What changed in this filing

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Item 1A. Risk Factors

2024-02-20 compared with 2023-02-21 · 95 added, 80 removed, 381 unchanged (31% of the section changed)

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In particular, during 2021, we had higher than anticipated demand in our pool business and certain parts of our residential and commercial businesses.

However, such demand in our pool and other residential businesses declined during 2022 and may not be repeated in future periods.

However, such demand in our pool and other residential businesses declined during 2022 and 2023 as we saw inventory correcting within our residential distribution channels and may not be repeated in future periods.

Important factors for our businesses and the businesses of our customers include the overall strength of the global economy and various regional economies and our customers’ confidence in these economies, industrial and governmental capital spending, the strength of residential and commercial real estate markets, residential housing markets, the commercial business climate, global supply chain stability, unemployment rates, availability of consumer and commercial financing, interest rates, inflation rates, and energy and commodity prices.

Recessions, economic downturns, inflation, slowing economic growth and social and political instability in the industries and/or markets where we compete could negatively affect our revenues and financial performance in future periods, result in future restructuring charges, and adversely impact our ability to grow or sustain our business.

For example, current macroeconomic and political instability caused by global supply chain disruptions, inflation, the strengthening of the U.S.

dollar and the conflict between Russia and Ukraine, have and could continue to adversely impact our results of operations.

For example, current macroeconomic and political instability caused by global supply chain disruptions, inflation and the strengthening of the U.S.

dollar have and could continue to adversely impact our results of operations.

In addition, military conflicts, such as those between Russia and Ukraine and Hamas and Israel, and their impact on economies may adversely impact our results of operations.

The businesses of many of our industrial customers are to varying degrees cyclical and have experienced periodic downturns.

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Also, in several emerging markets, potential customers prefer local suppliers, in some cases because of existing relationships and in other cases because of local legal restrictions or incentives that favor local businesses.

In addition, we need to be flexible to adapt our products to ever changing customer preferences, including those relating to regulatory, climate change and social responsibility matters.

In addition, we need to be flexible to adapt our products to ever changing customer preferences, including those relating to regulatory, climate change and social

responsibility matters.

We have identified specific product and geographic market opportunities that we find attractive and continue to pursue, both within and outside the U.S.

We expect to continue investing in our businesses to drive these opportunities through research and development and additional sales and marketing resources.

Unless we successfully penetrate these markets, our core sales growth will likely be limited or may decline.

Accordingly, our future success depends upon a number of factors, including our ability to transform and adapt our products, services, solutions, organization, workforce and sales strategies to fit localities throughout the world, particularly in high growth emerging markets;

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and develop or acquire competitive technologies, products, services, and solutions and bring them to market quickly and cost-effectively.

The failure to effectively adapt our products, services, or solutions could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We must also monitor disruptive technologies, such as artificial intelligence, and business models, and we may not be able to take advantage of such technologies, including if we are not able to attract and retain talent that would enable us to leverage such technologies.

In addition, the markets for our products, services and solutions may not develop or grow as we anticipate.

The failure of our products, services or solutions to gain market acceptance due to more attractive offerings by our competitors, the introduction of new competitors to the market with new or innovative product offerings or the failure to address any of the above factors could have a material adverse effect on our business, financial condition, results of operations and cash flows.

We may not be able to identify, finance and complete suitable acquisitions and investments, and any completed acquisitions and investments may be unsuccessful or consume significant resources.

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We may experience cost and other inflation.

During 2022 and 2021, we experienced inflationary cost increases of raw materials, such as metals, resins and electronics (including drives and motors), as well as increases in logistics, energy, insurance and labor costs (including wages, pension and health care), and we expect inflationary cost increases to continue in 2023.

In prior years, we experienced inflationary cost increases of raw materials, such as metals, resins, drives and motors, as well as increases in logistics, energy, insurance and labor costs (including wages, pensions and health care benefits), and due to the current volatile nature of the market, we expect inflationary cost increases to continue in 2024.

We strive for productivity improvements and implement increases in selling prices to help mitigate cost increases.

We continue to implement operational initiatives to mitigate the impacts of inflation and continuously reduce our costs.

