our ability to compete with companies that are not as highly leveraged;

• increasing our vulnerability to economic downturns.

There can be no assurance that our business will generate sufficient cash flow from operations to make these payments.

If we are unable to meet our expenses and debt obligations, we may need to refinance all or a portion of our indebtedness before maturity, sell assets or issue additional equity.

Credit Facility—Weak industry conditions could affect our ability to comply with the financial maintenance covenants in our senior credit facility.

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If the judgments and estimates used in our analysis are not realized or are affected by external factors, then actual results may not be consistent with these judgments and estimates, and we may be required to record a goodwill impairment charge in the future, which could be significant and have an adverse effect on our financial position and results of operations.

During the third quarter of 2020, the carrying values of our Chlor Alkali Products and Vinyls and Epoxy reporting units exceeded the fair values which resulted in pre-tax goodwill impairment charges of $557.6 million and $142.2 million, respectively.

During 2020, the carrying values of our Chlor Alkali Products and Vinyls and Epoxy reporting units exceeded the fair values which resulted in pre-tax goodwill impairment charges of $557.6 million and $142.2 million, respectively.

The goodwill impairment charge was calculated as the amount that the carrying value of the reporting unit, including any goodwill, exceeded its fair value and therefore the carrying value of our reporting units equal their fair value upon completion of the goodwill impairment test.

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Legislation or regulations that may be adopted or modified by U.S.

or foreign governments, including legislation or regulations intended to address climate change, antitrust and competition laws, tax regulation, import and export duties and quotas and anti-dumping measures and related tariffs could significantly affect the sales, costs and profitability of our business.

The chemical and ammunition industries are subject to legislative and regulatory actions, which could have a material adverse effect on our business, financial position or results of operations.

or foreign governments, including legislation or regulations intended to address climate change, the environment, antitrust and competition, tax, international trade matters through import and export duties and quotas and anti-dumping measures and related tariffs could significantly affect the sales, costs and profitability of our business.

The chemical and ammunition industries are subject to extensive legislative and regulatory actions, which could have a material adverse effect on our business, financial position or results of operations.

Many of our products and operations are subject to chemical control laws of the countries in which they are located.

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and the Registration, Evaluation and Authorization of Chemicals (REACH) regulation in Europe.

TSCA was amended in 2016, and the EPA is currently evaluating several of our products for additional regulation under the amended law.

TSCA was amended in 2016, and the U.S.

Environmental Protection Agency (EPA) is currently evaluating several of our products and manufacturing processes for additional regulation under the amended law.

Certain of our products, or inputs into our manufacturing process, are subject to regulation under current TSCA regulations, and other chemicals or ingredients may be regulated under the law in the future.

In 2022, the EPA proposed a regulation that would ban the use of asbestos, a principal material used in diaphragm-based chlorine manufacturing in as soon as two years following publication of a final rule.

Diaphragm technology-based chlorine production makes up a significant part of Olin’s capacity and this proposed government regulation could significantly increase the cost of production that would have negative consequences on our business.

The EPA has found “unreasonable risk” associated with several of Olin’s chlorinated organics products under the new TSCA law and we anticipate proposed rules from the EPA on these products also present risk to these businesses.

Olin also anticipates future regulatory action related to EDC under the amended TSCA law that could significantly affect the sales, costs and profitability of that product line.

Additionally, the U.S.

Congress has proposed legislation that would restrict our ability to import, process and use asbestos in our chlorine manufacturing.

While final passage of the legislation is not anticipated, congressional action on this issue could have a material adverse impact our business, financial condition and results of operations.

Likewise, Congress and government agencies routinely consider legislation and regulation related to the ammunition business, and legislative or regulatory actions could impact our ability to manufacture and sell certain types of ammunition.

Under REACH, additional testing requirements, documentation, risk assessments and registrations are occurring and will continue to occur and may adversely affect our costs of products produced in or imported into the European Union.

The European Union is currently considering regulations related to the use of bisphenol (BisA), or BPA, in chemical manufacturing, which is a critical component of the epoxy resins we manufacture and sell in the region.