However, these actions may not be successful in managing our costs or increasing our productivity and we anticipate inflation to continue with respect to materials (especially resins, copper, steel, stainless steel and electronics) as well as labor and logistics.

However, these actions may not be successful in managing our costs or increasing our productivity and we anticipate inflation to continue with respect to raw materials as well as labor and logistics.

Continued cost inflation or failure of our initiatives to increase prices, generate cost savings or improve productivity could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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These disruptions or our failure to effectively respond to them have increased and may continue to increase product, logistics or labor costs, limit availability of raw materials or cause delays in delivering our backlog or may cause an inability to deliver products to our customers or meet customer demand.

While we have elevated our engagement with our suppliers and used secondary suppliers and new methods of procurement where available to mitigate the supply chain pressures, we expect supply chain challenges to continue in 2023.

While we have elevated our engagement with our suppliers and used secondary suppliers and new methods of procurement where available to mitigate the supply chain pressures, supply chain challenges may continue in the future.

In addition, as we execute on our ongoing Transformation Program, we may experience costs as a result of changing to new suppliers.

Any material interruption in our supply chain, such as material interruption of the supply of raw materials and components due to the casualty loss of any of our manufacturing plants;

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unexpected delays in shipping or processing through customs of goods;

trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions;

increased logistics costs, including air freight;

lack of availability of marine cargo insurance for shipments in certain geographies due to hostilities;

trade restrictions, such as increased tariffs or quotas, embargoes or customs restrictions or inspections;

or other unexpected or uncontrollable events that cause a material interruption in our supply chain such as pandemics (including COVID-19);

social or labor unrest;

natural disasters or political disputes and military conflicts;

natural disasters;

or political disputes, international hostilities and military conflicts;

could negatively affect our ability to produce or deliver our products and have a negative material impact on our business and our profitability.

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These issues could have a material adverse effect on our business, financial condition, results of operations and cash flows.

The COVID-19 pandemic may have a material negative impact on our business, financial condition, results of operations and cash flows.

Our business and financial results have been and may continue to be negatively impacted by the COVID-19 pandemic and its repercussions.

The severity, magnitude and duration of the current COVID-19 pandemic remains uncertain, rapidly changing and hard to predict.

In 2022, 2021 and 2020, the COVID-19 pandemic significantly impacted economic activity and markets around the world and our business, and it may negatively impact our business in numerous ways, including but not limited to those outlined below:

• Due to the impacts of the COVID-19 pandemic, we have experienced and may continue to experience reductions in customer demand for certain products and in certain end-markets.

• Our workforce may be unable or unwilling to work on-site or travel as a result of the continuing pandemic and related vaccine requirements, event cancellations, facility closures, shelter-in-place, travel and other restrictions and changes in industry practice, or if they, their co-workers or their family members become ill or otherwise require care arrangements.

In addition, we have experienced disruptions at some of our facilities with higher absenteeism due to the COVID-19 pandemic.

• Government or regulatory responses to the COVID-19 pandemic have and may continue to negatively impact our business.

Mandatory lockdowns or other restrictions on operations in some countries have previously temporarily disrupted our ability to manufacture in or distribute our products to or from some of these markets.

A reoccurrence of these disruptions could materially adversely impact our operations and results.

In addition to existing travel restrictions, jurisdictions may continue to close borders, impose increased vaccine or testing requirements, prolong quarantines and further restrict travel and business activity.

These actions could cause related supply chain delays, which could significantly impact our ability to support our operations and customers, meet demand, develop new products, ship our backlog, impact the ability of our employees to get to their workplaces to produce products and services, or significantly hamper our products from moving through the supply chain.

We may not be able to predict or respond to all impacts of the COVID-19 pandemic on a timely basis to prevent near- or long-term adverse impacts to our results.

There still remains much uncertainty around the COVID-19 pandemic and its duration, severity and ultimate impact;

therefore, any negative impact on our business, financial condition (including without limitation our liquidity), results of operations and cash flows cannot be reasonably estimated at this time, but the COVID-19 pandemic could lead to extended disruption of economic activity and the impact on our business, financial condition, results of operations and cash flows could be material.