Compliance with current or future TSCA, REACH, or other regulations may limit or hinder our ability to manufacture our products and/or cause us to incur expenditures that are material to our business, financial condition or results of operations.

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See “Environmental Matters” contained in Item 7—“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

Labor Matters—We cannot assure that we can conclude future labor contracts or any other labor agreements without work stoppages.

Various labor unions represent a significant number of our hourly paid employees for collective bargaining purposes.

The following significant labor contract will be required to be negotiated in 2023:

Location Percent of Global Workforce Expiration Date

Freeport, TX 5% May 2023

Niagara Falls, NY 1% July 2023

In addition, a large number of our employees are located in countries in which employment laws provide greater bargaining or other rights to employees than the laws of the U.S.

Such employment rights require us to work collaboratively with the legal representatives of those employees to effect any changes to labor arrangements.

For example, most of our employees in Europe are represented by works councils that must approve any changes in conditions of employment, including salaries and benefits and staff changes, and may impede efforts to restructure our workforce.

While we believe our relations with our employees and their various representatives are generally satisfactory, we cannot assure that we can conclude any labor agreements without work stoppages and cannot assure that any work stoppages will not have a material adverse effect on our business, financial condition or results of operations.

Governmental Contract Compliance and Deliverables—Various risks associated with our Lake City contract and performance under other government contracts could adversely affect our business, financial condition and results of operations.

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Environmental, Social and Governance (ESG)—ESG issues and related regulation, including those related to climate change and sustainability, may have an adverse effect on our business, financial condition and results of operations and damage our reputation.

Companies across all industries are facing increased scrutiny related to their ESG policies.

Increased focus and activism related to ESG may hinder our access to credit and capital markets, as investors may reconsider their investment as a result of their assessment of our ESG practices.

Companies across all industries are facing increased scrutiny related to their ESG policies and practices.

Increased focus and activism related to ESG may hinder our access to credit and capital markets, as investors may reconsider their investment as a result of their assessment of our ESG policies and practices.

In particular, customers, consumers, investors and other stakeholders are increasingly focusing on environmental issues, including climate change, energy and water use, greenhouse gas (GHG) emissions and other sustainability concerns.

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These demand changes could cause changes in the market dynamics of our existing products, impacting pricing, or we may incur additional costs to make changes to our operations to comply with such demand changes.

Concern over climate change, greenhouse gas (GHG) emissions in particular, may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment.

Increased regulatory requirements or demands for enhanced mitigation of environmental impacts may result in increased compliance costs, higher energy and raw materials input costs or compliance with more stringent emissions standards, which may cause disruptions in the manufacture of our products or an increase in operating costs.

Concern over climate change, GHG emissions in particular, may result in new or increased legal and regulatory requirements to reduce or mitigate impacts to the environment.

Increased regulatory requirements or demands for enhanced mitigation of environmental impacts may result in increased compliance costs, including capital expenditures, higher energy and raw materials input costs or compliance with more stringent emissions standards, which may cause disruptions in the manufacture of our products or an increase in operating costs.

Any failure to achieve our ESG goals, or a perception of our failure to act responsibly with respect to the environment or to effectively respond to new, or updated, legal or regulatory requirements concerning environmental or other ESG matters, or increased operating or manufacturing costs due to increased regulation or efforts to mitigate environmental impacts could adversely affect our business, financial condition, results of operations and reputation.

If we do not adapt to or comply with new regulations or fail to meet the ESG goals or evolving investor, industry or stakeholder expectations and standards, or if we are perceived to have not responded appropriately to the growing concern for ESG issues, customers may choose to stop purchasing our products or purchase products from a competitor, and our reputation, financial condition and results of operations may be adversely affected.

Labor Matters—We cannot assure that we can conclude future labor contracts or any other labor agreements without work stoppages.

Various labor unions represent a significant number of our hourly paid employees for collective bargaining purposes.

No significant labor contracts are expected to be negotiated during 2022 or early 2023.

In addition, a large number of our employees are located in countries in which employment laws provide greater bargaining or other rights to employees than the laws of the U.S.

Such employment rights require us to work collaboratively with the legal representatives of those employees to effect any changes to labor arrangements.

UNRESOLVED STAFF COMMENTS

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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