The foregoing and other impacts of the COVID-19 pandemic could have the effect of heightening many of the other risks described herein and any of these impacts could materially adversely affect our business, financial condition, results of operations and cash flows.

We are exposed to political, regulatory, economic, trade, and other risks that arise from operating a multinational business.

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These risks include:

• changes in general economic and political conditions in countries where we operate, particularly in emerging markets;

• changes in general economic and political conditions in countries where we operate or purchase from, particularly in emerging markets;

• relatively more severe economic conditions in some international markets than in the U.S.;

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• trade protection measures and import or export licensing requirements and restrictions;

• the possibility of military conflicts or terrorist action affecting us, our operations, supply chains or our end-markets;

• the possibility of military conflicts or terrorist action affecting us, our operations, supply chains, our end-markets or economies generally;

• the threat of nationalization and expropriation;

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• changes in and required compliance with a variety of non-U.S.

laws and regulations, some of which may be incompatible.

laws and regulations, some of which may be incompatible with each other or U.S.

laws and regulations.

Our success depends in part on our ability to anticipate and effectively manage these and other risks.

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changes in U.S.

social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in the territories and countries where we currently purchase, have operations

or manufacture and sell products;

and any resulting negative sentiments towards the U.S.

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Patents, non-compete agreements, proprietary technologies, customer relationships, trademarks, trade names and brand names are important to our business.

Intellectual property protections, however, may not preclude competitors from developing products similar to ours, or from challenging our names or products.

Intellectual property protections, however, may not preclude competitors from developing products like ours, or from challenging our names or products.

Our pending patent, copyright, and trademark registration applications may not be accepted, or competitors may challenge the validity or scope of our patents, copyrights or trademarks.

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Furthermore, our business strategy also includes expanding our smart products and Internet of Things offerings and there are many other companies that hold patents in this space.

Over the past few years, we have noticed an increasing tendency for participants in our markets, including competitors, to use challenges to intellectual property as a means to compete.

Over the past few years, we have noticed an increasing tendency for participants in our markets, including competitors, to use challenges to intellectual property to compete.

Patent and trademark challenges increase our costs to develop, engineer and market our products.

We may need to spend significant resources monitoring, enforcing and defending our intellectual property rights, and we may or may not be able to detect infringement by third parties.

We may need to spend significant resources monitoring, enforcing and defending, including through litigation, our intellectual property rights, and we may or may not be able to detect infringement by third parties.

If we fail to successfully enforce our intellectual property rights or register new patents, our competitive position could suffer, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

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We test goodwill and other indefinite-lived intangible assets for impairment on at least an annual basis, and more frequently if circumstances warrant.

As of December 31, 2022, our goodwill and intangible assets were $4,347.2 million and represented 67% of our total assets.

As of December 31, 2023, our goodwill and intangible assets were $4,317.0 million and represented approximately 66% of our total assets.

Declines in fair market value could result in future goodwill and intangible asset impairment charges.

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While we do not have any other customers that accounted for more than 10% of our consolidated net sales in 2023, we have other customers that are key to the success of our business.

Our concentration of sales to a relatively small number of larger customers makes our relationship with each of these customers important to our business.

Our concentration of sales to a relatively small number of larger customers makes our

relationship with each of these customers important to our business.

Our success is dependent on retaining these customers, which requires us to successfully manage relationships and anticipate the needs of our customers in the channels in which we sell our products.

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Catastrophic and other events beyond our control may disrupt operations at our manufacturing facilities and those of our suppliers, which could cause us to be unable to meet customer demands or increase our costs, or reduce customer spending.

If operations at any of our manufacturing facilities or those of our suppliers were to be disrupted as a result of significant equipment failures, natural disasters, earthquakes, power outages, fires, explosions, terrorism, military conflicts, cybersecurity attacks, adverse weather conditions, labor disputes, public health epidemics (including the COVID-19 pandemic) or other catastrophic events or disruptions outside of our control, we may be unable to fill customer orders and otherwise meet customer demand for our products.

In particular, our pool business operations in North Carolina and California are in areas that are more susceptible to natural disasters such as hurricanes, wildfires, and earthquakes.

If operations at any of our manufacturing facilities or those of our suppliers were to be disrupted as a result of significant equipment failures, natural disasters, earthquakes, power outages, fires, explosions, terrorism, political disputes, international hostilities, military conflicts, cybersecurity incidents, adverse weather conditions, labor disputes, public health epidemics (including the COVID-19 pandemic) or other catastrophic events or disruptions outside of our control, we may be unable to fill customer orders and otherwise meet customer demand for our products.

Some of our operations, including our pool business operations in North Carolina and California, are in areas that are more susceptible to natural disasters such as hurricanes, wildfires and earthquakes.

These types of events may negatively impact residential, commercial and industrial spending in impacted regions or, depending on the severity, global spending.

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We maintain property insurance that we believe to be adequate to provide for reconstruction of facilities and equipment, and to cover business interruption losses resulting from any production interruption or shutdown caused by an insured loss.

However, any recovery under our insurance policies may not offset the lost sales or increased costs that may be experienced during the disruption of operations, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

However, any recovery under our insurance policies may not offset the lost sales or increased costs that may be experienced during the disruption of operations and may also affect the price and availability of insurance in the future, which could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Seasonality of sales and weather conditions could have a material adverse effect on our financial results.

We experience seasonal demand with end customers and end users within each of our business segments.

Demand for pool equipment in the pool business within the Consumer Solutions segment and residential water supply, infrastructure and agricultural products in the businesses within the Industrial & Flow Technologies segment follows warm weather trends and is at seasonal highs from April to August.

While historically we have attempted to mitigate the magnitude of the sales spikes in

the pool business and in the businesses within the Industrial & Flow Technologies segment by employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts), we cannot provide any assurance that should we use such programs in the future they will be successful.

In addition, seasonal effects in the pool business and in the businesses within the Industrial & Flow Technologies segment may vary from year to year and be impacted by weather patterns, particularly by temperature, heavy flooding and droughts.

Moreover, adverse weather conditions, such as cold or wet weather, may negatively impact demand for, and sales of, pool equipment in the pool business and residential water supply, commercial, infrastructure and agricultural products in the businesses within the Industrial & Flow Technologies segment.

Demand for pool equipment in the Pool segment, water solution products in the Water Solutions segment, and residential water supply and agricultural products within the Flow segment follows warm weather trends, with seasonal highs from April to September.

While historically we have attempted to mitigate the magnitude of the sales spikes in the Pool segment by employing some advance sale “early buy” programs (generally including extended payment terms and/or additional discounts), we cannot provide assurance that should we use such programs in the future they will be successful.

In addition, seasonal effects associated with products within our Flow, Water Solutions and Pool segments may vary from year to year and be impacted by weather patterns, such as temperature, heavy flooding and droughts.

Moreover, adverse weather conditions, such as cold or wet weather, may negatively impact demand for, and sales of products within our business segments.

Volatility in currency exchange rates could have a material adverse effect on our financial condition, results of operations and cash flows.

Sales outside of the U.S.

for the year ended December 31, 2022 accounted for 29% of our net sales.

for the year ended December 31, 2023 accounted for approximately 31% of our net sales.

Our financial statements reflect translation of items denominated in non-U.S.

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dollar reported revenue and income will effectively be decreased to the extent of the change in currency valuations, and vice-versa.

During 2022, we experienced a reduction in revenue and profits as a result of the significant strengthening of the U.S.

dollar against foreign currencies.

Fluctuations in foreign currency exchange rates, most notably the strengthening of the U.S.

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and margins on sales of products that include components obtained from suppliers located outside of the U.S.

Our business may be adversely affected by matters associated with our labor force.

Certain of our employees are covered by collective bargaining agreements or represented by works councils.

Although we believe that our relations with the labor unions and works councils that represent our employees are generally good and we have experienced no material work stoppages recently, no assurances can be made that we will not experience these and other types of conflicts with labor unions, works councils, other groups representing employees or our employees generally in the future, or that any future negotiations with these groups will not result in significant increases in our cost of labor.

In addition, an important aspect of attracting and retaining qualified personnel is continuing to offer competitive wages, employee healthcare, retirement and other benefits.

The expenses we record for our employee benefit plans depend on factors such as changes in market interest rates and healthcare cost inflation, and significant unfavorable changes in these factors could increase our

expenses and funding requirements.

An inability to control costs and funding requirements related to employee benefits could negatively impact our results of operations and financial condition.

Complications with the design or implementation of our updated enterprise resource planning system could adversely impact our business and operations.

We rely extensively on information systems and technology to operate and manage our business and summarize operating results.

We are in the process of a multi-year implementation of an updated global enterprise resource planning (“ERP”) system in connection with moving to digital processes under our Transformation Program.

Ultimately, this ERP system will update our existing operating and transactional financial systems.

The ERP system is designed to accurately maintain our financial records, enhance operational functionality and provide timely information to our management team related to the operation of the business.

The ERP system implementation process has required, and will continue to require, the investment of significant personnel and financial resources.

We may not be able to successfully implement the ERP system without experiencing delays, increased costs and other difficulties.

If we are unable to successfully design and implement the updated ERP system as planned, our financial position, results of operations and cash flows could be negatively impacted.

Additionally, if we do not effectively implement the ERP system as planned or the ERP system does not operate as intended, the effectiveness of our internal control over financial reporting could be adversely affected or our ability to assess those controls adequately could be further delayed.

Risks Relating to Our Debt and Financial Markets

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As of December 31, 2023, we had $2,006.8 million of total debt outstanding on a consolidated basis.

Our indebtedness increased materially in connection with our acquisition of Manitowoc Ice, which we funded with approximately $1.6 billion of new indebtedness.

We and our subsidiaries may incur additional indebtedness in the future, subject to restrictions in our debt agreements.

We and our subsidiaries may incur additional indebtedness in the future, including in connection with acquisitions, subject to restrictions in our debt agreements.

Our increased level of indebtedness and any future increases in our level of indebtedness may have important effects on our future operations, including, without limitation:

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Our credit agreements and indentures contain customary financial covenants, including those that limit the amount of our debt, which may restrict the operations of our business and our ability to incur additional debt to finance acquisitions.

Our ability to

meet the financial covenants may be affected by events beyond our control, and we cannot provide assurance that we will meet those tests.

Our ability to meet the financial covenants may be affected by events beyond our control, and we cannot provide assurance that we will meet those tests.

A breach of any of these covenants could result in a default under our credit agreements or indentures.

Upon the occurrence of an event of default under any of our credit facilities or indentures, the lenders or trustees could elect to declare all amounts outstanding thereunder to be immediately due and payable and, in the case of credit facility lenders, terminate all commitments to extend further credit.

commitments to extend further credit.

If the lenders or trustees accelerate the repayment of borrowings, we cannot provide assurance that we will have sufficient assets to repay our credit facilities and our other indebtedness.

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In the normal course of our business, we may access credit markets for general corporate purposes, which may include repayment of indebtedness, acquisitions, additions to working capital, repurchase of shares, capital expenditures and investments in our subsidiaries.

Although we expect to have sufficient liquidity to meet our foreseeable needs, our access to and the cost of capital could be negatively impacted by disruptions in the credit markets, which have occurred in the past and made financing terms for borrowers unattractive or unavailable.

Although we expect to have sufficient liquidity to meet our foreseeable needs, our access to and the cost of capital could be negatively impacted by disruptions in the credit markets, including due to failures of financial institutions, which have occurred in the past and made financing terms for borrowers unattractive or unavailable.

These factors may make it more difficult or expensive for us to access credit markets if the need arises.

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In the event that we believe or have reason to believe that our employees, customers, or agents have or may have violated applicable anti-corruption laws, including the FCPA, we may be required to investigate the relevant facts and circumstances, which can be expensive and require significant time and attention from senior management.

Violations of these laws may require self-disclosure to government agencies and result in criminal or civil sanctions, which could disrupt our

business and result in a material adverse effect on our reputation, business, financial condition, results of operations and cash flows.

Violations of these laws may require self-disclosure to government agencies and result in criminal or civil sanctions, which could disrupt our business and result in a material adverse effect on our reputation, business, financial condition, results of operations and cash flows.

Our failure to satisfy international trade compliance regulations, and changes in U.S.

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From time to time, we obtain or receive information alleging improper activity in connection with imports or exports.

Our policy mandates strict compliance with U.S.

Our policies mandate strict compliance with U.S.

trade laws applicable to our products.

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We may be named as a PRP at other sites in the future for existing business units, as well as both divested and acquired businesses.

In addition to clean-up actions brought by governmental authorities, private parties could bring individual or class-action claims due to the presence of, or exposure to, hazardous substances.

In addition to clean-up actions brought by governmental authorities, private parties could bring individual or class-action claims due to the presence of, or exposure to, hazardous substances, including at sites where we did not have operations but may have acquired liability through an acquisition of a business.

Certain environmental laws impose liability on current or previous owners or operators of real property for the cost of removal or remediation of hazardous substances at their properties or at properties at which they have disposed of hazardous substances.

We have projects underway at several current and former manufacturing facilities to investigate and remediate environmental contamination resulting from our past operations or by the operations of divested or acquired businesses or other businesses that previously owned or used the properties.

The cost of remediation and other environmental liabilities can be difficult to accurately predict.

The cost of remediation and other environmental liabilities can be difficult to accurately predict and is typically excluded by insurance.

In addition, environmental requirements change and tend to become more stringent over time.

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Our subsidiaries, along with numerous other companies, are named as defendants in a substantial number of lawsuits based on alleged exposure to asbestos-containing materials, substantially all of which relate to our discontinued operations.

These cases typically involve product liability claims based primarily on allegations of manufacture, sale or distribution of industrial products that either contained asbestos or were attached to or used with asbestos-containing components manufactured by third parties.

In addition, some cases brought against us involve the presence of asbestos at facilities that we own or used to own.

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Unfavorable rulings, judgments or settlement terms could have a material adverse impact on our business and financial condition, results of operations and cash flows.

In addition, while most of

the asbestos claims against us are covered by liability insurance policies from many years ago, not all claims are insured.

In addition, while most of the asbestos claims against us are covered

by liability insurance policies from many years ago, not all claims are insured.

As our insurers resolve claims relating to past policy periods, the aggregate coverage provided by those policies erodes.

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Failure to comply with the broad range of standards, laws and regulations in the jurisdictions in which we operate may result in exposure to substantial disruptions, costs and liabilities.

Our products, manufacturing facilities and business operations are subject to certain statutory and regulatory requirements.

These laws and regulations impose on us increasingly complex, stringent and costly compliance activities, including but not limited to environmental, health, and safety protection standards and permitting, labeling and other requirements regarding (among other things) product efficiency and performance, material makeup, air quality and emissions, and wastewater discharges;

the use, handling, and disposal of hazardous or toxic materials;

Our products, manufacturing facilities and business operations are subject to numerous federal, state and local statutory and regulatory requirements, both within and outside the U.S.

These laws and regulations impose on us increasingly complex, stringent and costly monitoring and compliance activities, including but not limited to environmental, health, and safety protection standards and permitting, labeling and other requirements regarding (among other things) product efficiency and performance, material makeup, air quality and emissions, and wastewater discharges;

the use, handling, and disposal of hazardous or toxic materials and substances, including perfluoroalkyl and polyfluoroalkyl substances (“PFAS”) and other substances of concern;

remediation of environmental contamination;

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It is uncertain whether, when and in what form a federal mandatory carbon dioxide emissions reduction program, or other state programs, may be adopted.

Similarly, certain countries have adopted the Kyoto Protocol and in February 2021, the U.S.

Similarly, certain countries have adopted the Kyoto Protocol and, in 2021, the U.S.

rejoined the Paris Accord.

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We may also be subject to consumer lawsuits or enforcement actions by governmental authorities if our ESG claims relating to product marketing are inaccurate.

It is uncertain what laws will be enacted and therefore we cannot predict the potential impact of such laws on our future financial condition, results of operations and cash flows.

It is uncertain what new laws will be enacted and therefore we cannot predict the potential impact of such laws on our future financial condition, results of operations and cash flows.

The laws and regulations regarding ESG disclosures and requirements are rapidly evolving and could have an adverse effect on our operations and the costs of compliance with, and the other burdens imposed by, these and other laws or regulatory actions may increase our operational costs.

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Moreover, we may determine that it is in the best interest of our company and our shareholders to prioritize other business, social, governance or sustainable investments over the achievement of our current targets based on economic, regulatory and social factors, business strategy or pressure from investors or other stakeholders.

In addition, investors and other stakeholders are increasingly focused on ESG matters, and as stakeholder ESG expectations and standards are evolving, we may not be able to sufficiently respond to these evolving standards and expectations.

Furthermore, we could be criticized for the accuracy or completeness of the disclosure of our ESG initiatives.

products and services by current and potential investors and customers, which could in turn adversely impact our business, results of operations, or financial condition.

Furthermore, we could be criticized for the accuracy or completeness of the disclosure of our

ESG initiatives.

If we are unable to meet our targets or successfully implement our strategy or our ESG reporting is inaccurate or incomplete, then we could suffer from reputational damage and incur adverse reaction from investors and other stakeholders, which could adversely impact the perception of our brand and our products and services by current and potential investors and customers, which could in turn adversely impact our business, results of operations, or financial condition.

Increased cybersecurity threats and computer crime pose a risk to our systems, networks, products and services, and we are exposed to potential regulatory, financial and reputational risks relating to the protection of our data.

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Establishing systems and processes to address these threats may increase our costs.

We have experienced cybersecurity incidents, and, although we have determined such cybersecurity incidents to be immaterial and such incidents have not had a material adverse effect on our financial condition, results of operations or cash flows, there can be no assurance of similar results in the future.

We have experienced cybersecurity incidents, and, although we have determined such cybersecurity incidents to be immaterial and such incidents have not had a material adverse effect on our business strategy, financial condition, results of operations or cash flows, there can be no assurance of similar results in the future.

Should future attacks succeed, it could expose us and our employees, customers, dealers and suppliers to the theft of assets, misuse of information or systems, compromises of confidential information, manipulation and destruction of data, product failures, production downtimes and operations disruptions.

The occurrence of any of these events could have a material adverse effect on our reputation, business, financial condition, results of operations and cash flows.

While we maintain cybersecurity insurance, the costs related to cybersecurity threats or incidents may not be fully insured, and future cybersecurity coverage may become more expensive if we experience a cybersecurity incident.

In addition, such cybersecurity incidents could result in litigation, regulatory action and potential liability and the costs and operational consequences of implementing further data protection measures.

For information on our cybersecurity risk management, strategy and governance, see ITEM 1C.- Cybersecurity.

Changes in data privacy laws and our ability to comply with them could have a material adverse effect on us.

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Insurance coverage is not available for some of our claims and may be disputed by carriers in others.

While we currently maintain what we believe to be suitable product liability insurance, we may not be able to maintain this insurance on our preferred terms or at an acceptable cost, and this insurance may not provide adequate protection against potential or previously existing liabilities.

While we currently maintain what we believe to be suitable product liability insurance, we may not be able to maintain this insurance on our preferred terms or at an acceptable cost.

Further, this insurance may not provide adequate protection against potential or previously existing liabilities.

In addition, we self-insure a portion of product liability claims and must satisfy deductibles on other insured claims.

Further, some of our business involves the sale of our products to customers that are constructing large and complex systems, facilities or other capital projects, and while we generally try to limit our exposure to liquidated damages, consequential damages and other potential damages in the contracts for these projects, we could be exposed to significant monetary damages and other liabilities in connection with the sale of our products for these projects for a variety of reasons.

In addition, some of our businesses, customers, and dealers are subject to various laws and regulations regarding consumer protection and advertising and sales practices, and we have been named, and may be named in the future, as a defendant in litigation, some of which are or may be class action complaints, arising from alleged violation of these laws and regulations.

In addition, some of our businesses, customers, and dealers are subject to various laws and regulations regarding consumer

protection and advertising and sales practices, and we have been named, and may be named in the future, as a defendant in litigation, including class action complaints, arising from alleged violation of these laws and regulations.

In addition, our indemnification obligations relating to the purchase or sale of businesses could result in litigation or claims of unknown amounts.

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Also, the tax laws and treaties of the U.S., the U.K., Ireland and other jurisdictions could change in the future, and such changes could cause a material change in our worldwide effective corporate tax rate.

For example, the Organization for Economic Co-operation and Development Pillar Two Model Rules (“Pillar Two”) for a global 15.0% minimum tax, are in the process of being adopted by a number of jurisdictions in which we operate.

In particular, the U.K.

has completed passage of legislation to comply with the Pillar Two framework, which became effective at the start of 2024.

We expect Pillar Two to have a negative 1.0% to 1.5% impact to our effective tax rate in 2024.

That impact could change in the future as we continue to evaluate the enacted legislative changes and as new guidance becomes available.

In addition, legislative action could be taken by the U.S., the U.K., Ireland or the European Union that could override tax treaties or modify tax statutes or regulations upon which we expect to rely and adversely affect our effective tax rate.

We cannot predict the outcome of any specific legislative proposals.

If proposals were enacted that had the effect of disregarding our incorporation in Ireland or limiting our ability as an Irish company to maintain tax residency in the U.K., we could be subject to increased taxation, which could materially adversely affect our financial condition, results of operations, cash flows or our effective tax rate in future reporting periods.

If proposals were enacted that had the effect of disregarding our incorporation in Ireland or limiting our ability as an Irish company to maintain tax residency in the U.K., we could be subject to increased taxation and/or be required to take action to maintain our effective tax rate, which could materially adversely affect our financial condition, results of operations, cash flows or our effective tax rate in future reporting periods.

A change in our tax residency could have a negative effect on our future profitability, and may trigger taxes on dividends or exit charges.

7 unchanged sentences

The MLI has now entered into force for a number of countries, including Ireland and the U.K.

Under the Double Tax Convention between Ireland and the U.K., as amended by the MLI, the residence tie-breaker provides that a company will remain dual resident unless there is a determination otherwise by the tax authorities of the two contracting states.

We have obtained a determination from the Competent Authorities of the Irish Revenue Commissioners and the U.K.

HM Revenue & Customs which states that we are resident for tax purposes only in the U.K.

Under the Double Tax Convention between Ireland and the U.K., as amended by the MLI, the residency tie-breaker provides that a company will remain dual resident unless there is a determination otherwise by the tax authorities of the two contracting states.

In January 2021, we obtained a determination from the tax authorities in Ireland, the Irish Revenue Commissioners, and in the U.K., HM Revenue & Customs, which states that we are resident for tax purposes only in the U.K.

It is possible that in the future, whether as a result of a change in law or the practice of any relevant tax authority or as a result of any change in the conduct of our affairs, we could become, or be regarded as having become, resident in a jurisdiction other than the U.K.

19 unchanged sentences

Further, the duties of directors and officers of an Irish company generally are owed to the company only.

Shareholders of Irish companies generally do not have a personal right of action against directors or officers of the company and may exercise such rights of action on behalf of the company only in limited circumstances.

Accordingly, holders of our securities may have more difficulty protecting their interests than would holders of securities of a corporation incorporated in a jurisdiction of the U.S.

1 unchanged sentence

Under Irish law, we must have authority from our shareholders to issue any ordinary shares, including shares that are part of our authorized but unissued share capital.

In addition, unless otherwise authorized by its shareholders, when an Irish company issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing shareholders on a pro-rata basis.

In addition, unless otherwise authorized by its shareholders or constitutional document, when an Irish company issues shares for cash to new shareholders, it is required first to offer those shares on the same or more favorable terms to existing shareholders on a pro-rata basis.

If we are unable to obtain these authorizations from our shareholders, or are otherwise limited by the terms of our authorizations, our ability to issue ordinary shares under our equity compensation plans and, if applicable, to facilitate funding acquisitions or otherwise raise capital could be adversely affected.

13 unchanged sentences

Children have a tax-free threshold of €335,000 per lifetime in respect of taxable gifts or inheritances received from their parents for periods on or after October 9, 2019.

The standard rate of CAT for gifts and inheritances received above this threshold is 33%.

General Risk Factors

19 unchanged sentences

These broad market fluctuations could have a material adverse effect on our share price.

UNRESOLVED STAFF COMMENTS

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

What changed 10-K

Item 1A. Risk Factors